Posts from Uncategorized

The Self Driving Bus

If you are in or around the Brooklyn Navy Yard and want to get to the East River Ferry, you can have a self driving car take you there.

I did that yesterday:

It’s sort of like a van. There are six passenger seats in the vehicle rand I saw four of them lined up waiting for passengers next to the main gate off Flushing and Cumberland.

There is a driver in the front seat but the van drives itself. That takes some of the excitement factor down a notch. But it increases the comfort factor. I assume the driver can take control of the vehicle and drive it manually if necessary.

It makes a ton of sense that autonomous vehicles would start out in places like the Navy Yard where there is not a lot of vehicle traffic and the map is fairly simple.

If you want a taste of the future go over to the Navy Yard and get a ride. It’s free.

And while you are there check out the amazing new Dock 72 building next to the East River Ferry stop. They are leasing it up now and there are some great office spaces still available there. They have smaller offices for startups. Link here.

#machine learning#NYC#robots and drones#Uncategorized

Fractionalizing Home Equity

USV recently invested in a company called Patch Homes and they are announcing that financing today along with some other important information on their business.

You can read about the financing here and USV’s investment blog post here (we do one of these for every new investment).

What I’d like to talk about is the bigger idea behind Patch and some other startups out there which is the ability to break up your home equity into pieces and sell some of it while holding onto most of it. I call this fractionalizing home equity.

In the existing home finance world, the only thing you can do with your home equity is borrow against it. And many homeowners do this. It is a big market and helps a lot of homeowners out. But once you borrow against your home equity you have larger monthly mortgage payments to make and many can’t afford to do that. And you need a certain credit score to be able to access the home equity loan market.

What Patch offers instead is to take a piece of your home equity (currently limited to $250k maximum) and sell the upside on it to a investment fund. Note that I said upside. This is effectively a call option on the equity not a full transfer of that equity. That makes things a lot simpler in many of the scenarios that could arise.

There are some great use cases for a partial sale of home equity. One example I like a lot is a family whose children are heading to college and soon will be out of the home. They plan to sell the home when all the kids are gone but don’t want to do that until then. They could sell some of their home equity, help pay for college, and then sell the house after all of the kids have graduated. There are plenty of examples like that where you are in a situation in life where you plan to sell but not just yet and you don’t want to add to your debt load and/or your monthly payments.

And that is why having more home finance options is great. It expands access to capital and that is a core part of the current USV thesis. And we are excited to be working with Patch to help them do that.

#Uncategorized

The Virtue Of Patience

Our portfolio company Duolingo is known for their super popular language learning app. According to Wikipedia over 300mm people all over the world have used Duolingo.

Back in May 2014, Duolingo launched something called the Duolingo Test Center. The idea was to compete with expensive and inconvenient foreign language tests like TOEFL.

It makes sense. If you are in the business of helping people learn a foreign language, you might as well be in the business of helping people demonstrate their mastery of a foreign language.

But there is a “chicken and egg” problem in the foriegn language testing market. If you don’t have a lot of test takers, it is hard to get your test accepted by educational institutions and corporations. But if you aren’t accepted by educational institutions and corporations, it is hard to get anyone to take your test.

Duolingo has been patient, largely because they have a primary business that is doing incredibly well. Slowly but surely they have gotten institutions to accept their test.

I saw this tweet this morning from Luis, Duolingo’s founder and CEO:

That is the kind of adoption that Duolingo’s tests need to become a standard.

And once you become a standard, you have a fantastic business, largely because it is so hard to accomplish that.

Many companies would have given up on a project like this. The payoff is too long and the effort too high.

But Luis has a personal interest in this offering. You can read about it in the blog post when he announced the service.

That is the power of founders on a mission. They can be patient and see things through that big companies never will.

There is a virtue in patience. You don’t see it that much in business. But it is powerful in the right hands.

#Uncategorized

Unlimited Capital

This post on the WeWork IPO ends with the following observation:

In fact, I would argue that the WeWork bull case and bear case have more in common than it seems: both are the logical conclusion of effectively unlimited capital.

I don’t think there is unlimited capital. If that were the case, every idea, every startup, every person would be able to get the capital they need/want.

And I see proof every day that is not the case.

But it is true that for some things, some companies, some ideas, there is effectively unlimited capital.

Probably the biggest change I have seen in my 30+ years in VC is the huge amounts of capital that are available to “big ideas” like WeWork, Uber, Bird, etc

And the questions to ponder are whether this is a temporary phase based on global macroeconomic conditions or the new normal and whether it is only true for companies at certain stages of their development.

Does Uber, now that it is a public company subject to the rules of rational capital markets, have the same unlimited access to capital it had while it was a private company?

Will WeWork, once it becomes a public company, have the same unlimited access to capital it has had in the last five years?

And what does the next economic downturn look like? Will capital availability dry up like it normally does?

I have heard the arguments why the business cycle has changed, why monetary policy is more effective now, and why rates will remain near zero for a long time.

I just don’t know if they are correct. I suspect we will find out in the next few years.

#Uncategorized

Extensible Games

The promise of blockchain games and non-fungible tokens (NFTs) is extensible games. Imagine if developers could build new worlds/games/experiences on top of Fortnite and you could take your character, your weapons, your vehicles, etc with you into those new worlds/games/experiences. That is what I mean by extensible games.

We are seeing the beginnings of that in blockchain games now. There are many game experiences that third-party developers have built on top of Cryptokitties (built by our portfolio company Dapper Labs).

And now Dapper Labs is pushing this idea even further by turning their CheezeWizards game over to the community.

The idea is pretty simple actually. This summer gamers will be competing to win the first CheezeWizards battle royale. But after that ends, the players will still have their Wizards because they are NFTs. The Wizards are like Bitcoin or Ethereum or any other cryptotoken. They can be stored in a wallet and used again and again in new games.

So Dapper Labs has released all of the CheezeWizards IP under an NFT license and is inviting developers to build new game experiences for all of these Wizards that are now out there.

And they launched the CheezeWizards Hackathon yesterday with over $15,000 in prizes for the winning game experiences.

I will be judging this hackathon along with a number of other crypto investors and I am excited to see the gaming experiences that developers build on top of CheezeWizards.

#Uncategorized

Funding Friday: Medicine Of Time Travel

A few weeks ago, I got an email from a reader. She asked if he could subscribe to this blog without the funding friday posts. He thought they were “spammy.” I replied to him “think about them as the ads” and politely told him that wasn’t possible.

I love funding things. And I love sharing the things I fund with all of you.

I saw this project this morning and backed it instantly. A musical art project. Awesome.

#Uncategorized