VCs are widely perceived to be groupthink aficionados. (What do we invest in? Whatever they are investing in next door!) There is some truth to this notion — clearly, many investments are thesis driven, and intelligent investors are going to recognize the same trends in the marketplace and reach similar conclusions.
One aspect of that groupthink that is lesser noticed is the groupthink among founders. Hundreds of startups don't just materialize out of thin air — founders have to conceive and build their products. They see the same trends in the marketplace as investors, so as an ecosystem, everyone ends up on the same wavelength pretty quickly.
Nowhere is this more obvious than in the the Great Bots Startup Explosion of the past twelve months. There doesn't seem to be a day that goes by than I don't receive some fundraise deck for another take on the future of our bot economy. Unfortunately, the "bot economy" is a bit like the economy of East Timor — it literally exists, albeit so small that it probably is irrelevant (and probably for some time!)
Desperate Waves
Why then have investors and founders spent so much time on the space?
VCs have gotten more sophisticated in our understanding of where returns come from in the technology space. We now understand that with massive outliers, most of the returns in our industry come in "waves": changes to technology that disrupt old companies and ensure that new startups can pick up wallet share or eyeballs from incumbents.
In the 1990s, the wave was the Internet, which upended traditional consumer and enterprise businesses almost completely. In the 2000s, we had the combination of social, mobile, and cloud (which also includes SaaS) — absolute tidal waves that completely refactored whole industries. Ten years ago, there were no
As I mentioned in my blog post yesterday about Boston, I just moved to New York City to launch (or perhaps more accurately, relaunch) CRV's presence in the city.
New York City has been written about extensively by investors who have lived here for decades. I just got here — so unlike my piece on Boston — I hardly have the depth of understanding of the local startup scene to write any meaningful analysis.
Instead, I want to talk a little about what I hope to contribute to this growing ecosystem, as well as the reasons why CRV is making a foray into the city (besides access to jianbing).
Head of the Charles
First, I want to talk very briefly about CRV, which acronymized our name officially from Charles River Ventures last year. The firm was founded in 1970 in Boston, with a focus on spinning out startups from MIT's prodigious technical labs. The idea of university spinouts was not yet widely used by universities, nor was venture capital as an asset class widely known (it would take some more years for pensions even to be allowed to invest!)
From the very beginning of the firm's history, we have invested in companies that are pushing the frontiers of technology. It's hard to believe today, but the key technologies for sequencing genes were only discovered in the mid-to-late 1970s, following the discovery of DNA. Thus, some of our early wins from that era included Amgen, originally Applied Molecular Genetics, which today is a $115 billion market cap pharmaceutical giant.
That focus on technology continued throughout the 1990s, in which Charles River moved to the new frontiers around networking, security, and storage companies that underpinned the growth of the internet. Beginning in the early 2000s, we opened an office in Silicon Valley, and were
For those of you who don't follow me on Facebook, or have somehow managed to convince the LinkedIn gods (i.e. Satya Nadella) to not send you update emails, I have moved to New York City.
I'm super pumped about the move, but as always when I move to new cities, there is a feeling of wistfulness of the places I have been, and the places I might still be. It's also a moment to consider all of the changes that have happened with startups, technology, politics, and society these past few years. While these decisions are individual, the wider strains of society's trends always seem to mark their influence.
In short, it is time to take account of these personal experiences. I have lived in Cambridge/Boston for the past two years , so I want to talk a little bit about Boston today, and will talk about my plans in New York in a future post.
Scale, Scale, Scale
As many know, I have not always been the most enthusiastic booster of Boston. After two years of living there, I will say that those feelings have perhaps intensified, but at the same time, have become more nuanced. All cities have their positives and negatives, especially when it comes to their startup ecosystems.
Part of the challenge of living in Boston for me was the immediate comparison to the two cities I had lived in previously: San Francisco and Seoul. Boston is incredibly small compared to Seoul, and even compared to San Francisco. Boston's direct population is only around 650,000, with 4.6 million in the metropolitan region. San Francisco proper is 840k (7.15 million metro), while Seoul's population is 10 million with 24 million in the Capital Region.
Perhaps the largest criticism was that my approach to Anki failed to fully use associations to make it easier for my brain to retain words. Word associations help our memories place words in different contexts, building up a "web" of our vocabulary. Connecting our words with sights, scenes, and sounds allows us to more natively recall vocabulary than simple rote memorization.
I completely agree with this. The problem is that Anki is a terrible product to try to build associative learning. Linear flash cards aren't linked into any sort of web or graph, and so at some point, they end up pretty much being random flash cards. You can sort of fake it by adding associations to a side of a flash card, but that's kludgy at best.
I am thinking how to address the problem more directly. How do you do spaced-repetition studying over knowledge graphs? From what I can tell, I can't really find a lot of information on the topic, but I am going to keep looking. If you see something or know something about the topic, definitely give me a shout out below.
Language learning sucks. It sort of sucks for kids, but it certainly sucks for adults. This is my journey trying to learn Korean, and slowly coming to the realization that our current learning tools are simply not adequate for the job.
I don't have answers, although I certainly have ideas.
Background
For the past five years or so, I have been studying the Korean language. I began in 2010 as I was preparing to be a Fulbright Researcher in South Korea. (technically, I started studying months before hearing back from the U.S. government that I was actually going — call it youthful confidence).
Since then, I have spent hundreds of hours studying Anki flash cards, reading books and articles, taking classes, getting tutored, watching movies, and more to try to improve my skill.
Like many, I love learning languages regardless of their specific utility — languages are windows into cultures that I can (usually) only enjoy from afar. Over the years, I have studied French, Arabic, and Chinese, but eventually ended up spending significant time with Korean due to my life overseas. Given all of my previous years of language training, I came into learning Korean with a lot of self-awareness about my learning style.
A Brief Aside on Adult Language Learners
Learning a language in your 20s is not like learning a language as a young kid. Child psychologists will tell you that the plasticity of the human brain declines by around 12 years old, making it significantly harder to learn a language later in life.
It's hard for me to assess the truth of that (and frankly, they can take their pessimism and go f*** themselves). However, I can assess other difficulties. Adults are simply busier, and often have jobs. Memorizing a language is nearly impossible when you also
There is a growing international understanding that cities have become too expensive for the people who live and work in them. It is an affliction across the United States, but also around the world as well. Just take some recent coverage of the issue:
Vancouver has been one target lately, with home prices rising to an average of C$1.3 million. Unsurprisingly, many workers are leaving, decamping for other nearby cities in a bid to try to lower their housing bills.
London has experienced an almost apocalyptic increase in housing prices, driven by Russian and other oligarchs moving huge dollars into the city’s real estate market. Rowan Moore shows in his book Slow Burn City just what the cost of that situation has been for London, and how it wasn’t always like this.
And of course, we have the United States, where San Francisco, New York, and Boston (among a long list of others) are pricing people out of the local property markets.
The high price of homes is an affliction across the planet, and as I have argued before, is probably the single most important public policy problem affecting my generation. Housing is fundamentally about access to economies. People want to live in these cities not just because of their amenities, but rather to access well-paying and dynamic jobs. Lack of housing — and lack of affordable housing — means that we are preventing people who would otherwise migrate for better jobs to flounder. What a waste.
The issues today around urban housing go beyond that though. Over the last few decades, homes have come to be seen less as shelter and more as a financial asset for the store of value to be traded. London is expensive because people want to live there of course, but the
Well, I guess it's news now: the New York Times is calling it for the end of the Republican party (and not on the editorial pages!). Party leaders are increasingly worried that the Republican party will split into two factions, a nativist/religious side and a free-trade/pro-government branch (as if it hadn't already been split for two decades).
They are probably right to some degree. It seems that the alliance formed between cultural conservatives and working-class white voters along with business elites in the mid-to-late 20th century is simply no longer viable. There are just too many points of disagreement to come to a consensus of exactly what the party platform should really include.
While the NYT took a narrow view of the problem, Republicans don't have a monopoly on potential disintegration. The continuing success of Bernie Sanders is complicating things for Democrats as well. While the language on the left these days tends to be less strident (and gets less publicity to boot than The Donald), there remains a gulf of difference between Sanders and Clinton, and really, Sanders and mainstream Democratic policymakers.
What's happening? The disintegration of our politics has been blamed on the widening income gap -- which it is -- but I think that is only a symptom of the problem. The real divide is really between what might be termed globalists and nativists (or Americanists if you think nativists sounds too pejorative).
Globalists advocate for free trade, benefit from broad, multicultural education, and love to travel and experience the world. They probably hold a "creative class" job and live in cities, although not exclusively. Their worldview comes directly from the core of economics: the pie can always get larger and we can always have a larger slice. Enthusiasm for technology change therefore
Critics of the internet often talk about the issue of distraction. There is always another article that we can read or another video to be watched, and that constant bombardment kills our ability to focus deeply on the issues that matter to us. That's sort of the crux of Nicholas Carr's book The Shallows, as well as several other writers.
Distraction might be a useful framework for thinking about this, but I think the issue is a bit different. It's really easy to aimlessly wander from content to content, sucking in the universe of knowledge. The challenge comes when we try to organize that information in a fruitful way.
As an example, the problem is not that I read about North Korean policy developments. It's interesting and on-going, even if knowing the ins-and-outs of the Supreme People's Assembly doesn't affect my job of being a venture capitalist (or does it?).
The problem is that I touch on the topic completely randomly in the course of the year. I honestly don't remember the last thing that happened, so I have no context when I stumble upon a new article.
When I defended higher education on TechCrunch last year, I discussed the importance of primacy, the idea that we have to center our thoughts on one concept for a time in order to more deeply understand a topic or issue. I think the concept applies to all media though, not just education. It's better to read twelve articles in
Hi, I'm Danny. I'm Partner, Research at VC firm Lux Capital, where I publish the Riskgaming newsletter, podcast, and game scenarios. I'm also a Fellow at the Manhattan Institute in New York. I analyze science, technology, finance and the human condition.
Formerly, I was managing editor at TechCrunch and a venture capitalist at Charles River Ventures and General Catalyst.
