Generalists. Working smarter. Usually I go to sleep not knowing what feature or bug I'm going to work on the next day. I have a huge list of major and minor projects all vying for attention. So how do I decide what do work on? I agree that a startup should focus on working smarter (as opposed to just harder). I'm the first to admit though that I don't have a particularly scientific or even spelled out process on how to do so, but the following are the principles I generally try to apply. First, I like to tie everything back to distribution, i.e. people using your product. You should be tracking quantifiable long-term metrics, e.g. number of signups, uploads, shares, whatever.
For my search engine startup, my main metric is number of direct searches/time. Despite the above, my process breaks down from time to time around the edges. Program Or Be Programmed. On Thursday night I gave a talk at NYU Poly and in the Q&A a young man asked me for advice for "those who aren't technical". I said he should try to get technical. The next morning I met with a bunch of Sloan Business School students doing a trek through NYC. A young woman asked me the same question. I gave her the same answer. I don't mean that everyone should become a software engineer. Dennis Crowley claims to be a terrible programmer.
Another great reason to "get technical" is so that you can work better with technical people. All of this is a big reason for our most recent investment, in Codecademy. I haven't written code professionally in twenty-five years. Our partner Andy wrote a great post on the USV blog announcing our investment in Codecademy. When human beings acquired language, we learned not just how to listen but how to speak.
Rate-of-learning: the most valuable startup compensation. The frothiness of today’s environment in Silicon Valley makes it easy to get sucked into a warped sense of reality. Valuations are high, capital is cheap, housing prices are skyrocketing, and RSUs are flowing like wine. Talk of another “bubble” is rebuffed, even by those who were scarred by the Dot-com collapse of 2000. Some argue we’ve exited the installation phase of technology—which was still sputtering along at the dawn of the new millennium—and have entered what Carlota Perez calls the ‘deployment phase’ of technology. In this phase, startups move “up the stack”, switching from building core infrastructure (i.e. interstate highways) to applications that go on top of it (i.e.
Teslas). Undoubtedly, changes in technology over the last 15 years have been breathtaking. One risk of living in this Gilded Age of Tech is the temptation to view your own career and compensation through a disproportionately financial lens—much as a growing company would. Compounding interest on learning.
Technology, Time Preference and the Return on Capital (Companies) Technology, Time Preference and the Return on Capital (Companies) Just as a quick recap. I have argued in Computers and the Return on Capital that having cheaper information flows will in the long run drive the risk free rate of return to the time preference. I then examined how technology is likely reducing time preference for individuals through a variety of different mechanisms.
In reply to that post Marc tweeted And yet tech companies keep raising giant rounds of funding and spitting off huge gushers of cash :-). That would suggest tech companies need more capital (increased time preference) and that they are producing large returns on capital. The second part of this is I have already addressed, writing that in the short run (some) tech companies will produce huge returns on capital. As a starting point it is useful to remind ourselves why companies need external capital at all. I do believe that this argument has merit due to network effects. A Dozen Things I’ve Learned From Marc Andreessen. Marc Andreessen is able to explain himself so well that I should have less commentary to add to the quotations in this post than usual. But where is the fun in that? My primary task with this blog post has been assembling the quotations and placing them in an order which flows well, since understanding the earlier topics helps the reader understand ideas which come later in the list.
Each set of quotations is a mash up from sources like the links identified in the notes at the bottom of this post. My transcription of video interviews may not be perfect and the text is sometimes edited to reflect the brevity required in a blog format. 1/ “The key characteristic of venture capital is that returns are a power-law distribution. Why power laws? 2/ “We think you can draw a 2×2 matrix for venture capital. “The entire art of venture capital in our view is the big breakthrough for ideas. 3/ “You want to have as much ‘prepared mind’ as you possibly can. 12/ “Software is eating the world.” What's new in CPUs since the 80s and how does it affect programmers? This is a response to the following question from David Albert: My mental model of CPUs is stuck in the 1980s: basically boxes that do arithmetic, logic, bit twiddling and shifting, and loading and storing things in memory. I’m vaguely aware of various newer developments like vector instructions (SIMD) and the idea that newer CPUs have support for virtualization (though I have no idea what that means in practice).What cool developments have I been missing?
What can today’s CPU do that last year’s CPU couldn’t? How about a CPU from two years ago, five years ago, or ten years ago? Everything below refers to x86 and linux, unless otherwise indicated. The Present Miscellania For one thing, chips have wider registers and can address more memory. Esoterica Memory / Caches Of the remaining topics, the one that’s most likely to have a real effect on day-to-day programming is how memory works. A few cycles vs. 400+ cycles sounds really bad; that’s well over 100x slower. TLBs Say we do something like. WhatsApp's Journey From Being Ignored To a $19 Billion Exit. Unless you've been living in a cave, you've probably heard that WhatsApp was purchased by Facebook for $16 billion in cash plus $3 billion in RSUs.
But what you may not know is that originally, WhatsApp was not solving a problem that people had. In fact, originally, WhatsApp was completely ignored. It's a great lesson for startups: WhatsApp kept at it and iterated from zero traction, to the fastest growing messaging platform of all time (in fact, some might say the fastest growing platform as calculated by monthly active users of all time). Here's what that growth looks like: But the original concept for WhatsApp was more of a status update app. “Jan was showing me his address book,” recalls Fishman.
Even more revealing is this forum post that Jan, the CEO, wrote on the FlyerTalk forum back in May of 2009: But here's the kicker: Nobody responded to his post. "It appears that this requires the other party to also have the app installed, right? " Ha! The best part of this story? Indeed. The Social Conglomerate. When news of the Facebook/WhatsApp deal broke, a lot of people gave me credit for being prescient: after all, I had just written 1,568 words on why messaging was mobile’s killer app.
WhatsApp, though, was all but absent from the article, meriting but a single mention, and in parenthesis at that! Viber does have strong user numbers, claiming 280 million registered users and 100 million monthly active users, and that is certainly a big part of the battle, but the creation of a meaningful platform is a significant next step that Viber (and WhatsApp) has not taken. A platform is about multi-sided markets; LINE and WeChat are so valuable because they not only have the users, but also advertisers, commerce sites, and developers. Thus, while I’m skeptical of Rakuten and Viber, for LINE and WeChat the sky is the limit.
Thus the reason for the exclusion: I believe that business models matter, and while WhatsApp had the users, I’d heard enough about their (admirable!) The Age of Conglomerates. 100 open source Big Data architecture papers for data professionals. | Anil Madan. The Apple Watch. Wednesday, 8 April 2015 Apple Watch is, in many ways, the Bizarro iPhone — in some ways parallel and similar, but in others, the inverse, the opposite. Both were introduced as three things in one. Steve Jobs, introducing the iPhone back in 2007: “The first one is a widescreen iPod with touch controls. The second is a revolutionary mobile phone. And the third is a breakthrough Internet communications device.” Tim Cook, introducing the Apple Watch: “In addition to being a beautiful object, Apple Watch is the most advanced timepiece ever created, it’s a revolutionary new way to connect with others, and it’s a comprehensive health and fitness companion.”
An iPod, a phone, and an “Internet communicator”. A watch, a “new way to connect with each other”, and a health and fitness companion. The iPhone did more than just those things. However, it was not without some trepidation that he embarked on the watch. That, they hope, is Apple Watch. The Watch Apple is targeting people from both groups. Apple Watch: the definitive review. Apple’s done an awful lot of work to position the Watch as a fitness device — in many ways, it’s the only thing it can do that an iPhone can’t do.
With a built-in heart rate monitor, an accelerometer, and the advantage of always being on your wrist, the Watch feels like it should be the ultimate fitness wearable, a tiny supercomputer to put all those Fitbits and Ups to shame. But like so much else with the Watch, while the fitness capabilities are the first steps towards what eventually might become a juggernaut, they’re nowhere near a complete solution. The Watch’s health and fitness features are broken up across two apps: Activity and Workout. The Activity app is beautiful, but extremely basic — it’s what monitors your movement. You can set goals for your calories burned, exercise, and standing, which are displayed as three concentric rings. Red is calories, green is exercise, and blue is standing.
The Watch and phone work together to make it even more accurate. Ken Robinson diz que as escolas acabam com a criatividade. Rose George: Inside the secret shipping industry | Talk Video. Justin Hall-Tipping: Freeing energy from the grid. The Fast Lane, The Slow Lane, and The No Lane. Since its emergence as a commercial platform in the early 90s, the Internet has treated each bit equally as it makes its way over the “last mile” to your home or office. If you put up a web server and write a game that anyone could play, those bits will be treated equally with the bits coming from IBM’s web servers.
There has been no fast lane or slow lane on the last mile of the commercial Internet. We have had a level playing field and that has resulted in an explosion of entrepreneurial innovation that has been very rewarding for entrepreneurs, investors, and society as a whole. But that period of “permissionless innovation” is likely to come to an end soon if we all let it. The FCC has responded to a court ruling by proposing a convoluted set of rules that will allow fast lanes, slow lanes, and what’s even worse, no lanes. The FCC’s proposal will allow the telcos and cable companies that provide the last mile connection to your home or office to prioritize some bits over others. Safe Harbors. A person we are working with on Net Neutrality policy wrote this email to me recently and I answered it as follows: The Email Question: Many people in D.C. understand that start-ups without significant outside funding won’t be able to pay those fees and won’t be competitive.
However, most people think that if a company is able to get venture capital, then it can use the VC funds to pay these fees.Fred’s post suggests that VCs won’t invest if they fear that the start-up will have to compete with established companies that can pay these fees. Can you help me understand what exactly the problem is? In other words, why can’t VCs simply pay for the access fees and thereby make the application competitive with established companies that can pay? My Reply: The answer to this quandry is “safe harbors”. The Bubble Question. Everywhere I go, everywhere I speak, I get asked this question.
Are we in a bubble? I’ve been getting asked that question for at least four years now. It’s hard to sustain a bubble for four years. But we are also not in a normal valuation environment for high growth tech companies and we have not been in one for a while. Here’s how I have been answering the question. I learned in business school that the multiple of earnings one should pay for a business is roughly the inverse of interest rates. Since the financial crisis of 2008, policy makers in the developed world have kept interest rates at or near zero. If you go back and apply the formula [yield = earnings/purchase price] and use zero for yield/interest rate, then one would pay an infinite amount for an earning stream. At some point this will change.
The other thing we have noticed is that this low rate environment has caused asset value/earnings ratios to be non-linear. I have no idea when and if that will happen. The Potential Bubble the Federal Reserve Cares Most About. In the aftermath of the 2008 financial crisis, economists debated whether the Federal Reserve should be involved — at all — in pricking bubbles. The housing bubble, and subsequent financial crisis, had led to a disastrous result: Hundreds of banks had failed and millions of Americans had lost their jobs.
At the time, many still believed the emergence of future bubbles could only be prevented through financial regulation, and not through interest rate hikes. Today, however, as interest rates remain at historically low levels and are expected to stay low at least into next year, there is growing concern among investors, economists and central bankers that a new bubble has emerged, and that increased regulation isn’t enough to stop it. Led by a powerful Fed governor, there’s a growing call for the Federal Reserve to raise interest rates to prevent this bubble from growing. So what bubble are we talking about? It’s not the one you might expect. The stock market is a trickier story. Zendesk opens IPO window with strong Wall St. debut. By Heather Somerville and Jeremy Owens Posted: 05/15/2014 03:47:54 PM PDT0 Comments|Updated: a day ago SAN FRANCISCO -- Silicon Valley breathed a sigh of relief Thursday morning when Zendesk barreled forward with its initial public offering, with shares in the cloud-software company jumping in their debut and bringing calm to recent market turbulence.
What would have been a relatively routine IPO last year or even a few months ago, was highly anticipated and carefully watched by the tech community as a barometer of the tech market, which tanked in April. As Zendesk stock opened above its initial pricing of $9 a share, and soared almost 49 percent higher in morning trading, not only did the company's three founders cheer, but so did the many tech companies waiting on the sidelines for their turn to go public. Zendesk CEO & Founder Mikkel Svane rings the Opening Bell at the New York Stock Exchange on May 15, 2014 in New York City. (Photo by Dario Cantatore/NYSE Euronext) Marc Andreessen sur Twitter : "@pkafka It is possible to overdo a good thing. Which is what I'm worried about now."... Now Marc Andreessen Says Tech Has a Burn Problem, Too.
Venture Capitalist Sounds Alarm on Silicon Valley Risk - WSJ. "Quantified Self" alone can't sustain the Apple Watch - Mobile Dev Memo. Apple Watch Review: Bliss, but Only After a Steep Learning Curve. Apple Watch: Asking Why and Saying No. Swatch Co-Inventor: Apple Will Succeed and an Ice Age Is Coming for Swiss Watches - Bloomberg Business.
Apple Watch: The success or failure of Apple’s next device. The most thoughtful critics of the Apple Watch are watch bloggers - Quartz. Late to watches, Apple set its own a minute early. Ways to think about watches. Apple Watch: Initial Thoughts and Observations. Apple Watch Review: You’ll Want One, but You Don’t Need One. Swatch inventor: Swiss watch industry missed the smartwatch boat. Apple Watch Hands-On: The Wristwatch Just Caught Up To The 21st Century. Restaurant Reservation Service LaFourchette Gobbled Up By TripAdvisor For ~$140M. BenedictEvans : Ecosystem sizes... The Problem with Payments. Google Is Preparing To Pay A Huge Fine For Tax Noncompliance In France. The one negative impact of venture capital on job markets. YouTube Founders to Sell Delicious, a Social Bookmarking Site. Dependent on Digital Whales.
Everyone Starts With Simplicity, No-One Ends There and That’s OK. Android fragmentation and the cloud. App Constellations. 2014 Internet Trends. TVTY Raises $4.5 Million To Sync TV And Online Ads. The Full New York Times Innovation Report. Zendesk IPO - Form S-1. The Consumer Internet Sweet Spot — Consumer Internet Trends. In mobile, everything is still wide open.
The Mobile Downturn. The Difference Between Large Funds and Small Funds. Microsoft's Mobile Muddle. Box has secretly filed for an IPO. Benchmarking Box's S-1: How 7 Key SaaS Metrics Stack Up. Savage capitalism is back – and it will not tame itself | David Graeber | Commentisfree. How Healthy is the Public Technology Market? The Challenges SaaS Businesses Face Communicating their Financial Health. Business Models for 2014. Box S-1. Larry Page: The Untold Story. Notes from the Box S-1 IPO Filing.
Burn Baby Burn: A Look at the Box S-1. Here's Why Box's Aaron Levie Is A Genius. LUMA's Color by Numbers Ad Tech Valuation Framework. The Box S-1, Delayed IPO, and the Genius of Tien Zuo. Trengriffin : QUIZ: If 40 exists in US >... The Road to VR. In Google’s Shadow, Facebook’s Zuckerberg Pursued Oculus Over Several Months, Ending in Weekend Marathon of Dealmaking.
Facebook Buys Oculus VR for $2 Billion. The Inside Story of How Facebook Got Oculus VR. Billion Dollar Dart Throwing. Cdixon : People new to tech don't remember... The Search For The Next Platform. How Google Can Steal Facebook's Candy. Counting The Hits. The Global Unicorns Universe. The Billion Dollar Valuation Club. How we can improve the odds of finding unicorns. The Unicorn Club: where does France stand? Board Observers. Goldman Sachs Equity Research on Tesla. Welcome To The Unicorn Club: Learning From Billion-Dollar Startups. You Shouldn’t Start an Ad Tech Company, But If You Do… Piketty, un marxisme de sous-préfecture. The big economic debate of the 21st C has just been launched – and it’s about power rather than money. This ‘ridiculously far-left’ economist is candy for liberals. Kapital for the Twenty-First Century? David Harvey Reviews Piketty's Capital in the 21st Century.
Contradictions of Capitalism: In Conversation with David Harvey | Novara Media. Thomas Piketty and the search for ‘r’ A world rate of profit revisited with Maito and Piketty. My review of Megan McArdle’s review of Capital In the 21st Century. Piketty's Tax Hikes Won't Help the Middle Class. CB Insights sur Twitter : "Damn! @usv has had a billion dollar exit every year for the last 5 years #Unicorn #VC #GOAT? Piketty – in French it’s worse. Piketty va se révéler une arme anti-marxiste encore plus efficace que Keynes. Reprendre le titre de Marx; vider le contenu de sa substance. Professor Piketty Fights Orthodoxy and Attacks Inequality. Capitalism and its critics: A modern Marx. J. Bradford DeLong is surprised by the poverty of conservative criticism of Capital in the Twenty-First Century.