Fred Wilson's A VC

"Senator Joe Manchin wrote a public letter to financial regulators asking them to “take appropriate action to limit the abilities of this highly unstable currency.” The letter in its entirety is here . What follows is a letter from me to the Senator. Bitcoin is a powerful new technology platform that, like the Internet itself, is not controlled by anyone or any company. It is a globally distributed network of computers that allow financial transactions to flow seamlessly and at a much greater efficiency than current methods. A bitcoin is the store of value in the system and it acts a bit like a currency or a commodity. This store of value is actively traded for fiat currency at a number of exchanges around the world. Bitcoin is already regulated in the US and it is becoming more regulated every day. And the regulatory environment in the US has dampened the amount of innovation around Bitcoin that has developed here in the US. All the major Bitcoin exchanges have been built outside of the US and a significant amount of the venture capital investment in the Bitcoin ecosystem is happening outside of the US. This is a direct response to the stricter regulatory oversight and requirements here in the US versus other countries. The volatility of Bitcoin relative to fiat currencies should be expected in a nascent and emerging technology. What is amazing, however, is its resiliency in the face of massive scrutiny, company failures, fraud, theft, and a host of other challenges it faces as it becomes mainstream and mature. The value of a Bitcoin at this stage of its development should move up and down more like a hot technology stock than a stable currency. In time, as Bitcoin’s market value grows and transactional activity  and liquidity develops, the value will stabilize and act more like a traditional currency. When something as new and as different as Bitcoin emerges, it is tempting to want to “put the Genie back into the bottle” and protect ourselves from it. But thankfully the US did not do that with the Internet. The impact of the commercial Internet on the US economy and our society as a whole has been massive and overwhelmingly positive over the past twenty years. We should approach Bitcoin in exactly the same way and if we do, I expect the benefits we will see will be equally important, impactful, and beneficial to our economy and our society." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 27, 2014.

"Senator Joe Manchin wrote a public letter to financial regulators asking them to “take appropriate action to limit the abilities of this highly unstable currency.” The letter in its entirety is here . What follows is a letter from me to the Senator. Bitcoin is a powerful new technology platform that, like the Internet itself, is not controlled by anyone or any company. It is a globally distributed network of computers that allow financial transactions to flow seamlessly and at a much greater efficiency than current methods. A bitcoin is the store of value in the system and it acts a bit like a currency or a commodity. This store of value is actively traded for fiat currency at a number of exchanges around the world. Bitcoin is already regulated in the US and it is becoming more regulated every day. And the regulatory environment in the US has dampened the amount of innovation around Bitcoin that has developed here in the US. All the major Bitcoin exchanges have been built outside of the US and a significant amount of the venture capital investment in the Bitcoin ecosystem is happening outside of the US. This is a direct response to the stricter regulatory oversight and requirements here in the US versus other countries. The volatility of Bitcoin relative to fiat currencies should be expected in a nascent and emerging technology. What is amazing, however, is its resiliency in the face of massive scrutiny, company failures, fraud, theft, and a host of other challenges it faces as it becomes mainstream and mature. The value of a Bitcoin at this stage of its development should move up and down more like a hot technology stock than a stable currency. In time, as Bitcoin’s market value grows and transactional activity  and liquidity develops, the value will stabilize and act more like a traditional currency. When something as new and as different as Bitcoin emerges, it is tempting to want to “put the Genie back into the bottle” and protect ourselves from it. But thankfully the US did not do that with the Internet. The impact of the commercial Internet on the US economy and our society as a whole has been massive and overwhelmingly positive over the past twenty years. We should approach Bitcoin in exactly the same way and if we do, I expect the benefits we will see will be equally important, impactful, and beneficial to our economy and our society." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 27, 2014.

"My son turned me onto a wine app called Delectable Wine . I am waiting for the Android version so I can use it too. But I've used it a bit on his iPhone and its a really nice and useful application. Think of Delectable Wine as Instagram for wine. People post the wines they are drinking, their reactions, tasting notes, etc. You follow your friends and experts (like Arnold ) and you see what they are drinking. You can tag where you had the wine and what you thought about it. There's a really nice searchable archive so you can go back and see what the wine was that you had at Perla that night with your friends that was so good. But all of this is possible because of a very cool feature that my son calls Shazam for Wine Labels. When you want to add a wine to Delectable, you take a photo of the wine label and Delectable figures out what wine it is, what vintage it is, etc, etc. All of that important metadata comes in automatically just because you took a photo of the wine label. I don't think Delectable would work nearly as well without this feature. It enables so much of the discovery and data that makes the app so great. The first time I saw it in action, I said "wow". I see a lot of technology demo'd every day. I don't saw "wow" that often. But I did when I saw Delectable in action. If you are into wine and have an iPhone, try it out . I think you'll like it." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 14, 2014.

"A few weeks ago the traffic coming to the new usv.com dropped off by 20 or 30% week over week. Brian and Nick were wondering if it was related to the new design we rolled out at the end of January. They decided to take a deep dive into our analytics to see what was going on. I told them it had to be some sort of plumbing issue. Something that was hooked up to usv.com must have gotten unhooked. Because I have rarely seen the behavior of an entire user base change drastically overnight because of something like a redesign. Change can come pretty quickly, but in my experience it is months not weeks or days for something to drastically change in your user base resulting from a subtle product change/tweak. They noticed in the analytics that front page views were steady but traffic to the article pages was off by a lot. I suggested that something in our twitter plumbing was off. And sure enough, we figured out that the autoposting of popular articles on usv.com to this twitter handle was broken (and apparently still is). I tell this story because we all encounter this sort of thing along the way of building and launching and growing a product. We make tweaks and something changes right away. That immediate change is usually related to something that brought traffic (google, twitter, email, appstore) and not a design change. More gradual changes (up or down) are usually because of design changes. There's a difference between these two kinds of effects and it is important to understand that." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 13, 2014.

"VC is a service business like law firms and ad agencies. Our customers are the entrepreneurs we back. Our shareholders are our limited partners. When we do a good job of helping our customers create value, our shareholders benefit. But, like law firms and ad agencies, it is hard to provide truly objective and unbiased advice when you have a conflict of interest. In the law and advertising business, clients will demand that their service providers don't work for their competitors. The same is mostly true of entrepreneurs and VCs. There is no language in the stock purchase agreements we sign with our portfolio companies preventing us from investing in a competitor. But there is an understanding about conflict avoidance and breaching that understanding can have negative reputational consequences. The problem that arises is that conflct is not the same to everyone. As I said to an entrepreneur yesterday, "conflict is in the eye of the beholder." This entrepreneur had pitched me on his business via email and I told him it sounded a lot like one of our portfolio companies. He was shocked as he didn't (and doesn't) see it. A few months later, he went to see the Gotham Gal about making an angel investment in his company. She pointed out the exact same conflict to him. Again he was surprised. So he emailed me yesterday about the situation and I pointed out that not everyone sees conflict in the same light. But I went on to point out that the perception of conflict is conflict. When someone feels that something you invest in is encroaching on his or her territory, you have created a perception of conflict with that entrepreneur. Even if he or she is dead wrong about that, it doesn't really matter because they are now in conflict with you in their own mind and they won't listen to you the same way again. And that is the most powerful leverage point a VC has when making an investment. If you cannot get an entrepreneur to listen to you objectively and rationally, then you have lost your greatest hope of postively impacting that investment. And that is a tool that VCs should not throw away lightly. So the meta point I am making in this post is that it isn't the facts that matter when discussing conflict. It is the perception that matters. If anyone in a relationship with you percieves that you are in a conflicted situation, you are in a conflicted situation whether you agree with them or not. Your only choice is to try to convince them otherwise before you obligate yourself to the conflict situation. Once you've obligated yourself, it is too late. A friend in the VC business told me yesterday that he thinks this is the biggest issue top VCs face. Because they get to see the most interesting investment opportunities, but the opportunity cost of saying yes to an investment is that they take themselves out of the running for everything else in that category going forward. I agree that conflict issues are large and need to be front and center in everyone's minds when making an investment decision. But I also think that large markets are large and there are ways to slice them up in ways that do avoid conflict. And if you can get an entrepreneur comfortable, you can make multiple investments in a large space. We made five or six social media investments. We've made a similar number of crowdfunding investments. I would like to make a large number of bitcoin related investments. If you think carefully upfront about how these markets will likely segment themselves over time, and if you can make that case upfront (not after the fact) to an entrepreneur, I think you can navigate this tricky issue. But the thing you have to keep in your mind first and foremost is that perception is reality. And managing that is the most important thing of all." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 12, 2014.

"The annual NYC tech bowling event is around the corner. Kingpins of Silicon Alley will happen on April 7th, at 7pm.   Kingpins of Silicon Alley Bowlmor - Chelsea Piers April 7, 2014  7 PM  Kingpins of Silicon Alley is New York City’s first and only startup bowling competition. It is a fundraiser and friendly competition for the entrepreneurial community in NYC. The funds go to benefit InSITE, a fellowship that connects exceptional graduate students to start-ups to help accelerate those companies to funding.   At the end of the event, we will crown the Silicon Alley Bowling Champion!   To attend click  www.kingpins.eventbrite.com I will be there and plan to sponsor a lane. If you would also like to sponsor a lane, you can do that here . I hope to see there on April 7th. It's a fun evening." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 11, 2014.

"So Fast Company has selected DonorsChoose.org as one of its most innovative companies and on top of that, they decided to put DonorsChoose founder Charles Best on the cover of the magazine and write a longer article about them as well. It's pretty unusual that a non-profit would be selected for such a list and highlighted in this way. But then again, DonorsChoose is a pretty unusual non-profit. I've been fortunate to have been involved with DonorsChoose for the past seven or eight years and have been on their board for the past three or four. So I thought I'd list some of the things that DonorsChoose has done to illustrate the point. - DonorsChoose launched a crowdfunding service and business model in 2000, fourteen years ago. To my knowledge they were the first crowdfunding service launched on the Internet, long before the leaders of the category like Kickstarter, Lending Club, and other emerged. - DonorsChoose has built a network of almost 200,000 teachers, over 10mm students, and over 1mm funders . That network has brought $227mm of funding into public school classrooms but it is being used for a lot more. Entrepreneurs are using it to get things like 3D printers, underwater robots, and computer science classes into schools. DonorsChoose has become a distribution network in addition to a funding network. - DonorsChoose has open data sets and an API that allow anyone to analyze what resources teachers and students are seeking. Increasingly policy makers are accessing this data to determine what resources are most needed in the public schools. - DonorsChoose is a sustainable non-profit. They apply a take rate like every other commercial marketplace (it is currently about 13% and donors can, but usually don't, opt out). This revenue scales as giving scales and has been covering the costs of the operating the business for a number of years now. Any profits they make above covering their costs are given back into the marketplace, usually in the form of match offers. - DonorsChoose looks like, acts like, and is a startup. When I walk into the DonorsChoose office, it feels just like walking into the Etsy, Kickstarter, or Twitter office. People are active, animated, and energetic. They have a large software and product team. They could easily fit into the USV portfolio and if they did, they would be one of our star companies. Networks are replacing hierachies as we enter the information era. And in the world of non-profits, the DonorsChoose network can and should be a model of how you can build an organization with huge impact using a networked model. Another node on the DonorsChoose network are corporations and their marketing and corporate social responsibility teams. Corporations and their brands have a place on DonorsChoose as well. They provide match and challenge funding in all sorts of interesting and innovative ways. If you are involved in these kinds of programs and want to work with DonorsChoose, you can go here and learn more and contact them . It's very satisfying to see Charles and DonorsChoose get this kind of recognition. They are one of the most innovative organizations I work with. And I work in the innovation business. Congratulations DonorsChoose." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 10, 2014.

"Ben Horowitz has a great post up on his blog, called Why I Did Not Go To Jail . I would encourage everyone to go read it. But in the event you aren't going to do that, he tells a story about an options strike price plan that his CFO recommended to him. It turns out the plan was against the law and his GC stopped him from implementing it. I've heard a lot of ideas over the years that, like this options strike price plan, sound too good to be true. And in most cases, they were just that. I have developed a deep skepticism around anything that sounds like a free lunch. As the saying goes, there is no such thing." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 09, 2014.

"I was on vacation with my friend John and he asked me how I used the favorite button on Twitter. I told him it is a way to tell people that I've seen the tweet when I do not want to reply. I use it in two primary ways. To signal that I saw and liked a tweet. And to signal that I saw a tweet to the person who sent it. The two are different only in that in the second case, I probably did not like the tweet but I still wanted to acknowledge it. I really like super lightweight engagement gestures. I am bombarded by stuff coming at me all the time. So if I can acknoweledge something publicly without having to do much work, I get a huge amount of value from that. Bumping on usv.com and upvoting on disqus are like that too. Because the identity of the bumber and the upvoter are on display publicly, they are an efficient way to signal that you saw it and liked it. I am going to try to upvote more on disqus. As I reply less and less in the comments, I need to upvote more and more. I will make an effort to do that." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 06, 2014.

"I attended a CS Teacher Meetup last night at USV. We talked about a lot of things but focused on the issue of getting more girls to code. It's an important issue that I think we are starting to make good progress on. Though not focused on girls per se, I heard about a neat coding challenge that is happening this Spring called Dream It. Code It. Win It . This is a programming challenge (not a Hackathon) aimed at High School and College students. It is organized by the MIT Club of New York, MIT Enterprise Forum, and Trading Screen. The goal is to reward "the creative aspects of a computer science education." College teams can win monetary prizes ($20k, $15k, and $10k). High School teams can win iPads. The submission is a video where the team explains the problem they set out to solve, their solution, and a demonstration of a live working product that solves the problem. Submissions can be made here and the juding panel will meet in NYC on April 30th from 5pm to 9pm to select the winners. If you know a high school or college aged student who likes to code, please let them know about this contest." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 04, 2014.

"My friend and former business partner Jerry Colonna has created The CEO Bootcamp . It's a four day retreat in the Colorado mountains with 19 other CEOs and a few facilitators, led by Jerry. The first CEO Bootcamp was last fall and you can see what attendees thought about it here . And here's a blog post by Sooinn Lee about her experience last fall at CEO Bootcamp. There are two aspects to this experience. There are the four days where attendees learn skills to help them manage the leadership role they are in, and there is the ongoing support that the group of CEOs provide each other after the retreat is over. The CEO Bootcamp has some requirements. They are: You’re the CEO of a tech start­up that has employees. This is the first time you have been a CEO within a company of this scale. You’ve logged immeasurable hours and have made tremendous sacrifices. You’ve had success with your company. You realize there is more to this game than “success.” You may be tired, but you  must  be vulnerable, curious and courageous. If you fit these requirements and want to spend four days in early April in the Colorado mountains with a bunch of peer CEOs figuring out what it takes to be a successful leader, you can apply here ." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 03, 2014.

"News is leaking out of Apple that iOS8's primary feature will be health and fitness data. Rumors are that there will be a new app called Healthbook that will track a plethora of health and fitness data that iPhones and related devices (iWatch?) will be able to collect on the person carrying the devices. This is interesting to me on a number of levels. We have been looking at this sector for a while and one of the things that has kept us (USV) from making investments in this space is the sense that all of this data capture is soon going to happen in the phone itself. Once that happens, things can change pretty rapidly. The key will be APIs. And my big question is whether Apple will give its users an open API to send their health and fitness data to third parties they authorize. I can see a button that says "auth with Healthbook" in my doctor's office, my gym's mobile app, my health insurers's web app, and a host of other places. So to my mind, the big question is not what Healthbook will look like but whether Apple will make it easy to get our data out of it. If they do, this will be a massive game changer for the quantified self, health, and wellness markets." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on February 02, 2014.

"I read this in an analyst report published on Yahoo! yesterday: We believe Tumblr is an underappreciated asset with fast growing user base and engagement levels. We think Tumblr may actually be capable of creating as much value as Yahoo! core. It's not clear to me how much value the "Yahoo! core" has so it is not possible to put a number on this statement. But it is telling. I have been using Tumblr every day for almost seven years now. USV invested in Tumblr in the fall of 2007 and we ceased being investors last year when Tumblr was sold to Yahoo! in May. I still use Tumblr every day. I think it keeps getting better and better. My feed today is incredible. As it was yesterday and the day before. The magic of Tumblr is that it sits between Twitter (short form) and WordPress (long form) and fills a gap in the world of blogging that nobody else has managed to capture. There are elements of Facebook and Instagram in it as well. So it's a lot like all of these apps but in the end it is like nothing else. It has a soul and pulse and a vibe that other social apps don't have. At times, it is simply magic. When Tumblr was sold to Yahoo! a lot of people thought that spelled the end of Tumblr. I was not particulalry worried because I knew that David was committed to sticking around and Yahoo! was committed to leaving Tumblr alone. Nine plus months later, I think we can all say that to date the marriage has worked out well for the Tumblr users. The product has never been better and it feels as alive today as it did when I first logged in almost seven years ago. So I agree with Carlos (the analyst who wrote the line I opened this post with). Tumblr is underappreicated. It always has been. But not by me. I love Tumblr." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 30, 2014.

"There are at least three Bitcoin events that I know of in NYC today. I do not think any of them are public events but the fact that there are three in a single day is interesting to me. This morning, NYC's Economic Development Corporation is hosting a Bitcoin breakfast with some of the leading banks and financial services companies in NYC to discuss Bitcoin. My partner Albert will be attending that. Also in lower manhattan, Ben Lawsky , New York State's Superintendant of Financial Services, will be holding hearings about Bitcoin.  I have been asked to testify and will do so, at 11:30 along with Barry Silbert , Jeremy Liew , and maybe a couple others, in a panel of investors. Then at 6pm this evening, in the USV event space, Wells Fargo is hosting a discussion about Bitcoin. My partner Albert will be part of the expert panel. I plan to attend the first part and then duck out to see the Knicks play the Celtics in the battle for the cellar in the east. This is a public event, but it has been sold out for weeks and if you are not already attending, unfortunately you can't. It certainly feels like there is a whirlwind of attention and discussion and debate about Bitcoin in the air in New York City. Last week Marc Andreessen penned a piece in the New York Times titled " Why Bitcoin Matters ." Later in the week, JP Morgan's CEO dismissed Bitcoin on CNBC . And over the weekend, well known NYC Bitcoin entrepreneur Charlie Shrem, shown in this AVC post from this summer , was arrested for knowingly transacting in Bitcoin with drug dealers (or something close to that, the complaint is here ). So there is a lot going on at the intersection of the Bitcoin world and the world of finance and money and regulators right now. I am happy that USV is engaged and involved in these discussions. They are important and necessary." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 28, 2014.

"I have a new favorite blog and I thought I'd share it with all of you. I found it via the Gotham Gal's blog (which in and of itself is kind of embarassing. We sleep together and I found this via her blog). It's called Humans Of New York . I follow it on Tumblr. Every day I get two to five posts. Each post is a picture of a new yorker or two. And something that was said by the subject of the photo. It's like riding the subway, but even better. You get to see all kinds of people and learn a little bit about them. Sometimes it is sad . Sometimes it is funny . Sometimes it is upsetting . Sometimes it makes you smile . But rarely does Humans Of New York fail to make me feel something. And that is great art at work. And that is Tumblr at work. Tumblr is great art and so is Humans Of New York. I love both of them." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 27, 2014.

"My partner Brad, who is the conscience of USV, said something in one of our recent monday team meetings that has been rattling in my brain ever since. It was a throwaway line for him. He probably doesn't even remember it. But I do. We were talking about some investment opportunity and one of us turned to him and asked him what he thought. He said, "I generally can't get excited about anything that is this for that." What he meant by "this for that" is Airbnb for boats, or Snapchat for business, or Dropbox for videos. What Brad is talking about is derivative works. There is nothing wrong with them, of course. But he was saying that it was hard for him to get excited about them. We've made a few of these investments and some of them have worked out pretty well. Edmodo is Facebook for classrooms. SoundCloud is YouTube for audio. If you are going to do a this for that investment, the first thing you need to make sure is the iconic company (this) is not going to go after this other market (that) themselves. Then you need to make sure the other market (that) is very large. And finally, you need to make sure that the founders are doing the startup for the right reasons. Nic and Jeff, the founders of Edmodo, were tech administrators in local school systems. They were frustrated with the tools teachers were using to distribute information to their students. So they built a new way to do it, influenced by Facebook for sure, but different in some important ways. Alex and Eric, the founders of SoundCloud, were musicians and sound engineers. They were frustrated by the tools that were available to them and their friends to put the sounds they were making out onto the Internet. They may have been influenced by YouTube (I honestly don't know that they were), but their drive to make SoundCloud was most certainly to scratch an itch, just like Nic and Jeff. The worst kind of "this for that" startup is one where you can tell that the founders have no intrinsic desire to build a solution for a recognized problem, but instead they are opportunists being influenced by the latest hot startup. We certainly try to avoid those sorts of things and comments like Brad's certainly helps us do that." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 26, 2014.

"In the google maps android app, if you search for a place, you can click the share icon and send that location to anyone via a wide assortment of apps. I did that last night and emailed this to myself. Buvette http://goo.gl/maps/7dzMz I absolutely love this feature and use it all the time. I email places to people, I kik places to people, I text places to people, I tweet places to people. But for the life of me, I cannot figure out how to do this on the web. When I locate a place on Google Maps on the web and select Share, the only option I get is to share the place via Google+ which is the one way I would not want to share it. Does anyone know how to locate a place on Google Maps on the web, pin it, and then share it out via a shortlink in email or otherwise? I am sorry for turning back to back feature fridays into Google Apps help requests, but I love these features and then they go and change them on me and I can't figure out how to get them back.  " Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 24, 2014.

"One morning earlier this week, I cam down early and was working in our family room/kitchen area. My oldest daughter was charging her iPhone in the kitchen and it was randomly playing music. I would get up, turn off the music, and then a few minutes later, it would start again. Eventually I turned off the phone. A bit later, when my daugher came down, she was in shock, her phone had randomly called dozens of her contacts on its own over the night. So I took a look at her phone and it seemed that voice control had taken over her phone. I googled around to see what could be done and came up with this support forum thread . It explained that we could turn off voice dialing which we did, so that she would stop randomly dialing her contacts. But we were not able to turn off voice control entirely. She's in Park City this week so when she gets back to NYC, she will take the phone into the genius bar and get it fixed. But until then, Siri is controlling her phone. Randomly playing music when she doesn't want it. Randonly facetiming people she doesn't want to talk to. It's a glimpse of the future to when AI goes haywire on us. It is not pleasant." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 23, 2014.

"I told a Rob Kalin story yesterday and I am going to start this post with another one. When Rob left Etsy for the second time, it fell to me to tell everyone what was happening at the company's all hands meeting. I asked Rob what he wanted me to tell the several hundred employees who would assemble to hear the news. Often there is a story concocted about the founder or CEO wanting to step back, take more time with their family, needing a break, etc. And so I wanted Rob to tell me how he wanted this story told. Rob said "Tell them you fired me. They will know anyway. You might as well tell them the truth." So that's what I did, with empathy, respect, and appreciation for Rob and his work. It went well. The team was happy that I was being straight with them. I then handed the stage to Chad who took it from there and has been doing a great job ever since. I don't tell that story to bring up old unhappy times. Although it may for some. I tell it because Rob had the courage to allow me to tell it like it is.  And yesterday Chris Poole told it like it is. With a blog post that is simple, honest, and sad . He made the decision that our portfolio company Canvas has failed. Running out of money is always the thing that brings this moment of reality. But so often an acquihire is arranged, or the company is put on mothballs, or you just stop hearing about the company. The story of failure is buried.  I prefer the way Chris did it. We tried, it didn't work, we failed. The truth is, as Chris explained in his post, that the first product Canvas was a failure. The pivot to DrawQuest came too late, took too long, and now DrawQuest is a succeeding product inside a failing company. I know that Chris is going to try to find a way to keep DrawQuest going. It's got 400,000 people who use it every month and 25,000 people who use it every day. But it has not monetized particularly well and the Company hasn't found a good way to inject virality into the product so it can spread without expensive marketing dollars. If you know of a good home or a good steward for DrawQuest, email me. There is a contact link in the footer of this blog that will send me an email. Chris says he is going to blog about the things he learned from this experience. Chris hates writing . But I think he will do this, as therapy for him, and as a post mortem for him and everyone else. So pay attention to his blog , subscribe to his RSS, or follow it on Tumblr .  Like his post yesterday, I expect Chris will continue to tell it like it is." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 22, 2014.

"My friend Gary said this to me the other day in an email. He wasn't talking about me but he could have beeen. Last night I went to bed thinking about my work, dreamt about my work, and woke up thinking about my work. It's been that way for me since I started Flatiron in the mid 90s. To some extent it's been that way for me since college. Fortunately I have the Gotham Gal and three awesome kids to keep me from going fully into the fire . I spent the past four days skiing wtih my family and some new friends and enjoyed it immensely. If anything I am letting my work sit idle in my brain more these days than I have in a long time. What Gary was talking about when he wrote those words to me was failure. And when you are your work, your failure at work is personal. Deeply personal. When Flatiron melted down after four great years and one awful one, it was painful. I went to see a therapist for the first time in my life. It was the best thing I could have done. I had been to see coaches but I had not taken the deeper dive into what was driving me. A few years later I was energized and Brad and I started USV. Failure can sow the seeds of success. It did for me. It did for Mark Pincus when he turned the failure of Tribe into the success of Zynga. It has done the same for countless others. But to get through failure, you need to be able to separate who you are and what your work is.  One of my favorite lines from an entrepreneur came from Rob Kalin. I am sure I've shared it here a few times. He said "I am an artist. Making websites is my medium right now" That's a helpful way for entrepreneurs to think about their work. They are the painter. Some paintings will hang in the MOMA and others will sit gathering dust in a storage room. Not every thing you create will be brilliant. But you can be brilliant while still making work that isn't, particularly if you understand why the work that wasn't great wasn't great. Jerry ended his amazing post with the observation that "I have to understand this viscerally if I’m going to be of service to my clients". When your work is servicing entrepreneurs, it is actually pretty easy to "understand this viscerally". Their failure is your failure. Their success is your success. Their work is your work. But it is not you." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 21, 2014.

"One of the big european tech conferences starts today. It's called DLD and my partner Albert is giving a talk there tomorrow. The last big european tech conference was LeWeb and I gave a talk there . You might wonder why we fly across the pond to attend and talk at these events. The answer, as  Sten Tamkivi explains in TechCrunch , is that europe is a great place to invest in startups. Sten lists five reasons that european startups are exciting: 1) Talent 2) New Models 3) 400 million customers 4) Global skills 5) Security and privacy I agree with all of those but to me the biggest thing is european entrepreneurs have fully made the change from locally focused to globally focused and are mostly now building businesses that can and do serve a global user base from day one. At USV, we have made nine investments in europe since 2008 when we started investing there. That is roughly 20% of our total investment activity in those six years. Contrast that with the bay area, where we have made thirteen investments during the same period. It is way easier to invest in europe from New York City than the Bay Area and that is something we have taken advantage of. And I am not sure that Silicon Valley can or will pay a huge amount of attention to Europe. But that is an opportunity for us. And we are taking advantage of it." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 19, 2014.

"Entrepreneur: I plan to launch a better streaming music service. It leverages the data on what you and your friends currently listen to, combines that with the schedule of new music launches and acts that are touring in your city in the coming months and creates playlists of music that you should be listening to in order to find new acts to listen to and go see live. VC: Well since Spotify, Beats, and Apple have paid all the telcos so that their services are free on the mobile networks, we are concerned that new music services like yours will have a hard time getting new users to use them because the data plan is so expensive. We like you and the idea very much, but we are going to have to pass.   Entrepreneur: I plan to launch a service that curates the funniest videos from all across the internet and packages them up in a 30 minute daily video show that people will watch on their phones as they are commuting to work on the subway. It's called SubHumor. VC: Well since YouTube, Hulu, and Netflix have paid all the telcos so that their services are free via a sponsored data plan, I am worried that it will hard to get users to watch any videos on their phones that aren't being served by YouTube, Hulu, or Netflix. We like you and your idea very much, but we are going to have to pass.   Entrepreneur: I plan to launch a photo sharing service where the faster your friends like the photos, the faster they disappear. It's gamified social snapchat. VC: Well since Facebook, Instagram, Twitter, and Snapchat have paid the telcos so the photos that are served up in their apps don't use up any of the data plan, I worry that users won't want to use any other photo sharing services since they will have to pay high data costs to use them. We love your idea and would have funded it right here in the meeting back in the good old days of the open internet, but we can't do that anymore. We are passing.   This is Internet 3.0. With yesterday's court ruling saying that the FCC can not implement the net neutrality rules they adopted a while back, this nightmare is a likely reality. Telcos will pick their preferred partners, subsidize the data costs for those apps, and make it much harder for new entrants to compete with the incumbents." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 15, 2014.

"The fourth annual Womens Entrepreneur Festival starts this evening and continues all day tomorrow. The Gotham Gal and her friend Nancy Hechinger , who is on the faculty at NYU's ITP program , are the founders and festival chairs. The goal of the WE Festival is "to sow the seeds for a community of women entrepreneurs, to expose women who have not yet taken the entrepreneurial leap to women who have." This year's theme is "be bold" and we all know that being bold is a requirement for entrepreneurship (and life I would argue). This year's event, like the three before it, is sold out and has been for months. But, if you could not get in, can't make it to NYC, or are just learning about it, you can watch the whole thing live or later on the livestream . The conference opens with a keynote this evening at 6pm eastern by Anne-Marie Slaughter who wrote one of the most talked about pieces on woman and work titled " Why Women Still Can't Have It All ". You can watch it live or later here . Though USV is allergic to sponsoring things, we make an exception for things that can move the needle where the needle needs to be moved and growing the community of women entrepreneurs is certainly in that camp. So USV is proud to be a sponsor of WE4 and the livestream. I will be at Anne-Marie's keynote and I will be at the WE Festival all day tomorrow. If you are going, I will see you there." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 14, 2014.

"Lightspeed India has a post with ten predictions for Bitcoin in 2014 . It's a good read and I agree with many of them. But prediction number 7 is the one I am most interested in right now: 7. The use of Bitcoin will evolve beyond ‘store of value’ or ‘transactions’ The underlying Bitcoin protocol makes itself applicable beyond the use cases of ‘store of value’ and ‘payments’. The Bitcoin foundation took a huge step in allowing meta data to be included in the blockchain. This will unlock a lot of innovation and maybe even prompt regulators to acknowledge the potential of Bitcoin, making it all the more difficult for them to shut it down or suppress it. As one can see from the current Bitcoin ecosystem map ( http://bit.ly/1krEd0Z ) that there are almost no start-ups, which solely use the protocol without using the ‘coin’ or the ‘currency’ as a function. 2014 will be the first year to see some of these. I think there have been three phases to Bitcoin so far 1) Bitcoin emerges, community develops, mining, wallets 2) Bitcoin vice, silk road, etc 3) Speculation, trading, collecting, price spike I think the next two phases will be/need to be 4) Commerce - real people buying real stuff with Bitcoin 5) Bitcoin as infrastructure - this is what prediction number 7 is all about. When will we see entrepreneurs coming to USV to talk about the marketplace for XYZ that they build on top of the Bitcoin architecture? Soon I hope. I would like it to happen today actually." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 13, 2014.

"For those of you who have made a habit of visiting usv.com regularly to see what the usv community is reading and discussing, we now have a way of getting that via email. Here is how 1) go to usv.com 2) on the upper right, click "Log in with Twitter". If you don't see that option you are already logged in and can go on to the next step. 3) once you are logged in, click "Settings" in more or less the same place on the page 4) under Settings, make sure we have your correct email addres, then look for Daily Email and check that box 5) hit Update You will now get a daily email with the top stories/links on usv.com. On that settings page, you can also make sure we have you properly auth'd with Disqus and if you are a USV portfolio company employee, you can auth with your Yammer and get USV portfolio only features on the Network page on our site. You will also notice tabs on that page to see all the links you have shared, the bumps you have handed out, and the places you have been mentioned by others on the site." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 10, 2014.

"In a double sided marketplace, of which we have many in our portfolio, it is always tricky to figure out who your customer is. Many marketplaces punt on this question and answer with "both". I think it's hard to run a business with two different customers. It can be done but it is hard. Yesterday, Kickstarter published some year end stats in a beautiful presentation. I would encourage all of you to take a quick spin through them. It will take you between 10 seconds and a few minutes depending if you watch the videos. Even though Kickstarter served over 3mm project backers last year, they have never been confused who their customer is. Their mission is is "to help bring creative projects to life" (from their about page ). So Kickstarter focuses on the creative project and the project creator. And by doing that, they end up serving millions of people a year who come to Kickstarter to back a project, or two (between 25% and 30% backed more than one project in 2013), or a hundred (almost 1000 people did that in 2013). So if you can figure out who your customer is and if you focus on them and their needs and serve them well, you can build a large two sided marketplace that can grow and sustain itself. Kickstarter is a great example of how to do that." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 09, 2014.

"I remember a time when I was growing up when many of the savings banks and insurance companies were mutual companies. A mutual company is one where the customers own the company, more or less. It seems like the concept lost favor and many of these banks and insurance mutual companies were " demutualized " in the 80s and 90s. I don't really profess to understand all the reasons and history behind mutualization and demutualization. I suspect some of you may know a lot more than me about this stuff. I started thinking about mutual companies after reading Joe Nocera's column in the New York Times which was based on his read of Jaron Lanier’s “ Who Owns the Future? ” Joe asks in the title "Will Digital Networks Ruin Us?" and here is the money quote: the value of these new companies comes from us. “Instagram isn’t worth a billion dollars just because those 13 employees are extraordinary,” he writes. “Instead, its value comes from the millions of users who contribute to the network without being paid for it.” He adds, “Networks need a great number of people to participate in them to generate significant value. But when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth.” Thus, in Lanier’s view, is income inequality also partly a consequence of the digital economy. At USV we invest in digital networks, so this is a fundamental question that we think about a lot. We would not want to be investing in something that "will ruin us" and we don't think we are investing in something ruinous. But we do talk about this issue all the time. I will come back to the mutual company thing in a bit, but first I want to say that Joe and Jaron are leaving out the notion of consumer surplus in their analysis. The newspaper costs money. Twitter is free. In a world where "we" create the newspaper instead of the NY Times, the newspaper can and will be free. That is happening all over the place, because of the efficiency of digital networks, and the result is a large amout of consumer surplus that is landing in all of our laps. But maybe that is not enough. Maybe the creators of these networks ought to mutualize so that their users, who are creating the value, can participate in the upside. We have not seen anyone do this to date. We have talked to a number of startups and networks about the idea. We have not seen any takers yet. But we will continue to have the conversation because this is worth trying and seeing how it would turn out. The result could be a much more sustainable and lasting network. Something for everyone to think about this morning." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 08, 2014.

"I just finished filling out a sixteen page questionnaire for an investment the Gotham Gal and I are making. I fill out this identical form about once or twice a month for various investments we make. Each time I get the form, I find a version I filled out previously in my archived email and copy the answers line by line. It's complicated and I want to make sure I answer the questions correctly. This form is created by lawyers to make sure that we are qualified and/or accredited investors. They also use this form to verify our tax and regulatory and compliance status. If you make an investment in a venture fund, a hedge fund, a private equity fund or a private placement, you will probably fill out a similar or indentical form. Here's the thing. I am literally answering the exact same questions again and again. I take great pains to make sure I answer them the same way each time. And it is a chore. I hate doing it. Though the size of the accredited/qualified investor market may be small, I really don't understand why there isn't a web service where I can go, fill this form out once, and then certify that the answers are correct, and then simply auth with this service each time we make an additional investment. If such a service exists, please point me to it and I will recommend it to the lawyers who handle these sorts of transactions.  USV requires our investors to fill out these same forms. When we close our next fund, we are going to hack together a web based system in partnership with our portfolio company CircleUp . But this isn't really CircleUp's business and they are doing this as a favor to us and our investors. What we really need is a third party to offer this service to all accredited and qualified investors and we need the market to adopt it. It would make me and many others very happy to stop filling out these forms." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 07, 2014.

"I took the past two weeks off. I turned on my out of office notification, checked email less, stayed on top of things but reacted to less, did zero meetings, did fewer calls, and didn't go to the office at all. I slept eight hours most nights and a bit longer on a few. It was great. I'm relaxed and rested. To celebrate the new year, going back to work, and to put an exclamation point on the rested and relaxed thing, I am going to archive all email in my inbox. If you sent me something and did not get a reply, please send it again if it is still important. My oldest daughter asked me yesterday if I was excited to go back to work, expecting a resounding yes. I told her I was going to miss vacation. I've read a few books and I have a bunch more I want to read that I probably won't get to until my next time off. I've been enjoying rolling over and going back to sleep at 5am/6am even 7am. I've been very happy working in my home office with a nice view , the music cranked, and no time pressure. So I've got mixed feelings about going back to the grind. A lot less than my son who starts school again today, but a few nonetheless. Like all things, the VC business has its good and bad. The good is working with incredible partners and entrepreneurs and getting to see the future imagined every day. The bad is the firehose of hopes and dreams that comes at you relentlessly every day which results in a crazy schedule, time pressures all around, and never enough time to think and breathe. Maybe I will figure out how to manage it better this year. Maybe that can be my new year's resolution. But I've been trying and failing for over twenty five years. Hopes and dreams are a hard thing to resist. And that's a good thing." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 06, 2014.

"During my year end vacation, I read a few books and saw some films. The two I want to talk about today are Dave Eggers'  The Circle and Spike Jonze's Her . I am a fan of both artists and have consumed most of their prior work. Though they are very different works, both take us on a trip to the near future and show us what our lives may be like. And, though I am more than a little bit involved in the industry that is taking us to that place, I came away from both disturbed and a tad bit agitated. Banksy says that "art should comfort the disturbed and disturb the comfortable" And in that context both the Circle and Her are great art. If you are disturbed by the ever increasing role of technology in our lives, both works will comfort you. For me, they shook me out of my comfort zone and made me wonder whether all the things I believe in and advocate for are going to work out so well. In The Circle, a young woman named Mae goes to work for the top tech company in silicon valley which is called The Circle. Eggers creates a company that to my mind is mostly Google with a fair bit of Facebook thrown in. Anyone who has spent any time in Silicon Valley will instantly recognize this company and all the great things about it. But the way Eggers tells the story, the dark side of The Circle is revealed slowly and surely. I don't want to ruin the story for anyone who is reading it or will read it but I will say that the idea of radical transparency, something that I have advocated for many times on this blog, is taken to an extreme that even I would not be comfortable with. I kind of hated The Circle. Many times I wanted to put it down. My wife and daughter urged me to finish it. Though I really like Eggers and his writing, I absolutely hated Mae and her story. It made a mockery of an industry that I love. And it made me uncomfortable loving it. Her is about a man named Theodore who is depressed coming out of a recent divorce. He mopes around all day. He installs a new OS that is "personalized" and all of sudden he is in a relationship with Samantha who is a lot like Siri, his very own personalized operating system. Again, I am not going to describe much more than that in case you want to see it. The thing that made me literally squirm in my seat was the idea that a real person could have such an intimate relationship with a machine. I was completely uncomfortable the entire two hours. However, I loved Her. It did not mock, but it sure did question. And all I wanted to do coming out of the movie was think about it and talk about it. I know a lot of people in tech who are excited about the coming of the Singularity. I am not one of them. While I love machines and artificial intelligence/machine learning and all that it can do for us, I love humans and humanity a lot more. These two works of art are, to my mind, about that human vs machines question and are an attempt to ask society if its happy with the place we are going to and getting there fast. If you work in tech, you should watch Her and read The Circle. Those of us who are building this future ought to subject ourself to this kind of art most of all." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 05, 2014.

"Brad Feld told the story of his first VC investment (after making 40 angel investments) on his blog yesterday. The Gotham Gal told the story of her first angel investment on her blog today. I was involved in both stories and both investments worked out well. Yoyodyne sold to Yahoo! and Curbed sold to Vox Media, both for similar amounts interestingly enough. My first venture investment didn't work out so well. It was in a company called Software Developers Company (SDC) which if my memory is working may have been a thinly traded public company. SDC was in the business of distributing programming tools for PC software and wanted to move up market into owning software development tools. They had negotiated a deal to purchase an editor called BRIEF and a version control package whose name escapes me (might have been VCS?) for something like $2.5mm. But they didn't have the cash. So I negotiated a deal to invest the funds into the company for a revenue share on the sale of both products plus a warrant to buy stock in SDC. SDC ran into financial difficulties and although the sales of BRIEF and the version control software product were doing fine, they could not make the royalty payments. So we were faced with a quandry, take back the products, which we could do by contract, or restructure the deal. I recall that we restructured the deal, insisted that new management be brought into run SDC, and I think we eventually got most or all of our money back. That deal taught me a few big lessons. The first is to avoid complicated deals. It seemed like such a smart deal structure but it really wasn't. The second is to avoid fast talking salesy entrepreneurs who don't know how to operate a business. That more or less described the entrepreneur who was running SDC when we did the initial deal. I worked the SDC deal as a team with Milton Pappas, who was one of two founders of the VC firm (Euclid Partners) where I started my career. Milton did a lot of the heavy lifting on the management change and I learned a lot from him on that deal and many others. There really is no substitute for learning the VC business from older more experienced partners and I am blessed to have been able to do that for a decade at the start of my career." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 03, 2014.

"The greatest thing about blogging is that it has opened up so many new voices and new outlets.  Just in the past few weeks, we have two new outlets, both from WSJ veterans. The All Things D team has flown the coop and has resurfaced as Recode . The formula seems to be pretty similar to All Things D, the team is intact (at least it looks so to my untrained eye) and the format is familiar. They will do a big conference to anchor the whole thing. At least right now, it seems that the only things that have really changed here are the URL, the color scheme, and the ownership structure. But a new home and a new ownership structure may open up possibilities that they could not pursue in the past. We will see about that. Jessica Lessin, one of the top tech journalists at the WSJ over the past ten years, launched The Information in December. I am not a fan of paywalls and barriers to the free flow of content and information and so I am not a subscriber or a reader and I don't plan to link to anything behind a paywall. But this is an ambitious experiment and an attempt to make a challenging business model work in the tech news sector. As I told Jessica in a private email last month, I am happy to be proven wrong about the paywall business model and there is nobody I would rather see prove me wrong than her. But maybe more exciting to me is the proliferation of new voices that I am seeing out there. One of the driving factors is the emergence of Medium as a blogging platform that is home to many of these new voices. Every day I seem to find a new blogger on usv.com who has written something interesting on Medium.  But it isn't just Medium that is hosting great content. You can still find great stuff on old platforms, like the one that Ev built before Twitter and Medium - Blogger. This post from Duncan Anderson on the important trends in mobile is on Blogger. As far as I can tell, there has never been more diversity and quality of content than there is right now. And the reason for that is the printing press of our times, the cms in the cloud, is just getting better and better, easier and easier, and cheaper and cheaper. I will continue to do my part in feeding the blogosphere and I hope and expect that usv.com will continue to be a good filter for those who are interested in the intersection of technology, startups, policy, and capital markets. With all of these new voices and new outlets emerging, we need filters and discovery more than ever." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 02, 2014.

"My friend John asked me yesterday what my New Year's resolutions were. I thought about it for a bit and then told him that I have none this year. Of course like most everyone I want to eat healthier and exercise more (which for me means mostly yoga and cycling). I want to be a better husband, father, business partner. But these are ongoing efforts that I have been working on for years. I also have some very specific things like finding a new doctor and shopping for some new pants, shirts, and jackets (some of which the Gotcham Gal has already started doing for me). But unlike years in the past, I can't find a thing or two that I really want to work on or change right now. So I am unresolved this new years day and totally fine with that." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on January 01, 2014.

"The Gotham Gal ends 2013 looking into the future and thinking about how her porfolio companies will grow next year. I am similarly minded as we wrap 2013. I am excited about 2014, and in particular the big opportunities that await many of our portfolio companies.  I/we have a view about what is coming and I tried to lay that out at LeWeb earlier this month . We continue to look for investments in companies that fit into that view of the world. But for me, it is the development of the companies we have already invested in that is always the most interesting work. And there are a bunch of them that are poised to have very big years in 2014 so that is what I woke up thinking about today and what I am most excited about professionally. I am also very happy to have finally wound down Flatiron Partners, our previous venture capital firm, in 2013. My partners and I continue to hold interests in a few of our remaining portfolio companies but the business of Flatiron Partners has been wound down, 17 years after we started it, and that is a great relief to me personally.  Like the Gotham Gal, I am also thinking about our impending empty nest status. This is something the two of us have been thinking about and to some extent planning for since 2007. Raising our family has been front and center for us for almost 25 years now and that phase is coming to an end in 2014. This means we can travel more, work more and less at the same time, and be more opportunistic about our lifestyle. I am looking forward to that. We are spending New Years in Mexico then flying back to NYC tomorrow to start 2014. I am refreshed, relaxed, and ready for 2014." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 31, 2013.

"Though I have made a few angel investments here and there over the years, it has never been my primary approach to investing in startups. I joined a venture capital firm when I was 25 years old and have been working at a venture capital firm ever since. I grew up in the business of investing other people's money and that is how I have gone about investing in startups ever since. Over the past five years, I have watched The Gotham Gal build a portfolio of angel investments . She has invested in almost fifty companies in the past five years and if you include things like restaurants and retail establishments, that number grows to closer to sixty five. She is investing our capital but these are her investments.  As I watch her select her investments and then work with them, I am impressed with the purity of intent that comes with being an angel investor. She invests in people she has confidence in and she invests in businesses that make sense to her. When she engages with her investments, she is giving her advice. Compare and contrast that with a venture capital firm. A venture capital firm is in business to make money for its investors. They must invest in things that they believe will make money and they must be able to rationalize and explain their investments and their investment strategy. A venture capital firm has multiple partners and its investment decisions are based on the consensus of those partners. The advice an entrepreneur gets post investment reflects the inputs of all of the partners of the firm, not just the partner manageing the investment. There are some great strengths that come from the venture capital firm approach. At USV we have benefited greatly from our work to develop an investment thesis and then evolve it over time and be rigorous in our application of it. We also benefit from the collective insights and intelligence of our partnership and broader investment team. But the more people you put around a table, the harder it is to make really gutsy investments. And the more you stick to your disciplined investment strategy, the more you say no to people and projects you like personally. When people ask me about the startup investments I am most impressed with, the Mike Markkula investment in Apple and the Andy Bechtolsheim investment in Google are the ones I always talk about. These were people who took out their own checkbook and backed some people with an idea they thought had merit. And they were rewarded handsomely for these investments. They took 100% of the risk and got 100% of the rewards. Yesterday at lunch my daughter Emily asked what I plan to do when I retire in the next ten or fifteen years. I replied that "I plan to do what Mom does". It looks like a lot of fun and I think I might be pretty good at it. " Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 27, 2013.

"I have been unhappy with the way this blog looks for a while. I've fallen into my typical habit of putting too many widgets on it and messing things up. I have also discovered that the layout of the blog is making disqus work more poorly on mobile than it should. Many of you have run into problems commenting on mobile and it's likely that is my fault, not disqus' fault. I also want to do an even better job of optimizing the blog for reading on phones and tablets. That was the goal of the last redesign, which we did in the spring of 2010, but a lot has changed with responsive design since then and we are going to leverage all of that to make AVC even better on mobile. I am also going to port this blog from Typepad to Wordpress. I've been wanting to do that for a long time but I've held off because it's a big effort and I didn't have the stomache for it. But I do now. We will port all of the posts and disqus comments, but I am going to leave the old typepad comments behind. They are full of spam anyway and its too much work to clean that up. I will be working with Nathan Bowers who has helped me with this blog for quite a while now. He and I work well together and I am confident we can get this done in a month or so. So now is the time to let us know what you like and don't like about the look and feel and user experience on AVC. Please share that with us in the comments." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 23, 2013.

"I watched the Steve Jobs movie with Ashton Kutcher last night on the flight to Salt Lake City. It wasn't great to be honest but the board room scences with Jobs, Markkula, and Arthur Rock (and later on John Sculley) were pretty compelling.  Having been through some of that myself over the years, I winced when Arthur Rock came down hard on Jobs and was depicted as a patronizing father figure. Mike Markkula got much better treatment and came across as the good guy who tried to to the right thing by Jobs.  The pivotal scene in which Sculley decides he can't do the CEO job effectively with Steve Jobs in the company and asks for a board vote to choose between the two of them, which goes his way, is painful to watch.  One wonders what would have happened had Jobs stayed in the company, worked with Sculley for a while, and then ascended to the CEO job when he developed to maturity and managerial instincts for the job. The story of Google, with Eric Schmidt in the Sculley role, and Larry Page in the Jobs role, is instructive here. Did Jobs' personality make that impossible? Was Sculley guilty of not trying hard enough to build a functional partnership wtih Jobs? Was the board guilty of not trying harder to make the situation work? I've read the Jobs book as well and it seems that this was a very tense and emotionally packed situation. In situations like that Boards really struggle to get things right. Ultimatums are made and Boards are asked to make a decision.  One thing I know is companies are better off when their founders remain involved in the business, even if they are not the right person to run it. That is not always possible and sometimes a scenario like what happened to Steve Jobs plays out. But it's not the ideal way to resolve these conflicts." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 22, 2013.

"Last saturday night in NYC was a bit of a moment for Uber and their surge pricing mechanic. Most people were seeing 3x-5x in manhattan for most of the night and there were reports of 10x for some people. There was a snowstorm, people were out at holiday parties, and there was more demand for rides than there were cabs. So in some sense the market worked and rides went to those who were willing to pay the most for them. The next day Mo Koyman tweeted about it and one of the larger twitter conversations I have seen developed . . @uber is loved by customers, but charging 4x - 8x in inclement weather is unacceptable. is that one day's margin > customer experience?!? ? Mo Koyfman (@mokoyfman) December 15, 2013 Today my partner Albert wrote a post about it and noted a couple issues with the way surge pricing works and the way the urban transportation market works. He also points out that the best way to get around NYC is the subway, which is how I got home from a holiday party last night around 10:30pm. I love the subway a lot more than I love any other form of transportation in NYC. However, this is an interesting discussion because it points out that as markets/networks (Uber) replace hierarchies/bureaucracies (the TLC), we are running into issues that are going to have to work themselves out over time. As Albert points out in his post, the current yellow cab fare model is even more flawed than Uber's surge pricing model. Ideally we will see more supply emerge and a real marketplace structure emerge in urban ride sharing. Then we may get reasonably priced rides on a wintery and festive night in NYC. And then, of course, there is always the subway." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 20, 2013.

"Jeff Wise has a piece in this week's NY Magazine about teaching kids to code which features my partner Albert's home school and great programs like Code.org and Girls Who Code. It also talks about the work my colleagues and I are doing to bring CS education to all of NYC's public schools. Jeff ends the piece with this observation: Like much tech-world philanthropy, the tech schools are arriving as a fiat from on high, rather than welling up from grassroots demand, and it’s easy to read the education evangelism as motivated, at least in part, by a desire to mainstream techies’ own idiosyncratic way of looking at the world. Pardon me, but that accusation stings. "A fiat from on high?"  "A desire to mainstream our idiosyncracies?" No good deeed goes unpunished. I know that. But this critique seems so out of left field. My idiosyncratic view of the world is a place where we all understand how to control the machines that are increasingly controlling our world. It is a place where kids who are headed to flipping hamburgers for a living get an option to do something a bit more stimulating. It is a place where we all have the tools to make things that make our lives better. Now that I've got that out of my system, I will go do some yoga." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 19, 2013.

"I woke up to this email: Hi Fred, This weekend our team traveled to Florida to compete in the National Grade Chess Championships. We won! Our sixth graders and our seventh graders each won the team championships after three grueling days of seven games each of which could last up to three hours. Thank you for your support! here is a link to a little video the kids made today...sorry to say i am better at chess that video production..if the kids look exhausted it is because we arrived back in NY at 1 am last night. https://www.facebook.com/photo.php?v=10202014393592894&l=6816040591261209313 Thanks! JG To everyone in the AVC community who contributed to the DonorsChoose that made this possible, thank you." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 18, 2013.

"Yesterday we announced a deal that I have been working on for the past three months. Our portfolio company Targetspot has merged with Radionomy, the leading streaming radio company in Europe. The combination creates the largest global audio ad network and brings Radionomy to the US. It also gives the Targestpot network an anchor tenant that will make it easier to do sophisticated targeting campaigns that require both scale and reach. Advertisers can now leverage the capabilities of a digital audio network with reach to over 75M listeners and more than 80 publishers in both the U.S. and Europe. The streaming audio business has gone mainstream in most parts of the world and is operating at a very large scale now. The advertising opportunities in streaming audio are attractive and there is no better place to reach a large and diverse base of listners than the Targetspot network. I always look for mergers where 1+1=more than 2. This is one of those. And I am excited to see what Radionomy and Targetspot can do together." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 17, 2013.

"Dec 17 2013 Targetspot and Radionomy Yesterday we announced a deal that I have been working on for the past three months. Our portfolio company Targetspot has merged with Radionomy, the leading streaming radio company in Europe. The combination creates the largest global audio ad network and brings Radionomy to the US. It also gives the Targestpot network an anchor tenant that will make it easier to do sophisticated targeting campaigns that require both scale and reach. Advertisers can now leverage the capabilities of a digital audio network with reach to over 75M listeners and more than 80 publishers in both the U.S. and Europe. The streaming audio business has gone mainstream in most parts of the world and is operating at a very large scale now. The advertising opportunities in streaming audio are attractive and there is no better place to reach a large and diverse base of listners than the Targetspot network. I always look for mergers where 1+1=more than 2. This is one of those. And I am excited to see what Radionomy and Targetspot can do together. More from my Circle Brad Feld: Shifting My Focus To Scaling Up (feld.com) Rand Fishkin: Mixergy Interview On Startup Marketing, Reaching Early Adopters, Burnout, & More (moz.com) Albert Wenger: Sharing: One Network (To Rule Them All) or Network of Networks? (continuations.com) CODE2040: I can create something to inspire others (code2040.org) Zemanta 67 CommentsDisqus commenter breakdown posted in streaming audio Dec 16 2013 Taking To Dos and Moving Up The Y Axis I chromecasted the kitchen laptop to our family room TV yesterday morning and watched the entire Sarah Lacy interview with Dick Costolo. Yes, I had posted it as the video of the week without watching it in its entirety. But I knew it would be good. And it was. All two plus hours of it. Dick has this management framework that I've heard him talk about before. He and Sarah talked about it in the Pando talk. It goes something like this: If you think about what you are trying to accomplish in a meeting with someone you are managing and you plot the following: one the x axis - whether you clearly communicated the issue to the person on the y axis - whether they walk out of the meeting happy or mad at you Dick's point is you want to optimize for the x axis, clear and crisp communication, and not worry too much about the y axis. In his talk with Sarah, they talked about meetings that "move up the y axis". Dick put it this way. In delivering difficult news to the person, you start trying to make them feel better. The next thing you know "you are taking to dos and moving up the y axis and you are going to spend all afternoon on those to dos you took". Dick's meta point here is your job as a manager is to give people direction not to make them feel good. And if you, in an effort to make them happier, take on a bunch of work that you shouldn't, you will be less effective too. As Sarah put it, "don't move up the y axis". It's good management advice and I thought I would share it with everyone who did not watch the whole video on this MBA Monday." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 16, 2013.

"Last night the Gotham Gal and I went out with a bunch of friends. We met at a restaurant on the upper east side that had recently opened. It was snowing pretty heavily all day yesterday and we were worried about getting a cab on the street. So as we were getting ready to leave, I hailed a cab on my smartphone so that it would pull up in front of our apartment building. The car came more quickly than I thought it would and we scrambled out of the apartment and got in the car and headed uptown. When we arrived at the restaurant, I realized that I had left my wallet in the apartment. Because the cab was paid for on my phone, the driver had been paid and tipped. But I was concerned about paying for dinner. So I told the Gotham Gal that she would have to pay for dinner. And then she told me that she too had walked out without her wallet. Fortunately we were having dinner with friends and I asked one of them to pay for our share of the dinner, which he was happy to do. When the check came, I asked him how much our share was, he told me, and I pulled out my phone, opened my Coinbase app, and sent him a fraction of a Bitcoin to cover our part. I then hailed a cab to get us back home and when we walked out of the restaurant the car was out front waiting for us. We got in, went home, and walked the dog and went to bed. We paid for every part of the evening on my smartphone. Had we been going out solo last night the Bitcoin bit would not likely have been possible. But my gut says that will change pretty quickly. We are not the only people getting used to paying for things on our phone and doing it frequently. The experience we had last night seems likely to be normal and customary in a few years time. And I can say that it is a convenient and pleasant and I am excited to see it coming." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 15, 2013.

"It's been a month since we've done a fun friday around here. Getting much too serious it seems. So let's do one today. It's year end and time for year end lists. Here are some that I saw and liked: The New Yorker's Best Books of 2013, Part 1 The New York Times 10 Best Books of 2013 The New Yorker Best Movies of 2013 Cliff Chenfeld's Music Picks for 2013 Kirk Love's Top 10 Albums and Songs for 2013 works in progress: my songs of the year (i will publish this at some point in the next week) Brian's best of 2013 Ok, that's enough from me. Please share your favorite year end lists in the comments." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 13, 2013.

"I am a capitalist. Contrary to the occasional community members who call me a socialist or a techno communist, I believe wholeheartedly in the power of markets to efficently determine what's best in most cases. But I am not an absolute capitalist. I believe that markets do break down from time to time and we need to recognize when those things happen and do something about it. The labor movement, when it was not corrupt for the most part, is an example of a societal response to a market breakdown. When we stare into the future, we see that our cars will not have drivers. We see that the stuff we buy from Amazon will be delivered by drones. We see that the foundations and structures of our homes will be built by 3D printed concrete. We see a world where many jobs will not exist anymore. Taken out by technology. The very technology that many of us here at AVC are working hard to create and that many of us here at AVC celebrate. My partner Albert has been talking about this on his blog for a long time. If you want to see the totality of Albert's thinking on this topic, read the economics tag on his blog. One of Albert's thoughts is that we may need a basic income guarantee to redistribute the consumer surplus we will be creating when we no longer have to pay for drivers, delivery people, and construction workers in our lives (and many others). He's now doing a research project to look into this idea in greater detail and is looking for a research assistant. But Albert is not the only one thinking about this stuff. Bruce Bartlett, a senior policy advisor to the Reagan and Bush administrations wrote a piece in the NY Times earlier this week advocating for a basic income guarantee. And if you haven't read David Simon's rant on this topic in the Guardian, I would suggest you do. I am not sure about the basic income guarantee. It feels like welfare to me and that system destroyed many productive lives. People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system. That said, we do need to recognize that technology is taking massive costs out of our collective P&Ls and creating a large surplus for many of us. At the same time, the people who made up that cost structure are out of work and struggling to put a roof over their head and feed their families. Shouldn't that surplus, at least part of it, go to assisting those people? So I welcome this debate and I will not be principled on this point. I will not let ideaology and orthodoxy drive my thinking here. And I don't think anyone else should either. Because this is an important discussion to be having. And not just for the US, but for the entire world." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 12, 2013.

"This is CS Ed Week and this year we are celebrating it with an Hour Of Code. The idea is to get every student to spend an hour this week writing code. If you want to do this with your kids (at home or in school), here are some resources to try: The Codecademy Hour of Code iPhone app - download this on an iPhone, iPad, or iPod Touch and learn the basics of coding in an hour. As many of you know, Codecademy is a USV portfolio company and millions of people have used Codecademy to start learning to code. Code.org - Code.org has built tutorials for teachers who want to do an hour of code in their classrooms. Code.org is a non-profit dedicated to bringing CS to schools all around the country and they are leading the Hour Of Code effort nationwide. Other resources - there are a host of resources out there, like Scratch, Scalable Game Design, CodeHS, Globaloria, and Tynker that you can use to teach the hour of code to your students. In other CS Ed news, Obama endorsed CS Ed and the Hour Of Code in this video yesterday. And the city of Chicago announced that they will integrate CS Ed broadly in their schools so that every student gets the opportunity to learn coding skills. And last but not least, in NYC, Chancellor Wolcott announced a $1mm program to train over 100 teachers in the code.org curriculcum. This program is a partnership between CSNYC, Code.org, NYC EDC, and NYC DOE, all of which participated in the funding. If you want to help support this effort, we are raising money for CSNYC so that we can fund more programs like this in NYC. Our crowdrise fundraising page is here. Yesterday was a big day for CS Ed. Everyone should celebrate CS Ed week by doing an hour of code with your kids. This is an important effort that is now getting the attention it deserves. " Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 10, 2013.

"Note: The website this post is about is now down. I am not sure if that means this thing was a hoax or something along those lines. Regardless, I believe the sentiments expressed on the website are correct and that Internet companies, large and small, should ban together to express them. Sometime last night, a letter to the President of the United States and Congress was published on the Internet. It was signed by eight of the largest Internet companies; Apple, AOL, Facebook, Google, LinkedIn, Microsoft, Twitter, and Yahoo! The website where the letter is hosted outlines five principles for government surveiilance: 1) sensible limitations on government's ability to compel service providers to disclose user data 2) checks and balances, including court oversight 3) transparency about government demands 4) letting information flow freely, particularly across national boundries 5) cooperation between governments to create multi-national treaties I wholeheartedly support these five goals. These issues do not only impact large Internet companies. They impact all Internet companies. When you get a National Security Letter, you have no choice but to comply, even if it violates everything you and your company stand for. It is time for governments around the world to rethink how they go about spying on us, particularly with the help of companies, both large and small." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 9, 2013.

"I've been doing some holiday shopping. I like to do all my shopping online. I don't really enjoy being in stores and I like the convenience of having the items delivered to me. This holiday season, I've been trying to shop more on mobile, both phone and tablet. I am doing this partly because I want to see what the experience is like and partly because as I spend more time shopping on mobile, I realize it's easier in some ways. It feels to me that as a reaction to the shrinking real estate that is available in mobile, particularly phones, designers have made the user experiences simpler and more intelligent. Features that were smart on the web, like recommendations, become essential on mobile. My favorite holiday shopping service remains Etsy. I know I am talking my book here as USV has owned a large stake in Etsy since 2006 and I am on the board. But the things you can find and buy on Etsy are one of a kind, special, and ridiculosly affordable. In previous years, I found Etsy on the web preferable to Etsy on tablets and phones. Not this year. I just spent twenty minutes on Etsy's android app and completed most of my holiday shopping. If you try some holiday shopping on their mobile apps, you can download them here. I'm curious if others are feeling this same way. Has the mobile shopping experience become better than the web shopping experience for you too?" Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 8, 2013.

"I have had a personal conference calling bridge number since the mid 90s. I know the number by heart. I give it out all the time via email, text, and kik. It does not require a participant code. When I type my host code, we are all connected. I have not found a better model for voice conference calls in the almost twenty years I have been using this number. But more and more I am doing hangouts instead of calls. And I want the same experience for hangouts. It used to be possible to get a "static URL" for a Google Hangout but this feature was dropped at some point. You can get a permalink for an event but it ends on the date of the event. What I'd like to do is get a permalink for a Google Hangout that is mine and always mine. Then I will shorten it via the USV link shortener and I can pass it out via email, text, kik, etc and Hangouts will become as easy for me as conference calls have been for the past twenty years. I am curious if anyone has figured out a way to make this happen." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 6, 2013.

"The New Yorker gives high praise for this web video series called High Maintenance. The episodes are short (~5min) and there are eleven episodes in all. It is about a pot dealer who rides around NYC and meets all sorts of strange and outrageous people. This bit from the lead actor in the New Yorker piece rings true to me after I watched a bunch of episodes last night: The thing about weed is, we didn’t want to use it as a punch line. Instead, it’s this substance that, like chocolate, causes people to expose their own foibles. People become so human in pursuit of this thing. And the interaction they have with the person bringing it is often tragic, because there are a lot of lonely people out there who order it and then that is their human interaction for the day. But here's the part of the New Yorker article that has me thinking outloud this morning. When I spoke with Sinclair and Blichfeld recently, they were on the West Coast signing a script deal with a major network, newly on the path to converting “High Maintenance” into a full-length cable show. It's a bit upsetting to me that the "major leagues" for filmmakers, writers, and actors who make it on the web is still the cable business. Why can't entrepreneurs build something that will work better for emerging web filmmakers than that? We have investments in Kickstarter and VHX, both of which are changing the game for filmmakers. We are also big fans of Vimeo, where High Maintenance is hosted. But this High Maintenance story tells me that we haven't yet built enough technology, distribution, and monetization systems so that filmmakers can be truly independent and realize their vision and have the financial sucess that should come with great work. So there is more to do here." Content from Fred Wilson's blog, avc.com, used under Creative Commons License. Fred Wilson is a VC and principal of Union Square Ventures. Originally posted on December 5, 2013.