Sometimes things can get overwhelming. Tasks can seem too big to even begin.
This, of course, is not true. Every journey begins with a single step, etc.
My wife recently pointed me to this great passage by Anne Lamott which puts it yet another way:
“Thirty years ago my older brother, who was ten years old at the time, was trying to get a report on birds written that he’d had three months to write. It was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother’s shoulder, and said, ‘Bird by bird, buddy. Just take it bird by bird.“
Last week I wrote about the inherent tension between data portability and privacy, and suggested that one solution would be an exportable “privacy context” that could travel with ported data. Such an approach, however, would require a notion of identity that is broader than a single account at a single company. Rather, it would require the linking of one or more “proprietary identities” (i.e., accounts at tech companies) with some type of “cryptographic identity” (private key) that really “belongs” to that person and represents them in a more holistic and permanent way.
This is not a new idea. Since at least 2017, both Keybase and Blockstack have enabled social media users to attest to a linkage between social accounts and a cryptographic identity. Here’s what it looks like on Keybase, and here’s what it looks like on Blockstack. Neither Keybase nor Blockstack are currently promoting this routine front & center, as it is admittedly a geeky thing that appealed (back in 2017) to identity explorers, but not to mainstream consumers.
But today, we are starting to see some new signs of life on this pattern, and I think we may be nearing some drivers that have the potential to bring it to mainstream scale. They are:
1/ Fun. It may be that some sort of social game figures out a way to bring crypto identities mainstream. For example, 2100 is a project that popped last fall, which let people issue tokens corresponding to their Twitter accounts. Interesting idea, though it seems to have lost some steam, at least for now. Another project that’s looking to connect crypto assets / identity to social identity is Roll, which lets anyone create “social money” connected to their social identity. You could imagine this taking off with social media influencers with large audiences, who are already super good at finding ways to commercialize their online presence.
Combining fun and money can be powerful. And from that, I think some of the more principled / architectural components will become more obvious and valuable over time.
2/ Privacy & Security. Speaking of Keybase, where they have focused more recently is secure, encrypted messaging, as a consumer use case building off of the core infrastructure. Related, are two separate projects called “Dmail” — dmail.io and dmail.online — the former lets you encrypt emails that you send across unsafe channels (like Gmail or any other email client) and the latter is a full system for sending private emails. One of the things you get with a cryptographic identity is the ability to encrypt and sign messages. It makes sense that this will be at the the center of a driving consumer use case. Privacy is more of a mainstream feature every day, and it can’t just be Apple that provides it.
3/ Compliance. Compliance is where this post began, thinking about coming regulations around data portability, interoperability and privacy, and where I’ll end it. While I don’t expect that we will get direct guidance towards cryptographic identity from regulators, it may be that cryptographic identity becomes clear as part of various compliance solutions.
For example, all payments systems need to comply with so-called Know-Your-Customer (KYC), Anti-Money-Laundering (AML) and sanctions rules, including the so-called Travel Rule which requires that both senders and receivers of funds verify identities. On the surface, cryptographic identities are digital bearer assets and would therefore seem to be at odds with formal identity systems. However, it may be that we come to use cryptographic identity components (e.g., blockchain accounts, digital signatures, or even non-fungible tokens) in creative ways to satisfy some of these requirements, vs. traditional methods employed by companies like Persona, Alloy and others today.
To tie it all together: In this week’s “On the Brink” podcast, Nic Carter and Matt Walsh from Castle Island Ventures talk with Balaji Srinivasan about social media handles as property, which potentially combines both the “fun” and “compliance” angles discussed here. It does feel like your online identity, whether it’s a bitcoin or a twitter handle, is a form of property and should be treated as such.
The main point I tried to make was that cultivating the development of blockchain and cryptonetworks is actually a critical strategy here. Regular readers will know that I don’t shut up about this, and I held to that on the panel. This point is painfully absent in most conversations about market power, competition and antitrust in the tech sector, and I will always try and insert that into the conversation.
To me, blockchains & crypto are the best “offense” when it comes to competition in the tech sector. Historically, breakthroughs in tech competition have included an offense component in addition to a defense component (note that the below only focuses on computing, not on telecom):
The “defense” side has typically included a break up (US vs. AT&T) or some kind of forced openness. Examples of forced openness include the Hush-a-phone and Carterfone decisions which forced openness upon AT&T. Several decades later were the (ongoing) battles over Net Neutrality with the ISPs. The discussion about data portability and interoperability brings the same questions to the applications / data layer.
Data portability & interoperability are important for two reasons: 1/ because they focus on a major source of market power in the tech sector, which is control of data (“break up the data, not the companies”), and 2/ because they represent a category of regulatory interventions that are just as easy for small companies to implement as large ones, unlike heavy approaches like GDPR that are easy for big companies to implement but hard on startups.
That said, when you dig into the issue of data portability, there are some hard problems to solve. I don’t believe they are insurmountable, but I also believe they haven’t been resolved as of yet.
For context, data portability is the idea that a user of a tech service (e.g., Google, Facebook, Twitter, etc) should be able to easily take their data with them and move it to a competing service, if they so choose. This is similar to how you can port your phone number from one carrier to another, or how in the UK you can port your banking data from one institution to another. Both of these examples required legislative intervention, with an eye towards increasing competition. Also, most privacy regimes (e.g., GDPR in Europe and CCPA in California) have some language around data portability.
Where it gets more complicated is when you start considering what data should be portable, and whose data.
For example, within tech companies there are generally three kinds of data: 1/ user-submitted data (e.g., photos, messages that you post), 2/ observed data (e.g., search history or location history), and 3/ inferred data (inferences that the platform makes about you based on #1 and #2 — e.g., Nick likes ice skating). Generally speaking, I believe that most type #1 and type #2 data should be portable, but most type #3 probably should not.
To add to the complication is the question of when “your” data also includes data from other people — for example, messages someone else sent me, photos where I was tagged, contact lists, etc. This was at the heart of the Cambridge Analytica scandal, where individual users exporting their own data to a third-party app actually exposed the data of many more people, unwittingly.
I’d like to focus here on the second category of complications — how to deal with data from other people, and privacy more generally, when thinking about portability. This is a real issue that deserves a real solution.
I don’t have a full answer, but I have a few ideas, which are the following:
First, expectations matter. When you send me an email, you are trusting me (the recipient) to protect that email, and not publish it, or upload it to another app that does sketchy things with it. You don’t really care (or even know) whether I read my email in Gmail or in Apple Mail, and you don’t generally think about those companies’ impact on your privacy expectations. Whereas, when you publish into a social web platform, you are trusting both the end recipient of your content, as well as the platform itself. As an example, if you send me messages on Snapchat, you expect that they will be private to me and will disappear after a certain amount of time. So if I “ported” those messages to some other app, where, say, they were all public and permanent, it would feel like a violation – both by me the recipient and by Snap the platform. Interoperability / portability would change that expectation, since the social platform would no longer have end-to-end control (more like email). User expectations would need to be reset, and new norms established. This would take work, and time.
Second, porting the “privacy context”: Given platform expectations described above, users have a sense of what privacy context they are publishing into. A tweet, a message to a private group, a direct message, a snap message, all have different privacy contexts, managed by the platform. Could this context be “ported” too? I could imagine a “privacy manifest” that ships alongside any ported data, like this:
# privacy.json
{
"content": "e9db5cf8349b1166e96a742e198a0dd1", // hash of content
"author": "c6947e2f6fbffadce924f7edfc1b112d", // hash of author
"viewers": ["07dadd323e2bec8ee7b9bce9c8f7d732"], // hashes of recipients
"TTL": "10" // expiry time for content
}
In this model, we could have a flexible set of privacy rules that could even conceivably include specific users who could and could not see certain data, and for how long. This would likely require the development of some sort of federated or shared identity standards for recognizing users across platforms & networks. Note: this is a bit how selective disclosure works with “viewing keys” in Zcash. TrustLayers also works like this.
Third, liability transfer: Assuming the two above concepts, we would likely want a liability regime where the sending/porting company is released from liability and the receiving company/app assumes liability (all, of course, based on an initial authorization from a user). This seems particularly important, and is related to the idea of expectations and norms. If data is passed from Company A to Company B at the direction of User C, Company A is only going to feel comfortable with the transfer if they know they won’t be held liable for the actions of Company B. And this is only possible if Company B is held accountable for respecting the privacy context as expressed through the privacy manifest. This is somewhat similar to the concept of “data controller” and “data processor” in GDPR, but recognizing that a “handoff” at the direction of the user breaks the liability linkage.
Last week, the Blockstack team formally rolled out their proposal for a new mining mechanism for the Stacks blockchain called Proof of Transfer (PoX). In addition to the blog post, you can read the full PoX white paper and the Stacks Improvement Proposal (SIP-007) that details the idea.
PoX is a way of building new blockchains on top of existing Proof-of-Work blockchains like Bitcoin. The Stacks blockchain has always been built on top of Bitcoin, but has thus far used a proof-of-burn (PoB) mining mechanism, which, while benefitting from Bitcoin’s security, requires burning BTC. Whereas PoX requires a transfer of BTC rather than a burn. This has the added benefit of creating a mining incentive pool denominated in Bitcoin.
At a higher level, one of the coolest aspects of cryptonetwork and blockchain technology is composability — the idea that crypto assets and protocols can be freely interconnected in almost any way imaginable, without barriers or permission. Every (public) blockchain, asset, and smart contract is a de-facto API that can be hooked into, built upon, and extended.
This may seem like a minor feature, but I believe this is a breakthrough characteristic. Today, we are seeing this play out most vividly in the DeFi space, where protocols like Maker, Compound and Uniswap interconnect to build new financial products. What Blockstack is doing with PoX brings this approach further to the Web3 / data space. Ultimately, I believe that this approach will enable a broad explosion of not only tech infrastructure but new experience & features, both for consumers and businesses. Zombies eating Kitties is just the tip of the iceberg.
It feels like consumer development in Web3 is moving slowly, and by the user numbers it is. But composable innovation is compounding, and the work that’s going on right now is creating the tools & patterns for what will certainly be huge, exponential leaps in functionality and experience over time.
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.
I spent the morning today at MTA headquarters, judging the “Accessibility” category of the NYC Transit Tech Lab competition, organized by the Partnership for NYC. Here is the view from the 20th floor of MTA HQ at Bowling Green:
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
A few years ago I wrote about one of my favorite product sayings: “Half, Not Half-Assed“, which comes from my favorite book on product development & teamwork, Getting Real (from the team behind Basecamp). I actually first got hooked into this thinking when I saw one of the Basecamp founders, Jason Fried, talk at a web design conference back in 2004 and it was a pivotal moment in my career (thanks Jason!).
I was reminded of that idea today, as I was working on a side project (an internal tool for USV). In this particular case, we had built a version of this tool a few years ago, but basically abandoned it because we could not build a good workflow around it. Looking back, the diagnosis on why was that it was overbuilt: too complicated, too much. And implemented in a way such that we just didn’t bother to keep up with it. In other words, half-assed, rather than “half”.
In version 2.0, I cut the scope and complexity down by 90%. Every new piece of detail went through the filter of “what’s the trade-off between nice to have and this will be sustainable to maintain.” But further, it was really easy to make design decisions because most of them had been made already before, and the key technical challenges had been worked through.
So it was very easy to build version 2 in a lighter, leaner, meaner way.
I am a big fan of iterating and taking things step by step. And in this particular case, it was that process that led the version 1 to be really interesting, but also a bit meandering, bloated and off target. Because the iterations were also an exploration.
This time, It felt good to do an iteration that started over, but from the place of wisdom of having built it all once before. Iterating from scratch. Very satisfying in its simplicity, and hopefully it will be on-target this time!
Today I’m finally switching off of Capital One because of their broken integration with Plaid. For those who don’t know, Plaid is a service that makes it easy for apps to connect to your bank account. So, if you want to do anything interesting that your bank doesn’t offer (spending analytics, smart transfers, etc) and you want to use a cool app to help you with that, you need Plaid to do it. Capital One has been notoriously bad with its Plaid integration, and people (including me) are frustrated.
I have been a long-time Capital One customer, from back when the online savings product was with ING bank. I originally joined for low fees and better than average interest rates. But I ended up staying because of how easy Capital One makes it to open and manage multiple accounts.
It has been a long journey for me to manage personal finances. For a long time, I had jobs that didn’t pay very well and managed to rack up a substantial amount of debt in my 20s. For the past 10 years I’ve managed that down, and a key tool for doing that has been breaking my financial life up into separate buckets, for various saving and spending goals, and automating as much as possible. This is a trick I learned from the amazing Ramit Sethi and his I Will Teach You to be Rich blog, which I read regularly back in the day.
The way I set it up is roughly this:
Paycheck comes in, gets split 3 ways (this is handled at the Justworks layer): 1/ primary spending account, 2/ overflow spending account, 3/ recurring bills & savings account. Each of these three accounts are at different institutions.
From there, all major bills (mortgage, insurance, car payment, utilities, childcare, etc) are paid from the recurring bills and savings account. And further, that account (until recently at Capital One) splits further into a bunch of smaller savings accounts for dedicated purposes (vacations, home improvements, certain kids activities, general savings, etc — I have about 8 of these I use regularly, and the transfers also happen automatically. I also auto-stash into my Stash account on a weekly basis.
The overflow spending account is for non-recurring large items (for example, some kids activity or a medical bill).
The regular spending is for things like groceries, eating out, random purchases. Essentially, what is left over after big things are handled.
It has been a lot of work to set all of this up in a way that makes sense. But it has been worth it, because now we have a system that keeps everything organized — not just in terms of budget categories and analysis, but in terms of actual accounts which we can spend out of and save towards.
And even so, using additional tools to help (like Personal Capital for overall analysis, or Zeta for couples-based tracking, or Astra for smart transfers) has not worked because of the broken Plaid integration with Capital One. So enough of that; goodbye Capital One.
The broader point is that financial analysis isn’t enough. Moving money is a core part of managing it. I don’t know how typical a setup mine is, but I have accounts at 5 different institutions just for basic spending and saving, not counting credit cards, investment accounts or crypto. I heard recently that the average consumer has accounts at 4+ financial institutions — I don’t believe this is a high-end phenomenon.
When I look out at the landscape of personal financial products, so many of them focus either on analyzing money or managing/moving it, but not both. Doing this in a holistic manner is difficult, especially with accounts across institutions. But it seems to me that it is the key to having an actually organized and manageable financial life.
I am feeling reflective at the beginning of this new year, as often happens to me. Today and yesterday especially so, as the kids are back to school but USV is still on break, so I have a few really free days to catch up, reflect and think.
I’m about to go out on a walk with Frannie, as we did yesterday. There is something so simple and helpful about just getting outside, getting some fresh air (especially in New England in the winter, but it really works anywhere), and moving the body a bit. Just the simple act of going outside is surprisingly powerful.
I am reminded this morning of our dear friend Sam who passed away nearly 13 years ago. Sam was a person who felt the world more than most people, both the beautiful and the painful. I remember from his service a story about the importance to him of the concept of “Write, and Go Outside.” I don’t remember perfectly, but I believe it was a teacher of his who gave him this mantra as a way to help when things felt tough. The idea has really stuck with me.
Write, and Go Outside feels especially important at a time in the world where it is so easy to “consume (read) and stay inside”. Both the “write” and “go outside” parts are about choosing a singular focus and a physical act, unplugged from other distractions. Both tend to make you feel good, for that reason and others.
Yesterday, I mentioned the Volt Planner, which I use every year to make long-, medium- and short-term plans. One of my goals for 2019 was to spend more time outside, in particular with my family. I have done a decent job of that and will step that up this year. One of my goals for 2020 is to focus more on writing, in all of its forms.
With both of those goals in mind, I’m hitting publish here and heading outside for walk.
Fred and Albert just posted their annual posts on predictions and issues to tackle for the coming decade. Both are great, and thinking about all that we will need to do to in the coming decade is both inspiring and intimidating.
Before I can even think about those kinds of things and how to approach them, I need to look on the personal side and check in to make sure that I have as strong a foundation as possible, like putting on your own oxygen mask before helping others:
Everyone has their own challenges and issues to work on, so here I will just note some resources that have been helpful to me, in no particular order:
Getting professional help. I have written before that one of the breakthrough moments for me was when I realized I could seek and get help where I needed it. In my case, it was a great therapist and a great accountant. But the big idea is that it’s ok to get help. You deserve it.
Dry January. For the past few years I have quit alcohol for the month of January and it always feels great. The holidays can be a bit much, and a lot of us consume more than we should anyway. Dry January is, at the very least, a good opportunity to explore the role of alcohol (or lack of it) in your life.
This NYT piece on procrastination is great. I have always struggled with this, and I completely agree with the main idea here which is that procrastination is an emotional issue (avoiding unpleasant feelings, self doubt, etc) not a discipline or self control issue.
James Clear and Atomic Habits. I’ve only skimmed James’ book Atomic Habits, but he’s great on twitter and seems spot-on to me with his analysis of how to create positive habits.
Work Clean by Dan Charnas. In this book, Dan studies how great chefs manage their workspaces and apply those lessons to other forms of work.
The Volt Planner by Kate Matsudaira. For the past 4 years I have used the Volt Planner, which guides you though yearly, monthly and weekly goal setting. I have found it to be supremely helpful in a world where there are a lot of things competing for your attention and it can be hard to focus.
Whatever issue you are tackling, I hope you can find the resources to help.
As I look out at the new year and the coming decade, I want to have all the energy and leverage I can to make good things happen, and that starts at home with building a strong foundation, whatever that means to you. A little better every day.
As I make my way through the various predictions & reflections that accompany the new year, one stands out: the EFF’s 2019 Year In Review, entitled “Dodging Bullets on the Path to a Decentralized Future“. I have long been disappointed that there have seemed to be two separate and parallel conversations going on: the “traditional” digital rights / internet freedom community talking about “re-decentralizing the web” and the blockchain/crypto community working on the same thing. I like the EFF’s recent work because they are connecting the two conversations, and their year in review is a good place to start on that.
A key link in the EFF review is to Cory Doctorow’s work on Adversarial Interoperability, which studies the history of interoperability of technical systems and all of the commercial, legal and policy battles that haven ensued because of it.
In this post in the Adversarial Interoperability series, Cory details the different kinds of interoperability and the dynamics around them. His mantra is “Fix the Internet, not the Tech Companies” and I couldn’t agree more.
I believe, and we have said at USV many times, that driving interoperability is the best and most effective way to limit the power of big tech companies, and that in today’s environment we should focus on “breaking up the data, not the companies.”.
When I talk to regulators, lawmakers and policymakers, I often use this diagram (credit to Placeholder for the underlying graphic):
Which shows that from a historical perspective, these “open” or “interoperability” technologies have been the driver in breaking up each era’s dominant monopoly.
It’s the same today, and Cory’s and EFF’s excellent work on the subject adds a lot of depth to the analysis.
I am always amazed at the people in the class — incredible diversity of backgrounds from around the world. And as we have discussed crypto over the past few years, the conversation has gotten better and better — whereas a few years ago it was a curiosity it is clear that people are paying close attention.
Here is the deck I used for the talk. Like many of my presentations on crypto, it is geared towards newer technical audiences with a deeper policy slant. Makes less sense without the narrative, but I have included speaker notes which you can see in the Google Slides version.
At USV, we talk a lot about our investment thesis. The USV thesis is a set of ideas that has guided our investing over the years. It is a tool we use to help ourselves know what to look for, and to help companies who fit into it to find us.
Despite all of the writing we have done on the thesis over the years, some parts of the it remain understood, but unwritten. One of those is what I like to call “The Butter Thesis”.
“Butter” is the term we use to describe interactions & experiences that are just so smooth. Rich, easy, delicious. Hard to define formally, but you know it when you see it / feel it.
Butter can apply to dev tools, enterprise/b2b products, and consumer products.
Classic examples of Dev Butter are the Stripe API and the Twilio API. Tools that are just so simple and fun to use (and useful!) that you just can’t help build with them. Or, the first time you install Cloudflare and your site just gets fast and the DDOS just stops. OMG Firebase. Takes my breath away. Or before that, Ruby on Rails and jQuery. The category-defining tools of each era of development have succeeded in large part because of their Buttery-ness.
B2B Butter is Airtable and Slack (and really, Google Docs, though that’s less exciting somehow). Or in narrower vertical, Splice. Or, in a hidden horizontal, Carta. Tools that make working together so so much easier — like, hard to imagine what it was like before they existed.
On the consumer side, Butter means end-user experiences that are frictionless and joyful. For example, I recently went to China and was blown away by the QR Code experience — straight butter wherever you go, linking the real world to the online world. Duolingo is Butter for Learning. Nurx is Butter for Health. Coinbase is Butter for Crypto. Amazon Prime is Butter for e-Commerce.
Building for butter means understanding that every step of the experience can be honed, smoothed and improved, to the point that it’s so good you just can’t take it. Butter is deceptively simple. A single ingredient that yet does so much.
Sounds easy, doesn’t it?! Maybe this is obvious and isn’t that deep. But it is hard to pull off, and truly extraordinary when it is accomplished.
