Dissecting This Week’s Media Fissure

(Disclaimer: Before a writer rips me apart or tweets this post without reading it fully, I used to be a long-time columnist for TechCrunch (the most frequent contributor they’ve ever had, over 100 posts and nearly 100 videos over a three period. I’m also a small, early-stage investor in Silicon Valley.)

A few days later, and the lava flowing from this week’s media eruption at Mount Gawker is still red hot. As I’m sure we all know by now, it was revealed that a multibillionaire founder, operator, investor, and board member of Facebook — the largest publisher in the world — secretly financed a citizen’s legal bills against an online tabloid magazine which outed the financier a decade ago and, more recently, took a very intimate video of the plaintiff in this case and published it to the web. Since then, a jury in Florida awarded the plaintiff over a $100M settlement and essentially rendered the online tabloid bankrupt, out of business.

Twitter has been aflame, where journalists spend lots of time tweeting before this eruption, with writers’ expressing concerns and fears over (1) the ability of one person to finance litigation against anyone, including media companies; (2) the potential threat to the future of free speech; and (3) a defensive backlash against claims from others that the online media model shouldn’t reckless chase page views. Targeting journalists as a victim can inflame an issue. This is a tactic disruptors used right after September 11, when different media outlets received packages laced with anthrax. The news this week was interpreted by many as if it were like digital anthrax.

As someone who is both pro-technology and invests in its future, but also as someone who has spent considerable time publishing online, here are my quick reactions to the furor, which I hope add a perspective and move the conversation forward:

1/ People Hate The Financier And Company He Represents: Imagine the plaintiff bankrolled his case by leveraging crowdfunding. He still would’ve won the summary judgment of over $100M. Some are saying the financier should’ve disclosed his backing, but that may have also affected the jury’s ability to assess the case on the merits. The plaintiff had a legal right to sue for damages. What’s clear now is the hatred for the financier and the growing fears of Facebook felt by the publishing world. We would be having a very different conversation if a big political backer financed this litigation.

2/ Protecting Privacy Trumps Freedom Of Reckless Speech: It’s almost like everyone forgot why this case went to the courts. Someone had private videos of them in compromised positions published to the Internet. Think about that. Someone could hack into your Dropcam feed at home and publish that to the web. There has to be a line of what people can publish without recourse and what is punishable by jail or fines. People also forget the courts will always uphold freedom of speech so long as the speech in question is of material public benefit. This case doesn’t threaten free speech, but it sure does make people think twice of posting immaterial, private personal information and trying to ruin someone’s personal life.

3/ Publishing Power Is Real: For over three years, I could post anything I wanted to TechCrunch, just hit publish and go. TechCrunch has huge distribution and many of those articles are syndicated around the world. I was never under oversight. I could hit publish without recourse. As a result, I was always hyper-careful to never make public information which was shared with me confidentially or in private. I’m not saying I was a “real journalist” as I was working in the industry at the time, but even then I would still get nastigrams for three out of every four posts I’d write because someone didn’t like it, but it always felt utterly reckless to cross the line of going after someone. There are some tech blogs that have done that (in addition to the defendant) and in the cases where it is material information (say, someone did something illegal), I’ve never seen anyone get mad at the respected tech and finance journalists. In fact, many of them are respected for bringing this information to the public record.

Finally, a personal thought:

4/ Writing As A Career Is Scary: I am not someone with marketable skills. I always enjoyed writing for fun, and for years, people would always say, “Why don’t you just write?” But I knew what that would entail. This case exposes deeper fears and anxieties many who have been stuck inside the journalism establishment feel deep down inside but rarely confront head-on. Many journalists work for media brands whose influence wanes in a digital world and/or are themselves bankrolled by a successful tycoon or family. Many of them (not all!) cling to a belief they’re independent or that freedom of press and speech need to be protected to the point where they can write about someone else without sticking the facts, without going to the videotape.

Writing online for a living is sort of like the taxi industry — an industry already under attack and waiting to be further disrupted by a Swiss Army knife of changes in the digital landscape: Facebook’s newsfeed, hosting, and algorithms; ad-blockers in iOS; social network products delivering information to users rather than media brands; and so on. Yes, some people will make it work, but aside from those who have the brand and digital-formula to carry through, it will be hard to carve out a career here, and as the courts have declared — it’s probably not a good idea to publish someone’s very private information unless it’s truly material to the public record. A tech investor who embezzles or a tech CEO who falsifies medical tests should be pilloried by the press, but publishing videos of them engaging in infidelity isn’t germane to the higher task at hand.

Despite what many people say online, there’s definitely a place for a Valleywag-style or new publication to act as a smart check against the tech and startup ecosystem at large, to take the other side on the merits and bring the hype down to the earth — it just so happened that this particular case was the fault line that was tested, but it was bound to happen at some point. The proper way to extrapolate from this event is to assume the lawsuit was self-financed or financed from the crowd — what then? I’d bet the conversation would be very different.

In Fundraising, As In Politics, “It’s The People, Stupid!”

People will sometimes stop and ask me, “How did you become an investor?” To which I usually reply, “I’m not a real investor — I just play one online.” It’s partly a joke, but there’s some truth to it — it’s easy to write a few small checks into a company, it’s much harder to compete for larger allocations, to lead rounds, and to win, to have founders pick YOU when you are telling them you want to commit to them. I believe only a small handful of investors truly lead deals, as in they take their role in deal leadership seriously and can do it repeatedly. One of those few firms is Homebrew. Even though I am close with them, keep a desk there, and have been friends for years, I will say that from the founder community all the way to LPs who have audited firms and conducted brand reviews, in a very short time Homebrew has created a brand. That is really hard to do, and it’s not an accident.

One of the ways they’re able to do it is by writing publicly and sharing insights that are typically not measured or distributed. Recently, one of their GPs, Satya Patel, wrote a post about their annual meeting and a review of their 2015 activity. To post this, it’s my idea, and emailed Satya to ask permission because I think he writes some things that would be useful for (future) founders to understand, in part because Satya is a straight-shooter and some of this stuff isn’t discuss more broadly because people are afraid of sounding politically incorrect.

You can read Satya’s entire post here, and here’s what I’d draw attention to:

1/ Raising a round does and should take time. So often people treat the interactions as a sales process executed from a Google Spreadsheet, but consider firms that lead, like Homebrew, may make up to 10 core investments per year. With two GPs, that’s only five per year, or a bit over one a quarter. Patel writes: “Our approach is to be the investor of record in the round. To us that means being the lead or co-lead investor (writing one of the larger checks, from $500k to ~$1m) for only 8-10 companies each year, typically taking a board seat and then working closely with the founders to help them build the company that they envision.” When they make a move, they not only see opportunity (in the person, space, or both), but they’re also making a commitment to spend time with them. It’s common logic that they’d likely prefer someone who takes care in how they present themselves and communicate. It’s a pretty intense relationship, but in a culture of so much money around like ATMs, it’s easy to just move on. Turn out, relationships matter in fundraising, and they compound over time.

2/ It’s not a bad strategy to be so good that investors contact you. There’s a hunting element driving some investors, and while they sniff out a goose chase quickly, being difficult to find and having mojo on your side is noticed. Patel writes: “We do spend a lot of time thinking about markets or trends we liked to invest in. We then take those interest areas and try to identify and contact companies or entrepreneurs doing innovative work in line with our theses. Not coincidentally, 3 of the investments we made in 2015 were the result of outbound efforts.” There’s something to be said for doing your thing and letting the investors find you based on their interests, or even at a time when you’re not fundraising.

3/ Cold hands with a warm touch. Very few investors will publicly admit to ignoring cold or bad emails, because no one wants to say that. Behind closed doors, we all know the truth — people want filtered information, references, recommendations, especially in a noisier world. Patel offers some tactical advice for cold communications: “We get a lot of cold inbound emails from founders asking us to invest. The form emails that are clearly being sent to a large number of investors get rejected quickly. But on occasion, a truly thoughtful, personalized email appears in our inboxes and grabs our attention. The sender has clearly done his or her homework on our investment approach and areas of interest. And the email contains data or a demo that tells a compelling story.” Building off the point that relationships matter, most relationships also begin via email, yet so many people don’t treat it as a personal communication — it’s more tactical. But, to get the attention of a lead investor, their business is personal because they’re not making many commitments. Warm touches are so rare that they stand out and they’re harder to fake.

4/ Differentiation cuts through the noise. It’s hard to stop for a minute and ask, “What differentiates me?” Oftentimes, it can paralyze a person. I know myself going through the LP fundraising process for Haystack, I got stuck on that slide forever and still am not happy with it. Patel writes on the subject: “We tend to be less interested when there is a market where a dozen companies are doing effectively the same thing. Unless we see a very clearly differentiated approach that has long lasting differentiation, we’re likely to pass.”

The thread running through Patel’s post and the parts I’ve drawn out is the importance of relationships, communications, and differentiations. Nearly ever month, I meet someone who wants to meet Homebrew or some other great lead investor but hasn’t gone past the “why” portion of the request, and I just sit there and wait. Unless I have my own reason to recommend, I know busy investors won’t just take any intros. Sure, some of them do “as a cost of doing business” to keep their deal sources humming along, but if you’re a founder and you get a meeting with a great investor who shows little to no interest, it’s because they’re taking the meeting out of obligation.

On the other hand, building up some genuine, personal communication momentum paired with building a relationship helps soften the transactional edges of raising money, as it ends up being a people-business. Marking your differentiation confidently also helps. It might be hard to get the meeting without doing these, but that’s also kind of the point, so thanks to Satya for writing it out so clearly.

What The Money Folks Are Saying

There’s a lot of noise about what’s happening the private startup market. It’s easy to just say X and Y are happening and read the headlines. Today, I got an email from Industry Ventures (IV), which acts as an LP into various VC funds and invests in “special situations.” They’re not known to most founders but sophisticated in their broader knowledge of the private and public markets and how funds are moving.

Their most recent post, titled “The Elephant In The Room: Hedge Funds and Mutual Funds,” can be read in its entirety here.

I wanted to draw out a few passages that caught my eye and draw a few conclusions from it. Before you consider this another saber-rattling post, please do see the points below and feel free to disagree and draw your own conclusions:

1/ Hedge fund and mutual fund involvement in the late-stage private sector has likely increased the number of “unicorns.” I guess we all sort of sense this by now, but IV writes specifically: “We believe growing mutual and hedge fund involvement has been one of the key drivers for the rise in the number of so-called unicorns—private firms with $1 billion-plus valuations…That said, the tide has recently shifted…When mutual funds and hedge funds cough, venture capital catches a cold.” For years, it’s been written VC money is fueling this price inflation. What if, in fact, it is also HFs and MFs, who have different objectives, and the companies themselves which accept this money?

2/ HFs and MFs are scaling back, but not going away. Writes IV: “[I]t appears more a matter of [HFs and MFs] being patient rather than losing interest, especially where they have dedicated pools of capital available for this type of investment.” So, this is interesting, they won’t “run for the hills” as many claim, but are taking a break to see how things shake out. Perhaps they want to make sure to avoid the situations which arose in 1/ above. Additionally, IV cites reports for HFs in particular that redemptions are up and could increase, sucking money out of the system further.

3/ The dislocation in private price vs public market prices could mean some companies simply collapse as a result of their own weight. Again, we all kind of sense that, but IV says it in a provocative manner: “Another concern is the fact that some of those investors we spoke with who dabble in private markets said they might not buy into the public offering of pre-IPO companies in which they had invested (assuming they do come to market). Depending on how widespread this view is, it could mean that the long awaited rebound in demand for small cap technology shares and IPOs is not yet at hand, further diminishing prospects for private-sector firms seeking a public exit.” Imagine any unicorn with a big HF or MF investor who, at the IPO, doesn’t buy more shares. It would be the mother of all signaling risks.

4/ M&A also could be impacted as private prices feel wrong to acquirers, who may elect to find comfort in public prices. As valuations got so high over the past few years, VCs and founders priced their companies beyond what the acquisition market would consider for their companies, thus shutting off one of two exits paths — the other path being IPO. As a result, we see more drive for liquidity in subsequent financing rounds, causing asynchronous liquidity events which potentially redistribute risk and reward unfairly. IV suggests that large acquiring companies wait and poach “smaller public companies, potentially creating pockets of demand that could be filled by private firms coming to market. That said, until IPO returns are seen as more attractive than those that have been garnered from investing in secondary issues, institutions have little incentive to step out of the publicly-traded safe zone.” This “safe-zone” is a way for the M&A market to gain leverage on price and, in doing so, call the bluff of their counterparts.

Whenever I write about the market like this, it is for me to internalize what I see on a daily basis and share that with you all. I do feel on this topic I have to add a disclaimer that I’m very optimistic about technology overall, that I am a very active investor and even invest in things that appear to be expensive. At the same time, I am trying to learn more about ecosystem overall and how market forces shape what we do. This post by IV does a good job of helping in that.

When Inbound And Outbound Get Turned Upside Down

In the world between founders and investors, both sides should always be mindful of their interpersonal behaviors — especially being aware if the origin of each relationship is outbound, inbound, or mutually developed.

In a situation where one experiences inbound interest, that person is often at an advantage and can bend the rules a bit in his or her favor. Flipped around, when going outbound to generate interest, that person often has to be extra accommodating to give themselves a chance at making a connection. When there’s lots of inbound interest, it’s easy to tilt the game in one’s favor, to get better terms, to control the ball and the clock; when one has to go outbound, usually that control and tilt shifts to the target.

Despite this common sense, I still see lots of folks who are going outbound act as if they have inbound interest.

I see this on both sides, for investors and founders. This usually becomes most apparent in the transition from angel/seed capital to the land of institutional venture capital. In seed, there’s so much money, rounds happen so fast, terms are really generous — but then all of a sudden, folks are doing well, and looking for $2M+ lead checks, often more, and they have to shift from the “abundance of inbound” in seed to the “realities of outbound” for the next round. On the investor side, I see many instances where folks just assume deals will come to them because they have money and a big office. Nope. Some funds are so far off the radar of today’s founders, they’d be shocked if someone conducted a thorough brand audit.

In short, I see inbound attitudes against the background of outbound realities.

I feel it because I live it. When I go out to raise my funds, even though they’re small, every single interaction is outbound. I have no inbound. As a result, I need to bend my schedule and attention to be outbound. It’s a big step to go from a few families and high net-worth backers to someone cutting a bigger check. It takes time. And it should. For some managers and funds that have made it, that carry huge brands, they’ll always have inbound — but the overwhelming majority, like in startups, have to generate their own outbound — not just for fundraising, but for recruiting, business partnerships, public relations, and so forth. Fundraising is talked about the most, but it’s just a proxy for how one may handle everything else. As a result of this dynamic (and, to each his/her own, of course), I always try to remind myself to not be fooled into thinking I can generate the inbound, but to rather let humility drive the outbound.

Medium Rare

I love Medium, the product. I wish I had the opportunity to invest. When Greylock became their first institutional investor, I knew Medium would be a billion dollar exit and wrote about it here. Since then, other great investors and firms have backed up their trucks to ride the Ev train, and that’s a smart move.

Online, it is easy to see blogs migrate, flock, gravitate to Medium. It is a phenomenal product. I can say that because I live inside WordPress, which I’ve come to learn (and like) over time. It can be frustrating, too – oh yes, very frustrating. That’s why Medium is doing so well. There’s little need now for WordPress for people who just want to write and post media and discover new content, and they needed some competition.

In terms of people migrating to Medium, I certainly see flocks of investors and tech people taking flight to Medium — or redesigning their blog/site to look like Medium’s. The advantages of going there far outweigh creating an independent blog, especially today. Some holdouts have cited the inability to get their domain, or customize their look, their investment in a commenting system, or an email list they’ve carefully built up, etc. — but Medium is chipping away at those, too. They understand what the holdouts want and are probably building it.

But, I won’t do it. While I have experimented with cross-posting and do some personal writing on Medium, I will not move this blog to Medium.

Maybe I’m holding on to an old habit. Maybe I spent too much time, over the years, designing my site to look and feel a certain way. Maybe I don’t want to feel I’m joining the ranks and just following along. Maybe it’s all of the above.

But, if I sit down and drill into why I won’t do it, it comes down to identity.

I don’t have an office for work. I don’t have staff. This site has evolved since summer 2012, like I have, and I’ve been able to slowly mold it to the things that I increasingly care about. Maybe, as droves flock to Medium, my site becomes more unique. I am sure I’m placing more weight on this than needs to be, yet I still feel as if going to Medium will feel like “changing offices,” or “acquiring a staff to manage” or, most frighteningly, will start to chip away at the little bit of individuality I hold in what is otherwise a competitive, overcrowded, monochrome investment world.

Shift To Consumer Investing

I intend to shift most (not all) of my focus back over to consumer investing in Haystack 3.

In my first fund, it was dominated by consumer. That wasn’t intentional. I was just starting out, I was a dog chasing cars. In my second fund, most of it was consumer, but I started to go a bit deeper into enterprise SaaS and industrial IoT. That exploration led me to start focusing on enterprise and industrial IoT in my third fund, which I’m currently in the middle of. In this current fund, I have focused my investing in two areas so far — enterprise SaaS, security, and infrastructure, and industrial-focused software and robotics. I’m finally able to write more about these so expect some “The Story Behind My Investment In _____…” posts over the next few weeks.

Along this way, in Haystack 3, I have been looking for consumer-focused companies but have ultimately passed on all the opportunities to date. Those were hard decisions, and I’m sure I made some mistakes. So far, in 8-9 months of investing Fund 3, I have only invested in one (1) consumer-facing seed-stage company, and it’s not yet launched and may shift its model to an indirect B2C2B model.

I would like to do more on direct consumer in this fund, and it’s been nagging at me for a while, so I finally wanted to post on it. I do not have a laundry list of categories to hunt down or chase after, and I have a small handful of ideas of where I think interesting consumer behaviors may emerge, but I’d rather see what’s out there and be surprised. Yes, I have thought about areas of consumer spending (insurance, rent/mortgage, self-improvement, health etc.) and consumer attention (VR, AppleTV, apps etc.) and I’ve written about live video and esports and bots… but I would say the pattern I’m looking for is as follows: Something I can experience/test myself or observe others doing; a company which is obsessed about creating and building a direct relationship with a consumer; a team that is obsessive about acquiring customers and users and their CAC numbers; and a team that has a vision for a future on a global scale — doesn’t need to be today, but eventually. A product vision and desired roadmap goes a long way.

I am going to focus on this now more intently and really dig into it over the summer. It’s OK if you’ve already raised a pre-seed or seed or whatever fund. And, I likely won’t make any investment decisions very quickly on this, so am looking to engage more and get to know more people before selecting a few to work with. I’d appreciate it if you could share this with people you like or find interesting in the consumer space, and thank you for reading.

The Chocolate Chip Cookie Company

Nearly a decade ago, I met an investor while I was in Boston who was trying to explain to me how some very rich people like to invest. This is many years before I become interested in investing myself. He called it “The Chocolate Chip Cookie Company” syndrome. He said that when rich people socialized with their friends, they’d like to name-drop companies they’re an investor in. “Oh yeah, we own a piece of that company.” Cheers!

He’d often refer to this investor psychology when he was trying to sell. “Chocolate Chip Cookie Company” he’d whisper and nod to himself. At the time, I had no idea what he was talking about. I didn’t know this world he spoke of, or the world he operated in.

Now, I think I have a better understanding of this investor psychology. In this world, think of chocolate chip cookies as a hot tech sector. Today. that is likely bots, or chatbots, or bot platforms, or bots with AI, or, really, any type of bot-cookie you can think of — the kitchen sink cookie.

Part of the psychology is to be able to prove ownership in something. Part of it is to make sure part of one’s portfolio is covered or has the right exposure — “gotta have a play in chocolate chip cookies, right?” No portfolio would be complete without it.

Today’s tech startup obsession du jour is… bots.

I gotta have a bot company.” But I am 99% sure no one knows where this is all going, and instead of harnessing an open web or relatively open iOS platform, it’s not yet clear if the big mobile messaging clients like Messenger, WeChat, Whatsapp, etc. will allow or permit a new service to take off on the back of its own property. But the category is interesting enough and barriers to entry are quite low, so investors (who don’t want to miss out) are piling into new startups, creating ad hoc funds, flooding to incubators, temporary funds, and even starting to invest at the institutional Series A level.

What do you think of bots?

Huge. I’ve got a bot play in my portfolio.”

Cool. Me, too.” (sips bourbon)

We all will, and it will take many months, if not years, to figure out who picked the right chocolate chips.

Minimum Wage, Maximum Automation

The State of California recently unveiled a plan to increase minimum wage in the state to $15/hour by 2023. Currently, America’s national minimum wage is $7.25/hour, which hasn’t increased since 2009. The concept of minimum wage is complicated, and I don’t want this post to be focused what is fair or isn’t about such an increase. I certainly don’t condone workers having to see most of their take-home pay go to rent and most of their free time eaten up by commuting. That said, I do sense aggressive increases to minimum wages will come with deeper consequences, ones that our society will now wrestle with on a daily basis and for years to come.

Increases in minimum wages will accelerate a massive shift to automation.

I see it on a weekly basis with startup pitches. Name any manual job currently booked at around $15/hour or so, and I’d bet there’s a 50% chance that task will be automated, either with pure software, enabled hardware (in the form of a robot), or some mix of both. Automation via software has been underway for a few years, but when it’s combined with hardware, the results will be astonishing. The components needed for such robots are now readily available and getting cheaper by the year. The hardware/robots can be differentiated by software and the vertically-specific applications they are designed for. The robots become a vehicle by which new technologies and services can be delivered, and of course done so at a fraction of the cost without the additional overhead (like healthcare, etc) that can saddle a balance sheet.

I know this is coming — and fast — because I myself use products on a daily basis that replace traditional human labor with automation and learning.

The way that I describe this trend in general is to imagine your local Starbucks. Say it is about 2,000 square feet total. At a busy time, you may see 8-10 workers in the store. Why? Shouldn’t I just be able to walk up, have a beacon notice my presence, and a robot makes my drink. The machines to do this already exist. It is coming.

We can expect to see the consequences of minimum wage increases (which I acknowledge are extremely complicated) take root in automation, robots, and corresponding services. Some solutions will appear like vending machines, whereas other solutions will mimic human movements and behaviors, just in different shapes and forms. The technology and builders are already here, working on these solutions — the turbulence in the bifurcation of the economy, the force-changes driven by technology, and the slow response to build enough suitable housing and transit may combine to usher in this robot-led era with greater speed. Minimum wage, maximum automation.

Investors Are Going Botsh*t Crazy

Bots. They are everywhere in startup land. It feels like a gold rush — a bot rush. And, there is a backlash, as well — a botlash. Whether it’s more and more people using Slack and other messaging apps and come across these new bots and features, the trends set by Y Combinator’s Demo Day (where, by my count, four very interesting companies launched in this space), or one of the 101 pitches investors see from founders, bots are everywhere.

In this rush, there is surely opportunity, and also noise. At a high-level, “bots” are attractive because it is a lightweight format by which a startup or messaging app or Amazon Echo can deliver services to users on the simple end of the spectrum, and perhaps one day automate, predict, and conduct work for us as it learns from our interactions and behaviors, as well as learning from other APIs they interact with.

The noise created by today’s frenzy makes it hard to find signal. As a I result, from an investment point of view, I see the bot world in three (3) categories:

1/ Vertical-focused B2B platforms w/ SaaS business model: This is targeting a specific end users (usually businesses) that need to create a bot for news, or commerce, and pay the startup for a suite of tools to do so.
2/ Selling picks & shovels: When you sense a category is going to be big/important, but don’t know what the end-users will use, one can invest in the developer platforms and services that the bot creators will need to make their bots.
3/ Direct to consumer (or prosumer) plays: This can be seductive because messaging apps are huge (easier to get users, distribution), but also dangerous because today’s platform can become tomorrow’s gatekeeper.

How do I think this will all unfold? I have no idea, but I think the three investment strategies above make sense, all for different reasons. I have an investment in 2, looking at 3, and looking for 1. I’ll let you know when I find out.


Separately, on the consumer side, I’ve been thinking about what I want personally in a bot service. I wanted to write that below in case anyone has built it, is building it, or is looking for an idea. Here’s what I want:

1 – I want to create my own personal bot, Semil-bot.
2 – On web or mobile, I go to your page and authenticate with Facebook. This has to be ID-based.
3 – I connect a range of services and accounts, beyond financial like with Digit etc. Definitely Gmail and Google Calendar, like Paribus.
4 – If I give Semil-bot the keys to my digital kingdom, I want it to not only dive in and learn everything about me beyond Facebook, I want it to crawl a network of specific APIs for financial services, insurance, digital media, social networks, etc. and constantly be on the lookout for my best interests, to save me time and money without me having to think about it or execute any actions.
5 – Semil-bot would send me a daily update email with actions that it’s taken an easy way to reverse, pause, or suspend commitments. It would work for me, on my behalf, 24 hours a day. I would pay $10 or even more for this service.
6 – But, this isn’t just a weekend hack project. As the system gathers more information about me and other APIs, it needs to learn and form a real brain. It needs to learn over time and make inferences. It needs to anticipate things. It needs to deliver a service that saves me both time and money, reducing cognitive load and becoming a trusted digital agent to act on my behalf.

Human Memory, Connected Storage, and Digital Nostalgia

I caught up on Lefsetz’s blogs from the past two weeks yesterday. A few stuck out, like always. In particular, he wrote something about his history of Springsteen concerts, which you can read here. His recounting touches on all sorts of nostalgia triggered by following The Boss over the decades, and while I’m not a huge fan of Springsteen, I hold him in high respect — I once saw him perform, without breaks, to a crowd in California for almost 3.5 hours. No stops. It was one of the most authentic musical experiences I’d ever seen. Maybe I’m more of a Springsteen-the-person fan than a fan of his music.

Re-reading Lefsetz’s journal entry, I remembered I had myself written about the concept of nostalgia intersecting with technology. I don’t know why I write about nostalgia, or why I’ve got a few tabs open for an unplanned afternoon of where I should be stack-ranking investment opportunities and focusing on work. It may be that nostalgia, for me, is even more powerful force that interrupts my ability to (attempt to) think rationally.

Back in 2012, I wrote on my blog here about Timehop, a fun app which sends you back in time based on photos and check-ins. The first time writing about Timehop, I mentioned:

“…while you can scroll down your Facebook Timeline and travel back in time, a service like Timehop could present older pictures to users in a way that strikes upon a deep emotional chord. It is this element of nostalgia that interests me. It is a product I’d want. I can imagine Timehop simply running in the background on my iPhone, sending me a gentle notification…”

Later in 2012, it occurred to me sharing photos to the right people at the right time can, in fact, trigger nostalgia. In the next post, I invoked the now famous scene from Mad Men, “Carousel,” where Don Draper, tasked with coming up with a pitch for a slide carousel, paints a picture of moving back and forth through time by pictures. This nostalgia, he says, has the power to create a close bond with the consumer. While Timehop can’t compete with Facebook, and while what Timehop pioneered might become a feature of how we all use Facebook in the future, it is fun to look back on how it presents us with nostalgia:

“…it simply gives people what they want in a new form — the place where you can keep your memories. The carousel of old slides, the cigar box of warped pictures, and the Instagrams you’ve taken, now in your pocket, delivered to you in just the right way.”

Nostalgia even led me to join a startup company, Swell. A few years ago, as someone who grew up as a radio and audio junkie, I got swept up by the old memories of listening to transistor radios and studied how radio and radio imagery influenced the brands, lyrics, and sounds of some of my favorite musicians. In writing about Swell’s product:

Radio fills the dead time in my life, when I am free to be more at ease, more relaxed, and as a result, my brain seems to expand a bit more to let in more information. Yes, we are visual and textual creatures, and images are central to how we process information, but audio is equally important for me, and when it comes to knowledge, the ambient awareness provided by radio is perhaps the most powerful.

And, so, all of this brings me to the original Lefsetz post about Springsteen. Check out this passage, edited for length:

And all of this went through my mind watching the Boss at the Sports Arena. My life slid by. People my age are thinking of retirement… But once upon a time we were the youth, we were the cutting edge, there were no social networks, cell phones were a “Star Trek” fantasy, we had to leave the house to connect, to feel alive, and where I felt the most comfortable was at the show… It was completely different. No one stood, except for maybe the encores. There were seats. You didn’t go to be seen, you went to communicate with the music, bond with the gods. And it was like that Thursday night. And it won’t ever be that way again. It can’t be. Mystery is history. You can see it all online. And scarcity is a thing of the past.


To connect, to feel alive, and places where we feel most comfortable — I’ve been thinking about that passage in particular. Today, Oculus Rift virtual reality headsets are shipping. eSports, where fans worldwide watch other people play video games. Legions of EDM or Taylor Swift concert-goers are recording their experiences through Snapchat Stories. The web and mobile devices are empowering people who may have once felt lonely now connect with likeminded people across social classes, political borders, and beyond.

And now that everything is recorded and documented in real-time, accessible by search, searchable on billions of devices worldwide, it is both empowering and unsettling from the point of view of nostalgia. Growing up in the 80s, most of my memories are locked in a few videos, many still photographs (that haven’t been put online), and in my mind — but what about my daughter, who is almost three years old, who is the adoring subject of thousands of photos? She will be able to see so much of her younger self in digital form, but where will her nostalgia reside? In digital form? In the corners of her mind?

I’m not sure I have a great conclusion here. Perhaps there isn’t one. I’ll end with one of Andy Weissman‘s old posts, back from 2013, where he writes this passage about the idea of putting old videos from his youth on YouTube:

When I tell people this story, they mostly have the same reaction. “You need to put the shows on Youtube!” The video tapes – cartons of them – are spread out. Maybe in California. Maybe at my mom’s place. Some in Woodstock. Maybe they are gone. These requests usually set off a flurry of internal emails amongst ourselves: should we do this? Have you watched them? Which one should we digitize? This year we will really get around to it, yes this year we will, right And then when I think about it, I realize we probably shouldn’t, and most likely won’t, digitize them and put them on Youtube or Vimeo or wherever. It would ruin the memories.

Haywire is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2016 Semil Shah.

“I write this not for the many, but for you; each of us is enough of an audience for the other.”— Epicurus