Research: The Cost of a Single U.S. Immigration Restriction


This post is by Dany Bahar from HBR.org

One executive order cost the American economy $100 billion, according to a new study.

PACs and SPACs!


This post is by HBR.org from HBR.org

Felix, Rebecca, and Mihir debate the role of corporations in politics and the rise of special purpose acquisition companies.

Why Biden needs a National Technology Council


This post is curated by Keith Teare. It was written by Jonathan Spalter. The original is [linked here]

The White House has a National Security Council and a National Economic Council. President-elect Joe Biden should move quickly to establish a National Technology Council.

Consumers are looking to the government to set a coherent and consistent 21st century digital policy that works for them. Millions of Americans still await public investments that will help connect their remote communities to broadband, while millions more — including many families with school-age children — still struggle to afford access.

America’s leadership in many new technologies is vital, but not a given: The enormous benefits of 5G, AI, cloud and quantum computing lay ahead, but other nations are threatening U.S. dominance. Meanwhile, our largest digital platforms are facing criticism over misinformation, algorithmic bias and concerns about anticompetitive market dominance, while foreign enemies are invading our government at the highest levels through sophisticated cyber warfare.

From all sides, the status quo leaves too many opportunities untapped and vulnerabilities exposed. This has significant implications for our nation, from jobs and modern health care to national security and global competition. Without greater coordination and leadership from the top, a fast-proliferating warren of competing federal agencies — all with a rightful claim of technology’s importance to their work — has no hope of uniting to help our digital economy "build back better."

The National Security Council was created by President Harry Truman in the aftermath of World War II. The National Economic Council was established by President Bill Clinton a mere five days after he first took the oath of office. Both serve essentially the same purpose: They exist to pull together the disparate efforts of a vast federal apparatus and ensure every oar is not just in the water, but pulling vigorously in the same direction on complex, interrelated issues that have far-reaching implications for the nation.

We need this more tightly-coordinated approach in the technology arena. From smart transportation to remote education and health care to the nation’s defense, commerce and trade, every agency rightly views technology as central to their work. Equally true: Every American has a rightful claim to a coordinated, ambitious and effective effort from their government.

We don’t have that today in the multi-headed, overlapping and often competing technology policy coordination processes, legacy functions like the Office of Science and Technology Policy and a host of more recently created ‘C-level’ offices (CTO, CIO, CISO, etc.) at work in the White House today.

To offer one example, there are currently 20 federal initiatives relating to 5G network security alone — each with its own set of objectives, its own circle of leaders and partners and its own set of tasks and requests for information and collaboration from industry.

Rather than a growing multiverse of agencies scrambling for the soccer ball, we need a coordinated effort to better ensure the U.S. government’s technology leadership can turn on a dime, whether in response to imminent cyber threats, marshaling federal resources to close the digital divide or creating more incentives for private sector innovation and investment.

We need one referee supported by a more streamlined and diverse team that can see the entire field and ensure the best ideas get the time, space and fair attention they require at the highest levels of the White House.

We’ve done it before. It’s been more than two decades since the White House launched an all-out coordination effort on a hugely important technology issue: standing up the Y2K Task Force. Its role was to prevent a global meltdown of digital systems that threatened to imperil everything from air travel and nuclear reactors to credit card expiration dates and social security payments.

From the public’s point of view, the turning of the digital calendar to a new millennium was a "non-event." To those of us who did the work — from coordination to coding — it was millions of hours of effort. Every designated representative was at the White House weekly coordinating U.S. preparedness.

It was a Herculean effort. It was also "one and done." In the 20 years since, technology has grown exponentially more central to virtually every part of our nation’s success. A permanent National Technology Council would offer President-elect Biden — and all who follow him into the Oval Office — a central and more cohesive coordinating mechanism with the stature to steer the massive ship that is the U.S. government according to a shared vision, common objectives and aggressive but achievable goals.

We have serious issues before our country. Technology innovation and network evolution are central to our path forward: from our health and wellbeing as a society and a democracy to our delivery away from this pandemic, and for sustaining growth, creating jobs and leading on the global stage.

The presidential transition offers a precedential moment. With a clear mandate to close the digital divide and in the aftermath of a massive, state-sponsored act of cyber warfare, President-elect Biden should seize the moment. President Truman famously declared: "The buck stops here." President-elect Biden should act now to definitively answer the question left to linger far too long over the nation’s technology policy: "The buck stops where?"

Twitter and Trump


This post is by Fred Wilson from AVC

I heard the news last week that Twitter had permanently banned Trump and thought “oh my.”

Sure it is wonderful news that the lies, the hate, the awfulness that is the current President of the United States will no longer be available on Twitter (where I am still a shareholder) and no longer in the White House very soon.

But as a very wise person texted me Friday morning:

Do you think it is appropriate? Do you think it is problematic that they have this much power?

Yes, I think it is problematic that Twitter has this much power. Not only are they silencing Trump, they are taking away his tens of millions of followers, and they are prohibiting all of his followers from seeing his tweets.

We should be careful what we wish for. This is a slippery slope we are heading down.

It is long past time that we move away from centralized applications to protocols.

If Twitter was a protocol, Twitter the app could ban the President from using its application and could block his tweets from being available in its app. But Trump could use another Twitter protocol client and his followers could as well and all of that social graph would still be available to them.

That is the way the web works. That is the way email works. That is the way social media should work as well and it is high time we start moving there.

This should be a warning sign to everyone in DC; the Senators, the Representatives, the folks leaving the White House and the folks entering it. He who kills the king becomes the king.

It is time to force the big centralized apps to open up. It is time to force the mobile app stores to open up. The longer we wait the worse this will get.

Update: My partner Albert posted his thoughts on this topic last night and I agree with them. You can read them here.


USV TEAM POSTS:

Albert Wenger — Jan 8, 2021
SilviaTerra

Twitter and Trump


This post is by Fred Wilson from AVC

I heard the news last week that Twitter had permanently banned Trump and thought “oh my.”

Sure it is wonderful news that the lies, the hate, the awfulness that is the current President of the United States will no longer be available on Twitter (where I am still a shareholder) and no longer in the White House very soon.

But as a very wise person texted me Friday morning:

Do you think it is appropriate? Do you think it is problematic that they have this much power?

Yes, I think it is problematic that Twitter has this much power. Not only are they silencing Trump, they are taking away his tens of millions of followers, and they are prohibiting all of his followers from seeing his tweets.

We should be careful what we wish for. This is a slippery slope we are heading down.

It is long past time that we move away from centralized applications to protocols.

If Twitter was a protocol, Twitter the app could ban the President from using its application and could block his tweets from being available in its app. But Trump could use another Twitter protocol client and his followers could as well and all of that social graph would still be available to them.

That is the way the web works. That is the way email works. That is the way social media should work as well and it is high time we start moving there.

This should be a warning sign to everyone in DC; the Senators, the Representatives, the folks leaving the White House and the folks entering it. He who kills the king becomes the king.

It is time to force the big centralized apps to open up. It is time to force the mobile app stores to open up. The longer we wait the worse this will get.

Update: My partner Albert posted his thoughts on this topic last night and I agree with them. You can read them here.


USV TEAM POSTS:

How Not To Regulate Innovation


This post is by Fred Wilson from AVC

The Secretary Of Treasury, in his last month in office, is giving us a textbook case of how not to regulate important technology innovation. The issue is “unhosted wallets” and how regulated exchanges and other “hosted wallets” interact with them.

Let’s start with why this is important. Our current financial systems are old, creaky, expensive, and do not serve enough people. According to a 2017 survey by the FDIC, 25 percent of U.S. households are unbanked or underbanked. That is close to 100mm people, mostly black and brown. This is a big deal. This is a piece of the structural inequity that exists in the US and around the world.

Technology can, will, and should change this. When a bank account can simply be a wallet on our phone or computer, it should be massively less expensive and much easier for anyone to have one. And when that wallet can connect to any other wallet or bank and send, receive, sell, buy, etc, as easily as a browser can connect to AVC.com, then you have the architecture for an open financial system that is several orders of magnitude less expensive and more available than what we currently have.

What I have just described is how blockchains and cryptocurrencies work today. You can download a cryptocurrency wallet onto your phone, you can send some Ethereum to it from your Coinbase account in the cloud (called a “hosted wallet” and/or “exchange”), and then you can send that Ethereum to anyone else using any other crypto wallet. All of this is built upon open protocols in the same way that the web was built on open protocols. It is completely and totally interoperable, like the web or email, unlike our current financial system.

The crypto sector is building a new financial system, that requires much fewer “middlemen” taking a piece of the transaction, that anyone can adopt and use by simply downloading some software onto their phone, and that is secured with state of the art technology.

But the Treasury Secretary and his advisors are concerned about bad actors using this new open global financial system to do bad things. That is a legitimate concern, but it turns out that only about 2% of transactions that go between regulated exchanges and hosted wallets and unhosted wallets are “illicit” according to Chainalysis.

So in late December, the Treasury Department issued a notice of proposed rulemaking seeking to make the rules around sending cryptocurrencies to unhosted wallets much more restrictive than cash.

The notice of proposed rulemaking is a long-standing approach to regulating new things. But this notice of rulemaking is not like any other. It was shortened to 15 days from the customary “at least 30 days and often much longer” and it was issued in late December making comments due yesterday. That means that comments were due over two holiday weeks in the midst of a global pandemic. And then the Treasury Department intends to wade through all of those comments and issue a rule before it leaves office in a couple of weeks.

That is madness and no way to regulate an issue at the very heart of a new open financial system that is poised to open access and massively reduce the cost of financial services for everyone.

One can only come to one conclusion about the Secretary’s intentions here and it is that this was done intentionally to stifle debate and discussion and jam bad regulation through on his way out of the door.

USV and many others in the tech sector, venture capital sector, and crypto sector have issued comment letters opposing this rulemaking. Our comment letter is here:

I hope the Secretary and his advisors come to their senses and realize that this is no way to regulate important new technology. This would be a terrible legacy to leave office with.


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Regulation is coming in 2021. Here’s how Big Tech is preparing for it.


This post is curated by Keith Teare. It was written by Anna Kramer. The original is [linked here]

The open internet. Section 230. China. Internet access. 5G. Antitrust. When we asked the policy shops at some of the biggest and most powerful tech companies to identify their 2021 policy priorities, these were the words they had in common.

Each of these issues centers around a common theme. "Despite how tech companies might feel, they’ve been enjoying a very high innovation phase. They’re about to experience a strong regulation phase," said Erika Fisher, Atlassian’s general counsel and chief administrative officer. "The question is not if, but how that regulation will be shaped."

Every company is putting their own spin on how they’re preparing for that regulation. They know that the regulation heat is only going to increase in 2021, and they are all focused on how to adapt so it does the least harm to their own business models.

Open internet

"The open internet" is by far the most popular way companies frame their focus. For Twitter, protecting the open internet means challenging regulatory frameworks that the company’s policy team said harm competition and entrench the power of the biggest companies, according to a Twitter spokesperson. The policy team cited GDPR as an example of a legislative framework that unintentionally hurts the open internet; they argued that while the law increased protections for user privacy, it decreased competition by strengthening large companies.

In the U.S. specifically, Twitter has drilled in on protecting Section 230 as an essential part of that goal. At a Section 230 congressional hearing earlier this year, CEO Jack Dorsey said that Section 230 rollback could collapse the internet as we know it, though he’s open to some reforms. Twitter is eager for creative "alternative regulatory paths" that protect competition and don’t force companies to frame their decisions around removing or protecting content, according to their spokesperson.

Facebook also framed its policy interests in terms of protecting the internet from increasing barriers. "Governments throughout the world are looking to build digital barriers and impose greater state control on the internet. This drive toward digital protectionism could have a devastating effect on economic recovery across the world," wrote Nick Clegg, Facebook’s policy chief, in an email to Protocol.

Global standards

In 2021, Facebook will also be lobbying for multilateral standards around digital taxation, privacy and data portability, among others, according to Clegg.

By multilateral, they mean multicountry and multi-stakeholder, rather than, for example, the digital services tax much-debated in France this year or data portability rules imposed by China on African countries receiving monetary support. Specifically, Clegg plans to urge the U.S., Europe and India to work together to create standards based on shared values.

And Google is also explicitly interested in the same type of international government cooperation. The company refused to identify and break down specific priorities, but their statement still reflected this theme. "As this pandemic has shown, we can’t solve big issues alone. This is why we will urge governments to restore multilateralism," said Karen Bhatia, Google’s vice president for government affairs and policy.

Access

Beyond the big global regulation and antitrust fights that are coming next year, some companies outlined very specific priorities for U.S. policy. At Amazon and Dell, policy leaders framed some of their focuses around increasing equitable internet access. For Amazon, increasing internet access means an increased focus on the Project Kuiper low-orbit satellite program, which received approval from the FCC in July and is intended to provide cheap internet in places with poor broadband coverage.

"Amazon will be working internationally to achieve licensing in other countries to move this initiative forward," Brian Huseman, Amazon’s VP for public policy, said. Amazon’s other major policy priorities for 2021 will be pushing for a minimum wage increase to $15 per hour in the U.S. and more ambitious federal climate policy, according to Huseman.

5G

Telecom companies and some big tech players will be mostly focused on 5G next year, including Dell. For Dell’s policy team, increasing internet access means lobbying heavily for an "open and interoperable" 5G network. "We would like to see the proper investment and partnerships across public, private and government organizations to advance U.S. leadership in 5G worldwide. The U.S. must drive the innovation and standardization of national 5G infrastructure," said John Howard, Dell’s public policy director.

Broadband and data providers like Verizon, Comcast and AT&T will also be zeroing in on the 5G fight, lobbying to end the Pentagon’s plan to control the commercial 5G network and instead pushing for the FCC to hold traditional auctions for 5G spectrum, according to an open letter from Jonathan Spalter, the president and CEO of trade group USTelecom. The more traditional spectrum-auction method would give telecom companies more control than the "nationalized" 5G Pentagon proposal (former Google CEO Eric Schmidt has been a key advocate of the nationalized plan).

Microsoft and Apple both declined to share their 2021 policy priorities.

Wake the Fuck Up, San Francisco


This post is by M.G. Siegler from 500ish - Medium

Photo by Patrick Perkins on Unsplash

Exodus. That’s all you read about these days when you read about San Francisco. I want to believe it’s largely overblown, because it’s my nature to believe things are overblown.¹ But I think there’s a risk that it’s not.

Part of this is my own experience. I’ve lived in San Francisco for over a dozen years now. I’ve seen a few cycles. This feels different. Maybe it doesn’t feel different from the Dot Com Crash, I don’t know. But I know you’ll tell me that I don’t know. From everything I’ve gathered this is different. First and foremost because not only is the tech industry not collapsing, it’s thriving. But the city is nevertheless rotting.

Perhaps the rot is, in part, because of the tech industry. I certainly think it’s a part of it. Too many in our industry are arrogant at best and completely out of touch with reality at worst. But the more pressing issue would seem to be that despite tech being such an important part of the city, nothing has changed. Things have only gotten worse.

The more obvious answer is the pandemic. That’s in play too, but all of this was happening before COVID-19 started. And that will eventually be behind us. What won’t be are the fires. And that’s seemingly more a state and perhaps national and certainly global issue. The reality is that it’s a mixture of all of these things which are exaggerating and exacerbating underlying problems.

When you talk about such issues, a thousand people come out of the woodwork to tell you why you’re dumb and you don’t know the history and all that. That’s fine. I just think we’re beyond that. I feel as if I can say that because I live it day to day.² This beautiful city is now disgusting in ways both literal and figurative. It’s a shitshow in ways both figurative and literal. And no one will do anything about it. Hell, we elect a DA who embraces it.

Our city is on fire and we elect gasoline, a San Francisco story.

I think in order to actually affect change in the city of San Francisco we need to actually change things, in fundamental ways. We need someone to come in who just doesn’t give a fuck about all the intricacies and nuance about historical San Francisco politics. They come in with a goal, and do whatever they think they need to do in order to get to that goal.

If that sounds extreme it’s because it is extreme. But it’s also because we need extreme. “It won’t work!” Blah. Blah. Blah. San Francisco, perhaps more than any city, has been eaten alive from within by the status quo. If that doesn’t change, the city is at real risk. It won’t die, of course. But it risks a fate worse than death: irrelevance. I was born and raised in Cleveland, Ohio — this is what you want to avoid for a once great city.

To do so, you need reinvention. An intervention. Some changes which would sound insane, but actually change things. Many would be hard.³ They would need to be. But what is there to lose at this point? The tax revenue is already hitting the exits. That’s existential. Now is the time.

I think it’s a fair assessment to say that tech has gutted the city of its former soul. And yes, I’m a part of this. But this also isn’t anything new. Nor is it necessarily bad. San Francisco has been reinvented multiple times throughout its history. Change is the only real constant. The difference, this time, is that rather than the latest occupiers possessing the body until something else displaces them (us), they’re (we’re) fleeing. Leaving an empty carcass to decay.

I realize I’ve framed this as an “us vs. them” with tech on one side and “regular” San Francisco on the other. This is the natural narrative of the time, brought more to the front by wealth discrepancies showcased during tech’s latest boom. And neither “side” is helping this.⁴ But this actually isn’t a battle with tech on one side. And that’s the actual point here. This is a battle with everyone who lives in San Francisco on one side and the city’s policies and ineptitude on the other. We are all in this together, but we’re distracted by thinking that we’re not.

That’s why I have a real fear that nothing will actually change. We’re bogged down in bullshit. Fiddling with scoring pointless political points while San Francisco burns. I worry that it will take something truly catastrophic — even more so than the pandemic — to change things. An earthquake. The big one. Nature resetting, in a way. That may very well heal what ails this city but it will undoubtedly cost lives and homes. Why not at least try to change things without that? This is a wake up call.

¹ And we’re already onto the backlash to the backlash part of the cycle…

² And that’s undoubtedly why I feel so strongly about this now. Here we are trying to raise our two year old in a city that has morphed from dysfunction to chaos. And as such, the question has morphed from if we would leave to why would we stay?

³ You may ask what those changes should be. I wish I had answers here, but I’ll leave it to folks smarter and more versed in politics than I. I simply believe we need to get people — the residents of San Francisco — on the same page and side to actually hope to change anything.

⁴ I do agree that it’s a false narrative that tech has “plundered” the city of its gold, when tech is actually largely responsible for the “gold” during this cycle. I also agree that it’s problematic for an industry to suddenly up and move after creating such an operation. And yet I also agree that the city is not giving individuals (and companies) a lot of choice in the matter, per the above footnote. This is what we need to fix.

More 1/2/21:

San Francisco’s Insane Own-Goal


Wake the Fuck Up, San Francisco was originally published in 500ish on Medium, where people are continuing the conversation by highlighting and responding to this story.

Open Up Instead Of Break Up


This post is by Fred Wilson from AVC

In the wake of the news yesterday that the FTC plus 46 states and a few other locales sued Facebook for being a monopoly, I want to, yet again, argue for a different, more modern, and more powerful regulatory approach to tech monopolies. I first posted this a year and a half ago, and have reposted it at least once since.


There have been many calls to break up the large Internet monopolies; Amazon, Google, Facebook, Apple, etc.

Breaking up a large monopoly feels like a very 19th/20th century move to me.

I would prefer that politicians and policy makers think about opening up as the better intervention.

A good way to explain this is to go back to the architecture that Twitter used in its early days when there were many third-party Twitter clients. Imagine if Facebook, Instagram, Twitter, LinkedIn, etc were protocols, not applications, and there were many high-quality clients to participate in these networks.

Then the clients could innovate on things like content filtering, promotion of high quality content, business model, etc

If we are going to “break up” these large social media platforms, I would urge elected officials and regulators to think about pushing them to move from platforms to protocols instead of just ripping them apart.

We could do the same thing with search. Our portfolio company DuckDuckGo has built a nice search business by building a different user interface on top of one of the two leading search indexes. If we made it easier and reliable for others to innovate on top of the core search engine, then there might be many more options in search.

In mobile, a good first step is to open up the app stores and allow the browsers to have the same access to the operating system as native mobile apps.

In commerce, if I could checkout as easily everywhere as easily as I can on Amazon, there would be more competition for my shopping dollars.

I think you get the idea. It is very true that the big Internet services have built centralized monopolies and have consolidated their market positions. We do need more competition in these core services. And the best way to do that is to force them to open up their services, not break them up.


USV TEAM POSTS:

Give Employees Cash to Purchase Their Own Insurance


This post is by Regina Herzlinger from HBR.org

It’s a way to cut health care costs — without cutting coverage.

Expand E-Rate To Low Income Households


This post is by Fred Wilson from AVC

E-Rate is a program put in place in the 1996 Telecommunications Act to expand Universal Service Fund fees to schools in order to help them upgrade their telecom infrastructure. Telcos charge customers Universal Service Fund fees so that they can provide “universal service”, originally aimed at rural and other locations that were/are not profitable to service otherwise.

E-Rate has largely been successful in helping schools move from no internet, to DSL and low bandwidth internet, to cable and fiber over the last twenty years.

But now we have the realization that remote, blended, and hybrid learning models, brought on by the pandemic and likely here to stay in some form, require something more. They require that EVERY child needs a reliable high bandwidth connection to the internet from their home.

School districts all over the country have been scrambling for the last nine months to raise money from charitable sources so that they can provide hot spots and other ways to get kids internet in their homes so they can attend school. I have participated in a number of these campaigns and they have been heroic in many ways, but it is still not enough.

The FCC can do something simple and powerful. They can do it now. They can expand E-Rate to include low income households who need reliable and high bandwidth internet so that their children can attend school.

I would like to see them do that asap.


USV TEAM POSTS:

Digital Dollars


This post is by Fred Wilson from AVC

I have written about stablecoins a bunch here at AVC. I believe cryptocurrencies that are not highly volatile are important for use cases like e-commerce. I explained why here.

So we need crypto assets that are price stabilized and one of the best ways to do that is to peg a crypto asset to a fiat currency like the dollar. You do that by fully reserving the asset with dollars.

The two most popular digital dollars are USDT (Tether) and USDC. There is almost $20bn of circulating supply of USDT and just over $3bn of USDC.

There has always been some concern that USDT is not fully reserved. I share that concern. I am more confident that USDC is fully reserved and it is the digital dollar that I hold and use.

We got some big news yesterday about USDC which is that the VISA card network is going to “help select Visa credit card issuers start integrating the USDC software into their platforms and send and receive USDC payments.”

I think this is going to give more payment networks and financial services platforms the confidence to also integrate USDC. I could imagine USDC having a circulating supply of the current size of Tether by this time next year. We will see.

There are concerns for those, like me, who are big fans of digital dollars. A few members of Congress yesterday proposed a bill requiring stablecoin issuers to be banks. I appreciate that our elected officials want to provide for consumer safety and confidence. But forcing all of this innovation into the banking system is the surest way to kill it that I have ever heard of. Maybe that is what they want to do. We cannot allow that. The crypto sector and innovative financial services companies like VISA will need to spend time on the Hill educating our elected officials on what good regulation looks like and what bad regulation looks like. All we seem to be getting out of DC right now is on the bad side.

Finally, I should mention that while we are debating the role of digital dollars here in the US, China is rolling out its own digital Yuan. Goldman Sachs estimates that over a billion people will be using the Digital Yuan within a decade. I think that is way too pessimistic.

I think everyone who uses fiat currency right now will be using digital/crypto versions of these fiat currencies within a decade. The only question is which ones we will use the most. If we want the Digital Dollar to be in the top two or three, we had better get behind the ones that are out there and support the issuances of new ones too.


USV TEAM POSTS:

Crypto Wallets Are Not Bank Accounts


This post is curated by Keith Teare. It was written by Fred Wilson. The original is [linked here]

We learned last week that the US Treasury wants to regulate crypto wallets like bank accounts. On the surface, one can understand that temptation. If people store, send, receive, and sell crypto assets in crypto wallets, then surely they should be regulated like bank accounts.

Except that is only one use case for a crypto wallet. It happens to be the primary use of crypto wallets right now but it is not likely to be the primary use of crypto wallets in a decade.

Regulators need to think of crypto wallets like web browsers. They are software applications that open up access to the decentralized internet and over time they will reduce our reliance on applications like Facebook, Google, Amazon, etc. But only if they are allowed to exist without crushing regulation, like we treated the web broswer when it came out in the mid 90s.

Brian Armstrong, the founder and CEO of Coinbase, pointed this out in a series of tweets last week and these two are particularly good examples of ways that crypto wallets are used that are not like bank accounts:

These are just early use cases for crypto wallets that don’t resemble bank accounts. There will be many many more soon if we don’t strangle crypto wallets with suffocating regulation.

Crypto will eventually lead to a decentralized internet but the first industry it is decentralizing is finance. It reminds me of the web browser that started in media. The issue with decentralizing finance first is that regulators are tempted to regulate crypto like it is just finance and that could not be more wrong. And it will take everything the industry has to push back on this temptation.


USV TEAM POSTS:

Crypto Wallets Are Not Bank Accounts


This post is by Fred Wilson from AVC

We learned last week that the US Treasury wants to regulate crypto wallets like bank accounts. On the surface, one can understand that temptation. If people store, send, receive, and sell crypto assets in crypto wallets, then surely they should be regulated like bank accounts.

Except that is only one use case for a crypto wallet. It happens to be the primary use of crypto wallets right now but it is not likely to be the primary use of crypto wallets in a decade.

Regulators need to think of crypto wallets like web browsers. They are software applications that open up access to the decentralized internet and over time they will reduce our reliance on applications like Facebook, Google, Amazon, etc. But only if they are allowed to exist without crushing regulation, like we treated the web broswer when it came out in the mid 90s.

Brian Armstrong, the founder and CEO of Coinbase, pointed this out in a series of tweets last week and these two are particularly good examples of ways that crypto wallets are used that are not like bank accounts:

These are just early use cases for crypto wallets that don’t resemble bank accounts. There will be many many more soon if we don’t strangle crypto wallets with suffocating regulation.

Crypto will eventually lead to a decentralized internet but the first industry it is decentralizing is finance. It reminds me of the web browser that started in media. The issue with decentralizing finance first is that regulators are tempted to regulate crypto like it is just finance and that could not be more wrong. And it will take everything the industry has to push back on this temptation.


USV TEAM POSTS:

Link 230 Protections To Opening Up


This post is by Fred Wilson from AVC

The latest charade of bringing Jack and Zuck in front of Congress to yell at them reminds me that our elected officials and regulators don’t have a plan for how to properly regulate social media. Jack and Zuck probably do have a plan and if they play their cards correctly, they will be able to use regulations to lock in their dominance for many many years to come. That should scare us all.

So what would a good plan look like?

My partner Albert laid it out plainly and simply in this post a while back and I thought I would recirculate it.

Give a Section 230 like protection to companies in return for providing a complete set of enduser APIs. In other words, require Twitter, Facebook, YouTube etc. to be fully programmable in order to have their liability limited.

https://continuations.com/post/619477235088457728/the-social-media-triangle

It is really simple. Allow third parties to build interfaces on top of these networks if they want to maintain section 230 protection. Those new interfaces will allow massive user choice in terms of algorithms, curation, moderation, and more.

We need 21st century forms of regulation for 21st century problems. And we are not seeing much of that from our regulators right now, sadly.


USV TEAM POSTS:

Educating Electeds


This post is by Fred Wilson from AVC

A number of members of Congress sent a letter to the Office of Comptroller of the Currency (OCC) on Tuesday. I have embedded it below but readers via email may need to click here to read it.

Letter to the OCC on Fintec… by CoinDesk

These elected officials are correct that way too many people in the US are unbanked or underbanked. They are also correct that community banks and minority owned banks are closing at a rapid rate, which is contributing to these alarming unbanked and underbanked numbers.

However, I think that the OCC and, more importantly, the crypto industry, owe these elected officials an education on how crypto can address these important issues and why it is not a distraction from them.

In the letter, the members of congress mention “the immediate needs of millions of at-risk individuals who have not yet received an economic stimulus check and/or cannot deposit their funds in a bank.”

If the United States was developing (as is China), a digital currency stablecoin (a digital dollar), then those millions of at-risk individuals would have been able to receive their economic stimulus funds via any one of the popular mobile apps that support or will soon support digital assets, like Coinbase, Square, PayPal, Robinhood, and many more.

It would have been less expensive (by an order of magnitude or more) and much simpler to get funds to these at-risk individuals with blockchain based assets vs outdated technologies like paper checks.

I am not taking a swipe at these well-meaning elected officials. I am saying that the crypto sector needs to sit down with them and their staffs, pull out their phones, have them do the same, and send them some money. And then talk about regulations that will accelerate the adoption of these new technologies among the at-risk communities instead of what we have now which are regulations that are holding all of this progress back.


USV TEAM POSTS:

Albert Wenger — Nov 8, 2020
We Must Strengthen Our Democratic Institutions

The Media Will Spark Mass Violence in November…or Maybe Not


This post is by David from David Teten's blog

I’m very concerned about the risk of civil strife in November. I suggest the most important lever to promote a smooth transfer of power is for the major media companies (especially Fox) and major social media companies to plan their moves carefully.

I have some friends who are executives at influential media companies. I shared the template memo/talking points below with them. I thought others may find this useful.

RE: Election Week coverage/Promoting smooth transition of power

Dear colleague,

We have a unique position and could be highly impactful in the 2020 election. Without exaggeration, I think we have a chance to shape history and save lives.  

Whatever the election results are, there is a risk of civil strife. We know for a fact that Trump will dispute them; he won in 2016 and disputed those results. The president has refused to commit (clip) to a ‘peaceful transfer of power’. Many thoughtful observers are extremely concerned about the possibility of violent civil conflict. Howard Kurtz wrote on Fox, “When you combine that with his warnings about massive mail-ballot fraud, you see a leader determined to cast doubt on the legitimacy of an election that polls show him losing.” Quoting the Atlantic, The Election That Could Break America: “Let us not hedge about one thing. Donald Trump may win or lose, but he will never concede…Not during the Interregnum and not afterward. If compelled in the end to vacate his office, Trump will insist from exile, as long as he draws breath, that the contest was rigged.”

(The Biden-Harris campaign have made it clear that they will honor the election results .. just as Al Gore and Hillary Clinton both conceded their election results, despite numerous irregularities and grounds to complain.)

If America descends into violence, that’s bad for the country, and also inevitably going to have a negative impact on our physical plant, the overall economy, not to mention the lives and homes of our staff. Civil strife is bad for business, except for weapons manufacturers, I guess.

We as a media company have significant influence over the country. I wanted to request we first review four thoughtful recommendations:

  • The National Task Force on Election Crises issued an open letter to the National Election Pool, FoxNews, and AP calling on them to share key elements of their election modeling and decision desk policies to bring transparency to the reporting of election results. 
  • The Election Coverage and Democracy Network released their Recommendations for Media Covering the 2020 U.S. Presidential Election.
  • The Washington Post has already committed they will not make predictions about the election outcome.  
  • Frank Luntz, prominent Republican consultant, posted this infographic which I think is a great summary of how to think about Election Week: 

In addition, I have 2 specific suggestions for our public-facing team:

1) Draw comparisons to past elections, to remind listeners of the norms of US elections.

2) If Trump loses, ask all on-air personnel to message something like: Trump lost unequivocally, and that’s the end of it. This is not fake news. We’re asking Trump to acknowledge this defeat, for his own self-interest, for three reasons:

  • Protecting Trump properties. On January 20, 2021, Trump is going to go back to full -time leading the Trump Organization. The only way he’ll have all of his hotels and other properties in good order is if he arranges a smooth transfer of power. If Trump calls this election result fake news or calls for violent resistance, this will certainly provoke much more substantive violence than the BLM protests, and the #1 target will be Trump properties. Visualize: bombing Trump hotels, riots at Trump resorts, etc.  (Show visuals of this.)
  • Jail.  If Trump does anything that looks like a call to violence, he’s going to open himself up to hugely expensive legal problems which will send him straight to jail. There aren’t many restrictions on freedom of speech, but we hope that President Trump is well aware that one of the classic restrictions is that you’re not allowed to yell “Fire!” in a crowded theatre. America now is a crowded theater.
  • Losing Twitter and Facebook access. If Trump calls for violence, he will immediately lose his Twitter and Facebook access. Twitter and Facebook will feel much more comfortable blocking Trump than they have in the past, as they prepare for the inevitable Biden ascendance to power. 

If you’d like to read some more analysis on how the media is handling the unique Trump phenomenon, see the Columbia Journalism Review: Yes, we’re doing it all over again .

If this was helpful to you, please sign up for my newsletter.

The post The Media Will Spark Mass Violence in November…or Maybe Not appeared first on David Teten.

Facebook Is Finally Admitting It’s A Publisher


This post is curated by Keith Teare. It was written by John Battelle. The original is [linked here]

The video above is from a conversation at The Recount’s SHIFT event last month, between Nick Clegg, Facebook VP, Global Affairs and Communications, and myself. If you can’t bear to watch 30 or seconds of video, the gist is this: Clegg says “Thank God Mark Zuckerberg isn’t editing what people can or can’t say on Facebook, that’s not his or our role.”

One month later, with Trump down in the polls and the political winds shifting, well, let’s just say the company has changed its tune. Dramatically. Not only has it banned Holocaust denial, it’s also banned anti-vax advertising and taken steps to pro actively manage the disinformation shitshow that will be the Trump campaign post election.

Witness this quote, from Zuckerberg himself, in his recent post framing why Facebook will now ban Holocaust denial from the platform: “Drawing the right lines between what is and isn’t acceptable speech isn’t straightforward, but with the current state of the world, I believe this is the right balance.”

Excuse me while I point out the most fucking obvious thing in the world when it comes to what an editor actually does: We draw lines about what is and isn’t acceptable, either as fact, as truth, as hypocrisy, or what is in the public interest. That’s the damn job of journalists: To call bullshit. And regardless of Facebook’s longstanding claims to not be a publisher or a journalistic entity, the truth is, these actions prove the company understands it is an arbiter of facts, truth, and the public interest. The  simple reality is this: The company has tried to have it both ways for Too. Fucking. Long. It’s time we treat Facebook for what it is: A media company, subject to the norms, responsibilities, and behaviors we all expect and demand from our media providers.

 

Partisan Activism 101 for Investors and Executives


This post is by David from David Teten's blog

You care passionately about certain political causes. How can you use your professional influence to help create change?

When your grandchildren ask you, “What did you do during the craziness of 2020?”, how will you answer them?   

Reid Hoffman, cofounder of Linkedin, writes:

Traditionally, CEOs … have tried to avoid mixing business and politics, perhaps because of the fear that the latter would harm the former. Back in the 1990s, basketball star Michael Jordan refused to endorse a Democratic candidate for governor of his home state of North Carolina, saying, “Republicans buy shoes too.” But in 2020, this traditional approach seems both outdated and untenable. The most important issues that affect every business – the Covid-19 pandemic, widespread protests against racism, and the presidential election – are, or have become, undeniably political.

My answer to my children is that in 2020 I became much more politically active. I’m an investor with very limited time, but I also have experience and a network that I didn’t have as a young person. At the same time, I have friendships with people from all parts of the political spectrum, and don’t want to unnecessarily alienate anybody. 

I started by becoming more politically active in a non-partisan way; I wrote up how I approached this in How Non-Partisan Business Leaders Can Help Fix America. However, if you’re comfortable taking stances on issues that are more partisan in nature, there’s a lot more you can do. I couldn’t find any good resources online for people like me, so I put together a 10-point checklist of Activism 101 for investors and executives.  I’m working through the steps below as a 2020 personal priority. 

Personally, I’m focused on saving American democracy from the unique threat of Donald J. Trump, despite the fact that I was previously Chair of a Republican PAC. But even if you disagree with me, my ideas below are still applicable.

  1. Most important, recruit other business leaders to get involved, in whatever way makes sense. Gather their feedback to change policy on the issues that you care about. Ask your friends: how would you like to get involved in supporting [our preferred position or candidate]? Ideally, encourage them to publicly endorse the candidate or position on social media. If they’re uncomfortable doing so, ask them to implement some or all of the ideas in How Non-Partisan Business Leaders Can Help Fix America. We launched the “Ambassadors at Large” initiative for the Biden/Harris campaign in order to provide a formal channel for business leaders to use their unique influence.
  2. Use your superpowers. Every business leader has unique expertise and network. For example, if you’re an investment research analyst, you have expertise in assessing the financial implications of America’s inadequate handling of COVID-19. Share that analysis. If you work in technology, you can invest in or work for a political technology company, as Michael Bloomberg did by launching Hawkfish. Chris Sacca, a prominent venture capitalist, has aggressively invested in progressive political tech companies. VIDA, which sells beautiful original accessories and other goods, launched a VIDA VOTE collection of facemasks and other apparel to help Get Out the Vote.
  3. Organize a parlor meeting for politicians and causes you support. As a business leader, you can recruit your peers to listen to a pitch for the causes you support. Innovators for Biden recently organized a “CEOs for Democracy” evening which attracted over 300 CEOs, who are all working to help Biden get elected.
  4. Publicly endorse your preferred candidates, leveraging your visibility as an industry leader. For example, I wrote a public endorsement of Joe Biden in 7 Easy Steps to Make America Functional Again. Reid Hoffman wrote: A Vote for Biden Is a Vote for American Business. In doing this, you need to be careful to separate your personal brand from your corporate brand. 
  5. Reach out to non-governmental organizations and candidates that you support, not just as a donor, but highlighting your unique competencies. Say to their executives, “I can give you a check, but given my position I suspect there’s a lot more I can do to further your mission. What do you suggest?” 
  6. Get on the media’s radar. It’s important that the media is aware that businesspeople are becoming politically active, and what topics you care about.  Qwoted and Cision Help a Reporter Out are services that journalists use to identify sources for their stories, at no cost to you. 
  7. When you’re meeting with people whose politics you don’t know, mention you’re politically involved, but don’t proselytize. Just leave the door open. Most likely they’ll ask about your initiatives, and you’ll learn they’re aligned with you. You can recruit them to get more politically involved also. But if not, it’s important they know that some of their professional peers have different political beliefs than they do.  Hopefully that will help them reconsider their views.  It’s normally very difficult to change peoples’ mind, but it’s much easier if you represent the “tribe” the person is from.  You’re in the tribe of business leaders, which helps your credibility with other similar people. Your goal should simply be to motivate people to take an action they might not otherwise have taken. As context, 77% of business leaders polled by Yale say they plan to vote for Joe Biden over Donald Trump in the November election.  
  8. Use your client-facing channels to share your values. Most businesses will not be as aggressive in promulgating their values publicly as, say, Ben & Jerry’s. However, in the past few years many major businesses have very publicly pushed on issues that might have been controversial in the past.  For example, hundreds of tech CEOs have publicly pushed to increase immigration.  Many others have also publicly talked about their race-related initiatives and concern about non-White Americans in response to the Black Lives Matter movement. You can do the same. 
  9. Recruit public influencers. If your business involves working with celebrities/influencers, then you are sitting on a lot of dry powder to impact opinion. Consider asking the influencers you work with to share political messages on their channels. Innovators for Biden has a Talent Task Force focused on recruiting influencers to evangelize for Biden.  
  10. Lastly, donate and recruit others to donate. The traditional political industry is very focused on fundraising, and money is always welcomed. That said, scientists have actually found it very difficult to prove that money influences politics. George Soros and the Koch family have far more money than the rest of us combined, but they’ve both failed to steer US politics in their preferred direction. We think that if you use your unique expertise and influence, you can do much more to impact politics than your money alone.

In the Ethics of the Fathers, a classical Jewish text, we learn, “In the place where there are no leaders, you will be a leader.” America desperately needs more civic involvement by people who are thinking about the long-term good of the country.

Further reading

Executive Activism

Xiao Wang, CEO, Boundless: It’s time for Tech Startups to Get Political

Reid Hoffman, cofounder, Linkedin: Talking Politics: When, How, and Why CEOs Should Speak Out

Chris Sacca, Lowercase Capital, What you can do to save our democracy

Brian Tayan, Stanford University: The Double-Edged Sword of CEO Activism

Corporate political activism is now becoming a requirement for doing business

Activism 101

A Step-By-Step Guide to Getting Involved in Political Activism

How to Make a Difference – Tips for Effective Activism

How to Persuade People

The Only Way to Change a Voter’s Mind: “Deep canvassing”

We asked a cult deprogramming expert how to talk your friends out of voting for Trump

Escape from the Trump Cult

At Yale, we conducted an experiment to turn conservatives into liberals. The results say a lot about our political divisions.

How to talk to conspiracy theorists—and still be kind

Thanks to Ben Leiner and Matt Wallaert for thoughtful input. I’m a past investor in VIDA via HOF Capital.

If this was helpful to you, please sign up for my newsletter.

The post Partisan Activism 101 for Investors and Executives appeared first on David Teten.

Partisan Activism 101 for Investors and Executives


This post is by David from David Teten's blog

You care passionately about certain political causes. How can you use your professional influence to help create change?

When your grandchildren ask you, “What did you do during the craziness of 2020?”, how will you answer them?   

Reid Hoffman, cofounder of Linkedin, writes:

Traditionally, CEOs … have tried to avoid mixing business and politics, perhaps because of the fear that the latter would harm the former. Back in the 1990s, basketball star Michael Jordan refused to endorse a Democratic candidate for governor of his home state of North Carolina, saying, “Republicans buy shoes too.” But in 2020, this traditional approach seems both outdated and untenable. The most important issues that affect every business – the Covid-19 pandemic, widespread protests against racism, and the presidential election – are, or have become, undeniably political.

My answer to my children is that in 2020 I became much more politically active. I’m an investor with very limited time, but I also have experience and a network that I didn’t have as a young person. At the same time, I have friendships with people from all parts of the political spectrum, and don’t want to unnecessarily alienate anybody. 

I started by becoming more politically active in a non-partisan way; I wrote up how I approached this in How Non-Partisan Business Leaders Can Help Fix America. However, if you’re comfortable taking stances on issues that are more partisan in nature, there’s a lot more you can do. I couldn’t find any good resources online for people like me, so I put together a 10-point checklist of Activism 101 for investors and executives.  I’m working through the steps below as a 2020 personal priority. 

Personally, I’m focused on saving American democracy from the unique threat of Donald J. Trump, despite the fact that I was previously Chair of a Republican PAC. But even if you disagree with me, my ideas below are still applicable.

  1. Most important, recruit other business leaders to get involved, in whatever way makes sense. Gather their feedback to change policy on the issues that you care about. Ask your friends: how would you like to get involved in supporting [our preferred position or candidate]? Ideally, encourage them to publicly endorse the candidate or position on social media. If they’re uncomfortable doing so, ask them to implement some or all of the ideas in How Non-Partisan Business Leaders Can Help Fix America. We launched the “Ambassadors at Large” initiative for the Biden/Harris campaign in order to provide a formal channel for business leaders to use their unique influence.
  2. Use your superpowers. Every business leader has unique expertise and network. For example, if you’re an investment research analyst, you have expertise in assessing the financial implications of America’s inadequate handling of COVID-19. Share that analysis. If you work in technology, you can invest in or work for a political technology company, as Michael Bloomberg did by launching Hawkfish. Chris Sacca, a prominent venture capitalist, has aggressively invested in progressive political tech companies. VIDA, which sells beautiful original accessories and other goods, launched a VIDA VOTE collection of facemasks and other apparel to help Get Out the Vote.
  3. Organize a parlor meeting for politicians and causes you support. As a business leader, you can recruit your peers to listen to a pitch for the causes you support. Innovators for Biden recently organized a “CEOs for Democracy” evening which attracted over 300 CEOs, who are all working to help Biden get elected.
  4. Publicly endorse your preferred candidates, leveraging your visibility as an industry leader. For example, I wrote a public endorsement of Joe Biden in 7 Easy Steps to Make America Functional Again. Reid Hoffman wrote: A Vote for Biden Is a Vote for American Business. In doing this, you need to be careful to separate your personal brand from your corporate brand. 
  5. Reach out to non-governmental organizations and candidates that you support, not just as a donor, but highlighting your unique competencies. Say to their executives, “I can give you a check, but given my position I suspect there’s a lot more I can do to further your mission. What do you suggest?” 
  6. Get on the media’s radar. It’s important that the media is aware that businesspeople are becoming politically active, and what topics you care about.  Qwoted and Cision Help a Reporter Out are services that journalists use to identify sources for their stories, at no cost to you. 
  7. When you’re meeting with people whose politics you don’t know, mention you’re politically involved, but don’t proselytize. Just leave the door open. Most likely they’ll ask about your initiatives, and you’ll learn they’re aligned with you. You can recruit them to get more politically involved also. But if not, it’s important they know that some of their professional peers have different political beliefs than they do.  Hopefully that will help them reconsider their views.  It’s normally very difficult to change peoples’ mind, but it’s much easier if you represent the “tribe” the person is from.  You’re in the tribe of business leaders, which helps your credibility with other similar people. Your goal should simply be to motivate people to take an action they might not otherwise have taken. As context, 77% of business leaders polled by Yale say they plan to vote for Joe Biden over Donald Trump in the November election.  
  8. Use your client-facing channels to share your values. Most businesses will not be as aggressive in promulgating their values publicly as, say, Ben & Jerry’s. However, in the past few years many major businesses have very publicly pushed on issues that might have been controversial in the past.  For example, hundreds of tech CEOs have publicly pushed to increase immigration.  Many others have also publicly talked about their race-related initiatives and concern about non-White Americans in response to the Black Lives Matter movement. You can do the same. 
  9. Recruit public influencers. If your business involves working with celebrities/influencers, then you are sitting on a lot of dry powder to impact opinion. Consider asking the influencers you work with to share political messages on their channels. Innovators for Biden has a Talent Task Force focused on recruiting influencers to evangelize for Biden.  
  10. Lastly, donate and recruit others to donate. The traditional political industry is very focused on fundraising, and money is always welcomed. That said, scientists have actually found it very difficult to prove that money influences politics. George Soros and the Koch family have far more money than the rest of us combined, but they’ve both failed to steer US politics in their preferred direction. We think that if you use your unique expertise and influence, you can do much more to impact politics than your money alone.

In the Ethics of the Fathers, a classical Jewish text, we learn, “In the place where there are no leaders, you will be a leader.” America desperately needs more civic involvement by people who are thinking about the long-term good of the country.

Further reading

Executive Activism

Xiao Wang, CEO, Boundless: It’s time for Tech Startups to Get Political

Reid Hoffman, cofounder, Linkedin: Talking Politics: When, How, and Why CEOs Should Speak Out

Chris Sacca, Lowercase Capital, What you can do to save our democracy

Brian Tayan, Stanford University: The Double-Edged Sword of CEO Activism

Corporate political activism is now becoming a requirement for doing business

Activism 101

A Step-By-Step Guide to Getting Involved in Political Activism

How to Make a Difference – Tips for Effective Activism

How to Persuade People

The Only Way to Change a Voter’s Mind: “Deep canvassing”

We asked a cult deprogramming expert how to talk your friends out of voting for Trump

Escape from the Trump Cult

At Yale, we conducted an experiment to turn conservatives into liberals. The results say a lot about our political divisions.

How to talk to conspiracy theorists—and still be kind

Thanks to Ben Leiner and Matt Wallaert for thoughtful input. I’m a past investor in VIDA via HOF Capital.

If this was helpful to you, please sign up for my newsletter.

The post Partisan Activism 101 for Investors and Executives appeared first on David Teten.