Stockton's Basic Income Experiment

I have been interested in the concept of Universal Basic Income (UBI) since first hearing about it from my partner Albert years ago. I’ve mentioned it on and off here at AVC a bunch since then.

NYC will get its own UBI experiment if front-runner Andrew Yang is elected Mayor. Yang proposes to spend $1bn a year (out of an almost $90bn annual budget) providing $2k a year to 500k of NYC’s neediest citizens.

The theory of UBI is that giving people direct cash payments is more efficient and more effective than providing services to them via third parties. For example, if giving someone $2k a year keeps them in their apartment, the cost of operating homeless shelters and other housing for the homeless goes down. There are many more examples.

Skeptics of UBI point to the welfare system of the “Great Society” and other efforts to suggest that it won’t work and can’t work. They believe it will lead to idleness, drug use, gambling, and other societal ills.

So I read with interest of an experiment the city of Stockton CA did where they gave 125 randomly selected individuals making less than $46k a year a monthly stipend of $500.

The results are interesting. Researchers at the University of Tennessee and University of Pennsylvania concluded that this sample group saw many benefits including helping people get better jobs, better living situations, and better self worth. There was no evidence of increased drug use, gambling, joblessness, or any of the other concerns expressed by opponents of UBI.

I look forward to more experiments with UBI. One of the reasons that Andrew Yang’s candidacy for Mayor of NYC interests me is the opportunity to do a much larger experiment in a city that has a massive social infrastructure and lots of diversity. If UBI works in NYC, that will be very telling.

#NYC#policy

Crypto and Climate

I keep reading that Bitcoin, Ethereum, NFTs, etc are a climate issue.

It is true that proof of work mining which secures the Bitcoin and Ethereum blockchains uses electricity to do that work. And certainly there are carbon emissions associated with that electricity consumption.

However, it is not as simple as that for the following reasons:

1/ Proof of work miners are constantly seeking the lowest cost of electricity to mine with. That leads them to electricity sources like geo, hydro, solar, and wind. There is a meaningful financial incentive to mine on clean energy in many cases.

2/ The Ethereum blockchain is moving to proof of stake and moving away from proof of work. Many other popular blockchains, like the Flow blockchain that powers NBA Top Shot and other NFT experiences, already use proof of stake. Proof of stake consensus uses vastly less electricity to secure the network.

3/ There is a narrative that much of China’s Bitcoin mining happens on coal powered electricity, but I have read that most of it happens on China’s overbuilt hydro capacity.

4/ Proof of work mining can stimulate the buildout of clean energy capacity because it can produce immediate monetization of that capacity.

It is time for the crypto industry to study this issue carefully and provide real data. I would like to see carbon emissions from proof of work mining measured over time and projected into the future.

#climate crisis#crypto

Return/Hybrid/Remote

With vaccinations topping 90mm doses in the US and upwards of 75mm doses likely to be injected into arms in the US in March, many companies are starting to think about what a return to the office might look like this summer and fall.

I read two great posts this weekend talking about what this all means for knowledge workers and the companies that employ them:

Imagine Your Flexible Office Work Future – Anne Helen Petersen

We’re Never Going Back – Packy McCormick

They both reference the writing of Dror Poleg on this topic so I will link to his blog as well.

What Anne and Packy are writing about is the future of our work spaces and whether our employers will require us to come back to the office full-time or will something else emerge.

Anne opens her post explaining that while the pandemic has proven that knowledge work does not need to be done in an office filled with all of our co-workers, what we have been doing in the last year is not what we will likely be doing in the future. As she observes, we have simply been working from our homes in the last year and that is not necessarily the future.

Packy asserts that employers don’t really have control over the decision of where we will all work going forward, employees do. The war for talent will determine where all of this lands.

Both are extremely thoughtful posts. I have been thinking about this topic for the better part of a year, for USV and for the 150 portfolio companies that we have invested in and advise. Anne and Packy’s thoughts line up pretty cleanly with mine. I think the change in venue for knowledge work is likely to be one of the biggest changes that we will see this decade.

Last summer, the Gotham Gal and I decided to make a co-working space where people living in the Clinton Hill and Bed-Stuy neigborhoods in Brooklyn could work when they don’t want to go to the office but also don’t want to work from their kitchen or bedroom. We call it FrameWork and it will be opening next month. The tagline is “Your Home Office Away From Home.” We are very excited by the possibility that many more people will work most of the time in the neighborhoods that they live in and commutes will be an occasional thing versus an everyday thing. I think the quality of life improvements and the quality of neighborhood improvements that will emerge from this will be dramatic.

FrameWork is just an example of the many ways that knowledge workers will choose to work going forward. I expect the innovation around work spaces will be fast and furious once we can actually start working somewhere other than our home. And I expect that to start to happen in the second quarter of this year as I explained in my Jan 1st 2021 blog post.

So if you are an employer, what do you do? This suggestion by Packy is interesting:

instead of mandating a certain number of days in-office, companies should view employees as customers who they need to convince to come in with a great product:

Re-design the office to facilitate things that employees can’t do at home: whiteboard rooms, podcast and video recording studios, screening rooms, maker tools, etc… 

Take less space on more flexible terms in order to adapt and evolve as employees’ needs do.

Make the office feel more like a social club, with more focus on spaces for employees to share meals, have spontaneous conversations, and take in work-related programming. 

Hire hospitality and flexible operators to help them figure it out. Alma does hybrid work/social well, so Carlström set up Another Structure to bring that expertise to companies that want to build the right spaces for this new world. 

Infuse the space with technology to facilitate communication and collaboration with remote employees. 

https://www.notboring.co/p/were-never-going-back

But it is this observation by Anne that I think is maybe the most powerful of all:

The idea of “boundaries” has become so porous when it comes to cultivating work/life balance that it’s lost all meaning. People don’t respect boundaries. You don’t respect them. Even when the pandemic is over, it’s going to be very, very difficult to try to rebuild them. What we actually need are guardrails, big and sturdy ones, to protect us from the runaway semi-truck of work.

In our current framework, boundaries are the individual’s responsibility, and when they’re broken, it’s because the individual failed to protect them. But guardrails? They’re there to protect everyone, and they’re maintained by the state, aka your company. There are a lot of ways to actually build guardrails around employee’s lives, and we discuss them at length in the book. But the larger shift has to be away from all of this worthless “personally-maintained boundaries” bullshit.

https://annehelen.substack.com/p/imagine-your-flexible-office-work

As Anne correctly points out, working from home has meant working non-stop for many of us. I am guilty of this and I feel it after a year of working this way. Employers will need to figure out how to constrain work hours for their employees because it turns out we can’t do that for ourselves. Office hours (9 to 5) did that for us. What will be the new office hours? We will need to figure that out.

We have the possibility to fundamentally change the way knowledge work is done and how we who do it experience it. The opportunities around this are almost endless and I am personally very excited by it.

#employment#entrepreneurship#NYC

Funding Friday: Watch Now From Kickstarter

My normal practice on Fridays is to post a Kickstarter project that I have backed that I think is interesting and that others might want to back.

But today, I want to talk about Kickstarter’s Watch Now on iTunes offering.

If you are like us and have watched so much TV during the pandemic that you are now struggling to find new things to watch, click on over to Watch Now and find amazing independent films that were funded on Kickstarter and are available to watch on iTunes.

#crowdfunding#Film

Fan Powered Royalties

Our portfolio company SoundCloud is introducing fan powered royalties to share revenues more equitably with musicians.

The streaming music business pools its revenues and pays out based on a mathematical formula. There is no direct connection between a fan and artist. This graphic explains the existing model:

What SoundCloud is offering is that direct connection, explained here.

If you are an artist and you want to get fan powered royalties you can monetize directly on SoundCloud or via SoundCloud’s Repost service which allows you to monetize on SoundCloud and all of the other streaming platforms:

Artists can participate automatically in fan-powered royalties in three ways:

SoundCloud Premier: Premier is our monetization program for Pro Unlimited subscribers. Artists will be notified and prompted to join once they become eligible to monetize. Click here for Premier eligibility requirements. 

Repost by SoundCloud: Repost by SoundCloud is for artists who want to reach fans everywhere by distributing their music to every major music service. There are no eligibility requirements to monetize with Repost by SoundCloud. You can subscribe to Repost by SoundCloud here.

Repost Select: While there are no eligibility requirements to monetize with Repost Select, it’s a program open to select Repost by SoundCloud subscribers via application or invitation only. Click here to apply or learn more.

While the pooling model has worked well to scale the streaming industry, it has not worked well for independent and emerging artists. This bit from SoundCloud’s Fan Powered Royalties page explains it well:

With fan-powered royalties, each listener’s subscription or advertising revenue is distributed among the artists they actually listen to, rather than being pooled. This new model benefits independent artists and empowers fans to play a larger role in the success of their favorite artists. It also encourages the growth of local scenes and the rise of new genres.

Fan-powered royalties benefit independent artists whose fanbases are dedicated to listening to their music frequently. So if a fan only listens to an early-stage rapper from Detroit or an emerging singer from France, most or all of their subscription or advertising revenue will go to those exact artists. 

SoundCloud has always been about the emerging artists and I am glad to see them leading the industry to a more equitable model for revenue sharing.

#Music#streaming audio

Digital Birth Control

Our portfolio company Clue announced yesterday that they have received FDA approval for a digital birth control feature.

Clue’s mobile app is used by over 13mm women around the world to track their monthly cycle and this new FDA approved feature, called Clue Birth Control, will be offered as a premium feature in the Clue app.

While Clue Birth Control is not 100% effective, it is an alternative to more invasive forms of birth control. It requires nothing more than regular inputting of the start date of a woman’s cycle.

Here are some comparison’s of its efficacy:

Clue says the product has been shown to be 92% effective at preventing unwanted pregnancy under ‘typical use’ and 97% effective under ‘perfect use’ — referencing the standard research terminology for measuring contraception effectiveness (the latter meaning the product is used exactly as instructed every time the woman has sex vs ‘typical’ use which accounts for some usage slip-ups).

What those percentages mean in practice is that under typical use, eight couples out of 100 would be predicted to get pregnant over a year of use of Clue’s digital birth control. While — in the perfect use scenario — the failure rate would be three out of 100 over a year’s use.

(For comparison, Natural Cycles says its product is 93% effective under typical use and 98% effective under perfect use; while — per the Guttmacher Institute‘s US study — the pill is 93% effective under typical use and 99% effective under perfect use; and male condoms are 87% effective under typical use vs 98% effective under perfect use.)

https://techcrunch.com/2021/03/01/clue-gets-fda-clearance-to-launch-a-digital-contraceptive/

The options available to women to manage their fertility cycle have grown significantly over the last 60 years and that has provided women with more control over their lives. Clue’s digital birth control offering will not be for everyone but it certainly will help some women who cannot or do not want to use more invasive methods.

#hacking healthcare

Decompressing

The last two months have been challenging in NYC. It has been cold, rainy, and snowy. There has not been a lot of sun. And the pandemic has things locked down. I know so many people who have found the last few months very challenging.

At the same time, more and more friends and loved ones are getting vaccinated. I hope to be able to do that soon myself. So there is light at the end of the tunnel, but we are still in the tunnel.

The other thing about the pandemic is it feels like we work all the time as there is little else to do. One one hand it is comforting to have something to occupy the time. On the other hand, working all of the time is not healthy.

The Gotham Gal and I decided to take some mental health time with some of our family and go skiing for a few weeks. I am looking to getting out in the fresh air, sun on my face, wind in my hair, and not working all of the time.

Decompressing is important. I am excited to do it and hope that all of you can find some time to do the same while we wait this thing out.

#life lessons

Funding Friday: The NYC Mayoral Race

In less than four months, the Democratic Primary will effectively choose the next mayor of NYC. For those of us who live here, this will be a very important choice. Though the race is partially funded by NYC through matching of small donations below $250, the candidates need more funds to get out their message, connect with voters, and help us make the best choice we can.

If there are candidates you like and want to support, here are some links to the donation pages of the most popular candidates. The Gotham Gal and I have financially supported most of these campaigns.

Andrew Yang

Maya Wiley

Eric Adams

Kathryn Garcia

Shaun Donovan

Ray McGuire

Scott Stringer

Dianne Morales

If you live in NYC and have the means to support the political process, I encourage you to do so and get behind some of these candidates.

#NYC#Politics

Ten Years And Just Getting Started

I remember meeting Zach Sims and his co-founder Ryan Bubinski back in 2011 when they started Codecademy. Zach was still in college and thinking of dropping out to focus on the Company. I just realized this morning that it has been ten years since then. Wow. Time does fly.

Like many great companies their idea was simple, but powerful.

build the easiest way to learn to code

They did that and they have gone on to build a large and profitable business helping anyone learn to code, get a job, and start a career.

But it isn’t as simple as that. In fact, when you look at the ten-year history of the Company that Zach lays out in this great tweetstorm, you see how hard it is to build something lasting, sustainable, and important.

What is more impressive is that when you read this blog post Zach wrote this week you see that he is just getting started. When building long-lasting companies, it helps to have a mission that really matters. This line from Zach’s post brings it home for me:

Times like these remind us that what we’re doing matters: hundreds of thousands of people around the world use Codecademy every single day to learn the skills they need to find jobs, upgrade their careers, and live better lives.

The world is changing quickly before our eyes, the job market is changing with it. Our educational institutions are trying to evolve to meet the needs of students and employers but it is hard to turn a battleship around. So companies like Codecademy are filling in the gaps, helping people learn the things they need to learn, and building some incredible businesses along the way.

To another ten years!

#entrepreneurship#hacking education