Musings of a VC in NYC

Guest Post: Who Are We Plowing For Today?

In the almost seven years of this blog's history, there have been very few guest posts. One I remember was JLM's take on Obama's rescue plan during the depths of the financial meltdown in late 2008/early 2009.

Today I am going to treat you to a guest post from AVC regular Andy Swan. Those who read the comments need no introduction to Andy. He's funny, smart, a talented entrepreneur, and a champion of freedom and free markets.

He sent me this post this morning and I love it. Lot's of wisdom and learning in here for everyone:

Who are we plowing for today?

In the early 1930’s in Southern Indiana. My grandpa Rock had just returned from a stint in Detroit, which was a favorable place to find employment in those unfavorable times. He was home to help with the planting season and to visit family….maybe settle down with the money he’d saved.

After the first day of plowing was done, and the sun was going down, he got off the tractor and felt that his wallet was missing from his back pocket. Panicked, he looked everywhere possible, to no avail. It was dark and there was no way he was going to find it that night.

What’s worse is that the wallet contained ALL of the money he had saved in Detroit, around $2500 I believe, a sizable sum during the depression.

After a sleepless night, he woke up and went to go to work. Upon arrival, his “boss”, who knew of the missing money, said “Well, Rock….who are we plowing for today?”

“I guess we should plow for Rock”, he responded.

And so all three jumped on a tractor and retraced, backwards, the plowing that they had done the previous day, with eyes searching for a wallet like the Coast Guard for a raft. After several hours and a lot of lost hope, my grandpa spotted the corner of his wallet sticking about an inch out of the ground. Hopped down, grabbed it and they went on to complete as much of actual farming progress that could be completed for the rest of the day.

With that money, he went on to buy his own piece of land, and begin the building of what would become his personal “empire”….a life’s work that spanned over 70 years, thousands of acres, and a family that continues to thrive beyond his leaving us a little over a year ago, at the age of 94.

Instead of criticizing the failures of others, or questioning their judgment in hindsight (how could you carry that much money on a tractor???)…..

Take some time out to plow for the passionate little guy every once in a while. You might just set a great thing in motion

Off The Grid

We are staying at a lovely house in Tuscany for the next few days with old friends. The house has beautiful views, a lovely pool, a huge kitchen, and no Internet.

Seems like a perfect excuse to take it easy and decompress with friends and family

If I get the urge to write something, I'll do it from my blackberry, which is how I am posting this.

But I could easily get lost in a book or a conversation and miss a day or two of blog posts.

Do Network Effects Span Geographies?

Three years ago most western european countries had a local social network that was the most popular social net in the country. Today Facebook is dominant in most of western europe and those local social nets have largely been bypassed.

It would seem that Facebook leveraged the size of its network (approaching 500mm people worldwide) to beat its competition in social networking. But what's interesting to me about that is that it also means that it leveraged a network that was larger out of country to beat an incumbent who initially was larger in country.

For the sake of this argument, I am assuming network size and network effects was the cause of Facebook's success internationally against local competitors. It could be that it was not network, but instead features that won the market for Facebook. Certainly it was some of both.

I come to this "argument" with a deep respect for the power of networks, particularly online, and so I believe that in fact Facebook was able to leverage the size of its out of market network to compete in market against a local incumbent who had a stronger in market network.

And why exactly would that work? Well first of all, many people have social networks that span geographies. And those people tend to be influencers who are important in the value of an overall social graph. I think it is also true that in many parts of the world, big american brands are powerful in local markets. And so its probably also true that there is an allure of being part of a big american social network. I've been told that there are only four countries that are mostly impenetrable for a US internet company; russia, china, japan, and korea. We will see if that is true in Facebook's case.

I was thinking about this yesterday as I was making my way around Paris, checking in on Foursquare. In every place I went to in Paris, there was an existing mayor and plenty of tips. But it was rare to check into a place and find someone else checked in as well. By contrast in NYC, I rarely check in these days without finding at least one other person checked in.

In talking to some local parisian web entrepreneurs, I heard about a local Parisian company called Tellmewhere that has 500,000 users, mostly french. Read Write Web has a good post up about Tellmewhere right now. So maybe the reason I found the usage of Foursquare in Paris to be light compared to NYC is the presence of a strong local competitor.

And thus my question that started this post. Do network effects span geographies? Does the fact that Foursquare is approaching 1mm users worldwide make a difference in Paris or will Tellmewhere, with 500k users who are mostly here, continue to dominate locally?

If we can use Facebook as a guide, it seems eventually the largest network wins. But can we use Facebook as a guide and is that universally true on the web? Let the discussion begin.

Thoughts On Buenos Aires

Our family spent the past week in Buenos Aires. I didn't do much in the way of travel blogging this trip but the Gotham Gal did. If you are planning to visit Buenos Aires anytime soon, you should click on that link and read her posts.

This is our second visit to Buenos Aires and we got to explore the city a lot more this time. It's a very big city and there is a lot of ground to cover. It's fun to walk around the various neighborhoods, but getting between them requires transportation. Fortunately Buenos Aires has a very good taxi cab system. We never had an issue getting a cab, be it early in the morning, mid day, or past midnight. We did stick to the "tourist neighborhoods" of La Boca, San Telmo, Puerto Madero, Recoleta, Retiro, Palermo, and downtown. I suspect getting cabs outside of these areas might be more problematic.

Buenos Aires feels like europe in many ways. The architecture and city planning reminds me of Paris, Madrid, and a few other european cities. However, it is a lot less expensive that europe these days. The US dollar gets you almost 4 pesos. Many things like dinner and taxi cabs can cost you the same amount of pesos that it would cost you in dollars in New York City.

We did not travel outside of the city during our visit but most people do. Common day trips include a boat to Uruguay and a visit to the northern suburbs. From what I've heard, both are worthwhile excursions.

We spent our days sightseeing, shopping, eating, drinking, working on our spanish, and soaking up the culture. Here are my top ten highlights of our visit:

1) San Telmo market on sunday. I wrote an entire post on this yesterday. The neighborhood fills up with people selling their wares and tourists and locals buying them. There's also singing, dancing, eating and drinking going on. It's a lot of fun.

2) Empanadas. We ate a lot of them. The best ones we had were at at La Cupertina in Palermo and El Sanjuanino in Recoleta.

3) Malbec. The red wine of choice in Argentina is Malbec and we drank a fair bit of it. We tried a number of different producers and enjoyed all of them.

4) Restaurants. We had some good dinners and some not so great ones. The Gotham Gal's blog has all the details. I loved the fish at Ovieda and the steak at La Cabrera. But the two hour wait at La Cabrera kind of ruined that dinner for us. We heard there are other steak places in Buenos Aires where the beef is just as good and the lines aren't an issue.

5) Ice cream. We hit up Freddo and Volta and slightly preferred Freddo. But both are great. We all found the Dulce De Leche a bit sweet and rich for our taste but you have to try it when you are here.

6) MALBA. This is the modern art museum of Buenos Aires. Kind of like the MOMA in NYC. It's great. I was not familiar with many of the artists in their permanent collection and enjoyed seeing their work. And the Warhol exhibit they have on right now is excellent.

7) Art shopping. There are galleries all over Buenos Aires. We visited galleries in Palermo, Retiro, and Recoleta. We've heard that the San Telmo and La Boca galleries are a bit more cutting edge but we didn't get there this trip. The art in Buenos Aires is excellent and very affordable. The galleries do a good job of curating, filtering, and representing their artists. If you like to collect art, you should visit Buenos Aires. I posted a few images I saw in galleries to my tumblog yesterday.

8) El Ateneo. This is an old theater converted into a bookstore. You can eat in the cafe which is where the stage used to be. It is beautiful and worth a visit.

9) Palermo. This is the northernmost neighborhood that tourists frequent. It's like Williamsburg in NYC or Marais in Paris in that it's been rediscovered in recent years and is full of fun and edgy stuff to do. We ate there most of the time and did most of our shopping and strolling there too. If our hotel was there (it was not), we might not have left.

10) The Park Hyatt. This is where we stayed. We had some issues with our room which put a somewhat negative taste in my mouth. But the hotel is spectacular, particularly the backyard between the old building (the former palace) and the new building. I would often spend my mornings sitting in the backyard reading while everyone else slept. The service is excellent and I would recommend it (just not our specific room).

11) I forgot about one highlight so I'm adding it after posting (and going over my allotted ten highlights). The cemetery in Recoleta is a must see. It like a tightly stitched together city full of above ground tombs. The Gotham Gal told me at one time the plots in this cemetery were the most expensive land in the world. It's hard to describe and pictures don't really do it justice. Go see it if you come to Buenos Aires.

If you've never been to Buenos Aires, I highly recommend it. It's big, bustling, full of culture and energy, and its very affordable as foreign travel goes for americans these days. And you get to work on your spanish which is always fun. My kids really impressed me with theirs. Mine, on the other hand, is awful.

Buenos Aires

OBELISCO- AV.9 DE JULIO
Originally uploaded by Tres Monedas.

I'm in Buenos Aires for the week on a family vacation.

The Gotham Gal and I came down here a decade ago while I was doing a lot of latin american internet investing (Starmedia, Patagon, MercadoLibre, and a bunch more). We loved this city and promised ourselves we'd be back with our whole family.

And so we are. We'll be relaxing, walking around, eating, drinking, and enjoying ourselves.

I'll post a bit on the trip as well as tech stuff and year end music. I plan on having something here every day.

But if you want a good travelblog of this trip, make sure to visit http://gothamgal.com . She's the best travelblogger in the family by far.

Two New Ways To Find A Better Place To Stay On The Road

My partner Albert said this a week or two ago on his blog:

When people ask me whether investing in web services is a long-term opportunity, I often say that “we ain’t seen nothing yet.”

I was reminded of that when I went to the web to find a hotel to stay in Miami when I am down there for Future Of Web Apps in February.

In the past, I'd have tried TripAdvisor or maybe even Google. But just in the past few months, there are two really great new ways to do this.

The first is Oyster, a web service dedicated to honest and excellent hotel reviews. They literally send out a person to stay in the hotel for a few days, take their own undoctored photos, and present in a clear and concise format. Here's their page on Miami hotels, and here's a page on Tides in South Beach, which they say has awesome rooms.

Oyster's strength, personally crafted reviews, is also its weakness because they only have reviews right now for certain destinations. I suspect it will take them a few years to be totally comprehensive. However, because so much hotel seeking traffic comes from Google, they can be a great service for people who start their hotel searches at Google. If you see an Oyster result in Google, you should absolutely click on it.

The other way to do it is Hunch. Instead of hiring "experts" to go out and review the hotels, Hunch takes an approach that is more like wikipedia. They crowdsource questions and answers from thousands of "contributors" and then package them up in easy question and answer sessions that lead you to the "right answer".

Try this hotels in miami page and see how it works. You'll notice that Hunch doesn't give you just one answer. It gives you a "best" answer and three other suggestions. I've found that not only do I get good advice from Hunch, it also helps me quickly understand the tradeoffs I am making in hotel decisions.

Of course, there's a natural partnership between Hunch and Oyster around hotels. Hunch is good at framing the decision and giving you a short list to consider. Oyster is great for digging into the specifics of the hotel to get to the final choice.

Since both companies are in NYC and are part of the great startup culture we've got going here, I bet that's not too hard to make happen.

Alinea

This post has very little to do with technology and venture capital. Every once in a while I like to share things with all of you that simply blow me away. This post is about a restaurant in Chicago that I went to thursday evening with my friends Dick and Eric. Dick has been telling me for quite a while that I had to go there. And so we did. And we had a meal that I don't think I'll ever forget.

Alinea is the creation of an amazing chef named Grant Achatz. He is a food artist and his food challenges every convention and then some. I've been to restaurants, like WD50 in NYC, that attempt to do the same. I've always felt the adventure in these restaurants compromises the taste they deliver. But Grant has figured out how to combine absolutely amazing tastes with adventursome presentations and that is why Alinea is one of the top restaurants in the world.

You don't order at Alinea. You simply choose between the 12 and 24 course tasting menus and decide if you want them paired with wine. We did the 12 course paired with wine. Here is our menu. Every diner is presented with one on their way out.

While every dish was amazing, my favorites were the pork belly, the foie gras, the crab, the wagyu beef, the bubble gum, and the chocolate.

The chocolate is prepared directly on the table. They clear the table, lay down a special table cloth, and Grant and one of his chefs come out and literally "paint" the table with chocolate, berry sauce, and malted cold chunks. Here's a photo I took of the presentation.

Alinea is expensive and it is also hard to get a reservation. Be prepared to spend in excess of $200 per head and possibly as much as $300. It's not something I would do often, maybe only once (I've got to go back with the Gotham Gal), but it is an incredible dining experience and easily in my top ten all time.

If you love food and memorable dining experiences and don't mind spending the money, make sure to visit Alinea next time you are in Chicago. I promise you that you won't be disappointed.

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Slovenia

Ever since we made our investment in Zemanta last summer, I've wanted to visit Slovenia, the country where Zemanta was founded and where most of the team is still located.

I got that opportunity this week when most of our family and I flew to Ljubljana, the capital and home of Zemanta. In addition to attending my first board meeting at the company's offices, we spent a day seeing the sights and scenes of Ljubljana and a day and a half on the Adriatic coast in the towns of Portoroz and Piran.

There are some great pics at my wife's blog, my tumblog and my flickr.

Slovenia is a small european country that sits between Italy, Austria, Hungary, and Croatia. It was part of the old Yugoslavia (its most northern part) and was the first country to secede (mostly peacefully).

It reminds me most of Italy but also a bit of Austria. The food we ate tended to lean Italian and it was all very good. The wines also reminded me of northern Italy and they were terrific. An added benefit is everything costs a lot less in Slovenia. And like most of europe these days, english is spoken well most everywhere.

The population is small, about 2mm in total, of which about 300k live in and around Ljubljana. But it is a well educated, commerce minded, and democratic country that has modernized significantly in the past decade. The roads from Ljubljana to the coast are among the best I've been on anywhere.

We did not visit the alpine part of Slovenia but you can see some very high peaks from Ljubljana and we flew over the alps there and back. There's serious skiing, hiking, and other mountain sport to be had in Slovenia.

My favorite part of the trip, other than a morning with the entire Zemanta team, was the Adriatic coastline. It is stunning and I am told if you drive south into Croatia, its even more beautiful.

We'll have to return for a longer stay and visit the mountains and the croatian coastline and other spots. It's on the ever expanding list of places we have to get back to.

If you have not ventured to that part of the world, I'd strongly consider it. You can have a lovely time with less crowds at half the price of the traditional hot spots of europe.

And there's some hot startups to invest in too!

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Stockholm

We spent two days in Stockholm. Enough to get a sense of the place but not enough to really explore it and soak it all in.

The city is wrapped in water, like Sydney Australia, but maybe more so. Everything seems to be an island. Its visually striking and beautiful. The people are also beautiful, both to look at and to interact with. They are nice, easy to talk to, and show a warm welcome to people from other places. English seems to be a second language for most everyone and when my kids went to see Harry Potter, the movie was shown in english with swedish subtitles. That maybe partially explains why everyone's english is so good.

I met up with a few entrepreneurs and investors while I was in town but missed the opportunity to meet with a bunch more that I wanted to see. It's hard combining work and family vacations. I don't recommend it.

My takeaway is that Stockholm has a thriving tech startup community. It may be smaller than London or Berlin, but they've had real successes and the engineering culture is very strong in Sweden. Plus, as one entrepreneur said to me, the winters allow you to spend long hours in front of computer screens.

Stockholm's a bit out of the way. It's a two hour flight from Paris and maybe only a bit less from London. But I think it's a place that those of us in the tech startup community need to pay close attention to.

We managed to get a lot of sightseeing in over the two days. The Gotham Gal has a few posts with some nice photos. I also posted some photos to my tumblog and my flickr. We did not take a boat trip out to the archipelago. From everyone I talked to, that was something you really should when you come to Stockholm. So it's a reason to come back.

We did take a long walk in the royal park which is an island right near the center of town. In the park is the Vasa Museum which is entirely dedicated to the completely restored ruins of a 1600s era warship. It is enormous and is something special to see closeup. I highly recommend it.

I also highly recommend our hotel, the Lydmar. It's new, wonderfully appointed, and makes a comforting and classy home away from home.

But mostly we just loved walking around town, visiting the different neighborhoods, shopping, eating, and taking the wonderful sights, sounds, and smells of Stockholm. It was a really great couple days. Now we are off to Slovenia by way of Paris.

In Europe This Week

I'm in europe this week doing a bit of work amidst a mostly famly vacation.

I'll be in Paris, Stockholm, and Slovenia this week.

As much as I'd like to meetup with entrepreneurs on this trip, my opportunities to do so are limited.

I'll be posting some photos on my tumblog and may post a bit about stockholm and slovenia on this blog.