Monthly Archives: January 2012

On the Evolution of Investing

Today Y Combinator announced they are adding two new partners, Garry Tan and Aaron Iba. This announcement is unique because it does not list their academic credentials, their previous investments, the boards of companies or non-profits they have sat on, how many years of experience they have, or any of the usual badges of honor investors parade in their biographies and Crunchbase profiles.

Instead we get accolades of “rare individuals who can both design and program” and “best hackers among the YC alumni.” Take note of this moment.

I was part of a dinner conversation the other night that included institutional and angel investors, entrepreneurs, and someone who was part of the YC program. The group circled with alarming intent on grilling the YC entrepreneur: “How much time did you actually get with PG?” “It’s a cult of personality.” “The average quality of the companies has really dropped as they’ve broadened.” “I can’t wait for this bubble to pop.” I believe it was mostly in jest — few topics were spared that night — but there was some truth in the defensive undertone.

The hackers and engineers of Y Combinator are doing what hackers and engineers do to any industry, they’re efficiently and ruthlessly disrupting the traditional model of venture capital and are going to destroy far more more wealth for their contemporaries than they create for themselves, as broadband did to entertainment, Craigslist did to newspapers, and Amazon did to traditional retailers. This is what outsiders, by definition, do.

The dark humor in this is that the same people who delight and celebrate investing in disrupting other industries are blind or in denial about it happening to their own.

The question then becomes if you’re an investor with a traditional LP model (and expectations), or a more financial background than an operational one, or an operational background more in management than in design or coding, what should you do to stay relevant through this shift?

Two excellent essays on how Hollywood has completely put our legal system out of whack through years of twisting our legislative process to their ends, or as Shirky put it “imagine the possibility of a longer jail term for streaming a Michael Jackson video than Jackson’s own doctor got for killing actual Michael Jackson?”

Andrew Bridges on PandoDaily: Forget SOPA, Hollywood Already Had a Field Day with the Justice System.

Clay Shirky on his blog: Pick up the pitchforks: David Pogue underestimates Hollywood.

Really great article from my friend Hunter Walk on #Reinventing the Chamber of Commerce, which is especially relevant given how the US Chamber of Commerce has been tending to side with the MPAA and RIAA rather than actual small businesses, startups, and tech communities.

I've built my life on a free and open internet. As the co-founder of WordPress.org, a free software project that aims to democratise publishing, and the founder of Automattic, the company behind WordPress.com that hosts blogs from around the world in pursuit of the same goal, the proposed US legislation to regulate and censor the free and open foundation of the internet makes my mouth go dry with fear.

The rise of the web over the past two decades and the freedom to publish and express yourself online will be looked back upon as a cultural revolution.

We have gone from a world split between gatekeepers and media "consumers" to a world in which anyone regardless of geography, finances, social class, race, gender, or any other demographic identifier is free to engage with the rest of the world on their own terms.

That freedom is of paramount importance and must be protected.

That's why we're blacking out our websites on the 18th to raise awareness of this issue, and giving our users tools to do the same.

The tech world is fiercely competitive and companies seldom agree on anything, when you see so many united in solidarity on a single issue, you know there's something to it.

What concerns me the most about Sopa and the Protect IP Act is not that media companies and legislators want to have measures in place to protect copyright – for example we reply to and comply with DMCA (Digital Millennium Copyright Act) takedown notices on WordPress.com when we receive them, it works well for everybody – it's that the authors of the legislation don't seem to really understand how the internet works.

The definition of domestic versus foreign sites shows a woeful lack of comprehension about how domains are used and how traffic flows on the internet.

Where do I stand? On the side of publishing freedom.

What do I hope for? That these pieces of legislation be set aside, and that any future legislation in this arena be drafted by people who understand how the internet works – and how it won't if they do the wrong thing.

My part of the set of op-eds on the BBC concerning today’s blackout. Check it out to also see Jimmy Wales, the MPAA, and the Chamber of Commerce. Hat tip to Jane for helping out with the above.