Regulation and the Tech Industry

Azeem Azhar has a great post up about the brewing conversation about regulation and the tech industry.

There are two main points that stand out to me:

1) In digital systems, ML/AI and data network effects create feedback loops that enable the biggest companies to keep getting better, faster:

and, 2) Regulation favors large incumbents over smaller challengers:

“Regulation is complicated. Dealing with it means dealing with lawyers, hiring compliance people, changing your product roadmap, building new code. Regulation raises barriers to entry. The most regulated industries, finance and health, have seen the deep consolidation and weak flow of new entrants for decades. Regulation favours the large.”

This has created a conundrum. The instinct is to apply thorough and tough regulations to solve for #1. But the chances are, doing so will only reinforce the lead that the big companies have, as per #2.

A good example is the GDPR privacy regime in Europe. As reported in the WSJ (paywall), the advent of GDPR has increased the market power of the big ad players (Google and FB), because they have the best ability to capture user consents and to implement complex compliance procedures:

“GDPR has tended to hand power to the big platforms because they have the ability to collect and process the data,” says Mark Read, CEO of advertising giant WPP PLC. It has “entrenched the interests of the incumbent, and made it harder for smaller ad-tech companies, who ironically tend to be European.”

The solution, we have long argued at USV, is to give simply increase data portability and interoperability. In other words, don’t add burdensome regulation that startups can’t comply with. And don’t break up the tech companies, break up the data. And the simplest way to break up the data is to give users a right to access it in a programmable way. This is what the proposed ACCESS Act would do. I talked about this previously in the Adversarial Interoperability post, where I also showed this diagram:

What this shows, is that throughout the history of computing, what has broken the monopoly power of each era’s dominant firm is the emergence of an “open” technology on top. Open source systems like Linux and open standards like HTTP.

Today, the set of open standards that need to be cultivated are cryptonetworks, cryptocurrencies and blockchains. These are the standards that make it possible to re-architect the data economy, including giving more control to individuals and removing it from companies. By design, crypto protocols replace certain things that companies do with things that any group of computers can do, like this:

So, the ultimate point we have been making is that if you’re worried about the problems with the tech economy, one of the solution paths is through crypto.

That brings us back to regulation, and the current state of play around the regulation of cryptoassets globally. The situation we are in right now is such that within the US, there is a lot of regulatory uncertainty, and as a result, a slowing of the crypto economy. Whereas outside of the US (particularly in Asia), the crypto economy is booming — not just tokens, but exchanges, wallets, and other infrastructure.

Because of all this, I worry that not only do we have the potential to miss one of the most important solution vectors to some of the issues facing the tech industry, but at the same time we (meaning the United States) may also be missing the opportunity to play a leading role in what has the potential to become one of the next major economic and technical platforms.


7 years ago on Martin Luther King Jr’s birthday, I wrote this post about the ideas in his Letter from a Birmingham Jail. Today I went back to the letter and re-read it, and a different section stood out at me, one that is really profound well beyond the context of civil rights:

“Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly affects all indirectly.”

Dr. King was a brilliant communicator, able to distill deep, profound ideas into memorable phrases.

Today on MLK’s birthday, I’m thinking about the overall lack of progress we have made as a society on the very issues he discussed in his letter, namely the structural segregation and dehumanization of black Americans and other marginalized groups. And also about the other issues facing the planet, like the climate crisis, that represent the same sense of mutuality.

Digital Bearer Assets

I spent time over the past few days with several entrepreneurs who are building crypto or “web 3” applications well outside of the financial space. One of the takeaways for me was of the important role that digital “bearer” assets will play in creating new experiences in web 3.

By bearer assets, I mean that you just show up with them, and they are respected sight unseen by whatever applications are expecting them. Every time I start thinking about this concept, I am reminded of the bearer bonds in the movie Die Hard:

For example: a device that has Helium data credits loaded on it can present itself anywhere on the Helium Network, and it will start working. No user account, no credit card, no contract — just show up holding the token and it will “just work“.

Or, take a subscription that is issued as an NFT on the Ethereum blockchain using the Unlock protocol. I show up with a compatible key and I can see the content. If I give (or sell) the key to you, you can see it.

Or, imagine decrypting content in a Zcash-based application using a Zcash viewing key. Anyone who has a key can see the content, whether it’s a blog post, an email, or a private message.

And of course, this is how it is with Bitcoin. He/she who has the keys (and can sign the transaction) has the assets. No account required.

I think of all of this as a shift from account-based experiences (web2) to digital signature based experiences (web3).

Digital signatures create bearer digital assets. They travel around freely, are transferable, and they are not tied to traditional web2 accounts. Rather than the account (as represented by a login, or a credit card, or a contract) have permissions, digital assets (secured by digital signatures and private keys) have permissions.

I believe that this will enable vastly superior user experiences over time.

Broadening Access

I spent the morning today at MTA headquarters, judging the “Accessibility” category of the NYC Transit Tech Lab competition, organized by the Partnership for NYC. Here is the view from the 20th floor of MTA HQ at Bowling Green:

Ostensibly, the theme of the day was accessibility in the sense of things that could improve the transit experience for people with disabilities and impairments of various kinds. This is, of course, a critical goal for every piece of public infrastructure, and is particularly important when it comes to transportation.

But what I quickly realized is that nearly every company that presented was not just increasing accessibility in that sense, but rather in a much broader sense — making the system more sensible, legible and usable for everyone.

Specifically, there was a single theme that came through from nearly every team: taking an invisible or analog signal, and making it digital. As simple as that.

I can’t link to the actual companies yet, as they haven’t been announced, but the kinds of signals that were being turned digital included: electrical signals emanating from infrastructure like elevators and escalators to monitor conditions & outages; voice announcements sent over the PA system; and contextual and wayfinding information from signs and other physical objects, such as buses and trains.

In each case, there is a valuable signal — valuable for people with disabilities yes, but really everyone — that is not at all captured digitally. And in each case, a system that manages to capture that signal and provide it in digital form. Once it’s digital, it can be used for anything: apps, alerts & notifications, analytics, compliance, etc. Once it’s digital, it’s accessible.

A major part of USV’s Thesis 3.0 is “Broadening Access” and this can come in many forms. What I realized today is that the simple act of capturing an analog or real-world signal and making it digital is a powerful act of broadening access in and of itself.

Form, Storm, Norm, Perform

I was out with some friends over the summer, one of whom is a college soccer coach, and we were talking about what it is that makes great teams great. I love talking to to coaches and people who have played for great coaches (just ask Ryan about how I always bug him for Coach K stories) — they always seem to have the best social hacks to get people to work well together.

College teams can be particularly difficult to manage because the tenure is short and there’s a lot of player turnover — so the team dynamic is constantly being reset. It is similar in startups, where teams reshape and reform as they grow.

My coach friend described the process as “Form, Storm, Norm, and Perform”. At the time, I took it to be another one of those witty and handy coach-isms, but, alas, it turns out this is an established group performance framework developed by psychology professor Bruce Tuckman back in 1965.

Anyway, I have been thinking about it a lot recently, as I see so many teams going through the various stages. For example, Plaid, which I mentioned last week, was acquired by Visa today for $5.3B — a great product and from what I hear a really positive and effective team culture. Clearly in the “Perform” phase :-)

What I especially like about the framework is that it acknowledges the importance of, or at least the temporal existence of, the “storm” phase. The storm phase can be hard when you’ve never been through it before, because it contains conflict and you’re not sure if it will end. But it does, and in the best situations, working through that is what enables you, and your team, to norm and perform.

Above all, what the framework reminds me of is that teamwork and success are about chemistry. Chemistry is hard to define, but it has a lot to do with trust. Trust in each other, trust in the vision, and trust in process. It is a beautiful thing when it comes together.

The Discuss on Twitter WordPress Plugin

Discuss on Twitter is a WordPress plugin that uses Twitter as the commenting system for your blog.

I’ve been developing it over the past few weeks along with Fred Wilson and Kirk Love as part of the launch of AVC 3.0 which went up yesterday. It’s currently live on this blog, as well as AVC and also

The idea is pretty simple: whenever you publish a new post, the post is auto-tweeted to your account. Then, you get a “Discuss on Twitter” button on your post, which will prompt a reply to the auto-tweet, as well as a “View Discussions” button which will link to the Twitter thread.

Twitter is a natural place to discuss long-form content on the web, and moving blog commenting to Twitter can both engage people in a natural way and help expand distribution and reach.

I should pause here and note that the core WP/Twitter functionality is provided by the amazing WP to Twitter plugin created by Joe Dolson. Joe’s plugin does all the heavy lifting of authenticating with twitter and teeing up the tweets. It’s really configurable and nice. Thank you Joe.

This is alpha software (Version 0.3 to be precise), so we are still testing and tuning. Totally open to feedback, so please send any ideas on github or in the comments…. er, on Twitter


Iterating from Scratch

A few years ago I wrote about one of my favorite product sayings: “Half, Not Half-Assed“, which comes from my favorite book on product development & teamwork, Getting Real (from the team behind Basecamp). I actually first got hooked into this thinking when I saw one of the Basecamp founders, Jason Fried, talk at a web design conference back in 2004 and it was a pivotal moment in my career (thanks Jason!).

I was reminded of that idea today, as I was working on a side project (an internal tool for USV). In this particular case, we had built a version of this tool a few years ago, but basically abandoned it because we could not build a good workflow around it. Looking back, the diagnosis on why was that it was overbuilt: too complicated, too much. And implemented in a way such that we just didn’t bother to keep up with it. In other words, half-assed, rather than “half”.

In version 2.0, I cut the scope and complexity down by 90%. Every new piece of detail went through the filter of “what’s the trade-off between nice to have and this will be sustainable to maintain.” But further, it was really easy to make design decisions because most of them had been made already before, and the key technical challenges had been worked through.

So it was very easy to build version 2 in a lighter, leaner, meaner way.

I am a big fan of iterating and taking things step by step. And in this particular case, it was that process that led the version 1 to be really interesting, but also a bit meandering, bloated and off target. Because the iterations were also an exploration.

This time, It felt good to do an iteration that started over, but from the place of wisdom of having built it all once before. Iterating from scratch. Very satisfying in its simplicity, and hopefully it will be on-target this time!

Automated Personal Finance

Today I’m finally switching off of Capital One because of their broken integration with Plaid. For those who don’t know, Plaid is a service that makes it easy for apps to connect to your bank account. So, if you want to do anything interesting that your bank doesn’t offer (spending analytics, smart transfers, etc) and you want to use a cool app to help you with that, you need Plaid to do it. Capital One has been notoriously bad with its Plaid integration, and people (including me) are frustrated.

I have been a long-time Capital One customer, from back when the online savings product was with ING bank. I originally joined for low fees and better than average interest rates. But I ended up staying because of how easy Capital One makes it to open and manage multiple accounts.

It has been a long journey for me to manage personal finances. For a long time, I had jobs that didn’t pay very well and managed to rack up a substantial amount of debt in my 20s. For the past 10 years I’ve managed that down, and a key tool for doing that has been breaking my financial life up into separate buckets, for various saving and spending goals, and automating as much as possible. This is a trick I learned from the amazing Ramit Sethi and his I Will Teach You to be Rich blog, which I read regularly back in the day.

The way I set it up is roughly this:

Paycheck comes in, gets split 3 ways (this is handled at the Justworks layer): 1/ primary spending account, 2/ overflow spending account, 3/ recurring bills & savings account. Each of these three accounts are at different institutions.

From there, all major bills (mortgage, insurance, car payment, utilities, childcare, etc) are paid from the recurring bills and savings account. And further, that account (until recently at Capital One) splits further into a bunch of smaller savings accounts for dedicated purposes (vacations, home improvements, certain kids activities, general savings, etc — I have about 8 of these I use regularly, and the transfers also happen automatically. I also auto-stash into my Stash account on a weekly basis.

The overflow spending account is for non-recurring large items (for example, some kids activity or a medical bill).

The regular spending is for things like groceries, eating out, random purchases. Essentially, what is left over after big things are handled.

It has been a lot of work to set all of this up in a way that makes sense. But it has been worth it, because now we have a system that keeps everything organized — not just in terms of budget categories and analysis, but in terms of actual accounts which we can spend out of and save towards.

And even so, using additional tools to help (like Personal Capital for overall analysis, or Zeta for couples-based tracking, or Astra for smart transfers) has not worked because of the broken Plaid integration with Capital One. So enough of that; goodbye Capital One.

The broader point is that financial analysis isn’t enough. Moving money is a core part of managing it. I don’t know how typical a setup mine is, but I have accounts at 5 different institutions just for basic spending and saving, not counting credit cards, investment accounts or crypto. I heard recently that the average consumer has accounts at 4+ financial institutions — I don’t believe this is a high-end phenomenon.

When I look out at the landscape of personal financial products, so many of them focus either on analyzing money or managing/moving it, but not both. Doing this in a holistic manner is difficult, especially with accounts across institutions. But it seems to me that it is the key to having an actually organized and manageable financial life.

Write, and Go Outside

I am feeling reflective at the beginning of this new year, as often happens to me. Today and yesterday especially so, as the kids are back to school but USV is still on break, so I have a few really free days to catch up, reflect and think.

I’m about to go out on a walk with Frannie, as we did yesterday. There is something so simple and helpful about just getting outside, getting some fresh air (especially in New England in the winter, but it really works anywhere), and moving the body a bit. Just the simple act of going outside is surprisingly powerful.

I am reminded this morning of our dear friend Sam who passed away nearly 13 years ago. Sam was a person who felt the world more than most people, both the beautiful and the painful. I remember from his service a story about the importance to him of the concept of “Write, and Go Outside.” I don’t remember perfectly, but I believe it was a teacher of his who gave him this mantra as a way to help when things felt tough. The idea has really stuck with me.

Write, and Go Outside feels especially important at a time in the world where it is so easy to “consume (read) and stay inside”. Both the “write” and “go outside” parts are about choosing a singular focus and a physical act, unplugged from other distractions. Both tend to make you feel good, for that reason and others.

Yesterday, I mentioned the Volt Planner, which I use every year to make long-, medium- and short-term plans. One of my goals for 2019 was to spend more time outside, in particular with my family. I have done a decent job of that and will step that up this year. One of my goals for 2020 is to focus more on writing, in all of its forms.

With both of those goals in mind, I’m hitting publish here and heading outside for walk.

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