Musings of a VC in NYC

Native Advertising Event

This Thursday from 1pm to 6pm, our portfolio company Zemanta is co-hosting a summit on native advertising here in NYC. 

I've written and spoken a fair bit about native advertising so regular readers will likely be quite familiar with this topic. However, from what I am seeing out there, native advertising is really hitting its stride as social platforms and mobile consumption become the norm. If you are a marketer or an entrepreneur working in the advertising/marketing space, you should be paying attention to this trend.

I will be kicking off the event at 1pm with a brief talk and some Q&A.

If you want to go, here is a link to get a 50% discount on the event for readers of AVC.

This is Internet Week in NYC and I am making a number of public appearances in addition to this native advertising summit. Here's the whole shebang:

Last night - introducing the Gotham Gal at the MOUSE 15 Annivesary Event

This morning - Opening the CMSummit with John Battelle at 9:10am

Wednesday evening - March For Innovation (immigration) event at AppNexus with Brian O'Kelly

Thursday mid-day - The Native Advertising event

Thursday at 4:30pm - OpenCo Festival event with John Battelle and Dave Morgan at Simulmedia

It's a busy week but with a Vespa scooter and a mind full of things to say, it shouldn't be too hard. I hope to see you all around town this week.

Feature Friday: Places People Go Next

I'm a data geek. I love data. And I love it when companies do interesting things with data, particularly my data.

So a few weeks ago, I was stunned to be told by Foursquare that the ice cream shop I had just stepped into was the most popular place people go to right after the japanese restaurant I had just left. This is a new feature Foursquare has rolled out on Android and I expect will be in the next iOS build.

I call the feature "places people go next" and I think it is awesome. Here's a screenshot I took of my home screen right after I checked into the Shake Shack on Wednesday at lunchtime.

So after a burger and fries, you are either going to get tea at Argo or a beer at Live Bait. I would imagine it has a lot to do with what time of day it is.

In any case, this is the kind of thing you can do when you have a dataset of billions of checkins from tens of millions of people all over the world. It's not just that you have the data, it's what you do with it, as Om so elegantly says in this post.

With new data driven features like "places people go next" coming out fast and furious these days, I am loving Foursquare more than ever. 

Data, Transparency, and Regulation

Last month, I pointed to a talk that Nick Grossman gave at Princeton where he laid out the principals of Regulation 2.0. This slide is from that talk.

Regulation 2.0 is a framework that we have been working on with a bunch of others who are rethinking what government means in a networked world. In the Regulation 1.0 world (the one we are in now) regulators are required to give you permission to do things. In a Regulation 2.0 world, as long as you report openly and transparently about what you are doing to the government and everyone else, you are free to innovate and operate. But you are accountable to live up to the rules that are set by the regulators and the data you report about your actions will be measured against those rules.

I thought about all of that when I read about Mayor Bloomberg's team of data crunchers in today's New York Times. This group, which is described as "the half-dozen post-collegiate techies", operate with a budget of less than $1mm a year and yet have been able to solve many tricky problems for city hall in the past three years.

This story is a good example:

Last fall, the city’s Department of Environmental Protection wanted, finally, to crack down on restaurants that were illegally dumping cooking oil into sewers in their neighborhoods

The antiquated answer would have been to have the health department send inspectors to restaurants on blocks with backed-up sewers and hope by chance to catch a busboy pouring the contents of a deep fryer into the street.

number-crunchers working from a pair of cluttered cubicles across from City Hall in the Municipal Building dug up data from the Business Integrity Commission, an obscure city agency that among other tasks certifies that all local restaurants have a carting service to haul away their grease. With a few quick calculations, comparing restaurants that did not have a carter with geo-spatial data on the sewers, the team was able to hand inspectors a list of statistically likely suspects.

The result: a 95 percent success rate in tracking down the dumpers. With nothing grander than public data, the Case of the Grease-Clogged Sewers was solved.

This story reminds me so much of the story Steven Johnson told in the Ghost Map and many of the stories he tells in his current book, Future Perfect. It should not be a surprise that Steven is one of the folks who have been working with us on this Regulation 2.0 framework.

As more and more of the data about what goes on in our world becomes available via network organizing structures, we will be able to regulate much more lightly, thus lowering the cost, and burden, of government and allowing innovation to prosper.

New York City, under Mayor Bloomberg, has been leading the way in using data and technology to locate and address problems in an efficient manner. But there is so much more that can be done in this direction. I hope that his efforts are adopted and evolved by his successor and all governments in the coming years.

Kingpins Night at Bowlmor

InSITE is one of my favorite organizations in the NYC tech community. They bring together graduate students at various schools around NYC (business, law, engineering, computer science, design and PhD and post doctorate programs in natural sciences and medicine) together for a two year program designed to get these talented people deeply engaged in the NYC startup community.

InSITE has been expanding a lot in the past few years and they are working to fund that expansion. That's where Kingpins Night at Bowlmor comes in. Advertised as "New York City’s first and only startup bowling competition. It is a fundraiser and friendly competition for the entrepreneurial community in NYC." It happens on April 15th, tax day, at 7pm at Bowlmor in the Union Square neighborhood.

When the InSITE folks told me about Kingpins at the talk I did last week, I immediately promised to buy a lane and compete. I then explained that while I am a terrible bowler, I can throw a strike between my legs. Asked to demonstrate, I did, forgetting that I was on video. This GIF resulted which I am most certainly going to regret. But it is too good not to share.

[click on the image to see the GIF in action. i will try to figure out how to embed a GIF here]

It may take me all night of trying to throw that strike between my legs, but try I will. I hope to see you there on April 15th at 7pm for some fun and a good cause. If you or your company wants to get a lane, go here to reserve one.

#askjack

It's going to be a fun friday because I get to interview Jack Dorsey late this afternoon at the NYU Entrepreneurs Festival. The festival is sold out but the interview will be livestreamed here. We plan to go on at 5:30pm eastern.

I love interviewing entrepreneurs I've had the opportunity to work with. Last year, I interviewed Dennis Crowley at the first NYU Entrepreneurs Festival and I think it was great. I hope to do as well with Jack today.

And you all can help me. Please tweet out the questions you'd like me to ask Jack. Please include two hashtags in your tweet, #askjack and the festival hashtag #nyuef.

Thanks for your help and I hope we see you on the hashtag and on the livestream at 5:30pm eastern today.

Hailo

It's no secret that USV invested in Hailo at the end of last year.

What is less well known is why we would do that.

Hailo announced the financing today and also a bunch of impressive hires for their US and Asia operations and they also disclosed a bunch of numbers for the first time.

Hailo is as big in their home city (London) as Uber is in SF and across the ten markets they are in, Hailo has similar scale as Uber in total transactions per day, week, month, and year. Hailo is different than Uber though. They focus exclusively on the regulated part of the market and as a result they can offer lower prices and a higher liquidity of cars to their riders. The power of this model becomes clear if you travel to London and compare the Uber experience to the Hailo experience.

Another big factor in our investment process was the "I told you so". In late 2011 as Hailo was just launching in London, the team came to see us and told us everything they planned to do in 2012. We were impressed by the team, their backgrounds, and their attitude and energy. But we had big concerns about everything they said they were going to do in 2012. A year later, they came back to see us and not only had they done everything they said they were going to do, they actually did a few things more than that. I referenced this story in a post I wrote at the end of last year. Now the company in the story has been named. They will be added to the investments page on usv.com today.

 And maybe most importantly, we believe in large networks of users that have the power to transform big markets. We've long thought that the ubiquity of the smartphone will enable transactional networks between buyers and sellers and it turns out the urban transportation market is one of the first big markets that is rapidly being transformed by large smartphone networks. We are excited to be able to invest in one of them.

Related articles

Hailo Raises $30.6 Million, Looks to Digitize New York's Cabs

Hailo closes $30.6m Series B round from Union Square Ventures, Richard Branson, KDDI and others

On-Demand Taxi Startup Hailo Raises $30M From USV And Others, Including Strategic Funding From KDDI To Launch In Tokyo

Museum Of Math

Last night the Gotham Gal and I were out and about town attending some holiday parties. One of them was on 26th street, on the north side of Madison Square Park. As we arrived at the building we were headed to, I saw this:

Somehow I had missed the news. The Museum of Mathematics has opened in NYC on the north side of Madison Square Park.

We did not go in. The museum had closed by the time we were there. I am eager to return and check it out. I am and have always been a math geek. And I love teaching math to my kids and anyone who will listen. It is magical stuff when you understand it.

I am so happy we have a place where we can take kids in NYC, either on field trips or family outings, to get them into math and all that it can lead to in their lives. Here's a short photo tour that gives a glimpse of what it is like.

Update:

Jason sent me this video. I am adding it to this post.

Related articles

New Museum of Math Opens in New York

Nation's Only Math Museum Opens Saturday

Can math be fun and cool? Museum wants to prove it

Museum of Math: Photo Tour

Museum of Math opens in NYC

MoMath: Manhattan's Museum of Mathematics

Support E-Hailing in NYC!

Last year, at about this time, USV met Jay Bregman and Ron Zeghibe, who are two of the cofounders of Hailo, a mobile app for hailing taxis, that had just launched in London. If anyone has been to London in the past year, you probably know that Hailo has taken London by fire with over half of all cabbies in London accepting rides on Hailo. Hailo has gone onto launch in Dublin, Toronto, Chicago, and Boston, and they hope to launch in NYC in 2013. Imagine being able to hail a yellow cab in NYC from your Android or iPhone? I cannot wait.

But before Hailo, Uber and other e-hailing apps can hail yellow cabs in NYC, we need changes to our taxi cab regulations. And that vote is TOMORROW. So I've asked Jay Bregman to pen a guest post explaining to all of you, and hopefully all of NYC (and especially five reluctant regulators), why we need e-hailing to be allowed in NYC.

-----------------------------------------------

Every ten seconds across the world a licensed taxi driver accepts a Hailo E-hail. And with each match, Hailo helps chip away at the millions of dollars lost by drivers and hours wasted by passengers due to inefficiency in the market. E-hailing apps help solve the line of sight problem – they are the natural evolution of the arm-flail, the doorman’s whistle, the light outside the hotel – and nowhere will our impact be greater than right here in New York City, my hometown.

Right now, cab drivers (and prospective passengers) are limited by their line of sight at any given time. A passenger can be very close by, but if a driver does not see them, they will not get picked up. As a result, the fare is lost, and the passenger misses out on a cab ride. Drivers currently spend up to half of their time cruising empty in NYC, desperately looking for passengers.

 

This does not make any sense.

E-hailing is now commonplace in cities across the globe - including London, Dublin, Boston, Toronto, Chicago, San Francisco and many others. In London, half of London’s 23,000 drivers safely use apps to get up to 30% more business every day. Hailo passengers on average wait only two minutes from tap to taxi.

This Thursday, the NYC Taxi and Limousine Commission’s nine-member board will vote on proposed rules which will allow E-Hailing in NYC, subject to a balanced and sensible licensing scheme similar to those already in place in cities such as Chicago and Toronto. If adopted, the rules would take effect in mid-February. But politics – in particular outcry from adjoining industries such as black car and livery companies seeking government protection against change – are currently threatening whether the rules will pass and therefore whether this technology will be allowed in NYC, where, like London, cabs provide a critical, cost efficient service.

Four commissioners have already expressed support for the rules - meaning New Yorkers are just one vote away from a substantial technology improvement to the iconic Yellow Cab. I am writing this post as the Founder & CEO of Hailo - one such E-Hailing provider - to explain why E-Hailing is important, why it is ready for NYC, and what you can do to help convince the commission if you agree. To be very clear, these rules do not select a single supplier or favor Hailo over anyone else; they merely establish an open marketplace in which E-Hail providers may compete for the hearts and minds of Yellow Cab drivers and the riding public.

 

There is overwhelming evidence that E-hailing works, it has been proven on New York style scale and sophistication, and it will do nothing but good for passengers and drivers - so why do TLC commissioners remain unconvinced?

 

The TLC must pick up the reins of innovation and competition and finish the task started when credit card machines were introduced in 2005, when the contracts with these providers first contemplated smartphone apps. We pledge our support to the drivers and people of New York, and the TLC, to make sure this time we get it right.

To make your voice heard, please email the TLC at [email protected] or contact the Chair here. The vote is Thursday, 13 December.

Further Information

Hailo’s testimony at a recent TLC Public Hearing on the E-Hailing regulations:

• Jay Bregman, Hailo Founder & CEO (fmr Founder of eCourier)

• Melissa Plaut, Hailo Driver Partner NYC

• Jahangir Khan, Hailo Driver Partner NYC

Status Update

The Gotham Gal and I have received countless messages from many of you wishing us well and volunteering all sorts of things. We even were offered use of a 3400 sf apartment on the upper west side! It is very gratifying to know that so many of you are thinking of us and wanting to help.

The past few days have been very strange here in NYC. North of 34th street in Manhattan and in most parts of Brooklyn, everything seems quite normal. But downtown manhattan is eerie. There are no working stop lights. Crossing a major avenue is a life threatening experience. Lower manhattan is a ghost town.

Our apartment building is on the hudson river. The Gotham Gal has a photo of what happened to it on Monday night on her blog. Our basement filled to the brim with part of the Hudson River and possibly a bit of the Atlantic Ocean as well. Happily we've been able to pump all of that water out as of last night. Every building on our street was pumping water out into the street the past two days. The Far West Village is a mess and will be for a while more.

We will be in remediation and repair mode for a while. We don't know how long yet. So we've been focusing on finding a place to live in for the next month or two. We are committed to getting back downtown as soon as power comes back on. All signs indicate that will happen in the next day or two.

In the meantime, we've been staying with friends on the upper west side. They have not one, but two families, camped out with them for the past few days. We are very fortunate to have such good friends.

What comes to my mind most as we struggle through all of this is how others who don't have the resources we have are dealing with things. I have to believe that tens of thousands of NY'ers are homeless or seriously displaced by the hurricane. And I am equally sure that many of them don't have the wherewithal that we have to deal with it. Those are the people that need help in NYC right now, not us.

I would guess this goes without saying, but I am not working this week. I am trying to stay up on my emails and doing a few calls here and there on urgent matters. But if you don't hear from me this week, don't be surprised. My attention is largely elsewhere.

Reflections on Sandy

I ended yesterday's post with this:

Hurricane Sandy looks to be coming through NYC at that time and I don't know what that may cause me and my family to be doing at that time. We live right on the Hudson, at the border of Zone A. So I've got a few things on my mind today that fit right into this Sustainability theme....

Stay safe everyone on the east coast today. Let's hope the hype is overblown. And let's prepare as if it isn't.

On my way back from a business breakfast, I saw folks in Hudson River Park looking at the Hudson River so I walked over and recorded this video of the Hudson breaching its banks around 10am eastern.

That was the moment I knew that our street would turn into a lake. I just felt it in my gut. Around that time my partner Albert posted this on his tumblr. We traded a few comments and he led me to this page on NOAA's website. This was the chart I was tracking all day yesterday:

At the time I took that video the water height on this chart was around eight feet. You can see that it peaked at about 14.5 feet. That's 6.5 feet higher than the time of my video.

After our monday team meeting (which we did on Google Hangouts with great success), I went downstairs and explained to the Gotham Gal and Josh that we should evacuate. I got a little pushback from both but mostly from Josh who thought we could ride out the storm in our apartment.

I was adamant that we should leave. I told them that our street was going to become a lake (or worse a river) and that we would lose power and things would be a mess. I finally won them over and we headed out around 4pm. We went uptown to stay at a friend's house on higher ground. Before we left, the Gotham Gal and I went to the basement storage room and removed all family heirlooms and anything we couldn't replace easily and took them upstairs to our apartment. But we forgot to empty the ice makers in our apartment (which caused me to wake up in the middle of the night last night with an "oh shit" moment).

We spent the rest of the day following events on Twitter and TV. The Mayor's regular updates on TV were helpful, but by far the best coverage of Sandy was on Twitter, with links out to blogs and Instagram. That led me to tweet this out yesterday night.

 

Twitter owns times like this. Images, important news, quotes, videos, and lots of humor #sandy

— Fred Wilson (@fredwilson) October 29, 2012

 

Our street in the west village did in fact become a lake with somewhere around 5 feet of water at the height of the storm surge. Our building's basement was submerged and our ground floor apartment which houses the Gotham Gal's office took many feet of water. The building lost power and I suspect it won't have it back for a while. It was a disaster from which we will be impacted for months I suspect.

But as bad as our street and building had it, much of NYC had it worse. Lower Manhattan and parts of Brooklyn were flooded way worse than the west village. The subway system took the most severe  flooding of anytime in its history. Many of the subway tunnels between Manhattan and Bronx, Queens, and Brooklyn are flooded. And some of the automobile tunnels are flooded too. There have been power plant explosions, fires, and all sorts of other Sandy related calamaties.

It was a big storm and it wreaked much damage on NYC last night. But the loss of life was relatively low and from what I can tell, city officials and the first responders in the fire and police department did their usual heroic job. We will get through this the same way we have gotten through other disasters.

I may take the week off. I have a lot to tend to on the home front and NYC is not going to be the easiest place to live and work this week. My son's school is almost certainly closed for the next few days. 

But I'll likely keep blogging. It helps to be able to talk about this stuff, to get it out, and to discuss it. So we can start doing that while my family and I start digging out.