A friend sent me this Kickstarter project which is about a public art project highlighting three languages that are at risk of extinction.

I backed it and I think you might want to as well. You can do so here. The project ends this weekend so if you want to back it, do so now.

I wrote a fair bit last year about the disconnect between how companies were being valued and the fundamentals of those businesses. It seemed to me that many companies, from the founders, to the leadership teams, and the rank and file employees got more focused on raising capital and valuations than the basics of a business (people, product, customers, revenues, profits, etc).

That is starting to shift. I can feel it. With the public markets bringing high flyers back to reality, you can now buy the best companies out there at multiples of earnings and profits that make some sense in a historical context. And we are seeing reports that many mutual funds and hedge funds are leaving the private markets because the values in the public markets are so compelling. All of this is healthy.

Vitalik Buterin, the founder of the Ethereum project, said this at ETH Denver this past week.

The winters are the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people

Vitalik was talking about a “crypto winter” but the basic point is more broadly applicable.

Business models need to be sustainable. Teams need to stick together and ship things. The fundamentals need to be in place for a business to succeed. All the money in the world at eye-popping valuations won’t do that for you.

I have no idea if we are in for another crypto winter. I have no idea if the stock market will continue to go down. I have no idea if the slump in the public markets will seep into the private markets. All of those questions are above my pay grade.

What I do know is that the businesses that focus on the fundamentals will succeed in any market, up or down. And I do feel that there is more of that going on in 2022 than we saw in 2020 and 2021 and that’s a very good thing.

I love using robotics to teach kids to code. A K12 teacher told me many years ago, “when the robot doesn’t do what you told it to do, you know your code is wrong and you need to fix it.” Robotics brings code to life for kids and that’s a great thing.

So when I saw this Kickstarter project, Codrone, I backed it immediately. So did 120 other people and so this project is going to come to life. If you want to back it too, you can do so here.

My friend Alex Iskold ran the 1K project during the pandemic to help families that were struggling with lost jobs/income, etc. I blogged about it here and AVC readers were generous with their support.

Alex came to the US from Ukraine many years ago, but he has many friends and family members there. So naturally, he has relaunched the 1K project focused on the suffering that is happening in Ukraine.

I supported a family and hopefully, some of you can join me in doing that. And those of you who don’t have the resources to support a family might be able to chip something in. Every little bit helps.

Electrified cars were greater than 10% of the US market in 2021 and EVs were about 5%. EV sales are growing at nearly 100% YOY and could reach 25% of the US market in a few years. This is good news for the effort to reduce our dependence on fossil fuels. But there are still challenges for the EV market.

Range anxiety and charge times are among the top reasons that consumers avoid EVs.

The Gotham Gal and I have owned EVs for eight years now and have struggled with a few of these issues. But we continue to buy EVs and prefer them to gas-powered cars.

This past weekend, we took a five-hour road trip with our brother and sister-in-law. We each drove our own cars, both EVs. We drove our eight-year-old original Tesla Model S. They drove a Volvo XC40. We ran into a number of challenges that led us to call this road trip our “range anxiety weekend.”

The first issue that arose is that our destination was slightly beyond the range of both of our cars. We needed about 250-260 miles to get to our destination and we both had about 240 miles of range. So we selected a stop for lunch that had EV charging stations.

Fortunately, when we arrived for lunch, both charging stations were free. They were the only charging stations that we could find in this small town. If either had been taken, we would not have been able to charge during lunch and would have had to go on a charging station hunt after lunch.

We had a leisurely two-hour lunch and when we got back to our cars, we had each gotten another forty miles. That was enough to get to our destination so off we went. We did get to our destination with some spare battery but both of us were below twenty miles when we arrived.

The hotel we stayed out told us they had EV charging stations, but it turns out what they had were two Tesla charging stations and we could not find an adapter to charge the Volvo XC40 on the Tesla charger. So the Gotham Gal and I charged our Tesla both nights at the hotel but our brother and sister-in-law were not able to do that.

The next morning we went on an EV charging station hunt and found an Electrify America fast-charging station which took the Volvo XC 40 from empty to full in about two hours. We left that car charging for most of the day and toured the area in our Tesla.

We charged our Tesla again overnight at our hotel and we both had full batteries for the drive back. We picked another lunch destination halfway home that had charging stations and started the trip back.

While the lunch destination on the way home did have both Tesla and non-Telsa chargers, the charging rate was so slow on them that we were not able to get enough additional mileage over lunch to make it home. So the Gotham Gal and I headed to a Telsa Supercharging Station and in about ten minutes got another fifty miles and then made our way home.

Our brother and sister-in-law had to find a fast charger in town and did but it was not easy. And it took a fair bit longer for them to get the extra fifty miles they needed to get home. But get home they did and the range anxiety weekend ended without any major issues.

But here is what we learned from this trip about the availability of charging stations on the road in California:

• When hotels and restaurants say they have EV chargers, they mostly mean Tesla proprietary charging stations that you need an adapter to use if you are driving something other than a Tesla.
• When you are on the road, you need fast charging stations. The slow variety, which is mostly what is out there, only work for an overnight charge. So they are OK for a hotel but not for anything else.
• Tesla has done an incredible job with their supercharging stations. Range anxiety is a signficantly reduced issue if you drive a Tesla.
• While Electrify America is doing a nice job of buildling out fast charging stations for non Telsa EVs, their charging stations are signficantly slower than Tesla’s superchargers and they are not nearly as prevalent.

Given that range anxiety and charge times are among the top reasons that consumers don’t purchase EVs, it would make sense for the automobile industry to come together and standardize charging outlets and invest heavily in fast (super fast) charging stations. Telsa can likely get away with its own charging network and charging outlets, but everyone else cannot. I don’t understand why this is not a bigger priority for the industry. It needs to be.

There is a lot of criticism of venture capital in web3. Bitcoin did not have or need venture capital. Ethereum did not have or need venture capital. So why would any web3 project need venture capital? It is a good question. In the age of community-funded projects, why would a web3 project want to take funding from venture capitalists?

Well buried deep in a 66 page blog post on the Flow blockchain by Packy McCormick lies the answer.

In a section called Kitty Down, Packy describes the challenges that the Dapper Labs team went through between late 2017, when CryptoKitties launched, and the summer of 2020, when Top Shot launched.

What Packy lays out is a series of notes that the venture capitalists (including yours truly) provided to Dapper during the last crypto winter that kept the project alive. As Packy says:

In Dapper’s case, VCs kept the company alive during the bear market and the company sold tokens to the public at the same price it sold them to VCs, even though VCs invested first. 

That latter bit is quite important. After Top Shot launched and it was clear that Dapper and Flow were gonna make it, Dapper offered Flow tokens to the community at the same price that the venture capitalists got in the conversion of the notes.

There are many alternatives to venture capital these days, particularly in web3, but there are few, if any, alternatives that stick with you, when times are tough, when a global pandemic hits and you have weeks of cash left, when everything seems lost and you are at rock bottom.

But venture capitalists do, particularly good, experienced, and confident venture capitalists.

And that is what Dapper had by its side. And that is why Dapper was able to launch the Flow blockchain, NBA Top Shot, the Dapper Wallet, and a bunch more hit products too.

That’s why you might want to take venture capital for your web3 project.

Investing is humbling. At 60, with 35 years of venture investing experience, I still get most things wrong.

Which is why I like to keep things simple. And when I do I am rewarded.

My friend Gordon asked me last night how I got into Bitcoin. I told him the story of how I bumped into Rikki Tahta walking through the garment district in NYC in the spring of 2011 and Rikki told me he was working on a Bitcoin startup. I replied, “a what coin startup?”. And Rikki told me to read the Bitcoin White Paper. I did and I was hooked.

I didn’t even understand parts of the white paper. But what I did get was that it described a way of making permissionless money. And it was not just an idea. It was a working system that had been operating for several years. I understand how important permissionless servers and applications (web 1.0) turned out to be and so I understood how important permissionless money was going to be.

That was all it took for me. I bought Bitcoin and went about finding a Bitcoin investment to make. That was Coinbase.

The same was true with blogging and tweeting a decade earlier. I met Mena Trott at a Nick Denton party in NYC in 2003 and she explained blogging to me. I was struck by the idea that anyone could be a publisher. And I became one myself a few days later (when I wrote the first post here on AVC). That led me to Twitter a few years later when I saw that most people would prefer to write a text message to the world over a long-form blog post. For those that don’t know, Twitter was initially built to use SMS to post and so the initial 140 character limit was just under the max characters you could put into a text message.

The same is true with NFTs. When I saw Rare Pepes, I was struck with the idea of making unique, rare, and scarce digital goods. And when I saw what Dapper Labs made with Crypto Kitties, I didn’t think too much about making that investment. It helped that the team had contributed to the ERC 721 spec and coined the name NFT.

The point of these stories is that aha moments come around every so often and you just need to let them grab you and take you to a foundational investment. You don’t need to do much due diligence on these. I did none on Twitter, Coinbase, or Dapper. What I did do is use the products, get in the game, feel the power, and get conviction.

You can read the investment memos for those investments on USV.com.

• Twitter
• Coinbase
• Dapper

We publish our investment memos for the world to see. When you read them you will notice that they are basically an articulation of a big idea, what could happen, and in these cases, what did happen. That’s all. No technical diligence (had we done any on Twitter, we would have passed on it), no financial models, no talking to industry experts. Just an aha moment and an idea of what could happen.

That’s keeping it simple. It doesn’t always work. We get more wrong than we get right. But when we get it right, amazing things can happen.

So I saw this tweet by Semil Shah yesterday:

So I clicked on the link to my Competing To Win Deals post, which I wrote in 2010, and read it. I often read things I wrote a decade or more ago and cringe at how out of date they have become. Not this one. It is as relevant today as when I wrote it almost twelve years ago. So I am reposting it below:

The venture capital business is highly competitive. There is more money out there chasing good deals than most people imagine. It is also true that there are good deals and good entrepreneurs that can’t find anyone to invest in them. That is a failure of the system. But this post is not about that. It is about how a VC can compete and win a deal that many others want.

Here are my rules:

1) Do your very best to connect with the entrepreneur. If you don’t have a great personal connection, you won’t win the deal. Don’t even bother to try to win a deal where you don’t have good personal chemistry with the founder/CEO.

2) Bring your full partnership into the deal process early and consistently. Entrepreneurs are smart and they know they are doing a deal with a firm as well as an individual. Let them see the full picture early. Make it easy on the entrepreneur to meet the full partnership. Don’t make the entrepreneur do all the work.

3) Encourage the entrepreneur to get feedback on you and your firm. Instead of references, I like to give a list of every entrepreneur I’ve ever worked with and an email address. I tell them “throw a dart at that list and talk to four or five of them randomly. you’ll hear the same thing from everyone.”

4) Don’t pressure the entrepreneur to make a decision. Don’t issue exploding term sheets. Don’t put no shops into your term sheets. Those kinds of things are signs of insecurity. I prefer to tell people that we’ll have an exclusive relationship when the deal closes and not before then. If someone wants to leave me at the altar, better it happens then than after we are married.

5) Make your offer in person and don’t do it via a term sheet. Tell the entrepreneur you want to be their business partner. Tell them how much you will invest and how much ownership you want. Leave it at that. Tell them that if they are interested, you will send them a term sheet. Leading with a term sheet focuses the discussion on the wrong things. The process should be all about personal fit and very high level deal terms. Once the decision is made to try to work together, you can get into the specifics of the deal.

6) Add value during the process. Talk about the strategy issues facing the company. Talk about the hiring challenges the company faces. Try to help with these issues even before you are an investor. Show what you can do right away.

7) Use the product or service. Ideally you should be using it well before you start chasing the deal. But use the product/service actively and smartly. The entreprener will be watching. I assure you of that.

8) Don’t feel the need to pay the highest price. Offering a crazy price to win the deal scares off most smart entrepreneurs. They will be wondering why you are so aggressive. Offering a fair price that is in the range is what you need to do. And communicate that if the entrepreneur chooses to work with you, you will be flexible on your offer. That way you put yourself in the position to win and you can work the specifics to close the deal when the opportunity presents itself.

9) Don’t team up with another firm. We’ve made this mistake a few times recently. Entrepreneurs want to choose their syndicate partners. By pairing up with another firm, you signal to the entrepreneur that you want to choose the syndicate and that is a mistake in a highly competitive deal.

10) Be prepared to lose the deal and if you do, lose gracefully. There are plenty of good deals out there. You don’t have to win them all. Lose gracefully and maintain your good relationship with the entrepreneur at all costs. They might come back to you on the next round.

Many of these rules are counter intuitive. But they work well for my partners and me. You might say they will only work for you if you are a top tier investor. That may well be true, but you have to act like a top tier investor to become one. So you might as well play the game that way from the start.

I went to renew a .ETH domain I own this morning and the gas fees were so high that I decided to come back another time.

Ethereum is the most popular smart contract blockchain by far but it frequently gets congested and expensive. Using it to acquire and renew domains, normally a transaction that costs less than $100 USD, is challenging.

That is why there are a host of Ethereum Virtual Machine (EVM) compatible layer one blockchains (L1s) and a number of layer two networks (L2s) that run on top of the Ethereum mainnet. These networks allow decentralized apps (dapps) that use Ethereum smart contracts to operate much less expensively.

I went into my Coinbase Wallet this morning to see how many of these L1 and L2 networks they currently support and found this list.

There are many more L1s and L2s that have launched, but that is a list of some of the most popular ones. I expect that Coinbase Wallet and Metamask and other self custody wallets will continue to add additional ones over the next few years.

My son went to the Knicks game on Saturday and they were offering Knicks NFTs on the Jumbotron. I told him to buy me one. He did and bought it on the Polygon network to save fees. He sent it to my self custody wallet and when I switch networks to Polygon in the wallet, I can see the NFT.

That’s how these L1s and L2s work in self custody wallets today.

I don’t think that is how they will always work.

I think that a lot of the Web3 “plumbing” that is now visible to users in the wallets and dapps will eventually be hidden by developers so users don’t need to worry about which network their assets are on. They will be able to find them, use them, transfer them, sell them, etc without needing to know which chain they are dealing with.

But for now, this is the state of play with the Ethereum ecosystem. You increasingly need to go to a different L1 or L2 to do things cost-effectively. And when you do, there is added complexity for the user. This is both progress in the sense that third-party developers are building technology to scale the Ethereum ecosystem and pain in the sense that an already complicated user experience is getting more complicated.

Hiding all of this complexity for the end-user is definitely one of the big opportunities in web3 right now.

Mike Masnick wrote a good piece on this topic on his Techdirt blog last week.

I particularly like this part:

First, let’s look at the world without any content moderation. A website that has no content moderation but allows anyone to post will fill up with spam. Even this tiny website gets thousands of spam comments a day. Most of them are (thankfully) caught by the layers upon layers of filtering tools we’ve set up.

Would anyone argue that it is “against the principles of free speech” to filter spam? I would hope not.

But once you’ve admitted that it’s okay to filter spam, you’ve already admitted that content moderation is okay — you’re just haggling over how much and where to draw the lines.

And, really, the spam example is instructive in many ways. People recognize that if a website is overrun with spam, it’s actually detrimental for speech overall, because how can anyone communicate when all of the communication is interrupted or hard to find due to spam?

https://www.techdirt.com/2022/03/30/why-moderating-content-actually-does-more-to-support-the-principles-of-free-speech/

I, like many in tech, would prefer a world where there is little to no moderation and where you get a lively expression of different views. I use Twitter explicitly to hear voices I don’t hear in my day-to-day routines.

But as Mike notes, you must moderate content online in order to create spaces where conversations can be had.

And inevitably, this leads me to the same conclusion that Mike comes to at the end of his post. What we need are way more venues for conversations and way more venues with different moderation policies.

In other words, the concept of free speech should support a diversity of communities — not all speech on every community (or any particular community). And content moderation is what makes that possible.

https://www.techdirt.com/2022/03/30/why-moderating-content-actually-does-more-to-support-the-principles-of-free-speech/

The early days of Twitter are instructive here. The Twitter website was unreliable and the API allowed anyone to build a third-party client. So many Twitter users used a different user interface to access Twitter and use Twitter. Had that architecture endured it could have created many “clients” with different moderation policies. Just like we have many email clients. It did not endure and so we have one company controlling the moderation policy of the entire Twitter conversation. That is not ideal.

Contrast this with Ethereum. We have a single protocol with many self custody wallets. Each self custody wallet has a slightly different user interface that allows users to access the Ethereum network in slightly different ways. But all of the teams working on the Ethereum ecosystem have a shared incentive to improve the network because they all own ETH. So a single protocol with a rich variety of third-party clients becomes sustainable.

If we want free speech then we want less concentration of market power and business models that allow for that. Advertising does not. Token-based business models do.

6529 is one of the top NFT collectors in the world and last week he launched the first destination in an Open Metaverse that he is encouraging people to develop along with him.

That destination is the 6529 Museum District and you can visit it here.

When you arrive you will see this map which gives you a sense of what is there right now.

All of these museums are fun to visit, but I particularly recommend:

– Genesis

– Sunshine Square

– Imagined Worlds

– General Assembly

– ACK Bar

I hope you take a stroll through the Museum District this week and if you do, I expect you will enjoy it.

Full Disclosure: USV and I both own interests in many of the NFTs shown in the Museum District.

It is Earth Day, a day to celebrate our planet and rededicate ourselves to saving it. I plan to walk and ride my bike, avoid cars, and enjoy being out and about in NYC today.

But I’d also like to talk about something that is bothering me.

The New York State Assembly and Senate are working to pass a bill that would put a two-year moratorium on “proof of work” cryptocurrency mining. Here is the most important part of the bill:

1. For the period commencing on the effective date of this section and
    25  ending two years after such date,  the  department,  after  consultation
    26  with  the department of public service, shall not approve a new applica-
    27  tion for or issue a new permit pursuant  to  this  article,  or  article
    28  seventy  of  this  chapter,  for  an  electric  generating facility that
    29  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    30  behind-the-meter  electric energy consumed or utilized by cryptocurrency
    31  mining operations that use proof-of-work authentication methods to vali-
    32  date blockchain transactions.
    33    2. For the period commencing on the effective date of  this    section
    34  and  ending  two years after such date, the department shall not approve
    35  an application to renew an existing permit or  issue  a  renewal  permit
    36  pursuant  to  this  article  for  an  electric  generating facility that
    37  utilizes a carbon-based fuel and that provides, in  whole  or  in  part,
    38  behind-the-meter electric energy consumed or utilized by a cryptocurren-
    39  cy  mining  operation  that uses proof-of-work authentication methods to
    40  validate blockchain transactions if the  renewal  application  seeks  to
    41  increase  or  will allow or result in an increase in the amount of elec-
    42  tric energy consumed or utilized by a  cryptocurrency  mining  operation
    43  that  uses  proof-of-work  authentication methods to validate blockchain
    44  transactions.

I believe this bill resulted from an application to fire up an old coal-powered electric plan to power a Bitcoin mining facility and I will be the first to admit that is a horrible idea. We should not be firing up old fossil fuel plants for any sort of economic activity. It is time to retire fossil fuel-powered plants and replace them with nuclear, hydro, wind, solar, and other clean energy sources.

But the idea of targeting a specific industry for this moratorium and leaving all other economic activity in NYS free to use fossil fuel is just absurd. Is it OK to use fossil fuels to power bowling alleys, movie theaters, car washes, sports stadiums, data centers, banks, homes, cars, etc, etc? Is it just not OK to use fossil fuel to power a network that secures our next-generation technology stack?

And at the same time New York State is doing this, the State of California is preparing an Executive Order that will be extremely friendly to the emerging crypto/web3 industry. New York State is already fighting an uphill battle with the crypto/web3 industry with its god awful BitLicense law and now they want to do this.

New York State should just put signs up on the Holland Tunnel, the Lincoln Tunnel, the George Washington Bridge, the Peace Bridge, and everywhere else people arrive in New York State that says “Web3 Is Not Welcome Here.” And save themselves the time and energy of doing nonsense like this.

We get the message loud and clear.

When I read the news a few weeks ago that Elon Musk had offered to buy Twitter, I wrote this:

I continue to believe that decentralization is the right long-term answer for a core communications protocol of the Internet and hope that Elon will think about doing just that once he owns it and is not concerned with the stock price and meeting quarterly revenue targets.

My partner Albert wrote this yesterday:

Albert’s suggestion would return Twitter to where it was a decade and a half ago when it first launched and that would be a fantastic first step towards full decentralization.

I continue to believe that a single person owning one of the most important communications protocols of the internet is a bad idea, but maybe it can be a bridge to something better.

Certainly being a public company has not been the right ownership model to make the big fundamental changes which are badly needed.

Last week we held USV’s annual Portfolio Summit here in NYC. Every year we invite the leaders of our portfolio companies to come to NYC and spend a couple of days with us and each other. However, we were not able to do that in 2020 and 2021 so this was our first Portfolio Summit since 2019.

In the three years that have passed since our last summit, we roughly doubled the size of our portfolio, adding 65 new investments. That is 65 founders and leaders that had not been to a USV Summit, and in some cases, we had not met them in person.

This is a photo of folks arriving on the first day and settling in:

There is nothing particularly interesting about that photo. Most of us have been to these sorts of business affairs countless times. Except that we have not been able to do it for the last two years.

I have always felt like our two-day Portfolio Summit is my favorite work event of the year. And I had not realized how much I had missed it. It is so great to see everyone together in person, sharing experiences and ideas with each other and building relationships.

We learned some new tricks over the last two years. Those of us who work in VC and startups can work remotely and get most everything we need done. But we have to remember the power of being together and do more of it. It really makes a difference.

Tech:NYC is launching a new initiative, Tech Year NYC, which helps young people from underrepresented backgrounds get access to careers in NYC’s fast-growing tech sector.

Tech Year NYC is a rollup of several existing city programs into a single point of entry and engagement for tech companies and students. The idea is to make it easier for local tech companies to engage with this population and easier for the students to get access to these pathways to jobs.

Students are compensated for their participation by the city and industry partners and will come out of the program with professional skills essential to work in the tech sector and additional skill-building opportunities.

Tech Year NYC is an expansion of a project-based learning curriculum that Tech:NYC developed with the Mayor’s Office of Youth Employment back in the summer of 2020 called Summer Bridge. Over the last two years, over 100 tech companies and over 3,000 students have participated in this effort.

The summer 2022 Tech Year NYC pilot will run from July 5th to August 12th and serve over 1,000 students. 500 of these students will continue career exploration and skills development through the fall semester. If and when this pilot proves successful, Tech Year NYC will be expanded to reach many more students and employers.

Tech NYC is recruiting employer partners to lead these 5-week long project-based programs, open your doors for “tech open houses”, and participate in professional skills workshops for these students. You can learn more and register to be an employer partner this summer here.

Investing in founder-led businesses is comforting to me. They have the ability to see the forest through the trees and do what is necessary to evolve the business.

Two great examples of this are Microsoft in the mid 90s and Facebook a decade ago.

Microsoft had spent more than a decade competing and winning the desktop software market and then Netscape came along and presented an entirely new market opportunity that had both major upside and major downside for Microsoft. Microsoft reacted by moving aggressively to compete with Netscape by launching Internet Explorer and using its desktop software dominance to establish IE as the dominant browser by the end of the decade.

Facebook had spent about a decade competing and winning the social networking market and then Apple launched the iPhone and new mobile social networks like Instagram emerged that both threatened Facebook’s existing dominance and also presented new large opportunities in social networking. Facebook went on a year-long effort to become a “mobile-first” company and also acquired Instagram that year. This all happened in Facebook’s first year as a public company.

I was thinking about that because as many are wringing their hands about the collapse of crypto prices and stock prices and cutting back costs and playing defense, Coinbase announced yesterday that they are investing heavily in the next wave of web3:

The application era of crypto is upon us and products/companies like Metamask and OpenSea are showing how important and lucrative that market is. Coinbase has reacted by making huge new bets on Coinbase Wallet and Coinbase NFT and is committed to winning in those markets like it did in the investment era of web3.

It is very hard to do this sort of thing when your stock price is under pressure and when the markets are in free fall. And yet that is what leaders must do when new use cases emerge and present themselves as both an opportunity and a threat.

Disclosure: I am a Director of and our family is a large shareholder of Coinbase.

I blogged about the $1k Project For Ukraine a couple of months ago. Since then over 5,000 families in Ukraine have gotten a $1k gift, no strings attached, to help them survive during this crisis. That is $5mm of direct aid to families in Ukraine.

Yesterday, Stewart Butterfield, the founder of Slack, tweeted that he and Jen Rubio will be matching another $2.5mm of $1k donations over the next 48 hours, starting at mid-day yesterday.

I just supported another five families and with this generous match, that is ten families.

You can join me in supporting a family, or five, or however many you’d like here.

Back in February of last year, I wrote a blog post with the same title and said this about the asset price bubble we were living in and investing in over the last few years:

Well now the markets have hit the brakes and the new question is how that ends.

I have been using the early 80s as a bit of a mental model. The late 70s saw oil prices rise and stagflation emerge and while that is not exactly what has happened with COVID and the war in Ukraine, there are some similarities.

In the early 80s, the G7 economies tightened the money supply, raising interest rates dramatically, in an effort to bring inflation under control. You can see the effect in this image:

The early 80s had a double dip recession (one in 1980 and another one for 18 months in 1981 and 1982). The economy was weak for three years at the start of the decade. But the latter half of the decade was one of the best economies in modern times.

So I suspect we are either in a recession right now or headed to one, brought on by tightening money supply/higher rates that are being used to control inflation. That recession could easily last until the end of 2023. But we don’t really know how long it will take for this cycle to play out.

Markets have already corrected and I think that public tech stocks have already seen most of the damage they are going to see. I don’t know if we have hit bottom but I think we are closer to the bottom than the top now. But that does not mean they will turn around and go right back up.

This is a price chart of the NASDAQ during the early 80s recession and you can see that prices did not start to move up until the second half of 1983, when the recession was starting to end.

So how does this market meltdown that we are now in end?

First, we need to see the economy slow down and inflation slow down. We need to see stocks bottom out and hang out there for a while. And we need to be patient. None of this is going to happen fast.

I would be planning to ride this thing out for at least eighteen months or more.

Gotham Gives is a public charity that the Gotham Gal and I started one year ago to complement the family foundation that we have been using to make philanthropic gifts for over two decades.

A public charity allows us to raise capital from others in addition to our family’s philanthropic gifts. We use this public charity to put together syndicates of donors and raise more capital for our projects than would be possible on our own. It reminds me very much of the way early-stage venture capital works.

We started raising funds in addition to making gifts over a decade ago when we started our computer science education work in New York City and Gotham Gives takes that approach to philanthropy and allows us to use it in other areas.

This page shows the projects we have supported in our first year and who we have partnered with on them.

This page hosts videos we have recorded with some of the founders and operators of these projects and we plan to produce more videos in the coming months. You can subscribe to our YouTube channel to see more videos as they come out.

You can also follow Gotham Gives on Twitter if you want to follow our activities on social media.

Gotham Gives is run by Jennifer Klopp and we are joined on the board by our long-time friend and philanthropic partner Sarah Holloway. The entire team is shown on this page.

Philanthropy is an incredibly rewarding way to invest in the change you want to see in the world. In our case, that is change we want to see in our home, New York City, and we are committed to investing in programs that leverage community, knowledge, and culture to drive positive change for New York City.

New York Senator Gillibrand and Wyoming Senator Lummis have teamed up to propose a bi-partisan bill that would shift much of the regulatory oversight of crypto assets from the SEC to the CFTC, acknowledging that these tokens are much more like commodities than securities.

The details of the bill will be made public today and then there will be a lot of feedback from elected officials, regulators, and industry. It is not certain that this bill will become law and if it does, it is not certain that it will look anything like the initial bill.

But even so, I am very encouraged by this development. Crypto tokens are a foundational element of web3, a technology architecture that allows for decentralized applications which lessen the control of big tech monopolies on our lives and our data, and that allows for users to own their data and a share of the networks that the applications are built on. Constraining these user tokens as securities is not only incorrect but also would inhibit much of their utility and therefore the potential for web3 to remake the technology industry as is so desperately needed.

So I applaud the work of Senators Gillibrand and Lummis and their staffs. They are making an important statement with this bill and I believe that this is a big step in the right direction.