2019: tough times for Europe?

2019 is starting to look like it might be the perfect storm for Europe. 

The ECB has pulled back on and will completely cease its massive asset purchase scheme in early 2019. Markets expect Draghi to raise rates in the last months of his term. We’re at -0.40%, so not a lot of wiggle room in any case. 

Brexit is looming. We’ll know more after December 11, but whatever happens it’ll be a massive disruption. Except for an about-turn to continued membership, all alternatives look fairly poor. Including the prospect of a “democratic socialist” government under Corbyn. 

Italy’s debt crisis is accelerating. The country is probably already in recession and banks and companies are having trouble refinancing themselves. 

German lenders (and tax payers) will be left holding the bag. Deutsche Bank, which never recovered from 2008, is looking particularly vulnerable. A money-laundering raid of its HQ this month didn’t help. 

Populist discontent is growing. It has spilled onto French streets and is changing politics in multiple other countries. Expect more unrest. This is a key theme in European politics, pitting elites against the middle classes. Dissatisfaction stemming from inequality of economic opportunity, but with a particular focus on failed immigration policies and multiculturalism, will be a defining factor of European politics for the next decade. 

The electoral win of AKK as the conservative party’s chairman to replace Merkel communicates clearly: the elites don’t get it (yet). Germany’s politics will fragment further - expect Greens and AfD to become the largest parties, leading to a similar polarization as in the US. 

The schism between Western and Eastern Europe is widening. The EU is one to two more Brexit type events from total stasis, if not (informal) dissolution. And it doesn’t look like Merkel/Macron will be able to heal that divide. There needs to be a policy alternative to “ever closer union” and centralization. 

Trump has declared a temporary truce with China (markets have caught on that it really may be temporary). But he’s not a politician who operates without an enemy. 2019 is looking like it will be tough for him domestically. Look for the rhetoric to switch to Europe - Germany’s car industry leadership has already bent the knee. But I expect him to push on further on trade and NATO and dial up the rhetoric. 

And then there’s the wildcard of Russia. Ukraine is volatile to the point where both parties may find it beneficial to escalate the conflict. 

None of this matters for startups per se. Europe’s travails will be a rounding error in the narrative of successful founders. But economic volatility spooks capital and the contagion is psychological above all. Europe may well be the crucible for global recession in 2019. 

It’s not quite RIP Good Times 2.0. 

But raise your next round while you can and bunker down to keep building the future. 

Spotify Top Songs 2018

It's amazing how much music reveals about you. I've known this at least since my first angel investment, Last.fm

I wish Spotify made it easier to see other people's top lists. 

Here's mine. The one thing it clearly shows is that I'm getting older...

Password management

There's an assumption of security in technology that has never been true. 

More and more of how we live, work, and play is intermediated by online services. Every time you get in your car. Every time you buy a coffee. Every time you pick up your phone. Book a flight. Wire some money. Watch a movie.

From unauthorized access to social engineering, the core fabric of online services is not secure. And that won't change for the foreseeable future. If anything, breaches will be bigger, more impactful, more costly.

The fact that one of the largest hotel chains in the world didn't find out that its guest database was leaking passport and credit card numbers is mind-boggling in its implications. 

And so I want to encourage you to take one annoying but necessary step to protect yourself: use a password manager.

Most people use a primary password, or some tiered level of "more secure" passwords that are nevertheless the same between services. 

You only need one breach for it to become a real problem.

I personally use 1Password, but I've heard good things about LastPass and maybe Dashlane. 

Do it today. 

The supremacy of Mind in human affairs

Kapil Gupta MD, coach to athletes, CEOs, and perhaps most notably (in our world) reviewed very favorably by Naval Ravikant, tweeted this in response to my previous post and comment "Not everything is political": 

Doesn't that feel right? It does to me. 

And reminds me reflexively, media-addled mind that I am an owner/a slave of, of this somewhat less beautiful Simpsons quote:

Image result for beer the problem solution simpsons


It is an addiction of mind, this obsession with news and politics and media. The ingestion, processing (labeling, judging), regurgitation of information, data, the attempt to accumulate, to hoard "knowledge", to better and lecture and prescribe. And the belief that through this same process we can relieve the symptoms of the pain... 

The process is the pain in the first place.

We forget that we give permission to being disturbed by meaningless things. But once you're in the mind-world, it is much harder to stop. Just like an addiction.

I have days that I live without. Where I am with the world. Where I see, touch, smell, taste, am more. 

Interestingly it is those days that my connection to others is strong. Where I am fully there and others - strangers, too - unfailingly notice. 

On days like these I seem to be able to live more smoothly. There can be no wrong. Mind is my tool, rather than I a tool of it. 

These are not fleeting times, a few minutes, here or there. It goes a while if I don't hit... a bump. It feels less like a different "state" than what the mystics write, and more "hyper-real." 

Oddly it is not practice that makes it better. It's just awareness. There is no tension in it. 

But then I wake up another day and it is gone, disturbed by... I am not sure what. A "bump." Some event, some anxiety, some future plan the outcome of which matters so much. And then we're back on the merry-go-round.

I think it is a form of self-sabotage. Surely I am overthinking this. :)  

Go follow Kapil Gupta in any case + check out his books (free with Kindle Unlimited).

The supremacy of politics in human affairs

I try not to write about politics on this blog. I fail all the time. 

How can you not be political when everything today is political? What you wear is political. What you eat is political. What God you believe in and what you like on Twitter is political. 

“Everything is political” is a win for the authoritarian radicals. It forces you to evaluate your behaviors through the lens of politics. 

Should you be vegan? Should you fight against oppression? Should you combat climate change? Can you do business with Russia? Should you hire more minorities? Are you perpetuating the white supremacy of the patriarchy? 

Even if you believe in personal liberty and that not every single simple preference you have means you believe it should be a policy prescription for everybody, the effects of everything being political are pernicious. 

Because the respect and tolerance of that perspective will not be accorded to you by those who believe they are your moral superiors. 

And so we develop subtle self-corrections. Many people now lie - they falsify their preferences - to align socially and morally with their respective in-group. Since it is the most pure (and extreme) of the individuals in those groups that set their new moral standards, we drift further and further into polarization. 

Along the way, all nuance is lost. Are you for liberty or are you against school shootings? Are you a baby killer or do you believe in women’s rights? And so we start to normalize the policing of others, the only remit being a shaky moral authority I had assumed we had left behind with the enlightenment. 

I seem to remember a time where it was perfectly valid to have reasonable policy answers between those extreme poles. Or to perhaps not have a well-informed view at all, because frankly who cares? Some people might but I choose not to. That’s a perfectly sensible ethical position. 

The entrenchment into polarized groups and the loss of nuance fosters an increasingly wary citizenry that is afraid to be themselves. Some become reactionary. Others retrench. What results, in a convoluted and highly ironic causal chain, is less diversity and less tolerance in our dealings with one another. 

How did we let this happen? How were things so good for us that we let politics become supreme in human affairs? 

What happened to putting individual initiative, inventing things, building our lives, making our communities better ourselves first? Ask not what your country can do for you, and so on? 

What happened to understanding that government and laws won’t fix everything (and maybe shouldn’t)? 

And what happened to having different opinions and being friends? Because the human is not political. 

Transparency in the entrepreneur-to-LP tech ecosystem #OpenLP

Venture capital used to be a highly opaque industry. Very few firms, accessible only through network, intransparent decision-making processes. From the outside it looked slightly mystical and certainly very glamorous (it is not).  

Thankfully much has changed. The first generation of VC bloggers, like Fred Wilson, Brad Feld, Fred Destin, and others, have contributed to making the industry much more transparent and approachable. And so much capital has flowed in that you can't really move for new firms.*

Venture is now universally discussed - almost overly so. If you're in tech, it's hard to escape "VC Twitter", which is its own little ecosystem. Some of it is content marketing (a lot of it is content marketing), but there are so many smart, well-intentioned, insightful people that are very open that founders can now follow and reach out easily.

A similar openness has been coming to the Limited Partner ecosystem. LPs are the capital behind the venture funds, which are turn managed by General Partners, the VCs themselves. 

Sapphire Ventures launched OpenLP in 2016 to foster more transparency in the tech (LP) community. The site aggregates blog posts and other writings by a very diverse set of LPs. It also has a Twitter hashtag #openlp that lets you follow the conversation.

I love the opportunity of learning more about the motivations and decision-making processes in a part of our industry that used to be similarly opaque. 

If you're in venture, or an interested founder or investor, check out OpenLP. I've found it fascinating. Much props to Sapphire for running it.  

* In numbers, the amount of capital available has certainly grown faster than the amount of good companies to invest in. Not dissimilarly, the amount of founders now outstrips the availability of good engineers. 


We are all so distracted. You glance at the phone during our meeting. 

When was the last time you gave something your full attention? 

By that I don't mean focusing your mind. That just means pushing your distraction to the edges. It is still there. But now also there's tension.

It's hard to live while stealing glances to the side.

Step one might be to undo the labels. 

Just to look, without naming the thing. To just be with the thing. To grok it.

Old mistakes

Fred has a great post about track record today. 

It got me thinking about my (much shorter) venture career and what some of my most valuable mistakes have been.

The top one is probably getting seduced by traction. Early metrics are good - we all like them. But they de-risk an investment less than commonly presumed. Particularly when customer acquisition is paid marketing and it skews the "true" data you could be getting.

I'd much rather see something grow organically in the beginning, even if that growth is slower than what's possible using paid. 

Traction also shouldn't supplant other considerations, like what the market's true prospects are. It's easy to believe that because one company is making this new thing work for a small group of early and passionate customers, it has the potential to be a category-defining innovation. Sometimes novelty is just novelty. 

Traction also shouldn't outweigh the team's overall potential. I've compromised on team a few times in my career. Particularly when there was a ton of traction and the idea was really big. Compromising on team has always turned out to be a mistake. 

I love audacious people, but there's a fine line that separates it from slightly delusional. Where the vision supplants the details, I am much more careful than previously. A great founder can find the right balance between keeping the big vision and sweating the small stuff. 

And finally on team, personality matters a lot. Low agreeability is a trait of a lot of successful founders, but low emotional stability is pretty harmful. 

The other lesson is that a geo focus sucks. I invested very widely early in my career - hardware, B2B, marketplaces, travel, mobile apps, commerce... I believed that Europe as a geography had too little depth to really select on anything but people (see above).

I think that is still largely true for the market as a whole. But as an individual or even a firm, there's now enough capital that the huge benefits of thesis-driven specialization outweigh the missed opportunities. 

That's why I've been 100% focused on consumer/user-only investing for the past year and a half, and I think that's what I'll want to do for the rest of my career.

I'm sure I've made many other mistakes in the last five years of active venture investing (and ten as an angel). But these are the ones that immediately come to mind as the biggest lessons learned.

Better writing

So I’m getting more into the swing of blogging. But my audience varies wildly post by post. 

Partly it’s because the stuff I write about may not be interesting to my audience. I’ve never much thought about what it is that you want to read about. I might do more of that. 

I’m also thinking about moving to Wordpress for better integrations. I want to write more on mobile. And get Disqus comments. It would also allow me to make email a primary distribution channel, rather than relying on social. I want to automate social as much as possible. As fun as Twitter is (and Facebook isn’t), I don’t feel like it’s a great use of time. 

And then I want to simplify my writing. This post from Scott Adams points the way: https://dilbertblog.typepad.com/the_dilbert_blog/2007/06/the_day_you_bec.html

The Broken Earth trilogy (The Fifth Season, The Obelisk Gate, The Stone Sky)

I finished the final volume of the Broken Earth trilogy today, The Stone Sky. It is my favorite book of the three, not least because it feels more raw, complex, and has an incredible narrative crescendo culminating in one of the most dramatic fantasy scenes I have ever read.

I have to admit that I was skeptical initially - the three consecutive Hugo wins to the same author? But I am wrong. N.K. Jemisin is a fabulous storyteller and these are more than deserved.

While never overtly political, it is a story of allegory set in a world after climate change, touching on slavery, inequality, prejudice, revolution, redemption. The two female protagonists are mother and daughter, with all the complexities that entails. The plot is driven by a race to save the world and to uncover the mystery of the planet's ailments and its heritage of dead civilizations.

If you enjoy good fantasy/sci-fi and haven't heard of the books, they're worth your time. Or you can just wait for the TV show - TNT is making at least the first volume.