• I used to split my westward trips between San Francisco and Palo Alto, but I didn’t leave SF this trip. Today’s startups seem to start in San Francisco, and those that started in the South Bay have (nearly all) moved to SF.
  • Lyft, Sidecar, and Uber’s taxi service changed San Francisco for me. I found cabs on the street – which, c’mon, never used to happen in SF – but often didn’t bother, because ordering a Lyft/Sidecar/Uber Taxi was easier and sometimes cheaper.
  • “What, we’re all okay with gypsy cabs now that they come from an app?” one irrate yellow-cab driver asked. And the answer, basically, is yes: cars from an app come with drivers with background checks and known bank accounts, and these startups know more about drivers’ and riders’ current locations than the yellow-cab company. The world in which I feel safer in a “Lyft gypsy cab” than in a regulated yellow cab doesn’t feel that far off.
  • I’ve started to believe the leverage in the “sharing economy” will be in opening regulated industries. SF cabs were atrocious because there are too few medallions. (Turns out the medallion holders, keen to restrict medallion supply, were well-incented lobbyists, as any good monopolist should be.) The revolutionary part of Lyft and Sidecar is that those companies decided, forget the medallion battles! and let’s just increase the number of drivers on the road.
  • I’d suspect, but don’t know, that each Lyft, Sidecare, or Uber Taxi driver earns less than a yellow-cab driver did for the same work because of the influx of drivers. Though in the short run, new demand might keep those rents afloat even as the monopoly cracks.
  • Within two years, I bet the east part of the Mission will supplant SOMA as SF’s startup hub: it’s sunnier, gritty (or so; there’s also Central Kitchen and Blue Bottle), and young teams can get cool, warehouse-y spaces for less than an elevator’d building off Third Street. (Who likes those buildings anyway?)
  • Dropbox is the whispered-about company of the moment – “can you believe they hired [this person]?”, “have you heard what my friend is working on there?” etc etc. – and it’s becoming the latest pool of very very good people in the tech industry. (Facebook used to be this company.)
  • Building codes that discourage density are San Francisco’s greatest threat. There’s been much written about SF rent increases, which are a nuisance if you start or work at a well-funded startup but more dangerous if you’re just starting out: talented people are not always rich, and we’d all lose if they chose not to live in the Bay Area. (Though to be clear: New York’s residential areas aren’t dense enough, either.)
  • Did it feel like a bubble? Mostly not. Some things felt off, and others unsustainable, but it also feels like we’re coming up on a golden age of software, as we realize we can and must understand computers now, and software moves from media toward other, huge sections of the global economy. It’s all exciting.

I left USV at the end of 2012 without a clear idea of what would be next. I’ve never had much of a career plan, but this felt different. I’d been unsure of a next job before, but always in a will-this-shiny-thing-accept-me kind of way. This time, I was pretty sure I wanted to do something different.

I joined USV in 2010, not expecting I’d work at a venture capital firm so soon after school. The last two years were amazing. USV’s partners – Albert, Andy, Brad, Fred, and John – are fantastic, the team with whom I worked – Gary, Dorsey, Nick, Brian, Zander, Veronica, and Gillian – unbeatable, and the entrepreneurs the firm backs brilliant. I thought very seriously — torturously, even (hi, friends!) — about staying at USV, and I’m extraordinarily grateful to Albert, Brad, and Fred for taking a chance on me.

Why did I want to do something different? In part, because I wanted something that felt more tangible. But mostly because the story of the internet continues to be the story of our time. I’m pretty sure that if you truly want to follow — or, better still, bend — that story’s arc, you should know how to write code.

I also wanted to learn to write software out of stubbornness. It felt that you’re not really supposed to do that after school, and such low expectations amazed me. When did we decide our time’s most important form of creation is off-limits? How many people haven’t learned to write software because they didn’t attend schools that offered those classes, or the classes were too intimidating, and then they were “too late”? How much better would the world be if those people had been able to build their ideas?

Programming wasn’t entirely new to me. I’d taken classes, and I’d worked with a few APIs while at USV. I didn’t talk about these projects often (the people with whom I met were solving fantastically harder problems), but it sometimes came up. Most didn’t take my coding prospects too seriously, which stung at first and then became annoying.

Admittedly, my need to learn to code wasn’t as obvious to most everyone else. Empirically, you don’t need to program to invest in software companies. Empirically, you also don’t need to understand software to invest in software companies. Venture capitalists have other tools to evaluate a new company beyond asking technical questions, and often, those other tools are used first. But evaluating companies isn’t what I wanted to do.

So writing software is what I’ve been doing. For the past few weeks, I’ve been working on a web app. Unsurprising to those who know me, it surrounds books. I’d like to think of it as a digital bookshelf, a conversation starter amongst friends … but it’s not there yet. It’s got a database though – which none of my side projects had – and it’s got caching, OAuth integration, a few queues for jobs that can be made asynchronous, and other things I’d never explored before. It’s also got some users, friends who put up with the site’s lumpiness and frequent ill behavior.

I’ve more thoughts about writing software, and learning to do so “later in life”, but one thing’s certain: though I’ve written about the tools of software development becoming more accessible, and the process of software-creation becoming simpler, it’s still really, really hard to build a good product. I don’t have one yet. I do have a changelog, a day-by-day record of what I’ve been through. Just like the site, it’s scattered, idiosyncratic, and lopsided. And while I don’t think I’ll spend much more time on it, it’s given me sea legs.

On stable ground, it’s easier to stop worrying about the future or the past and simply enjoy what I’m doing now: learning every day, testing and discarding my opinions, and making something that oh-man,-real-people-use!

I spent a few weeks in Kenya in September. In many ways, Kenya is immensely tech savvy, including in its payments systems. M-PESA is a mobile money system that Vodafone launched in Kenya in 2007. It’s not something often written about in the US, but it’s very relevant to payments systems broadly. Here’s a few thoughts/facts/observations:

  • M-PESA is the world’s most widely-adopted mobile payments system. More than 50% of the mobile payments in the world happen over M-PESA. M-PESA operates in Kenya, Tanzania, South Africa, Afghanistan, and India, though almost all transactions still take place in Kenya, the first launch market. M-PESA was developed by Safaricom and Vodafone (Safaricom’s parent company). The IP is still held by Vodafone.
  • M-PESA’s premise is simple: users conduct instant peer-to-peer money transfers, using phone numbers as identifiers. Cash enters and leaves the system through M-PESA agents or traditional ATMs.
  • Safaricom introduced M-PESA in Kenya in 2007, initially to lower operating costs for microfinance institutions. During the pilot, loan recipients began using M-PESA more broadly, and the product was expanded. This history is documented in Money, Real Quick.
  • Today, 70% of Kenyan adults have used M-PESA, which is greater penetration among Kenyan adults than Facebook has among US adults. The equivalent of 30% of Kenyan GDP flows through it each year.
  • Safaricom, the incumbent monopoly, is by far the largest telco in Kenya. In rural areas, rival telcos struggle to provide any cell reception; Safaricom has coverage, data, and M-PESA agents.
  • The network of human agents that broker M-PESA-to-cash exchanges is over 40,000 agents strong – meaning M-PESA has more physical points of presence than there are bank branches in Kenya across all banks.
  • Other telecoms have replicated M-PESA’s technology, but they’ve yet to replicate its agent network. Load-balancing cash requirements seems to be the hardest piece. (Cash tends to flow from urban to rural areas.)
  • M-PESA agents are everywhere. It feels like every fourth shop in Nairobi had an M-PESA sign. “M-PESA is like your shadow”, as the saying goes.
  • It appears that the local entrepreneurs who double as M-PESA agents do so not for margin from the service but to drive foot traffic into their stores.
  • Similarly, Safaricom makes razor-thin margin on M-PESA itself but makes up for it with improved customer retention.
  • At Nairobi’s shopping centers, the ATMs that dispense or transfer money from M-PESA had the longest lines.
  • M-PESA adoption has been strongest where its alternatives are worst. Bank transfers and checks are practically unavailable in Kenya. Before M-PESA, internal remittances were sent on a bus with a human courier and utility bills were paid in cash to a teller. Now, internal remittances and larger recurring charges are two of M-PESA’s dominant uses. M-PESA offers a better version of both checks and bank transfers.
  • M-PESA is used less often for local transactions – a restaurant bill, a product at the market, transportation, small services like shoe shining – because cash works sufficiently well most of the time. Its flat fee per transaction model makes smaller transactions disproportionately expensive, which disproportionately affects its cash-constrained users. In current form, M-PESA is not a better version of cash.
  • M-PESA doesn’t yet offer a product that grants credit, though one is purportedly imminent. Banks and microfinance institutions offer loans, but credit cards are rare, and credit card acceptance rarer still. The internet offers no salve; many ecommerce sites based in the US or Europe reject outright credit cards issued in Kenya for fraud risk.
  • The Kenyan Government announced last week that it planned to tax cash withdrawals from M-PESA at 10%. It’s probably ill-conceived: it’s a consumption tax that hits the most price-sensitive consumers, and may become an example of “the tax that shifts consumption so far it destroys more revenue than it creates.”
  • M-PESA’s IP is held by Vodafone in London, though it was largely developed by IBM in Germany. People who develop software atop M-PESA say that technology’s stilted, the service is erratic, and they’ve little hope for its improvement. Still, while development can be slow and brittle, success means access to the world’s most widely-adopted mobile money system.
  • M-PESA slipped past financial regulators and banks, who seemed to think little of the service, and by the time it took off, its market position was sufficiently strong that it could avoid the onerous regulation requirements under which banks fall. This lowers the system’s cost structure, relative to that of a bank, and broadens its potential customer base. Banks have petitioned unsuccessfully for regulation; it might help the Kenyan Government holds a minority interest.
  • Telecoms like Safaricom should be in the pole position: they’ve got brand recognition and millions of networked customers, whom they can contact and with whom they’ve a billing relationship. Yet they differ from the slow-moving, multinational incumbents found in the US or Europe: they still operate in a market that’s yet to suffer from a barrage of smartphones.
  • If you’re curious for more, this Kindle Single is one of the best things I’ve read about M-PESA.

Venture Deals: Be Smarter than your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelsohn
Actually an excellent introduction to the world of early-stage financing; I expected little, but the book is fantastic and will become my recommendation to people who want to know more about the venture industry.

The Hare with Amber Eyes by Edmund de Waal
A well-written history of a family of wealthy Jewish financiers who crossed paths with Proust and Rilke and then lost everything when Germany annexed Austria. At times, I couldn’t tell if the book was fiction or nonfiction. I never fell into this book.

Love and Shame and Love by Peter Orner
This book felt lazy, as if Orner-the-short-story-writer wanted a novel and so chained short stories together, rather than write a proper novel. I do have friends who loved the book.

Open City by Teju Cole
This novel doesn’t have much of a plot, doesn’t differentiate speech from narrative, and has a marginally-present main character — and yet I loved it as much as the deafening reviews suggested I would. “Ordinary solipsism” and all the rest.

Triumph of the City by Edward Glaeser
One of my favorite nonfiction books of late. It’s fast and overwhelms – in a good way – with evidence for city life. I came away more conscious of housing stock levels and land-use regulations. Definitely recommended, particularly the chapter on Detroit.

Finally re-read the Bitcoin paper this weekend and came away with a few more thoughts. In somewhat-scattered fashion:

1. The paper’s introduction seems to suggest, without being direct, that the existence of reversible transactions (and the resulting need for dispute mediation) explain micropayments’ poor adoption. My impression had been that micropayments’ lack of success had more to do with marginal costs other than fraud being prohibitively high for both spenders and financial institutions. So even if we eliminated all fraud risk, I don’t believe micropayments would make sense.

1a. Transaction batching is often cited as the way we’ve gotten to what looks like micropayments. (Payments on Apple’s iTunes store and Flattr both look like micropayments, but neither are.) If anything this seems to support the it’s-transaction-risks-other-than-fraud hypothesis; batching transaction would seem to make chasing down any instance of fraud more difficult but reduce total costs because it’s (mc*1 transaction) rather than (mc*n transactions). Though transaction batching makes dispute resolution more difficult, we’re still willing to do it.

2. Bitcoin’s gold-mining analogy will likely become my at-hand anecdote for technology that borrows from but does not replicate “the real world.” Much has been written about the reasons social software should mimic the real world; I was once one of the advocates. Yet a few recent conversations have convinced me the best technology doesn’t mimic the real world but rather extends the real world.

3. The privacy models laid out in section 10 referenced banking, but they’re general. Here’s the models from the paper in which “Traditional Privacy Model” is a traditional bank and “New Privacy Model” is Bitcoin:

Here’s Facebook and Twitter repurposed in Bitcoin’s language. Interestingly, Facebook’s model is precisely that of a bank: it sees all transactions, knows the attached identities, and mediates between parties. Twitter is a bit different; it doesn’t shield anyone or anything from the public.

What social software divorces all content from any sort of identity (pseudonymous, anonymous, or identified)? I’m looking for something that has no concept of public identities, even those defined temporarily like 4Chan’s.


This is all very high level, so more practically: I would love to see a version of Twitter that includes replies, RTs, and favs but drops usernames and profile photos — if anyone works on this, please let me know.

It’s also very technical, but the interesting part here is in the feelings: I’m very curious about the experience of reading tweets on an identity-less Twitter stream. What would the product feel like? Would different tweets spread in an identity-less network, and if so, what does that mean for Twitter? How large must the difference be between identified Twitter and identity-less Twitter before you’d reconsider your beliefs about the social web? How large before you’d change your beliefs about Facebook?

Tyler Cowen and Robin Hanson recently blog-debated the reasons “so many young people go into finance, law, and consulting.” (Tyler’s post, Robin’s post.) I do find this topic interesting for some reasons that are more and less personal. My own explanations are below, with credit due to the friends with whom I talked through these … thank you guys.

1. I agree with the three general reasons Tyler lays out: “You are productive fairly quickly, you make good contacts with other smart people, and you can demonstrate that you are smart, for future employment prospects.”

1a. The productivity point may be controversial, but it shouldn’t be. If nothing else — and there is much else — it’s rendered true by salary in the medium- to long-run. Most corporations don’t (and arguably can’t) pay a $60-120k starting salary for 22 year olds. Maybe it’s because they have trouble identifying which 22 year-olds will be sufficiently productive to justify that salary, but maybe it’s because 22 year-olds just can’t be that productive in larger firms.

1b. These jobs pay well in part because the higher-ups in each field actually work with the recent graduates and get utility out of working with smart people. It’s often worth an extra $x,000 from the partners’ pool to get the recent grad whose market rate is $75,000 rather than the $(75-x),000 recent grad.

2. These fields are considered impressive and prestigious. Talented students who guide themselves toward increasingly prestigious problems were and probably still are likely to spend time in consulting, finance, or law. These fields are the output of “the Ivy League hill-climbing algorithm,” as one friend put it. (I do believe software engineering is gaining ground here.)

3. Consulting and finance firms have figured out how to allow smart young people to live in New York/Boston/San Francisco but work in Dayton/Piscataway/Bentonville where they are most needed. This is non-trivial.

4. Adjusting for quality of life, I don’t think consulting, finance, law (or even operations at Google) pay differently. There’s time at work and workplace culture and people’s utility functions — and then if that fails, there’s expense accounts. Consulting firms often have the best ones and pay less than banks and law firms at similar experience levels. But take-home pay matters less if you charge expenses 4.5/7 days of the week to your employer.

5. Coming out of school, declaring you “don’t know what you want to do,” and devoting time to “figuring it out” is hard for many high-achieving students. Those that pull it off still face awkward questions from friends and family members. Consulting and finance (and to a lesser extent law) seem like “places where one can go and be productive and figure out what one should really do.” In these fields, career swaps are the norm.

6. That these jobs are not the most exciting things one could be doing is often the worst that can be said. They are very rarely “bad options.”

Another way to phrase this question is “why can’t [some specific field] attract more smart young people?”