Diagnosing Tech Prices

I read this Business Insider piece over the weekend titled: “Here’s Why It’s Ridiculous To Say The Fed Is Blowing A Tech Bubble

In the piece, the author points to PriceWaterhouseCooper’s report tracking VC funding, by sector, over the last 10 years. He points out that while software has seen a precipitous spike in the last few years, healthcare, financial services, biotech have all stayed relatively steady in terms of attracting funding.

His greater point, that low interest rates and the Fed buying up bonds haven’t flooded the market, is interesting. Some data seems to contradict this. Dan Primack at Fortune reports that the glut in dry powder for private equity today is one of the largest in recent memory, topping $1 trillion. The Wall Street Journal points to record-setting profits driving the continued institutional appetite in private equity. It’s my opinion that the dry powder is indeed related to the tactics employed during the financial recovery, and attempts to stimulate the economy. I take it further and happen to think that monetary stimulus outstripping infrastructure stimulus is a further cause of this dry powder explosion. But regardless, the data does show that most VC investment sectors have stayed steady… except tech, which has, indeed, grown (highest levels since 2001) — and, as the author points out, specifically in software. This does not a bubble make. But it does warrant some further investigation.

I wonder if, in the ‘financial services’ sector, software-powered businesses like LendingClub, Propser, Upstart, Inventure, Earnest, Mirador, Bond St, etc. qualify?

I wonder if, in “healthcare”, software-powered businesses like Castlight, Sherpaa, Doctors Know Best, SharePractice, Figure1, etc. qualify?

As for “biotech”, is the software-enabled citizen science revolution of 23andMe, Science Exchange, Experiment, uBiome, part of that sector?

Part of this story, it seems, is that ‘tech’ increasingly represents a broader and deeper cross-section of other industries. Doctors, scientists, and financiers are writing code into their innovations as a de rigueur feature of their innovation. It’s a cliché today that “software is eating the world”, but it seems some journalists forget that when they look at the data.

What do y’all think?

Dry Powder and The Unequal Recovery

When I read Fred Wilson’s very interesting blog post “The Bubble Question" the conclusion I immediately drew was so this is what inequality looks like. Why did I think that?

As Fred indicated in his post, after the crash of 2008, financial policy makers dropped interest rates and made cash cheap, in hopes of stimulating the economy through investment and small business growth. As he describes, the results of that approach were somewhat mixed. I wondered, after watching Ray Dalio’s "How The Economic Machine Works", whether the fact that a lot more stimulus went to financial assets and institutional investors, rather than to infrastructure building (and re-building), had an accelerative effect on the current inequality crisis. I still think that’s the case, but I’m realizing there are more implications. Here are some that come to mind:

1. Institutional capital (and family offices) is starved for risk-adjusted return (low double digits, high single digits IRR), and they are certainly not finding it in the bond market, or in other markets whose growth is predicated on a healthy national infrastructure.

As valuations and EBITDA multiples confound and concern us all in the startup space, one has to wonder if there is room for another trend — perhaps looking something like crowdfunding for non-growth companies — of liquidity pathways that allow for lower-risk, lower-return, patient capital allocation in the startup ecosystem. There are whisperings of this, but I expect to hear and see more.

2. It’s no wonder that the alternative lending universe has absolutely exploded, for small businesses and for individuals with Lending Club, Propser, and some exciting up-and-comers, many of whom are our investments. I think these are very good. Access to capital for the individual, whether they are underbanked, about to take the plunge as an entrepreneur, or a young promising person with limited credit history, will represent a stimulus package to the streets - to our recent grads, to the enterprising, and ultimately to the infrastructure. It likely won’t be nearly sufficient in the short term, and the challenges of the unequal recovery will multiply and persist — but maybe it’s a small, promising sign of the market overcoming federal regulatory failure, for once. 

Why Bevel Is More Than Just A Razor

Before shaving with Bevel, I figured I would take a before/after picture, to really scrutinize how well it worked. You can see them below. 

My face is, to borrow a joke from Twitter, like a Nestlé crunch bar. Nasty. I probably have the curliest hair you will ever see. I break combs at the barbershop, even when I’ve combed my hair beforehand. I had dreadlocks when I was younger, and could shower every day and they wouldn’t come out, because of how curly my hair was. I have had folliculitis thrice in the last 12 months: wherein the ingrown hairs create an infection, enlarging my lymph nodes to golf balls and causing very, painful migraines, and sometimes other complications. And here’s the rub, if you’ll allow the pun: until I spoke to Tristan Walker about it, I had no idea how incredibly common this issue is. 45-83% of black men have it. I could have sworn I was just unlucky. Or not shaving right.

When I first tried out Bevel, a razor specifically designed for people with coarse and curly hair — the unboxing experience, the form factor on the bottles of primer, lotion, and the razor itself are all world class consumer products, but that’s actually not the point — I followed the instructions to a T, applied the restorative balm, and went to sleep. When I woke up, my chin felt great. It seriously felt great. And in that moment I felt like I was finally being taken care of, in a way that I had never realized I even needed taking care of.

As a person of color in America, that is a common refrain. Even though Blacks overindex on Twitter, take a guess at the company’s demographics, to say nothing of their executive leadership or board of directors. While TV consumption and social media participation skew to Black and Latino women more than any other demographic, the advertisers, producers, platforms, and networks don’t take care of them. We invested in Walker & Company Brands, Tristan Walker’s company to create a consumer products group for people of color, because he was building into a very large market, because he has insane hustle and a varsity team, because ads targeted to the “World Star Hip Hop” demographic convert at eye-popping premiums over the average, and because by 2040, the United States will be a nation of color again. But I invested in Walker & Company Brands because it pushes the world forward by taking care of people who don’t even realize they need taking care of

image

When venture investors speak about “signals” that point to their comfort level in an investment, they often don’t speak about unconscious bias. Game recognize game, and investors, like all people, react well to things they recognize. And just as good salesmen are trained to mimic the body language of their target, we are social beings, and so the more common ground the better. In the case of Walker & Company, as an investor, the common ground was that in Tristan, I saw someone I recognized — someone who had been on the outside looking in, and knew there was huge opportunity in solving that problem.

Bevel’s attention to detail in the packaging is fantastic. It’s hard to open the box fast when it first arrives, so you have to reflect on it. The obsession with the extrasensory, so to speak, elements of the experience, are delightful. The little side-box for the used razors makes my shelf and trashcan look that much better. The shapes of the tops of the bottles are intentionally wrought, and fresh. Their Zappos-like customer service is natural, personal, and quirky enough to be real. Bevel makes me feel like I was using a product that was designed to be world class, but that was designed for me. And for someone for whom my demographics are instinctively a disadvantage, it was an utter revelation. People who crack business models like these will win big.

Before:image

And after, two days later:image

Two days. It works.

Single-tasking.

Single-tasking: I’ve been terrible at it my whole life. Put another way, I’ve been a fantastic — or, at least, relentless — multi-tasker. When I was young, my mother was my math teacher for a year (and my father my chemistry teacher, in fact). During that year, and in years before, I spent the entire math class literally on my feet. I would hunch over to do problems, took notes in my head, and I only sat down to take tests, because she threatened detention. I couldn’t sit still. I was always restless. Growing up, I wanted to be an actor, or a diplomat, or a teacher, or a pharmaceutical chemist, or a psychiatrist, or a novelist. It would change every day. Right, we all did. Only difference, perhaps: well into my twenties, that was still me.

Over the course of my career in innovation and technology, I’ve done a lot of running around, following my nose from experiment to project to business and back again. I’ve learned that I am extremely passionate about the type of work I do, particularly when it’s mission-driven, and that I am unafraid to take risk, only because I have confidence that I’ll be picked up when I fall. In 10 years of work, I’ve found 10 things worth doing, and grown from them all. But it’s time to change. And I’d like to briefly explain why.

When I met Craig, (with forever thanks to Jessica, Ben, Max, Casey, and Zach), I was busy reading Kant’s transcendental idealism at Stanford, sourcing private equity deals in South Africa, failing at growing tomatoes in my yard, experimenting with Ruby libraries, and prototyping with friends. Since I agreed to jump on the Collaborative Fund train, I have been in a process of siloing and culling, siloing and culling. And it has been utterly life-giving. It is fashionable for cultural critics to describe my generation as having a penchant for going “gig to gig”. We are likely to hold a job for only 3 years, an average number that has been steadily declining as optimizing, and optimizing, and constantly optimizing has become the norm for a career trajectory. But what of the value of doing one thing, and learning to do it well? How does a young person learn a trade, and hone it through the stillness and monotony of time? Who will develop an expertise, if we are all jacks of all trades, and masters of none?

So. I’m happy to say that I’m doing something that I want to do for a long time. (Of course, I’m doing who-knows-how-many things *within* Collaborative Fund, but.) My brilliant partners and our incredible investors have made it a fantastic place to call home, and I can’t imagine doing much else. The past few years have already been extraordinary. But I’m really excited for this, and the adventures we have ahead of us. Here’s to single-tasking, for once.

Network Science and Startup Teams

For those who study networks, weak ties are well-understood as holding the most value in interpersonal dynamics, and as indicators of success. One’s strong ties are the people they are close to, or know well. Weak-ties are the next ring of the circle — in LinkedIn’s words, ‘second-degree connections’. But in referring to theory about weak ties, we tend to think about it narrowly as “friends-of-friends” and stop there. I recently read this Forbes article about applied network science which pushed some of my thinking around weak ties and network science, and how it informs our thinking at Collaborative Fund. After some reflection, and hearing hundreds upon hundreds of startup pitches, I have come to believe that the best startup teams are those who manage the tension between these three characteristics: speedcreativity, and resilience. Homogeneous teams lead to speed, but diverse teams lead to creativity and resilience.

Speed
Max Levchin said that “The notion that diversity in an early team is good or important is completely wrong,” because the most important quality for a startup is speed, and diversity of thought creates dissent, which slows down idea generation and execution. This anecdotal perspective accords with the clustering aspects of a network. Strong teams work fast, and homogenous teams are likely to have the capacity to work faster than weaker teams. But most startups die because they run out of money. And plenty of the teams who ran out of money were building very fast. So while speed is likely a necessary condition for startups, it is not a sufficient condition. Because if you’re working on a problem nobody needs or wants, it doesn’t matter how quickly you build, or iterate. The Forbes article describes networks as sharing thick “clustering” characteristics, whereby there is a lot of mutual friendship within the network, and as a result, ideas flow very quickly within the network, but very slowly outside the networkThis approach creates blind spots. And if your early, homogenous team happens to be working in your collective blind spot, you might end up working on a problem nobody needs or wants. 

Creativity
UChicago Booth School of Business sociology and strategy professor Ron Burt discovered that weak ties are most powerful not simply because they extend one’s network, but because they introduce otherwise insular clusters to each other; they result in brokers who translate between these clusters, thereby introducing new ideas and radical collaboration, two key elements of design-thinking and creativity. Working in diverse teams creates brokerage between networks in ways that constantly expose blind spots, and give teams the opportunity to address them earlier than they would otherwise have been able.

image

Resilience
Most startups die because run out of money. And, I bet, the rest of them die because of team disagreements. In his excellent book Antifragile, Naseem Taleb describes the phenomenon of those things which “gain from disorder”. Startup teams fit this criteria. Early disagreement, chaos and pain is highly common in the stories of most of the culture-defining startup companies. Diversity of perspectives, attitudes, and networks in the early stages of a startup enter it into the antifragile process earlier; this makes it harder to build quickly, perhaps, but it benefits companies in the long run.

At Collaborative Fund, our team is native speakers of Portuguese, Xhosa, Korean, Spanish, hail from all corners of the United States, and represent all manner of academic backgrounds. Our strongest founding teams are mashups of highly varied perspectives and demographics, and some of our favorite products are built particularly for under-considered demographics. I strongly feel that team diversity and multi-network access will be a huge asset to our portfolio in the long run.

What’s happening to the ‘seed’ round?

Lately, a growing number of people have claimed the current seed round, which I take to be between $600K and $2M, is falling out of favor, and I can’t quite wrap my head around what this means. Last year, all the fervor was about the Series A Crunch, and then Jeff Jordan at Andreessen Horowitz made waves by calling “Series A the new Series B”, which has borne out in my experience, with plenty of companies raising really big, $10M to $12M A rounds. But I’ve also seen a number of the very best venture investors lately making small, sub $3M Series A investments into early-stage businesses that have found some magic, but aren’t quite yet ready to turn on the gas. So what’s going on here?

Is it because seed investors are fatigued at having to bridge to increasingly-hard-to-get A’s? Or is it because Series A rounds themselves are bifurcating into “super small $2M or super huge $10M”? Or is it because of something else?

My guess is that this is on some level semantics, but the semantics matter. By calling a $2M round a “seed round”, you are less likely to set a 409A valuation, the likelihood of a board seat goes down, and in the case of a convertible note, the investors don’t get pro rata rights, so the type of vested interest changes. All of these things benefit the entrepreneur in the short term, and in some cases, but not most, they benefit the entrepreneur in general. And the ability to raise a huge seed round is a result, of course, a result of the incredible proliferation of angel investors and micro VC funds, the increasingly organized startups who create support networks and new labor unions to concentrate talent, resources, and access to ever-improving information about the ecosystem. But what happens next?

Perhaps, for most companies, we will go back to a world where a “seed” round is very early and small (under $750K), and an A round is likewise early, high-risk, and also smaller (back to $2M or 3.5M). And for the high-growth, or extremely hot companies, they will raise very big seed rounds (over $1.5M) so their A rounds will be similarly huge, and more like growth ($7-10M). And if you’re stuck in the middle, there’ll probably be a squeeze.

If I were an entrepreneur, I’m not sure which category I’d rather be in. But it seems like there isn’t going to be much in-between.

Faith: the Beginning of Understanding

"Understanding is the reward of faith. Therefore seek not to understand that you may believe, but believe that you may understand.” — St. Augustine of Hippo

When I first heard that quotation, it resonated deeply with me, and I wanted to investigate why. I’ve recently been saying to myself “Instead of believing it when I see it, I will see it when I believe it” and I think this is a similar idea.

One of my favorite subjects in mathematics was geometry. I was, for a time, obsessed with the idea of a geometric proof**. A proof requires at least one “first principle” to start. This can either be a previously proved theorem, or it can be an axiom or postulate, which is a self-evident, or a ‘given’ truth. From here, a proof uses that ‘first principle’, applies it to a given hypothesis, and by deductive reasoning arrives at a proved theorem. Point being, you have to start with a first principle if you can prove any other hypothesis. And while there are plenty of proved theorems, at the bottom of it all, there is always an axiom, or a postulate. And those don’t have to be proved, because they are either self-evident, or, yes, taken as a matter of faith. Every insight we come upon, every perspective we adopt, every strategy we employ, follows this framework. We start with a kernel of faith, and we apply a hypothesis to that kernel, until we have a theorem.

This should help explain why R.H. Coase’s quotation “if you torture the data long enough it will confess” is so brilliant to me.  It should remind you to reflect on your first principles. What are conclusions that you have taken to be a result of sound reasoning that are in fact matters of faith? And once you do recognize those first principles — those matters of faith from which you build your framework— do you identify with those beliefs? Do they line up with how you want to live your life? Relevant in business, religion, love, and all of it.

**This may explain why I was drawn to philosophy, as well.

Making Bets

As originally appears on Progress Report.

It is instructive, when thinking about venture capital, to consider a venture firm as a two-sided marketplace.

On the one side, the firm is selling its capital to entrepreneurs. It has to demonstrate that the brand, services, and relationships that come along with an investment will have a greater material impact on the business than another firm at a similar (and in some cases worse) price. And so they will build platforms, blog, sit on boards of directors, and serve as formal advisers to startups. At Collaborative Fund, we do all of these things to serve our customers on this side of the marketplaces: the entrepreneurs.

The other-side of the marketplace is very important for entrepreneurs to understand as well. Limited Partnerships are structures where everybody, including the General Partnership, invests in a fund, and the Limited Partners hope that at the end of the fund, they will be returned their capital with some gain.

Many, but not all, limited partnerships consist of institutional investors — endowments, pension funds, fund of funds, foundations, et cetera. For these institutions, there are a number of asset classes where they invest, and venture capital tends to fall under the “alternative investments” asset class. That is, we are lumped alongside hedge funds and later stage private equity. Alternative investments, for most portfolios, are the highest risk in the portfolio, and so often represent only a small percentage of the total assets the institution has under management — usually less than 10%, and often less than 5%. As an institutional investor, the hope in this allocation is that the high-risk nature of the category will result in a commensurate high-yield. The most successful venture capital investments, then, are those where the yield was abnormally high - and the risk was abnormally high.

These two sides of the equation should inform each other. Smart institutional investors look for venture capitalists who create a support system for their founders, so that they will drive returns by better serving their portfolio companies. And entrepreneurs should seek venture capital when they are building “high-beta” concepts.

These are concepts that, in the early stages, have a very high risk of failure, but by their nature have the ability to become so big as to transform culture.

Software and internet businesses have served as excellent venture capital investments because the barrier to entry for millions (and today billions) of users is incredibly low. The likelihood for the winners to become truly extraordinary, is astronomically low, but far higher than in any other type of company.

To be honest, entrepreneurs (and venture capitalists), in the spirit of mitigating risk in the very early stages, often aim too low in dreaming up their products, or making investments. While there are many ways to make substantial revenue in the medium term, there are fewer ways to change culture through technology. And it is only the culture-changing products — the Googles, Oracles, Facebooks — that will keep this industry in balance the way it is today.** 

VC associates are trained to ask: Can a scaled-up version of this vision change culture? Because those are the companies that drive the necessary returns.

The moral of the story, for both the founders and the venture capitalists, is dream big. Make bets. When Josh Tetrick decided that he could invent a solution to replace all eggs in food with Hampton Creek Foods; when John Zimmer heard his urban studies professor at Cornell describe a transportation future that was truly, completely revolutionary, they were making bets. 

They had no idea if they were crazy, and were likely told along the way that their ideas were unlikely to succeed, but they were compelled by their conviction in wanting to change the culture. 

And as venture capitalists, we ought to do the same in backing entrepreneurs such as these. Most of the best early stage venture investments aren’t speculative, small, “risk-adjusted” bets, but significant investments, with real allocations. And most of the best early stage venture investments happen when the investor sees an idea that’s “so crazy it might work”. 

**It is worth noting that as an asset class, the venture industry doesn’t perform better than the public stock market, so there is a question as to whether the industry’s balance today does make sense.

On English

Fiduciary does not have roots in the words for money or profit or cash. Fiduciary simply means: “of, and relating to, trust between individuals.” coming from fidere, Latin for trust. People say “well, we have a fiduciary responsibility to our X” to justify the need to make more money. The people who are using fiduciary correctly there are referring to an agreement between parties that financial outcomes will be prioritized above all. But most legal agreements don’t say that. They are neutral, and people infer that, when push comes to shove. And plenty of legal agreements actually have mission-based charters in them, suggesting that there is another outcome that must be prioritized above all. In these cases, then, fiduciary responsibility might mean maximizing an impact goal.

Conclusion: profiteering isn’t as justified as our culture has led us to believe. But now that the culture is changing, one must imagine that will, too.

Currency Abundance and the Tip of the Iceberg.

Albert Wenger, investor at Union Square Ventures, wrote a piece about the technological ages of human history, and some characteristics of the modern age. This paragraph jumped out at me: 

Much of what we believe to be true about society is informed by the more recent historical record. But the forager age might be more informative going forward. Why? Because both the agrarian age and the industrial age were fundamentally marked by scarcity. Only the forager age had a relative sense of abundance. In the digital realm, however, we are dealing once again with abundance and we are gradually extending that to the real world.

What does it mean to live in an age of abundance? How does a truly ubiquitous digital era bring that about, for one, and what does that change? By way of aiming at an answer to those questions, I started thinking more deeply about Bitcoin. As this article very elegantly describes, Bitcoin protocol is an open-source ledgering system, so by keeping a record of where every Bitcoin goes, one can allow direct transfers between individuals with no need for a third party insurer. As Balaji Srinivasan, Naval Ravikant, and many others have explained and predicted, this protocol is powerful not just because of the value of Bitcoin on any given day (unlike what most speculators might lead you to believe), but because of what an open source, increasingly-hard-to-game ledgering system will enable in terms of all types of transactions. I want to walk you through the one that’s captured my imagination today.

First of all, a word about Bitcoin itself (rather than the protocol). It is a resource-based currency, like gold, rather than a fiat currency, like the US dollar. This means that it is backed in something real, while something like the dollar is guaranteed by a government central bank, but holds no intrinsic value. In the case of Bitcoin, unlike gold, real isn’t physical, but digital. But you still have to mine Bitcoin, as you would mine gold. There is a known supply of Bitcoin in circulation, and each one is intrinsically valuable. In both of these cases, fiat and resource-based, the philosophy of the currency is based primarily on managing its scarcity.

Bitcoin is obviously scarce, in that you have to mine it (a time-intensive, arduous process) or buy it to have access to it, like gold. And the dollar is scarce in that the central government has to print it or you have to exchange valuable goods for it in order to have it. Currency scarcity results in a specific set of network behaviors that we all do without even thinking about them — the currency itself, by virtue of being scarce, quickly becomes not a means to an end, but an end unto itself.

Plenty of Bitcoin entrepreneurs (and the thinkers behind something like Ripple) use it as a fundamentally ‘speculative’ product. That is, its valuable today because it’s going to be more valuable tomorrow. This is a feature, not a bug, of scarce currency (ForEx is the same). Saving cash, stealing cash, and investing (in general, perhaps) are all examples of network behaviors that are a function of scarce currency. I can’t produce a dollar (or Bitcoin) whenever I need one, so there are certain behaviors I tend towards as a result. What if currency scarcity weren’t an issue? How would that change network behavior? And how would that even be possible?

Enter mutual credit systems. Most loans accrue interest, and that interest is added value to the lender, who has gained from the transaction, by virtue of getting back more than the value of what he put in. The borrower also gains, by accessing goods and services when he/she needs them, rather than when he/she has the immediate barter value to pay for them. And “pay later” enables all sorts of cool commerce (just look at a mortgage). So credit is sort of made-up value. Every time you give me something, and instead of paying you now I pay you later instead of now, that is debt that gets added to the ledger of a system, out of thin air. If you have credit, you don’t need currency. (Side note- these days, debt can be split up, combined, sold, bought, etc. Large swaths of the financial services industry are simply this. Information technology was the first step towards this, so the financial services industry owes a lot more to technology than they might admit.)

A mutual credit system, then, is one where there is no currency, and only credit. In these cases, the total transactions on the system are effectively IOUs. If you owe me and I owe her and she owes him and so on and thus, you can create a big ledger where everyone is keeping track of everyone else’s debts, and everyone can use their actual goods and services to pay down their debts, and can create credit to access more goods and services in the system. My brilliant friend Alex Chung has worked on some problems in this space; I’m finally properly wrapping my head around how it works.

This gets especially interesting because when it’s just ‘credit’, the ‘units’ are somewhat arbitrary. They can be IOUs, or hugs, or high-fives, or really anything. There are models all over the world where the units are hours, called time banks. But I wonder what other units there could, or should be for what Trust Labs calls “community currency”. Trust and safety is critical to the success of a system like this, like many peer-based networks. You can “price risk” better with more information, which is why most mutual credit systems to-date have been for very small groups of people (in the hundreds): they have enough information about any other actor that there is a high level of community trust, and thus comfort in any given transaction. high level of community trust, and thus comfort in any given transaction. Also most mutual credit systems have a limit, so someone can’t run up a bunch of debt and then leave. But the Internet works towards enabling the trust/reputation layer. Moreover, making ones credit/debt available on a ledger is a very powerful social feature that would conceivably change behavior, since what you owe or are owed is your reputation in and of itself.

Why does Bitcoin protocol matter to this? A ledgering system that is immune to being gamed is very powerful. And given that it’s open source, one can fork it not only for things like Snapchat of email, or music (and other digital good) distribution systems, and so on, but one can use that ledger to power mutual credit systems, as well. And consider the implications of this! 

Thanks to David Anderson, Ryan Jacoby and Alex Magnin for pushing my thinking on this.

Why does eBay still use seller ratings?

On peer-to-peer platforms, trust and safety is of paramount importance. After all, they are intended as safe spaces on which certain categories of transaction can be made. But trust and safety isn’t perfect anywhere, and particularly not on marketplaces. Uber recently was in the news for one of their drivers having a criminal record without them being aware of it. Thumbtack has thorough automated background checks, but that is a defensible competitive advantage for them, rather than a de rigueur feature for the industry.

I recently met with a startup who has automated the seller fraud detection process for inventory on their site, by using machine learning on certain sets of behaviors and language that a given seller uses. In the event that a seller fails in certain among these criteria, they are prompted to take a CAPTCHA and other fraud-deterring steps, to ensure the integrity of the products that are sold on the site. Lyft has more stringent driver vetting processes than the livery industry, but they don’t have as strict a process on the passenger side. If a driver has a bad ride, the passenger is automatically blocked from that driver permanently. If it’s a bad actor, I assume they eventually kick them off, but I haven’t seen evidence of it (and, hopefully, neither have they). All of this is to say, technology can enable a bevy of automating processes which can prevent fraud, take steps to ensure user identity but also product integrity. And yet the backbone of eBay’s service is still, to date, human reviewers, not so different from Yelp. Why?

Truth is, at least as it relates to product integrity, because they don’t want to. In 2008, eBay lost a lawsuit against LVMH, who sued them because of the sale of counterfeit goods on the eBay platform. According to details of the suit, more than 75% of the LVMH goods sold on eBay were fraud or fake. Tiffany’s has said that 80% of their goods sold on eBay are counterfeit. The pieces eBay has put in place now to create trust and safety on the platform around product integrity were done reluctantly, however. The bad goods were driving revenues on the platform, so why get in the way of that? Interesting example of where being an “amoral” peer-to-peer platform can be dangerous, when the revenue leads the strategy…

Mission Burrito Awards.

Inspired by Esquire’s “Eat Like A Man Awards” (a name I take some umbrage with, for reasons I’ll maybe blog about later), which named El Farolito’s as the Most Life-Changing Burrito In America, I’ve decided to assign awards to a handful of Mission burritos**. Submissions most welcome. 
Papalote: “Most likely to only have been to the Mission once.”
La Taqueria: “Most likely to have a drinking problem”
El Toro Taqueria: “Most likely to live in Noe Valley.”
Taqueria Cancún‎: “Most likely to grocery shop at Bi-Rite Market while also complaining about being broke.”
El Metate: “Most likely to think Humphry Slocombe has better ice cream than Bi-Rite Creamery while not knowing more than three phrases in Spanish.”
Little Chihuahua (h/t Kyle): “Most likely to be not-so-secretly happy about gentrification”
Taqueria La Cumbre: “Most likely to be visiting from out of town”
Tacolicious (h/t Banks): “Most likely to be visiting Dolores Park via Uber.”
The same could be done for another 5 or 6 spots, but I’ll let you riff on those in your own time.
** Burritos are for losers anyway. Tacos and tortas FTW.

kanyi:

I used to think of communication in one-dimensional terms: using language to represent our empirical observations to each other. The Internet has taught me some incredible things about how we communicate with each other, and what creates community. We have ideas, we need a medium of expressing…

[Old post] Pre-Snapchat thoughts I dredged up. Think it still stands.