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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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Snipers and Fortune Tellers

Posted on August 12, 2020. Filed under: Uncategorized |

I think it was Matt Cohler at Benchmark who said “our job is not to see the future, it’s to see the present very clearly.” I’ve never really identified with that perspective on venture, but I certainly see its merits and how one could build a very successful venture practice by internalizing and adhering to it. This morning I found myself wondering if the value of seeing the present clearly was as actionable in this moment as it has been historically. It feels like core to the premise of the above framework is an assumption that the near future looks more like the present than not, and that a company that is well positioned for the present will therefore thrive in the near future. Investing behind this clear view of the present presumes that one sees it before it is more broadly recognized, and eventually consensus catches up to reality.

So fast forward to today. It’s hard to see this present clearly. We’re dealing in very dynamic information and a state that feels more fluid than static. The present is always fluid, but I’d argue that it’s more fluid now. So many of the assumptions that shape behavior and people’s way of being on have been challenged…so many of the inputs to the systems that we’ve designed to organize/govern society and behavior have been upended. We are rewriting the way things are in a very compressed and abrupt way, and it’s happening with frequent real-time edits and little uniformity. There is definitely a true version of today’s present, but that version feels uniquely defined by motion.

It’s harder to see something clearly when it’s moving, especially if it’s moving faster and more erratically than usual. Nonetheless, a sniper level of vision can catch a glimpse of that truth, and then the question is…what do you do with it? If your investment horizon is short like some hedge funds, you trade on it. But if you are investing on a venture time horizon (10+ years), that is less obvious. The near future may look much more different than the present than it typically would. The value of seeing the present today decays outside the seeming microbubble that is pandemic times…we can extrapolate out and bet on what persists and what doesn’t, but that feels like a practice in seeing the future, which breaks the initial framework.

I’m sure I have a more blunt and unnuanced understanding of this philosophy than its creator and disciples, but it is interesting to overlay the volume of financing activity in today’s venture market on top of this approach. Perhaps there’s a disconnect? Perhaps this environment favors the fortune tellers…

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A Mindshift

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

After 4 months of pretty remote isolation in the Adirondack Mountains, our family has returned to New York City. We expected the move back to be an adjustment, and it has been. We’re back to making 10x the number of decisions in a day as we figure out our new flow and protocol for living in this denser and quite distinct environment. Something I realized today, that seems to be making things easier, is that “success” in this moment is not just a function of how you act, but also how you think.

The first week of being back, I’d walk around looking at every stranger as an attack vector. I’d keep my distance, cross streets, and generally have a very defensive posture with anyone around me. From a physical safety standpoint, these actions made sense, but this morning I realized that I was turning one of the most beautiful and rich parts of New York City into something very negative. Part of what makes New York special is the interaction with strangers. It’s the texture to a day, which has been unfortunately sanded down in the name of self-preservation and fear.

I didn’t trade open space and mountains for a sterile and isolated city experience. It’s that very interaction and energy that makes the trade worth it, so I’m committed to finding a way to participate. My first shift, which has been very positive has been saying good morning to people I pass on the street. My sense is that when people collide in NY right now, there’s a micro-standoff, as each looks at the other as risk. Rather than lean back, I make eye contact, say good morning, and all fo the sudden that standoff becomes something else much closer to why we are all here.

I think you can lean in at a distance, and so that’s what I’ll be doing from now on.

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A letter to my son from the depths of isolation

Posted on May 17, 2020. Filed under: Uncategorized |

Dear Odysseus,

When you were 1 year old the world changed. Your mom and I packed up our shit into the car and drove you away from home to a place where we could be without being around others. We chased you around the house for 13 hours a day, splitting the duties of your development and learning and our respective professional lives. We were able to plant seeds, hang a humming bird feeder, set up a swing, import books and toys, but you developed thinking that mom and me were the only two people in the world who you could hug. Your grandparents got to know you through the pane of an iphone and you had but two physical witnesses of each great milestone that came to be. It was winter when we left, and stayed winter way longer than would have been ideal. Caring for you without any help was simultaneously the most amazing and impossible pursuit imaginable. We figured out a routine that worked for you and came up short for each of us, which of course was the correct optimization. You’d get up in the morning, I’d scoop you from your crib, and drop you down into the covers surrounding mom in the big bed. We’d cuddle as a family, forgetting for 10 minutes that the world, and we, were suffering. That may sound strange for you, given that we had food to eat, health, money, and a place to stay away from the epicenter, but it was a time where everyone suffered, irregardless of their security or context. Many suffered much more deeply than us, but all suffering was valid nonetheless.

When our isolation started, your mom and I had a sobering conversation, where we agreed that she would pause some of her professional pursuits to care for you while I worked. The virus came at a time where my job supported us financially and hers did not. It was a crude heuristic, that certainly did not capture the nuance of the sacrifice, but it was the best one we had. From 9AM to 4PM every day, your mom committed deeply to helping you understand the world, your voice, your physicality, and life. You walked in nature every single day. Your mom talks to trees, and she taught you to do the same. You cried when you saw a tree get trimmed, and learned to point out the trail markers before we could even find them. We built a world for you where our friends were birds and bugs and deer and chipmunks…but we couldn’t give you time with other kids. We felt so sad about that, and it was hard to know if and when and why that might change.

At 4PM, my last meeting would end, and your mom would come and drop you in my lap for the evening. She did the best she could to keep up with her work in the 3 hours a day she had before your bedtime. Something we learned quickly was that neither of us would feel satisfied with the time we had to pursue our work. I tried my best to be present with you during our time together. I read you every book in our house at least 500 times. We crawled and walked and wrestled and built…it felt repetitive to me, but you never seemed to notice. There were moments where I snuck an email here and there while you picnicked with Bear and Superman, but I always felt bad doing so. Your mom was better about that than me. She found a plane of perfect presence with you…and I admired her for it. Most nights I had the honor of feeding and bathing you. While the bathtub filled, I’d throw you down on the big bed and let you jump around and laugh. This tended to be my favorite time of day with you.

With pajamas on, I’d take you downstairs to do sing along with mom before bed. We’d turn down the lights in the living room and sing Blackbird by the Beatles. Once you were down for the night, mom and I would do our best to cook something for ourselves and be with each other…that was easier some days than others. We’d oscillate between connectedness and disconnectedness…doing our best to reset together when the stress and strain got to one of us. We were lucky…we had the kind of love that gets your through a time like this…but it was still harder than normal to maintain appreciation for it.

Some nights, we just gave in and allowed ourselves to retreat back into our brightly lit screens…catching up where we left off in work or grasping at social connection in the only form it was available. I learned after about a month not to read about the virus right before bed. We carved out date nights, to escape the screens. Of course, we had nowhere to go, but your mom liked dressing up anyway, and we’d cook and talk to each other and maybe drink a beer or two.

Life became something between treading water and living. Days were long and weeks were short and largely blurred together. For the most part we were happy…we had you, and each other, and that was so much. I kept waiting for tears to come…but they never did. And then one day…something happened and we got in the car and went home and you made friends, and we hugged our parents, and our city awoke from its prolonged coma. I can’t tell you what happened or when, because it hasn’t happened yet, but you will learn that your dad is an optimist, and I know you are reading this from a better moment.

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On Board Service

Posted on May 5, 2020. Filed under: Uncategorized |

One of the things I’ve enjoyed most about the past 10 or so months at Pace has been my service on the board of an unannounced company in our portfolio. The vast majority of my board experience over my career has been in the CEO seat with institutional investors from firms like General Catalyst and Softbank serving on my boards. Although I probably led 50+ investments during my time at Lerer, in most cases, as seed investors, we did not take board seats with an investment. Now sitting in the institutional investor seat and serving on someone else’s board, I have a different level of empathy for the job. I think one of the absolute privileges of board service is profound alignment. I don’t want anything except what’s best for the company. There’s nothing for myself outside of that desire. I think I’d be there philosophically regardless, but it doesn’t hurt that what’s best for the company is best for me…i’ve internalized deeply that my success is hitched to the wagon of a CEO and group of people I believe in.

Service as I see it is not directive. I sync with the CEO every 2 weeks and I never come with an agenda of things I think should happen. I do way more listening than talking and my only goal is to help the CEO make the best decision possible on any given topic. When I have product or tactical ideas, I am sure to preface with “feel free to throw this away or tell me it’s stupid.” When I interview a candidate on the company’s behalf, I debrief with inputs not conclusions. The CEO of this company is a better CEO than I ever was. I expect that to be the case for every founder I support. The best decisions and best outcomes for the company are going to come from him and his leadership team…I want to be a foil, inspiration, food for thought, emotional support, ethical support, but decidedly not a decision maker. Sure in the realm of governance and management team construction, there are moments that will call for more assertion, but almost every other decision that might float up to the board, I tend to redirect back through the eyes and mind of the CEO. I don’t want to be persuasive, I want to be illuminating. Success is listening and widening the aperture of the team’s thinking, if only to discard and zoom back in narrowly.

I was very clear with the CEO prior to our investment: “You don’t pick me on your board to tell you how to do it. If you want that level of applied contribution there are better people. You can hire for applied value. You pick me for trusted counsel, and that is something you can’t hire for.” I believe that in my role as a board member, if I can help world class founders be and decide at their best, everything else in our model at Pace falls into place. So far so good.

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What the world might look like

Posted on April 19, 2020. Filed under: Uncategorized |

One of the hardest mindfucks of isolating at home through this pandemic is not knowing what the world will look like when we can finally go out and explore it again. Most everyone is asking themselves “when can we stop isolating at home?” I find myself more interested in “what will it be like in the months and years after?” Here are a few guesses in the spirit of provocation/inspiration more than prediction:

1) Payment at the point of sale will go completely contactless. Tailwinds for Apple Pay for sure, but I think an even more likely architecture will be a customer paying in store via an app on their own phone. “Venmo whole foods $78” feels safer than touch my phone to the same pad/sensor as everyone else who shopped here today.

2) New protocols for social interaction will emerge. For example, maybe as we start to socialize in groups again, we will do so only once every 14 days. As the fear thaws, every person will make their own underwriting decisions about with whom they feel safe interacting. I know which of my friends are being as careful as me and which are not and I trust certain of them, but it’s not fair to expect that trust has a transitive property with all others that trust me. Underwriting the risk of social interactions will be easier to do if we don’t have to also underwrite our friends/family’s underwriting ability. Socializing once every 14 days would be a way for people to take their desired level of risk, either get sick or not in those 14 days, and then socialize again with pretty high confidence that they aren’t putting others at risk. I think leveraging social trust obviates the need to authenticate any individuals adherence to a protocol like this. This is just an example of how we might transition back into social behavior…i’m sure it won’t be this, but I do see transitional protocols emerging before all out social butterflying returns.

3) Full service gas stations will make a comeback. You’ll pump your own gas less, and pay the gas station via an app without rolling your window down to interact with the attendant.

4) Telemedicine will become a regular part of your overall care protocol with your primary care physician. Tons of reluctant doctors were forced to embrace this style of care over the past few months. They’ll find leverage in these tools. A 10 minute Zoom screen will be the default first step in most patient journeys. I think you’ll still go see the physician post Zoom in many cases, but even in those cases, the basics of intake and fact finding will be done prior via Zoom.

5) High attention applications and interaction paradigms will fall from grace. I’ve seen it posited that video calls/conferencing is the new platform, or that such functionality will spread across applications with the same prevalence as messaging. I’m not so sure. People are going to get busy again. Fitting interactions into micromoments or multitasking moments once time gets competitive is a very different design challenge than fitting them into a gaping abyss of idle boredom. I think audio with modern interaction mechanics might emerge as a better happy medium for many momentarily growing live video use cases.

6) Antibodies will be a new status symbol. It will be a very bizarre instantiation of the haves and have nots. New labor models will emerge to reflect this dynamic. It’s hard to see our most vulnerable populations bearing the brunt of the virus. Perhaps an inadequate silver lining is there will be better paying work on the other side for those that make it through and attain immunity. (note: i understand the jury is still out on testing methodology here and the correlation btwn presence of antibodies and immunity)

7) Real estate and retail operations will vertically integrate. Property owners will own the retail in their buildings and rent ops as a service as opposed to retail ops renting property. I know this one is weird…not fully baked, but I could squint and see landlords needing to become their own retailers to monetize empty space. It will just be different cash flow and liability dynamics…same SMBs and business operators will be running the day to day, to the consumer retail will feel the same.

8) Grocery stores will start to sell memberships. You’ll pay $100 a month for priority rights and desirable delivery windows. Every grocery store will offer their own version of Prime and enjoy a new revenue line item. As we ebb and flow in and out of social isolation waves, members will feel an increased ease and sense of security that they’ll have access to provisions without needing to keep 30 days of food on hand in perpetuity.

9) Some new company will emerge that offers emergency provisions in the cloud. rather than sending all the stuff to your home, for $400 a month, they’ll maintain a storage facility for you that is perpetually stocked with all of the food and supplies you’ll need if the country locks down or the world melts again. They’ll rotate out expiring goods, and guarantee delivery of your stash within 3 days of request. Think Makespace for crises…

10) Work from home won’t be viewed as the luxury it once was. Will there be more remote work than before? Sure. But when given the option, I think most will prefer to “go to work.” Sweatpants ain’t all they’re cracked up to be.

11) Actually, perhaps the most controversial take of all: I think the world is gonna look a lot like it did before.

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Silver Lining

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

We’ve been on isolation protocol for 9 days. I could cover all the challenges and stresses associated with such an abrupt change to daily life, but you can read about those everywhere. As we settle in to an unknown amount of time in this new reality, I have moved beyond lamenting about the points of friction where something is not as good or easy or comfortable as I am used to. This period is it’s own thing and I’ve accepted a new baseline. With that acceptance comes the opportunity to improve and optimize and build up new behaviors and routines that are for this moment specifically.

Call it a silver lining, but I’ve had more intimate conversations with friends and family in the past week than I have in the preceding year or so. Life gets busy, we have a little dude who is about to turn 1…there’s work, and relationship, and kid, and surface area with that wider set of folks who I deeply care about had gotten smaller. Even time spent and conversations with parents and siblings have spaced out as everyone builds up their own lives and families.

With all of the context that gets in the way of nurturing valued relationships shed, and most everyone I know holed up in their apartments or homes with nothing to do and a lot on their minds, I’ve started Facetiming a pretty wide set of friends and family, many of whom I don’t talk to that much in normal life. Everyone is available, all the time, and that’s an opportunity to reconnect, check in, get support, give support, and frankly pass the time. Nobody has important things to do. Everyone picks up. If we were living in Gchat days, my entire graph is green. It’s really really nice.

Don’t get me wrong, when I zoom out at what’s going on, which I do quite a bit…it’s very, very hard. But there are moments of warmth and connection available solely because of this fucked up context, and for those I am grateful.

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Hack Idea: ~Waze for Coronavirus

Posted on March 11, 2020. Filed under: Uncategorized |

I think I’m through the initial shock of coronavirus. I’ve taken steps at home and work to best mitigate my role in the transmission of this virus and have encouraged everyone around me to do the same. With immediate/reactive efforts in as good a shape as they can be, I’ve started to think about how our industry can contribute to the overall challenge our country, and the world, currently faces. I think history will look back on those that looked out for themselves with understanding, and those that looked our for others with reverence. It would be nice if we, as an industry, could use our considerable resource and skill to do more than simply analyze public data and amplify warning or concern on social media.

Is tech going to start building test kits which are sorely needed? Ulikely. Are we going to increase hospital capacity in the near term? Probably not. So what are the assets we have or could develop to do our part?

One asset that I find particularly interesting is location based data. I would guess that 70% of infected people in the US allow at least one application to track their location persistently. That line through space of where a patient traveled, how long they spent time in different locations, and on what dates/times feels like a very valuable input to both identification of potential infected persons as well as prevention of further infection. I’m guessing most of these apps don’t store historical logs of such a history, but I wouldn’t be surprised if Google Maps and Waze, for example, have this data. Findmyiphone and Life360 feel like interesting assets to explore for the same use. AT&T and Verizon probably have pretty darn good visibility at scale as to where their customers have moved through space and when. Whether or not these data assets are being used by disease detectives in current workflow is unknown to me, but now feels like a moment where people would be willing to trade privacy for safety of themselves and others…so there’s one question, which is “can we access existing/historical location data and redefine the terms of how it can be used?”

Another question is can we hack together a new piece of software to help people navigate these uncertain times. I’m interested in the idea of an app who’s sole purpose is to continuously track your location and alert you when you are entering high risk places and contexts. I think people would trade their privacy for a service that helped them and their loved ones stay virus-free. You could start by using non-network contributed data to provide these notifications/intelligence. Inputs like people density, popularity at certain times, proximity to publicly reported cases, etc…would be enough to help people make decisions on where to go and when. The more interesting part to me is if you could harness a collective mindset, where everyone using the app was trying to help others not get sick, that could be really powerful. What if the app enabled users to anonymously self report when they have symptoms or a positive diagnosis? That type of input, paired with the self reporter’s historical movement through space and time (which we’d have been capturing already), transposed on everyone else’s movement through space and time, could be a recipe for hyper-personal, hyper-actionable warnings of potential exposure. I think we’ve seen globally what top down govt surveillance can do to assist in the fight, but I’d like to believe that there’s a bottoms up answer for us to fight within the context of our civil liberties and norms. So yea, can we build Waze for coronavirus and try to help each other out in staying safe? What if instead of reporting cops to help others avoid speeding tickets, we reported symptoms and diagnoses alongside our historical movement in order to help others avoid the coronavirus. That’d be a dope hack. Single player mode: “use this app to avoid the virus,” multiplayer/network dense mode: “use this app to help others too.” Happy to throw some (personal) financial resources against that or someone else’s better idea if that’d help something get built and distributed. jordan@pacecapital.com

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Processing risk and response

Posted on March 6, 2020. Filed under: Uncategorized |

It has been a very tough month or so. Typically, I write this blog to organize my own thoughts. It’s been hard to wrap my head around what is going on at the moment…maybe if I start writing it will help. I am typically pretty cool, calm, and collected. However…when it comes to matters of health, I can thank my mother for giving me a heightened sense of anxiety relative to the average bear. Something that’s been hard to figure out for me is what % of mindshare is appropriate to spend on the potential pandemic we have on our hands. I’m not sure that’s answerable. Lately it has felt like watching the world burn could be a full time job. I continue to take meetings, support our companies, look at new investments, read, etc…but that idle moment when my mind is not occupied has been claimed by the coronavirus. Whether it’s monitoring, preparing, communicating with colleagues, communicating with family and friends, or frankly just worrying…it’s a lot of time and energy. That effort and mindshare feels both productive and afflictive at the same time. There is undoubtedly an optimal point of information consumption and corresponding action, but damned if anyone knows where that is.

I see people around me approaching these questions in very different ways. It’s hard to process such divergent paths from people I equally respect, none of whom are particularly better equipped to make decisions than me. I find myself conversing with other folks who’s job it is to process risk and probability (and bet on it), but is that a good input in this context? I talk to folks who are uniquely tuned to detecting and understanding the shape of growth…do they qualify as authority? I see large corporations like Coinbase, Microsoft, and Twitter, as well as smaller companies and other venture firms like ours, implementing work from home protocols, while others go on conducting business as usual. Is anybody doing it right?

To me, these questions all come down to calibrating risk, reward, and consequence. Despite feeling like that practice, in the abstract, is a power lane for me, I don’t feel particularly well equipped to do so in this context. Information is sparse and conflicting, emotion and survival instinct are obfuscating, and decision making must be made not in a vacuum, but in the context of friends, family, colleagues, and strangers. This is an extremely hard problem to navigate.

So yea, there’s no takeaway or insight that I have to share, but I figure if i’m experiencing this level of anxiety and uncertainty, many others are as well, and perhaps it’s helpful to know that you aren’t the only one who’s having a hard time with it.

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A Counterintuitive Proposal for How AR Will Unfold…

Posted on February 4, 2020. Filed under: Uncategorized |

You are walking down Bleecker street in New York City. You pass by a store with a cool jacket in the window. You say “Hey camera, how much is that jacket? And a voice replies into your Airpods, ”It’s $400:“ I think that’s gonna be the way it goes down.

There have been many proposals for how augmented reality (AR) will solve this use case and ones like it. Most demos you see today, a person takes her phone out of her pocket, opens an app that invokes the video camera, and then metadata about whatever is in the frame appears on the screen. I don’t think that’s the way it’s gonna go down.

More futuristic versions of this use case contemplate heads-up displays, where the metadata about the jacket is written visually to a lens on your glasses or even a contact lens. I don’t think that’s the way it’s gonna go down either (at least not this decade).

I think the insight that we will use computer vision to augment the way we process our physical surroundings is more or less a given. Car’s are perhaps further along than people in this regard. It seems implausible that this assistive capability will not follow us into all realms of our mobility (i.e. when we get out of our car and walk). What I don’t think is a given is a) that the camera we use to capture our surroundings will be on our phone, or b) that the response to a camera based query will be displayed visually.

Most read/write situations don’t traverse disparate medium. If you capture visual information, it tends to be displayed visually. If you capture audio information, it tends to be displayed acoustically. Even if you capture tactile information, it tends to be displayed/processed tactilely.

But in the case of AR, I see the capture/write function and the read function decoupling as it relates to media type. I think will use a wearable, voice activated camera to capture and query, and I think we’ll listen to the response or results that come from that query.

Ring and other always on camera have desensitized us to the reality that we might be recorded when in public. There is definitely a societal learning curve that Snapchat Spectacles began to climb, around wearing cameras in social settings. But I think consumers have learned what a “wake word” is thanks to Siri and Alexa, and have gotten comfortable with always on sensors that are known to be asleep unless awoken. My instinct is that voice and audio is paving the way for visual sensors to do the same.

It’s not just a privacy issue that will need to be solved, but also a fashion issue. Snapchat Spectacles came close but not close enough to solving the fashion challenge of wearing sensors on your face. Airpods solved it completely. Whatever camera wins will have to thread this same fashion needle. I could actually see a not too distant world where your Airpods have a camera(s) on them. If not, I guarantee you Apple is working on a Siri controlled wearable camera that is meant for everyday use (as opposed to gopro use cases, etc). Interestingly, I see these cameras as being utilitarian as opposed to creative in the near term. Spectacles captured media that was meant for human consumption, and in that way, kind of fell short of the production quality we’ve come to expect from our smartphone camera. But if the consumer of an image is a machine, the image doesn’t have to be pretty, or compelling, or even particularly high fidelity in order to be valuable…and in that way a hardware manufacturer can bend the typical constraints around size, form factor, cost, battery life, etc to optimize for the fashion and form over image quality.

I think the promise of AR is that we can look up at the world and not down at or even into a screen, and this camera/earbud architecture feels like the closest we can come to an invisible read/write interface that marries our surroundings to machine assisted computation and the internet.

If you are working on any piece of this future, be it hardware, software, or other, I’d be up to jam and maybe even lead your Series A round: jordan@pacecapital.com

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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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