Posts from Sports

A few years ago, my friend Jonathan Klein asked me to come speak to a strategy offsite for his company Getty Images. A few days later, I got a thank you note and he asked me to pick any image from their website for a thank you gift.

I picked this one and he was shocked. He asked me, “of all the famous and important images on our website, why would you pick that one?” I told him this story.

On March 23, 2008, our beloved Georgetown was playing in the NCAA regional finals against Davidson. My son Josh and I were certain this was going to be Georgetown’s year. We had big Roy Hibbert in the paint and a bunch of scoring guards and a tenacious defense. We sat down for the big game expecting a win and a trip to the final four.

Instead we got our first glimpse of Steph Curry. He pretty much singlehandedly beat Georgetown that game and by the second half Josh and I were rooting for him. He was that good and that fun to watch. We knew then that he was going to be something special.

Then in 2009, we watched with horror as the Warriors picked Steph with the 7th pick when we were sure our Knicks were going to get him with the 8th pick. MSG would be a different place with Steph on the floor every night in a Knicks uniform.

I missed last night’s game. We are in Berlin and I had to be up early for a board meeting. So when I got up and checked my phone and saw that Steph and his Warriors teammates had won game six and the NBA title, I was pleased.

LeBron may be the best player in the game right now, and he showed why in this series, but Steph and KD are my favorites. They play the game with an elegance and beauty that I appreciate.

I am really happy that Steph got his ring last night. Josh and I saw it coming 7 years ago when we first saw him in action.

One of my favorite techniques to buying and selling transactional assets (stocks being the prime example) is to dollar cost average on the way in and the way out.

I am doing this right now with Bitcoin. I want to buy enough bitcoin so I can make charitable gifts and political donations with it and generally transact in it as much as possible. I’m buying 1.5 bitcoin every week in my Coinbase account. I have a reminder in my calendar and I buy some every week at the same time (I bought some this morning). I’ll keep doing this until I feel like stopping. A lot depends on how much I spend I guess. But the point is I would not be comfortable going out and buying a bunch of bitcoin in one transaction. There’s too much market risk in doing that. By purchasing an asset in small amounts over a long period of time you average into your price and I like doing that.

When a stock is distributed to me from USV, I generally sell a little bit and then put some away permanently. And then I slowly sell the remaining amount over a long period of time, generally three to five years. I generally like to sell once a quarter at the same time. I like the week after the earnings reports, when all the information is in the market and the market has digested it. But that’s not the important thing. The important thing is to sell roughly the same amount in a regular rhythm.

The point of averaging in and averaging out is you never get the top or the bottom, but you get the average. And the average is just fine with me.

In some ways, building a position in an early stage venture fund is the same thing. We buy a bit at the seed stage, a bit more at the Srs A stage, a bit more at the Srs B stage, and so on and so forth. In some of our best companies, we have bought stock in five to ten rounds. Some of those rounds will turn out to have been bargains. Some will turn out to have been overpriced. But on average, if you get to invest in ten rounds, you will build a very good position at a very good price.

It goes back to optimizing versus satisficing. If you want to find the optimal entry price or the optimal exit price, you will drive yourself crazy. I prefer to find an acceptable price. And I think that averaging in and averaging out does that for you.

With the news that Steve Ballmer now gets to do to the Clips what he did to Microsoft, I thought we could talk about buying/owning sports teams.

My son Josh and I like to dream about owning the Knicks. That’s not likely to happen unless someone can get Jimmy Dolan on tape saying stupid shit. One can dream.

So if you could buy a sports team, what team would you buy?

My friend Bijan tweeted this last week:

One of the hardest things to watch is a company having an identity crisis

— Bijan Sabet (@bijan) November 27, 2013

He's right, but I would go further. One of the hardest things to do in the venture business is to stick with a struggling investment.

I woke up thinking about this as I spent yesterday with Josh watching the hapless Jets lose badly to the Dolphins and then heading up to MSG to watch the equally hapless Knicks lose to the Pelicans. It is tempting to stop watching both teams and sell off our seats at MSG for the rest of the year. But we aren't going to do that and we will sit loyally and watch loss after loss at the Garden if that's what comes for the rest of the year. We are fans, even if our team sucks. And they sure do right now.

It is equally tempting to write off a failing investment and stop showing up at board meetings, stop responding to the emails from the founder, and stop thinking about the company. At some point, the company will run out of money, there won't be a reason to put more money into the company, and the investment will fail. Until that happens, as long as the founder is willing to listen to you, I think you have to give your struggling investments your all.

The truth is the investments that are working often don't need that much from an investor. They need more capital, they need recruiting help, and sometimes they need strategy and advice. But the reason they are having success is they are doing the right thing and doing things right. On the other hand, the struggling investment needs a lot of help. And I think the lead investor board member has an obligation to provide that help.

One of the characteristics of USV that I am most proud of is that we stick with our struggling investments. And we have made a lot of them. We have way more of them than our successful ones that are always cited when we are talked about publicly. I think how you treat your struggling investments says more about you than how many billion dollar exits you have had. You need both to be successful in the VC business, of course. The latter metric defines your selection acumen. The former defines your empathy acumen. And when I pick people to work with, I look for the latter. I suspect most people do that.

This is not a new theme. I've written about this here before. But it is an important theme for me and for entrepreneurs and investors. As we headed out last night to MSG Josh said to me, "I am not feeling good about this game". I told him I wasn't either, but all we could do was root them on as hard as we could. We did that. And we will do that again on Thursday when they head out to Brooklyn to play the Nets. We will be there too. That's what fans do and what investors should do too.

Interesting blog post on how EA's FIFA game franchise got off the ground.

My son and his friends play lots of Xbox games and they play lots of Xbox sports game. But FIFA is their favorite. It is the game they come back to again and again and it is the game they play year round.

I have this theory, based on a sample size of one (my son Josh), that FIFA for Xbox is responsible for the surging interest in football (which we call soccer) here in the US.

All of my kids played youth soccer but they never loved playing the game. They all went for basketball as their game of choice. So they didn't really learn soccer by playing it.

But Josh has learned to understand the game, the players, the teams, and so much more about football/soccer from playing FIFA. And he watches the big matches on TV and he cheers for teams like Bayern Munich because he loves Franck Ribery. And he loves Franck Ribery because he's awesome in FIFA Xbox.

And his obsession with the sport has led me to become more interested in it over time. We've been in europe during the european cup and the world cup and have hung out in the bars and watched the matches with the locals. It is a great sport and a great experience.

And for us, all of this interst in and love of the game of football, originated with FIFA on Xbox. And I suspect that is true for lots of people in the US who grew up in the age of videogames.

So going back to the post that I linked to at the start of this post, EA didn't think FIFA was going to be popular. They didn't really care about the game. And yet it has become a monster franchise for them and to my mind, one of the main reasons for the surging popularity of the game here in the US.

Like many big deals, it was ridiculed at the start. That's a sure sign you are on to something.

My friend Cliff Chenfeld recently appeared on the Media Reporter TV show. Cliff has been in the entertainment business for over 25 years and he talks about the changes he has seen in the music industry, film, sports, and other entertainment sectors. It’s about 30 minutes long and worth a watch/listen.

The idea for today's fun friday comes from Tyrone who wrote this in an email to me this week:

fun friday idea: best entertainment this year across the board, albums, films, series, sites, youtube channels etc?

For me, the answer is the NBA playoffs (though the result bums me out), This Is The End (the jonah hill exorcism is hysterical), and my favorite records of the year so far are Lysandre, Modern Vampires Of The City, Random Access Memories, Mala, and Isles.

What are your favorite entertainment moments of the year so far?

I was at my friend Vanessa’s birthday party last night and another friend Cliff was saying to me that baseball is falling fast in popularity amoung the younger people in america. So we asked all the kids who were in attendance and sure enough baseball was considered “boring” and was not interesting to them. Soccer (football) on the other hand was rising fast. Among the kids in attendance last night, basketball was first, football and soccer were in a close second, with hockey and baseball in the rear view mirror.

So for fun friday today, I thought I would poll the AVC readers on our favorite sport:

Please participate in the poll and in the comments. After all, this is fun friday.

We talk a lot of NBA basketball in the comments but I don't post about it. This blog is supposed to be about startups and tech, for the most part. But the Knicks lost last night in Indiana and my season is over. I will root for the Grizzlies and the Pacers now but I doubt I will watch many games.

This photo sums up the Knicks Pacers series. Actually it sums up the entire season for me.

Carmelo Anthony is an incredible talent. He has upped his defensive game in the past year and he carried the Knicks as far as he could. But he doesn't have a second superstar at his side and he could not beat Indiana all by himself.

Roy Hibbert played a great series. In the end, Roy and the Pacers were too much for Melo.

I went to something like twenty five Knicks games this year, almost all of them with my son Josh. I had a great time. We saw some incredible games. And I remain a diehard Knicks fan. My season is over.

I wish Roy and his mates the best of luck with Miami. I will be rooting them on.