Net Neutrality

Enough people asking what I think of net neutrality so I will attempt to answer, but warning, I do not have a clean and simple answer!

I think the permissionless innovation, nondiscriminatory nature of Internet is of critical importance and must be maintained or strengthened. I also think telco/cable companies need incentives to build far more/better net infrastructure than we have now and be able to make money on it. Due to the economics of network businesses, I think these are extremely difficult principles to reconcile and I don’t envy the regulators.

I further worry about the simplistic and politicized nature of much of the debate, which I think is not conducive to navigating complexity. And I further still worry about the sausage-making of any regulatory process and the likelihood of unanticipated and undesirable outcomes.

And generally, I try to spend my time trying to figure out how to bring more/better/faster Internet to more people in new/different ways.

Source Tweets: 1,2,3,4,5,6,7

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Next Generation Movie Theaters

Next generation movie theaters could be so much better, charge a premium and dominate financially (like ArcLight Hollywood).

Convenience: Reserved seating, valet parking, warm embrace of Lyft and Uber including ride-pooling, on-site daycare.

Experience: No commercials before movie; super-comfortable chairs and sofas; food delivery directly to seats; sparkling clean bathrooms.

Food and drink: High-quality food with healthy options; sit-down dining on site; full bars (Lyft and Uber make more practical and safe now).

Variety of screening experiences: Silent, or noisy, or use of phones allowed, or families + kids, or all kids, or dining + movie together.

Use of crowdsourcing and crowdfunding for special screenings; full embrace of group and corporate events; all-you-can-view subscriptions…

Source: 1,2,3,4,5,6

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The Difference Between Technical-Founder/CEO vs Professional CEO

In tech, we talk about difference between technical-founder/CEO (product/eng background) vs professional CEO (sales/marketing background).

Our general theory is: It’s easier to teach product innovator how to manage, than it is to teach sales/marketing operator how to innovate. There are many exceptions in both directions, of course. The mountain is hard to climb either way. There’s lots of work/learning/adaptation required.

I propose another lens on the dynamic: The difference between knowing What and Who, vs knowing How, Where, and When. Bear with me… Great tech founder/CEOs tend to focus on What and Who: What product to build, and Who to hire/train/retain/motivate to build it. Great pro CEOs tend to focus on How, Where, & When: How = processes; Where = geographic expansion; When = optimizing business across time.

To succeed at scale, each needs to learn the other skills and hire people who have them: Founder/CEO -> How/Where/When; Pro CEO -> What/Who. The challenge: It’s usually easier to hire skilled business professionals who know How/Where/When than What/Who. This is fishing from unbalanced pool. The trap: Only nailing What/Who can carry startup a long way, but only nailing How/Where/When = slow road to zombieland and company death. Ultimately = team-building for both paths. But dynamic different and differently challenging in each direction; requires open discussion.

Addendum: The Why = the mission, ideally beyond just “the company’s success.” This is increasingly important for all paths.

Addendum: The truly great tech CEOs have mastered all of these: What, Who, How, Where, and When… and Why.

Source: 1,2,3,4,5,6,7,8,9,10,11,12

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Lessons Learned From Large Institutions in Financial Crisis

Lessons learned by managers and shareholders of large regulated financial institutions for the next financial crisis: There is no risk of individual executive criminal prosecution whatsoever. Bailouts are guaranteed, particularly for bondholders, for all but the weakest members of the herd.

The one thing that will get punished is acceding to the government’s request/demand for stronger companies to buy weaker companies. Ultimate fines will be levied against your shareholder base eight years in the future, not your shareholder base when the sins are committed. “Too big to fail” institutions will be allowed to become bigger than ever, increasing their safety buffer for next time.

And for bonus points, regulatory barriers against new competition will be raised, not lowered, further entrenching incumbents.

AND: “Too big to jail” is real, according to the Attorney General of the United States.

AND: Regulators on whose watch the last crisis happened, will be allowed to become even bigger and more powerful.

AND: All three government branches — executive, legislative, and judicial — are out to lunch on oversight.

Followup reading, from US Federal Judge Jed Rakoff: http://www.nybooks.com/articles/archives/2014/jan/09/financial-crisis-why-no-executive-prosecutions/

Followup viewing: Both nonfiction “Too Big To Fail” film and fiction “Margin Call” film are excellent at capturing the 2008 crisis.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Lyft Line Launch

We @a16z are very excited about the launch of Lyft Line, and I want to explain why!

Lyft and Lyft Line are an archetypal example of how Silicon Valley is going straight at the hard problems, in this case transportation. A growing number of people know about the amazing consumer utility and convenience created by “a ride on demand whenever you want”. And in parallel, services like Lyft make it possible for people who may otherwise not be able to make car payments to keep their cars.

In many cities, this results in a triple win: Consumer convenience, driver economic benefits, and improved business/tourism environment. But beyond that, as Lyft and its peers grow, ride sharing becomes increasingly convenient and affordable as *alternative* to owning a car. This leads to environmental benefits: Fewer cars needed -> less natural resource utilization; Network efficiency -> fewer miles driven.

Online supply/demand matching eliminates the need for cars-for-hire to drive around & look for riders. Network optimization in bits not atoms. Lyft Line is especially environmentally friendly: Facilitates multiple people riding together on the same route, still with high convenience! Everyone in world wants equivalent to upper-middle-class American lifestyle. Services like Lyft make it possible without destroying planet.

Few new techs deliver so much to so many: riders, drivers, car owners, cities, environment. And to think it just looks like an app :-). Closing note: Lyft Line is the classic “peace dividend of smartphone wars” — not possible pre universal smartphones.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Pruning Brands and SKUs to Encourage Company Growth

Really interesting business experiment starting at Procter & Gamble: P&G “will sell or exit 90-100 mostly minor brands in bold attempt to refocus the business behind its 70-80 remaining best-selling brands. Less will be much more,” P&G CEO told analysts. “The objective is growth… We’re going to be much more agile and adaptable.”

I think a majority of big company CEOs think they should do this in their own companies. But few ever pull the trigger. It’s too scary. A common thing you hear at big companies is “SKU proliferation” — the sheer number of items for sale. It bloats the organization and makes action harder.

Steve Jobs legendarily used the strategy of cutting brands and SKUs for Apple’s turnaround. But few CEOs have followed suit in last 15 years. Like Steve, AG Lafley at P&G is one of the most respected CEOs in the world. If this works for P&G as well as it did at Apple, I think the odds go way up that many big company CEOs will pull the trigger on the same strategy. It could be transformative for business.

The stakes are high: Whether, and how, big companies will be able to grow their businesses and their number of workers in the future. Further, whether/how big companies will invest in new product creation in the future. Paring the old can be staging for creating the new.

Of course, Larry Page is busily ignoring Steve Jobs’ advice to do the same thing at Google! And Jeff Bezos is furiously expanding Amazon. There are no absolutes, but I think it’s very healthy for every big company to consider: How to best set up to grow and create new things?

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Ten + One Ways to Grievously Damage Your High-Growth Tech Startup and Silicon Valley in the Process

Ten + one ways to grievously damage your high-growth tech startup, and Silicon Valley in the process:

  1. Only hire, and only train/motivate/incent your managers to hire — don’t optimize efficiency, don’t do performance management, don’t fire.
  2. Founders, sell too much of your own personal stock too quickly, alienating your employees and questioning your long-term commitment.
  3. Let private stock sales by employees get out of hand: create hit-and-run culture and take on burdens of being public before going public.
  4. Dilute the s*** out of cap table: be sloppy and undisciplined w/stock grants to early employees, plant morale land mine for later employees.
  5. Maximize absolute valuation of each growth round: make later rounds harder and harder to achieve, until you trigger a disastrous down round.
  6. Let non-SV investors suck you into terrible structural terms on growth rounds: guarantee massive trauma if anything goes slightly wrong.
  7. Go public too soon, before you’re a fortress, before you can withstand all the assaults: ending in stock price death spiral and train wreck.
  8. Pour huge money into overly glorious new headquarters, signaling to employees “we’ve made it, we’re amazing”, then repeat two years later.
  9. Confuse conference circuit and party scene with actual work. Encourage alcohol and drugs, party culture in company, value ballers over nerds.
  10. Refuse to take HR seriously: allow terrible internal manager and employee behavior to catalyze into catastrophic ethical and legal crisis.
  11. And the one that will actually kill you: Assume more cash is always available at higher and higher valuations, forever.

Source: Tweets – 0,1,2,3,4,5,6,7,8,9,10,11

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