There is a certain excitement, a certain uptick in pace, in the Fall around these parts. This year, I feel like I’ve seen enough interesting early-stage founders and companies (so much of it falls into patterns) that I sort of have a picture of what we may be talking about as September and the final months of 2014 unfold. Keep in mind that this list is about the Series A level, when bigger institutions get involved — and is by no means an indication of overall success for anyone involved, investors included. (Also, of course, we will all be chattering about Apple and the other big tech giants, as a given.)
In no particular order, here’s what seems to be entering either the echo chamber and/or mainstream conversation:
Parking: Yes, I’m obsessed with parking startups. No good reason other than I can’t wait to see the #Parkageddon hashtag spread.
Apps That Support On-Demand Economy Companies: See a company like Checkr, which helps the Ubers of the world perform better background checks and processing of labor. These startups and companies will likely need a whole set of services and have likely built their own, as well.
Apps That Support On-Demand Economy Workers: This is a category where I’m seeing tons of startups. Like Mailbox clones designed for “the enterprise,” I’ve passed, but I’m just waiting for one to have a clever hack around distribution — most likely to be the preferred vendor of a company like Instacart or Postmates, etc. There’s an opportunity for a new Intuit for 1099′ers out there, but it has to grow like a weed.
Block Chain Apps: There will be a few companies that get bigger institutional funding which leverage the block chain to handle business processes, most notably the creation, enforcement, and settlement of contracts. Yes, some of these can be mediated in Bitcoin, but it’s not required to do so.
Mobile Commerce: This is the area I’m most excited about, even more than parking! If you’re working in this space or have an app you love, please tell me. I like mobile commerce experiences that either leverage a phone sensor; or have a clever logistics angle; or leverage a proprietary data set; or even those that hold inventory in inventing ways. Of course, I’ll rarely turn down any mobile marketplace, and my old fears about mobile platform fragmentation crippling liquidity is now gone. iPhones, all the way.
Consumer-Grade Artificial Intelligence: This totally snuck up on me and I will admit I missed it, even though it was right under my nose. For the first time, I saw an app/service that uses a combination of AI and ML to do a job better than a human and solve multiple problems in the process. Then I started to think — if it can do it for this one task, why not other mundane tasks? I see no reason why not.
Interactive iPhone Notifications: No real surprise here. Borrowing from Android, iOS developers now have the power to allow users to take action on an item directly from push. Let’s go back to Uber. The app knows you’re about to leave work (you’re a pattern). The app pushes to you — “Call an Uber?” You gently slide over the push and tap “Yes.” Never go into the app itself. That is huge, and apps like Wut, Yo, and others, as well as the push notification ESP equivalents like Kahuna and AppBoy, are well positioned to secure their place in this new landscape.
Welcome to the 11th Sunday Conversation — on a Monday. While I want to name these videos “Sunday Conversation,” I came up against an opponent — the NFL ;-) Anyway, since I do these only once in a while now, I’ll likely just post them at different times. I hope you understand. In Round 4 with Keith, we revisit Bitcoin (again), we talk about the rest of the Khosla team, YC’s latest Demo Day, the motivation founders need, chatter about parking startups, and much more. Note that full audio of the conversation is at the bottom, via SoundCloud. Also, Keith and I will likely do one more (maybe in November?) and then starting in 2015, we will have a new guest for the year. That person is TBD, but the short list is awesome. Keith is a tough act to follow, no doubt. ♦
Part I, Revisiting Bitcoin And Stellar (7:23). I give Keith an opportunity (again) to revisit his statements on Bitcoin both as a currency and as a protocol, and he discusses a few investments in the space, primarily leveraging the block chain. He also discusses the relationship between Stripe and Stellar, which is worth watching.
Part II, Identifying Potentially Great Founders (8:28). Rabois goes in-depth about what intangibles he looks for in founders. This is notable because Keith is one of the few investors who will just invest in a team before any product. In this chat, he talks about how to leverage asymmetric information about people, how picking founders can be a bit like scouting athletes, and why it’s important to have a differentiated model in investing.
Part III, The Rest Of Khosla Ventures (3:28). It dawned on me that aside from Keith and a few conversations with Vinod, I didn’t really know about the rest of KV. Keith gives a brief overview, describing the firm as “irreverant, broad,” and talks about the portfolio in alternative energy, sustainability, and food/ag tech.
Part IV, “Peak Sports” Or Bubble? (6:15). Rabois explains why real-time sports dominates at aggregating consumer audiences and changing behavior given the passion (or addiction) society places on sports.
Part V, Thoughts On Y Combinator (2:51). Rabois shares his views on the latest YC Demo Day. (I had written earlier that YC is kind of a like a growing startup.)
Part VI, (Over) Optimizing In Fundraising (2:16). We discuss the pros and cons of split caps in seed rounds, and why changes in the macro environment don’t matter with respect to startups and early-stage investing.
Part VII, Parking Startups Frenzy (3:04). I’m obsessed with this lately. It’s a thing people hate, it’s expensive and inefficient, destructive. We look into why it’s happening now.
A special thanks to the team at Scaffold Labs for sponsoring the Sunday Conversation series on Haywire. Scaffold Labs is a boutique technology advisory firm based in Silicon Valley which designs and builds scientific and predictable talent acquisition programs that helps technology startups hire great people. Scaffold Labs has previously partnered with companies such as Cloudera, Appirio, and Nimble Storage, among others. For more information, please visit www.scaffoldlabs.com
Here’s a brief thought that’s come up in conversation quite a bit this week, about where consumer attention is:
In venture capital, the one of the biggest categories is consumer, because consumer-facing products and services at scale present the greatest possible market. This is, in part, what drives valuations for early-stage hot consumer deals up — the upside always has huge potential. On the web, consumer products and services could grow and scale based on the network effects of the open web itself.
But, today, we live in a different world — a mobile world. All consumer attention is on mobile, but on mobile, growth and scale are confined to a few “growth pipes” which present their own issues. For instance, gaming is an expensive category to compete in, photo and location apps are usually chased by investors after the fact, messaging apps create network effects but those options have largely been set and regionalized, and then there’s the hottest category out there today –> mobile on-demand services.
I’ve written about mobile on-demand services often here. We all get the picture. In a world where mobile scale is near impossible, better to aggregate consumer demand on the phone, but fulfill that demand through offline logistical prowess. Hence, we have Uber, Instacart, and many others. But, consumer web products could scale with much less friction. In the world of mobile on-demand services, there is significant friction — expanding geographically, hiring and training reliable labor, and so much more. As the coefficient of friction rises, so does the risk. This dissuades some investors from jumping into the space, but it also highlights the importance (or advantage) of having investors with real operational experience in geographical expansion, logistics, delivery models, and more.
There is an inherent friction to this new consumer mobile opportunity. With mobile growth elusive, entrepreneurs have shifted to transactional businesses, and with each transaction comes friction. This is both a challenge and opportunity — a challenge to those founders and investors who are concerned about friction (which is a real concern in venture investments) and an opportunity for those who can identify the categories (and the people behind them) who can overcome any coefficient of friction.
Each August, as the Fall approaches, I try to quickly jot down my “field notes” and tips for folks who enter the marathon fundraising season from Labor Day to Thanksgiving. This Fall is a bit different. More companies, even more money, and new capital sources like the crowd and private equities. For Fall 2014, no long preamble or disclaimers, I’ll just launch right into it, in no particular order:
The Jump From Seed To Series A Is Big: I hear many people in their seed round already talking about their A Round in the next year. Optimism is great, but if that’s the goal, everyone needs to be clear about how to put the seeded company on the right path. If the institutionalized seed folks are looking for six months of trailing data, imagine what the billion dollar funds want.
Don’t Get Tripped By Outdated “Round Name” Terminology: What are seed rounds? What are Series A’s? Who on earth knows anymore. Yet, I see so many folks getting hung up on what to call it that it clouds their vision and judgment. I’ll paraphrase a line from PG: “Series A is when the pros do it and call it that.”
Optimal Ratios Between Branded And Unbranded Money: Every founder is different here, no rights or wrongs. The trap is to get stuck. Some founders want some level of branded money, and some just want money. Know where you stand on this spectrum and execute accordingly. Those who want a mix of branded and unbranded can likely close quicker (as opposed to rolling closes) and save time, as fundraising is quite a distraction to product and company development.
The Trick With Introductions: I’ve seen 100s of founders do the rounds for random intros to investors they want to meet. Those rarely work, in my experience. Rather than play a numbers game, 4-5 targeted introduction requests from people who BOTH you and the investor know will be much better received. It’s really about the strength of the connection between the nodes, that’s what sets up an introduction to be timely, awesome, and potentially game-changing.
Own Your Process: Dorky as it sounds, running a fundraising process is a way for investors to see how a CEO runs process. Investors like to see someone in control, this gives them confidence. Give them something to believe in — like running the process.
The Uber Effect: Uber is the hottest company on the planet now. It’s first round was pegged at $5m, and I believe it was on AngelList. People even questioned the $30m B round from Menlo. Now everyone realizes it was under their noses, so they’re looking for not only breakout ideas, but breakout people — Travis already had a startup he slogged through for six years and was determined to the bone. Motivation reveals itself.
Conversations, Not Pitching: Speaking of conversations, the best advice I received from a mentor in graduate school in preparing for interviews was to turn any Q&A into a conversation. If you can do that, it breaks up the unnatural interrogation and allows an investor to see the range of your thinking, as well as personal characteristics. Also, I just fundamentally believe that people want to have conversations rather than pitches or business meetings — they want to be heard, they want to listen, and they want to feel as if they met someone new that they can work with. That is what creates excitement.
Start The Conversation With Traction: Here’s a bold idea — After your cover slide in the deck, have the first real slide be about traction, usage, metrics. If you don’t have traction, say that upfront and explain where you are. People will still fund things pre-traction (and even pre-product), but just be upfront about that.
Speaking Of Slides, They’re Meant To Attract Others: Slide decks are a way for investors to determine if they want a meeting. Some don’t like slide decks and want to just try the product. Either way, if you have an app — send the investor the app. If you have a deck, make it simple and attract others to want to meet you. The deck or app is just a means to a meeting where you can have a conversation in real life.
Part Of The Pattern, Or Part Of The Portfolio: When a space gets hot, investors want to meet everyone in the space. This helps them develop a thesis, meet the players, and build a pattern. When you’re talking to an investor, try to determine if you’re becoming part of their pattern or can be part of their portfolio. If things don’t move in a manner that has momentum, take it as a “no” and move on…believe me, the investor will rush to get back in touch if they come to a decision later or change their mind. I have done this too — waiting by the phone — and it’s just a bad place to be. Don’t do it! (Tangent: Read this post on “Turf Signaling” – the location of where you meet reflects power dynamics often overlooked.)
Hard Problems or Timing Inflection? A fun criticism of investors is that they (and some founders) don’t “solve hard problems.” It’s a misguided critique. These kind of investment dollars are to be applied to hard problems, yes, but what really drives this is traction, market timing, and potential for inflection. Some do it by chasing after it’s obvious, and others are able to predict when something is on the precipice of inflection. Again, there are plenty of patient investors and capital, but with companies staying private longer, secondaries available but not predictable, and so many investment opportunities around them, investors are going to naturally pick up on things that are already working — where the question isn’t “How big will it grow?” but rather “How big will it grow and how fast?”
Sophistication With Stats: A bad place to be in an investor meeting is when the CEO does not own the metrics. The metrics should be like oxygen to a CEO. Also, the way in which stats are presented (month by month rather than cumulative, properly labeled graphs, etc.) show a level of business sophistication that will be noticed.
Alternative And New Capital Sources: VC firms have used social media and content to convince you that you need it. In some cases, you do; in many, you don’t. There are now tons of alternative funding sources (you know the ones). Additionally, for companies who are growing, there is even more new money coming into late-stage private financings. This is an increase even from last year as companies stay private longer and mutual funds, hedge funds, corporates, and even SWFs are getting into the game with direct investing. There lots of money out there (some may say too much), so make your plans accordingly.
A few brief nuggets of interest re: today’s outlier outcome, which is Amazon’s nearly $1bn all cash acquisition of Twitch:
Seven Years Post-YC: Justin.tv (the original) company went through Y Combinator in 2007 and then made a hard pivot. You know, a 7-year over night success. (This is also the largest acquisition of a YC company to date.)
Concentrated, Risky Bets @ Series A: Alsop Louie invested close to $8m to help Justin and his team handle video server and storage costs, and because there was electricity in the house that they were building it. He had to visit the company’s office to find that out, he told me over lunch last year. It was a concentrated, highly risky bet — exactly what a proper Series A should look like.
Gaming = Media = Attention: The act of playing games, and the act of watching games, are media. Building Minecraft servers are the new legos. This is just the beginning of this wave.
Low-Key Founders: I’ve come in contact with various Twitch founders here and there, and they were all very quiet in their own way. Limited social media presence, quite reserved in the settings I saw them. Maybe their minds were on something else ;-)
Amazon’s Motives: Amazon paid an all cash sum amounting to a seriously non-trivial percentage of their total cash on hand (especially relative to what Google may have wanted to pay). In this light, we could view Twitch as a gaming portal, a streaming base for other media, and/or even a social network. They probably also had all sorts of inside data on how Twitch was scaling their cloud services. Let the theories fly around! Either way, we have to believe there is something deep in this for Amazon, perhaps across all three areas, which made this deal vital.
I have been involved in many situations in all sorts of capacities in and around companies with mobile products where the topic of “When should we go Android?” comes up. My own thinking has evolved on this, and will likely continue to as the world changes. But, for right now, for 2014, this is what I believe: For early-stage startups focused on mobile, there is usually is no need to worry about Android until the product in question attains product-market fit and gets large enough to begin lock-in.
The most common trap here is the early iOS app which gets some buzz. All of a sudden, the founders hear “When are you building for Android?” The natural, enthusiastic response to sincere requests of the Android chorus is to go ahead and build for Android and seek more downloads, more growth, more revenue. I have a different view though. The proper response is: “No. Buy an iPhone.”
Let’s revisit why this is the case. Let me state up front that I have no problem with Android and see its own benefits. But in this context, startups should follow the lead of Instagram and only start dabbling with Android if and when there’s a solid base of millions on iOS and/or if it becomes a strategic chip for the startup. Ok, so why is this so?
Early-stage startup teams cannot afford to handle the hardware fragmentation that plagues Android.
Study after study demonstrates iOS users are not only growing in key geographies, but are more valuable customers.
iPhone 5c and future low cost models will likely steal share from Android relative to yesterday.
Product-market fit is elusive in general, and acutely so on mobile, where distribution pipes are either constrained or flooded. I’m seeing too many teams building for Android too early. Unless there is a huge foundation under the iOS apps, building for Android is likely only to result in a few spikes in user growth and then a lifetime of hair pulling — too much for a small startup to handle. The common wisdom used to be iOS first, Android second — but I think it needs to be amended right now to the following: “With the caveat there may be a small handful of apps which need to be on Android early, mobile startups should be iOS first (of course) and resist the urge to make Android second too soon.” For a product early in its life cycle, the return on investment often can’t be justified.
I was in a meeting the other week where someone started talking about “The Efficient Frontier.” I had heard of the phrase, but wasn’t able to immediately recall the exact definition, though it was made clearer as this person charted out the different portfolio mixes the following groups take: founders, private investment funds, and incubators. The optimal place to be on the curve, he argued, was right above the point where the return on investment would be inefficient.
As I read more about the term, I realized it can be different things to different people. Here’s the Wikipedia definition:
The efficient frontier is a concept in modern portfolio theory introduced by Harry Markowitzand others. A combination of assets, i.e. a portfolio, is referred to as “efficient” if it has the best possible expected level of return for its level of risk (usually proxied by the standard deviation of the portfolio’s return).Here, every possible combination of risky assets, without including any holdings of the risk-free asset, can be plotted in risk-expected return space, and the collection of all such possible portfolios defines a region in this space. The upward-sloped (positively-sloped) part of the left boundary of this region, a hyperbola, is then called the “efficient frontier”. The efficient frontier is then the portion of the opportunity set that offers the highest expected return for a given level of risk, and lies at the top of the opportunity set (the feasible set). For further detail see modern portfolio theory.
So, it makes sense that angels, VC firms, and the like want to be on the efficient side of this frontier. But, what then of the folks who are beneath it? It is cliche to say founders take on extremely concentrated risk, but taken within this particular framework, the majority of founders are on “The Inefficient Frontier.” The word “inefficient” isn’t a good word. It implies friction, sub-optimality, and rewards that may not be properly tied to performance. Seen in this slightly different yet powerful perspective, it is a good reminder for me (having been through one of these myself) that a founder’s frontier is often inefficient to begin with, and getting to that point of efficiency requires significant energy to overcome the brutal laws of gravity.
Remember “The Series A Crunch”? Well, I think an offshoot of this will manifest itself across what feels like almost 500 Bitcoin related companies. I, myself – I am a Bitcoin believer and Bitcoin junkie. Yet, despite that optimism, I am continuously floored by just how many Bitcoin startups are out there. I don’t know who is funding them or how they’re making money to survive the typical cycles needed to make Series A investing, which I’ve recently heard defined as “when pros invest and set the terms.” (As a disclaimer, please note I’ve invested in 7-8 early-stage Bitcoin-related startups. I am a long-term believer.)
So, based on that, I’ll try to briefly summarize my thinking: A year ago, some of the world’s best investors placed their bets on a small handful of Bitcoin startups. Many of these companies centered their offering around payment and exchange of Bitcoin. A few months ago in 2014, there was more talk of storage of Bitcoin. And most recently, in the summer of 2014, there’s more talk about companies offering more robust access to the block chain itself, or building out chain-powered apps around ideas such as derivatives and other types of smart contracts.
Reflecting over the last 20 months, I am shocked by the number of Bitcoin startups I’ve seen. It may be more than photo-sharing apps now. Most of them, of course, sadly have no traction whatsoever. Many of them are tended to by people who haven’t been toiling away with the protocol for years. They are solutions chasing a problem. Given the landscape, here’s my view on what will happen to Bitcoin startups moving forward.:
There was an arms race to acquire early Bitcoin accounts and wallets, and a small handful of companies dominate that space. It’s unlikely someone can just enter the space now (though there is a caveat) and do anything meaningful.
The successful Bitcoin teams I’ve found had at least one founder who grew up hacking around with crytocurrency and the Bitcoin protocol. There are many folks entering the Bitcoin space in a “fast friendly” way and those people are likely to lack the proper context of what the technology can really do in order to build something innovative.
Companies which get good seed funding generally consist of stellar teams, are working on consumer adoption issues (like building a mobile app), are building more merchant tools to get suppliers interested in Bitcoin, and are leveraging the Bitcoin platform to bring developers and larger companies into the mix.
The risks associated with these developments (or predictions!) are three-fold:
First, there are some great investors who do not conceive of Bitcoin as anything beyond a currency, or ones that do not believe the environment will be welcoming to these companies (for legal or regulatory concerns). This has constricted the number of larger venture capital firms that can invest in the category (for now), which means Bitcoin startups who graduate to the level of institutional investor may either find a smaller market for their equity and/or some of them may be conflicted out of participating given the eventual consolidation of talent and product ideas that will undoubtedly occur as the ecosystem matures.
Second, all of this means many of the startups which purport to be Bitcoin-related won’t meant the thresholds required to graduate to the level of real institutional venture capital. This is what I refer to as “The Bitcoin Crunch.”
Third, I think this is all healthy and natural, and starts to separate the winning solutions from the mediocre. I’m a believer in Bitcoin both as a unit of exchange as well as a platform for people to build all sorts of new applications, including ones that never use bitcoins themselves. It will take time, though. I do believe something will tip all of this over at some point — it could be an entrepreneur who cracks the code on tying Bitcoin to consumers’ mobile phones, or the group of developers that partner with a company like Amazon or Google to build the next generation of distributed computing architecture on top of the protocol. I have no idea what it will be and when it will happen, but I do believe it will.
“No phone, no phone…I just want to be alone today.” –Cake, “No Phone”
Years ago, I was talking with Davy Kastens, CEO of Sparkcentral, about his product. His company builds products for large consumer-facing businesses to handle, triage, and address consumer complaints about products and service. In our chats, he mentioned a term to me — “Call Avoidance.” I didn’t think much of it at the time, but Devy build his product around the costs companies would incur as a result of fielding customer inquiries via phone.
Only recently did this term pop back into my head. You may remember the “Push For Pizza” mobile app and viral video. (If you haven’t watched the video — it’s hilarious, well worth the time.) As soon as I saw it, Davy’s line came back to me. The entire app is built around the concept Call Avoidance. On mobile, all of the apps that have cropped up where you “tap stuff to get things,” many of them replace our need for having to make a phone call and talk to another person altogether. My immediate reaction to the pizza app was: “Ha! But, I would use that.”
And, then it dawned on me…on mobile phones, so many popular apps have essentially replaced our previous reliance on telephone calls with app-initiated API calls. For instance, we now can now call a taxi, order food for delivery, schedule services, or just send a “Yo” by simply tapping our phones with mobile software which replaces API calls with telephone calls. It’s charming yet odd that rapid growth mobile phones enabled us to not to have call other people at all.
There’s a deeper lesson here for people who aspire to build consumer mobile apps. I’d say, observe the world around you and see where people are still laboring to make phone calls on a somewhat frequent basis. You’ll find issues like medical billing and insurance claims (or any kind of customer service) and phone calls made to local businesses, where consumers often spend the most money within a certain radius of their home (and perhaps why Path acquired and integrated TalkTo earlier). Today’s consumers expect powerful yet elegant applications which will make their lives easier, and not having to call anyone to discuss logistics makes life that much easier.
Over the past few years, various startups have attacked the “transportation” space by offering different modes of transport — private black cars, fist bumps with mustaches, sidecars with community donations, car rentals at home, car sharing near work, personal drivers for the day, private buses to replace popular public bus lines, and more.
All of this activity drives home the point that transportation’s value to us is directly related to our own needs of sustaining income and relationships. And, it helps that public transit infrastructure lags woefully beyond what the public requires today: We don’t want to pay for new infrastructure, but we wanted to be driven to tonight’s event yesterday.
So, if entrepreneurs have figured out how to get a good deal of us from Point A to Point B without our own personal vehicles, and what happens to those folks who still drive their own cars into the parking abyss that is San Francisco? Have you seen parking rates on the nights of Giants games in SOMA creep up yearly? Is the city adding more office and residential space but fewer garage slots?
These questions are, of course, rhetorical, and the only answer I have for you is: Get ready for what I like to call #Parkageddon! That’s right. This Fall 2014, in San Francisco, you will see a level of car congestion that will beat last year’s levels. More and more startups (and investors) are now permanently in the city. The Giants are doing well, and the A’s even better. People who have been forced out of San Francisco as residents yet hold jobs in the city are likely to commute in by either car or rail.
#Parkageddon. Just watch, you will see people traveling into the city spend 33% of their commute time cruising to the city perimeter, 33% of the total trip time getting through the bottlenecks to permeate the perimeter, and then 33% of their commute time securing parking. And, those people will frustrated or even angry. They will tweet their rage. They will experience #Parkageddon.
[When I started writing this, I thought I’d list out some of the startups I’ve heard of like Caarbon, Vatler, Curbstand, Flightcar, SpotHero, ValetAnywhere, Zirx, Luxe, MonkeyParking, and others. But, then I was curious -- “How Many Are There?” Well, according to AngelList, there are 83 parking startups. Eighty Three. So, no...I won’t detail them here. As a disclosure, I am a consultant to Bullpen Capital which recently invested in SpotHero.]
It’s a natural reaction to snicker, but when I sit back and think about it, parking is a real, nationwide, mass consumer problem, or at least an annoyance. And, we have already seen scores of businesses launched that tap into labor markets and match demand (here, to park my car) with supply (here, to pay people to valet). All sorts of risks abound with this space, and we can also expect to see some unsavory stories hit the press. Some of the solutions are based around networks of individuals workers (mobile-empowered valets) while some try to give you access to parking garage inventory; some startups tried to let people trade public parking spots (which was met with City Hall fury), while others try to provide crowdsourced intelligence about where someone should park, like Waze but for parking.
Just as we’ve seen with transportation, and with food delivery, and with home cleaning, there’s no good reason to not think parking can be on that list. Will we let drivers take our cars? We already do at hotels, or at restaurants. We let people sleep in our extra rooms or squat in our subletted apartments. The common risks associated with handing over your car keys to a stranger can be managed with networks like Facebook, GPS tracking and motion sensing from a valet’s phone, background checks powered by companies like Checkr, and so forth. It sounds kind of crazy and even twisted, but parking eats up a lot of peoples’ time, and those who have money are willing to spend it for more time. Put that in the meter.
** Post-script:I’ve been thinking about parking much more now. Too much. Today in the car, something dawned on me — if this takes off in SF, the city (and other vested interests) are going to fight this big time. Now, you might say “Well, they fought the cabs and looked what happened?” But, that isn’t the right analog. If this P2P distributed parking thing works, it will likely (1) reduce parking violations and therefore one of the city’s biggest revenue machines and (2) potentially take money away from garages which prey on people who only realize too late that they’re paying $6 per every 15 minutes (and are run by “vested” interests). The city and the garages can be more effective at squeezing these startups because the companies have to rest the cars somewhere when they’re not in use. This isn’t (yet) carsharing. While Uber and other transport networks cut out the middleman, there aren’t middlemen in parking. If they succeed, the startups will become the middlemen.