This week was the annual USV CEO Summit, one of my favorite moments of every year (remarkably, this was my 8th summit, and they seem to get better and better). The theme of this year’s summit was “Trust”, which, for those paying close attention, is the anchor of USV’s investment thesis 3.0.
We have been spending a lot of time thinking about the concept of trust, what we mean by it, and how we think it can become an actionable part of a startup strategy. More on that to come.
As part of the summit yesterday, we asked a handful of CEO’s to talk about what trust means in the context of their product and/or company. As you can imagine, there are many different ways to look at it and think about it. Here, I’d like to point out the framework that CircleUp‘s Ryan Caldbeck presented, which is:
(click through to read the entire thread with Ryan’s commentary)
I found this to be surprisingly simple and profoundly useful. I hope it’s useful for you too.
Like most people, I have struggled over the years to comes up with a organizational/productivity system that works for me. Disclaimer: I do not yet have it down perfectly, and am not claiming guru status. But I do have a few things that have worked pretty well, and I have noticed some things that others do that seem to work, so I will share those here.
I have a somewhat elaborate system which I will explain below, but at the end of the day it all boils down to a single strategy: getting things into my calendar. The other main thing I try to solve for is simply not forgetting things. I live in a constant stream of emails and meetings, and it’s easy to forget something important. So a goal here is to help ensure that I don’t forget things and ultimately, that I’m focused on the most important thing most of the time.
I live by the calendar and generally obey it. This is a trick I learned from Fred, who doesn’t use any productivity system except for brute force email and calendaring everything. Getting something into my calendar is the most sure-fire way that it will get done — having a date and time attached to something gives it a lot more weight than a wishy-washy entry on a list of to-dos or “priorities”.
Working backwards from the calendar as ultimate do-place, I have a few tricks for capturing and prioritizing, loosely based on the “Getting Things Done” theory of capture/clarify/organize/etc. As much as possible, I try to get big things out of my Inbox and into a place where I can see and organize. For this I use Trello. I have a board I use every day that looks like this:
From right to left:
The main show here is the “priorities” list, where I try to pluck out the important big things on my plate — this helps me make sure I am not forgetting something. Roughly daily, I review this list, sort it, and make sure things are in my calendar to do.
Another list in my Trello is “meetings”. I use this list to capture high-level takeaways from meetings. I am a big believer in the concept of the “commonplace book” and the value of taking notes and reviewing them over time. For me this step is more about just general processing rather than to-dos, though there is a to-do component. I take meeting notes by hand in a small notebook (currently a moleskine but in the old days I used a spiral bound), and always mark follow-ups with a “F/U” with a circle around it — this is a trick I learned from Phil Myrick back when I worked at PPS. As a way of processing the meeting notes, I make a card in trello for each meeting and add the follow-ups as checklist items (Dani has a system similar to this, using Notion, and I’m always impressed with how well it seems to help her process meetings). For little things, I just do them right away, for bigger ones, I prioritize and calendar them.
On the left is the “Inbound” list. I use this to capture fleeting thoughts, ideas and notes. Things get on this list in two ways: 1) via Wunderlist, which I mainly use by phone — I have found this to be the easiest and quickest way for me to jot something down on the go. I use Zapier to move things from my main list in Wunderlist into “inbound” on Trello. 2) I use Trello’s built-in email-to-board feature to get larger items out of my inbox and into Trello. Again, the goal here is just to capture so I can process/prioritize later.
Another input into this system is my other notebook, the Ink+Volt Planner. I am on my third year of using this wonderful tool: it’s a structured goal and priorities setting notebook that helps you create and reach yearly, monthly and weekly goals. I find that the Ink+Volt, like meditation, helps me cut through the noise and see what’s important more clearly. I do a planner session every week (it’s in the calendar), and use that to inform all of the above.
Having now written all of this, it seems pretty clear that this is a lot of work, and may be excessively complex. My wife would probably describe this as “planning to plan”, and just an elaborate mechanism for avoiding doing the actual stuff, or something like that. That may indeed be so, and I often think about Fred’s simple strategy of blast relentlessly through email and calendar everything. It is impressive and seems to work. Mostly, I use this system so that I am not just at the whims of my inbox.
For sure, my biggest weakness is email, which I still struggle with. Albert has a system here, which seems to work for him, which is: using a set of predefined gmail filters, clear the inbox daily. Not the entire inbox, but a few filtered versions (family, USV team, his portfolio companies). I’m not there yet.
So, there you have it. That’s my system. It’s a work in progress. What’s yours?
Community is a funny thing. It can sound like a fluffy word or concept, but it’s actually really powerful. Maybe more powerful than many things.
Community is about helping people feel connected and aligned. When people are connected, they feel warm and good, and part of something bigger than themselves. When people are aligned, each of their individual efforts adds to the whole overall effort, so you have a lot of leverage.
There are so many examples of this. Here’s one: today is International Women’s Day — essentially an effort to get 1/2 half of humanity connected and aligned around a sense of community. On a much smaller level (and as a part of that), some friends of ours own a restaurant near where we live. As part of Women’s Day, the restaurant hosted an event, and was bustling all day long with people from the neighborhood, all wearing purple and doing a variety of activities. The restaurant itself is an important center of community where we live, and today it was plugging into an even bigger community movement.
Or, dating back to a past life where I helped create Streetsblog and Streetfilms: these were both community media efforts in the transportation policy space. When these launched, back in 2006, there were already plenty of organizations doing good policy work in this area. What Streetsblog and Streetfilms added were online places where this passionate community could come together, gain energy, and grow. The streetsblog comments section was (and is, today) a hotbed of community, and the Streetfilms videos (nearly 1000 today) highlighted community stories and community members. It was, and is today, a powerful force that has multiplied the effectiveness of people working on these issues.
Or let’s look at examples from the cryptocurrency space, like Ethereum and Bitcoin. Both of these (and other strong communities in the crypto space) have developed something bigger than a company ever could, in terms of the connection and alignment of the community. These communities are wild and wooly, for sure, but they are broad and deep and powerful. People who are deep into them feel like the are really part of something.
At USV, we invest quite a lot in community. We have a network team whose mission it is to build community among our portfolio companies — in this case charged with helping everyone become better at their jobs, and helping their companies succeed. The USV Network started out as a pilot program led by Gary back in 2010, was then grown larger by Brittany, and is now a 4-person team, scaled up by Bethany, that’s running over 150 events per year and managing a ~4,000 person online community.
It can be hard to measure the impact of community, and this can make it hard to know how well you’re doing when your job is to cultivate. But sometimes you can just know it when you see it / feel it.
Picking back up the series on what decentralization is good for (part 1, part 2), today I want to focus on one of the most exciting aspects of decentralization: growth.
In this case, when I say “decentralized”, what I really mean is “open and non-proprietary”. The two often go hand-in-hand.
Ok, so why are open, decentralized systems especially good for growth? When a technology is open (anyone can use, extend, modify, build on) and decentralized (no one party or company is in full control), it has the potential to spread like wildfire, for exactly those reasons. Since it is free to use without restriction, permissionless innovation is possible — meaning anyone who feels like it can pick it up and run. And because open, decentralized systems reduce platform risk, developers can feel comfortable building on them with less of a risk of getting the carpet pulled out from under them.
When this works, it works really well. Many of the technologies we use every day — like HTTP, SMTP, WiFi, USB and Bluetooth — have become ubiquitous precisely because they are open, nonproprietary and decentralized in nature (in addition to being useful!).
Everyone knows that it’s safe to build to the Bluetooth standard without platform risk. And what that means is that anyone, no matter what company they are with, or what country they live in, has the potential to grow the platform. This kind of omni-directional growth is really only possible with open, un-owned, decentralized technologies.
Often times, however, a single company drives the development of these open, un-owned, decentralized technologies. For example, the General Transit Feed Specification is on open data format that powers most of the public transit industry. As I have written about before, this standard came to market in large part because of Google’s initial efforts, and was then adopted and grown by a large community of others (including our work at OpenPlans back in 2009-2012). Or, to go farther back, we can look at the role that Mozilla/Firefox played in bringing modern web standards (includuing Cascading Style Sheets) to market. Or to today, and Apple’s and Google’s role in bringing USB-C to market (of course, Apple does not have the best track record on this topic). The point is, it can be difficult for open, nonproprietary, decentralized technologies to take off — they need some sort of catapult. Historically that has come from companies with some self-interest — this has been a good thing (generally speaking).
Today, in addition to companies driving open technologies, we have the potential to use cryptocurrencies to drive initial adoption. We seen this work to great effect with Bitcoin, Ethereum and other platforms, and while the specific mechanics are still being explored and experimented with, the basic concept is clear: we can use cryptocurrencies and tokens to bootstrap new open, non-proprietary, decentralized technology platforms. It doesn’t work every time — and we will no doubt continue to see a parade of flameouts — but when it does work, it has the potential to work in a massive, exceedingly rapid, and global way.
Just about 10 years ago, I had a migraine that lasted two weeks. I have never been in such pain; even an ER visit and a morphine drip didn’t touch it. Then, 6 months later, I had a stomach pain that just wouldn’t go away. Finally I went to the hospital, and it turned out that the stomach pain wasn’t indigestion, and the migraine wasn’t a migraine; both were actually blood clots.
And so I embarked on a multi-year journey to try and figure out why the clots were forming. In the end, after dozens and dozens of tests and weeks in various hospitals, we came up empty — and as a result, I have been on blood thinners as a precautionary measure ever since.
For me, it was the first time I ever dealt with a chronic condition. I had had plenty of injuries before — mostly broken bones and other sports-related injuries — but I’d never dealt with anything internal, and never anything… permanent. Not a welcome feeling.
I would say it has taken me close to 10 years to really internalize this. I have resisted it. Not only is the blood clotting a problem in itself, but the medicine causes its own problems — specifically, constant risk of over-bleeding. In other words: if I don’t take my medicine, I’m at risk of clotting up, and if I do take my medicine, and something happens (like a car crash or bike accident) I’m at risk of bleeding out. My wife put it pretty succinctly the other day when she said: “Anyone could fall down the steps, hit their head and die. That means you need to be more careful than everyone.” Ugh.
Being more careful than everyone has never been my strong suit, and really just isn’t in my nature. But truth is, that’s how it has to be, and I need to deal with it.
Here is the funny thing about making life-changing… changes. On the one hand, it feels lousy, unfair, and like missing out. On the other hand, when I think about the people I know who have done it, I am the most proud of them.
I remember when my uncle, who passed away a few years ago, had a health scare and abruptly quit drinking and smoking (after many years of doing both pretty seriously). I was maybe 14 at the time, but I remember being so impressed by the way he took the reigns and just did it. He knew he needed to, and was almost gleeful and proud about taking a hard right turn towards his health (and for his family).
An entrepreneur I know recently made a huge concerted effort to exercise, lose weight, quit drinking, and doubled down his focus both on his personal relationships and his company. He is thriving, big time. I see an effort like that and I am like, damn, that’s awesome. It takes courage and dedication to make changes like that. But it is so beautiful.
Another friend was in a bad place with his marriage. After close to 10 years and three kids, he and his wife finally divorced. After some time, they are both better off and have things going in a new way, on a more solid foundation. He, in particular, seems so renewed and rejuvenated. Almost like being healed from a sickness.
It feels like it often takes a big shock, of some kind, to make these kinds of changes. I will never forget another time, back in 2008 — I was dealing with a challenging situation at work, and wasn’t dealing with it well — ruminating, avoiding. I remember sitting in the doctor’s office, watching my son’s ultrasound, and seeing and hearing his heartbeat for the first time. Right at that moment I resolved to deal with the situation head on because, shit, I was undoubtedly responsible for important things and didn’t have time to fuck around.
There is something about that feeling of being forced to make a big change that ultimately does it. Without that, it is often just too easy to let things be as they are, and to continue sliding through.
So, to everyone out there who is mulling a major change that has the potential to fix something important in your life; I hope to give you just the smallest bit of extra strength as you consider it.
Last night I went to see RAIN, a Beatles tribute band, with my friend and neighbor Jeff. If you haven’t been to one, tribute bands/shows are kind of odd: on the one hand, typically technically/musically perfect (the tribute band can play the entire catalog of the original band flawlessly); and on the other hand, the vibe is strange: it’s a band pretending to be a band, so it doesn’t have any original energy or punch.
As I was watching the show I kept thinking about this. What is the difference between being a Beatle and being a musician that can play the Beatles catalog perfectly, in character?
Perhaps the answer is obvious, but it still got me thinking. I believe the answer is part creativity and part risk. Creativity because, of course, half of being the Beatles is actually inventing the music, not just playing it. Probably more than half the challenge.
And on risk: playing new music, music that has not been played before, or “digested” and understood by the general public, is hugely risky. People won’t “get it” right away, or worse may simply hate it (whether on the merits or just for being new and different).
On a broader level, it got me thinking about the difference between being a leader and a follower. Once the creative work is done, and the opportunity is de-risked, it is relatively easy to look at something and copy the execution. But it takes creativity and balls to do it on your own the first time.
This applies to all things — music, art, writing, a startup, investing, restaurants, etc. I have seen it particularly first hand in the startup and investing world, where a “lead” investor not only has the foresight and conviction to back an early team, but they have the leadership to bring other investors along.
Platform Risk is is the risk that the tech platform that you build your product/app/business/life on will become a critical dependency, will become unreliable, and/or worse, will screw you in the end.
Here is a post from a few years back that details many different flavors of platform risk, many of which are benign, and some of which are malicious. And here are some examples, to make it more concrete:
This is not to say that any of these acts are necessarily illegal, or even immoral. But if you are investing serious time and money — especially dropping everything to build a business on a platform — these kinds of risks are of grave concern.
So, what does decentralization have to do with platform risk? When the platform is a protocol (i.e, decentralized) rather than a company (i.e., centralized), the rules of engagement are known up front and can’t change on a whim or because of a business decision.
If we think about the original internet protocols (TCP/IP, HTTP, SMTP, FTP, SSL, etc), they are a set of networking, communications and data exchange protocols that ultimate form the platform we know of as the web. While there are certain forms of platform risk on the web (e.g., stability, speed, security), the web on the whole has become a very stable and reliable platform, generally absent of the flavors of risks detailed above.
Cryptonetworks (i.e., public blockchains and cryptocurrencies) combine the architecture of the original internet protocols with the functionality of today’s corporate applications platforms (data management & transactions). While there are still major issues to solve before these systems collectively become a mainstream platform, they are gaining major adoption from developers in large part because developers are so keenly aware of platform risk, and see cryptonetworks as a type of platform they can trust.
As an illustrative example, let’s compare downloads of the Truffle framework (a popular dev tool for Ethereum):
… with the price of ETH over the same time period:
Developers are the canary in the coal mine when it comes to platforms. And at the moment, they are pointing to the desire for platforms with less inherent risk, more reliability and more trust.
Over the long weekend, I spent a bunch of time with my kids doing outdoor cold weather activities. I love the winter, and I love winter sports — there is something about being outside on a cold, sunny day that gets my blood moving and makes me feel great.
This past weekend, while skating with my kids, I had a breakthrough moment — the elusive “backwards crossovers” that I wrote about back in 2016 finally made sense, both to my brain and to my body. It’s like that moment in Night School where Kevin Hart finally manages to make sense of the jumble of mathematical symbols:
It was amazing: somehow I managed to slow things down, connect my brain and my body in the right way, and the move that I just couldn’t master for so long suddenly made sense. It was absolutely a combination of body and mind — understanding it the way as well as feeling it the right way.
This is not a post about ice skating. But rather about the magic that happens when you finally unlock a new skill. It is an amazing feeling, and not something we get to feel every day.
I think there is something particularly important about doingit to get it — it’s one thing to read about something, or watch videos, etc — but nothing substitutes for getting out there and trying it (and falling a few times along the way). This is a lesson I keep reminding myself of whenever I’m trying to learn something new.
Recently, Simon Morris, a long-time BitTorrent exec, wrote a provocative series of posts on the nature of decentralization, in the wake of BitTorrent Inc’s acquisition by TRON. They are relatively short and a good read:
There are decades’ worth of experience here, which are absolutely relevant for anyone and everyone working in the area of cryptocurrencies, cryptonetworks, and decentralized computing today.
In the second post in the series, Simon makes the argument that the killer feature of decentralized systems is rule-breaking:
“While a decentralized architecture can be effective at routing around a variety of different failures in a network, the type of decentralization that was achieved by Bittorrent (and by Bitcoin for that matter) has enabled routing around rules.”
While there is undoubtedly a strong dose of truth here, I think it is a dangerous place to stop. There is already a narrative that cryptocurrencies and decentralized systems are for pirates and criminals, but if we focus on that alone, we risk missing the more important characteristics and properties of decentralized systems. It’s a little bit like saying the original internet is only good for porn and copyright infringement, and stopping there.
For today, let’s focus on one key aspect of decentralized systems — a characteristic that was fundamental to the creation of the original internet protocols: resilience.
For example: decentralized mesh networking is resilient to centralized telecommunications going offline in the case of a disaster (as happened in NYC during Superstorm Sandy). USV portfolio company goTenna was founded out of the Sandy experience, and now serves a wide customer base of first responders, law enforcement and military who desperately need communications that are resilient to traditional network failure.
Or, decentralized HTTP/DNS (e.g., IPFS) which is resilient to infrastructure failure and censorship, as demonstrated by IPFS’s republishing of wikipedia in Turkey during internet censorship there. IPFS, generally, is a major improvement to content addressing on the web, adding substantial resilience by detaching physical location from the logical address of content.
Or, a simple example that Joel typically uses: the Bitcoin network has had 100% uptime for 10 years.
These are real, important properties. Remember, the original internet protocols were designed so that the network could withstand nuclear and other major attacks. Many centralized systems trade convenience for fragility, and resilience is a real, valuable property.
Coming up, I’ll look at other important properties of decentralized systems: platform risk, security, and innovation.
The first observation is how awful the air quality is. Holy cow. This report from Plume Labs (snapshot from the time when I took this above photo of the skyline) tells the story:
While the air quality has made it a bit difficult to get around (no views, but more importantly, you just start to feel sick after a while), something else here has made it tremendously easy to get around: the Octopus Card.
The Octopus Card is a reusable, contactless smart card used for payments throughout Hong Kong, which most importantly works for nearly all modes of transportation. Yesterday, I traveled by high-speed train, subway, streetcar, bus, tram and ferry, and used my Octopus Card to pay every time (it also works in some, but not all, taxis).
It is hard to overstate how much of a convenience this is, especially to a visitor to a foreign city. I traveled by seven different modes of public transportation yesterday, and had zero cognitive overhead trying to figure out tickets, rates, etc. It is really liberating and makes exploring a new city so easy and so much fun.
Similar systems exist in other cities (Oyster Card in London, UPass in Seoul). It really makes the city so much more accessible, both for residents and for tourists.
Experiencing infrastructure like this makes me realize how broken and unusable most of the US equivalents are. Imagine if you could pay for a train, subway, bike, and ferry in NYC using one system? It is a shame we can’t make investments like that work (by and large) — the closest is perhaps EZPass, which in the American tradition works for cars.
USV’s book club book for this month is Drug Dealer, MD, by Dr. Anna Lembke, Director of Addiction Medicine at Stanford Hospital – so we have spent a bunch of time recently talking about addiction.
It is not a stretch to hypothesize that we, as a society, are at a moment of heightened addiction, generally speaking. Binging on Netflix, checking phones constantly for emails and “likes”, playing Fortnite, vaping, pills, etc. There are a lot of forces pulling us towards a pattern of repeated short-term, immediate “highs”.
I worry about all of these forms of addiction, particularly for my kids, who are just entering the “danger zone” where the combination of access to things and social pressure starts to cause problems — for example, what’s happening with vaping, starting in middle school, is surprisingly powerful and terrifying.
Naomi, who proposed the book, invited Dr. Lembke to join us yesterday for our discussion, which was fantastic. In addition to talking in depth about the causes and treatments for opioid addiction, we spent some time talking about digital addiction — screens, games, etc.
I cannot at all claim that I am good when it comes to managing screen addiction, but we have done a few things around our house that I think are helpful, so I thought I would mention them here.
1/ No devices in the bedroom — no phones, computers, or TV allowed. I charge my phone on a dresser across the room from the bed. This serves double duty of forcing me to get out of bed to turn off the alarm.
2/ Meditation. Meditation seems to me to be the most obvious antidote and counter-force to addictions of all kind. For this reason it doesn’t surprise me at all that it is surging in popularity right now. Meditation not only focuses the mind, helping to shed the the static, but it also helps build that muscle to resist the moment-to-moment impulses that are so common with digital addiction.
3/ Physical activities. As much as I can, I try to engage in completely “analog” physical activities, especially with my kids. Sports (playing, coaching), projects in and around the house. Skiing, while expensive and hard to do a lot, is probably my favorite, as it’s really an extended digital vacation.
4/ Read physical books. Whether I’m reading before bed, or reading in the living room around my family, I try to read in print form. Or, worst case, if I am reading something digital around my family, I prefer to do it on a tablet rather than my phone — this is a subtle difference but I think it really does change the social dynamic (you are more “there” and others can see what you’re doing).
Zach was telling me yesterday that he sometimes does “no social media Saturdays”, which I like. I don’t do that formally, but I definitely do orient my weekends around non-digital activities as much as possible.
One area I would like to work on is not keeping my phone with me when I’m in the house, especially when I am with the family. I often keep the phone plugged in and charging in the kitchen, which helps, but is not 100% the norm.
I am also trying to do this without making a lot of rules for the kids around screen time. I prefer to get them to enjoy non-digital activities, rather than hold out screen time as some sort of prize if they abstain for long enough.
As anyone who has dealt first-hand with addiction knows, it is an awful thing, that can destroy people, relationships and families. So given that there is so much ambient opportunity for it these days, I think it’s really important to try and be proactive around it.
Debt is a complicated subject. On the one hand, it is empowering — it lets you get a quick start on something, and lets you do things that would not be possible otherwise. There are times when it is useful, necessary, and unavoidable.
I think about “debt” in the broadest possible terms: times when you are left “owing somebody” (including yourself) for something. My inbox is in a state of debt right now. The pile of unsubmitted medical bills on my desk is debt. Duct tape & bubble gum holding up v0.1 of an app is debt. Friends or family you haven’t called in a while is debt. Not to mention financial debt, which comes in many flavors.
I am actually a fan of incurring “technical debt”, especially in the early days of a project, when you are iterating quickly and you are not yet sure what the long-term architecture of your product should be. I think a “get something up and running quickly” attitude is often best. So taking on this kind of debt early is a strategic choice that if, done well, can actually save you time and/or money in the long run.
The challenge with debt, of course, is paying it down.
It seems as though one of the characteristics of debt is that you overestimate the short-term benefit and underestimate the long-term cost. The result being that it’s easy for things to get out of control, slowly and then quickly. This article on the nature of a “debt spiral” covers it well.
I always think about paying down debt at the end of the year, as it feels like a time to try and get the house in order and work on a fresh start on the new year. I don’t like “rolling over” debts (at least the kind I can really control in the short-term) into the new year. So I am doing my best to grind through and catch up on things now.
But better than getting in debt, and then getting out of it, is figuring out how to stay ahead of it. And again, I don’t just mean financial but in every way. Replying to an email before someone pings you with a reminder. Checking in on a friend or family member without them asking. Dealing with bills and expenses as they come in. Or even better, building capital: write a blog post, build v2 of that app, publish that presentation, make the budget, contribute to your savings or 401k. Proactively paying ahead.
The Pixel Slate is an odd machine, and I am still trying to figure out how to use it, and then, whether I like it or not. The heart of the oddness is that it is really equal parts laptop and tablet — when the keyboard is attached it feels and acts like any other Chromebook. And with the keyboard detached, it feels like an Android tablet — actually running mobile apps from the Google Play store. (I didn’t realize this until now, but apparently this is also true for other new Chromebooks)
It is the back and forth between tablet mode and laptop mode that is odd, and requires a fair amount of cognitive overhead. Like, for reading email should I use Gmail in Chrome or use the Gmail app? Same goes for all other apps — you have to make about which experience you want, when, and then adjust accordingly. Often times this means multiple apps doing the same thing simultaneously (or more specifically, a Chrome web version and a mobile app version).
But to take a step back: what got me interested in the slate was exactly this mix of form factors:
For example, for long-form reading, I like tablet-mode, where I can get full focus on the content, and page through with my finger (like reading a newspaper on my lap). Same goes for short-form emailing. Basically, I like the addition of this “lean back” mode that the tablet form factor gets you.
And then, in “laptop mode”, you want the experience of, well, a laptop. High fidelity interaction with emails, docs and websites. The slate does all of that basically fine, though the major question is the keyboard. I am currently using the Google Pixel Slate Keyboard, which is a floppy, folio-style magnet-attached model. The key and trackpad action are surprisingly good, but the dynamics around folding and holding the keyboard take a little getting used to — the attachment is floppy, and the magnetized folding holder on the back takes up additional space. Another option is the Brydge keyboard, which intends to deliver more of a “laptop feel” when using it in laptop mode — I am curious here about both the key action and the quality of the Bluetooth connectivity.
Another nice feature of the tablet+laptop is fingerprint unlock — this is what you’d expect from a phone or tablet, but don’t normally see on a laptop. It’s a nice convenience.
So, I would say the jury is still out. The real questions are whether “tablet mode” and the fingerprint unlock are worth the overall cognitive load of a device that’s neither entirely here nor there.
Disclaimer: I am not a lawyer, and I am not your lawyer.
I have been in an uncountable number of conversations over the past few years discussing the question of what defines a “security” in the context of cryptocurrencies, cryptonetworks, and token offerings.
Here is my current understanding, including a number of key questions I am still working on. I invite any and all corrections to this visual framework. And I should note that this is a high-level framework: the nuanced details are the subject of many enforcements, settlements, and litigations and will be worked out over a long-period of time to come.
First: the what constitutes a “security” has been defined by the courts more specifically as an “investment contract”, which is a transaction with the following properties:
An investment of money
With the expectation of profits
In a so-called “common enterprise” (roughly meaning: investors and the company rise and fall together)
From the efforts of a promoter or third party (some dispute over whether this means “solely” from a promoter, but clear that it entails “significant managerial efforts” of a single promoter)
This four-part test was established as part of SEC vs. Howey, a 1946 supreme court case involving the sale of tracts in an orange grove, with an associated lease-back arrangement where buyers of the land leased the land back to the Howey corporation in exchange for profits generated from cultivation of orange crops. This so-called “Howey Test” is now the basis for determining whether such a transaction constitutes an “investment contract” and would therefore fall under securities laws (with all associated registration and disclosure requirements).
The way the test works is that, if the contract satisfies all 4 “prongs”, it “passes” the Howey Test and is therefore a securities transaction. If the contract does not satisfy any one of the prongs, it fails the Howey Test and is therefore is not a securities transaction.
The 4 prongs of the Howey Test
Ok, with all of that as background, here is how I see the Howey Test — 4 prongs that all need to be satisfied:
So, if you were to start to think about how to “knock out” prongs of the test, thereby removing a transaction from securities status, you’d start one-by-one.
1) Remove the “investment of money” and what you have looks more like a Gift (think: receiving airline miles, or ride credits on Uber, or “airdrops” of tokens in a crypto network)
2) Remove the “expectation of profit” and what you have looks more like a product (think: pre-buying a backpack or movie on Kickstarter, purchasing laundry or arcade tokens, or buying Stacks Tokens to insert records in the Blockstack blockchain):
3) Remove the “common enterprise” and what you get looks more like a collectible (think unique items like stamps, baseball cards, or CryptoKitties):
4) Finally, remove the “efforts of a promoter or third party” and what you get looks more like a commodity (think gold, wheat, or Bitcoin or Ethereum):
All together, it looks like this:
Is a “security” an asset or a transaction?
A key question throughout all of this is whether the “security” is the digital asset itself, or instead the transaction involving the digital asset.
In a key speech by the head of SEC’s Corporate Finance Division, Bill Hinman, earlier this year, he addressed this question head on:
To start, we should frame the question differently and focus not on the digital asset itself, but on the circumstances surrounding the digital asset and the manner in which it is sold. To that end, a better line of inquiry is: “Can a digital asset that was originally offered in a securities offering ever be later sold in a manner that does not constitute an offering of a security?” In cases where the digital asset represents a set of rights that gives the holder a financial interest in an enterprise, the answer is likely “no.” In these cases, calling the transaction an initial coin offering, or “ICO,” or a sale of a “token,” will not take it out of the purview of the U.S. securities laws.
But what about cases where there is no longer any central enterprise being invested in or where the digital asset is sold only to be used to purchase a good or service available through the network on which it was created? I believe in these cases the answer is a qualified “yes.”
The Hinman speech clarified two things: 1) that by knocking out the “efforts of others” prong of the Howey Test (#4 above) a crypto asset transaction can be viewed through the lens of commodities vs securities and 2) that an early transaction of that asset (in this case the pre-sale of ETH) can be analyzed under Howey distinctly from a later sale, given different facts and circumstances at the time.
This last part is really important, and I still have a hard time pinning down (really smart, expensive) lawyers on the subject. There is an idea that a “security” is a thing rather than a transaction, which does seem at odds with both Howey and the Hinman speech. In the case of Howey, the oranges produced under the contract are not the same as the contract itself (similar to contracts for future tokens), and in the case of the Hinman speech, it’s the transaction rather than the underlying token (BTC or ETH).
Finally taking all of this together, it’s important to remember that 1) there are many kinds of cryptoassets, and 2) they are offered/sold/traded/transferred under different circumstances over time. I think about it like this:
I hope that is helpful. This is complicated stuff, and new territory.
Our good friend Chris Burniske was on Squawk Box this morning. I got up and watched it. You can see the video here.
Of course there is interest in the crypto market right now, as it is falling hard. I suspect there are many out there who are enjoying the drop, waiting for the bubble to finish popping and for this whole idea to go away.
One takeaway from watching the segment is how much of a learning curve there still is around this whole space. If you look at the questions Chris fielded this morning, you’ll see a looming gap in understanding of the fundamentals. The questions range from “why do we even need this” to “what is the rational basis for these prices”
It’s a complicated topic, with complicated mechanics, and to make matters worse, the narrative itself has shifted a bunch over time (digital cash, digital gold, decentralized computing, the new internet, etc).
Here is one way to think about it, that feels native to CNBC and the financial markets industry:
Crypto is a market-based system for providing computing services. The “miners” and other participants are just like the participants in other commodities markets. It really is a shift from providing computing services via a corporate/securities/centralized model to an ecosystem/commodities/decentralized model.
If you just hold that idea for a moment, then where Chris was trying to take the conversation (but didn’t exactly manage to — talk TV is tough!) is around the rational pricing of commodities. A simple way to start is by looking at the marginal cost ofproduction, which is one way of looking at commodities pricing. While this does not make sense in a highly speculative bull market, it makes a lot of sense in a flat or bear market, as we seek a basis for understanding where the bottom might be.
Another challenge here is that the utility of cryptoassets like bitcoin ethereum is still being understood, so we do not yet have solid anchors for pricing. In the case of oil, for example, we have industries upon industries using it, establishing consumer value which lets price flow back to the original production. This is still nascent in the crypto space, but is getting clearer every day.
Thank you Chris for working to advance the dialogue.
One of my favorite things to do is get my hands into something and figure out how it works, whether that’s an app, or a gadget, or a house.
For example, over the past few months I have been renovating our basement, turning an unfinished, dank storage area into a playroom for the kids. Here is my friend Ned, and my son, as we were pouring the new concrete floor over the summer:
I get completely enraptured by a project when my hands are into it. There are so many details to figure out, and enjoying the final result, when you know exactly how much work went into it, is so satisfying.
Perhaps most importantly, getting hands on with anything is (for me at least) the best way to learn. When I learned programming, it was in the context of building apps and websites with friends — I learned as I went, and got deeper and deeper and deeper. Same goes for every single thing I’ve learned over the years (deeper in tech, legal, investing, crypto, etc). The more hands-on I am, the more fun I have, and the more I learn.
I have been thinking about this in the context of investing. Looking back over the years, at the times when I have felt the strongest sense of conviction about an opportunity, it’s the times when I was the most hands-on that I felt it the strongest.
At USV, we try to be users of every new platform that we invest in (in some cases this is easier than others). It is easy to say that, but also easy to forget it sometimes, especially in areas that are really new. But there is just no substitute for approaching things that way, for me at least.
With real-time, interconnected, self-executing systems, sometimes when things wrong, they go really wrong. I wrote about this general idea previously here.
Yesterday, while I was writing my post on Trusted Brands, I was doing a little searching through my blog archives, so as to link back to all the posts categorized under “Trust”. In the process of doing that, I went back and actually re-categorized some older posts that fell under that category, but weren’t appropriately marked. In the process of doing that, I came across a whole bunch of posts from 2013 that I had imported from my old Tumblr blog, but were still just saved as drafts rather than published posts.
So, I did a little test with one of them — hit Publish and checked that it looked right. Then, after that, I did a bulk-edit with about 15 posts, selecting all of them and changing the status from “draft” to “published”.
This did not have the intended effect.
Rather than those posts showing up in the archives under 2013, they were published as of yesterday. So now I have 15 posts from 2013 showing up at the top of the blog as if I wrote them yesterday.
That would not have been a real problem on its own — the real problem stemmed that because of our automated “content system” (that I built, mind you) within the USV team, those posts didn’t just show up on my blog, they showed up on the USV Team Posts widget (displayed here, on Fred’s blog and on Albert’s blog), they showed (via the widget) in Fred’s RSS feed, which feeds his daily newsletter, and blast notifications were sent out via the USV network slack. Further, some elements of the system (namely, the consolidated USV team RSS feed, which is powered by Zapier) is not easily changeable.
Because of the way this happens to be set up, all of those triggers happen automatically and in real-time. As Jamie Wilkinson remarked to me this morning, it is unclear whether this is a feature of a bug.
Of course, as all of this happened, I was on a plane to SF with spotty internet, and was left trying to undo the mess, restore things to a previous point, monkey patch where needed, etc.
Point is: real-time automation is really nice, when it works as intended. Every day for the past few years, posts have been flowing through this same system, and it’s been great. No fuss, no muss, everything flowing where it should.
But as this (admittedly very minor) incident shows, real-time, automatic, interconnected systems carry a certain type of failure risk. In this particular case, there are a few common sense safeguards we could build in to protect against something like this (namely: a delay in the consolidated RSS feed in picking up posts, and/or an easy way to edit it post-hoc) — maybe we will get to those.
But I also think about this in the world of crypto/blockchain and smart contracts, where a key feature of the code is that it is automatic and “unstoppable”. We have already seen some high-profile cases where unstoppable code-as-law can lead to some tough situations (DAO hack, ETH/ETC hard fork, etc), and will surely see more.
There is a lot of power and value in automated, unstoppable, autonomous code. But it does absolutely bring with it a new kind of risk, and will require both a new programming approach (less iterative, more careful) and also new tools for governance, security, etc (along the lines of what the teams at Zeppelin, Aragon and Decred are building).
Today is election day. I’m on a plane today, so I voted early, a few days ago. I cast my vote and it felt good. I marked my paper ballot with a marker (for optical scanning) glued it shut into a sealed envelope, and handed it to a volunteer who placed it in a secure case. I left with a sense of confidence that my vote had been placed, and would be counted fairly.
“the legitimacy of an election depends on the electorate accepting that it was fair, that everyone who tried to vote got to vote and that every vote counted. Lose that, and your voting system might as well have suffered a devastating technological attack.
Unfortunately, in much of the United States, we are no longer able to assure people that none of those things has happened. A recent poll shows that 46 percent of the American electorate do not think their votes will be counted fairly, and about a third think it is likely that a foreign country will tamper with the results.”
Put more generally, America’s most important product, our democracy, is developing a trust problem.
I have been writing about trust for a long time. It is an essential ingredient for institutions (civic, corporate, etc) and also for technology platforms. It is famously hard to earn and easy to lose.
In the most recent iteration of the USV investment thesis, we explicitly call out the idea of “Trusted Brands” as a key component. This has been somewhat controversial, because — obviously — it’s premature to declare that any early-stage startup is a trusted brand. But what we mean by this is not that it’s already a widely trusted brand, but that it’s architected to be a trusted brand.
“Trusted Brands” is also controversial because in startups, things change. For example, while for a long time many considered Google (or really, insert nearly any other large tech company here) to be a trusted brand, initially because of the super useful/helpful services it provides, and then through it’s mantra of “don’t be evil” — it’s safe to say that today, many people (both consumers and b2b users) may not feel the same way.
So, “Trusted Brands” is both aspirational, and potentially fleeting.
By “architecting for trust“ we mean two things: 1) a business model where the platform and its stakeholders are aligned; and/or 2) a technical architecture that makes tampering/hacking/meddling difficult or impossible, even for the creators of the system.
On business model alignment: this one gets trickier the more stakeholders you have, and typically as tech platforms grow and expand, so does the breadth and variety of stakeholders. But core decisions can be made, early on, that align interests as much as possible — for example, see Andy’s post about our recent investment in Scroll, and how they are attempting to align interests in the publishing industry.
On technical architecture: most of the work in the crypto/blockchain space is based on this concept, and many have taken to a mantra of a “can’t be evil” as a counterpoint to the arbitrary decisionmaking that is possible in traditional platforms — this is at the heart of the “centralized vs. decentralized” debate. But even in “regular” apps, technical design decisions, particularly around how data is stored/processed/shared/accessed, can go a long way towards building trust.
What we can safely say is that we are suffering from trust problems on a number of fronts. On the tech platforms side, it’s things like data breaches, abuses of market power, shady privacy practices, harassment and abuse, etc etc. On the institutional side, it’s relevance, capacity, efficiency, technological capability, corruption, and fundamental integrity. Not a small or simple list of challenges to face.
The technology we build is really the foundation of our lives, and even the two “sides” I discuss here (traditional institutions and tech platforms) are getting blurrier by the day. Given all that, what we mean by “Trusted Brands” is that establishing and sustaining trusted products / platforms / systems / institutions / brands is more important than ever, and we believe that the efforts that do manage to earn our trust over the long term will be the most important and valuable.
The massacre in Pittsburgh is heartbreaking and awful, and another example of the extent to which society seems to be fraying.
The Pittsburgh attacker spent a lot of time on social media sites that stoked his fear, isolation and anger. I think about the internet a lot, and while the internet has the ability to help us form a better understanding of “we” (global humanity), it can also cultivate a strong sense of “them” (the dangerous other), as this case demonstrates.
In other words, we are simultaneously increasing our capacity to understand one another through connectedness and information, and fracturing along tribal lines, increasing the sense of distance and disconnectedness.
I am no scholar of Buddhism, but have been interested recently in the Buddhist notion of the relationship between “suffering” and the “self”. In a nutshell, the concept is: suffering is an essential human condition, and it is primarily brought about by our sense of self and how events impact us as individuals (jealousy, greed, wanting, disappointment, etc). Meanwhile, there actually is no “self”, as everything in the universe is connected. Therefore, if you can release your focus on the self, you can dissolve the suffering. (Here is a good overview of these concepts.)
I think about these concepts in the day-to-day: for me they manifest in all the little moments of going about my work and getting things done. Often times, I feel a resistance welling up, often manifested as fear, which I have written about, but more generally I think the culprit is the self-centered thinking. When this happens, an idea that works for me is actively seeking to replace thoughts of the self with thoughts of service: take the suffering that comes from seeing things through the lens of your individual self, and redirect it to the service of others. When this happens, I can physically feel the “suffering” melt away.
My own examples are of course trivial compared to the broader environment of fear, suffering, and violence. But I would like to think that we have the potential as humans to re-knit the ties that bind us together, somehow.