Haywire

Apr
27

Hosting @WestCoastBill In The Studio, Talking Shop on Mobile Apps and Angel Investing

Category: Career, Technology, Venture Capital Leave a Comment

Earlier in 2013, I had Bill Lee into the studio to chat about his new company, Twist, mobile apps in general, and his varied experience as an angel investor and LP in venture capital funds:

Bill Lee is a hard guy to pin down, but if you can get his attention, he has an unique wealth of knowledge of how entrepreneurship works in the Valley, from many angles and vantage points. Aside from co-founding a successful company to an acquisition in a previous life, Lee is known to many early-stage founders as one of the most thoughtful, helpful, and savvy individual angel investors around. His portfolio hits include companies like Yammer, AngelList, SpaceX, and Tesla, plus many more. Lee has co-founded a new mobile app startup, Twist, which seeks to run in the background and send messages between people who are going to meet.

In this brief discussion with Lee, we talk around many, many topics. In the first part, Lee uncovers the insight that led him to co-found Twist, how they chose to build on iOS first, how they are waiting for Samsung’s Android devices to catch up, how SMS converts better than email, how to think about virality in non-social graph products, and a host of little variables that he believes make for a compelling app that can be used daily by millions of people. In the second part of the discussion, Lee reflects on today’s investment climate and the changes he’s made as an individual angel investor. For now, with so many more seed investors out there, Lee is reducing his number of investments but deploying the same amount of capital. He’s also investing within small networks and avoiding the hyper-syndication party rounds we tend to hear about on an hourly basis. Finally, as an angel investor in both Tesla and SpaceX, Lee offers some fascinating ideas about software apps that entrepreneurs may be able to build on these platforms and behind these huge waves.

Apr
23

By Semil Shah

Iterations: How Founders Can Fight Through The Great Fragmentation Of Talent

Category: Career, Culture, Technology, Venture Capital Leave a Comment

Earlier in 2013, as I’ve been working with a small handful of CEOs to build out their organizations, I grew even concerned about the overall climate for technical recruiting in the Bay Area. As a result, I wrote this post on TC about tactical ideas founders could consider in the face of such competition for talent…

The #1 request I hear when talking to founders in San Francisco is: “We are hiring engineers. Know any?” We all know this is a big issue that’s only getting worse, and so do most of the investors. But, I’m now starting to hear this so often, I’m beginning to worry that all the conventional tactics simply won’t work. Early-stage startups that don’t start experimenting with new ideas to source, recruit, and close engineers and other technical hires may end up running out of money or never achieving the product traction they need to get to the next level. I don’t have data to support this, but my intuition is that technical talent is so fragmented right now, all options need to be reexamined and placed on the table.

In that spirit of investigating all available options, here are 10 tactics your startup may consider given today’s conditions. And, while we often read high-level posts about how to hire people, the on-the-ground reality is that so many early-stage companies are being funded every day that when the founders close that first round, they often turn into (near) full-time recruiters, and many of them don’t succeed at it because they either don’t understand the weight of the issue before them and/or because they aren’t willing to consider these kind of options below, some of which require a serious change in thinking:

Hire Remote Employees: Conventional wisdom says that your team should all be together, in person. Unfortunately, there are many great potential hires who are not located in NYC or SF and, for a host of reasons, cannot move.
Hire Contractors (onsite or remote): Conventional wisdom says that this can backfire and cause more work because of incongruous development, but some great people may not be in the mood to commit to something so early and may want to work on other side projects for a host of reasons.
Hire Qualified Candidates And Help Them Relocate: Early-stage companies don’t like to get into the game of relocation expenses, but if that’s the only thing stopping the close of a great potential hire who doesn’t live around here, it may be worth considering breaking that rule.
Referral Systems: I’m sure most startups do some form of this, whether through gifts or cash incentives. But, maybe they need to be more robust and creative.
Pay More Money and Share More Equity: If it’s that hard to land good technical talent, maybe a startup cannot afford the market price, or maybe the conventional wisdom around 15-20% option pools and current salary bands are not in line with this reality.
Acqui-hire Teams That Can’t Survive: The Series A Crunch is real and might be just beginning. For companies that have raised more growth capital and/or those who are making enough money to warrant reinvestment into their core business, there are lots of teams out there who can be slimmed down and gobbled up, usually for a salaried offer, some equity, and a modest bonus.
Open A Second Office: To get around the fear of remote and/or contract workers, there could be situations where a small group of qualified candidates reside close to each other but far away from your HQ. If this core group is open to setting up a new office and could hire more people through their own networks, it may not be a bad approach for a startup that has enough cash runway to handle it.
Publicize Your Infrastructure And Stack: Talented folks want to see what your company has under the hood, so one approach is to invest the time and resources into a real engineering blog and sharing what goes on behind the scenes. This kind of openness attracts others who may be like-minded and could send a strong signal about how differentiated your approach is.
Hire Less-Developed Candidates And Train Them: What if a founding team found raw talent and made the decision to hire these folks and train them? Without reducing the bar on quality, these teams may be able to hire folks like this and devote time and resources to developing them into full team players.
Everyday Improvements: It’s obvious, but any list like this would have to include options like making your office the best place to work, by spending more time on recruiting, or actually hiring an accomplished recruiter who can demonstrably earn the respect of good candidates, or organize more tech talks, or more hackathons, or more competitions. [And, continually learn from experts like Dan Portillo, who captures all of his knowledge and tricks in this great slide deck.]

Naval Ravikant tweeted a great line last year: “It’s never been easier to start a company, but it’s never been harder to build one.” This fragmentation of talent is the other side of the coin in this bubble we are in — and yes, it is a bubble, but the bubble isn’t where you may think it is. Today, the asset that is overvalued is the amount of funds and shares of equity that founders are in control of and chose to hold on to — to recruit the right people, founders now have to work extra harder or be even more creative and daring to fill in their open slots. Put another way, in order to win in today’s game, many founders are going to have to make uncomfortable decisions, especially with respect to money for salaries and equity as incentives.

I am not an expert on all of this. And, I know it’s not cool to suggest these tactics because everyone says it’s all about “team” and because you want to protect your culture and because you don’t want to manage people remotely or hire contractors or spend time training a diamond in the rough, but for many early-stage companies in a flooded market like San Francisco, the harsh truth of 2013 is that everyone and their mom has a tech startup now, and everyone and their dad has a new seed fund, and you, as a founder, are caught right in the middle, forced to make suboptimal tradeoffs between quality and speed. It’s not a pretty choice, but in order to survive or succeed in this environment, I simply don’t see another way.

Apr
21

By Semil Shah

Hosting Greylock’s @DavidSze “In The Studio”

Category: Career, Culture, Technology, Venture Capital Leave a Comment

“In The Studio” this week hosts a special guest who doesn’t typically go on camera that often. As a result, I decided to make this particular episode of the show longer to capture my entire discussion with Greylock’s David Sze. For anyone who follows the ins and outs of venture capital, Sze’s name looms large. By now, most everyone knows of Greylock’s impressive run over the last decade, a firm which originated decades ago in the Boston area and has, thanks in large part to Sze, successfully transformed to one of the premier Silicon Valley shops. Over the last decade, he has helped lead the firm to write early checks into consumer-focused companies such as LinkedIn, Facebook, and Pandora, as well as startups attacking the enterprise, such as Workday and Palo Alto Networks. More recently, he made his largest investment ever (in terms of dollar size) in NextDoor, a company which fits into larger societal trends he’s observed.

What’s not often discussed, with respect to Sze, are the careful moves he’s made to position the firm where it is today. This is the focus of our video conversation, and while it’s a bit longer than most, I would encourage anyone interested in venture capital, Silicon Valley history, and those embarking on a career in technology startups to spend the time to watch this. In this video, Sze and I discuss the following topics: The early stages of his career, when he graduated from college and went into consulting; His move out to the west coast, going to business school, and jumping into the technology world; His first operational role at a real startup; How he paired up with former classmate Aneel Bhusri to join him at Greylock; How he began investing in enterprise and was, admittedly, not that good at it; How he went back to his consumer roots and began investing in consumer companies, such as Pandora; How he met Reid Hoffman, invested in LinkedIn, and eventually recruited a team of operators; and advice he would give young folks who are interested in venture capital and/or who coming to the Valley.

Apr
16

By Semil Shah

Iterations: How Five Real Economists Think About Bitcoin’s Future

Category: Culture, Media, Public Policy, Technology Leave a Comment

Last Sunday’s column on TechCrunch did surprisingly well. I still can’t believe how much chatter there is about Bitcoin, but I also felt that it would be nice to have some real economists weigh in. I emailed a large number of my former professors, but most of them hadn’t heard of it yet. Here’s the post.

There isn’t just a bubble in the Bitcoin economy, there’s a bubble in the number of posts about Bitcoin. I’ll pile on, even after this week’s mini-crash, but with a twist. A few weeks ago, I wrote some brief notes on what I thought about Bitcoin, but the over-arching feeling I had was that I couldn’t put my finger on what could become of this currency in the future. Perhaps that’s part of the reason this phenomenon is so fascinating to us all. So, instead of trying to determine future scenarios in a world I don’t understand and because Twitter has turned everyone into armchair professors, I reached out to a number of practicing economists who were either former professors or classmates, or had friends make introductions, and asked them to chime in briefly on a future with Bitcoin. Please note I requested a rather informal, fun submission from them — nothing too serious. Interestingly, most of my former professors hadn’t yet heard of Bitcoin and subsequently elected to pass on this opportunity — perhaps I’ll follow up with them later in the year. Luckily, I was able to corral a few economists to participate, and I’ve reposted their thoughts below:

Chris Robert, currently a Professor of public policy and economic development at Harvard:

It would really be something if intelligent people chose to invest more trust in a currency system built and managed, in large part, by anonymous computer hackers than they did in currency systems built and managed by governments of the people, by the people. Fortunately, we are not there yet. Today, Bitcoin is mostly just a matter of media speculation arising from the continuing financial turmoil and growing distrust in the global financial system. This media speculation may well lead to a protracted period of financial speculation, however, during which techies are joined by increasing numbers of financial sophisticates seeking a new bubble to exploit.

Compared with corporate securities, futures, or even derivatives, Bitcoin is even less inhibited by any underlying sense of value. The bubble can just grow and grow, so long as demand increases faster than supply — and so long as the network doesn’t crash, a new cryptographic exploit doesn’t unravel everything, the fundamental lack of anonymity doesn’t bother anyone, those who lose private keys and thus potentially small fortunes don’t complain too loudly, improvements (or hacks) to “mining” don’t lead to sudden shocks to supply, etc. Profiting from a bubble of any sort can be a risky business, but our global economy is not at all lacking in people willing to give it a go. Thus, as a potentially exciting new vehicle for financial speculation, Bitcoin may be with us for some time.

Robert McMillan, a former economist with the U.S. Federal Trade Commission and Stanford economist, currently Head of Portfolio Management and Director of Quantitative Research at HNC Advisors AG:

Bitcoin is dead. Long live Bitcoin. The value of having an easy-to-store, hard-to-steal, and hard-to-counterfeit medium of exchange is substantial. Especially one which doesn’t lead to the extermination of species (e.g. cowry shells, ivory) or direct environmental degradation (e.g. gold). Unfortunately, as those familiar with Paul Krugman’s writings on liquidity traps know, Bitcoin’s known and finite supply dooms it as a workable replacement currency. Furthermore, as it has no apparent use-value (unlike, say, Platinum), this kills it entirely. Nevertheless, the flaw lies with the implementation, rather than the idea itself. I expect Bitcoin (“BC”) will soon see competition in this space from “Currency 3.0″ entrants that fix the flaws in Bitcoin and thus have a better (i.e. nonzero) chance of achieving the “gold standard” of currency acceptance, namely a liquid market in Forex forwards with another major currency. At any rate, be on the lookout for Awesome Drachmas (“AD”) using newly-discovered prime numbers as units of exchange. They’re costly to “mine”, in infinite supply, and even have use-value (e.g. cryptography). Coming soon to a money-changer near you!

Matthew Bishop, currently the U.S. Editor for The Economist, where he’s been for 22 years:

As I wrote in my recent ebook on the future of money, “In Gold We Trust?“, the resurrection of gold and the emergence of Bitcoin are two sides of the same, er, coin. Both are a response to falling confidence in the soundness of government-backed ‘fiat’ money in an era of quantitative easing. I think the algorithmic approach to controlling the money supply used by Bitcoin and other digital currencies being developed in Silicon Valley could go a long way to creating a sound store of value. The biggest risk to these currencies may turn out to be government action to destroy an alternative to fiat money. But what if a sovereign state was to issue an algorithm-based currency? Would that drive fiat money out of business?

Brett Gordon, currently a Professor at Columbia’s Graduate School of Business:

There are two scopes for discussion about the future of bitcoin. First, the short-term: if this is a bubble, when will it burst? It’s notoriously difficult to predict the end of a speculative bubble. Those lucky enough to time it correctly can make a lot of money, but that won’t be true for the rest of us mere mortals. The price chart for bitcoins reminds me of the Nasdaq from 1995 to early 2000. Clearly, these are vastly different, but I think the Nasdaq plot is representative of many yet-to-burst bubble prices. The Google Trends chart for bitcoins is similarly shaped, which suggests that when the media frenzy over the digital currency subsides, so too may much of investors’ interest. Second, the long-term: what will the bitcoin market look like in 5-10 years? That’s even harder than calling the peak of a bubble. I think a significant contribution of the bitcoin market is that it serves as a proof-of-concept for a decentralized crypto-currency. Two benefits are that bitcoins are inherently deflationary and transactions are anonymous. Given the recent slew of fiscal crises and increasing concerns about online privacy, these are two strong points in bitcoin’s favor—or whatever future crypto-currency arises.

Peter Rodriguez, currently a Professor at Virginia’s Darden School of Business:

At first blush Bitcoin is nothing special. Virtually anything can be used as a pseudo-currency. And, there is nothing new about a profound fear of fiat currencies and all manner of efforts to avoid the risk of relying on central bankers. Indeed, the prevalence of fiat (paper) currencies in a post gold-standard world is flat-out amazing. But, when the confidence underlying fiat currencies falters folks resort to recognizable and reliable stores of value and it’s not that hard to manage in such a world. After the fall of the Berlin Wall, Russians and others in FSU states resorted to a highly functional trinity of currency substitutes: cigarettes for the small stuff, Vodka for the medium and Cognac for big ticket items.

In some ways, Bitcoin is just a virtual pack of smokes. But in other ways, it’s revolutionary. Cigarettes have inherent value and alternative uses, like cotton and even gold. Bitcoins are valued in and of themselves. They have even less alternative uses than paper currency or baseball cards. So, if they can establish their worth and hold the confidence of investors long enough, the institutions that can eventually convert Bitcoins from a fad-like store of value to a real currency might just begin to develop. And then, Bitcoins could become a reliable medium of exchange and index value that has some real place in the world. Even it they just serve to measure the value of goods ultimately transacted in ‘real’ currencies, Bitcoins will have become something entirely new: a true, stateless, virtual currency rooted in nothing other than confidence in the set of rules that surround them. It could all implode, of course, and that’s not unlikely. But, currencies are always tested and all of them have gone through existential crises. The real question isn’t whether Bitcoin will falter, plummet or take us all on a crazy ride, it’s whether it will actually survive its inevitable test. If it does, even at very low values, it will change the way we think about stores of value, finance and the independence of the virtual economy.

Apr
16

By Semil Shah

Brief Thoughts On The Rollout Of Facebook “Home”

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Earlier this week, I was helping a friend think through his post on Facebook’s recent ads for “Facebook Home.” He’s an early employee and investor, and the TV ads seemed to bother him. In our email conversation, I shared my brief view of Facebook Home overall, from concept to TV spots, and he suggested that I share them. So, I have reproduced them below, slightly cleaned up from our email change.

How I Think About “Facebook Home.”

From a technical standpoint: It’s brilliant. They have reinvented “what is an app?” from the ground up.
From an execution standpoint: It’s brilliant. It’s not easy to pull off a v1 like this, and they made the right move.
From a strategic standpoint: It’s great. One carrier and handset to let them iron out any kinks, after which they can choose to move accordingly.
From a product point-of-view: Hmmm….I’m not sure I’d want “Home,” but more importantly, the younger demographic seems to shun the idea of permanence, the web, and Facebook altogether.
Analyzing positioning during launch: It was OK. Not bad. They got their overall point across.
TV commercials: A pure disaster. They’re off-key. not cool. too weird. potentially ruin brand further. It’s a tone-deaf mistake that allows the chattering classes to easily point to how out of touch FB may actually be.

Apr
13

By Semil Shah

“Finishing”

Category: Career, Culture Leave a Comment

I just finished watching Day 3 of this year’s Masters tournament. One of today’s greatest golfers, Jason Day, finished today with a chance to be in the lead, but unfortunately recorded bogey-bogey on the last two holes. He had a bad finish. The word finish is kind of an interesting word. I can mean so many things. It can be the final touches a painter does on a job, or the final touches on a product. It can be a noun, and it can be a verb, something you may want to stop or want to end. I’ve been thinking about the act of “finishing” lately when it comes to any kind entrepreneurship. This is not confined to technology and websites and mobile apps. I assume that nearly everyone who makes it this far has the skills and determination to start, to get over that initial hump. It is hard to start a product, or a business, or a services firm, or a restaurant, or coffee shop. Many people get over this hump, and it’s to be celebrated. But, how many “finish” in a manner they’re proud of? How many have the ability to concentrate in the face of being tired, exhausted, uncertain, and pulled in many professional and personal directions. Of the few things I’ve started, yeah, I got over the hump, but I didn’t finish with greatness. Jason Day today, one of the best golfers in the world, started this tournament on fire, but today, just today, he didn’t finish with strength. This is something that I look for when evaluating new products, services, and companies. While the work is never really done, there is always some level of “finishing” that it takes to make a success. Around here, I assume everyone can start, and the trick is to try to identify those who can also close it out.

Apr
8

By Semil Shah

Iterations: The Tension Between Transparency And Privacy In The Startup Ecosystem

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Recently, there has been an increase in demand for transparency in the startup world, and while I understand where that desire comes from, I do think there are some nuances and benefits of private enterprise that should be examined. So, that’s what I did in yesterday’s column, see below.

Everyone wants more transparency. It is part of a deep, fundamental trend. In government. In the workplace. Inside large systems like health care. And, more recently, around early-stage startup metrics and investment data. The crowd wants more transparency. They want to know more about metrics, revenues, and stats, and they want to know more about how investment dollars are allocated. Yet, the result of this shift raises concerns about privacy. In this world of imperfect, asymmetric information, combined with the desire among participants to build up, invest in, and report on the industry itself, frustrations can mount easily because, somewhere in the recess of our minds, the game feels slightly rigged in the other person’s favor, and the light of sunshine offers a promise of transparency to perhaps root out those bad apples and, just perhaps, inject an ounce of fairness, comfort, and peace of mind in an otherwise shady world.

In this real tension, we find many nuances.

For companies, unless they’re growing as fast as Pinterest or booking revenue as fast as Bloomreach, there’s little incentive to be fully transparent and publicly disclose metrics. Doing so may impact future fundraising efforts, strain relationships with existing investors, hamper potential partnerships, and inform competitors of an opening. Remaining relatively quiet is one of the key benefits of being a small, closely-held private company.

For investors, transparency may be an even dicier proposition. First, companies they invest in may want to remain stealth or not have their investors made public. In these situations, it is the founders who drive privacy — not the investors. Second, some investors may prefer to keep their moves private so as to not give their own competitors actionable information, especially in a climate where competition among funds within a contracting industry is growing fiercer. By law, investment funds are required to make filings with regulatory agencies, but those laws do not include, for example, listing out limited partners and other details many would like to know. Many people are also simultaneously investors in many funds at multiple stages, compounding the sensitivity.

So, here we are. Many want — in fact, at times, demand — that all of this data be made public to identify, tag, and call out the early-stage companies and investors who are not active, who are not what quite what they say they are. Investors may be growing tired of companies who craft and broadcast vanity metrics, and founders may be growing tired of converting their investor spreadsheets into a never-ending cascading waterfall of pointless investment pitches that waste time. Investors are in pursuit of perfect information when considering pulling out the checkbook, and every minute a founder spends pitching an investor who likely won’t pull the trigger because they’re generally disinterested, are phishing for information, or may not have any gunpowder left.

We have forgotten one dimension. We must investigate what fundamentally drives all of this to begin with: It is our collective curiosity to know more during a time in society where demand transparency is rising and at loggerheads with keeping some information private.

Nearly everyone in the ecosystem participates in the making of, analyzing of, or reporting on the news. Nearly everyone has a desire to know more about “who” funded “what” and at “what price.” Founders are lured to coordinating PR around their funding announcements, helped by an industry devoted to this and a network graph of relationships which can make dreams sing above the noise to target the right set of potential partners, the next key hires, and even the next investor. By the same token, investors love to be mentioned in these announcements, their brands gently stitched into the threads of the story. Both, ironically, work in concert, revealing what is material but oftentimes — as is currently their right — cloaking the specifics. The result is speculation masked as information. Add the real-time nature of Twitter to the mix, and perception distorts any signal frequency into reality.

People are keeping score, if even in the back of their mind, of who is following who, who is investing in who, who has real growth, who has real money, who is walking dead, who won’t be able to raise their next round, who won’t be able to raise their next fund, and all the other aspects and currencies of what makes the Valley’s parlor game so dynamic and opaque. I believe in more transparency on a fundamental level and am not an apologist for shadowiness, but I do recognize that part of the draw of private enterprise is, well, privacy.

The big fault line here is between transparency versus privacy. The web continues to make imperfect markets more efficient, and it is only rational that in these imperfect markets, rational actors will want as much information as possible before transacting. The startup world, in this context, is just another market, one that has traditionally been kept largely private and is slowly opening up thanks to new platforms, blogging, and (ironically) private dashboards created by actors to try to use data to make sense of the madness. The cost of this transparency is privacy, but not just for private companies and firms — but also perhaps for people, because a person’s reputation in our industry is tied so closely to one’s place of work, the drive for transparency might mean that individuals, in addition to firms and startups, may have to give up more privacy than they bargain for.

Apr
4

By Semil Shah

From My Archives: The Facebook iPhone (Sept 2011)

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I wrote this post back in September 2011 to speculate what I’d do with iOS if I worked for Facebook…

In The Facebook Effect, David Kirkpatrick posits the great social network is the one entity that could bully Apple, today’s most powerful technology company. As the iPhone and other iOS devices have paved the way toward an unprecedented level of convergence, the collective power of Facebook’s user base presents a daunting challenge to Apple: specifically, could Facebook literally imprint its own applications on iOS devices, most notably the iPhone, to the point where it could, theoretically, transform the device into “The Facebook Phone” without ever having built its own hardware and/or standard mobile operating system?

At the moment, Facebook is believed to be undertaking what has been dubbed “Project Spartan,” its own Trojan Horse for stitching its social layer into multiple mobile platforms in lieu of building its own phone (like Apple) and/or its own mobile operating system (like Android). As “Spartan” has been written about before in detail (which I won’t recount here), the basic idea, as it applies to Apple, is the development and rollout of multiple HTML5 applications which would allow Facebook to create a range of mobile applications without having to adhere to the rules and toll charges imposed by Apple’s app-store.

Now, let’s consider an alternative scenario: What if Facebook releases an entire suite of iOS apps, as fast as “Messenger” (which feels faster than SMS) and powered by users’ own social networks?

Specifically, what if Facebook decides to apply resources to construct a full “suite” of federated yet interconnected native iPhone and iPad applications to satisfy a number of interactions within Facebook, entirely powered by your friends? Consider, for a moment, the possibility of having individual apps for asking questions, playing games, sharing pictures and videos, digesting your newsfeed, listening to music with friends, accessing your address book, participating in groups, viewing pictures and videos, and so on. You could have them all, or just use a few. I’m not suggesting that it will happen, but theoretically, Facebook has the muscle to create these apps and, with its huge user base, they would be downloaded in droves.

A few months ago, Apple announced a partnership to tie Twitter into its operating system. Many lauded the deal as a win for both sides, and to be sure, it is a great idea. But to be fair, it also underscores the lengths to which Apple, a company without a social network and notorious for wanting to control its platform, made strange bedfellows with Twitter. Earlier, when Apple had tried to bake Facebook into its iTunes player experience, Ping, apparently it didn’t work out because one side exerted more strength than the other. Guess who?

Whether Project Spartan continues, or whether Facebook builds out all these native iOS apps, Facebook will increasingly become the mobile identity gatekeeper and power source behind some of the newer application layer services. For example, one of the most anticipated iPhone apps to arrive this month is Turntable.fm, which requires that users login via Facebook only.

One thing is clear: Facebook is determined to get onto your iPhone. And your Android, and any other major mobile platform, too. The number of platforms doesn’t matter—this game is platform-agnostic. It will either build its own “lingua franca” for mobile via HTML5, or maybe it will build an entire fleet of apps. Or, they Facebook simply improve upon its current iOS app and not fragment the experience. Or, maybe it will develop its own mobile operating system (like Android) or, shoot, maybe build its own phone (Apple). Well, maybe those aren’t as likely, but given what we’ve seen in the last few months, with Google buying Motorola, and with Android use growing and iPhone profits skyrocketing, expect Facebook to do something big, something ambitious, and something that leverages its massive user base to penetrate the fabric of the mobile experience with social, by all means necessary.

Apr
3

By Semil Shah

The Theatricality and Deception of Bitcoin

Category: Culture, Media, Technology Leave a Comment

It’s been a while since everyone in my Twitter feed has been talking about something that seemed to have come out of nowhere: Bitcoin. Maybe the last time was when SnapChat exploded in the fall of 2012. Of course, Bitcoin has been around for a few years, but for a variety of reasons — the run on the Cypriot banks, general fear about the global economy and specifically the Euro Zone, and politically-based currency manipulations based on reserves — Bitcoin has raised in prominence in the tech world, become the subject of articles in everything from BusinessWeek to the MIT Tech Review to all the daily tech blogs.

Yesterday, I spent 90 minutes reading seven (7) different articles and primers on Bitcoin. There was so much chatter about it, yet if pressed, I couldn’t explain what it was beyond “internet currency.” After reading this pieces, I feel I have a good grasp on what Bitcoins are, but all of the articles I read explained “what” Bitcoins are and “why” they’ve risen in popularity, but none of them offered a glimpse into a future world where Bitcoins were mainstream. That led me to wonder, “Why?” I’ll explain my answer to that question below, but briefly, here’s what I learned about Bitcoins:

Bitcoins are a form of web-based currency created by a developer, working under the name “Nakamoto,” who meticulously calibrated the economy around the coins with a finite set of units and around a distributed, peer-to-peer mathematical model of how a Bitcoin captures and retains value.
In the past few weeks, the market price for a Bitcoin has increased a lot.
There is a startup accelerator that is devoting its summer class to startups focused around Bitcoins, such as YC-backed Coinbase.
Tech crowds may be unduly enamored by Bitcoin because it feeds a deeply libertarian utopia where currency is not backed by hard assets (such as gold) or political guarantees or regulatory environments (such as governments), but rather dispassionate algorithms which control both supply and demand.

This much, we all know now. The rise of Bitcoin is fun, fascinating, foreign, and depending on your point of view, scary, a joke, or a real fundamental shift in currency. The truth is, in this case, no one really knows. I’ve thought about writing about this for a few days, but held back because I didn’t think I could add anything that wouldn’t be redundant. Above, I’ve only summarized what I’ve read.

It’s hard for me to imagine a future with Bitcoins, not because I don’t think it’s possible, but because I simply can’t see it in my mind. What I did think about, instead, were some of the initial scenes in “Batman Begins” when Bruce Wayne met Mile Ducard and was educated about the ways of the League of Shadows: “Theatricality and deception are powerful weapons.” Even though people have written about potential regulations (from government, of course), my conclusion in reading those seven posts is that there is a theatricality and deception about Bitcoin that give it incredible potency, something that the crowd intuitively understands could be a shift in how value is stored and shared, but also one where the crowd doesn’t fully understand just how this could all fold — or how disruptive it could be. And, the fact that Bitcoin is faceless, dispassionate, and regulated by networks and models — not governments or hard assets — is so foreign to all of us, that it just may outlast all of the analysis we could conjure up. It could outlive us all and, in doing so, be immortal.

Apr
2

By Semil Shah

Full-Time Tech Writers Deserve More Respect

Category: Career, Culture, Media, Technology Leave a Comment

Because I’ve been a contributor to TechCrunch for so long and been consistent about contributing over the past two-and-a-half years, people sometimes think I’m a full-time reporter. That’s definitely far from the truth. Usually when this happens, I respond with the following: “Oh, no, I’m not a full-time reporter, nor could I be one.” My feeling is that, while the crowd likes to pick on full-time tech writers because they’re an easy target, the truth is more subtle. I know this because I’ve seen this live and up-front through my relationship with TechCrunch. The folks there have an extremely hard job, and I’d imagine everyone who does this professionally does. Here are some aspects of being a full-time tech writer that others may not know:

Number of posts per day: Many writers are required to write many posts per day. There are some obvious reasons for this, of course, since most people don’t want to pay for information online, but some non-obvious ones which I’ll explain below. Writing at this pace increases the likelihood for all sorts of errors and mistakes, not to mention the competitive pressure to write better posts (faster) than their competitors.
Competition: Writers build up their reputation partly by competing with other writers, so they’re racing against their peers to find and publish scoops before others, or to put the best analysis around the news. They can’t let perfection be the enemy of good given their time constraints.
Few Incentives To Share Brutal Truths: In the startup world, there are lots of incestuous funding and work-related relationships, and sharing opinions based on hard truths (many of which would be negative) don’t serve the writers well because they may not be contacted by companies in the future or be able to work in the industry later in their careers. Some way not care about this, but other writers may not want to close these doors.
Startup Explosion, and PR Explosion: Writers are literally bombarded by startups and their PR reps. I don’t think people truly realize how many people just start things and call themselves “startups,” so the market does need validation like investment notes, as crass as that may seem. Additionally, the amount of money spent on PR would shock people, and it’s hard to escape it — many VCs have reps, too. In many cases, even though investors wouldn’t admit it, they and many others sometimes rely on the analytical work of these writers to help inform their investment decisions.

Finally — and I think this is important — tech writers actually help startups a lot out of a pure desire to be helpful and see them succeed. I’ve seen writers ruin their nights or weekends to cover a launch or new product because the team didn’t get in touch with them far enough in advance. This is not to say that the writers pen glowing reviews, but others often don’t respect the writer’s time, and I’ve seen many of them change their schedule to accommodate the rest of us, the founders and investors, because generally this kind of work is viewed as not-as-important in the Valley. This is something I’ve been thinking about because I hear complaints often, and I always say that, having seen how this is done, this is a job that I wouldn’t be able to do — it is very hard and requires a different level of dedication and risks. All of this isn’t to say that full-time writers should be immune to criticism (just like any other job), but I’d like people to consider these facts before bashing the folks who do this hard work.