That Was The Week 2021
A week where believers in a future were confronted by a host of non-believers
By Keith Teare • Issue #11 • View online
Content
Editorial
This week sees the parting of the ocean, perhaps somewhat appropriate for the Passover weekend. On the one side the believers, believing in startups, Bitcoin as an energy store and an investment-grade asset, Remote digital events, Medium as a platform, NFTs, and yes, Microsoft, believing in the blockchain as a trustless identity platform. Trustless is good by the way, It means we can trust without needing proof. The believers’ number in their ranks Geoff Ralston of Y Combinator, Nick Grossman of Union Square Ventures (along with his colleagues), Hopin, the $5 billion startup, Ev Williams of Medium, The buyer of a $500k digital house via NFT, Chamath Palihapitiya, Marc Cuban, Fidelity Investments and Packy McCormick of Not Boring fame.
The non-believers include a similarly impressive list. John Thornhill of the Financial Times piles into Sam Altman for believing in automation and a workless future. Casey Newton at The Verge piles into Medium after speaking with 14 departing employees, Mark Zuckerburg begs to be regulated by Washington DC, presumably because he has stopped believing in himself, Lauren Goode at Wired piles into Slack for enabling direct messages between all Slack users.
All progress is uneven, for sure. And whenever brave individuals and teams stretch beyond what is already normal to create something new there will be detractors mocking them, laughing at them, scorning them. And, for a while, the detractors seem sane and the revolutionaries seem crazy. But as Steve Jobs told us, it is the crazy ones who make history. The critics only disbelieve it is possible.
I was planning to discuss the Y Combinator “scaling” piece by Geoff Ralston and make it this week’s lead, but when I stood back and read the other content I realized that if I did I would be joining the non-believers.
My initial idea for the cover image looked like this:
Is Y Combinator Factory Farming Startups?
Whoops. That was a close one.
Y Combinator has been making history since its formation. It is true that 300 startups given almost zero time to pitch is hard on the startups, not to mention the investors. But those are 300 startups that loved the chance and the cash injection. Some of them will become very successful if only a few.
As for Medium. Ev Williams is pivoting the project and not for the first time. His letter to employees is honest about the past and that he is committed to trying again, this time as a writer’s platform, not as an editorial organization. He is brave, honest, and decisive. All you can ask of a leader.
Nick Grossman explains why when Iceland uses its energy to mine Bitcoin, then Bitcoin is acting like a battery, storing energy and turning it into value. In times when the world seems to think Bitcoin is the cause of global warming, this is a bold and correct framing of its role.
And NFTs? And AI? Are they delusions and improbable? Maybe. But most likely not. The future of digital artifacts as holding value and the end of work due to automation is nothing less than inevitable. It just does not seem so yet. So, this week, we recognize the crazy ones and we also publish their detractors. You, the reader get to choose. I think I made myself clear. And if not, one of the favorite quotes from Theodore Roosevelt, and often quoted by TechCrunch founder Michael Arrington, can end this editorial:
The Believers
Scaling YC
One of the most common questions I hear is: “why has YC continued to grow our batch size?”.
For each twice-yearly batch, we receive thousands of applicants through our online application. We have always wanted to fund as many great founders as possible and are convinced that in the incoming torrent of applications there are hundreds of startups with epic potential, if we could only work with them and make them part of the YC community. Growing the batch not only allows us to accept more of these companies, it also has other benefits, including adding greater value to the overall YC network. The batch’s value itself grows with size as founders make more contacts, have more companies and founders to learn from, sell to, and with whom they can make lifelong friends.
But we took to heart a lesson on scaling, which many of us have lived in previous jobs and of which we always remind our companies: scaling too fast before you are ready can be fatal. When I led the team building Yahoo! Mail, the challenges of scaling and what could go wrong were obvious. Adding too many users, too quickly, led to painful outages and failures I won’t ever forget.
Therefore, we have grown our batches with deliberateness and care over the past sixteen years. Our first batch included eight companies, and we didn’t break one hundred companies in a batch until our twentieth. And then it took us another four years to fund two hundred companies in a batch. Scaling from eight to two hundred companies per batch was hard, but we managed it with care and by focusing on a few key aspects.
Bitcoin as Battery
That was a head-scratcher for me at the time. But what he meant was: Iceland has vast amounts of accessible, inexpensive renewable energy in the form of geothermal. But you can’t build power lines in every direction under the Atlantic. So instead of selling it directly, you convert the electricity into aluminum and you ship that around the world. In other words, you convert stranded renewable energy into value.
In a sense, the aluminum coming from Iceland is like a battery. What is a battery? A way of shifting both the location and the time-of-use of energy. Whereas live electricity (whether produced by coal, gas, wind or solar) must be used right then and there, electricity converted to aluminum can be used anywhere, anytime.
Dams are batteries; gasoline is a battery. And in a way, aluminum is a battery. Of course, while traditional batteries start and end with energy directly, aluminum’s battery is economic, converting energy to value. And that value can be re-used elsewhere (even converted back into energy!)
Which brings us back to crypto mining. Crypto mining converts electricity into value, in the form of crypto assets (BTC, ETH, etc). Those assets, like the aluminum produced in Iceland, can then be moved, transferred and transformed. But unlike aluminum, which must be physically shipped to its final destination, crypto assets are programmable, and can move there instantly via an internet connection.
The post Bitcoin as Battery appeared first on Union Square Ventures.
Hopin buys two more companies as it triples down on video focus — TechCrunch
Hopin, a unicorn best known for its online events-hosting service, announced this morning that it has acquired two more companies. The smaller concerns, Jamm and Streamable, were acquired in deals that Hopin declined to detail. However, in an email to TechCrunch, Hopin CEO Johnny Boufarhat said that both companies were “early-stage” concerns. We can infer […]
Medium Editorial Team Update. We announced a buyout and leadership… | by Ev Williams | Mar, 2021 | Medium
We announced a buyout and leadership change to the Medium editorial team today. Below is the email I sent to the company. We are making some changes to our editorial strategy and leadership and…
Medium Offers Buyouts to Editorial Employees — The New York Times
A top executive is leaving the company, which announced plans to shift its focus from its own publications to writers who use its platform.
Breaking Down OpenSea’s $23 Million Raise in NFT Boom
As one of the first NFT-centered open marketplaces on the web, OpenSea has enjoyed a surge in popularity as collectors and speculators alike latch onto the red-hot trading of non-fungible tokens. From a startup that launched nearly 4 years ago at the advent of early-NFTs (i.e. Ethereum-based CryptoKitties), the company has now grown to sell digital assets ranging from digital art, gaming items to even domains. “Creators, musicians, artists, influencers, and gamers are diving headfirst […]
Photograph: Guardian Online
‘Digital home’ sells for $500,000 in latest NFT sale
Owner will be able to take virtual reality tour of ‘Mars house’, their new living quarters
In what might be most easily understood as the most expensive game of the Sims to ever be played, a “digital home” set within a Mars-like landscape has sold for $500,000 (£360,000) or 288 Ether, a cryptocurrency, in the latest purchase on the non-fungible token market.
The house, called “Mars House”, was designed by Toronto artist Krista Kim with the help of an architect and video game software, the architecture and design magazine Dezeen reported.
Bitcoin Billionaire Chamath Palihapitiya Says He’s Buying Crypto Art, Calls NFTs the Next Frontier of Digital Assets
Venture capitalist and Social Capital CEO Chamath Palihapitiya recently predicted the explosion of crypto art and non-fungible tokens (NFTs). In a recent interview with Bloomberg Markets and Finance, the billionaire posits that NFTs are the next frontier in the digital asset space. “I am building a fairly sizeable portfolio of what are called NFTs (non-fungible […]
The post Bitcoin Billionaire Chamath Palihapitiya Says He’s Buying Crypto Art, Calls NFTs the Next Frontier of Digital Assets appeared first on The Daily Hodl.
Billionaire Mark Cuban is building a digital art gallery for NFTs
The gallery, dubbed “Lazy.com” will allow users to display their NFTs in one place, as well as share their collection on social media.
The post Billionaire Mark Cuban is building a digital art gallery for NFTs appeared first on The Block.
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Asset management giant Fidelity files for a bitcoin ETF
A new filing with the U.S. Securities and Exchange Commission indicates that asset management giant Fidelity is seeking to create a bitcoin exchange-traded fund (ETF).
The Wise Origin Bitcoin ETF is the latest entrant in a growing race to launch a bitcoin exchange-traded product in the United States. According to the filing, a firm called FD Funds Management LLC is the sponsor of the fund, with Fidelity Service Company, Inc. serving as administrator. Per the document, FD Funds Management LLC shares the same Boston, MA address as Fidelity’s headquarters.
Fidelity Digital Assets, the asset manager’s crypto-focused arm, will serve as custodian.
The ETF, if approved, will also employ Fidelity’s in-house bitcoin price index, per the filing.
“The Trust’s investment objective is to seek to track the performance of bitcoin, as measured by the performance of the Fidelity Bitcoin Index PR (the “Index”), adjusted for the Trust’s expenses and other liabilities,”
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Microsoft Rolls Out Bitcoin-Powered Identity Platform
Microsoft is launching a platform that can authenticate identities using the Bitcoin blockchain. The tech giant says v1 of the ION decentralized identifier (DID) network is finally complete and now live. ION is a decentralized layer 2 technology for DID, which can verify the identity of a person, or any subject, without relying on third […]
The post Microsoft Rolls Out Bitcoin-Powered Identity Platform appeared first on The Daily Hodl.
The Dao of DAOs
More simply, DAOs are a new way to finance projects, govern communities, and share value. Instead of a top-down hierarchical structure, they use Web3 technology and rapidly evolving governance and incentive systems to distribute decision-making authority and financial rewards. Typically, they do that by issuing tokens based on participation, contribution, and investment. Token holders then have the ability to submit proposals, vote, and share in the upside.
The Non-Believers
The delusions of techno-futurists who ask: crisis, what crisis?
The Covid-19 pandemic may have killed 2.7m people and resulted in the worst economic contraction in a generation. But the optimism of the West Coast tech elite remains undimmed. “The future can be almost unimaginably great,” as Sam Altman, who heads an artificial intelligence research company, wrote in a recent essay, Moore’s Law for Everything.
Like many tech evangelists, Altman argues that we are on the brink of an AI-induced productivity explosion that will shower abundance on all. The entry of millions of Chinese workers into the global labour force over the past three decades will be seen as nothing compared with the arrival of tireless AI “workers” that will radically cut the cost of all tradable goods. When robots start inventing better robots, we will achieve “Moore’s Law for everything”, not just computing power.
“Imagine a world where, for decades, everything — housing, education, food, clothing, etc — became half as expensive every two years,” he enthused.
Altman admits that many readers may think his arguments utopian. Others will dismiss them as those of a techno-crank. But it is hard to deny that Altman has an interesting vantage point from which to peer into how the future may unfold.
The mess at Medium — The Verge
Interviews with 14 current and former employees paint a portrait of dysfunction and indecision as the publishing platform pivots again.
Last week, a partnerships manager at Medium working with the White House found that there was a strange problem with the platform: President Joe Biden was being served porn.
The manager was in a video conference with a White House staffer to discuss how Biden, who had used Medium as a campaign blog in 2020, could begin posting to the official Medium @POTUS account. While sharing his screen with the White House, the staffer logged in to @POTUS and saw the first article recommended to him by Medium: “A is for After,” which a sub-headline described as “a cuckold love story.”
It’s unclear if the White House saw the story. But after the meeting, the Medium staffer tried to improve Biden’s recommendations. He followed political topics; he “read” posts by President Obama and Vice President Kamala Harris while logged in as the president. When he refreshed his recommendations, Medium recommended another piece of erotica: “Getting a Piece (and Some Pizza Too),” a story that carries the sub-headline “step sister taboo erotica.”
MEDIUM HAD SOMEHOW ADDED BIDEN AS A WRITER ON 10 “GARBAGE PUBLICATIONS”
The employee previously found that Medium had somehow added Biden as a writer on 10 “garbage publications,” as well as at least one software development blog. “President Joe Biden is Being Served Erotica on Medium.com,” the staffer complained in an internal post.
Facebook wants Washington’s help running Facebook
Facebook CEO Mark Zuckerberg has a message for Washington: We’re happy to change the way we run Facebook. Just tell us how.
That’s the main takeaway from a statement he will provide to Congress on Thursday, in a hearing about social media’s role in spreading misinformation. But it’s also the mantra Zuckerberg and Facebook have been repeating for years, in targeted messaging like Washington Post op-eds and paid ads aimed at the Beltway crowd.
And it’s also, more or less, the Facebook default position when it comes to making all kinds of decisions about running the enormous and enormously profitable company: “Yes, we run a company that generated $84 billion in revenue last year and is currently worth more than $800 billion. But we’d like someone else to take responsibility for …” and here you can fill in the blank, because it can range from anything from whether a Pulitzer Prize-winning photo can run on the site to whether Donald Trump can post on Facebook.
Now Facebook is in a position where everyone in Washington wants to do … something about Facebook, though exactly what depends on what part of the political spectrum they sit on. Republicans want Facebook to promise to stop censoring Republicans, though there isn’t any evidence that’s actually happening; Democrats want Facebook to promise not to destabilize democracy.
So now Zuckerberg is adding a twist to his standard request for regulation: He is telling Congress it should force Facebook — and everyone else who runs an internet platform — “to demonstrate that they have systems in place for identifying unlawful content and removing it.”
Facebook wouldn’t have to necessarily find all of that stuff and take down every last piece of it — Facebook is really big! But it would have to prove that it has spent a lot of time and money to try to do that.
Slack Now Lets You DM Anyone. So Long, Work-Life Balance
BACK IN OCTOBER 2020, Slack, which has made virtual chats with your coworkers so sticky that Salesforce has bid $27.7 billion to acquire it, announced a bold move. A new feature would soon let anyone from outside your company send you a Slack DM (that’s a direct message). The feature, called Slack Connect, has been slowly rolling out to some of Slack’s business clients over the past few months. Today, the DM eagle has landed.
The internet, and by the internet I mean Twitter, and by Twitter I mean Media Twitter, has strong feelings about this feature. Which is to say: They hate it. Or, at least, they hate the idea of it; not everyone has been able to use the feature yet. Those who have been able to try Slack Connect have already pointed out a significant security flaw. Slack is now scrambling to fix this, but in the interim it’s worth asking what utility Slack Connect actually offers.
Heard in Silicon Valley
In many venture financings, it now takes longer to go from accepted term sheet to close than is does from early pitch to accepted term sheet — Summation by Auren Hoffman
Enough Said?
The a16z Marketplace 100: 2021 — Andreessen Horowitz
A ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies. From food delivery to outdoor travel, the Marketplace 100 reflects the imprint of a year like no other.
Taming the hybrid work chimera: Tips from Slack, WordPress, & Salesforce chiefs — Josh Constine’s PressClub
“I cannot f*cking do eight hours of zoom calls per day for the rest of my life” Slack CEO Stewart Butterfield said, to what I would imagine would have been thunderous applause if the thousands of listeners weren’t muted in the audience on Clubhouse. This week on my show PressClub I hosted some top employers and hybrid work experts to discuss how IRL and remote collaboration will collide as we start to return to offices.
The consensus: We’ll be going back to in-person co-working sooner than expected, but employers will have to compete for the most inclusive hybrid work culture in order to attract talent.
We were fortunate to be joined by:
- WordPress/Automattic CEO Matt Mullenweg
- PagerDuty CEO Jenn Tejada
- SalesForce COO Bret Taylor
- NYT’s Zeynep Tufekci
- Raise/42Floors’ CEO Justin Bedecarre
- Initialized partner Kim-Mai Cutler
- And surprise guest: Slack CEO Stewart Butterfield
Sovereign Writers and Substack
Substack is at the center of media controversy, most of which misses the point that sovereign writers — not Substack — are in control.
…I suspect we have only begun to appreciate how destructive this new reality will be for many media organizations. Sovereign writers, particularly those focused on analysis and opinion, depend on journalists actually reporting the news. This second unbundling, though, will divert more and more revenue to the former at the expense of the latter. Maybe one day Substack, if it succeeds, might be the steward of a Substack Journalism program that offers a way for opinion writers and analysts to support those that undergird their work.
What is important to understand, though, is that Substack is not in control of this process. The sovereign writer is another product of the Internet, and Substack will succeed to the extent it serves their interests, and be discarded if it does not.
Battery Ventures: VC Investments Are Way Up. But Deals Aren’t.
Battery Ventures recently put out its Software 2021 report with a ton of interesting learnings across the leaders in SaaS and Cloud.
A few top takeaways:
#1. Battery Ventures’ data says while VC investment $$$ are on fire — they aren’t going into more startups. Instead, more dollars are going into the break-out leaders, not more deals. Different data sources slice this data differently, but it’s definitely interesting to see it this way. “Venture dollars hit an all-time high, but deal count was at an eight-year low; and deals valued over $500 million accounted for 12% of software M&A transactions, a decade high.”
The post Battery Ventures: VC Investments Are Way Up. But Deals Aren’t. appeared first on SaaStr.
EU Deploys Region’s Largest VC Fund to Create Local Unicorns
(Bloomberg) — Europe has started deploying the largest venture capital fund ever created in the region, in its latest attempt to create health and deep-tech startups that will rival the U.S. and Asia.The 3-billion-euro ($3.5 billion) fund run by the European Innovation Council, which formally launched last week, has invested in CorWave, a French startup that develops an implantable heart pump based on cutting-edge technology.
©2021 Bloomberg L.P.
The gap at pre-seed in the UK is real. ???Number of first rounds in the UK have dropped to 2012 levels, while follow on rounds are at an all time high. https://t.co/l5FiBScNgc
The gap at pre-seed in the UK is real. ???Number of first rounds in the UK have dropped to 2012 levels, while follow on rounds are at an all time high. linkedin.com/posts/johnbspi…
– Maren Bannon (@Maren_Bannon)01:45–2021/03/23
Startup of the Week
UiPath IPO: everything you need to know about the stock — Protocol — The people, power and politics of tech
UiPath filed its S-1 for its IPO. UiPath stock price is still to be determined, and the UiPath IPO date has yet to be disclosed, too. The company got its start with a $1.6 million seed round in 2015. By the end of 2020, it had raised nearly $2 billion. UiPath provides RPA software to help employees automate the monotonous parts of jobs.
Robinhood files SEC paperwork for public offering
The popular trading app has submitted a draft registration statement on Form S-1 with the SEC.