Oct 27, 2019

Everything about venture capital . . . you can learn from music lyrics

Here I go, it's my shot, feet fail me not
This might be the only opportunity I got

As I get older, I find that I need to give myself mental tricks to remember ideas or concepts.  

A few weeks ago I gave a brief presentation at a USV offsite that uses music lyrics to cover some of the concepts about venture capital that I think about often. My first draft was much longer - 70 or 80 slides. The final one is 36 slides. I have attached it below.

The playlist is:

Drake & Future - Change Locations
Bob Dylan - Don’t Fall Apart on Me Tonight
Jay-Z - U Don't Know
Bruce Springsteen - Rosalita
Lou Reed - Some Kinda Love
Courtney Barnett - Avant Gardener
Post Malone - Leave
Ween - Roses Are Free
Lil' Wayne - 6 Foot 7 Foot
Jay-Z - D'Evils
Rihanna - Pour It Up
Kanye West - Touch The Sky
Billie Eilish - Bad Guy
Willie Nelson - Blue Eyes Cryin’ In The Rain
Lizzo - Juice
Taylor Swift - You Belong with Me
The Beatles - The End

May 5, 2019

What Do You Think?

The whole freaking world was full of people who were bound to tell you they weren't qualified to do this or that but they were determined to go ahead and do just that thing anyway 
-Tom Wolfe, The Electric Kool-Aid Acid Test

In the mid-90s I worked for a man whose management style we used to call Mentor/Tormentor. He would give us - junior, barely experienced businesspeople - complicated yet wildly interesting transactions to complete (from start to finish) with almost no guidance other than “you’ll figure it out” or “you know my issues.”

Definitely the most stressful professional moments I’ve ever had. Also definitely, the most I ever learned in a work setting. His philosophy appeared to be that he hired smart people and relied on them to figure things out.

Managing a group of people is hard, especially as that group of people gets larger. At betaworks, I remember the feeling when the company got large enough that when the office door opened and I looked up, I could no longer tell if the person walking in worked with us or not. That feeling was one of intense uncertainty.

At the same time, the “contract” between a company and an employee can be thought of very simply. Patty McCord uses this succinct construct in her book Powerful: Building a Culture of Freedom and Responsibility: “Help make our company more valuable, and we’ll make you more valuable.” 

The most effective way I’ve seen to make employees more valuable at the same time as creating a space for them to do their best work was the one I experienced: by giving people agency over their ideas, decisions, and suggestions. That agency came with fear and repercussions - the fear of screwing up, of making the same mistake repeatedly, of not getting the next great assignment - but it was personal agency nonetheless. 

And the most effective technique I’ve used or seen to deliver agency is also a simple one. Ask someone: “What do you think?” “What do you suggest?” “What is your opinion?” Ask it over and over again and listen to what people have to say. Then let them try it out.

We still tell stories about the Mentor/Tormentor, about deals that we screwed up and victories that we won. There were a ton more of the latter than the former. He made us more valuable professionals, and in turn we made the company much more valuable, by letting us experience the feeling of acting independently and making choices. By giving us agency. By asking us “What do you think?”

Jan 20, 2019

Ghosts and Ancestors

People will tell you where they've gone
They'll tell you where to go
But till you get there yourself 
You never really know
-Joni Mitchell

Towards the end of his Broadway show, Bruce Springsteen describes how he’s realized that as parents, we have a choice to make: will we be ghosts or ancestors to our children. As ghosts, we haunt them with our mistakes and burdens; as ancestors, we free them from our flaws and walk alongside (or behind them) and help them find their own way.

In the past few months and without really thinking about it, I’ve started to get my morning coffee set up in place before I go to bed. On the kitchen counter I place the coffee dripper, filter, and scale, and then I weigh the beans. Last night at dinner I realized this was what my mother used to do every evening when we were kids. 

Was she now being a ghost to me, or an ancestor with me? Maybe it’s not so easy to tell.

She never said to do it this way, I just watched her. Mornings were busy - she alone had to get two boys off to school. This made it a little easier. 

In Martin Gurri’s The Revolt of the Public, he makes the provocative point that we are in a period of crisis resulting from the switchover from an “industrial” world to an “information” world. In that industrial world, trusted institutions mediated the flow of information to people and thus created coherent visions of society. In the information era, people have direct access to information themselves and thus have seen that these institutions are fallible (maybe even corrupt). The result - a crisis of authority. 

I’ve spent a large portion of my career investing in early-stage companies. Part of that job is to advise and counsel, to assist a company in reaching its potential. I try to ask for feedback on how I am doing in that job. A constant thing I hear is to provide more direct answers to problems posed to me. Typically, I am told, I answer their questions with further questions.  

Yet, I think it’s important to tolerate ambiguity. Maybe there isn’t a direct answer. Maybe I don’t know the answer. Maybe I want to assist others in coming up with their own answers. A partner of mine used to say its ok to make a mistake, but not ok to make the same mistake more than once. Where is the balance? Here, of course, the relationship is not remotely the same as parent/child, but I still don’t want to be a ghost, rather an ancestor.

In the end, Springsteen describes what happens when you walk alongside and assist someone in finding their own way: transcendence.

May 20, 2018


What is the future that will unfold?
Some like it hot, others like it cold
But we all want to hold the remote control
-Beastie Boys

Sometimes a service provides a value to its customers that may not be readily apparent at first glance. And sometimes that value can be more fundamentally important to those customers that the actual “widget” that is being sold.

Netflix is a good example. Their stated service is simple: “Watch Netflix movies & TV shows online.” But if you listen to the words of the people that run that company, something different emerges.

CEO Reed Hastings has in the past described how viewing works on Netflix:

“Binge-watching is great because it puts you in control. You have complete flexibility.”   

These words don’t appear to be an accident. Chief Content Officer Ted Sarandos was very specific in February 2018 when he stated that "the core to the consumer proposition of Netflix is consumer control."

Clearly, Netflix provides a service to view content. But it also delivers something much more powerful to people - the ability to determine how and when to spend their time, attention and focus (a form of self-actualization). To compete effectively with Netflix would require that another service competes on the axis of control. Not as easy as delivering content.

Having and giving control is very empowering.

This gets interesting if we view control as a way to evaluate markets or companies. What other services deliver control to their users in this way?

Let’s take healthcare. How transformative would it be to see services that deliver a radical shift in control from the system to the patient? What would this mean? More than online appointment booking or pleasant offices. Instead, directly shifting control over time and space from the provider to the patient.

The value of control, or agency over a person’s own time and space, is hard to measure or quantify in a business model. The Netflix analogy here is instructive. Some have imagined what the Apple or Amazon of healthcare would look like. The Netflix of healthcare would be vastly more interesting. It could catalyze a movement in a market where changes are tightly-restrained by large organizations and professionals. It would provide a value to consumers beyond just their health: control.

Feb 11, 2018

Addition by Subtraction

“Dangerfield eliminated everything from his act
but the setups and punchlines”

Alex Halberstadt’s essay on Rodney Dangerfield is a masterclass on how to improve by reduction. Dangerfield worked for decades as a comedian until he figured out the thing, his insight: “by eliminating every extraneous element, you could isolate what makes it work and just do that.”

Dangerfield reduced his act to just two lines: setup and punchline.

There are other examples. Blumhouse Productions (Paranormal Activity, Insidious, The Purge, Get Out) uses only micro-budgets of $3-5 million per film. This limit doesn’t come solely from frugality. Rather, from the idea that

“Anytime you limit somebody, it always - in terms of resources - kind of creates opportunities. Our movies have few visual effects”

Blumhouse films have grossed over $2 billion worldwide.

Steve Martin writes about this in his memoir Born Standing Up. He describes more than a decade of performing with only marginal success before it occurred to him to reduce his act:

“What if there were no punch lines? What if there were no indicators? What if I created tension and never released it? What if I headed for a climax, but all I delivered was an anticlimax? What would the audience do with all that tension? Theoretically, it would have to come out sometime. But if I kept denying them the formality of a punch line, the audience would eventually pick their own place to laugh, essentially out of desperation”

In this case, Martin’s constraint was to deny the audience the very thing they expected to be at the core of a comedy routine.

Constraints can apply to fields beyond entertainment. I’ve written before about how USV applies a series of constraints to guide our investing framework. Those include a specific investment thesis, small fund size, single office and collaborative decision-making.

Willie Nelson once remarked that “three chords and the truth — that’s what a country song is.” This legendary graphic from the Sideburns zine gets even more specific:

In working with entrepreneurs I often first ask them to consider what to remove from their service or application. Maybe this also applies more generally. We could then regularly embrace what happens simply by applying constraints to what we do.

Nov 12, 2017


If dreams came true, oh wouldn’t that be nice

Most of my sleep dreams are mundane if I can even remember them. The other night I dreamt that I missed a flight to Toronto because I didn’t have my passport.

There are other dreams that are more profound. Those are the dreams of one's life - how it turned out, how you wanted it to turn out. We often evaluate our life based on its relation to those earlier dreams we created. Sometimes that hurts.

But maybe instead of being ends, those dreams are means. Guideposts, data points, simple memories.

Bruce Springsteen’s new show Springsteen On Broadway makes this point. It comes on the heels of his 2016 autobiography, Born to Run. That book - as I read it - was not specifically about dreams. Instead, it begins:

“I come from a boardwalk town where almost everything is tinged with a bit of fraud. So am I.”

Here we have the artist messing with our mentals - trying to flip every preconceived notion of who we thought he was. Springsteen, though, is too clever for something as simple as that. His autobiography too is a work of art.

Thus, On Broadway backs off from - indeed, alters - his earlier self-classification as a fraud. Instead, in the show, he calls himself a “magician.” What is that magic? A songwriter whose famous songs are about busting out of your hometown, yet now lives 5 miles from where he grew up. A body of work about the hardships of the working life, yet who has never had a real job. No longer is this person a fraud, for his art is magic. An art form in and of itself. One can still be authentic and be a magician.

This matters because he can now be comfortable with those earlier dreams, those represented in the songs. For he is now free of having to actually live them. They don’t represent the ends of his life, just the means. They are just ideas. We don’t need their literal success to find true meaning in life.

One good minute could last me a whole year

On Broadway reminded me of one of my other favorite works of art, Bob Dylan’s book Chronicles: Volume One. The main feeling I took away from that book was the mundanity of Dylan's life. Chronicles can then be read as his personal confession: at one point in time, I wrote some really, really good songs. I am not sure why. Other times I wrote merely good songs. But I am also a father, and I took my kid to little league games, and those were profound moments for me, maybe as much so as any “protest” songs (but I can’t explain how those happened anyway). It is as if Dylan is saying: my little details matter to me as much as my songs might mean to you. You don’t know me because what you'd find is far less interesting than what you'd expect. But, it's interesting to me.

In a new podcast with Malcolm Gladwell and Rick Rubin, Eminem relates his insecurity as a songwriter. He speaks about being younger when his art was a blank canvas. Everything he did was a new component filling up that canvas. But, as he matured, it became harder and harder to find blank spaces. The canvas is full. Insecurity, even ego death, occurs. What does one do? Springsteen refers to something similar in his Broadway show. He tells a story about how he can remember when he felt the most joy in his life: he was 19 and broke, his family had moved to California, his sister had moved out. His only friends were his bandmates. And yet, he was intensely happy. Everything was fresh and ready to be painted.

The trick was to surrender to the flow

My favorite time in NYC is 5am. That semi-quiet moment, motion is occurring but at three-quarters speed, the streets and cars providing most but not all of the light. Volume is there - it always is - but it is hushed. Stores opening. People just getting home. At 5am, all that exists are the details. There is something about this middle ground.

I backpacked around Asia a long time ago with a friend. Over the years the memories became more specific. We remembered less and less about the temples outside Jakarta or the canals of Bangkok. Instead, it was the guy from Canada who was obsessed with Arthurian legend. The bar in Koh Samui that showed VHS episodes of The Young Ones 24 hours a day. Mamet reminds us in Glengarry Glen Ross that ”a great meal fades in reflection; everything else gains.”

So many things I would have done but clouds got in my way

Maybe then it is important to dream and live our life with those dreams. Perhaps, though, we’ve used them the wrong way. They aren’t supposed to come true but are only meant to guide us to a place, a place of different truths. After all, as Robert Louis Stevenson wrote, to travel hopefully is a better thing than to arrive.

Aug 1, 2017

The Future and the Process

"People are often asking me what’s going to happen next in science that’s important, and of course, the whole point is that if it’s important, it’s something we didn’t expect. All the really important things come as a big surprise."

Uncertainty about the world, desire to control our destinies,  maturation - all make us want to understand what’s going to happen in the future. Similarly, one of the jobs of the investor is to buy an asset today that in the future increases in value. Thus, investors - and particularly early stage venture investors - often are asked what they think the future holds: “What’s next? What’s the new new thing?”

I have no idea what the future holds. When asked I supply generic answers.

What if the role of the venture investor is not to predict the future. What if the job is to develop a process to evaluate enormous amounts of data and ideas(quantitative and qualitative), collaborate on making decisions with that data, and then choose a set of investments which represent different possibilities for the future.

In other words, the VC job is not to peer into the future but instead to come up with a process that allows you to construct a large set of different choices about what the future potentially could be.  Perhaps, then, venture capital is about the process, not the outcomes. Trust the process.

Process means you think about situations in two ways - those you can control and those you cannot control. We can’t control what happens with the companies we invest in - the outcomes - but we can control how we make the investment decisions - the process.

There are many types of investing processes, what is important is just to have one, create its parameters and trust it. USV’s is comprised of these attributes: thesis driven, small funds, early stage, collaborative decision making, one office in one city, conversational, active investing. Each of these components is an explicit constraint that tightly guides decision making. It may not be the best process, but it is uniquely USV’s.

Out of that process comes a portfolio of investments, associated with a particular fund. Each of our funds, for example, has 20-24 companies. Those companies are what our process has determined to be our view of one potential future.

Relying on a process is hard when faced with rapid change and enormous uncertainty, when you see companies struggling or failing. I’ve made investments in companies that have blown up. I am sure I will continue to do so. Human nature and ego ask us to change course when things don’t appear to be working. The process, however, requires us to keep going.

Mar 14, 2017

The Riff

Today we have have posted The Riff #1 to Soundcloud (and soon to iTunes, Google Play and other places I suppose).

The Riff is a 24 minute, unedited single conversation about one topic with one person who knows something about that topic (ie, a riff). David Tisch and I are the interviewers. We conceived of this idea and after a few months of planning we have started to put these into the wild. A few times over the past few months I have asked myself why we are doing this, have questioned it really, and I’ve come up with some reasons that make sense to me. So, why does the world need anymore stuff to listen to, and why would we be so arrogant (or narcissistic) to think that such stuff should come from us?

Well, the main reason is that we are doing this for ourselves, not anyone else. By that I mean these riffs are hard to do. Hard in that this does not come natural for either of us. The Riff forces us to beg people to join us, to prepare to interview them, and then be engaged enough to try to keep a conversation going on one subject for 24 minutes. I think we’d both rather be quiet listeners rather than upfront talkers. On top of that, we are committed that these Riffs are recorded live and in person - no phone or skype. So, in short, we are doing this because it feels like unnatural effort. Good skills to get better at. Also, as it is unedited and one take, if we screw up it will all be there, we’ll look foolish. Lots of room for failure = good incentive to prepare.

Secondly - focus. I feel inundated with information. The Riff is more information but it is designed to be 24 minutes about one thing and one thing only. #1 is about tv news. Later ones will include a riff of retail, a riff on NYC, a riff on celebrity and a riff on culinary mashups.

Why 24 min? That feels like the most we could ask of someone’s attention in a single setting. It’s the length of a short walk, a subway ride from Carroll Gardens to Union Square, a slow-sipped cup of coffee. These are not unstructured conversations - they are meant to be tight, fast and on topic. Also, as part of the bargain - of asking for someone's time - these things need to sound great, high fidelity. The Riff sounds great due to the mad talents of Ben the Engineer. Even if the content sucks, The Riff will sound great.

Riff #1 is about what the future prospects might be for television news. Laurie Segall, the senior technology correspondent at CNN, joined us.

Oct 21, 2016


Much ado is all I see
And feel like it's surrounding me
The crowd intrudes all day
'Til I'm finally swept away

A few weeks ago I had the extreme privilege of going to a meeting in Washington, D.C. at a building called the Eisenhower Executive Office Building. This the building that houses the offices of the executive branch of the United States government. It is a great old building the majesty of which you feel as you enter it via the multiple layers of security.

Then inside, there are . . . offices. Some of them reflect the architecture of a building built in 1917, but they are otherwise for the most part nondescript and surely less opulent or fancy or technology-laden than the average mid-sized venture capital firm. There are simply rooms designed for groups of people to meet with each other.

Which took me aback at first until I thought to myself that, at its core, the business of government is just groups of people attempting to make decisions - negotiating, cajoling, arguing, attempting to build consensus. It’s just people.

As a venture investor, one obviously gets the opportunity to back entrepreneurs - people - and different firms place different levels of emphasis on people, ideas, stage, and other things. Regardless, the people part is one of the best aspects of the job.

Which brings me to the blockchain. Our firm has what is now a well documented, ongoing and evolving thesis and related ideas about why we believe the blockchain is one of the most exciting technology shifts (movements?) we’ve seen in a long time. But there is also another aspect of it that is as exciting as the transformational nature or potential of outsized investment gains that may result therefrom.

It’s the people.

The blockchain and its evolving ecosystem and community (Joel and I called it “True Believers” the other day) are a wonderfully smart, intense, focused, weird, open, fun group of people. Almost across the board. Some are capitalists, some may not be capitalists, some cannot figure out which way to go, but all are curious. They are interested in finance, medicine, protocols, storage, music. But virtually every single person I’ve met is as open to conversation and debate, is transparent about their ideas and biases, as anyone I have professional come across. And, every single one of them smiles and laughs, simultaneously taking this blockchain stuff really seriously, and not seriously enough.

I’ve seen this before - when I worked at AOL in 1996 and in the early days of the social web 2006 or so.

Clearly, smiling, engaged entrepreneurs do not an investment thesis make.

Yet, almost weekly I’m coming across articles online making valid points about the unknown and dislocating changes that will be wrought when computers continue their march towards replacing tasks that people do. These concerns feel real.

But at the same time I also can't help but allow myself to get swept away in the enthusiasm of these people I am meeting - the humans - building blockchain software. That their enthusiasm, openness and sense of humor will in fact show us the way towards finding am amazing middle where technology and humanity do in fact meet.

Jun 14, 2016

The Reordering of Medicine

When you wake up in the morning
You'll have a brand new feeling
And you'll find yourself healing
-Daniel Johnston

The nature of the way we interact - or desire to interact - with medicine and our medical care is starting to change fundamentally. This is less about the unbundling of medicine (which may also be happening) but instead the reordering of it. Stemming from a combination of user desires (driven by the mobile transformation of the last 10 years) and software and device capabilities, the reordering can be seen acutely in some conflicts that are now occurring.

Take just one example: UnitedHealthcare recently decided to make equipment by Medtronic its preferred in-network device for insulin pumps. This is a Medtronic device.


The diabetic community was incensed by this decision. Why? Because alternative device manufacturers had been delivering insulin pumps with different features that users wanted. Like touch screen devices from Tandem or color screens from Animas or Omnipod:

Screen Shot 2016-06-12 at 7.54.54 AM.pngtslim_Hand_View.jpg

Of course, people took to social media to express their feelings: #mypumpmychoice and #accessmatters are just two of the relevant hashtags here.

Underlying this all is the simple idea that “technology is intensely personal.” No longer does technology being personal solely apply to our creative modes of self expression (our cameras, pictures, videos, tweets and Snaps) - it now also applies to how we manage our lives and health. Our phones may not be becoming our new doctors (though I think they can), but they are shifting the ways we interact with and track our health care.

This has the potential to put people at the center of the medical universe (in the same way people have become one center of the media universe).

This isn’t unbundling but more like reordering. Unbundling refers to the phenomenon whereby a market or industry that is tightly coupled, or otherwise concentrated or vertically integrated, is then later transformed when it splits into component parts. The components of healthcare are already fragmented, however. Instead, what is happening may be that the components of medical care are being reordered into something new - patient demanded and patient centric. Defined by the user and user needs.

This isn’t totally new. Jay Parkinson, MD, has been writing about this for years, my favorite quote of his:

People are the CEO of their health, and doctors are just consultants.

What may be new is the technology and services have finally caught up to make this a reality.

And it’s not just insulin pumps, but also many other services. For example, apps to track fertility (like Clue) only indirectly implicate a physician, but for sure help a person collect vital signals about their bodies and health. Parkinson’s very own Sherpaa tackles the problem of the complexity of employer managed healthcare by viewing it as a user experience problem to be solved. Smartphone accessories can now perform tests to detect HIV and syphilis from a finger prick of blood and in just 15 minutes. AliveCor allows you to perform an electrocardiogram at home. Services like Lemonaid and Nurx dramatically simplify the diagnosis experience (and cost) by providing computer-assisted mobile-only medical care directly to users.

This user-centric approach to medicine is also occurring in more b2b oriented services too. Eligible has created an API that enables a healthcare service developer to focus on user experience and not payment and insurance infrastructure (in a similar manner to, for example, Stripe). Lumity uses employee data to help companies provide the best benefits.

USV has, natch, invested in a bunch of these companies, some listed above.  

The thing that ties all these together is putting the user - the consumer of the healthcare - at the center of the universe and building out from there. There are, of course, other vital players in this medical matrix - but this reordering may be the beginning of a user-centric approach that has been largely absent so far at scale. One that feels consistent with trends we have seen in other markets and also one that could result in real change in the economy and society.