33 Questions We Asked Ourselves Before Starting Pace Capital

Posted on July 12, 2019. Filed under: Uncategorized |

The first 10 months of Pace Capital we didn’t pitch a single LP for investment. The effort was entirely inward as we attempted to assemble a partnership and lay sound foundation. A mantra that originated during that time and persists today is, “Don’t optimize for outcomes, optimize for alignment.” Health willing, forming Pace at this stage in our careers is a 30+ year commitment. For such a long range decision, it was essential that we get to a more granular understanding of each other, our fundamental values, our communication plane, our relative investment frameworks, what we wanted to build, and perhaps most importantly, what we valued in future partners. Because the cost of a false positive in partnership is so high, we didn’t want to form the partnership via probabilistic decision making, but rather we committed to setting the bar at certainty. With a goal of getting to 4-5 perfectly equal GPs at Pace, we saw real advantages to beginning in a formation that most closely resembled our steady state (i.e. a team of 3 or even 4), so we explored those configurations very actively. A LOT of time was spent in different combinations and permutations. It’s a totally non-linear path to conviction around partnership (venture or otherwise). At its most basic level, there is no substitute for time spent, and getting a requisite number of reps in together is simply a requirement. But not all time spent is equal. We found tremendous value in unstructured group meals and coffees, etc., but also went through a series of much more structured exercises in order to accelerate our understanding of how any combination of GPs would impact the ecology of the firm as a whole. One tool that was born from that process of particle collision was a structured set of discussion topics. After some number of more informal discussions, we’d all get in a room together, often over multiple sessions, and each of us would speak to every point on this outline. It was designed to surface conversation around topics that might be difficult or not likely to occur organically, and the only goal was to surface alignment or misalignment within that group. After hundreds of conversations with potential partners, and thousands of hours spent, we learned that the best thing we could do for the future of the firm was to stand it up. So 5 months ago, Chris and I decided to begin our fundraise for Pace Capital as the first 2 customers of a platform that will decidedly come to service additional GPs over time. We don’t have any attachment as to when that might happen, but it’s a priority for us. Recently, a number of people have asked how we conducted those early conversations, so I thought I’d share the discussion topics. Below is our Structured Discussion Topic Outline. Hopefully others going through something similar might find it helpful 🙂

GP structured discussion topics

1) Work style

  • how do you spend time and decide where to spend time
  • where on spectrum of collaborative vs independent?

2) Team

  • What do you want and need in a partner(s)?
  • What can’t you tolerate? Pet peeves?
  • How big a group do you want to be a part of?
  • What does a team look like in year 1, fund 1, fund 2, etc. How would you staff?

3) Budget

  • where do you spend the money?
  • What’s worth investing in? (office, admin, research, contractors, software development, platform, press, events/programming

4) Economics

  • beyond an equal partnership, how do you think about sharing carry with staff
  • what kind of salary will make you happy/comfortable?
  • what are your economic goals over what time frame?

5) Superpowers and strengths

  • what are yours, and how can we accentuate and build around them?
  • what are our strengths as a team?

6) Brand

  • what brand do you want to build?
  • How do you want to be understood by founders, other firms, lps, etc?
  • What channels do you like to communicate through to build and reenforce a brand?
  • What type of behavior is decidely on brand vs off brand in this context

7) Absolutes

  • what will you never do and never tolerate from anyone on your team
  • what will you always do and demand from everyone on your team

8) People

  • who are your closest thought partners and collaborators and why?
  • mentors?
  • who doesn’t like you and why? who would you consider adversaries?

9) Ethics and Behavior

  • Have you ever had any issues in the realm of sexual harassment, inappropriate work behavior, legal issues, or has anyone ever challenged or questioned your integrity in a way that might come into focus in the future?
  • What if any policies or infrastructure would you want to create to ensure a healthy and ethical work environment?

10) Fund size / structure / strategy

  • What stages and shape of assets do you think it’s important to be setup for in the early days and the end state?
  • Multistage vs Early Stage vs Growth vs Crypto
  • Generalist vs Thesis Driven vs Vertically focussed and how does this change from fund 1 to say fund 4 or 5 if at all?
  • What size fund do you feel most comfortable managing in fund 1, 2, 3, 4. What does this arc look like. AUM goals if any and why?

11) Decision making

  • Consensus vs Single sponsor or something in between and why?
  • Ideal process of a deal from investment thesis through firm decision?

12) Values

  • What are the values that you want to define your firm?
  • Things the firm and everyone in it will live by and stand for?

13) Concerns / worries

  • what do you think is going to be hard both initially and down the line?
  • Where do you think you are weak and where do you think we are weak as a team?

14) First 365 days

  • what are the most important things for us to do?
  • is it make great investments? engage the right supporters?
  • if we do x, y, and z what will be a great first year in business?

15) Motivations

  • why are you doing this vs joining another firm vs some other career option?
  • what gets you out of bed each morning?
  • is winning important to you?
  • what role does money play in your ambitions?
  • how do you measure the impact of your work?
  • Who’s opinions of you matter and why?

16) What’s the ideal relationship between a firm and it’s limited partners?
17) What’s the relationship you want founders to feel to you personally and your firm?
18) How do you win a deal? along what axis?
19) What is the balance between crypto narrative and the rest of the startup and venture world and how should it be reflected in our strategy?

  • is this a moment in time vs the new reality?
  • What is the venture landscape going to look like in 5 years. more like today or more like 3 years ago, or nothing like either?
  • how does crypto strategy differ from overall early stage firm strategy. Seed vs A mentality, support, investment cadence, size and concentration, etc.

20) Structure

  • Do you think we need to innovate structurally to reflect post crypto world or any other market/technology dynamics that might call for structural innovation?
  • Ideas on how if yes?
  • How do you feel about registering with the SEC?
  • Are these decisions that need to be made now vs later?
  • tradeoffs between enabling functions of structural changes vs challenge/ease of raising capital and large amounts of capital?

21) LP relationships

  • who are your strongest?
  • who would you most value and why?
  • Do you have strong preferences around sources of capital: endowments vs. pension funds vs. hedge funds vs rich people vs family offices vs china etc.

22) Geography

  • Is it 100% requirement to all be in the same place/office?
    • for how long?
  • What if any remote strategy would we run to cover other coast?
    • scouts/venture partners/college programs, etc.
  • Life updates, spousal considerations, etc.

23) Pace and portfolio construction

  • how many deals per year?
  • how many companies in a fund?
  • ownership minimums or no?
  • Home run swings vs. batting average?
  • When do you pay up and when do you stay disciplined on valuation?

24) What’s your process for learning?

  • are you a certain type of learner? (audio/visual/textual/collaborative/independant?)

25) Roles and Responsibilities

  • What do you want responsibility over and what do you actively not want to own?
  • What responsibilities do you think should be shared?
  • (marketing & brand building, public relations, programming, LP management, team management, support, admin & ops, finance, reporting and communication, recruiting, etc.)

26) Without referencing what other people are doing, what do you want to create?
27) What is the relationship we have with the entrepreneurs we work with?

  • Spectrum of investor-friendly to entrepreneur-friendly
  • What are examples of conduct that you use as theses / antitheses?

28) Life timeline

  • What major life events do you envision over the next 10 years?
  • How do you imagine your frame of mind evolving over the next 10 years?

29) Personality type

  • Enneagram / Myers-Briggs?
  • What kinds of founder personalities do you find yourself most drawn towards?
  • What kinds of founder personalities do you resonant most well with?

30) Investment methodology

  • overall what’s your process beginning to end?
  • collective portfolio review: let’s look at everyone’s deals historically and talk through them
  • dive into how you get to investment decisions, thinking behind them, etc
  • what turned out to be right and wrong and why?

31) how does rising early stage round sizes and large fund dynamics at multistage firms impact our strategy, fund size, etc?
32) Roughly how much do you envision allocating or reserving for follow-on investments?
33) Are there markets you are morally opposed to investing in (e.g. tobacco, guns)?

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Pace Capital

Posted on June 27, 2019. Filed under: Uncategorized |

Today we are stepping out a bit with a new venture capital firm called Pace Capital. We closed our first fund, Pace I, which is a $150 Million vehicle focused on Series A investments. As we were raising the money, investors would ask us, “What’s the brand? How are you going to position the firm?” Our answer, which we deeply believe, is that a venture firm’s brand is the aggregate of the community it builds. Everything else is just hype. Right now our community is small: two GPs (Chris Paik and I) and about a dozen institutional LPs. But so much of what Pace will become is dependent on our future partners, be they the founders we back or the GPs and staff we assemble. To define Pace today would be premature. We have a clear idea of what we want to be, and we’ve laid the groundwork and foundation for that to occur, but ultimately it’s Pace founders who will come to speak for us and define us. They’ll let you know if we are their most valued investor. They’ll let you know the degree of our integrity, whether we help them consistently make good decisions, and if they like spending time with us and each other. They’ll show you what a Pace founder is and what a Pace company is, and you’ll see that Pace is a collection of generation defining entrepreneurs and investors. Until then, we’d love to lead your Series A: jordan@pacecapital.com and chris@pacecapital.com.

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Concert ticketing 2.0?

Posted on June 10, 2019. Filed under: Uncategorized |

This past weekend Olivia and I did a lot of driving…which for us means a lot of Spotify. We sort of have 2 modes for selecting music: 1) Creative: we’ll assemble a unique playlist for the drive and queue up a bunch of music that hits a certain vibe, or 2) Old Faithful: we have between 8 and 15 artists or playlists that are regular defaults when we don’t have the energy to curate our music. As I rotely scrolled through my library of recent listens, selecting from the default set, I thought to myself: “I wonder what insane percentage of my Spotify consumption is Leon Bridges?” I have to believe I listen to him more than most Spotify users, and I realized that, only with the advent of streaming, this is actually a pretty valuable piece of information.

Concert ticketing, at least in the primary market (the first time a ticket is sold, as opposed to say Seatgeek or Stubhub), is still living in the stone age. Priority as to who gets early access to ticket sales is still rooted in ridiculous loyalty programs like “Amex presale.” In what way does being a gold or platnum card member have anything to do with whether I deserve to see my favorite artists? Artist level loyalty is still living in the age of email sign up forms to follow your favorite acts. Perhaps, if you are a registered fan, you get an email with an early invite code, but even those programs don’t seem particularly effective in getting the most loyal fans to the show.

But what if access to ticket sales was rooted in relative consumption of a given artists’ music across streaming platforms like Spotify, Apple Music, or Tidal. For fans, there are now objective metrics to demonstrate how loyal and dedicated a fan you are relative to others. You might even listen to a given artists more than you would otherwise in the name of jumping the ticket line. For artists, not only would you have more fun at shows playing to a sea of your most die hard fans as opposed to, say, your richest fans, but also you would introduce an incremental revenue boost to your standard concert monetization. You see, in the primary market, monetizing a concert presents a fixed upside, irregardless of demand for the tickets or who buys them. Your addressable revenue is: number of seats times x price per seat time x number of shows. The value of excess demand is captured largely by the secondary market, which on the surface, you don’t participate in. So how do you further monetize the tour? Well, if people know that listening to more of your music on streaming services gives them a better shot at tickets, you now have an uncapped increase in payouts from said services as your music is consumed more and more.

I think there’s real alignment in a listening based loyalty and ticketing strategy, and would love to see an independent company be the analytics and data provider to primary ticketing platforms, or to see any of the primary ticketing platforms leverage APIs from the streaming services to enable this type of presale. The big concern with a system like this would be people/brokers etc trying to game it, as they have every other angle of the ticketing market. I like the idea that there is a cost to gaming the system rooted in streaming subscription fees, and also that detection of unnatural listening patterns (i.e. one artist streamed 24 hours per day, 7 days a week) is within the realm of existing technology capabilities. There’s something very simple about the contract between an artist and a fan that says “if you listen to more of my music, I will hook you up with tickets, and we both win.” and that is a contract that could not be written in the age of CDs or even downloadable music.

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Airpods as the next platform, part three

Posted on June 5, 2019. Filed under: Uncategorized |

If you’ve been reading this blog, you know I think Airpods have a chance to be the next platform. There’s a lot of surface area at the application layer designing against this hardware edge, but I also have been thinking that it’s not just Airpods that are interesting, but rather the entire fabric of internet connected microphones that is permeating our space and society. It’s your Amazon Echo, Google Home, Apple Watch, the phone in your pocket that has the microphone on even though you don’t opt for it, the voice interface in your car, and your television, and if you squint you can see a world where there will be, if it hasn’t happened already, as many internet connected microphones as there are internet connected cameras. And if you think about the amount of value that’s been created on top of internet connected cameras, the voice and audio ecosystem is an incredibly compelling problem space.

So you might ask, what’s the most valuable position you could own in a world where there exists this dense fabric of internet connected microphones? I actually think the answer may be the identity layer. Not dissimilar from how Facebook began as an application and pushed down stack to a more infrastructural identity layer largely through Facebook auth, a similar opportunity exists in the voice ecosystem. Facebook auth made it so that you could show up at a website you’d never been to before, click a button, and get a personalized experience as a result. The same premise is going to be important in the voice ecosystem.

Currently, all the internet connected microphones we use contemplate a known user or set of users. You talk to YOUR watch, or YOUR airpods. Amazon Echo can already serve different results based on whether I or my wife is asking a question, but it’s still a known set of users. If you believe that voice is going to become an important, if not dominant way that we query the internet and our various services, it’s going to be necessary for me to be able to query my information and applications regardless of who owns the microphone with which I’m interacting (i.e the conference room mic in someone else’s office). That’s a non-trivial technical problem, and I’m guessing the implementation will require not just a voice ID, but multiple inputs (i.e. your voice AND the location of your phone, or a series of other unique/probabilistic identifiers). But it’s gonna matter.

The value of this identity layer is not lost on Apple and Amazon. Amazon already is distributing the Alexa OS via Samsung televisions, trying to spread out horizontally and attain this position. Google is doing the same, but seems less likely to win here without a novel/leading voice based hardware edge. And you ask, could a startup plausibly win the identity layer in this market. I think the answer is yes, although it would probably come in the form of a new hardware edge. But even if that doesn’t happen, the mere presence of an identity layer within the voice ecosystem is going to enable an entire class of applications that was not previously possible. Again, if you are building in the space, I’d love to talk and potentially invest (especially when you are ready to raise an A round): jordan.cooper@gmail.com

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Airpods as the next platform, Part deux

Posted on May 31, 2019. Filed under: Uncategorized |

A while ago i started developing a thesis on “AirPods as the next platform.” I wrote about it here. Core to that thesis were two new primitives that the hardware exposed on which developers could build applications not previously possible. Since posting, I’ve spoken with a number really creative founders who are designing and developing apps native to this new hardware edge. It’s an area where i am spending a fair amount of my investment energy.

I realized this week that in addition to “always on audio access” and an “always on microphone interface” there is potentially a 3rd new primitive afforded by the AirPod hardware edge that is worth talking about for a minute. I say potentially because I haven’t studied the constraints and capabilities of the underlying technology yet. Please correct me if you have and I’m wrong here, but…

I’ll call this third primitive “head position.” Before i get into head position, we need to acknowledge the technical specification that enables it. AirPods have a sensor in them called an accelerometer (actually they have 2 accelerometers, the one I’m interested in measures motion and the other is an assist on the microphone). Your iPhone and your Apple Watch and your Fitbit have this type of sensor as well. The motion accelerometer is one of two ways, along with a light sensor, that your AirPods know when you’ve put them in your ears, or more generally their orientation and movement through space.

If your AirPods can detect how they are moving through space, and they are in your ears as they are moving, for the first time developers can have a sense for a users head position at any moment. So who cares if your AirPods know your head position?

I do. Because with head position applications and users can start to ask “what am i looking at?” The current state of the art in this line of questioning is “what’s here?” And that is a question that Google Maps, Foursquare, Yelp and a myriad of other valuable applications try to help users answer. But…if you combine “head position” with off the shelf mapping data, for example, a user can now look at a place or a statue or anything else and ask the internet what it is without pressing a button or describing it or even taking her phone out of her pocket.

This is interesting because it’s a commonly suggested augmented reality use case that is largely expressed today through the interaction of a user holding their open camera in front of what they are looking at in order to ask the same question. The open camera UX, in my opinion, is clunky, obtrusive, and feels like more of a gimmick than a useful tool. So maybe that “what am i looking at” or “tell me more about what I’m looking at” AR use case will end up being more of an audio AR experience then a visual/camera based UX, and “head position”, enabled by AirPods as motion sensors attached to your dome, could be the primitive that unlocks it. I’m guessing this data isn’t exposed via an API yet, but when a billion people are walking around with AirPods in their ears all day, bet that it will be and developers and designers will build awesome native applications against it. As I’ve said before, if your building applications that are native to AirPods I’d love to think with you, especially as you look toward your Series A: Jordan.cooper@gmail.com

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Greatness at all costs

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

Last night we went to see Free Solo. For those who don’t know, it’s an incredible documentary that follows Alex Honnold as he prepares to and eventually does “free solo” the 3000 foot vertical rock formation El Capitan. Free soloing is when a climber, unassisted, scales the rock face without any ropes or protective measures in place. Ipso facto: one slip or missed hold and your dead. As the film makes clear, free solo repeatedly over successive attempts, and you will eventually die. Alex’s attempt represents by far the highest and most significant free solo climb in the history of the world.

Overall the film is inspiring. It chronicles the life, habits, and mind of someone practicing his craft at the very highest level. Many of the themes will be familiar to entrepreneurs and founders, especially around sacrifice and dedication and pursuit of greatness at literally all costs. In our world, mistakes cost money and time and reputation, but in Alex’s world a single mistake costs his life. It’s hard not to admire his dedication and ability, but there is also something pretty imbalanced about the way he prioritizes his pursuit relative to love and family and his life itself. I spent the better part of my 20’s skewing toward the balance that Alex strikes between these realms. Granted, the stakes were much, much, lower and I was not nearly as good at business/investing/founding as he is at rock climbing, but something about a guy living in a van for 7 years methodically training and studying to achieve his destiny reminded me of my mindset as I was searching to realize my potential.

You walk out of the film and think “well, that was incredible…and impossible without exactly that level of imbalanced obsession toward a singular craft and goal.” It’s a bittersweet feeling, knowing that it’s possible to achieve the impossible, but only if you’re wiling to give everything else up…you’re inspired, and refocussed, and connected to a very pure energy of ambition…and then you turn to your wife, look her in the eye, and realize you aren’t wiling to give everything up to do the same. Alex talks openly about being ok leaving his partner behind if he dies…but as you leave the theater and drop into whatever balance you’ve struck between all of your various pursuits and priorities, you realize you’re not ok sacrificing EVERYTHING…so what does it mean? Does it mean you won’t achieve greatness? Does it mean you won’t be the absolute best, but you can still be quite great while having some semblance of balance? I want to believe that it doesn’t mean either of those things. That sacrifice is a spectrum and not binary…that this film is a simple reminder that if you want to achieve your goals you better be comfortable sliding further towards imbalance than wherever you are on such a spectrum…I want to view this film as more of a kick in the ass than a mandate to sell all your shit, live in solitude, and do nothing but work and practice your craft all day every day. But I don’t know…maybe that’s delusional.

Personally, I didn’t walk into this film thinking I need a kick in the ass. I’m very motivated and dedicated and industrious in the pursuit of my goals…but I did leave longing for a bit of that almost manic imbalance that fueled an earlier version of myself.

Regardless of whether your a founder or an investor or anything else, if you have goals and want to understand the most extreme form of goal oriented behavior and mentality, I strongly recommend you see the film. It’s still in a few theaters, which I suggest you try to get to vs. on demand, as the film is a visually stunning look at Yosemite National Park as well.

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Hack Idea: ~Calendly for the self-aware

Posted on November 27, 2018. Filed under: Uncategorized |

I was scheduling a call this morning with my friend Greg via iMessage and something occurred to me. Normally I am scheduling in email, and I have a pretty routine flow for moving between my calendar and email and suggesting times, etc…but I guess b/c i was on my phone, and in iMessage which feels more natively mobile than Email, when it came time to suggest times, I toggled to my calendar and instead of picking a few times and messaging back, i just screenshotted my calendar, sent the screenshot in imessage, and asked if he was free when I was. It was very easy but I was worried it might be offensive. There is something about this action which evokes Calendly…and I’ve always hated Calendly and other scheduling tools that put the work of calendaring a meeting on the other person in an interaction. When someone tells me to pick a time on their Calendly my immediate (and maybe unfair) response is “what an asshole, do your own calendar work.” I was worried that the screenshot might have a similar feel, but there’s something about not making the recipient click through a link, select a time, input their email credentials, etc…that felt more lightweight and friendly and helpful. It felt like the lightest possible way to sync on calendars without using an overbuilt or presumptuous tool to do the job. I asked Greg if he liked being on the other side of it, or not, and he was a fan. I asked if he’d ever seen anyone else do that, and he said no. Neither have I. One reason why, might be trust and transparency. I know Greg really well and trust him without question. So him knowing who else I was meeting that day wasn’t a big deal. But I think this flow could benefit from a very light software build to mitigate this trust requirement. In it’s simplest form, I think the hack would be to build a native app that runs in the background and:

1) auths with your camera roll
2) detects screenshots
3) determines if screenshot is a calendar view (maybe clarafai API can do this easily as a service. it’s a trivial ML problem, no idea how plug and play they are)
4) blurs all text in calendar view
5) deletes non blurred version
5) saves blurred view back to camera roll

The user experience would be identical to the UX I had with Greg, except when selecting the screenshot from photos to share in iMessage or email or whatever, my selection would automatically be the blurred version.

I’m not sure if anyone else would value a simple tool like this that fits within your mobile workflow and let’s you continue to schedule in your preferred channels with a light enhancement of a screenshot for availability, but if you want to do a little hack with (or without me), I’m up to put a little elbow grease in or at least test/use it if you build it without me. jordan.cooper@gmail.com.

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Juuled in the face? maybe here’s why

Posted on October 10, 2018. Filed under: Uncategorized |

I am not exaggerating when I say that I get Juuled in the face every single day walking around New York City. For those that don’t know, Juul is the most popular vaping device in the country. The company recently raised money from fancy investors like Tiger Global at a reported $15B valuation, reflecting it’s explosive growth over the last few years. I’ve read the statistics…last year 11% of high schoolers vaped. This year north of 20%…but even still, when I walk around New York I find myself wondering if it’s possible that THIS MANY more people are inhaling nicotine than pre-Juul days.

Last night, as I dodged a plume of mist coming at me on my walk to the grocery store, I realized the moment of the act was not a typical smoking moment. It was a transitional moment…a guy was stopped at a crosswalk, reached into his pocket, took a single hit from his Juul, and then put it away and crossed the street. It was a moment that a non-vaper who, like all of us, is addicted to the phone, would have pulled out a device and thoughtlessly checked some notification or feed.

When you light a cigarette, there’s a commitment to the minute or two that you will dedicate to enjoying it/feeding your addiction. You have to take out your lighter, stop to light it, and then be in a situation where you know you’re going to have time to finish smoking it. It’s intentional. Juul, I believe, has changed that paradigm…there’s no commitment in taking a sip form your vape…and as such, I feel like Juul has increased the addressable market of moments that a user can consume nicotine. It’s broken the core unit of nicotine consumption down into a smaller size, that fits in everywhere, and in this low friction model, people are consuming it in a way that’s closer to phone consumption than cigarette consumption.

So as I walk down the street…yes…there are more people vaping than there have been smoking in a long time, but also, the volume and frequency with which they are doing so, I would bet, is increasing…many more acts because the friction is lower to engage…When Twitter reduced the size of a public expression from 3 paragraphs for a blog post, to 140 characters for a tweet, they removed significant friction from the act of publishing. The effect was a significant increase in the number of people publicly “speaking” and also an increase in the frequency with which they published. I fear that Juul has done the same thing for smoking…

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On Equal Partnership

Posted on September 30, 2018. Filed under: Uncategorized |

1992 USA Basketball “Dream Team”

I’ve had a lot of discussion recently about the concept of equal partnership in a venture firm. Most venture firms you have heard of are NOT equal partnerships. There are degrees of partners, uneven economics, small groups within larger groups that suck up excess fees and carried interest, and bright distinctions as to which partners do and do not control the firm. These inequities lead to politics and over a long enough arc tend to be cancerous.

Benchmark Capital is the most visible example of a firm who insists on equality in their partnership. Whether you just got there or you’ve been there forever, if your a GP you are equal. In some ways this is counterintuitive. Most compensation and responsibility in an organization tends to flow to the people who got there first or who have been there the longest. In startups, for example, founders keep most of the equity for themselves and the nth executive, irrespective of their impact and responsibility, is granted a fraction of what a founder grant would look like. There’s been a fair amount of ink spilled about the misalignment this causes in startups, but this is not a post about that.

I understand why the partners who have their name on the door at venture capital firm xyz don’t cede their power and economics to the rest of the GP, but to me this is not the way to build an enduring and leading firm. A venture firm wins if it’s able to attract and retain the best talent in perpetuity. An uneven partnership, by definition, creates a ceiling on the new talent you can attract to your platform. Sure, with a fancy brand and a bunch of money, you can get good people to come work “with you” but where the rubber hits the road, actually “for you.” But you’re never gonna get the BEST people with that architecture. And even if you do manage to trick the best talent into your hierarchal structure, as their success unfolds, good luck retaining them in anything other than an equal structure.

Beyond talent attraction/retention, an equal partnership is a choice to practice venture capital as a team. It’s a structure that creates alignment to work as a group and offer the full resource of the firm to any founder in the portfolio, regardless of who holds her board seat. Not everyone in venture capital is collaborative, or likes to work as a team. A common criticism of even some of the best firms, is that they are a loose federation of individual practitioners sharing a brand and capital base. I think on this axis, it’s different strokes for different folks, but if you don’t believe you can be greater than the sum of your parts as a GP, than your working with the wrong people.

There’s short term orientation and long term orientation when it comes to building a firm. If you are a founding GP who’s in it for the next 10 years, wants to pull out $100M and go sail around on your yacht, you’re not going to strive for equality within your firm. You’re gonna suck up the economics as much as possible and leave whoever is left when you’re gone holding the bag of tier 2 or 3 talent you leave behind. But if you’re a 30 something who wants to spend the next 30+ years building the firm where you end your career, and if you aspire to have your firm endure even beyond your tenure, I believe equality is a requirement.

Lastly, if you’re a founder thinking about with whom to partner, selecting a GP from an equal partnership is advantageous. There are politics in every firm, but if you want to minimize the likelihood that internal firm politics will adversely affect you and your company, choosing a firm that is most aligned is the way to go. Even beyond the politics risk, when a firm tells you everyone in the partnership is there to help you succeed, that’s way more believable when they are economically and emotionally compensated to behave that way.

I think I’ve always held these beliefs about how to build a winning firm, but the more I think about it and talk about it, the more I believe in the power of an equal partnership. If you get the people in that structure right, there’s no reason to be greedy or controlling…everything that you want will organically follow.

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Welcome to crypto, here are the only 10 things worth working on

Posted on September 17, 2018. Filed under: Uncategorized |

Lately I’ve been thinking about a subtle but apparent change in the blockchain world that kind of bums me out. Go back 2 or 3 years, the amount of technical talent that was learning and building in the space was small, but the breadth of systems and projects they were exploring was vast. Because nobody “knew” anything, and the market of thought leaders and investors hadn’t anointed any particular class of project as viable are particularly of merit, there was an intoxicating creativity in system design as people explored newfound primitives afforded by the underlying technology, and dreamt up networks or platforms that they could, for the first time, design with them. I absolutely loved this phase. Not everything people were building made sense, but the aperture was wide on what was worth trying.

Fast forward to today, the amount of technical talent pouring into the space is amazing and deeply encouraging, but I fear the diversity and creativity of what they are aspiring to build has narrowed and plateaued. More people for sure, but they’re zeroing in and directing their energy to a handful of known classes of project or system, as opposed to experimenting with something brand new.

Loud and influential thought leaders and investors have declared that “somebody will build the winning stablecoin” and somebody will build the “winning money coin”, and the “winning privacy coin,” and the “winning smart contract platform” and the winning “decentralized exchange”, and “decentralized derivatives platform”, and “prime broker”, and “interoperability platform”, and “security token platform” etc…and that when they do…that thing will be valuable and important. Developers and system designers that are coming up the curve, who are passionate about building something in the space, seem to choose one of these known classes (and by the way vear away from say the dreaded “utility token”) because somebody else has looked into the future for them and told them if they can just build xx, it will matter.

I’m of the opinion that the classes of project or system that will end up being important have largely not been surfaced yet. It’s too early to anoint any crypto use case as “true” or “viable,” and I kind of miss the wider aperture we had when people were just trying to experiment and figure out what was possible. I’m not saying the anointed areas of interest aren’t worth working on…in fact I think most of them are…I just have this sense that there are more primitives to surface and more classes of project to define, and I’d like to talk to the people who are doing that work. The nth more scalable smart contract platform is getting a little boring. If you’re doing novel work or trying something weird that people aren’t yet talking about as worthwhile or interesting, I’d love to learn about it. jordan.cooper@gmail.com

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

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

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

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

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

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

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

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

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

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

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

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

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Chasing a Perfect Storm

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

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

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

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

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

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

Exciting times!

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On $80M Series A rounds…

Posted on July 11, 2018. Filed under: Uncategorized |

I read Dan Primack’s term sheet email most days. Increasingly I read things like “xx startup raised $80M Series A” and I’ve been trying to make sense of it. I am an early stage investor. I love the beginning and I love thinking about the future with people in their first years of building and testing and learning. When I started working in venture capital in 2006, the standard high profile Series A deal was $3-5M, split between two well regarded firms. A competitive seed round in 2008 was $500-700K at $4 or $5 Pre. Obviously, things have changed. I’m not the first to suggest that constraints and sobriety yield success in the nascent stages of development. USV and others have been singing that song forever, and I tend to agree. I’ve also lived raising $10M when I should have raised $3M and I’ve seen what happens when the money gets ahead of the stage of development. I think the purest early stage investor in me believes that less is more and the discipline that comes with is healthy, but the market is the market, and a founder rightly questions this position. “Why would I raise $5M when for the same dilution I could raise $10M?” There are some arguments around valuations getting ahead of you, and down rounds, and limited outcome options when you do this, but if you are upside thinking, the $10M is attractive. Extrapolate that out, and the $30M, $50M, $80M war chest at onset can also be attractive.

Increasing fund sizes for early stage investors is driving this early stage round bloat. Most marquee firms are raising $1 Billion+ funds now and a $10M early stage check from a % of fund standpoint, economically feels to them like writing $3-5M in a past company in a past smaller fund at the same stage of development. Yes, the outcomes might be increasing in size, and this behavior might be justifiable both for scaled firms and aggressive entrepreneurs, but it leaves me wondering if and how you can play the purist, sober game while everyone else is buying into the creep.

If you have been in venture for a while, you know that these dynamics move in cycles as opposed to straight lines. Normal 5 years ago, isn’t normal today, and what’s normal today won’t be normal 5 years from now. It’s not clear to me when the market is getting ahead of itself on the risk/reward curve whether or not holding the line on what you know is healthy and normal is the right approach or not. There’s an argument that you have to invest through all stages in the cycle and a smaller check size product is “off market” in today’s terms. And there’s an argument for not chasing the inflated financings, staying disciplined, slowing down if need be, and allowing for self selection in the founders and companies with whom you work. i don’t think there’s a right answer to this question, but a $50M or $80M Series A round is something I want no part of. I don’t care if Softbank, or A16Z, or whoever else does…

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Team Design

Posted on May 10, 2018. Filed under: Uncategorized |

I don’t hear people talk about building a team as a design problem, but I think it is. It’s not just butts in seats for sure, but it’s more than that. When i design teams, I tend to look at each candidate as a specific shape. The challenge is to design a group where all the shapes fit together and align with the goals and strategy for the group. I think this concept often gets simplified into “culture fit” but I don’t think culture is a homogenous constant…rather I see it as an amalgamation of individual personalities and aptitudes. Something I’ve come to realize is that there is more than one construction of shapes that get you to your desired end state. I’ve learned not to be attached to an initial design, to assemble one piece at a team, and then evolve the design as the shapes come together. I try to anticipate a few moves ahead. I ask myself, is this a shape that fits well with many other shapes, or is it a “pointy shape” that fits with a much smaller set. Ideally, I try to sequence the pieces so that flexible shapes come in first, and pointy shapes later. Both can be hugely valuable, but adding pointy shapes at the beginning limits the pool of subsequent additions. Pointy shapes don’t feel foundational to me, and a strong foundation is everything when attracting the right talent to accomplish something special.

I love the design challenge of building early teams. It doesn’t feel like recruiting to me. It feels like searching for puzzle pieces that fit together. When working on a puzzle, I always start by sifting through the entire box and finding the four corners. That’s my foundation. Yes, I’ll sort a bit and start to group things as I see them, but I won’t start assembling anything until I’ve got the corners. They orient you. After the corners come the border, which further solidifies the foundation of all future work. From there, you can work on different pieces of the puzzle simultaneously…make progress, but not become attached to finding a specific piece for a specific section at a specific time. I’ve come to realize that designing a team is fluid. When you become attached to a specific construction or a specific outcome the design challenge becomes intractable.

Actually, as I think about it, I feel like the design challenge looks more like taking two puzzles, mixing up all the pieces, and then trying to complete one of them from the combined set. No matter how beautiful, not every piece is going to be right for the puzzle at hand. Sometimes you have to sift through both boxes, recognize a piece, see that it’s attractive or high value, but be ok if it’s from a puzzle you may or may not get to once you complete the one at hand.

Sometimes it can be emotional, finding a corner and realizing it’s from the wrong puzzle, but life is long and orienting outside of your immediate focus is valuable too. Building teams is a career long pursuit. You will or won’t get to the puzzle that needs that corner, but it’s good to know where corners are independent of which one your working on.

I think it takes practice to see people’s true shape and extrapolate out what they and you together are capable of. That’s experience and craft and is tough to learn without seeing a lot…but when you get over the hurdle, it’s like turning the light on after you’ve been working in the dark.

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Amazing people

Posted on April 25, 2018. Filed under: Uncategorized |

Yesterday I went for a run on the west side highway with my wife Olivia. For those of you who don’t live in New York, the running path along the west side highway is on the Hudson River and there’s a beautiful park that goes from the tip of manhattan up to the George Washington Bridge. I’d guess hundreds of thousands of people run or walk or cycle there everyday.

As we were making our way south on yesterday’s run, a cyclist started riding alongside us as we ran, and he looked over to my wife and said “you are an amazing person.” She was taken back for a moment, and then we realized he had been riding behind us for a while and then it made sense. You see, when we run along the river, my wife will break off from our pace whenever she sees a piece of plastic or an empty water bottle…she’ll swoop down and pick up someone else’s garbage and run with it until we pass a trash can where she disposes of it and catches back up with me.

Olivia is a student of sustainability. She cares deeply about the health of our environment, and the thought of more plastic washing into the ocean is just too much for her to stomach…so she cleans it up…every time…without hesitation. Sometimes I wonder why I don’t help her…the answer is partly because my vision isn’t as good as hers, so she always spots the plastic first and zips off to get it, and partly it’s because while she is focussed on the well being of the planet and all beings that inhabit it, I’m in my head, thinking about whatever is going on in my life or my work…and I just am not conscious of it until she disappears from my side and reappears with someone else’s crumpled starbucks cup in her hand.

My wife is selfless. I interact with amazing people all day long. We all revere the people who found Ethereum or run Amazon as incredible…unique…one of one type people…but amazing comes in many forms…and I agree with the cyclist…my wife is unusual and unique and absolutely an amazing person. Somewhere along the way Olivia’s selflessness became so routine that I normalized it…that’s just who she is…but this unusual interaction with the cyclist on the path reminded me just how unusual and one of one and incredible she is. I guess you could say I’m married to the Jeff Bezos of selflessness…and I’m pretty proud of that 🙂

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Is this bear ever gonna hibernate?

Posted on April 19, 2018. Filed under: Uncategorized |

I had a beer last night with a friend who has been instrumental in the formation of a number of well known blockchain protocols, and he asked me a question that I thought worth writing about. He basically said that we’ve been in a bear market for 4 or 5 months, and it reminds him of other bear markets in crypto (i.e. 2014-2016), and he was wondering if I thought this would be a similar duration to the prior, or if mainstream investors would buoy the aggregate market cap of crypto in the near term. My response, was that, despite recent runs, it feels to me like all participants in the ecosystem that are focussed on the here and now, have pulled back and will stay on the sidelines until some other catalyst pulls them back in. I don’t think the droves of new Coinbase and Robinhood users are going to take the price of Bitcoin from $8200 to $20,000. I also think that most of the crypto hedge funds that spun up opportunistically to capture LP demand are here and now focussed, losing money, and have pulled back in a similar way. I don’t see these cryptofunds driving the market into a bull scenario either.

So here and now thinkers have their foot closer to the break than the gas, but engineers, and builders, and venture capitalists in the business of investing on a 10 year time horizon are still flooring it…even more so than 6 months ago. This is almost certainly a more healthy dynamic for a nascent technology and ecosystem, and the investments that these longer time horizon participants are making, be they labor or capital investments, are undoubtedly going to grow the total value of this space on a 5-10 year timescale.

I think the here and now thinkers trying to time the next run should be looking more to institutional inflows to reverse a bear market…which is not a new idea. There has long been the narrative than institutional money is coming in as soon as custody and some other surrounding infrastructure problems are solved, and I think it was largely posited that those inflows would accrue to “large market cap” coins like Bitcoin and Ethereum. In practice, I think that shape of institutional money is still largely on the sidelines, while venture capital institutions represent the most significant institutional inflows to the space so far. Interestingly, venture capital is not flowing to large market cap coins because it’s very difficult to persuade LPs that venture managers are or should be in the business of buying public securities (or public non-securities depending on where you net out from a regulatory standpoint). Every top tier VC just got finished convincing LPs to let them buy tokens instead of equity, but surely they still must be in the business of proprietary access and early deal making. That requirement to “buy privately” and a requirement for funds ranging in size form $300M-$2B to put enough capital to work in any given investment to “move the needle”, has led to a clear bubble in what I’d call the “2nd presale” where hot projects are raising tens to hundreds of millions of dollars pre-float, at valuations that have not yet reconciled with the recent haircut in publicly traded tokens. Going forward, I expect these venture inflows to get more sophisticated and confident in how and where they build their ownership positions. I think the “2nd presale” will cool meaningfully and it’s likely that venture capital will accrue to publicly traded tokens going forward…it’s just not happening yet (with a few exceptions).

So I think that redistribution of institutional venture capital out of the private bubble and into a forward rationalized public market, if not already rationalized, coupled with the sovereign fund, pension fund, endowment type inflows that have long been posited, is the most likely path to the next bull market, at which point, as always, retail and mainstream investors will follow and amplify the run, and I have no idea on what timeframe that happens, but it feels at least a year out from now. X factors like geopolitical instability, public equity market corrections, government currency manipulation, and the like, I think are also reasonable candidates to catalyze another run, but it’s pretty hard to count on those events.

I am not a here and now investor, I’m not in it for a quick buck, I don’t actively trade crypto, and I have an incomplete view of the wall st side of this market, so take all this with a grain of salt, but high level it does appear to me that the right long term human and financial capital is flowing deeply into the crypto ecosystem, and therefore on some longer time frame, meaningful value is going to come out the other side. I would not want to be in the business of giving my LPs near term exposure to this space, because you are a genius one year and a complete flop the next, but I feel pretty good about assembling the right 5-10 year exposure. That’s how I’ve allocated my personal capital and it’s how I’d do it for others if they asked me to.

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Society is Breaking

Posted on April 11, 2018. Filed under: Uncategorized |

This is a disorienting moment where society is reeling to adjust to significant contextual changes to the way things have been. Change happens all the time, driven by technology and regulation and capital markets and media and a host of other factors, but it doesn’t always happen at a layer that is fundamental to our concepts of self and reality. There are many implications of having a completely networked society, where information flows quickly and to far reaches, but perhaps the most salient is that we are not equipped to process the volume and velocity of what is coming at us today. That’s a narrative that you’ve heard for a number of years, as expressed by such concepts as internet addiction, but perhaps less talked about is our inability to process the transparency that comes with this data-abundent reality. It used to be that there was a set of things or premises that we could simply accept or take for granted, and another set that we knew were variable or in flux or unknown. With the base of what we could take for granted, the variable was processable to degrees. Today, however, people are reeling, in large part, because almost everything that we were blissfully ignorant to accept as true, is now in question. Everything is variable. There is no truth. And if there is no truth, certainly we can’t have a foundation of premises and beliefs that are static enough to process the variable. We can’t take it at face value that the government is stable. We can’t take it at face value that a publicly trusted figure is trustworthy. We can’t take it at face value that an article or an image or anything is as it seems. Everything is degrees of probability now. We see the bubbles we live in more clearly. We are aware of confirmation bias, what’s on the otherside of it, and increasingly the data and truths of that other side, and we can’t say for sure that things are the way they are anymore. These changes to how we see and understand the world are very low down in the stack. So many upstack systems, and social structures, and infrastructural elements, and applications, and products and services, are rooted in the notion that there is truth and that what most people believe to be true is…and when that belief is called into question or breaks, everything upstack breaks with it. I think this is the most disorienting moment in my 36 years on earth. I think we are all more disoriented than we even realize, and I think we are increasingly numbing this disorientation with pictures of our friends vacations and babies (and even those we are starting to understand don’t represent the truth of their lives). The good news is society tends to respond and reshape around big changes in context. It’s incredibly painful to those who lived in the old and now must transition to the new, but the out generations will develop different upstack systems to reflect the ambiguity and multifaceted nature of truth. As I watched the Zuckerberg senate hearing yesterday, all I could think about was this new reality, and how much people are suffering as they are forced to question that which they thought true. The upshot is that when systems break, and society responds, value tends to transfer from the incumbents of the old reality to the native products and companies of the new reality…and that’s a good thing for founders and entrepreneurs…if that’s any consolation.

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Hack: Ethereum vs. the NRA

Posted on February 23, 2018. Filed under: Uncategorized |

So I’ve been obsessed with this idea of distributed lobbying on the blockchain. Basically, I think it’s bullshit that the top 50 companies in the US have an efficient way to put capital against influencing legislation and judicial outcomes, but we as a self organized and distributed population of individuals don’t have an equal ability. We can protest (now more effectively than ever as a result of communication tools like Facebook and encrypted messaging apps that let us self organize), we can vote, we can speak (now louder than ever as a result of communication tools like Twitter that help us self organize our voice), but money talks…and we as a group don’t have an efficient tool for self organizing our capital to push against the organizing forces in our country. I’ve seen more money pooled in the crypto space around theoretical projects than the entire pharmaceutical industry, oil and gas industry, etc…spend through lobbying in a year. It’s doable to exert force against legislation if we can create a trust model that allows us to self organize our capital. Here’s an experiment I’ve decided to run in this vein:

put whatever amount of eth you want to use to fight the NRA into this address 0x33Bd9F7419296a4400F81057b59EA054474C3CCC (anybody can audit the amount of funds and changes in account balance via https://etherscan.io/address/0x33bd9f7419296a4400f81057b59ea054474c3ccc).

It’s not a donation. It’s not an investment. It’s not a pledge. It’s something inbetween the three. It’s a decision to financially join a collective that is alligned around impact and economics.

As the administrator of this collective, i promise to deploy the capital to further the fight against the NRA. I don’t know yet all of the most efficient channels but likely candidates include: independent lobbyists, lobbying firms, direct campaign contributions, surrounding awareness campaigns, and whatever other channels help to translate capital into political and legislative influence.

I promise to report to you how and when i allocate the money.

I will use a private telegram group as the primary channel for reporting and being accountable to you and also for hosting a dialogue and planning forum amongst our community of contributors. This is how we will organize collective thought and action, but ultimately it will be my job to listen to the community and act in our shared interest when deploying capital.

i promise to send you back your % of the remaining capital at any time if you are unhappy with the way i’m deploying it. If you put in $100 worth of eth and decide 6 months later that i’m doing a bad job advancing our cause, if in that time the pool has spent 20% of the capital raised, you can walk way with your remaining $80. If you are happy with our work, keep your money in and help to grow the collective by recruiting like-minded others and their capital

I wish i could make a bonding curve for this pool such that the order that you send eth in will determine the % of the total pool you can take out in a way that financially rewards early participation and support of a growing movement, but I can’t administratively handle that just socially hacking on an eth wallet. As a hack to this, i am going to take 5% of all eth sent in and put it into a bonus pool, and on a discretionary basis dole it out to the earliest and most meaningful supporters of the project as defined by the amount and date they put in, their actions in growing the capital base, their ideas and actions in the private telegram channel, etc. I will report all bonus transactions with links to such transactions in the public telegram group. Basically if you are responsible for increasing the impact of this pool in combatting the NRA, you have some claim to the bonus pool and I’ll do my best to recognize contributions fairly and administer it accordingly.

To participate, send eth to this address and then immediately email jordan.cooper@gmail.com with the public address you sent it from (and if you are sending from Coinbase, also the amount of your contribution b/c public addy gets obscured in the transaction). your email must be timestamped ahead of the block that your transaction shows up on so as to prevent false claims. I will reply with confirmation and a link to join the telegram group. If you don’t want to claim your contribution with your identity, that’s cool but you’ll forgo your ability to redeem your contribution or earn any of the bonus pool. Basically, in the absence of being able to codify this rule set at the smart contract level, i’m using communication tools like email and telegram to handle redemption requests and other messages btwn you the contributor and me the administrator.

you shouldn’t have to take counterparty risk in this agreement, but this is a hack

you shouldn’t have to trust me to do the right thing, but this is a hack. for this experiment you can use my online reputation, my decade of writing on this blog with a deep focus on ethics, and whatever social cred I’ve earned in the technology community and calibrate the risk of me being a fraud as an input into your decision to contribute.

you shouldn’t have to trust my discretion and bonus pool mechanic but this is a hack. the size and vintage of your economic support should dictate your claim to an outsized portion of the pool upon exit, independent of my judgement. If discretion or judgement is needed to quantify non-economic contributions to our collective goal (i.e. referrals, awareness, etc), we should have governance to make those allocations together, or at least you should have recourse to remove me if I’m not fair…but this is a hack.

but there’s no generalized platform or smart contracts available to help me administer this experiment without trust and hacks. I want that platform. it’s why i’m doing this experiment. I care about fighting the NRA. you care about electric vehicle tax credits, someone else cares about animal rights legislation…every cause, whether socially, economically, or some combination therein motivated, deserves the ability to harness self organized capital as a tool to advance it’s political agenda. the 50 biggest companies in the US do this all the time via lobbying to the tune of hundreds of millions of dollars per year…democracy talks when electing officials, but unfortunately money talks when it comes down to votes. if we are to achieve collective economic force in a truly distributed and self organized way, the trust model between contributors of capital (aka a constituency) and the administrator(s) of that capital needs to evolve. We need to redefine concepts of decision making, accountability, recourse, and even economic gain associated with such efforts, and the blockchain is a perfect place to do that.

So consider this a campaign to fight the NRA w our collective ETH

Consider this a commitment on my part to put time and energy into efficiently deploying our collective capital

Consider this an experiment, or proof of concept, or proof of need for a more generalized framework for self organizing our capital as a tool of force (with a true and honest recognition that you cannot decouple the concepts of profit/wealth and capital regardless of it existing in a social or political context)

Consider this a call to design and build the generalized and trustless version of this experiment that will enable anyone, regardless of their reputation or social reach, to harness the capital of a widely distributed community or constituency and both ask for and earn the right to point it at the political institutions both government and surrounding, that shape legislation, judicial decisions, and as a result the way our society operates and is organized. I’l happily invest in you to work on this problem and help you design it and build it: jordan.cooper@gmail.com

I’ll start by putting in $5000 worth of eth. To be very transparent: Although philosophically I believe it’s a stronger design if I am eligible for the bonus pool that I will be administering, I commit to not pay myself from the bonus pool for hygiene and simplicity in this experiment. I say it’s a stronger design because part of the point of redefining how we self-organize capital via the blockchain is to explore new points of optimization btwn things like impact and wealth creation to create “organizations” or “collectives” that look different than the way we organize work and capital today. In doing so, if we find the right ones, we have the potential to draw in more work, better people, more capital, thereby leveling the playing field when competing against the existing organizing forces of private enterprise and government institutions that currently shape our society and day to day. So yea, if my contribution is the biggest and the first and this effort grows in size and scope and impact and capital raised, I should stand to profit along the way…by design. In practice, again, I won’t allocate any of the bonus pool to myself, but I don’t expect that people using the generalized form of this experiment (i.e. organizers/administrators) would or should recuse themselves from the economic upside of a successful campaign or movement.

1) I think I have a sense for the amount of effort that will go into running this experiment, processing transactions and administering our capital in a way that is impactful, but if it turns out to be a massive effort i reserve the right to send you your ETH back at my discretion, or whatever portion of it the collective hasn’t spent.
2) I have a pretty in depth understanding of the security and custodial mechanics of crypto and will adhere to best possible practices…but I reserve the right to apologize with no further recourse if something bad happens…

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Bubble-Gazing in San Francisco this Winter

Posted on January 2, 2018. Filed under: Uncategorized |

In 48 hours my wife and I are headed to the Bay Area for the winter. New York is just getting frigid in a way that makes your body clench up the minute you step outside, and everybody is walking around in a post New Years haze that will turn to hustle in a day or two. In California, our Airbnb is starting to amass parcels for things that were cheaper to buy again and ship for free through Amazon as opposed to box and ship across the country ourselves. My attention has been focussed on logistics ranging from getting our car and our dog across the country to rerouting my Soylent and New York Times subscriptions to our new address…so much so that I haven’t really has a chance to reflect on what I hope to accomplish once we’re there.

A lot of people have asked if we are going to stay in California permanently. My answer is “no”…Olivia’s answer is “i’d be up for it.” Last time I lived in San Francisco was a 4 month stint that I had to do when we sold Hyperpublic to Groupon. I didn’t have a great time then…but I guess it was also a time of pretty extreme transition for me, and maybe not representative of where we are today.

Olivia and I spend a ton of time in the car, driving to nature where we can hike with our dog and be outdoors. Part of our decision to live in Marin was to test out a chapter of life living in a house with a yard close to nature, vs an apartment in the heart of one of the busiest cities in the world. I think we are happy when we can get outdoors easily, and living 10 minutes from the Tennessee Valley Trailhead is going to be awesome. We spent a bunch of time this past year looking at places an hour outside of new york that would give us this kind of live in nature / work in the city setup, but ultimately decided we weren’t ready to make the move…so maybe this is some kind of trial run. I plan to find an office somewhere in downtown SF and commute to work by ferry ~4 days a week which i think will be fun and different.

I have a mix of excitement and anxiety around professional pursuits out west. I think subconsciously I wanted to experience life in the Bay Area during a proper bubble, and I’m both looking forward to and terrified to touch that energy in a space I’ve developed a real understanding of over the past two years. I get hints of the SF cryptomania via media and some geographically distributed Telegram groups that I’m in, but something tells me that no matter what else I accomplish, hanging out in the valley during bubble time will be educational in the context of the next 30 or 40 years of my venture capital life. Call it forensic tourism…

Bubble-gazing aside, I’m looking forward to spending real in person time with a bunch of people with whom I typically only get to see via spotty google hangouts or the occasional “i’m in town lunch or tea.” Some of the people I respect most live in and work in SF, and I’m excited about seeing them more often, while also getting to know new folks. I’ve been investing pretty actively in blockchain protocols and projects over the past few years, and I’ll be dedicating a lot of my time to angel investing in local projects while out in SF. I don’t claim to be an expert here, but I am and have been a dedicated student and would be glad to help think through early protocol and application designs where I can be helpful (jordan.cooper@gmail.com).

Beyond closer collaboration with my west coast friends, I’m excited to diversify my dataset a bit, learn what non-blockchain focussed investors and founders are passionate about, and generally I’m excited to hear some versions of the future that people are trying to make happen that have nothing to do with decentralization, cryptocurrencies, and the like. I do think hanging out in SF is giving up a bit of the inspiration that comes from New York’s diversity, but in the absence of that energy, hopefully I can diversify a bit within the technology and ideas I’m living and breathing day to day.

Crypto Club meetings in New York are on a bit of a hiatus given our normal Washington Sq Park venue is freezing cold at the moment, but the conversation has ported nicely to Telegram which should hold our reading group over until Spring. For those that don’t know, Crypto Club is a whitepaper reading group, where anybody can attend as long as they commit to reading an entire whitepaper or two and coming with questions and thoughts for the group. It’s been an important part of my learning in the space and a nice way to find community and share thoughts with one another over the past few years. I think we’ll do a Crypto Club lunch every few weeks this winter in SF (jordan.cooper@gmail.com if your not yet on the west coast list).

Overall, if we can get some good nature in with our dog, find intellectual fulfillment and close collaborators, make it up to Tahoe once or twice, and eat some good Mexican food I think the winter in Marin will be a success. Now to go knocking on doors in my building to see who’s kids are willing to keep our plants alive while we’re gone…

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What Wall St Wants

Posted on December 14, 2017. Filed under: Uncategorized |

Earlier today someone who I frequently invest alongside and think with in the blockchain world told me about a company he talked to that makes it easier for wall street to participate in the crypto markets. If you’ve been paying attention, “the herd is coming,” and there is no shortage of friction or nascent solutions between here and it’s arrival. Hedge funds, pension funds, endowments, etc. all have an interest in owning cryptocurrency, but the infrastructure that enables them to do so in a familiar, comfortable and compliant way doesn’t totally exist yet. Their frustration and demands are becoming a louder voice in the crypto world.

So there’s this narrative around Bitcoin, and the next pick your number of “alternative currencies,” which goes something like “unlike other bubbles where institutions got in first, in crypto retail investors got in first, and it’s not the taxi driver who’s coming in next to really drive up the price, but rather the fancy institutional money…and when they come in…and when all these surrounding services and products enable ‘an institutional way of doing things’ the floodgates will open, incredible buy side volume will follow, and all the early nerds and retail investors who listened to their family’s nerd at Thanksgiving, will be rewarded handsomely.”

I don’t take issue with this narrative…from the hedge funds and endowments I’ve talked to, it’s true…whether or not this dynamic is already priced into the market or not is debatable, but there’s no question that greasing the skids for large pools of professionally managed money to enter the crypto market will be good for early holders. What I do take issue with is the distraction…the capital markets are a necessary and valuable actor in a number of the novel systems being built on the blockchain…they enable shortcuts to liquid networks, a point of exchange for value accrued in a system applied to debts owed outside of the system, and you don’t get a lot of the most interesting coin governed systems without hooking the networks’ unit of value up to the secondary market where these institutions can buy their piece of the future your building…but I see very talented people increasingly viewing wall street as their user or customer, and letting wall st’s voice influence what within the blockchain ecosystem they choose to build or spend time on.

The premise that you could design a network that organizes people or businesses into a behavior that wasn’t possible without the blockchain, and that you could get rich doing it by owning the coin which governs it, seems to be slipping in expected value relative to designing the service that let’s the billions of dollars at Blackrock or Point72 buy top 20 market cap coins efficiently and without regulatory or LP headaches. Don’t get me wrong, I love bitcoin and think there are a lot of important reasons why these pools of capital will strengthen the likelihood that it achieves it’s ultimate destiny, whatever version of it’s destiny you choose to believe, but I think the much more interesting picks and shovels work, in the future that I want to see, will be done by projects that contemplate developers and individuals, as opposed to financial institutions, as their user…i feel like the ethos that attracted me to the blockchain was this energy around bottom up self organization…and a redistribution of power from those that held it to all beneath them…and now we are falling all over ourselves for Goldman Sachs or Tiger Global to come hang out with us.

It’s hard not to get sucked into the solutions that bring wall st to crypto…the near term economic opportunity, especially in a bull market such as this, are undeniable…but from a venture perspective, investing in these slivers of institutional grease feels largely like investing in optimizations as opposed to revolutions in a moment where revolutions are surely being built…or at least gestating in the minds of those that could give two shits about what Lloyd Blankfein thinks of their work.

I am guilty of the same greed as everyone else…i want the institutional volume, i want the money…but if that narrative comes true…and it seems it might…it will be to the benefit of work I did years ago…and not work that I am doing right now and going forward. There is more out there to be discovered…brand new economies to be formed…new jobs to be created…new social structures, work structures, software structures…and yes economic structures…that will be attractive to wall street by virtue of their merit, and not FOMO or easy arb opportunities as they exploit the seems of a nascent market that hasn’t been abused, and therefor hardened, as badly as public equities or the like.

Refreshing coinmarketcap every 10 minutes is not making progress. Watching the talking head on CNBC call BTC $100K per coin is not making progress…and building the products and services that enable the herd to get here quicker doesn’t feel much like progress either…not in the context of what’s actually being built behind the 3 letter tickers and 30% daily swings that everyone is so fucking obsessed with right now. The frenzy and the fast money is distracting us from what is possible…

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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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