Musings of a VC in NYC

Sidecar

While we believe in network effects and the defensibility and leverage that comes from them, we have never subscribed to the popular theory that one single company can leverage network effects to "run the table" on a large market on the Internet and Mobile.

Certainly Google has largely done that in search and yet there are still several smaller players in the search market in the US, there are a number of regional search leaders around the world, and there are search engines, like our portfolio company DuckDuckGo, that compete on the basis of privacy or some other vector that Google chooses not to compete on.

In e-commerce, many think that Amazon is a force that cannot be reckoned with. And yet there are many successful e-commerce companies that have been built over the years. And there are new e-commerce companies being started every day.

In social networking, many believed that Facebook would be the only social network that mattered. As far back as 2007, I argued on this blog that we would see many social networks emerge offering different social graphs, user experiences, and use cases. We successfully invested in some of them, including Twitter and Tumblr.

In the mobile transportation market, which we believe will be a very large global market opportunity, many believe that Uber will run the table. And it certainly looks like they are doing that right now. It reminds me of the juggernaut that Facebook looked like five years ago when everyone thought they had won the social networking market.

But we believe that there will be a number of meaningful companies built in the mobile transportation market, just like there have been a number meaningful companies built in all of the really large markets that have developed on the Internet and mobile.

We have had an investment in one of these meaningful mobile transportation companies, Hailo, for a couple years and they have leveraged the existing taxi cab market to build a very large mobile transportation company operating in some of the largest cities in Europe and the eastern US, where taxi services are well established and work well.

And last summer, we made a second investment in this sector, in Sidecar. At the time of that investment, Sidecar was planning a significant change to their strategy and product to deliver a true marketplace experience to the mobile transportation market. We agreed with the company that we would keep our investment private until they were ready to launch the new product and strategy.

Well today, Sidecar has launched its new product and strategy and with that, we are announcing that USV is an investor in Sidecar. We are very excited about the marketplace model and what it can bring to drivers and riders in the mobile transportation market.

Om Malik wrote a post on GigaOm a few weeks ago that foretold this new strategy, although I don't believe he knew about it or had been briefed on it. He wrote:

But this efficiency over the human touch is also an opportunity for Uber’s rivals

The human touch means not turning car owners who want to make a bit more money into limousine drivers. The human touch means allowing a driver to choose when and where they drive. The human touch means allowing drivers to market themselves in the app with a picture and a little bit about them and their car. The human touch means allowing the drivers to change their pricing whenever they feel like it.

The human touch means allowing riders to see the drivers in app and choose the one they most want to ride with. The human touch means giving the rider a real fixed price instead of some multiplier that goes up whenever you most need a ride.

When Sunil Paul, Sidecar's founder and CEO, laid this out for me and my partners last summer, I immediately thought of Etsy vs Amazon. I use Amazon all the time. It's a great service. I get the lowest price, quick delivery, and confidence. That's the Uber model. But I also use Etsy all the time. At Etsy, I get something unique and personal. I get to buy directly from the seller. I get to have a conversation with them. I can favorite/follow them and get notified whenever they post new stuff.

Amazon is efficient and Etsy is personal. There is room for both of them to build big businesses in e-commerce. Uber is efficient and Sidecar is personal. And we believe that there is room for both of them to build big businesses in mobile transportation. 

If you live in the the Bay Area, Los Angeles, San Diego, Seattle, Chicago, Boston, Washington DC, or Charlotte, you can try out the new Sidecar marketplace experience. Download the app and give it a try. It won't be for everyone, but I bet there are a lot of people out there who will really enjoy the human touch of Sidecar and use it frequently.

Hypercard - Way Too Early

I have always loved the name of my friend Howard Morgan's now dormant blog - Way Too Early. 

Some ideas are just way too early. And one of them was Apple's Hypercard, which was a Mac application that came with a built in programming language. The interface was a series of cards that were mini apps inside of the Hypercard application. I built a few Hypercard based applications in the late 80s and early 90s as I was winding up my programming "career". 

But as I look around the mobile landscape, I see cards everywhere. Benedict Evans wrote a good post about this trend a few weeks ago. Google is pushing cards as a UI inside Android and their Google Now UI is the best example of that. Twitter has had cards inside of Tweets for several years now, although I wish they would display them by default in my timeline. The Facebook mobile UI looks like a series of cards, although you can't really do anything with them, yet. And, of course, my favorite example are the Kik Cards that are mini mobie web apps that run inside of Kik's messenger. I've blogged about them a number of times here at AVC as Kik is a USV portfolio company.

It feels like the Hypercard metaphor has arrived as the atomic unit of content in mobile, both inside of native apps and, if Kik is going in the right direction (I think they are), as the default mobile web atomic unit (cards instead of pages).

The problem with the native app environment is that there are things you cannot do inside of a card without violating Apple's and Google's terms of service. If Facebook wanted their cards to allow the purchase of music or video natively in the card, well that would not be possible in the current regime.

On the mobile web, that is different. You can do anything you want in a browser, even if that browser is on iOS or Android. That's a legacy of the desktop web and it's a damn good thing. Innovation happens best when there are few if any limitations on what you can do as a developer.

So keep your eye on cards. I think Apple was on to something important from a UI and usability perspective thirty years ago when they started building Hypercard. It is now coming to life again on mobile and I think this will be the most interesting battle ground on mobile in the years to come.

Inspired by GitHub

I wrote a post the other day called This For That in which I suggestred that derivative ideas are challenging to execute on and equally challenging for USV to get excited about. But there are exceptions. And Github insipired ideas are one particularly interesting area to us.

I recall when Steve Martocci came to talk to us about Splice. He talked about watching musicians work and wondering why there was nothing like GitHub for them to use to store the various versions of their work. That, of course, led to Splice. And one could call Splice "GitHub for Music". It is a lot more than that, of course, because building GitHub for Music opens up a lot of opportunities to do more for musicians. As GitHub did for programmers.

Yesterday, my partner Andy posted this link on usv.com. It's a story about a one time programmer who left software for the world of molecular biology and after a decade in the world of academic research, is leaving to do a startup which is, not surprisingly, GitHub for Life Science Protocols. You can back his Kickstarter here. I just did.

When programmers who are used to modern tools and techniques come across other industries where the tools are antiquated and the work is frustrating, they get inspired to create similar tools to make life easier. That's happening in a lot of sectors now, not just music and life sciences. 

The power of the GitHub model is not just a repository of work and version control in the cloud. It's the public nature of much of that work. And the reputation and identity effects for those who publish some or all of their work publicly. 

Tools like StackOverflow (a USV portfolio company) and GitHub allow programmers to see how other programmers have solved similar problems. I was at a hackathon up at Columbia University last weekend and one of the hacks was a development environment that automatically queried StackOverflow and GitHub as you are writing code so that you always have in front of you the answers to the questions you are most likely to ask. The developer who did the hack introduced it by saying something like "programming these days is more about searching than anything else". That reflects how collaborative the sharing of knowledge has become in the world of software development as a result of these cloud based tools for developers.

And this approach will naturally be adopted by other industries. And the entrepreneurs who bring these tools to other industries will most likely be developers who are inspired by GitHub and StackOverflow and tools like that. We are starting to see that in lots of interesting places.

You Can Turn Off Comments, But You Can't Turn Off Discussions

I saw this on usv.com today:

Popular Science has decided to turn off comments. They aren't the first and they won't be the last.

As Adrian says in the usv comments:

Let's face it - dropping comments on PopSci isn't going to stifle societal debate. There are more than enough places online to debate the impacts of science.

There are so many places on the web to talk about stuff. There are the blog communities, like AVC and many others, and there are the link sharing communities like Reddit, Hacker News, and USV.com. 

The web (and increasibly mobile) is a great place to talk about stuff that matters to you. It always has been and it always will be. Some publishers will foster those conversations on their own domains. Some will let the conversations happen elsewhere. I am not particularly concerned about who does what. 

I am concerned that we keep talking and I am not the least bit worried that we will continue to do that.

Video of the Week: Chris Dixon on Good Ideas That Looked Like Bad Ideas

Chris gave this talk last year at startup school. It's great. It's about 20mins so an easy watch.

Feature Friday: Recognizing Wine Labels

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.

The Behavior Of Your Users Normally Doesn't Change Overnight

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 (it is actually an RSS issue that is being fixed today).

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, rss, 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.