Tech:NYC is launching a new initiative, Tech Year NYC, which helps young people from underrepresented backgrounds get access to careers in NYC’s fast-growing tech sector.

Tech Year NYC is a rollup of several existing city programs into a single point of entry and engagement for tech companies and students. The idea is to make it easier for local tech companies to engage with this population and easier for the students to get access to these pathways to jobs.

Students are compensated for their participation by the city and industry partners and will come out of the program with professional skills essential to work in the tech sector and additional skill-building opportunities.

Tech Year NYC is an expansion of a project-based learning curriculum that Tech:NYC developed with the Mayor’s Office of Youth Employment back in the summer of 2020 called Summer Bridge. Over the last two years, over 100 tech companies and over 3,000 students have participated in this effort.

The summer 2022 Tech Year NYC pilot will run from July 5th to August 12th and serve over 1,000 students. 500 of these students will continue career exploration and skills development through the fall semester. If and when this pilot proves successful, Tech Year NYC will be expanded to reach many more students and employers.

Tech NYC is recruiting employer partners to lead these 5-week long project-based programs, open your doors for “tech open houses”, and participate in professional skills workshops for these students. You can learn more and register to be an employer partner this summer here.

Last week we held USV’s annual Portfolio Summit here in NYC. Every year we invite the leaders of our portfolio companies to come to NYC and spend a couple of days with us and each other. However, we were not able to do that in 2020 and 2021 so this was our first Portfolio Summit since 2019.

In the three years that have passed since our last summit, we roughly doubled the size of our portfolio, adding 65 new investments. That is 65 founders and leaders that had not been to a USV Summit, and in some cases, we had not met them in person.

This is a photo of folks arriving on the first day and settling in:

There is nothing particularly interesting about that photo. Most of us have been to these sorts of business affairs countless times. Except that we have not been able to do it for the last two years.

I have always felt like our two-day Portfolio Summit is my favorite work event of the year. And I had not realized how much I had missed it. It is so great to see everyone together in person, sharing experiences and ideas with each other and building relationships.

We learned some new tricks over the last two years. Those of us who work in VC and startups can work remotely and get most everything we need done. But we have to remember the power of being together and do more of it. It really makes a difference.

When I read the news a few weeks ago that Elon Musk had offered to buy Twitter, I wrote this:

I continue to believe that decentralization is the right long-term answer for a core communications protocol of the Internet and hope that Elon will think about doing just that once he owns it and is not concerned with the stock price and meeting quarterly revenue targets.

My partner Albert wrote this yesterday:

Albert’s suggestion would return Twitter to where it was a decade and a half ago when it first launched and that would be a fantastic first step towards full decentralization.

I continue to believe that a single person owning one of the most important communications protocols of the internet is a bad idea, but maybe it can be a bridge to something better.

Certainly being a public company has not been the right ownership model to make the big fundamental changes which are badly needed.

It is Earth Day, a day to celebrate our planet and rededicate ourselves to saving it. I plan to walk and ride my bike, avoid cars, and enjoy being out and about in NYC today.

But I’d also like to talk about something that is bothering me.

The New York State Assembly and Senate are working to pass a bill that would put a two-year moratorium on “proof of work” cryptocurrency mining. Here is the most important part of the bill:

1. For the period commencing on the effective date of this section and
    25  ending two years after such date,  the  department,  after  consultation
    26  with  the department of public service, shall not approve a new applica-
    27  tion for or issue a new permit pursuant  to  this  article,  or  article
    28  seventy  of  this  chapter,  for  an  electric  generating facility that
    29  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    30  behind-the-meter  electric energy consumed or utilized by cryptocurrency
    31  mining operations that use proof-of-work authentication methods to vali-
    32  date blockchain transactions.
    33    2. For the period commencing on the effective date of  this    section
    34  and  ending  two years after such date, the department shall not approve
    35  an application to renew an existing permit or  issue  a  renewal  permit
    36  pursuant  to  this  article  for  an  electric  generating facility that
    37  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    38  behind-the-meter electric energy consumed or utilized by a cryptocurren-
    39  cy  mining  operation  that uses proof-of-work authentication methods to
    40  validate blockchain transactions if the  renewal  application  seeks  to
    41  increase  or  will allow or result in an increase in the amount of elec-
    42  tric energy consumed or utilized by a  cryptocurrency  mining  operation
    43  that  uses  proof-of-work  authentication methods to validate blockchain
    44  transactions.

I believe this bill resulted from an application to fire up an old coal-powered electric plan to power a Bitcoin mining facility and I will be the first to admit that is a horrible idea. We should not be firing up old fossil fuel plants for any sort of economic activity. It is time to retire fossil fuel-powered plants and replace them with nuclear, hydro, wind, solar, and other clean energy sources.

But the idea of targeting a specific industry for this moratorium and leaving all other economic activity in NYS free to use fossil fuel is just absurd. Is it OK to use fossil fuels to power bowling alleys, movie theaters, car washes, sports stadiums, data centers, banks, homes, cars, etc, etc? Is it just not OK to use fossil fuel to power a network that secures our next-generation technology stack?

And at the same time New York State is doing this, the State of California is preparing an Executive Order that will be extremely friendly to the emerging crypto/web3 industry. New York State is already fighting an uphill battle with the crypto/web3 industry with its god awful BitLicense law and now they want to do this.

New York State should just put signs up on the Holland Tunnel, the Lincoln Tunnel, the George Washington Bridge, the Peace Bridge, and everywhere else people arrive in New York State that says “Web3 Is Not Welcome Here.” And save themselves the time and energy of doing nonsense like this.

We get the message loud and clear.

6529 is one of the top NFT collectors in the world and last week he launched the first destination in an Open Metaverse that he is encouraging people to develop along with him.

That destination is the 6529 Museum District and you can visit it here.

When you arrive you will see this map which gives you a sense of what is there right now.

All of these museums are fun to visit, but I particularly recommend:

– Genesis

– Sunshine Square

– Imagined Worlds

– General Assembly

– ACK Bar

I hope you take a stroll through the Museum District this week and if you do, I expect you will enjoy it.

Full Disclosure: USV and I both own interests in many of the NFTs shown in the Museum District.

Mike Masnick wrote a good piece on this topic on his Techdirt blog last week.

I particularly like this part:

First, let’s look at the world without any content moderation. A website that has no content moderation but allows anyone to post will fill up with spam. Even this tiny website gets thousands of spam comments a day. Most of them are (thankfully) caught by the layers upon layers of filtering tools we’ve set up.

Would anyone argue that it is “against the principles of free speech” to filter spam? I would hope not.

But once you’ve admitted that it’s okay to filter spam, you’ve already admitted that content moderation is okay — you’re just haggling over how much and where to draw the lines.

And, really, the spam example is instructive in many ways. People recognize that if a website is overrun with spam, it’s actually detrimental for speech overall, because how can anyone communicate when all of the communication is interrupted or hard to find due to spam?

https://www.techdirt.com/2022/03/30/why-moderating-content-actually-does-more-to-support-the-principles-of-free-speech/

I, like many in tech, would prefer a world where there is little to no moderation and where you get a lively expression of different views. I use Twitter explicitly to hear voices I don’t hear in my day-to-day routines.

But as Mike notes, you must moderate content online in order to create spaces where conversations can be had.

And inevitably, this leads me to the same conclusion that Mike comes to at the end of his post. What we need are way more venues for conversations and way more venues with different moderation policies.

In other words, the concept of free speech should support a diversity of communities — not all speech on every community (or any particular community). And content moderation is what makes that possible.

https://www.techdirt.com/2022/03/30/why-moderating-content-actually-does-more-to-support-the-principles-of-free-speech/

The early days of Twitter are instructive here. The Twitter website was unreliable and the API allowed anyone to build a third-party client. So many Twitter users used a different user interface to access Twitter and use Twitter. Had that architecture endured it could have created many “clients” with different moderation policies. Just like we have many email clients. It did not endure and so we have one company controlling the moderation policy of the entire Twitter conversation. That is not ideal.

Contrast this with Ethereum. We have a single protocol with many self custody wallets. Each self custody wallet has a slightly different user interface that allows users to access the Ethereum network in slightly different ways. But all of the teams working on the Ethereum ecosystem have a shared incentive to improve the network because they all own ETH. So a single protocol with a rich variety of third-party clients becomes sustainable.

If we want free speech then we want less concentration of market power and business models that allow for that. Advertising does not. Token-based business models do.

I went to renew a .ETH domain I own this morning and the gas fees were so high that I decided to come back another time.

Ethereum is the most popular smart contract blockchain by far but it frequently gets congested and expensive. Using it to acquire and renew domains, normally a transaction that costs less than $100 USD, is challenging.

That is why there are a host of Ethereum Virtual Machine (EVM) compatible layer one blockchains (L1s) and a number of layer two networks (L2s) that run on top of the Ethereum mainnet. These networks allow decentralized apps (dapps) that use Ethereum smart contracts to operate much less expensively.

I went into my Coinbase Wallet this morning to see how many of these L1 and L2 networks they currently support and found this list.

There are many more L1s and L2s that have launched, but that is a list of some of the most popular ones. I expect that Coinbase Wallet and Metamask and other self custody wallets will continue to add additional ones over the next few years.

My son went to the Knicks game on Saturday and they were offering Knicks NFTs on the Jumbotron. I told him to buy me one. He did and bought it on the Polygon network to save fees. He sent it to my self custody wallet and when I switch networks to Polygon in the wallet, I can see the NFT.

That’s how these L1s and L2s work in self custody wallets today.

I don’t think that is how they will always work.

I think that a lot of the Web3 “plumbing” that is now visible to users in the wallets and dapps will eventually be hidden by developers so users don’t need to worry about which network their assets are on. They will be able to find them, use them, transfer them, sell them, etc without needing to know which chain they are dealing with.

But for now, this is the state of play with the Ethereum ecosystem. You increasingly need to go to a different L1 or L2 to do things cost-effectively. And when you do, there is added complexity for the user. This is both progress in the sense that third-party developers are building technology to scale the Ethereum ecosystem and pain in the sense that an already complicated user experience is getting more complicated.

Hiding all of this complexity for the end-user is definitely one of the big opportunities in web3 right now.

So I saw this tweet by Semil Shah yesterday:

So I clicked on the link to my Competing To Win Deals post, which I wrote in 2010, and read it. I often read things I wrote a decade or more ago and cringe at how out of date they have become. Not this one. It is as relevant today as when I wrote it almost twelve years ago. So I am reposting it below:

The venture capital business is highly competitive. There is more money out there chasing good deals than most people imagine. It is also true that there are good deals and good entrepreneurs that can’t find anyone to invest in them. That is a failure of the system. But this post is not about that. It is about how a VC can compete and win a deal that many others want.

Here are my rules:

1) Do your very best to connect with the entrepreneur. If you don’t have a great personal connection, you won’t win the deal. Don’t even bother to try to win a deal where you don’t have good personal chemistry with the founder/CEO.

2) Bring your full partnership into the deal process early and consistently. Entrepreneurs are smart and they know they are doing a deal with a firm as well as an individual. Let them see the full picture early. Make it easy on the entrepreneur to meet the full partnership. Don’t make the entrepreneur do all the work.

3) Encourage the entrepreneur to get feedback on you and your firm. Instead of references, I like to give a list of every entrepreneur I’ve ever worked with and an email address. I tell them “throw a dart at that list and talk to four or five of them randomly. you’ll hear the same thing from everyone.”

4) Don’t pressure the entrepreneur to make a decision. Don’t issue exploding term sheets. Don’t put no shops into your term sheets. Those kinds of things are signs of insecurity. I prefer to tell people that we’ll have an exclusive relationship when the deal closes and not before then. If someone wants to leave me at the altar, better it happens then than after we are married.

5) Make your offer in person and don’t do it via a term sheet. Tell the entrepreneur you want to be their business partner. Tell them how much you will invest and how much ownership you want. Leave it at that. Tell them that if they are interested, you will send them a term sheet. Leading with a term sheet focuses the discussion on the wrong things. The process should be all about personal fit and very high level deal terms. Once the decision is made to try to work together, you can get into the specifics of the deal.

6) Add value during the process. Talk about the strategy issues facing the company. Talk about the hiring challenges the company faces. Try to help with these issues even before you are an investor. Show what you can do right away.

7) Use the product or service. Ideally you should be using it well before you start chasing the deal. But use the product/service actively and smartly. The entreprener will be watching. I assure you of that.

8) Don’t feel the need to pay the highest price. Offering a crazy price to win the deal scares off most smart entrepreneurs. They will be wondering why you are so aggressive. Offering a fair price that is in the range is what you need to do. And communicate that if the entrepreneur chooses to work with you, you will be flexible on your offer. That way you put yourself in the position to win and you can work the specifics to close the deal when the opportunity presents itself.

9) Don’t team up with another firm. We’ve made this mistake a few times recently. Entrepreneurs want to choose their syndicate partners. By pairing up with another firm, you signal to the entrepreneur that you want to choose the syndicate and that is a mistake in a highly competitive deal.

10) Be prepared to lose the deal and if you do, lose gracefully. There are plenty of good deals out there. You don’t have to win them all. Lose gracefully and maintain your good relationship with the entrepreneur at all costs. They might come back to you on the next round.

Many of these rules are counter intuitive. But they work well for my partners and me. You might say they will only work for you if you are a top tier investor. That may well be true, but you have to act like a top tier investor to become one. So you might as well play the game that way from the start.

Investing is humbling. At 60, with 35 years of venture investing experience, I still get most things wrong.

Which is why I like to keep things simple. And when I do I am rewarded.

My friend Gordon asked me last night how I got into Bitcoin. I told him the story of how I bumped into Rikki Tahta walking through the garment district in NYC in the spring of 2011 and Rikki told me he was working on a Bitcoin startup. I replied, “a what coin startup?”. And Rikki told me to read the Bitcoin White Paper. I did and I was hooked.

I didn’t even understand parts of the white paper. But what I did get was that it described a way of making permissionless money. And it was not just an idea. It was a working system that had been operating for several years. I understand how important permissionless servers and applications (web 1.0) turned out to be and so I understood how important permissionless money was going to be.

That was all it took for me. I bought Bitcoin and went about finding a Bitcoin investment to make. That was Coinbase.

The same was true with blogging and tweeting a decade earlier. I met Mena Trott at a Nick Denton party in NYC in 2003 and she explained blogging to me. I was struck by the idea that anyone could be a publisher. And I became one myself a few days later (when I wrote the first post here on AVC). That led me to Twitter a few years later when I saw that most people would prefer to write a text message to the world over a long-form blog post. For those that don’t know, Twitter was initially built to use SMS to post and so the initial 140 character limit was just under the max characters you could put into a text message.

The same is true with NFTs. When I saw Rare Pepes, I was struck with the idea of making unique, rare, and scarce digital goods. And when I saw what Dapper Labs made with Crypto Kitties, I didn’t think too much about making that investment. It helped that the team had contributed to the ERC 721 spec and coined the name NFT.

The point of these stories is that aha moments come around every so often and you just need to let them grab you and take you to a foundational investment. You don’t need to do much due diligence on these. I did none on Twitter, Coinbase, or Dapper. What I did do is use the products, get in the game, feel the power, and get conviction.

You can read the investment memos for those investments on USV.com.

• Twitter
• Coinbase
• Dapper

We publish our investment memos for the world to see. When you read them you will notice that they are basically an articulation of a big idea, what could happen, and in these cases, what did happen. That’s all. No technical diligence (had we done any on Twitter, we would have passed on it), no financial models, no talking to industry experts. Just an aha moment and an idea of what could happen.

That’s keeping it simple. It doesn’t always work. We get more wrong than we get right. But when we get it right, amazing things can happen.