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Tree Grown Money

Posted on November 12, 2021. Filed under: Uncategorized |

About 6 months ago I registered the ENS (Ethereum Name Service) name jordancooper.eth. For those who are newer to crypto, this is similar to registering a domain name on the web (i.e. jordancooper.com…which I don’t own). It took about 10 minutes to register my ENS name, it cost basically nothing, and it was fun interacting with a piece of the web 3 ecosystem that was newer to me. My intention at the time was to have a human readable identity attached to my crypto wallet address because at some time in the future, it feels like that might matter. That was the sole value I was seeking.

Fast forward to today, ENS recently launched a governence token which gives $ENS token holders the ability to participate in governence (decision making) within the system. If I hold $ENS tokens I can vote on the future direction of the system, and there is a value in that. That value, specifically, is roughly $55 per token today. Tokens were recently “airdropped” to anyone who had registered an $ENS name before October 31, 2021. This means, if you had registered a name in the past, you can now claim a certain number of $ENS tokens for free as a function of your historical activity in the ENS system (i.e. buying and using a name). For me, I was allocated 403 $ENS tokens, which in aggregate have a market value of roughly $22,000 today. It took me 5 minutes to claim those tokens, I paid about $90 in ethereum gas fees to do it, and now I have the equivalent of $22,000 that I didn’t yesterday.

As soon as I finished claiming my tokens, my immediate thought was that “this isn’t fair.” I feel like I’ve been desensitized to the ease with which money is accessible if you have a minimum threshold of knowledge and access to the web3 (crypto) world. I fully acknowledge that this may be a moment in time, that today’s levels of speculation aren’t sustainable, and so forth, but it’s hard not to think about how many “analog first people” would KILL for $22,000. It can’t be this easy. It shouldn’t be. It’s the closest thing I’ve seen to money growing on trees. And the reality is that it’s more easy for some than others to harvest it. It’s true that crypto expands and broadens access to financial services and assets, but just because it’s theoretically open to everyone, doesn’t mean it’s actually accessible to everyone. Computer literacy, technical capability, and time are all requirements to participate, and that cuts out a meaningful segment of the population.

I think access to financial gain has been unevenly distributed forever…but at least in the realms I have previously focussed, one would have to either risk capital or do work in order to attain it. In this case, I didn’t have to do either, and it just doesn’t compute.

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Flipping My Script

Posted on November 2, 2021. Filed under: Uncategorized |

Often times when I meet a founder for the first time, the path of least resistance is to follow a standard intro pitch format. Often times a founder will show up, eager to jump into the slides they’ve prepared. Rarely, if ever, do i enjoy this path. I like to focus intro conversations on things i actually want to explore. And the generic competitive matrix slide ain’t one of them. Sometimes I’ll guide a conversation with the following prompt: “I’m always interest in genesis stories, so would love to understand the experiences you’ve had along the way that input to you dedicating your life to this company and I’d love to understand what your initial hypotheses were when starting it, which of those you’ve validated, which you’ve invalidated, and how those learnings inform the trajectory on which you are now orienting the company.” It’s genuinely what i want to know and if someone is willing to engage with that format, you can cover a lot of ground in 30-45 minutes.

I just reread this excellent post by Graham Duncan which is one of my favorite pieces of writing on the internet, and it occurs to me that such a prompt, while efficient, might be routing founders toward a headspace and analytical cut at their business which misses the upside. This prompt doesn’t really lead to the “what if everything goes right” version of the future, which is the question i tend to ask myself when something clears a more analytical initial filter. The flaw in the initial prompt is that I am forced to ask that best-case question ex post facto, in isolation, without the input of a founder.

I think I’m going to change my prompt. The new prompt I’m going to try is “if there were one thing i needed to understand to see as much value in your business as you do, what would it be and let’s talk about that.” I think that question will orient toward the upside thinking that is essential in building conviction. There’s plenty of time after the fact to dissect and analyze, and frankly most of that can happen async, but i sure wouldn’t want to miss the sliver of what’s possible that a founder sees in her own business.

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On taking and giving credit

Posted on October 29, 2021. Filed under: Uncategorized |

Chris and I talk a lot about how a longer time horizon can be a competitive advantage when making strategic decisions, be them investment decisions or otherwise. At the end of the day, we have chosen to measure our success as a firm on a 30+ year timeline…and that orientation has led us to make decisions that you wouldn’t if you were playing for the next 10 years, or simply for this iteration of the game. Something I’ve observed in myself, is that this longer focal length has only developed for me in the second leg of my professional journey. In my 20’s, I was so impatient. I wanted to get to the top as fast as possible. I measured my success relative to my peer set in any given moment, and my mindset was without question a “taker” mindset. I wanted to grab everything I could, and that included both opportunity and credit. I accomplished a lot during this phase of my career, but in hindsight is was not the long-term dominant way to approach my work.

In a multi-iteration, long term game, the dominant strategy is to give way more than you take. Defer value extraction for as long as possible, and trust that in doing so, your good will and reputation will compound to a place that’s much more valuable at some distant date in the future. It’s a very hard strategy to run when you measure yourself by where you are in the moment. Around my 30th birthday, I went through a pretty meaningful evolution in the forces that motivated me. I stopped being driven by competition and status and started on a path to a much more inwardly driven form of motivation. I started to measure myself relative to my self-perceived potential and the rate of improvement in my craft, and I think that was the beginning of my focus elongating. All of the sudden it became clear that the race that I was running would never end, and in the absence of a destination, I could remove the impatience of getting “there.”

I think about the credit I’ve taken along the way, and almost universally I think it was honest, but looking back I wish I had shared it more. I remember the first investment I ever sourced in venture capital was in a cellulosic ethanol company called Mascoma. The technology had come out of my alma mater, and I was introduced via a relationship I had on campus. I remember I surfaced the opportunity to Hemant at General Catalyst, who was already familiar with the company and knew their largest existing investor. We drove up to Dartmouth together, toured the lab, met the creator, and ultimately made the investment. As a result of this collab and the multiple touch points we had with the company, the sequencing and attribution of that investment was a little blurry. At the time, I fought for the credit of sourcing that deal. There were economic implications to establishing that, as well as reputational ones, and I felt like I needed to capture the associated value. If I’m really honest looking back at it, I should have shared the credit more. In reality we did it together (and certainly Hemant is the reason we won it and did it). If I could go back, not only would I have better shared that credit, I actually would have given it entirely to him. Why? Because it wasn’t black and white. Because $25K and some slightly elevated stature as an Associate at a VC firm isn’t worth shit relative to the long range relationships you build along the way. That’s obvious now, but wasn’t in the moment. Fortunately, Hemant didn’t hold it against me, and I’ve been able to enjoy his mentorship throughout my career but it was still a mistep driven by impatience.

On the second leg of the journey it has become clear that giving credit is very inexpensive in a multi-iteration game. The dominant long term strategy is actually to minimize what you keep and maximize what you give. People remember that. The ones with whom you do good work tend to rise, amassing more and more influence and impact in the game, and at some point, in an organic and non-transactional way, the value that you deferred will materialize at a different order of magnitude than might initially have been available. Strategy aside, it’s also just a much nicer way to live.

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The Robot I Want

Posted on October 11, 2021. Filed under: Uncategorized |

I had a conversation last week with a very accomplished entrepreneur who was interested in making robotics a more accessible design space for hackers, tinkerers, and startups. Core to his vision was the idea of a generalized and composable hardware/software setup that the curious could develop against. The conversation quickly went to “what can robots do?” and beyond industrial applications, my mind went to what can they do for me? I focussed there because I think people like to build stuff that solves their own problems, and outside of a roomba, I don’t really see robots touching mine or developers’ personal life in a way that might inspire many to build/program new ones on weekends.

This conversation got me thinking about where a truly generalized robot (robotic arm) might fit into people’s homes, and my first thought was a step function improvement to telepresence. I think when people think robots, they think of some machine autonomously doing something like washing the dishes or cooking for them, but I go elsewhere. I’m obsessed with telepresence and achieving the highest fidelity telepresence possible. The question of how to we “be together” when we are not physically together is some of my favorite design space. The progression of telephony to video communication was a giant leap in telepresence, and the emergence of new hardware edges like Facebook’s Portal and Zoom Rooms have progressed things even further. Facebook Portal, for example, enhances my parents ability to consume not just me, but my physical environment. They can feel and absorb the room I’m in, the way it’s changing, new people entering and exiting, without me doing a thing. That’s so much more context that contributes to us “being together.”

So back to robotics…what if my parents couldn’t just consume my physical environment? What if they could interact with it? They are already “having breakfast” with my 2 year old while he eats and everyone is on video with their respective portals. But what if they could actually feed him? That would free up a set of grown up hands and deepen the togetherness during mealtime. If I can think of one place I’d want to put a robot arm in my home, it would be directly adjacent/grafted to my Portal. I like the idea of introducing a physical dimension to remote communication. What if my parents could read Ody a book and turn the pages with said arm? There’s so much to do there to close the gap between “real life” and “telelife” and interestingly, the use case is general enough, that developers could design lots of applications against it. Further…contemplating a human on the other end of a robot interface solves a lot of the challenges associated with complete autonomy…

I shared this idea with said entrepreneur because I couldn’t hold it in, and his response was “hell no you don’t want to do that.” Apparently robot arms are very dangerous, and well suited for a warehouse, and not yet well suited for a 2 year old’s breakfast table…but that seems addressable. Anyway, if anybody wants to graft a robot arm to my Facebook portal, or if your building hardware/software that integrates video based telepresence with physical world manipulation…I’d love to hear from you: jordan@pacecapital.com

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An evolution in care and coverage

Posted on August 3, 2021. Filed under: Uncategorized |

Do you buy Apple Care when you get a new phone or computer? I do. Not every e-commerce company has such a great coverage and care program, but when I buy Apple Care I know what I’m getting and it’s worth it. At Pace, we’ve invested in a company called Mulberry that has historically enabled online merchants to offer a similar quality of care to their customers at the time of checkout. The business has grown by 10x since we invested a year ago, due in large part to the quality of the consumer experience they deliver to merchant’s end customers. Until today, Mulberry was only able to offer this care to consumers at select merchants with whom they had partnered and integrated. Today that changes with the launch of MulberryCare. MulberryCare enables you, the consumer, to get 12 months of FREE care and coverage on most everything you buy on the internet. From Amazon to Best Buy, to every Shopify site on the web, with the MulberryCare chrome extension, you can claim a year of totally free coverage on most anything you buy online. I’ve been using the extension for a bit, and the experience is super easy and literally free value on top of my normal online purchases.

Give it a try if you want the equivalent of free Apple Care on whatever you are buying online.

Or watch this video to get more on the vibe/experience.

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Syncing Curves

Posted on July 28, 2021. Filed under: Uncategorized |

Tonight when I was putting my two year old to bed, I realized that he’s now at an age from which I have actual memories. It was like he was touching the first plotted point on the curve of my conscious life…and with that realization came a very different type of empathy and envy for him. Empathy was for the depth of his current experience. A weekend is no longer just time to move through, but perhaps something so significant that it will be with him forever. And envy, for the volume of experience that is the product of that depth times the time that he will walk the earth. I think about the volume of my own life over the past (cough) 39 years, and suddenly I see this forward movie of his playing that is so rich and full of everything it is to be human, come of age, love, learn, feel, and so forth…He’s in for such an epic fucking ride…and as he moves through the years and stages that I have already experienced and loved, I will be experiencing something that is probably going to be great also, but without the kick of self-actualization. You only get to go through that once, and it’s ahead of him and behind me.

I look at his little butt, squirming in the sheets as he searches for a comfortable position to sleep, and I think about his physical growth as a form of timepiece, measuring his progression through this voluminous ocean. It doesn’t reflect but a fraction of the experience ahead, and yet it progresses at that same rate as all the more etherial and metaphysical elements of his existence.

I can’t help but fear for him in the decades ahead. Climate, intolerance, inequity, pandemic, and so forth…all constraints that will make his version of growing up different than mine. What if his entire existence is in the same state of stress that feels an aberration to us at this moment? But that fear is tempered by an equal or greater optimism. I see the problems he’s facing, but can’t yet see the solutions and inventions and revolutions that will make his life as rich and “good” as mine has been. My sense is that they will come. I had lunch last week with my friend Nick Chirls. I was in a particularly glum mood, contemplating the potential demise of humanity and the planet, and he looked at me deadpan and said “I think we are going to figure it out.” I think he’s right, and I think the solutions don’t come until a generation of people, like my sons, are born with these stressors baked into their earliest sentient experience. And while it’s painful to internalize the harm that truth presents to my kids, it’s reassuring to know that the ingenuity and ability of our species, when trained on a given context over a long period of time, can change that context. My hope is that my sons will participate in that endeavor.

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The Times They Are a Changing

Posted on July 26, 2021. Filed under: Uncategorized |

I took a walk around Washington Square Park last week with someone I’ve known for a long time in the startup ecosystem. We’re not super close, but I read his writing, and he mine…which I suppose is a different type of closeness. He mentioned on the walk that he’s noticed I am writing less frequently and asked why. The first, knee jerk answer I had was that I used to write more when I had nothing to lose. Whether I was fighting to establish myself as a VC in my 20s or fighting to get a company off the ground…in both scenarios I had little to lose…so I wrote pretty much everything that was on my mind. I look back at that writing, and some of it was excellent…to the point where I’m in disbelief that it actually came out of me. Some of it is also totally cringe, or embarrassing, or not representative of who I feel I am. Either way, it was unfiltered (as I think the best writing is). Today, I probably have more thoughts or feelings that I just let marinate…sometimes I’ll take the time to write them down, but often I ask myself “does the public need or want to read this?” I used to not care about that question…I’m still not sure I care if I really think about it, but it does come up and it does get in the way of publishing posts.

Overall, I don’t think that’s actually the main reason. The main reason is because I have less of a dialogue with myself than I used to. I am an introvert. I need and value quiet time and reflection. And most of my writing is just documenting the conversation I am having with myself in that quiet time. My life at the moment is more execution and less reflection. I now have a 2 year old named Odysseus, which zapped about 90% of my independent reflection time, and a month ago I had a second child named Atlas which zapped 9 of the last 10%. I think I write less now because I “talk” to myself less. I miss that dialogue but it’s an obvious trade to make so I can be present with my family.

I’ve managed to carve out quiet “deep work” time at Pace, where I’m able to advance my professional thinking in a more focussed and applied way, but the meandering walk around Washington Square Park, or the hours spent sitting on a bench and watching New York City go by…that stuff is gone (for now). I guess this is nothing novel…the story of every young New Yorker turned parent of two…I guess it just means I’ll have to get more creative about finding a 25th hour in my days…

P.S. Look at these little dudes. Totally worth it 😜

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Let’s DAO this

Posted on June 9, 2021. Filed under: Uncategorized |

For those that have read this blog for a while, you will know that I’ve been thinking and writing about crypto for about 8 years. I’m not an expert, but I am an engaged student and have been for some time. From 2013 in a less immersive way, but much more deeply during the “crypto winter” of 2018-2020 I went hard at understanding all of the new primitives that crypto presented and fell in love with the systems that people could and would design against them. In that time, I angel invested in probably 15 projects, ranging from low level protocols, to surrounding analytics and infrastructure, to exchanges, and even chip level secure compute. It was one of the richest academic explorations I’ve had as an investor…my reward was learning and thinking with great people…the economic prospects of said activity were secondary and anybody’s guess at the time. I’d like to think i learned and thought alongside Matt Huang, Alok Vasudev, Chris Dixon, and a handful of other people who all went on to start crypto related funds…I thought about doing the same, but I am a generalist, always have been, and always will be. I knew my long term game was going to look more like Pace and less like those sector specific efforts.

When we started forming Pace and I stopped putting personal capital to work in the space, I’d say I left the crypto world in a largely theoretical state. Almost nothing had a live Mainnet, everything existed in 30 page papers, but I internalized the belief that these system designs, and their more evolved successors, would be built and that I would be investing in the space for the next 20 years. Once we closed our first $150M fund at the end of June 2019 I started to revisit, but most of the activity at the time was in DeFi (decentralized finance), which I was less passionate about than the promise of self organized behavior, bottom up assembly of work, and more human centric networks of people collectively exerting their will on the universe in a trustless and economically coordinated way. I didn’t really care if a hedge fund or a whale had figured out how to earn 20% yield on their ETH position. I now know there are some corners of DeFi that are more interesting than that, but at the time i didn’t. So, I followed along, but it wasn’t the right shape of activity for me to deploy capital into on behalf of Pace.

More recently the rise of NFTs and DAOs (Decentralized Autonomous Organizations) have been pulling me into a mindset of actively allocating our fund’s capital into the crypto market. On the NFT thing, my interest is not in digital collectibles so much as tokenized membership to groups or networks. I guess that’s why I find the activity in emergent DAOs particularly interesting. All i’ve ever wanted in crypto was a way for people to self organize, agree to a set of values and rules, and coordinate not just their time, but also their work and their capital around a shared agenda or intent. I want to see new behaviors orchestrated where there was no economic incentive large enough for a company to come along and make it happen. I want to see new activism where the powers that be have no political incentive to orchestrate it. I want to see a group of people collectively amass and allocate resource against a shared goal. I want to see a group of people that don’t know each other employ others to do work and then agree on who those people might be and that the work was, in fact, done. And I want to see the early participants that organize these new behaviors, not only reap the reward of their shared agenda realized, but also economically rewarded for achieving that goal together. I’m still understanding the tooling…but it is getting better and feels closer. I haven’t seen the fully formed mechanics expressed elegantly and together, but I am starting to see projects that are surfacing early building blocks for everyone to copy along this line. If you are working in this direction, Pace can contribute anywhere from $1M to $15M at a very early stage and I’d love to do that. jordan@pacecapital.com

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Growing the GP at Pace

Posted on May 12, 2021. Filed under: Uncategorized |

When we started Pace, Chris and I were very focussed on laying a foundation and creating a platform that would be the most attractive place for ascendant GP level investment talent to practice their craft over the long term. Every decision we made, we contemplated ourselves as the first two customers of a platform that would ultimately be equally owned and controlled by a GP of 4-5 people. Selecting partners into an equal partnership is a high stakes decision for all parties involved. What you gain in talent attraction and non-zero sum dynamics, you give in the form of extremely expensive false positives. As such, we try to create as much surface area and as many touch points with potential GPs as possible, irregardless of whether they would be joining for fund 2 or fund 5…we know that GP recruiting will be one of our highest priorities for the life of our firm…a constant pursuit as opposed to a small set of transactions.

We raised our first $150M fund about 6 months before the pandemic hit. Needless to say, we did not predict such an unusual inaugural year, but for the most part we’ve been able to execute well against our highest priorities. About 3 months into lockdown, however, Chris and I accepted that we weren’t going to be able to advance our GP discussions in the absence of safe, in person time with others. Chris and I sat together for almost a year before starting Pace, making sure we were deeply aligned, and the idea of attempting to reproduce that through a Zoom window seemed rather impossible. Of course, some of our GP conversations are with people we have known for a long time, which makes it easier, but still, we believed that in person time was a requirement for everyone involved to make the right decision. If I look at today, the one area where I feel Pace is behind what I would have anticipated at onset, it’s in growing our partnership.

But with vaccine penetration on the rise, our team fully vaccinated, our friends and colleagues starting to travel, cases in NY falling off a cliff, and an overall sense that in person time together is once again an asset and not a liability, we have a renewed focus on developing this element of the firm. GP recruiting has always been the first agenda item of every partner meeting we’ve ever held at Pace, but it’s incredibly exciting that those discussions are once again highly actionable. If we know you and you are excited about the prospect of joining Pace as an equal GP…great…let’s start spending time together again. If we don’t know you, whether you are 6 months or 6 years away from making a move..great…let’s start spending time together now (jordan@pacecapital.com). One thing we are certain of, is that there is no substitute for time spent. Look forward to more of it with all of you.

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The bit rate of writing

Posted on April 9, 2021. Filed under: Uncategorized |

I’ve been thinking a lot about new online note taking interfaces and document creation more broadly.  It feels like knowledge management systems like Roam and Notion have applied bidirectional linking and a more defined data structure to 1.0 online editors like Google Docs or Quip.  That’s a clear advance, but there’s more that can be done.  Knowledge management systems provide potentially a 10x experience in terms of discovery and recall of your documents, but don’t really innovate around creation of documents. Yes, Notion advances on embedded content within a document, interactive functionality within a document, and provides some out of the box formatting templates which all are helpful, but no online editor makes it easier for me to actually create the content.  The writer in these tools is doing 100% of the work associated with document creation, but there’s clear surface area for programatic assistance in that effort.  The bit rate of writing (or the speed with which a thought moves from your head into a document) has remained roughly constant from the advent of word processing, through its migration to web based editors, and has further persisted through the recent evolution toward knowledge management software.  I believe there’s an opportunity to increase that bit rate significantly.  One vector, that I’m less interested in within this specific context, is GPT-3 and programatic generation of text.  In my most intimate and intentional writing contexts, that breaks my intent model, but it does pose the promise of increasing the bit rate of writing.  Another, is what Beam is pushing on.  Without giving away too many details, Dom, Seb, and the team at Beam are circling what I believe to be a step function increase in the bit rate of online document creation.  Oh, and of course, it’s inclusive of every previous advance mentioned, with an aesthetic and ease that surpasses many of the most penetrated tools people use today.  It’s a really exciting effort. If you’re interested in learning more, I keep a spreadsheet of “early access requests” that I’m happy to add you to: jordan@pacecapital.com.

Disclosure: Pace is an investor in Beam…obviously biased.

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NFTs…beyond digital art and collectibles

Posted on March 3, 2021. Filed under: Uncategorized |

In blackjack, a group shares a collective economic goal that governs their decisions: “beat the dealer”

Sometime around 2009 the startup ecosystem in NYC started to explode. By 2017 it became the second most important market in tech and venture capital (sorry Boston). When people ask me what happened? Why the sudden bloom, my answer is really simple. Around 2009 it became easy to build a software application…previously, in order to build a web based experience, startups needed real technical talent. It was important to be colocated with Stanford/MIT/Harvard and you’d construct a team with formal computer science backgrounds to build a thing. Once it become possible for a much wider, and less “skilled” population of developers to create digital experiences, New York popped. NY doesn’t have an elite technical school, but it has always had a vibrant and maybe the largest creative class in the world. Prior to 2009, that creative community was largely distributed across the ad agency ecosystem and the arts more broadly. But all of the sudden, and fortuitously right around the time that the iphone came out, this creative class was able to productize their creativity easily…and a million flowers bloomed.

There is a lot of attention pouring into Non-Fungible Tokens (NFTs) at the moment…and as I see people process this activity, the market seems too heavily rooted in digital art and collectibles as “the thing that is happening.” NFTs are getting lumped into the narrative around a renaissance in sports cards, limited edition toys, etc…which is easy and partially true. But I think the change is more fundamental than that. I process NFTs as a manifestation of a step function reduction in the friction required to issue a token at all. As recent as a few years ago, if you wanted to design anything in crypto, you needed very very specific knowledge and DNA to productize your creativity. You could write about what might be possible on a blog, or get deep into protocol development, and there wasn’t much in between. Fast forward to today, the issuance/minting layer in the NFT ecosystem is robust. There are 50 places you can go to issue a token with almost no technical understanding or domain knowledge in crypto. The building blocks through which you can do that in a no-code way are still pretty naive but they are functional. Certain structures built atop these blocks are becoming common (i.e. tradable digital works of art), but as the blocks become more expressive, so will the structures (which I think of as apps) atop them.

There are glaring structural holes even in what has become common. Most economic logic embedded in NFTs requires a leap of faith and an acceptance of the irrational. That’s totally fine. We found a way to quantify the leap of brand value in traditional companies via a line item called “good will,” but the loops that govern most NFTs need meaningful tightening. Essential, in my view, to tighter economic loops is the presence of data feeds that serve as reporting and measurement of the “success” of the tokenized thing. That’s not an easy problem to solve, but it’s important. In public company stocks, the speculative demand of an asset shapes its price over short periods of time, but then a company reports earnings quarterly and that recalibrates the price of the asset. Nothing like that exists in NFTs…yet. What would happen if you could measure the reach of a piece of digital art or a meme? What if there were a datafeed of the number of impressions that asset achieves on the internet…that would tighten the loop. Protocols that hold the position of serving such assets would be in a position to do that in a trustful way, but there will be more interim hacks at this. I’m fascinated at the idea of bootstrapping atop public networks like twitter and facebook…where public metrics around “likes” are available to be aggregated and fed into the NFT ecosystem. You see glimpses of this as people mint NFTs of their tweets, etc…hybrid architectures where the loop is closed by more centralized arbiters of influence, reach, and performance will also emerge. One way or another…the current market needs data to anchor the balance of supply and demand.

Beyond the holes, the most exciting emergent NFT structure to me is not tokenized art or collectibles. It’s tokenized membership. I spent 3 years beginning in 2016 studying the new primitives that people were exploring in crypto and thinking on the types of systems and applications that were possible to design…and the thing I wanted more than anything else was tokenized membership to groups. I was, and still am, fascinated by the bottoms up organization of behavior that crypto affords, and group construction is the most expressive layer/canvass I can see for how to design/formalize/codify collective action, and importantly collective economic action, within a group of people where no top-down force is incentivized to do it.

Today, people are scratching at this via token-permissioned access to discord channels or telegram groups. Platforms like Roll are providing a piece of the canvas, and bots that live in those channels from efforts like Collab.land enable rule sets around access to be enforced. But this line of thinking is going to go way beyond access to private discourse. The collective goals and benefits of holding a groups token are going to deepen…from good conversation, to coordination around more impactful real world initiatives and experiences. The state of play here, from a building block standpoint, exists in the form of gated access paired with an NFT that exists on a bonding curve to dictate value as it relates to demand, but what happens when you expose the “dues” building block. What happens when groups share a treasury or pooled assets? What happens when they share a strong incentive, like a political agenda. And what happens when growth and success along a given intention begets wealth. It’s gonna be bananatown.

When I was very actively investing in crypto from 2016-2019, the primary purpose was to build knowledge and curate the people with whom I was thinking and learning. I invested in 4-5 low level protocols, a bunch of surrounding infrastructure and developer tooling, all the way down to the chip, and the entire time it was “still early for the application layer.” I believe that the tooling within the NFT landscape is enabling creativity at the application layer, and I can’t wait to see it more deeply applied to group construction, coordination, economic action and governance.

If you are working in these areas, Pace leads $3-15M financings with very little data required to get to conviction. I’d love to be a thought partner and serve you as you build the future. Jordan@pacecapital.com

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Improving VC to VC Meetings

Posted on February 23, 2021. Filed under: Uncategorized |

It used to be that I stayed in sync with other investors in the venture market over coffees, walks or meals. Meetings were longer and more organic, if less frequent or prescriptively scheduled. Who I spent time with was largely based on what city I happened to be in, what I was thinking about at the moment, or with whom I just wanted to see and catch up. There were many natural prompts that would act as the impetus to sync with investors I care about irl. I borrowed that word “prompt” from Diana Kimball Berlin, who recently joined Matrix after building one of my favorite products ever in Quip. I think it’s a perfect word for what’s been lost in the age of Zoom.

In the absence of natural prompts, I’ve come to schedule reoccurring syncs for the people with whom I want to stay in touch. If I have a good conversation with a new investor, I’ll suggest we sync every 4 weeks or 8 weeks or whatever makes sense and I’ll send calendar invites going out months. It’s not my natural flow, I prefer to be more fluid, but it has been effective in collaborating with new people and deepening those relationships in the face of constraints.

Something I’ve observed in these syncs, however, is that everybody has a different style and intention coming into them. For some people, it’s just about our relationship with each other. For others, it’s about sharing ideas and thematic work. Some want to talk about market dynamics and what they’re experiencing on the field. Others want to share or receive potential investment opportunities. Personally, I value and appreciate all of those conversations. I gravitate naturally toward some more than others, but I’m flexible enough that I tend to let the other person define the time.

The downside of this approach, is that you can waste 10-15 minutes of a 30 minute sync in mutual discovery of what would be most valuable to the other person. When Chris and I do our partner meeting at Pace, we create an agenda in advance. There’s a lot of unstructured time and conversation, but it keeps us on track and ensures that we cover the things that are important to each other and the firm. This morning I started to wonder, what if I created a standing agenda for all of my investor syncs? VC to VC communication rarely comes with a written agenda. In fact, I don’t think I’ve ever seen it done before. Nobody has ever sent me a note in advance and said, here’s what I want to cover in today’s catchup. So I thought I’d try it. Here’s my proposed agenda for all my VC to VC syncs. I’m gonna send it to people and see if they’d be open to try it:

30 minute agenda (more time on 1, 2, &3 if we have a full hour together)

1) General catch up, personal life updates, etc. (5 mins)

2) Things you are thinking about (5 mins)

  • themes/theses/ideas
  • inspiring signals/products (what’s caught your eye)
  • Skip market dynamics even if you have been thinking about them (VCs can wast an entire hour complaining about valuations or behavior of other VCs or whatever)

2) Things I’ve been thinking about (5 mins)

  • themes/theses/ideas
  • inspiring signals/products (what’s caught my eye)
  • Skip market dynamics

3) Investments (You) (5 minutes)

  • recent investments you’ve made
  • things you are actively considering
  • things I should consider or look into

4) Investments (Me) (5 minutes)

  • recent investments I’ve made
  • things I’m actively considering
  • things you should consider or look into

5) Help (this one is borrowed form Julia Lipton at Awesome People Ventures, who is the first VC who has ended a meeting with me by asking “is there anything I can do to support you?” (5 mins)

  • anything I can do to be helpful to you (i know, i know…what a cliche)
  • things you can do to be helpful to me

This might suck and people (myself included) might hate it, but I’m gonna try it for a few weeks and see if I can’t improve the quality of my reoccurring meetings.

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A mind-blowing business model

Posted on February 11, 2021. Filed under: Uncategorized |

I’ve been thinking recently about the interchange business model. It’s pretty insane to me, that if you originate a new checking account / debit card, Visa or Mastercard will pay you 1-2% of every dollar your consumer spends on said card. Originate a credit card…the numbers get even larger. That is a sick business model IF you are able to retain that consumer for a long period of time. Something that’s become apparent to me is that it is easier than ever to spin up a new card and start taking spend away from a consumer’s previous bank/card. Banking infrastructure is highly rentable, as is payment processing and ATM infrastructure. The competition at the top of the funnel for this type of origination is fierce…and just as easily as you can pull a consumer to “your” debit card, the next new bank / personal finance app / whatever can pull that consumer from you. There is a lot of innovation happening at the top of the funnel…people building better mousetraps to acquire new users…and the lowest CAC seems to win in the near term. The more interesting question is how do you keep participating in that consumer’s spend 12, 24, 36 months later?

In my mind, you have to provide perpetual value, beyond a nice brand and interface, in order to justify that spend staying with you. Credit products are an obvious answer, to the extent that you can underwrite a loan that the next service can’t. Rewards and cash back is an age old approach…but to me that is a race to the bottom. Ideally, you would justify your existence by providing a value that is deeply integrated into the spend itself, and that does not contemplate erosion of your margin over time.

I find myself asking, beyond credit or rewards, what experiences can you deliver to a consumer that would keep them spending with your card despite the onslought of new top of funnel competition trying to poach that spend away. One interesting lens, is to think about the delta in data fidelity between what an application can deduce from Plaid, and what an application can deduce from owning the card on which you’re spending. Can you deliver ongoing insights at that position that you couldn’t without the spend. Can you get more granular on budgeting, anomaly detection, etc? I find myself asking, what type of experience could you deliver to a consumer if rather than merchant level spending data, you had SKU level data on which to build your experience. One potential architecture that’s interesting is pairing a debit card with a chrome extension that grabs SKU level data on every transaction you make across the web. Interestingly…if you could achieve penetration with that architecture, in addition to interchange fees form the card, you could also capture affiliate revenues from those transactions.

I’m sure there are a ton of other ideas that innovate less on customer acquisition, and more on unique retention mechanics, and to the designers of those experiences I believe goes the long term prize. If you are one of those designers, I’d be interested in leading your Series A. jordan@pacecapital.com

P.S. I’m equally interested in more horizontal layers that index the interchange business model and the rise of online top of funnel points of origination. Who is building tooling between the consumer’s transaction and the point of origination’s monetization that indexes this entire class of businesses? I think payment processing and white label banking infrastructure are obvious answers, but I wonder if there isn’t more stratification inbetween those two points…what can be abstracted away? How can you ease the pain of the next incremental point of origination to participate in this model?

P.P.S. I’m still learning about this stuff, so if I have anything wrong here, please reach out and let me know.

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Stranger Danger

Posted on January 28, 2021. Filed under: Uncategorized |

I’ve always said that I enjoy interactions with strangers more than with people I know. Not in an extroverted bump into 50 people at a networking event kind of way, but rather the small glimpses of humanity that you get striking up a conversation on a park bench or with the barista who makes your coffee in the morning. New York thrives on these interactions. There’s a closeness that comes with this level of population density and shared context is everywhere. The thing about talking to a stranger is you can often see their humanity, without any of the baggage that undoubtedly accompanies it. You can be idealistic, and choose to see the most beautiful or interesting or kind facet of somebody, and keep it short enough, or far enough at a distance, that the assumption is rarely disproved.

I don’t talk to strangers to build enduring friendships or relationships. I talk to strangers to connect to humanity in a very pure and uncomplicated way. One of the hardest parts of the pandemic for me, beyond the obvious, has been this disconnect with strangers. When you see somebody on the street or in a park, the immediate response is “stranger danger.” If I don’t know you, get the fuck away from me is the mindset I and most maintain in these unfortunate times. There’s been a lot of focus on the lack of connection with friends or family, and those things are very real. In them, we also find humanity, albeit at a different depth and complexity, but I believe it’s been easier to maintain some semblance of that connectivity than it has connectivity with strangers.

Part of the disparity comes from a set of modern communication tools that give us the 80% substitute for known socialization. Zoom and signal and Facebook portal and even telephone have done wonders to combat what would otherwise be deeply crippling isolation. They are far from perfect, but they have played a righteous role in this time. Conversely, those same tools and ones like them don’t address interaction with strangers. The digital version of talking to someone on.a park bench 40 years older than you, from a different country, doesn’t really exist. There are, of course, digital watering holes, such as Clubhouse or Twitter, that approximate this conversation, but they are devoid of the intimacy and connection of irl.

Even more so than audio, live video communication presents the best primitive to enable intimacy with strangers, but a network based on this primitive has not yet emerged at any scale. There have been attempts at this that go back multiple startup generations. Chat roulette tapped this vein, and obviously devolved into something different. Sean Parker’s airtime hypothesized that shared context or “things to talk about” would enable this type of human discovery at a higher level of intimacy. When that product launched I could feel humanity in the branding and intention, but it wasn’t enough. The barriers to live, semi-real identity, video connection are high. There’s enough discomfort and inertia working against depth of interaction with strangers, that it takes a lot to “get there” via this medium.

Increasingly, it’s become clear to me that to find true intimacy with strangers online, and especially via video, the interaction requires facilitation. You see this at a clinical level in group therapy platforms like Pace.group. You see this at an admin level in conversations like Clubhouse (or even telegram, albeit lower fidelity). Where you don’t yet see it is in an open, high discoverability, video based network. I think this is happening in zoom to some degree, but discoverability of others is outsourced to off-platform assembly by an admin or guide or whatever you want to call it. I am looking for the live video based watering hole, that leverages the primitive of facilitated intimacy with strangers, and if you are building it I want to invest in it. Hit me up jordan@pacecapital.com.

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Credit Where Credit is Due

Posted on November 30, 2020. Filed under: Uncategorized |

It’s pretty in vogue these days to hate on Facebook. I myself installed a chrome extension years ago that wipes my newsfeed and replaces it with a single quote. It was my compromise to keep my identity layer and FB auth while shunning the product itself. I don’t have the FB app on my phone and am not an MAU (monthly active user).

All of that said, I have to acknowledge that Facebook has created the single most valuable product I’ve bought and/or used during this past year. Right when shelter in place began, I ordered a Facebook Portal+ for my home and sent one to my parents and one to my sister’s family. I figured if we were only going to be together virtually, we should have the highest fidelity, most natural virtual togetherness possible. The Portal is not just a dedicated video screen with a nice camera (although it is both of those things), it’s also software product. The camera automatically sizes and frames the shot to acknowledge everybody in a room, it focusses on who’s speaking, and intelligently pans around to capture movement, changes in activity, and whatever else is happening in your environment…it breaks the concept of a single point of focus in video conferencing in a way that more closely mirrors the focal permissions of in person presence. It’s honestly delightful.

My family has a tradition on Thanksgiving of going around the table and saying what each person is grateful for. This year there was no table, but we still shared in the same format over Zoom (which btw is now supported on Portal hardware). Common answers were “health” “the vaccines and biotech companies” etc…but when the conch passed to my mom, and she thought about what she was grateful for, she said “I’m grateful for the Portal. Honestly, without this, I’m not sure I would be able to get through this time. It really makes me feel like we’re together.”

I’ve heard countless pitches from founders that begin “we have so many ways to connect on social media, and yet we all feel isolated.” The party line is that Facebook is an afflictive force, stripping us of real connection…but in practice they’ve created an amazing product in Portal that does just the opposite.

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DNS for online/offline addresses

Posted on November 15, 2020. Filed under: Uncategorized |

I’ve always been obsessed with the idea of being able to send physical mail or packages to someone’s email address. We recently sent Pace Airpods to a large handful of friends and we had to manually chase down everyone’s mailing address to do it. These are super close people who we talk to and email all the time, but we never had a reason to know their physical address until now. Why can’t I just put their email address on the package and feel good that they’ll receive it. The world needs a mapping of physical addresses to email addresses, or more broadly physical addresses to any online id, be it an email addy, a phone number, or even an Instagram/Tiktok handle.

The tough part about this idea that has always been a block is awareness. Even if I had a way for you to send a package to jordan@pacecapital.com, you’d have to know about it in order for it to be useful. Historically, this awareness felt insurmountable, but the world has changed. Thanks to social media and the emergence of creators and influencers, there are now very built out distribution channels (i.e. creators) with a need/painpoint that said mapping service solves. It’s quite common for an influencer’s followers to mail her samples, gifts, promotional products etc…but in order to receive this form of compensation, an influencer must reveal her address to strangers…not ideal from a safety standpoint…even if that isn’t not an issue, the friction of a fan sliding into an influencer’s DMs, asking for an address, etc…is more than it needs to be. What if a creator’s followers could send these items directly to her Instagram handle…feels like a win for all…

With influencers evangelizing this new capability, it’s not a leap to think that mainstream awareness would follow, and that everyone eventually could sign up to be reachable physically by way of an online identity. I’d love to invest in a startup that is tackling this. My hack solution, which can DEFINITELY be improved upon, is to route all the mail and packages through a proxy that maintains the mapping between digital and physical addresses. You’d be able to send me a package to: 

@jordancooper
C/O Instagram ID
333 Front Street (Newco sorting facility address)
NY, NY, 10012
or
Jordan@pacecapital.com
333 Front Street  
NY, NY 10012
or
212-555-5555
333 Front Street
NY, NY 10012

333 Front Street would be a sorting facility owned and operated by Newco, which I as a creator or consumer pay to securely maintain (and authenticate) my digital/physical mapping. Newco would receive, readdress to my physical address and forward the package (or deliver it in the scaled state where Newco has usurped UPS, Fedex or USPS).

So what about spam? Feels solvable/manageable with focus, but yea…
So what about security? Feels solvable/manageable with focus, but yea…

I always wished the US Postal Service would have done this in a highly standardized way…but that ain’t happening so someone else should do it. Shopify and Amazon both have a pretty significant mapping of email addys to physical addresses, and I guess could play here, but seems pretty far afield for them near term. 

Holler if you happen to be thinking about this stuff or if you’ve solved it more elegantly than me: jordan@pacecapital.com

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On Skipping Brunch, Service, and the Pursuit of 10 People

Posted on September 13, 2020. Filed under: Uncategorized |

Chris and I spent Saturday morning on Zoom with a founder who is in the last stages of a pretty intentional fundraise process. There’s something I love about a founder who validates an investor’s level of interest and commitment by their willingness to speak early on a Saturday morning. In times like these, where lazy, momentum oriented investors will throw money at anything that’s “working,“ conviction means something different. I love a founder who says “i’ve got plenty of people asking to invest, but are you willing to skip your brunch this weekend because that’s what my company needs in this pivotal moment?”

For Pace, it’s a no brainer. Service and support for founders is at the core of what we do. It’s a philosophy that extends to our prospective partners the same as it does founders with whom we already work. Pace, by design, makes very few investments each year. It allows us to concentrate on relationships that matter. We love that board seats don’t scale. We take a drop everything, full resource of our team at the moment of need, approach to serving founders, and we’ve organized our firm in a way that allows that practice to be sustainable in perpetuity. There are a lot of different ways that VC firms try to scale GP time: large platform efforts, function specific services, junior investment professionals filling in at board meetings…all levers to pull so that the incremental GP at Megafirm X can hold 22 board seats while slinging another 10 “small checks” per year. Those approaches just aren’t us. We don’t want to scale. We’re optimizing for fewer deeper relationships and there’s nothing I would rather be doing on Saturday morning than developing depth with someone who inspires me.

I recently internalized a pretty clarifying framework around partnering with founders in these frenzied times. I’ve come to believe that there are about 10 professional relationships that will define the next decade of my life. When I’m thinking about making an investment and committing to serve on a company’s board, I ask myself “is this person(s) one of those 10 people?” Of course the product matters a ton, the mission matters a ton, the market matters, the economic opportunity matters, etc…but at the end of the day we are the aggregate of those with whom we spend our time, and distilling complex decisions down to something as simple as “who are this decade’s 10 people?” has proven to be a useful lens.

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Pace x Mulberry

Posted on September 3, 2020. Filed under: Uncategorized |

Today one of our portfolio companies at Pace announced their Series A financing. I’ve been waiting to talk about Mulberry since we invested in March, and now I finally can! Currently, Mulberry delivers product insurance and warranty coverage via an API at the point of sale through e-commerce and D2C channels. Whereas a company like Affirm distributes credit through these channels at the point of sale, Mulberry similarly distributes insurance. For E-Commerce sites, Mulberry empowers them to offer an Apple Care-like experience to their end customers, while simultaneously dropping meaningful margin to their own bottom line. For consumers, Mulberry lets you protect the purchases you value, whether it be your Mirror fitness equipment or your Breville espresso maker, both of whom are amongst a wide set of brands with whom Mulberry has partnered. There is a real elegance to Mulberry’s model and the company has clearly found product/market fit, but the real story with Mulberry is the team. At the helm is one of the strongest CEOs I’ve ever worked with in my decade plus in venture. Chinedu’s story is kind of nuts. He grew up in Nigeria, his parents won the visa lottery and they moved here when he was 11. At 16 he went to Cornell, where he graduated early and immediately cofounded a fintech company called Zibby. He scaled into the CTO role there despite not having focused on computer science in school. Zibby has built 9 figures worth of enterprise value and is still going strong. I’ve had the pleasure in serving on Mulberry’s board since March and have been blown away by the quality and character of Chinedu, his three co-founders (Lee, Ashley, and Ali), and the broader leadership team at the company. We’ve recently leveled up leadership across a number of key functions within the company, and I’d say the unifying theme amongst the entire leadership team is a deep motivation to practice their respective crafts at the highest level. Mulberry has executed through COVID beautifully, experiencing tailwinds on a number of fronts while addressing headwinds confidently and thoughtfully. The company has grown meaningfully since we made our initial investment, and is on track to have a great year. This is not a company you join for the quick flip. The team is extremely long term in their orientation, and I believe Mulberry will be a public company one day, albeit not for quite some time. We’re actively looking to bring on a VP Marketing, as well as some consumer product DNA to lead an exciting new business line that has the potential to transform the company. I’m in it for the long haul here, and would love to work closely with you if you’re interested in joining this special organization and team. Pace led Mulberry’s Series A alongside returning investors like Founder Collective and Quiet Capital and we were fortunate to bring in a few amazing strategic angels like Jack Chou (Former CPO at Affirm and Pinterest) and Jeff Weinstein (Product at Stripe). If you’d like to learn more about Mulberry, hit me up: jordan@pacecapital.com.

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The Rent is Too Damn High

Posted on August 14, 2020. Filed under: Uncategorized |

I’ve started to develop a thesis around what I perceive to be one of the most fundamental breaks to come out of the pandemic. I’m by no means an expert in real estate, but what I do know is that when residential, commercial, and retail tenants stop paying rent en mass, that is a break at a pretty low level in our societal stack. In aggregate, unpaid rent is a massive amount of value that is not flowing in the historically prescribed pattern within our broader system. I’ve started to think about the implications of this break from a few different perspectives. I like to begin thinking about a market by defining all of the key stakeholders within it, and then starting to isolate their distinct incentives and likely future decisions. In this case, I think the key stakeholders are 1) Property Owners/Landlords 2) Tenants 3) Lenders.

Across the country, but especially in urban centers, the same conversation is playing out over and over again. Whether it’s a person renting an apartment, a business renting an office, or a retailer renting a storefront, either out of necessity or opportunism, tenants are not paying their rent or paying partial rent or renegotiating their agreement with landlords. It’s contentious and landlord’s are in a position of less leverage than they have been in a long time. Demand is so low, that tenants collectively can turn the screws in a way that they haven’t been able to in recent times.

On the other side, landlord’s have obligations. Most physical buildings are highly levered. Developers borrowed heavily to build their buildings with the expectation that rental income would be used to amortize the debt over time. Nobody’s models contemplated such a uniform break in cash flows, and as a result landlord balance sheets are starting to get stressed. Property owners typically don’t enjoy much societal empathy, and going back thousands of years, tend to be the “haves” that can afford to lose money, but the “haves” balance sheets can only last so long when they have levered up their assets as they have. So just as tenants are coming to them and saying “we can’t pay,” they are going to their lenders, which might be banks, credit funds, mezzanine lenders, etc…and they’re saying “I need a new deal or I’m not gonna be able to meet my obligation.”

Lenders are listening and have a choice to make, whether they want to float their borrowers or become equity owners in the case of default on secured loans…and at some point of exposure, especially if liquidation of the equity doesn’t cover the outlay, banks are gonna start knocking on the governments door and saying “bail us out.”

This is a grim picture that harkens back to 2008, albeit in a different shape. Without the data to back it up, the exposure feels as great, if not greater.

So anyway, questions/observations that are on my mind that I would be interested in investing around to the extent there are Series A stage companies tackling or addressing them:

1) In the case of unpaid rent by necessity, the capital that was flowing from tenant to landlord has evaporated and won’t be reallocated. But in the case of opportunism, tenants of all types can and will reallocate unpaid rent to new channels. What are they and why?

  • Interestingly, I see opportunity for thin margin businesses where rent is a high percentage of the overall cost structure to thrive on the other side of a reset. For example, the beta on the restaurant industry may be more attractive today/tomorrow than it has been in a long time.

2) Where there’s pain it’s good to be a pain killer: Who’s aiding the landlords in meeting their obligations. Ironically, it’s an optimal time to buy lease exposure in bulk across property types. If there were ever a good time to build Wework, the residential version of Wework, whatever…it is coming. It’s a tricky timing question, but I’m a buyer of long term exposure here, especially in an asset light way.

3) Similarly, who’s aiding tenants in meeting their obligations? Income smoothing, lending, gig economy, etc…all speak to assisting consumers and businesses in meeting rent and other obligations, but there are likely more targeted products that speak to rent as a specific expense. My sense on the retail and commercial side, is that there’s a class of more equity like financial products that will have fit in today’s world, and those that are able to underwrite said products effectively will be well rewarded. Revenue shares, novel payment terms, non-traditional forms of security, etc…

4) Both of the above speak to a more general opportunity: negotiation between tenants/landlords and landlords/lenders is happening in a very one-off way without standardization or uniformity. This type of one-off negotiation doesn’t scale. There’s an incredibly ripe opportunity for 3rd parties to either facilitate or even obviate the need for parties on either side of said negotiations to come to an agreement. That could take the form of buying one side’s exposure, but also at the ornizational level, concepts of collective bargaining, standardized structures that are proposable by either side in volume, or even something as simple as arbitration as a service could find fit quickly.

5) Unleased retail space: Even before the pandemic, and especially at today’s volume it’s hard to walk by empty storefronts without thinking about what could be done with all the empty space. Companies like Spacious or whatever marketplace facilitates “pop-up” agreements play with the idea of unrealized value here. What else can go into these spaces with selling goods or food don’t make near term sense?

  • Related: I’ve been thinking about how screwed scaled fitness companies like Equinox must be, not collecting membership fees for the past 6 months. Even when gyms do open back up, demand for working out in shared space is gonna be a small fraction of what it was pre-pandemic. That said, demand for exercise will remain constant if not higher than it was pre-pandemic. I kind of like the idea of turning empty storefronts into on-demand private gyms. The model in my head looks like Breather. Can you buy up a ton of cheap storefront leases, put a standard set of exercise equipment in them (treadmill, free weights, mat, bench, elliptical, bike) without any or much additional buildout), and then let people book 30/60/90 minute slots 24 hours a day, 7 days a week? Most people in urban centers don’t have the space for at-home workout equipment and I believe would pay either their unused gym dollars, or even likely a premium, to “go the gym” without sharing space.

6) The distributed fitness idea touches on a broader insight that I’ve felt recently, which is around personal space. In a world where we are trying to figure out what does and doesn’t persist post pandemic, I find myself believing that personal space will evolve from a necessity to a preference, but that preference will be larger and more widespread than it was prepandemic. Willingness to pay for personal space will be high amongst those with disposable income, while those spending on necessity will revert back to pre-pandemic level of space per service or product. A perfect example of this will be expressed in relative marketshare of Uber and Via post-pandemic. Even when there’s a vaccine and virus levels/risk are low, Via is undoubtedly gonna lose marketshare to “private rides.” I’m interested in services and products that deliver familiar value to consumers with evolved personal space profiles. Hyperloop, for example, is well positioned to take more marketshare from other forms of public transport than they would have on the value prop of speed alone, because they happen to contemplate individual/private pods as a form factor.

7) Affordable/low income housing: I’d like to have exposure to affordable housing in urban centers. I believe there is a high volume of people who won’t trade the urban experience for affordability, and therefore demand for the most affordable housing that can keep them in cities will grow. If you looked at vacancy rates amongst all bands of price in New York over the next five years, a like the cheap band the most. Who is building products/services here? Coliving would have been an interesting answer except for the unique safety/health issues of the moment, but there must be other people asking “how can i serve the furloughed waiter/actor in NY to help them stick around?

8) The exchange position: ownership of real estate assets is going to change hands in high volume. As a result, the exchange layer between old and new owners is valuable. Brokerage is the most obvious beneficiary, but in the case of forced transfer, there are other positions that might accrue more value. Chris had the thought that liquidation and foreclosure marketplaces stand to benefit, as would 3rd party property management in the case where lenders become equity owners en masse. One of the most interesting architectures I see at the exchange layer is in pairing a balance sheet with the exchange function. If an exchange can afford to take possession of the asset in order to protract the liquidity window in which a transaction must clear, that’d be a very compelling path to volume.

9) Lastly, the value of an incremental tenant across real estate types is higher now than it’s been in my memory. Owners (and by proxy brokers) stand willing to pay a higher CAC today then they have historically. Zillow spiked hard this quarter, not surprisingly, but any channel that catches tenant acquisition dollars is well positioned for the foreseeable future. I could even see standard broker commissions increase from industrywide norms as the leverage dynamics btwn landlords and brokers tilt toward the demand side.

So yea, if you are building around any of these themes, I’d love to lead your Series A: jordan@pacecapital.com

P.S. I apologize for any blind spots or misperceptions I have in this market, i’m learning…smart people, please correct me on anything that’s wrong.

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Deconstructing the Fortune Teller

Posted on August 13, 2020. Filed under: Uncategorized |

I’ve been thinking more about seeing the present clearly vs predicting the future as venture investment frameworks (after writing about it yesterday), and it occurs to me that they are more related than I initially considered. To me, “seeing the future” is just an exercise in game theory. Even a basic product-centric approach to investing can be reduced down to a simple game, which is “if this is the best product today, then people will buy it tomorrow.” My supposition is that fortune teller investors who “predict the future” tend to spike in game theory, whether that be conscious or subconscious. In seeing the future, everything can be reduced to if/then statements, and the further out you see, the more consecutive or parallel if/then statements you have strung together. The interesting thing about fortune telling, is that there are many confounding and intertwined variables that influence one’s confidence level in the “ifs” upon which they rely and orient. I think great fortune tellers can hold a bunch of different, and not necessarily obviously related, lines of game theory concurrently in state, and in doing so, experience unusual confidence in the set of ifs they consider true en route to the terminal state. So back to the two frameworks, even though they appear at odds, in addition to game theoretic superpowers, fortune tellers are actually heavily dependent on seeing the present clearly. If they get the present wrong, they begin their game at the incorrect starting point (they fuck up the first if)…and even if all subsequent moves/logic are sound, they’ll end somewhere off the mark. Maybe these two approaches to venture investing aren’t such odd bedfellows after all…

 

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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 Jordan.Cooper@gmail.com (p.s. i don’t use spell check…deal with it)

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