Last year around this time, I had a major medical scare which shook me pretty hard. The details don’t matter, but the takeaway was that afterwards I felt lucky to have not had a more serious problem, despite a bad situation that was totally avoidable. I dodged a bullet. It was a wake-up call.
Last week, I was in the Netherlands, and as always, was enraptured by the water. The water is, of course, a major threat to the Netherlands and has been for centuries, so as a result the Dutch have become known for their water engineering prowess and forethought. Thomas sent me this article on 21st century Dutch water management with regard to climate change, which details the Dutch approach to water management. This line stood out:
“During Gustav, the level was all the way up to here,” Van Ledden says, placing his hand just below the top of the wall. “And Gustav was just a friendly wake-up call. In 50 years, if the sea level goes up 1 or 1½ feet, the level for that storm would be here,” he says, holding his hand well above the top of the flood wall. To make sure that doesn’t happen, the Corps is planning to build a giant storm-surge barrier between Lake Borgne and the Gulf Intracoastal Waterway.
A “friendly wake-up call” is something that’s scary enough to set you straight, but not bad enough to do real damage. It is and incredibly useful thing. Hopefully it should never come to that, but I find that it’s human nature to push things to their natural limits until some sort of wake-up call inspires a correction.
I am flying home from Europe today (by way of Reykjavik) and as a result, have a lot of time to catch up on things. I have spent the bulk of the day writing up a handful of strategy docs relating to some of our portfolio companies and subsequently chatting about them.
In every endeavor, whether it’s a startup, a family, a venture firm, or whatever, perspectives drift over time. Things get busy, and we all get focused on executing. And things can get a little out of alignment. A little out of alignment is no problem, and of course we are always course correcting as we go. A lot out of alignment, or little bits of misalignment, over time, that aren’t addressed, can cause problems.
What often happens is that strategy develops piecemeal, over the course of meetings, emails, texts and chats. And while important ideas get discovered this way, it’s also easy to leave ideas half-baked, or questions half-answered (if they are even fully articulated at all). So when I have time, I find that trying to summarize a complex topic in a single document is a helpful step in regaining alignment and making sure we are seeing the whole picture the same way. That’s what I’ve been doing today.
This gets harder the more multifaceted a project is, the bigger a team or company is, and the more money that’s being invested (especially in long-lead-time items like hardware). For a CEO, communicating the vision and strategy of the company to the team is most of your our job. Our job as investors is a little simpler: we need to help the CEO do the above. Not easy, but not a communication scaling challenge on the scale of what a CEO needs to do.
Part of getting alignment is having the right communication channels open. For me personally, I get a lot of that through chat/sms/signal. For the folks I work most closely with, that’s the most open bloodline of ideas in development. I think this is especially true for me since I’m most often not physically together with who I’m working with most of the time. So, as I think about it, I tend to stay most aligned with the people and projects where I have the best chat relationship. A challenge here, of course, is that everyone works in different ways. But that tends to work the best for me, and I think for the people I have the easiest time working with, for them too.
But whatever the method or mechanism, the key moment is recognizing that you’re out of alignment in the first place. This almost always feels like an “aha” moment — like, oh yeah, you’re right, we do feel out of alignment on that. It’s actually a good feeling, because its a signal to do some work.
I am in the Netherlands this week, catching up the Leap engineering team which is based here in Utrecht, and attending an IoT conference that Helium will be at in Amsterdam.
I have always loved it here, primarily because of the close relationship to the water. The Dutch have for centuries harnessed the water, both for commercial purposes (extensive canal network for shipping) and for defensive purposes (flooding out the attacking Romans).
At present, more than 15% of the country is below sea level, and only about 50% of the country is more than 1 meter above sea level (according to Wikipedia).
Amsterdam and Utrecht, where I have spent the most time, are intensely connected to the water. Canals weave between all the streets, most of which are also lined with houseboats (including the one I am staying in, thanks to Airbnb). Whereas walking around most other cities where what you notice are cars and trucks, here, you notice boats and bikes. It’s just incredibly beautiful.
I was at a dinner last week and got into a conversation about what is it, exactly, that makes the water connection so powerful. I don’t know if everyone feels this way, but when I am near or on the water, I feel different, better. Whether it’s a beach, lake, river, or canal: being on the water just feels freeing and awesome. Something about the flowing openness of it, I guess.
Of course, being close to the water is perilous. Venice, parts of the Midwest, large parts of Southeast Asia, are all flooding. A quarter of Manhattan was underwater after superstorm Sandy. Water is dangerous, and more is coming.
As far as the Dutch are concerned, I sincerely hope that they can figure out to protect the beautiful way of life they have established here, closely connected to the water. It is beautiful and unique, and I feel lucky to be able to experience it while it lasts.
1) In digital systems, ML/AI and data network effects create feedback loops that enable the biggest companies to keep getting better, faster:
and, 2) Regulation favors large incumbents over smaller challengers:
“Regulation is complicated. Dealing with it means dealing with lawyers, hiring compliance people, changing your product roadmap, building new code. Regulation raises barriers to entry. The most regulated industries, finance and health, have seen the deep consolidation and weak flow of new entrants for decades. Regulation favours the large.”
This has created a conundrum. The instinct is to apply thorough and tough regulations to solve for #1. But the chances are, doing so will only reinforce the lead that the big companies have, as per #2.
A good example is the GDPR privacy regime in Europe. As reported in the WSJ (paywall), the advent of GDPR has increased the market power of the big ad players (Google and FB), because they have the best ability to capture user consents and to implement complex compliance procedures:
“GDPR has tended to hand power to the big platforms because they have the ability to collect and process the data,” says Mark Read, CEO of advertising giant WPP PLC. It has “entrenched the interests of the incumbent, and made it harder for smaller ad-tech companies, who ironically tend to be European.”
The solution, we have long argued at USV, is to give simply increase data portability and interoperability. In other words, don’t add burdensome regulation that startups can’t comply with. And don’t break up the tech companies, break up the data. And the simplest way to break up the data is to give users a right to access it in a programmable way. This is what the proposed ACCESS Act would do. I talked about this previously in the Adversarial Interoperability post, where I also showed this diagram:
What this shows, is that throughout the history of computing, what has broken the monopoly power of each era’s dominant firm is the emergence of an “open” technology on top. Open source systems like Linux and open standards like HTTP.
Today, the set of open standards that need to be cultivated are cryptonetworks, cryptocurrencies and blockchains. These are the standards that make it possible to re-architect the data economy, including giving more control to individuals and removing it from companies. By design, crypto protocols replace certain things that companies do with things that any group of computers can do, like this:
So, the ultimate point we have been making is that if you’re worried about the problems with the tech economy, one of the solution paths is through crypto.
That brings us back to regulation, and the current state of play around the regulation of cryptoassets globally. The situation we are in right now is such that within the US, there is a lot of regulatory uncertainty, and as a result, a slowing of the crypto economy. Whereas outside of the US (particularly in Asia), the crypto economy is booming — not just tokens, but exchanges, wallets, and other infrastructure.
Because of all this, I worry that not only do we have the potential to miss one of the most important solution vectors to some of the issues facing the tech industry, but at the same time we (meaning the United States) may also be missing the opportunity to play a leading role in what has the potential to become one of the next major economic and technical platforms.
7 years ago on Martin Luther King Jr’s birthday, I wrote this post about the ideas in his Letter from a Birmingham Jail. Today I went back to the letter and re-read it, and a different section stood out at me, one that is really profound well beyond the context of civil rights:
“Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly affects all indirectly.”
Dr. King was a brilliant communicator, able to distill deep, profound ideas into memorable phrases.
Today on MLK’s birthday, I’m thinking about the overall lack of progress we have made as a society on the very issues he discussed in his letter, namely the structural segregation and dehumanization of black Americans and other marginalized groups. And also about the other issues facing the planet, like the climate crisis, that represent the same sense of mutuality.
I spent time over the past few days with several entrepreneurs who are building crypto or “web 3” applications well outside of the financial space. One of the takeaways for me was of the important role that digital “bearer” assets will play in creating new experiences in web 3.
By bearer assets, I mean that you just show up with them, and they are respected sight unseen by whatever applications are expecting them. Every time I start thinking about this concept, I am reminded of the bearer bonds in the movie Die Hard:
For example: a device that has Helium data credits loaded on it can present itself anywhere on the Helium Network, and it will start working. No user account, no credit card, no contract — just show up holding the token and it will “just work“.
Or, take a subscription that is issued as an NFT on the Ethereum blockchain using the Unlock protocol. I show up with a compatible key and I can see the content. If I give (or sell) the key to you, you can see it.
Or, imagine decrypting content in a Zcash-based application using a Zcash viewing key. Anyone who has a key can see the content, whether it’s a blog post, an email, or a private message.
And of course, this is how it is with Bitcoin. He/she who has the keys (and can sign the transaction) has the assets. No account required.
I think of all of this as a shift from account-based experiences (web2) to digital signature based experiences (web3).
Digital signatures create bearer digital assets. They travel around freely, are transferable, and they are not tied to traditional web2 accounts. Rather than the account (as represented by a login, or a credit card, or a contract) have permissions, digital assets (secured by digital signatures and private keys) have permissions.
I believe that this will enable vastly superior user experiences over time.
Ostensibly, the theme of the day was accessibility in the sense of things that could improve the transit experience for people with disabilities and impairments of various kinds. This is, of course, a critical goal for every piece of public infrastructure, and is particularly important when it comes to transportation.
But what I quickly realized is that nearly every company that presented was not just increasing accessibility in that sense, but rather in a much broader sense — making the system more sensible, legible and usable for everyone.
Specifically, there was a single theme that came through from nearly every team: taking an invisible or analog signal, and making it digital. As simple as that.
I can’t link to the actual companies yet, as they haven’t been announced, but the kinds of signals that were being turned digital included: electrical signals emanating from infrastructure like elevators and escalators to monitor conditions & outages; voice announcements sent over the PA system; and contextual and wayfinding information from signs and other physical objects, such as buses and trains.
In each case, there is a valuable signal — valuable for people with disabilities yes, but really everyone — that is not at all captured digitally. And in each case, a system that manages to capture that signal and provide it in digital form. Once it’s digital, it can be used for anything: apps, alerts & notifications, analytics, compliance, etc. Once it’s digital, it’s accessible.
A major part of USV’s Thesis 3.0 is “Broadening Access” and this can come in many forms. What I realized today is that the simple act of capturing an analog or real-world signal and making it digital is a powerful act of broadening access in and of itself.
I was out with some friends over the summer, one of whom is a college soccer coach, and we were talking about what it is that makes great teams great. I love talking to to coaches and people who have played for great coaches (just ask Ryan about how I always bug him for Coach K stories) — they always seem to have the best social hacks to get people to work well together.
College teams can be particularly difficult to manage because the tenure is short and there’s a lot of player turnover — so the team dynamic is constantly being reset. It is similar in startups, where teams reshape and reform as they grow.
My coach friend described the process as “Form, Storm, Norm, and Perform”. At the time, I took it to be another one of those witty and handy coach-isms, but, alas, it turns out this is an established group performance framework developed by psychology professor Bruce Tuckman back in 1965.
Anyway, I have been thinking about it a lot recently, as I see so many teams going through the various stages. For example, Plaid, which I mentioned last week, was acquired by Visa today for $5.3B — a great product and from what I hear a really positive and effective team culture. Clearly in the “Perform” phase :-)
What I especially like about the framework is that it acknowledges the importance of, or at least the temporal existence of, the “storm” phase. The storm phase can be hard when you’ve never been through it before, because it contains conflict and you’re not sure if it will end. But it does, and in the best situations, working through that is what enables you, and your team, to norm and perform.
Above all, what the framework reminds me of is that teamwork and success are about chemistry. Chemistry is hard to define, but it has a lot to do with trust. Trust in each other, trust in the vision, and trust in process. It is a beautiful thing when it comes together.
Discuss on Twitter is a WordPress plugin that uses Twitter as the commenting system for your blog.
I’ve been developing it over the past few weeks along with Fred Wilson and Kirk Love as part of the launch of AVC 3.0 which went up yesterday. It’s currently live on this blog, as well as AVC and also USV.com.
The idea is pretty simple: whenever you publish a new post, the post is auto-tweeted to your account. Then, you get a “Discuss on Twitter” button on your post, which will prompt a reply to the auto-tweet, as well as a “View Discussions” button which will link to the Twitter thread.
Twitter is a natural place to discuss long-form content on the web, and moving blog commenting to Twitter can both engage people in a natural way and help expand distribution and reach.
I should pause here and note that the core WP/Twitter functionality is provided by the amazing WP to Twitter plugin created by Joe Dolson. Joe’s plugin does all the heavy lifting of authenticating with twitter and teeing up the tweets. It’s really configurable and nice. Thank you Joe.
This is alpha software (Version 0.3 to be precise), so we are still testing and tuning. Totally open to feedback, so please send any ideas on github or in the comments…. er, on Twitter