Opportunity in Two Flavors

One night this week I met up with one of my best friends. I don’t get to see him that often, but that’s alright. It’s one of those friendships that picks up right where it left off, even if it’s been weeks or months.

He’s had a lot of opportunities, and so have I. This friend of mine is a bit older than me, and, accordingly, has moved farther on in his career. He’s one of these people with a solid job and, like, three side projects, all of which are doing phenomenally well. If he wasn’t so down to earth, it’d be all too easy to resent the guy’s success.

Somehow, we got to talking about opportunities in the meta sense, and I realized his definition of opportunity and my definition of opportunity are quite different. And, now that I’ve had a cumulative fourteen hours on airplanes without internet this week to reconcile these two differing definitions, I think I’ve been won over by his. Continue reading “Opportunity in Two Flavors”

Snapchat, By Some Numbers

Snap Inc., maker of the Snapchat app and face-mounted camera glasses called Spectacles, filed its S-1 with the SEC this past week, the first major step toward going public.

I thought it’d be interesting to compare Snap Inc. to Facebook, considering that Snap CEO Evan Spiegel’s IPO roadshow message is that his company is “The next Facebook,” according to coverage in the Wall Street Journal.

I spent some time digging through Snap’s S-1 filing and found some interesting tidbits:

  • Snap aims to raise $3 billion in its IPO at a $25 billion valuation, up just slightly from the $20 billion valuation it reached in its $1.8 billion “extended” Series F round closed in May 2016 (and reported on here in the 4th edition of this newsletter)
  • Snapchat currently boasts 158 million daily active users. (For reference: the company reported 110 million DAUs in December 2015.)
  • These DAUs are currently creating 2.5 billion “Snaps” per day.
  • 60% of these users use the chat service every day.
  • DAUs check Snapchat more than 18 times per day.
  • Snapchat users spend an average of 25-30 minutes each day.

I found some comparative figures from this article published in ZDNet in February 2012, on the day Facebook filed its S-1.

  • Facebook had 483 million daily active users during the month of December 2011. (Roughly 3x Snapchat.)
  • In that same month, Facebook users uploaded 250 million photos daily to FB. There were an average of 2.7 billion likes and comments made during the 3-month period ending December 31, 2011. (Roughly 1/10th of the photos uploaded but a comparable number of aggregate interactions to Snapchat at time of IPO filing.)
  • Facebook users spent an aggregate of 9.7 billion minutes per day on the desktop site, which works out to about 12-13 minutes per day for each of FB’s then 845 million monthly active users. This also does not count time spent on the mobile app. (To compare: FB users spent slightly less time than Snapchat users on a per-day basis.)

Oh, and Facebook was also profitable and had comparatively more valuable assets and cash on hand at time of its IPO filing.

One of the metrics I find most interesting is to compare the per-user value of Snapchat compared to other platforms and services. I arrive at these figures by dividing the number of Daily Active Users by the then-current (or desired) valuation of the platform. (I’d prefer to use MAUs, but, tellingly, Snap Inc didn’t disclose MAU statistics in its S-1 filing.)

Per user values (DAU/valuation) are as follows:

  • Snapchat: $25 billion valuation / 158 million DAU = ~$158 per DAU
  • Facebook: $103 billion at IPO / 483 million DAU reported in S-1 = $213.25
  • Twitter: $14.2 billion at $26 IPO price / 100 million DAU = $142
  • Line: $7 billion IPO price on July 14, 2016 / 220 million DAU in 2016 = $31.81
  • WhatsApp: $16 billion at time of acquisition by FB / 324 million DAU (72% of 450 MAU, via Sequoia Capital) = $49.38
  • Instagram: $1 billion acquisition by Facebook in April 2012 / 1.38 million DAU in April 2012 (That’s via data from ComScore, but data from AppData suggested that Instagram had only 860,000 DAU at acquisition) = $724.63 per user at 1.38M DAU

It’s interesting to look at these figures, because it might hint at how Snap values and intends to position itself going forward. Whatever signal can be divined from Snap’s per-user-value figures points toward the company’s intention to aggregate attention and data in the same way as Facebook and Twitter did, rather than provide a simple service like Line and WhatsApp. In other words, the per-user value Snap Inc aims to show its investors is in the same ballpark as other massive social platforms of previous generations.

As a platform, Snapchat is compelling for a number of reasons, including its unique augmented reality components, an innovative user experience design paradigm and, importantly, a strangle hold on users’ attention by way of its ephemeral messaging and video play-back features. Whether Snap Inc is able to capitalize on its strengths and deliver on its potential value as a platform is still uncertain.

However, I remain skeptical that Snap Inc will be the next Facebook. I doubt Snap will attain Facebook’s scale or scope, and I’m not the first to point out that Snap’s current price feels a bit expensive.

We’ll see what happens.

Great Tech Podcasts From Off The Beaten Path

If you’re involved in the tech industry and like to listen to podcasts, chances are you’ve already heard the standard-issue stuff that consistently ranks at the top of iTunes. Shows like Exponent (of which I am particularly fond), the a16z Podcast, Startup from Gimlet Media, and even NPR offerings like How I Built This and the TED Radio Hour are probably old hat.

Starting a couple of months ago, I set out to find podcasts about topics I want to learn more about. The broader goal beyond finding some entertaining content is two-fold: As an auditory learner, listening to experts talk about a subject is the easiest way for me to pick up the jargon of a field, which feels like half the battle. And hearing from domain experts on podcasts is the most effective way to wrap one’s head around both the “state of the art” and the general consensus about where a particular field is going. Continue reading “Great Tech Podcasts From Off The Beaten Path”

2016: My Year In Writing, And Goals For 2017

Since (finally) graduating from college in March and spending much of April on a couch recuperating, I spent the latter three quarters of 2016 doing a lot of writing, both for money (from Mattermark and other clients) and for pleasure (i.e. in my personal blog, in The Missive and my newsletter).

A look back at 2016

screenshot-2017-01-02-13-38-35

Here’s a rundown of some of the statistics:
  • 73 articles and posts in 7 different publications (including my two blogs)
  • 31 editions of my weekly(ish) newsletter, which I launched in May.
  • 113,704 words published publicly… which doesn’t include the embarrassing number of half-done drafts I’ve got stowed away or the words cut by my long-suffering editors.

Continue reading “2016: My Year In Writing, And Goals For 2017”

Answering The Void’s Call

Scattered thoughts on the election and what to do next.

In the wee hours of Wednesday morning, we learned who our new president is going to be. I did not vote for him, and like many I am very concerned by the prospect of his presidency. Yesterday, I spent most of the day on the couch or in bed, sleeping off the previous night, which consisted of several glasses of wine at a friend’s “election night party” and a very late-night binge of bad news and hot takes. I went to bed at 4:30 AM on Wednesday. I am not proud of this. Today, Thursday, I am now well-rested and recovered from the initial shock of the event, and it has been weird. Here’s what’s on my mind.
There is this phrase in French, “L’appel du vide.” It translates to “the call of the void.” An example: Have you ever taken a walk along a cliff, overlooking the majestic view such a high vantage point gives you, peered over the lip and hear a little voice suggest, “Jump!” You’ll shudder and feel ill-at-ease. You wonder whether this constitutes “suicidal thoughts or actions” and whether you should tell your doctor about it the next time you see them. The call of the void is a somewhat antique phrase for what psychologists today call “intrusive thoughts.” Think of them as brief lapses of conscious control, a moment when the chain of thought jumps the derailleur. The key fact about intrusive thoughts is that, like swamp gas, they bubble to the surface, make their odious presence known, and then drift away. You cope with them by letting them pass. By virtue of their sudden appearance and shocking quality, the little voice is easily ignorable. His election was not an answer to the call of the void. It was not as if almost 60 million Americans took a stroll along the proverbial cliff and heard a little voice suggest, “Trump!” Instead of answering to a sudden impulse, it’s clear that much of his following was drawn ineluctably into the his campaign and ultimate election, as if by a siren’s song, weeks and months ago. Wave upon wave of red flags were ignored like bumpy reefs on a course of dead reckoning headlong toward shore. Instead of the warm embrace of the siren, though, supporters are attracted by a simplistic image of safety, to a time before, in their eyes, America fell from greatness. I feel as though there is nothing more I can add to the discourse in these respects. No amount of personal anecdote is going to change the course of history, much less rise above the din. It seems as though stories about LGBT friends who are now uncertain about their rights, family members with “pre-existing conditions” that might inhibit their access to healthcare in a post-ACA era, people on the south side of Chicago fearing expanded police power, or sisters and female cousins who may lose control over what they do with their bodies will fall on deaf ears. Khizr Khan and Alicia Machado’s stories didn’t move the needle. Nor will more recursive analysis of the deep grievances that fueled the president-elect’s rise to power. The generalities about what motivate different segments of our population — white working class, black women, soccer moms, Latinos, etc. — now feel like tired and insufficient stereotypes from a recently bygone era. No one story will affect anything, really. And, the darker and more cynical side of me is painfully aware that the people in my orbit who can be most negatively affected by a new regime fit snugly into the very stereotypes I am so desperate to avoid contributing to. So again, I feel as though there’s nothing constructive I can contribute to the discussion of why things played out the way they did, or who might be affected. What I can contribute to is the discussion of how to go on from here. Hold their feet to the fire. Even for people like me who treat politics like sports, it can be exhausting to keep up with everything. But now more than ever it’s important to remain informed about what’s going on, so your voice can be heard. Here are some of the basics. Holding your elected officials accountable means consuming a diverse media diet and breaking out of your personal filter bubble. Actively seek out a range of sources about the issues you care about, and be sure to include those voices that don’t agree with yours lest you become as partisan and narrowly-informed as the people you disagree with. Vote in every election. I didn’t vote in 2008 or 2012, the first general elections I was eligible for. I am one of those people who believe that your vote doesn’t matter, and in the presidential race that’s pretty much true unless you live in a swing state. But down-ballot races matter, and in those smaller races your vote has more leverage. And remember The President ≠ The Government. In America, we live at the intersection of federal, state and local governments, as well as special-purpose governments like school boards, water reclamation districts, and the like. There is no monolithic entity controlling it all, so chances are you can actually pinpoint the few people in that one government office that support that policy you disagree with. They have email addresses, fax numbers and physical mailboxes that have to be checked. You can learn how to send faxes from Gmail on gmailfaxhelp.com and use this method to get their attention as well. The attention paid to your complaint is proportional to the amount of effort you put into it: physical letters are worth a thousand angry tweets. There are over 500,000 elected officials in the USA, almost one in 400 people. The president is just one person. If you don’t like what they’re doing, then vote them out. But it’s incumbent on you to actually make your voice heard. Don’t make rash conclusions. Although I haven’t taken a course in journalism, I find myself writing a lot of things for public consumption, and I hold many journalistic best practices dear. To echo the sentiments of Brooke Gladstone, the host of WYNC’s “On The Media” and a contributor to The Washington Post, when reporting it is extremely important to focus only on what is actually happening, rather than what might or could happen. It’s my belief that that advice is applicable to leading life day-to-day. The fact of the matter is that, right now, we don’t know what a Trump presidency will look like. I have my serious doubts about his ability to be a good president, but for now I’m not willing to entertain the idea that he’s the second coming of Hitler. It might be my college-educated, upper-middle class, straight, white, able-bodied, unmarried, childless cis-male privilege talking, but I feel such comparisons are needlessly hyperbolic and that fleeing the country now smacks of a degree of cowardice I don’t feel comfortable calling out in person. At least for now, the images of sprawling internment camps for “Illegals,” Pence-mandated conversion therapy for gay kids, and other horrors are just as farcical as the “FEMA camps” Alex Jones and his ilk have been blathering about for years now. The right has been terrified that Obama would send in “jackbooted thugs” to take away our constitutional rights, and nothing happened. Now that the tables have turned, it’s no surprise that the left is entertaining its own dark fantasies about what could be. But until sales of jackboot polish start to rise, it seems like there is much ado about nothing. Giving into those fears by leaving or giving up is to answer the call of the void. Finally, as hard as it may be, it’s vitally important to give the other side the benefit of the doubt. I spoke with my mom today and she said something that stuck with me: “Now I feel like how the Republicans must have felt for the past eight years. [By January,] I won’t have a president that reflects my vision for the country.” This election taught me that there is a huge empathy gap between the right and the left. I really don’t know what makes some Republicans tick, and I’m sure there are things I believe that are unconscionable to those on the other side of the aisle. As someone who works in the tech sector, which has only exploded in cultural relevance and economic prosperity over the past quarter century, it’s all too easy for me to ignore the plight of those who work in fields that are on the decline. For example: I catch myself more and more saying that humans will be “abstracted away” from certain types of work, like in some cold algebraic trick, by machines. I maintain that that is still a net positive to society, but it’s a very acute loss to a certain part of the population, and something needs to be done to ameliorate the economic pain they will suffer before it gets worse. But it goes beyond token concern for those who are facing hard times now or in the future. Learning more about how “the other side” thinks, what they worry about, what motivates them, and what they want from government will help prevent the kind of blind divisiveness that seems to pervade public discourse. And it might help to cure the statistical myopia that caused this election to be such a shock. Iam trying very hard to follow Obama’s suggestion to give the incoming president a chance, to be “open minded.” I’m doing my best to stay positive, and for all of our sakes I am sincerely hoping to be surprised by President Trump. (It still feels weird to say it.) Nietzsche has this saying, “if you stare into the abyss, the abyss stares back into you.” The prospect of President Trump may seem scary to a lot of people, myself included, but there’s nothing I can do to change the situation today. There’s another election in two years, and another presidential election two years after that. Just how much damage can he do in four years? On second thought… it’s best not to answer that. That’s the void calling. Update: Well, my post has been up for 4 hours and then this happens. It’s going to be a long four years…
Cross-posted on Medium.
Image credit: Tom Sodoge, via Unsplash. (License: CC0)

Rothenberg’s Wake: Does One Fallen Domino Signal Future Failures in Micro VC?

Earlier this week, Backchannel published a piece chronicling the “Trouble In The House of Rothenberg”.

For those unfamiliar with the story, Mike Rothenberg is – or, was – an uber-connected 31 year-old solo general partner of Rothenberg Ventures (which changed its name to “Frontier Tech Ventures” this week). He was known for being one of the best-connected “millennials” in Silicon Valley, his rapid turnaround on deals, throwing raucous and very expensive parties, unorthodox management fee structuring and carried interest distributions, and funding his (failing) startup project with $5 million of Rothenberg Ventures’s capital. (~10% of the entire firm’s AUM.)

TLDR is: His fund ran out of operating capital, his investors are Royally Pissed, and he’s facing possible scrutiny from the FBI and SEC.

The question is, is this a one-off event or a signal of more failures to come in the micro VC space. As I’ve previously written about there is a real explosion in the number of funds with less than $100 million in assets under management, many of which are raised by first-time fund managers.

How many of them are spending too much of their small management fees on marketing, events and providing services to their portfolio companies? Rothenberg is the apotheosis of “young VCs go wild” stereotypes. I mean, the guy inscribed his VC fund’s logo into his bathroom tile.

But there are surely many like him. Excess and irresponsibility exist on a gradient, and it’s worth identifying the funds on the darker grey side of the spectrum sooner rather than later.

There is a lot of good that small funds can do, but the VC community might want to proactively prevent stuff like this from happening again. In the meantime, those looking to raise should hope that one very public bad apple doesn’t sour LPs to the prospect of investing in smaller funds.

How to Compare Venture Returns & The Curious Case of a16z

The Wall Street Journal published an article shining a light on Andreessen Horowitz, the vaunted VC firm that seemingly came out of nowhere in 2009 to become one of the most prestigious venture firms in Silicon Valley. The article indicates that a few of a16z’s funds are not performing as well as their age-matched peers.

Basically, one evaluates venture fund performance by comparing a fund raised in a certain year to the set of other funds raised in that same year. Much like wine enthusiasts, investors in venture funds use the term “vintage” as a way to talk about the relative performance of funds. Continue reading “How to Compare Venture Returns & The Curious Case of a16z”

Dive Into Network Theory: Some Resources for The Curious

Earlier this week I published a piece for Mattermark’s blog that maps and visualizes the network of international mergers and acquisitions of startups and a few other private companies. To accomplished this, I used data from Mattermark recording 2,250 cross-border M&A deals made between January 1, 2015 and the end of August, 2015.

The visualization I made for that piece is one of the coolest I’ve made during my time freelancing for Mattermark. (See featured image above.) An explanation of how to interpret this network visualization can be found in the piece on Mattermark’s blog. But that’s not what this post is for.

One of my editors asked me to share some information about how I created the visualization and more about social network theory and analysis in general. Rather than letting my list of resources lie forgotten in a direct messages channel on Slack, I decided to expand and share it here for other people to benefit from. Continue reading “Dive Into Network Theory: Some Resources for The Curious”

Simple Security Best Practices for Bitcoin Users and Investors

One of the biggest stories to hit the Bitcoin space in months was the theft of 119,756 BTC (valued at ~$70 million USD) from Bitfinex this week. For those that aren’t familiar with the story, a great re-cap was published on CoinDesk within 24 hours of the break-in. (Obviously, if you’re reading this far into the future, the public’s understanding of the hack has likely changed.)

The attack brought to light a lot of questions about the security of Bitcoin exchanges and online wallets. As I’ve previously written, a lot of these questions arise from the tension between the trust one necessarily places in third parties to secure users’ Bitcoin holdings and the notion that Bitcoin, as a system, is built around the principle of trustless-ness. In light of the repeated failures of trusted third parties to maintain security, it’s likely that there will be more scrutiny of Bitcoin wallet providers and renewed interest in self-managed Bitcoin security. Phishing Test helps you to boost the security awareness of individuals and organizations.

Here are some suggestions for Bitcoin users looking to beef up their own security. Continue reading “Simple Security Best Practices for Bitcoin Users and Investors”