The Exchanges, every show

Q I do want to ask, like, new things are always nerve-wracking. When you think to, like, the next few years and becoming a VC now, having been an angel and an operator, what are you most nervous about?

A So I think it's really easy to be pretty loose with angel checks, if I'm being honest, right? It's your money. You're answering to nobody else. The checks are relatively small, so it feels less risky, but obviously with venture, and you know this way better than I do, you've been doing it for a while, you're investing other people's money, and now you're not just investing for yourself, you're investing for others who are entrusting you to make really smart decisions. So, you know, and not only that, but if you're joining or leading venture rounds, I should say, you're obviously joining boards. So you're signing up for a very meaningful and long-term partnership. So I think what I'm trying to say is the stakes are much higher. And so all this will be new to me. And like anything, I think there, there's always going to be a certain level of anticipation. So that's probably what I'm, um, I'm, I'm anticipating most, but, um, but yeah, uh, you know, I think, I think a lot of it is going to be new.

AI assessment note: “I think what I'm trying to say is the stakes are much higher.”

Q very hot, and then there's obviously Clubhouse, which was very hot. You know, there's been many, I'm just kind of regaling from my past memory, but none have broken out into Facebook, Instagram, Snap. Is there room for another, given their ability to copy so effectively as they're trying to with Be Real now, is there room for another, and will we see a next-gen social giant, or actually not?

A I, I think we will. And if you had asked me this question about a year ago, I, I may have said the opposite. I may have said no. I think there's this thing happening right now. I recently wrote about this trend called recommendation media, where the biggest social platforms in the world are actually pivoting more to be recommendation engines and, and really more like entertainment platforms. And I think as a result, there's going to be sort of this vacuum, um, of social experiences, true social experiences. And so I think if ever there was a time for a new startup to emerge, to create a great new groundbreaking social network or social experience, now is the time. I mean, literally the most iconic social media company of the past 15 years, Facebook, literally just walked away from their social graph, right? They're, they're, they're pivoting to recommendation media. They've been Very, very public about this, and so if there was ever a time to place a contrarian bet and lean into being the next big social platform, this is probably that time.

AI assessment note: “I, I think we will. And if you had asked me this question about a year ago”

Q I have to, you, there's many things I want to unpack. I'm loving this chat. You said the content being posted. It is a complete fallacy that with 500 hours of YouTube videos submitted every minute, YouTube, Google, anyone is able to moderate the content efficiently at that scale. Am I not wrong? And is it just completely unfair to expect them to?

A You're right. Here's the difference though. So when, when the platform has control over the distribution, they don't owe the distribution to anyone. Yes, there may be a problematic piece of content, but if it's problematic and they're getting takedown requests, just bury the distribution, right? Just like, just, just bury it and nobody will ever see it. Whereas if somebody puts out a piece of content that's doing really well and it's not getting takedowns, dial it up, increase the distribution, increase the ROI. The difference is in social media, they can't make that decision because they're on the hook to distribute the content to those hundred friends. Regardless of whether or not it's expensive in terms of moderation or it's not engaging in terms of value and ROI. So the moderation still exists, but, but they're not on the hook to deliver it anymore. They can just bury it and they can use machine learning to pattern match and know which types of content to boost and which to bury. Does that make sense?

AI assessment note: “You're right. Here's the difference though. So when, when the platform has control”

Q um, very quickly. And it went terribly wrong. And I blame myself. I relied so heavily on someone else who knew the market so well and just said, Harry, come in with me. This is a great, great opportunity. And I said, Hey man, let's do it. Um, I should have done my own work. Um, what would you say your mistake was and what did you learn from it?

A So I'll give you two. One is almost the exact thing you mentioned. Um, I I'm somebody, you know, having been a founder, I really like to back founders that are super mission driven. You know, they've experienced the problem personally. They want to like be the change they want to see in the world, you know, that whole thing. And, and those are the types of founders. I like to back somebody who I really trust. And I still trust this day. I don't hold this against this person came to me and said, Hey, there's this company. They're starting this. There's they, they, they've modeled this out. You know, these guys have done this before. It's, it's basically what I like to think of as like a spreadsheet startup. Like somebody like figured out the model for a startup and they gave the spreadsheet to a team that, you know, wasn't necessarily passionate about the problem and said, go build this. And, uh, and yeah, it, it was one of my early checks and it, it didn't work out. And, um, like I said, I don't, I don't hold the person, hold it against the person, but that was a mistake I made. Like, I think it taught me that I need to, I think I should stick to the mission oriented founders. And then maybe another sort of like small tactical, annoying, uh, thing, a mistake I made early on was that, I, in the early days of writing checks, I wasted my time and money on reviewing the legal docs.…

AI assessment note: “So I'll give you two. One is almost the exact thing you mentioned.”

Q last week, um, snap, uh, actually announced shutting down Zenly, a completely bizarre decision in my mind. Um, Forty million users. Incredible team. No idea what's going on there. Sorry, I know that's a lightspeed company. Forgive me. Um, but my question to you is, why are these incumbents moving away from the social graph when it's served them so well, and it's the core of their very good business?

A Because I think it's, it is not defensible anymore. It's actually very easily commoditized, right? So, um, there, there are a number of reasons here. So it used to be that the way that content got distributed on these platforms was through your social graph, right? You would join, let's just use Facebook as an example. You would join Facebook, you would get a hundred friends and you would post a piece of content and it could instantly distribute that content to those a hundred friends. And arguably that distribution was guaranteed. Gave you a lot of power in terms of distribution and programming. But in reality, it's actually not that efficient a means of content distribution. Just because you can distribute a piece of content to me doesn't mean that it's going to resonate with me. In fact, it might not resonate with me at all. And in fact, it might be problematic. It might be a piece of content that has hate speech in it. Or something that needs to be moderated. And so what these platforms were doing was they were effectively giving away free distribution that, um, that was more or less guaranteed, potentially very expensive for them in terms of, uh, content moderation, and maybe not really that efficient in terms of engagement and, uh, in terms of driving ROI for the business. Well, then TikTok comes along and they say, hey, forget the social graph. This thing is not that eff…

AI assessment note: “Because I think it's, it is not defensible anymore.”

Q Okay, so 50 investments as an angel. What have been your biggest takeaways from those 50, and how did it impact your mindset moving towards being a venture investor?

A So, I mean, I think I wanted to build a portfolio. I learned from my days fundraising for anchor about the power law dynamics of venture investing. And so it was really important to me from day one to actually build a portfolio and not just go like super, super deep, a select few in just one area. And so if you look at my investments, you could see there, there are some common themes, but they're pretty well spread out. The other thing that I wanted to do was I wanted to be really consistent with how much I invested. Um, So, so I, so I wrote the same check size every single time, and the reason that I did this was You know, I think you can get into a trap of altering the check size based on your conviction, but the reality is like at this stage, the angel stage, they're all super risky. Like regardless of your conviction, like any of them could go to zero and any of them could potentially blow up. And so I think what I felt was it was better to sort of like equal out the check sizes to give you more bullets in the chamber rather than try to predict which one has a higher success rate and doubling down. Um, That's kind of what, what my approach has been. And of course, like, you know, I, I've learned things over time. Like, you know, there are certain categories that I'm, that I've become less interested in and other ones that I've become more interested in. But I think like any…

AI assessment note: “I learned from my days fundraising for anchor about the power law dynamics”

Q Okay. You just gave me my next question. Why did you not?

A Uh, I think it, for me, it was something I had to work up the courage to do. I think, first of all, I, I think I never really had an idea or a problem that I wanted to tackle that I've, I've felt as passionately Uh, about as I, as I do with anchor. And then the other thing is I don't think I ever found the right partner, the right co-founder to, to go after this thing with. And fortunately with anchor, I found both the problem that I was passionate about and, and a really fantastic partner in, in near. Uh, I don't think we would have been able to do this without, without each of us being involved together.

AI assessment note: “for me, it was something I had to work up the courage to do.”

Q So tell me, from photo editing to one of the hottest startups in audio and, and South by Southwest, I, yeah, I read that article wherever that was. Uh, so tell me, what's the story to your founding of Anchor?

A Sure. So, Anchor started, um, a little over a year ago, about a year and a half ago, by my co-founder, Nir Zickerman, and, and I, uh, we both shared, uh, a passion and a love for audio and podcasts and music and radio, and, We felt like there was an opportunity to enable people to broadcast their voice much easier than, than they were able to prior. Um, it, it, it struck us as a space that had so much opportunity, but in terms of creation, it's a very, very difficult medium to create for. I mean, you have a podcast, you know, how much work goes into creating a podcast. And we felt, we felt like it could be much, much simpler for people to contribute.

AI assessment note: “Anchor started, um, a little over a year ago... by my co-founder, Nir Zickerman”

Q I want to dive in quickly before the quick show around into one topic that always arises in VC meetings with consumer startups, and that's monetization, particularly in today's funding environment. So talk to me now, how do you address the route to monetization option, and how much of a role does that play in your kind of product and decision making going forward?

A Sure. So I think, you know, the key, the key with a consumer product, from my experience, is that you need to build a really big audience before you think about monetization. You got to make sure that there's something stable here. You got to make sure that Um, you know, you have a, an extremely large audience that's going to stick around for, for a long time. I think the encouraging thing for us is we know sort of how in demand audio is as a space right now for monetization. Podcasts are starting to monetize and in bigger and better ways than they ever have before. Um, but I think for us, for anchor, the way we think about monetization is sort of true to our, our mission. Our mission is all around democratizing radio, democratizing audio and Uh, giving the people radio that they can control, giving the people audio and a medium that they can, you know, they can take ownership over. And I think sort of in that vein, when we do decide to monetize, I think it's important to us that the people are able to monetize the content, that the people can actually earn a living on anchor.

AI assessment note: “when we do decide to monetize, I think it's important to us that the people are able to monetize”

Q is rather pessimistic of me on the consumer downturn and the difficulty of consumer And consumer products, but you've done an immense job with, with this, with anchor and with the launch. And as I said about the South by Southwest article where it said how you were kind of crushing it and the talk of the town. So what were the key elements then to your success at launch?

A I think that, you know, the things that we really chose to focus on were product and community. Um, you know, we spent a year in beta a year plus in beta before we, before we released the app. And You know, the purpose of that was to really study the product, and study the behaviors, and study how people were using it. I think that was critical for us, because we made a lot of wrong assumptions early on. We assumed that people would use it a certain way, and then once we spent time with it in beta, we realized they were using things in a different way, and it helped us to make sort of smart product changes and product decisions. I think the other thing is the community. You know, when I was at Aviary, one of the Biggest strengths, I think, that company had was the relationship with the audience and making the audience and the user base feel like they had a voice and had a say in the product. And, you know, I think that really inspired us to, to, to pay a lot of attention to the community, both before launch with the beta and now post launch. Um, I think, you know, that, I think it's all about community and making people feel like they're a part of the product. You know, we, we as a team, As Anchor, uh, we like to be extremely open and accessible, and, and we like to be a part of the community, right? Like, I use Anchor just like, you know, as any, any of our, any of our users m…

AI assessment note: “the things that we really chose to focus on were product and community.”

Q to the next element, which is, which is the self-perpetuation phase and creating virtuous loops in the product. So how do you address the retention at Anchor? We all, uh, went crazy about Peach when it first came out. Um, I haven't seen anyone on it since that first week. Uh, Anchor obviously has done better, uh, in terms of retention, but how do you address retention and virtuous loops?

A Sure. So I think, you know, much in the same way that we tried to mirror, mirror very specific features of anchor off of natural human behavior, like the telephone mode recording, right? That would, that was sort of modeled after a thing that we all do in real life. We, we also try to model UX patterns off of things that we all do in real life. And a perfect example of that is, uh, voice-based replies inside of anchor. We felt like it was unnatural to have text comments associated with audio of people talking. When, when you talk, you say something, I listen, and then I respond with my voice. This is how we talk. This is how we as human beings communicate. And so what we realized early on was that a much more powerful way to comment on someone's piece of content inside of Anchor was with your voice because it was natural and it felt human. And replies have now become that engagement mechanic for us that drives people back, that keeps them coming back into the app, that retains users over time.

AI assessment note: “replies have now become that engagement mechanic for us that drives people back”

Q That's pretty, do you think it'll be a two billion dollar company? I, I think you're behind that.

A You know, you know what's cooler than two billion? No. Um, So here's the thing. I think the next couple of years are the battleground, right? So Facebook meta is now saying we're coming into this space. I think right now, Tik TOK has the advantage because they sort of, um, invented this format. They've popularized the format, but, uh, the reality is the, the, the elements that will end up being critical on this battleground are, um, ocean of content. From which to do matching and recommendations and best in class machine learning and computing power. And, uh, there's no doubt that Meadow, one of the most valuable companies in the world can definitely have both of those things. So I think right now, if TikTok can sort of fend off Meta for the next couple of years, they do have a shot at being one of the most valuable companies, but I'll be honest. I think Meta has just as good a chance as them or anyone else to displace them Over the next couple of years. So I think this battle sort of will be won over the next, let's call it, 24 months.

AI assessment note: “if TikTok can sort of fend off Meta... they do have a shot”

Q What is the secret to a successful marriage?

A Hmm. Good one. So I think this could apply to marriage, but also lots of other important relationships like, you know, great friends or maybe a co-founder or a partner. And that is, um, listening, not just always trying to fix. Right. I think I'm a builder. Um, and so naturally, like I always want to fix everything, but I think what I've learned as I've gotten older and, you know, I've been with my wife now for, you know, 1517 years or since we first started dating, whatever it is. And I've learned a lot over time. Relationships are built on listening and actually like empathizing, not on action. I mean, obviously action is important as well, but. I think, like, sometimes people just want to be heard, and you really need to listen and stop trying to make everything about you and about what you can do to fix a situation, and you really just need to listen and hear people, and so I, I think that's the key.

AI assessment note: “listening, not just always trying to fix”

Q Well, the trouble is that thesis driven can also be conventional. And, and so, and so what I'm actually worried about is that, what if the winners of venture, and what if venture is just from this point out, consensus driven?

A So, I think that we are coming out of a time in the market where we have undergone, we have went through a massive infrastructure build out in AI. We've had these new companies, these new, these companies building these brand new technologies, which has, which have required vast amounts of capital to build out the infrastructure. And obviously I'm talking about the labs. I'm talking about OpenAI, Anthropic, XAI, SpaceX, et cetera. And those required a lot of capital, and they produced magical technology that has generated billions. We're, we're about to see trillions of dollars in value. Um, but now that infrastructure is built, and it reminds me a lot of the early days of the, of the internet, when we built out fiber, and we built out broadband, and then we had these new technologies to play with, and the internet came along, and an application layer came along, and took advantage of that new technology. To me, it feels like we are back in that mode right now, where we've got this infrastructure, and now it's time for the applications to be built, and I think there's going to be So many applications, so much software, ah, that you're not really gonna be able to make a bet unless you know what you're looking for, and I think that's what USV has always been great at, knowing what they're looking for and placing the bet when they see it.

AI assessment note: “now it's time for the applications to be built... unless you know what you're looking for”

Q Peace out. Goodbye. Um, but no, I'm totally fucking wrong. I turned down Riverside. This, this company is fantastic. The product is amazing. What a mistake. I also turned down Descript, the editing tool, which Andreessen did. Fire product. Now are either of these multi-billion dollar companies? I don't know. I use them daily, and they're amazing.

A Well, the thing that I'll say about both of those companies, and I like them both, ah, a lot as well. I really like the products. I've used Riverside a bunch. I really like Descript. Um, great teams, great founders. Um, Is there different business models, right? So we're talking about, um, you know, we're talking about tools to enable like the long tail of creators. I think what these products are trying to do is, and this is my perspective, they're trying to be Adobe, right? And if you look at Adobe, Adobe is a really valuable business, right? If you can create really, really great tools and charge like a SAS style, uh, subscription, you could have a pretty valuable business. Now, I think you need to do more than just like, Remote video recording and that's it. And in the case of Descript, you probably need to do more than just like text-based, um, audio editing. And I know they are doing a lot more, um, but best in class tools for creators. Can be, it can be a pretty valuable business.

AI assessment note: “they're trying to be Adobe, right? And if you look at Adobe, Adobe is a really valuable business”

Q Peace out. Goodbye. Um, but no, I'm totally fucking wrong. I turned down Riverside. This, this company is fantastic. The product is amazing. What a mistake. I also turned down Descript, the editing tool, which Andreessen did. Fire product. Now are either of these multi-billion dollar companies? I don't know. I use them daily, and they're amazing.

A Well, the thing that I'll say about both of those companies, and I like them both, ah, a lot as well. I really like the products. I've used Riverside a bunch. I really like Descript. Um, great teams, great founders. Um, Is there different business models, right? So we're talking about, um, you know, we're talking about tools to enable like the long tail of creators. I think what these products are trying to do is, and this is my perspective, they're trying to be Adobe, right? And if you look at Adobe, Adobe is a really valuable business, right? If you can create really, really great tools and charge like a SAS style, uh, subscription, you could have a pretty valuable business. Now, I think you need to do more than just like, Remote video recording and that's it. And in the case of Descript, you probably need to do more than just like text-based, um, audio editing. And I know they are doing a lot more, um, but best in class tools for creators. Can be, it can be a pretty valuable business.

AI assessment note: “they're trying to be Adobe, right? And if you look at Adobe, Adobe is”

Q When you get founder reads wrong, what do you not see that you wish you'd seen?

A I often see communication as a, as a big hurdle for, for founders. I think one of the hardest things you can do as a leader is communicate effectively, because I think communication touches every part of company building. Uh, it's part of recruiting, which as we know is one of the most important things you could do. You have to be able to communicate your mission, your values, why you exist, what you're trying to accomplish. Um, you have to communicate to investors, right? If you're not a great communicator, you're not gonna be able to raise capital. You're not gonna be able to put venture dollars into the business. You need to be able to communicate your product vision to your team, right? How can you align the team around building the perfect product if you can't communicate it? You have to be able to tell your story to the market. When I think about some of the, the, the mistakes I've made in evaluation, it's, it's, it's maybe been on communication. That's probably been one of the biggest.

AI assessment note: “mistakes I've made in evaluation, it's, it's, it's maybe been on communication.”

Q Final one for you. When you look forward to the next five to 10 years, what are you most excited for? I like optimism. What do you like? This can be amazing.

A So my partners the other day, uh, Rebecca and Nick, we, we asked each other actually, like, what are, you know, What do you want? What do you, you know, what do you want to do at USV? And I said three things. First thing is I want to show up to work each day and collaborate with people who I love being around, people who I enjoy collaborating with, people who I just have fun with. That's actually number one for me. Number two is I want to partner with some incredible founders. And again, like similarly, I want it to be about that relationship and that dynamic. You know, and I want these founders, obviously, uh, who are going to change the world. And number three is I want to produce generational returns in terms of funds in that order. Number one for me is show up to work, have fun with the people I work with. Number two is partner with founders who, who I love and who I believe can produce generational companies. And then number three is produce generational returns as a fund in that order. And I think that's a good recipe. I think if you optimize for fun and like enjoying your day to day, good things will happen.

AI assessment note: “I said three things. First thing is I want to show up to work”

Q Ok, number two is that actually we have less of this kind of exponential and more of a linear style. When you look at that kind of more mature market on the S-curve basis, What does that composition look like in terms of market between open and closed and anthropic and open AI?

A I think in that world, enterprises and individuals are probably optimizing for a couple of things. I think they're probably optimizing for cost, right? They're starting to think about the trade-offs between intelligence and spend and how they can optimize their token spend. So what does that mean? It probably means, you know, leveraging things like open weight and open source models. It probably means leaning into things like the routing layer to optimize the token usage towards You know, the, the model that maybe gives you the most bang for your buck rather than always just token maxing and picking the most powerful model. I think the other thing it looks like is choosing tools and products and, you know, uh, one of you, you know, hate to use the new, the new buzzword of the past six weeks, harnesses that are maybe a little more human aligned.

AI assessment note: “leveraging things like open weight and open source models”

Q Can I ask you, do you see different deals at USV to the types you saw at Lightspeed? I'm not saying bad or worse, do you just see different?

A I think that when, you know, going back to what we talked about earlier with Seed, I think if you put yourself out there in the world, you're gonna see deals that match those themes and ideas. And not to say I didn't do that at Lightspeed. We did that at Lightspeed as well, but to the point earlier about being very focused on energy, right, or now being very focused on this Rebel Alliance, we're gonna see a lot of those companies come to us. And I think when you're small, you kind of have to pick Your spots. You have to have constraints and focus on a small number of things, and so I think to the extent that we see things different, it's because we focus really, really deeply, and for a period of time, we may only look at a couple of different areas that we have theses on.

AI assessment note: “to the extent that we see things different, it's because we focus really, really deeply”

Q I'd love to hear about your time in beta then and, and how you chose whether, you know, I'm always intrigued whether that you choose mass feedback groups of say a thousand people or highly curated groups of say a hundred people and then go for that approach. And then I'm also intrigued to hear what were the wrong assumptions that you made on early testers?

A Sure. Sure. Happy to. So a couple of things. I think the one thing that I think is always key with a beta group is making sure it's diverse, right? You always want to have a diverse set of people. Um, because that's what you're going to have when you're, when you're live and when you're in the store, right? You're not going to have a hundred. Yeah, exactly. You're not going to have just a bunch of people who are all into tech or a bunch of people who are all into podcasts. You're going to have people that come from all different walks of life. So I think for us, it was really, really important early on to have a very diverse group. And even though we didn't necessarily have thousands and thousands of beta testers, We had a diverse group that represented a lot of different opinions, ideas, and suggestions. So that was really key. And there's actually a really famous article and study by, uh, the great sort of UX designer, uh, Jacob Nielsen, in which he shows that you don't necessarily need a lot of users to get returns out of, out of user testing. In fact, the study that he shows is that you can, if you're testing a feature or a specific product idea, Oftentimes you only really need five users before you start to get diminishing returns on an increase in users in the group. It's really fascinating. And I definitely recommend you check it out.

AI assessment note: “we didn't necessarily have thousands and thousands of beta testers”

Q When you get founder reads wrong, what do you not see that you wish you'd seen?

A I often see communication as a, as a big hurdle for, for founders. I think one of the hardest things you can do as a leader is communicate effectively, because I think communication touches every part of company building. Uh, it's part of recruiting, which as we know is one of the most important things you could do. You have to be able to communicate your mission, your values, why you exist, what you're trying to accomplish. Um, you have to communicate to investors, right? If you're not a great communicator, you're not gonna be able to raise capital. You're not gonna be able to put venture dollars into the business. You need to be able to communicate your product vision to your team, right? How can you align the team around building the perfect product if you can't communicate it? You have to be able to tell your story to the market. When I think about some of the, the, the mistakes I've made in evaluation, it's, it's, it's maybe been on communication. That's probably been one of the biggest.

AI assessment note: “When I think about some of the, the, the mistakes I've made in evaluation”

Q Why has no one gone, why has no one gone big? It's a strategic acquisition for any big European healthcare buyer, insurance provider. It's not a ten billion dollar company here.

A So I think that, um, we talked earlier about how there's sort of like this bundling and unbundling that happens. I think, you know, you, you asked about why isn't there been a big period tracking app. I actually view it more as a health product and a health service. And I think period tracking is one potential vertical for a company, uh, to really establish a great product. But in order to build, you know, a 10 or twenty billion dollar business, that business then needs to ladder into new categories and new verticals, establish strength in that vertical. And then again, ladder up into the new strength and the new vertical and establish strength there. And so I, I view it more as, um, One offering in a suite of, um, of health products and services, and obviously there have been countless massive, massive health businesses.

AI assessment note: “in order to build, you know, a 10 or twenty billion dollar business, that business then needs to ladder into new categories”

Q Is the game not unbelievable returns in generational defining companies?

A So, USV, again, I think has never been afraid to take a position, and I think USV maybe, ah, did not invest in any of the big model layer companies. Um, but what USV now has been doing for a number of years, and, and I'm, I'm a big believer that we haven't seen the full circle of this narrative play out, is they've been betting on energy. And they've been, they've been betting on energy since 2001. Um, and the idea has been for a long time now that no matter what model wins, if you believe in AI, and if you believe in intelligence, there's going to be an energy layer underneath That is gonna be needed to power these things. And over the time, since 2001, we've, we've learned that we only need even more energy than we thought, and we need more portability of energy than we thought. And so, um, you know, energy is a big theme at USV. It was starting in 2001, and it still is to this day in 2000, or twenty-twenty-six. Did I say 2001? I meant twenty-twenty-one.

AI assessment note: “no matter what model wins... there's going to be an energy layer underneath”

Q about kind of the movement away from the social growth and the changing nature of the social landscape. We look at NFTs today, largely the dominant use cases around social capital of having a crypto punk, you name whatever, chain runner, whatever we want to have. Um, How does that kind of social capital associated to NFTs tie into a changing world of social and moving away from social graphs?

A So I actually, the reason I like, uh, OpenSea and NFTs is not because of what you just said. I am not long-term bullish on the social capital aspect of the NFTs. Um, I'm more bullish on sort of the, uh, The creator based use case of it. The reason I liked NFTs was because, you know, you look at, you look at art. I'm just using art as one use case, but you could apply NFTs to a number of different use cases. You look at art and you see that there are naturally tons of people in the world who are making art, but it's really hard to monetize, right? If you're not a great artist or you don't, you know, you're not great at, uh, rubbing elbows with people in your local art community and getting in with galleries and things like that. It's really, really hard. To monetize your art. And you couldn't monetize your art on the internet before NFTs came along. You couldn't just, you know, take one of your paintings or your drawings or your digital art and put it up on the internet and monetize it. NFTs, um, maybe as a byproduct, because maybe it is more about what you're saying, enabled artists who had never been able to monetize their work to all of a sudden have a very willing, uh, potential customer base that might be willing to pay them a lots of, lots of money for their, for their work. You know, I have this friend, John, John Genuzzi. And, uh, you know, he's been an artist his whole …

AI assessment note: “I am not long-term bullish on the social capital aspect of the NFTs.”

Q I'd love to hear about your time in beta then and, and how you chose whether, you know, I'm always intrigued whether that you choose mass feedback groups of say a thousand people or highly curated groups of say a hundred people and then go for that approach. And then I'm also intrigued to hear what were the wrong assumptions that you made on early testers?

A Sure. Sure. Happy to. So a couple of things. I think the one thing that I think is always key with a beta group is making sure it's diverse, right? You always want to have a diverse set of people. Um, because that's what you're going to have when you're, when you're live and when you're in the store, right? You're not going to have a hundred. Yeah, exactly. You're not going to have just a bunch of people who are all into tech or a bunch of people who are all into podcasts. You're going to have people that come from all different walks of life. So I think for us, it was really, really important early on to have a very diverse group. And even though we didn't necessarily have thousands and thousands of beta testers, We had a diverse group that represented a lot of different opinions, ideas, and suggestions. So that was really key. And there's actually a really famous article and study by, uh, the great sort of UX designer, uh, Jacob Nielsen, in which he shows that you don't necessarily need a lot of users to get returns out of, out of user testing. In fact, the study that he shows is that you can, if you're testing a feature or a specific product idea, Oftentimes you only really need five users before you start to get diminishing returns on an increase in users in the group. It's really fascinating. And I definitely recommend you check it out.

AI assessment note: “we didn't necessarily have thousands and thousands of beta testers”

Q Can I ask you, do you see different deals at USV to the types you saw at Lightspeed? I'm not saying bad or worse, do you just see different?

A I think that when, you know, going back to what we talked about earlier with Seed, I think if you put yourself out there in the world, you're gonna see deals that match those themes and ideas. And not to say I didn't do that at Lightspeed. We did that at Lightspeed as well, but to the point earlier about being very focused on energy, right, or now being very focused on this Rebel Alliance, we're gonna see a lot of those companies come to us. And I think when you're small, you kind of have to pick Your spots. You have to have constraints and focus on a small number of things, and so I think to the extent that we see things different, it's because we focus really, really deeply, and for a period of time, we may only look at a couple of different areas that we have theses on.

AI assessment note: “to the extent that we see things different, it's because we focus really, really deeply”

Q about kind of the movement away from the social growth and the changing nature of the social landscape. We look at NFTs today, largely the dominant use cases around social capital of having a crypto punk, you name whatever, chain runner, whatever we want to have. Um, How does that kind of social capital associated to NFTs tie into a changing world of social and moving away from social graphs?

A So I actually, the reason I like, uh, OpenSea and NFTs is not because of what you just said. I am not long-term bullish on the social capital aspect of the NFTs. Um, I'm more bullish on sort of the, uh, The creator based use case of it. The reason I liked NFTs was because, you know, you look at, you look at art. I'm just using art as one use case, but you could apply NFTs to a number of different use cases. You look at art and you see that there are naturally tons of people in the world who are making art, but it's really hard to monetize, right? If you're not a great artist or you don't, you know, you're not great at, uh, rubbing elbows with people in your local art community and getting in with galleries and things like that. It's really, really hard. To monetize your art. And you couldn't monetize your art on the internet before NFTs came along. You couldn't just, you know, take one of your paintings or your drawings or your digital art and put it up on the internet and monetize it. NFTs, um, maybe as a byproduct, because maybe it is more about what you're saying, enabled artists who had never been able to monetize their work to all of a sudden have a very willing, uh, potential customer base that might be willing to pay them a lots of, lots of money for their, for their work. You know, I have this friend, John, John Genuzzi. And, uh, you know, he's been an artist his whole …

AI assessment note: “I am not long-term bullish on the social capital aspect of the NFTs.”

Q you're a little more protective of your brand than me, I don't worry about upsetting people. The worst place to be is a 50 to a hundred million dollar seed fund. You will get crushed by the large funds who are able to write large checks and lead rounds, but you're also not small enough to be collaborative. Very difficult middle ground to be in. I think. Do you agree?

A I think the best funds in the world at doing seed are really, really good about building their networks and meeting amazing people. I think you've been doing a good job recently at empowering a new class of entrepreneurs here in Europe and in London, uh, with very, very, very early stage seed checks. So I think you have to build a great network. I also think to do seed well, you have to put your ideas out there into the world. You have to show the market what you're looking for. You have to be willing to take a stand and take a position and say, you know, I, I just put out a, a post yesterday about, uh, the Rebel Alliance and saying, hey, at USV, we're really interested in the Rebel Alliance. This new universe, this new universe of open weight models and open source harnesses and distributed compute and agents, right? Human aligned agents. And I think when you put things out into the world, you're, you're sending up a bat signal that's telling these early stage founders that Maybe haven't gone out into the world yet with a product. Oh, this is the VC, or this is the person, or this is the team I should be talking to. So, I think you need a great network. I think you need to ship your ideas, and I think you need to be willing to take bets on people, which again, I think you've done a good job of with your program.

AI assessment note: “I think the best funds in the world at doing seed are really, really good”