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Senator Joe Manchin wrote a public letter to financial regulators asking them to “take appropriate action to limit the abilities of this highly unstable currency.” The letter in its entirety is here.What follows is a letter from me to the Senator.Bitcoin is a powerful new technology platform that, like the Internet itself, is not controlled by anyone or any company. It is a globally distributed network of computers that allow financial transactions to flow seamlessly and at a much greater efficiency than current methods. A bitcoin is the store of value in the system and it acts a bit like a currency or a commodity. This store of value is actively traded for fiat currency at a number of exchanges around the world.Bitcoin is already regulated in the US and it is becoming more regulated every day. And the regulatory environment in the US has dampened the amount of innovation around Bitcoin that has developed here in the US. All the major Bitcoin exchanges have been built outside of the US and a significant amount of the venture capital investment in the Bitcoin ecosystem is happening outside of the US. This is a direct response to the stricter regulatory oversight and requirements here in the US versus other countries.The volatility of Bitcoin relative to fiat currencies should be expected in a nascent and emerging technology. What is amazing, however, is its resiliency in the face of massive scrutiny, company failures, fraud, theft, and a host of other challenges it faces as it becomes mainstream and mature. The value of a Bitcoin at this stage of its development should move up and down more like a hot technology stock than a stable currency. In time, as Bitcoin’s market value grows and transactional activity  and liquidity develops, the value will stabilize and act more like a traditional currency.When something as new and as different as Bitcoin emerges, it is tempting to want to “put the Genie back into the bottle” and protect ourselves from it. But thankfully the US did not do that with the Internet. The impact of the commercial Internet on the US economy and our society as a whole has been massive and overwhelming

My son turned me onto a wine app called Delectable Wine. I am waiting for the Android version so I can use it too. But I've used it a bit on his iPhone and its a really nice and useful application.Think of Delectable Wine as Instagram for wine. People post the wines they are drinking, their reactions, tasting notes, etc. You follow your friends and experts (like Arnold) and you see what they are drinking. You can tag where you had the wine and what you thought about it. There's a really nice searchable archive so you can go back and see what the wine was that you had at Perla that night with your friends that was so good.But all of this is possible because of a very cool feature that my son calls Shazam for Wine Labels. When you want to add a wine to Delectable, you take a photo of the wine label and Delectable figures out what wine it is, what vintage it is, etc, etc. All of that important metadata comes in automatically just because you took a photo of the wine label.I don't think Delectable would work nearly as well without this feature. It enables so much of the discovery and data that makes the app so great. The first time I saw it in action, I said "wow". I see a lot of technology demo'd every day. I don't saw "wow" that often. But I did when I saw Delectable in action.If you are into wine and have an iPhone, try it out. I think you'll like it.

A few weeks ago the traffic coming to the new usv.com dropped off by 20 or 30% week over week. Brian and Nick were wondering if it was related to the new design we rolled out at the end of January. They decided to take a deep dive into our analytics to see what was going on.I told them it had to be some sort of plumbing issue. Something that was hooked up to usv.com must have gotten unhooked. Because I have rarely seen the behavior of an entire user base change drastically overnight because of something like a redesign. Change can come pretty quickly, but in my experience it is months not weeks or days for something to drastically change in your user base resulting from a subtle product change/tweak.They noticed in the analytics that front page views were steady but traffic to the article pages was off by a lot. I suggested that something in our twitter plumbing was off. And sure enough, we figured out that the autoposting of popular articles on usv.com to this twitter handle was broken (and apparently still is).I tell this story because we all encounter this sort of thing along the way of building and launching and growing a product. We make tweaks and something changes right away. That immediate change is usually related to something that brought traffic (google, twitter, email, appstore) and not a design change. More gradual changes (up or down) are usually because of design changes.There's a difference between these two kinds of effects and it is important to understand that.

VC is a service business like law firms and ad agencies. Our customers are the entrepreneurs we back. Our shareholders are our limited partners. When we do a good job of helping our customers create value, our shareholders benefit.But, like law firms and ad agencies, it is hard to provide truly objective and unbiased advice when you have a conflict of interest. In the law and advertising business, clients will demand that their service providers don't work for their competitors. The same is mostly true of entrepreneurs and VCs. There is no language in the stock purchase agreements we sign with our portfolio companies preventing us from investing in a competitor. But there is an understanding about conflict avoidance and breaching that understanding can have negative reputational consequences.The problem that arises is that conflct is not the same to everyone. As I said to an entrepreneur yesterday, "conflict is in the eye of the beholder." This entrepreneur had pitched me on his business via email and I told him it sounded a lot like one of our portfolio companies. He was shocked as he didn't (and doesn't) see it. A few months later, he went to see the Gotham Gal about making an angel investment in his company. She pointed out the exact same conflict to him. Again he was surprised. So he emailed me yesterday about the situation and I pointed out that not everyone sees conflict in the same light. But I went on to point out that the perception of conflict is conflict.When someone feels that something you invest in is encroaching on his or her territory, you have created a perception of conflict with that entrepreneur. Even if he or she is dead wrong about that, it doesn't really matter because they are now in conflict with you in their own mind and they won't listen to you the same way again. And that is the most powerful leverage point a VC has when making an investment. If you cannot get an entrepreneur to listen to you objectively and rationally, then you have lost your greatest hope of postively impacting that investment. And that is a tool that VCs should not throw away lightly.So the meta point I am making in this post is that it isn't the facts that matter when discussing conflict. It is the perception that matters. If anyone in a relationship with you percieves that you are in a conflicted situation, you are in a conflicted situation whether you agree with them

The annual NYC tech bowling event is around the corner. Kingpins of Silicon Alley will happen on April 7th, at 7pm. Kingpins of Silicon AlleyBowlmor - Chelsea PiersApril 7, 2014  7 PM 

So Fast Company has selected DonorsChoose.org as one of its most innovative companies and on top of that, they decided to put DonorsChoose founder Charles Best on the cover of the magazine and write a longer article about them as well. It's pretty unusual that a non-profit would be selected for such a list and highlighted in this way. But then again, DonorsChoose is a pretty unusual non-profit. I've been fortunate to have been involved with DonorsChoose for the past seven or eight years and have been on their board for the past three or four. So I thought I'd list some of the things that DonorsChoose has done to illustrate the point.- DonorsChoose launched a crowdfunding service and business model in 2000, fourteen years ago. To my knowledge they were the first crowdfunding service launched on the Internet, long before the leaders of the category like Kickstarter, Lending Club, and other emerged.- DonorsChoose has built a network of almost 200,000 teachers, over 10mm students, and over 1mm funders. That network has brought $227mm of funding into public school classrooms but it is being used for a lot more. Entrepreneurs are using it to get things like 3D printers, underwater robots, and computer science classes into schools. DonorsChoose has become a distribution network in addition to a funding network.- DonorsChoose has open data sets and an API that allow anyone to analyze what resources teachers and students are seeking. Increasingly policy makers are accessing this data to determine what resources are most needed in the public schools.- DonorsChoose is a sustainable non-profit. They apply a take rate like every other commercial marketplace (it is currently about 13% and donors can, but usually don't, opt out). This revenue scales as giving scales and has been covering the costs of the operating the business for a number of years now. Any profi

Ben Horowitz has a great post up on his blog, called Why I Did Not Go To Jail.I would encourage everyone to go read it. But in the event you aren't going to do that, he tells a story about an options strike price plan that his CFO recommended to him. It turns out the plan was against the law and his GC stopped him from implementing it.I've heard a lot of ideas over the years that, like this options strike price plan, sound too good to be true. And in most cases, they were just that.I have developed a deep skepticism around anything that sounds like a free lunch. As the saying goes, there is no such thing.

I was on vacation with my friend John and he asked me how I used the favorite button on Twitter. I told him it is a way to tell people that I've seen the tweet when I do not want to reply.I use it in two primary ways. To signal that I saw and liked a tweet. And to signal that I saw a tweet to the person who sent it. The two are different only in that in the second case, I probably did not like the tweet but I still wanted to acknowledge it.I really like super lightweight engagement gestures. I am bombarded by stuff coming at me all the time. So if I can acknoweledge something publicly without having to do much work, I get a huge amount of value from that.Bumping on usv.com and upvoting on disqus are like that too. Because the identity of the bumber and the upvoter are on display publicly, they are an efficient way to signal that you saw it and liked it.I am going to try to upvote more on disqus. As I reply less and less in the comments, I need to upvote more and more. I will make an effort to do that.

One of my big weaknesses as an early stage investor is my eyes glaze over at wireframes, design sketches, photoshop screens, and prose that describes a product. Until I can get my hands on it and use it, I have an incredibly difficult time imagining what the thing is.For that reason, I prefer working on projects that are designed in code as opposed to paper, photoshop, or some other tool. That's a lot easier on the web and much harder on mobile, which is a bummer. When something is designed in code, it comes to life for me quickly and I can react to it, give feedback on it, and think about it, and consider investing in it.I've pretty much given up investing in products that aren't ready for public use. It has not really worked out for me. I really enjoy investing in a business where the product is out in the wild, getting used, and everything else has to be figured out. I am good at that. But I am not good at investing in the figuring out the product stage. My track record proves that conclusively.I get a ton of requests (mutiple requests a day) to meet with entrepreneurs to give them feedback on their product. I also get emails with links to wireframes and sketches where entrepreneurs want feedback. I generally decline these requests because I know that my feedback will be poor. I lack the imagination to see where the entrepreneur is going with the product.Everyone has their strenghts and weaknesses. My weakness is the pre-product phase. I thought I'd make that clear to everyone. It will save us all a lot of time and energy.

I attended a CS Teacher Meetup last night at USV. We talked about a lot of things but focused on the issue of getting more girls to code. It's an important issue that I think we are starting to make good progress on.Though not focused on girls per se, I heard about a neat coding challenge that is happening this Spring called Dream It. Code It. Win It.This is a programming challenge (not a Hackathon) aimed at High School and College students. It is organized by the MIT Club of New York, MIT Enterprise Forum, and Trading Screen. The goal is to reward "the creative aspects of a computer science education." College teams can win monetary prizes ($20k, $15k, and $10k). High School teams can win iPads.The submission is a video where the team explains the problem they set out to solve, their solution, and a demonstration of a live working product that solves the problem.Submissions can be made here and the juding panel will meet in NYC on April 30th from 5pm to 9pm to select the winners.If you know a high school or college aged student who likes to code, please let them know about this contest.

My friend and former business partner Jerry Colonna has created The CEO Bootcamp. It's a four day retreat in the Colorado mountains with 19 other CEOs and a few facilitators, led by Jerry. The first CEO Bootcamp was last fall and you can see what attendees thought about it here. And here's a blog post by Sooinn Lee about her experience last fall at CEO Bootcamp.There are two aspects to this experience. There are the four days where attendees learn skills to help them manage the leadership role they are in, and there is the ongoing support that the group of CEOs provide each other after the retreat is over.The CEO Bootcamp has some requirements. They are:You’re the CEO of a tech start­up that has employees.This is the first time you have been a CEO within a company of this scale.You’ve logged immeasurable hours and have made tremendous sacrifices.You’ve had success with your company. You realize there is more to this game than “success.”

News is leaking out of Apple that iOS8's primary feature will be health and fitness data. Rumors are that there will be a new app called Healthbook that will track a plethora of health and fitness data that iPhones and related devices (iWatch?) will be able to collect on the person carrying the devices.This is interesting to me on a number of levels. We have been looking at this sector for a while and one of the things that has kept us (USV) from making investments in this space is the sense that all of this data capture is soon going to happen in the phone itself.Once that happens, things can change pretty rapidly. The key will be APIs. And my big question is whether Apple will give its users an open API to send their health and fitness data to third parties they authorize.I can see a button that says "auth with Healthbook" in my doctor's office, my gym's mobile app, my health insurers's web app, and a host of other places.So to my mind, the big question is not what Healthbook will look like but whether Apple will make it easy to get our data out of it. If they do, this will be a massive game changer for the quantified self, health, and wellness markets.

I read this in an analyst report published on Yahoo! yesterday:We believe Tumblr is an underappreciated asset with fast growing user base and engagement levels. We think Tumblr may actually be capable of creating as much value as Yahoo! core.It's not clear to me how much value the "Yahoo! core" has so it is not possible to put a number on this statement. But it is telling.I have been using Tumblr every day for almost seven years now. USV invested in Tumblr in the fall of 2007 and we ceased being investors last year when Tumblr was sold to Yahoo! in May.I still use Tumblr every day. I think it keeps getting better and better. My feed today is incredible. As it was yesterday and the day before.The magic of Tumblr is that it sits between Twitter (short form) and WordPress (long form) and fills a gap in the world of blogging that nobody else has managed to capture. There are elements of Facebook and Instagram in it as well. So it's a lot like all of these apps but in the end it is like nothing else. It has a soul and pulse and a vibe that other social apps don't have. At times, it is simply magic.When Tumblr was sold to Yahoo! a lot of people thought that spelled the end of Tumblr. I was not particulalry worried because I knew that David was committed to sticking around and Yahoo! was committed to leaving Tumblr alone. Nine plus months later, I think we can all say that to date the marriage has worked out well for the Tumblr users. The product has never been better and it feels as alive today as it did when I first logged in almost seven years ago.So I agree with Carlos (the analyst who wrote the line I opened this post with). Tumblr is underappreicated. It always has been. But not by me. I love Tumblr.

There are at least three Bitcoin events that I know of in NYC today. I do not think any of them are public events but the fact that there are three in a single day is interesting to me.This morning, NYC's Economic Development Corporation is hosting a Bitcoin breakfast with some of the leading banks and financial services companies in NYC to discuss Bitcoin. My partner Albert will be attending that.Also in lower manhattan, Ben Lawsky, New York State's Superintendant of Financial Services, will be holding hearings about Bitcoin.  I have been asked to testify and will do so, at 11:30 along with Barry Silbert, Jeremy Liew, and maybe a couple others, in a panel of investors.Then at 6pm this evening, in the USV event space, Wells Fargo is hosting a discussion about Bitcoin. My partner Albert will be part of the expert panel. I plan to attend the first part and then duck out to see the Knicks play the Celtics in the battle for the cellar in the east. This is a public event, but it has been sold out for weeks and if you are not already attending, unfortunately you can't.It certainly feels like there is a whirlwind of attention and discussion and debate about Bitcoin in the air in New York City. Last week Marc Andreessen penned a piece in the New York Times titled "Why Bitcoin Matters." Later in the week, JP Morgan's CEO dismissed Bitcoin on CNBC. And over the weekend, well known NYC Bitcoin entrepreneur Charlie Shrem, shown in this AVC post from this summer, was arrested for knowingly transacting in Bitcoin with drug dealers (or something close to that, the complaint is here).So there is a lot going on at the

I have a new favorite blog and I thought I'd share it with all of you.I found it via the Gotham Gal's blog (which in and of itself is kind of embarassing. We sleep together and I found this via her blog).It's called Humans Of New York. I follow it on Tumblr.Every day I get two to five posts. Each post is a picture of a new yorker or two. And something that was said by the subject of the photo.It's like riding the subway, but even better. You get to see all kinds of people and learn a little bit about them.Sometimes it is sad.Sometimes it is funny.Sometimes it is upsetting.Sometimes it makes you smile.But rarely does Humans Of New York fail to make me feel something.And that is great art at work. And that is Tumblr at work. Tumblr is great art and so is Humans Of New York. I love both of them.

My partner Brad, who is the conscience of USV, said something in one of our recent monday team meetings that has been rattling in my brain ever since. It was a throwaway line for him. He probably doesn't even remember it. But I do.We were talking about some investment opportunity and one of us turned to him and asked him what he thought. He said, "I generally can't get excited about anything that is this for that."What he meant by "this for that" is Airbnb for boats, or Snapchat for business, or Dropbox for videos.What Brad is talking about is derivative works. There is nothing wrong with them, of course. But he was saying that it was hard for him to get excited about them.We've made a few of these investments and some of them have worked out pretty well. Edmodo is Facebook for classrooms. SoundCloud is YouTube for audio.If you are going to do a this for that investment, the first thing you need to make sure is the iconic company (this) is not going to go after this other market (that) themselves. Then you need to make sure the other market (that) is very large. And finally, you need to make sure that the founders are doing the startup for the right reasons.Nic and Jeff, the founders of Edmodo, were tech administrators in local school systems. They were frustrated with the tools teachers were using to distribute information to their students. So they built a new way to do it, influenced by Facebook for sure, but different in some important ways.Alex and Eric, the founders of SoundCloud, were musicians and sound engineers. They were frustrated by the tools that were available to them and their friends to put the sounds they were making out onto the Internet. They may have been influenced by YouTube (I honestly don't know that they were), but their drive to make SoundCloud was most certainly to scratch an itch, just like Nic and Jeff.The worst kind of "this for that" startup is one where you can tell that the founders have no intrinsic desire to build a solution for a recognized problem, but instead they are opportunists being influenced by the latest hot startup. We certainly try to avoid those sorts of things and comments like Brad's certainly helps us do that.

In the google maps android app, if you search for a place, you can click the share icon and send that location to anyone via a wide assortment of apps. I did that last night and emailed this to myself.Buvettehttp://goo.gl/maps/7dzMzI absolutely love this feature and use it all the time. I email places to people, I kik places to people, I text places to people, I tweet places to people.But for the life of me, I cannot figure out how to do this on the web. When I locate a place on Google Maps on the web and select Share, the only option I get is to share the place via Google+ which is the one way I would not want to share it.Does anyone know how to locate a place on Google Maps on the web, pin it, and then share it out via a shortlink in email or otherwise?I am sorry for turning back to back feature fridays into Google Apps help requests, but I love these features and then they go and change them on me and I can't figure out how to get them back. 

One morning earlier this week, I cam down early and was working in our family room/kitchen area. My oldest daughter was charging her iPhone in the kitchen and it was randomly playing music. I would get up, turn off the music, and then a few minutes later, it would start again. Eventually I turned off the phone.A bit later, when my daugher came down, she was in shock, her phone had randomly called dozens of her contacts on its own over the night.So I took a look at her phone and it seemed that voice control had taken over her phone. I googled around to see what could be done and came up with this support forum thread. It explained that we could turn off voice dialing which we did, so that she would stop randomly dialing her contacts. But we were not able to turn off voice control entirely.She's in Park City this week so when she gets back to NYC, she will take the phone into the genius bar and get it fixed. But until then, Siri is controlling her phone. Randomly playing music when she doesn't want it. Randonly facetiming people she doesn't want to talk to. It's a glimpse of the future to when AI goes haywire on us. It is not pleasant.

I told a Rob Kalin story yesterday and I am going to start this post with another one. When Rob left Etsy for the second time, it fell to me to tell everyone what was happening at the company's all hands meeting. I asked Rob what he wanted me to tell the several hundred employees who would assemble to hear the news. Often there is a story concocted about the founder or CEO wanting to step back, take more time with their family, needing a break, etc. And so I wanted Rob to tell me how he wanted this story told.Rob said "Tell them you fired me. They will know anyway. You might as well tell them the truth." So that's what I did, with empathy, respect, and appreciation for Rob and his work. It went well. The team was happy that I was being straight with them. I then handed the stage to Chad who took it from there and has been doing a great job ever since.I don't tell that story to bring up old unhappy times. Although it may for some. I tell it because Rob had the courage to allow me to tell it like it is. And yesterday Chris Poole told it like it is. With a blog post that is simple, honest, and sad. He made the decision that our portfolio company Canvas has failed. Running out of money is always the thing that brings this moment of reality. But so often an acquihire is arranged, or the company is put on mothballs, or you just stop hearing about the company. The story of failure is buried. I prefer the way Chris did it. We tried, it didn't work, we failed.The truth is, as Chris explained in his post, that the first product Canvas was a failure. The pivot to DrawQuest came too late, took too long, and now DrawQuest is a succeeding product inside a failing company. I know that Chris is going to try to find a way to keep DrawQuest going. It's got 400,000 people who use it every month and 25,000 people who use it every day. But it has not monetized particularly well and the Company hasn't found a good way to inject virality into the product so it can spread without expensive marketing dollars. If you know of a good home or a good steward for DrawQuest, email me. There is a contact link in the footer of this blog that will send me an ema

My friend Gary said this to me the other day in an email. He wasn't talking about me but he could have beeen. Last night I went to bed thinking about my work, dreamt about my work, and woke up thinking about my work. It's been that way for me since I started Flatiron in the mid 90s. To some extent it's been that way for me since college. Fortunately I have the Gotham Gal and three awesome kids to keep me from going fully into the fire. I spent the past four days skiing wtih my family and some new friends and enjoyed it immensely. If anything I am letting my work sit idle in my brain more these days than I have in a long time.What Gary was talking about when he wrote those words to me was failure. And when you are your work, your failure at work is personal. Deeply personal. When Flatiron melted down after four great years and one awful one, it was painful. I went to see a therapist for the first time in my life. It was the best thing I could have done. I had been to see coaches but I had not taken the deeper dive into what was driving me. A few years later I was energized and Brad and I started USV.Failure can sow the seeds of success. It did for me. It did for Mark Pincus when he turned the failure of Tribe into the success of Zynga. It has done the same for countless others. But to get through failure, you need to be able to separate who you are and what your work is. One of my favorite lines from an entrepreneur came from Rob Kalin. I am sure I've shared it here a few times. He said "I am an artist. Making websites is my medium right now" That's a helpful way for entrepreneurs to think about their work. They are the painter. Some paintings will hang in the MOMA and others will sit gathering dust in a storage room. Not every thing you create will be brilliant. But you can be brilliant while still making work that isn't, particularly if you understand why the work that wasn't great wasn't great.Jerry ended his amazing post with the observation that "I have to understand this viscerally if I’m going to be of service to my clients". When your work is servicing e