Archive for August, 2018

Airpods as the next platform (and the native applications therein)

Posted on August 29, 2018. Filed under: Uncategorized |

If you hang out around venture capitalists for any length of time, you will inevitably arrive at the question of “what’s the next platform?” There are a lot of nebulous definitions of platform, but I typically think of a platform as a piece of infrastructure on top of which many businesses and applications are built. Iphone and Android are platforms than enable millions of independent apps. The web was a platform that enabled millions of applications. At various points in their lives applications like Twitter and Facebook have evolved downstack to become platforms for 3rd party developers, and there are plenty of others. Platforms tend to be quite valuable and very difficult to rip out or replace. The reason venture capitalists are looking for “the next platform” is partially because platforms themselves are valuable, and partly because every time a new platform emerges, there are native applications or businesses built on top of it that were not possible before, but that are uniquely enabled by the underlying platform’s existence. Those native applications also tend to be incredibly valuable, and so venture capitalists are looking to escape the saturated, over picked domain space of the last platform, and move to greener pastures.

Candidates for the next platform that are currently in play, or that have been suggested as possibilities include blockchain/ethereum/whatever smart contract platform replaces ethereum, VR and AR, the smart/connected automobile, and i’m not sure what else. In the latter two cases, new hardware edges represent the promise of new applications native to the hardware. So if VR truly becomes the next platform, companies like Bigscreen VR or Vchat might represent uniquely native applications playing with the newfound primitive of “presence,” and those applications might be very valuable. Similarly, you can imagine a set of native applications to the smart car or the self driving car that are native to the underlying platform and have not yet been explored because the install base and consumer adoption of the would-be platform is still on the come. VR and AR, for example, have a combined install base of about 12 million headsets (many of which are early generation and not performant/enabling). Facebook and Twitter had many 10s of millions if not hundreds of millions of users before they were able to become true platforms. Obviously IOS and Android and the web have an even larger install base. So there’s this uncertainty around what hardware, software or computing edge might be next to get to this kind of scale and infrastructural position.

It might sound strange, but through a few conversations with friends, I have come to believe the dark horse platform might actually be Apple’s Airpods. I believe Airpods now have about 40 million users, and the growth curve looks pretty good to me. Granted, Airpods as a platform, is not nearly as expressive or dynamic as say virtual reality, but they are here and now and I believe unlock a few new primitives on which very valuable applications can be built.

The first and I think most interesting primitive is also in the realm of presence. You have heard anecdote after anecdote of people “who never take their Airpods out”, and I think it’s safe to assume, although I don’t have the data, that an Airpod user has headphones in 2-3x the time of traditional headphone users, and importantly they stay in even when not in use. It’s becoming normal to order a coffee while still wearing your Airpods or even have a conversation with your wife. I used to caveat a walk and talk w my Airpods by saying “these are on but not in,” but I no longer have to do that. The person just knows. So what happens when a platform exposes the primitive of always on audio access to 3rd party applications. What can I create knowing that I have a channel to somebody’s ears that follows them wherever they go day and night.

The second primitive is similar to the first, but is an input primitive through an always accessable, but not yet always on, microphone that is embedded in the Airpod.

*A key distinction between these two primitives exposed by the Airpod platform, and say smart speakers like Alexa or Google Home, is that Airpods are 100% personal/private, and I’m guessing the native applications enabled by this privacy model are different than a public interface like Alexa.

I spent a little time thinking about what you could build with those primitives and especially what a social application might look like thats built for Airpod users. Although not part of the initial inspiration, I realized that Fortnite is actually an “audio social network” where a new form of presence has been unlocked via the headset dimension to the game. Granted it is heavily supported by the visual input of say the Xbox hardware edge, but still it’s a unique headset based social experience that I think you can squint and transpose onto the Airpod use case. There was actually a whole class of applications that might be native to an audio/Airpod platform that contemplate the user looking at the real world, as opposed to a gamescreen as shared context. But I think more interesting than that, is a new presence paradigm. In this class of applications I’d put things like Houseparty, telepresence robots, Vchat, etc…but for the Airpods I think a presence application might look more like an evolution of the walky talky use case. A walky talky is an open line between two parties with a basic permission model (the button you press) that gates that line. If 40M people and all of my friends have their airpods in all the time, I kind of like that construct as a basis for what shared audio presence might look like. Critical to success of any such platform would be getting the permission model right to interrupt another person and talk into their ears. I could see an audio directory showing the status of who has their airpods in and who doesn’t, and a low level audio notification exposing the name of any friend that’s asking to pop into your Airpods. Kind of like a Waze alert notification.

A completely different line of thought I had was that music may be the “unit” of interaction within a social application that’s native to the Airpod platform. I don’t know whether that means new forms of song sharing, singing to your friends, etc…but there’s something about music that feels richer than voice alone…I found this line of thought less personally interesting, but there might be something there.

I think it’s highly likely that Siri will be exposed via an always on mic interface in future generations of Airpods, which unlocks the Her like virtual assistant use case and a bunch of others, but those fall into the category of utility more than social, and my exercise was more socially oriented.

Anyway, just some ramblings on a slow day in late August. If you are building in and around this space, I’d be interested in talking to you and maybe supporting you as an angel investor.

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Chasing a Perfect Storm

Posted on August 3, 2018. Filed under: Uncategorized |

Every few years a deep change in technology, capital markets, society, or regulation catalyzes meaningful flow of power and value from large incumbents to new market entrants. These catalysts are the lifeblood of venture capital returns and the beginning of every thesis I have ever had as an early stage technology investor. As a general rule, my approach is to look for the “native” systems and companies created in a catalyst’s wake that could not have existed prior to it’s occurrence. These native systems are the purest expression of the underlying change and are often the most valuable when they grow up. Today, we are in a moment of deep flux. As of October 2017, it is possible that not only has a single catalyst emerged along one of the above axis, but rather that we are in a perfect storm where deep change is present in all four of these catalyzing realms, simultaneously.

From a technology standpoint, the advent of blockchain technology looks like a fundamental development that has and will enable multiple $10B+ market cap systems to develop where they could not have previously. Recent technical catalysts on the magnitude of this development might include the advent of social networking technology in 2002 (~$1 Trillion of value creation/capture), the development of the iPhone and mainstream mobile computing in 2007 (well over $1 Trillion of value creation/capture), and not much else.

This technical breakthrough not only challenges the large, centralized incumbents that dominate the technology landscape today, but importantly also the capital markets that surround them. A new financing mechanism, business model, and organizational structure has emerged around blockchain technology, known as tokens, and their issuance and behavior has impacted the early stage capital markets on as fundamental a level as, say the accelerator model and Y-combinator did in the early 2000’s. Venture Capital firms, hedge funds, angel investors, and entrepreneurs are reeling and reorganizing in response to this development and new entrants are capitalizing on de novo market positions built from scratch for this new reality.

From a societal perspective, both domestically and internationally, bottom up dissatisfaction and lack of trust in the powers that be, coupled with modern communication tools assisting in self organization and public communication, has led to a state of social instability. Tensions between the “haves”, the “have nots”, and the “used to haves” are at a boiling point and existing societal systems and infrastructure are being challenged daily and with ever increasing veracity. Further, we have entered a “post truth” world where we can no longer take an image, a public figure, or a piece of content at face value. Many of the upstack systems built on a premise that facts exist can and will be rewritten. The crowd, whatever faction of which you choose, wants change and increasingly has the tools to exert force against our organizing systems, namely private enterprises and government structures. These tools, to date, have largely been social media and messaging platforms that have organized and amplified voices, whereas Blockchain represents a new ability to align and coordinate economic force within these now networked and organized segments of the population. With coordinated information, behavior, and economics, incumbent challenging ideas, movements, and services stand to accelerate the flow of value toward new entrants and those that finance them.

From a regulatory standpoint, the United States has an administration that is ripping up the carpet on which we have stood for over almost a decade. Value promises to change hands in highly regulated arenas such as insurance, healthcare, transportation and energy, as well as tangential markets that feel the ripple effects of administrative 180s. In addition, new regulation around capital markets and cryptocurrencies is being written and defined in real time. Decisions made here will have a profound effect on the early stage capital markets, themselves, as well as the very formation of entities that birth new technology.

Exciting times!

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    I’m a NYC based investor and entrepreneur. I've started a few companies and a venture capital firm. You can email me at (p.s. i don’t use spell check…deal with it)


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