Code is a mobile app built onchain that allows anyone to send anyone else money anywhere in the world and it is entirely self custodial. Code uses the Kin token that came out of the Kik mobile messaging app. The Code team are the same folks that built Kik and Kin. I've been working with them for almost a decade and a half and it has been a wild and fun ride.

You need the Code app to do anything with Code but once you have it, it is slick. You can download Code here or by scanning this QR code:

One of my favorite features of Code is the tip card. Here is mine:

If you have Code on your phone, you can also go to https://tipcard.getcode.com/X/fredwilson

Anyone who has the Code app can scan that card and tip. Everyone who has Code has a tip card. Your tip card can go in your social profile on TikTok, Twitch, etc. You can send it via a messaging app. Or, like I just did, you can put in in a blog post.

Micropayments has always been one of the most exciting onchain use cases for me. And as we are seeing all over web3 now, tipping is leading the charge for micropayments. I think that's awesome.

A friend of mine stopped by the USV office the other morning and asked me about startup mortality rates. Her business sells to startups and big companies in roughly equal measure and she told me they were seeing a rising rate of startups closing up (and thus churning as customers). While churn is never good, you really can't beat yourself up too much about your customers going out of business. She wanted to know what we are seeing.

Our portfolio has been relatively free of startup mortality in the last couple of years but it is something we expect for, plan for, and underwrite for.

I have always said this, on my blog and in person, about what we have seen at USV and what I have seen in other early stage venture funds I've worked on and invested in:

1/3 are good investments

1/3 turn into something but you wish you hadn't made the investment

1/3 are zeros

Another friend of mine asked me a similar question via email this week and pointed me to something out of Nate Silver's book, On the Edge.  Nate breaks down risk in data driven ways and uses as examples poker, venture capital, crypto, etc.  The book quotes some figures from Marc Andreessen wherein he outlines that a16z's funds perform as follows (note: he also broadly says these are 'top decile' fund performance numbers, too): 

• 25% of investments make zero return (i.e. 100% write offs)

• 25% produce a return greater than zero but less than 1x (i.e. are losses)

• 25% produce a return between 1x-3x

• 15% produce a return between 3x-10x

• 10% produce a return of 10x or greater

If you bucket the first two as "zeros" or near zeros, the third one as "something you wish you hadn't invested in" and the last two as good investments, you get to roughly the same 1/3, 1/3, 1/3 that I like to use.

Of course, these are numbers over a very long period of time. Startup mortality rates rise and fall based on the vibrancy of the overall fundraising market and at times will be higher and at times will be lower.

But if you look at the data over a very long periods of time, you see that a small percentage of investments produce all of the returns. And that has always been the case for the fortyish years I have been in early stage venture capital.

Maybe that will change but it hasn't yet.

A lot of folks who are new to the venture capital business and are building their own firms and funds will email or message me about reserves and recycling. I am happy to engage with them on these very "inside VC" topics because I believe they matter a lot when managing venture capital fund and firm.

For those of you who are not VCs, you may find this irrelevant. Or you may find it interesting. For those who are in venture capital, I think you should understand these topics so I hope you find this valuable.

Early stage venture investing is like poker. You make a small initial investment, which is like the ante in poker, and you get a seat at the table. Then you watch the founder and team execute until they need more money. That is like the first set of cards you get. Then you get the chance to invest more money. That is like putting more chips on the table. This repeats a few more times and eventually the company succeeds or fails. That's like the river and the reveal.

In order to play the hand correctly, you need to have reserves. You can't invest all of your money in the ante. You need to have more chips so you can keep seeing more cards. A lot of investors, particularly newbies, don't understand this and run out of money too early in a deal and don't get to keep investing in their best companies. That's like not being able to play your best hands in poker. That's a disaster since you only get a few of those.

So at USV, we make sure we always have sufficient reserves for each and every portfolio company. We do this by building a sophisticated model of each fund and the fund's portfolio of investments and the expected capital needs of each and every business over a long period of time along with probabilities associated with each and every round and we run simulations to predict what the fund will need to reserve to support each company and we raise a new fund when our simulations tell us we need to do so.

In this way, we always have enough reserves for each portfolio company so we don't get tapped out.

We also recycle capital at USV. This means that for any given fund, we will keep the returns we get on early smaller exits and put them back into the fund. This increases our reserves capacity but it also means that we invest more money in our portfolios than we raised, including the management fee load. If a $200mm fund can actually invest $250mm and gets a 3x on that $250mm, it generates a 3.75x on the $200mm that was invested by limited partners. That has a hugely positive impact on returns.

Reserves and recycling are two techniques that can significantly enhance the returns on a venture capital fund. We use both of these techniques at USV. They are built into our culture, our DNA, and our processes.

You cannot produce a top decile fund with just reserves and recycling. You need to be working with great founders and teams who are building breakout companies. Just like a poker player needs to get dealt some great hands. But how you play those hands when you are dealt them is also critically important. I have seen early stage VCs make way too little on their best companies because they ran out of money and could not keep on participating or they had to sell too soon or some other reason that was effectively poor portfolio and fund management.

Reserves, recycling, and returns go hand in hand. So build them into your firm's culture and processes. They make a difference over the long run.

I have long been interested in displaying digital art on the walls in my home and office. I wrote this back in 2017 and this when we opened our new USV office in 2022.

I have digital art running on off the shelf displays in many places that I live and work and it brings me endless joy. I also run view.art on the second screen on my desktop when I don't need it for zooms and the like.

Here is some digital art on the TV in our family room:

https://opensea.io/assets/ethereum/0x0a1bbd57033f57e7b6743621b79fcb9eb2ce3676/35000046

But there are issues with the tech needed to make all of this work and I've been eager for something simpler that would be easy for everyone to use.

Today the Bright Moments community is opening view.art to the public and anyone can use it. USV has been an investor in the Bright Moments DAO for the last three years and I've watched them evolve the technology they use to put digital art on screens and make it better and simpler. View.art means that the technology that Bright Moments has used to run some of the most important digital art shows all over the world is now available to everyone.

View.art allows anyone to run a digital art collection in a browser and showcase it on any screen that can be connected to a browser. The digital art needs to be "onchain" (aka NFTs). That makes the art publicly accessible because all onchain assets are.

Here are some of my collections:

https://view.art

view.art

Curate and showcase onchain art anywhere

https://view.art

view.art

Curate and showcase onchain art anywhere

The first one is a channel I made using view.art. The second one is the vault where I keep my favorite NFTs.

If you have an old laptop or mac mini, you can connect that to a screen, fire up a browser, and show off your art.

If you don't have a spare computer to use, you might try a yodeck, which is a tiny raspberry pi computer we use at USV for our NFT screens, and put the view.art URLs into the yodeck dashboard and get them onto your screen that way.

Many smart TVs have browsers in them and if you have one of those, you most likely can just put the view.art URLs directly into them.

Of course, you can showcase art you don't own as long as you know where to access it. View.art has already curated a bunch of collections on their home page.

So if you want to showcase your digital art or someone else's digital art on a screen in your home or office, I encourage you to try view.art. I think you will like it.

I took the last two and a half weeks off from work and blogging (and a lot more) and attended the 2024 Paris Olympics with much of our family. It was a fantastic experience and a great vacation too.

Although I've watched the Olympics with excitement since I was a kid (and so has the Gotham Gal), neither of us had ever been to an Olympics. So a few years ago, we decided to take two weeks off mid-summer in 2024 and go to Paris and attend the Olympic Games. It was a great decision.

We saw eleven events over eighteen days and also took a vacation within a vacation and rode the train to the beach for a few days in the middle of the first week. We timed that getaway perfectly as we avoided the two warmest days in Paris of the entire two weeks.

We were concerned about the heat in Paris in August when we planned the trip last year. Much of Paris is not air conditioned and many Parisians head out of town for August to go to the beach or the countryside. But we got lucky. It was sunny and warm for most of the two and half weeks we were there but not hot and steamy.

Paris did an incredible job hosting the Olympics. The metro ran perfectly the entire time we were there and it was very well marked where to transfer and get off to get to the various venues. The events and venues were well-staffed and there was always someone you could ask (in English) where to go.

Place de la Concorde, a huge open plaza right in the center of Paris, was turned into the center of the Olympics and they held a bunch of "urban sports" (break dancing, 3x3 basketball, skateboarding, etc) there.

There were venues all around Paris and even out in the suburbs (like Equestrian at Versailles). We only went to venues we could take the Metro to although we got to see parts of the suburbs of Paris that we had not visited before like La Defense and Saint-Denis. We came away from this two weeks with an even better feel for a city where we have visited many times and have owned two apartments in over the last twenty years. That was a big win for us.

Paris was pretty quiet which is typical of August and it was clear that many Parisians had left town. But about half of the places we like to go out to eat, drink, have coffee at, etc remained open and it was pretty easy to get into anywhere we wanted to get into.

The events were full. Even though many of the locals had left town, the tourists filled the seats. We saw people from all over the world, particularly China and Japan, and European countries like Netherlands, Germany, and Italy were also noticeable.

But of course, we were there for the events and they were great. We saw beach volleyball, track and field, swimming, diving, table tennis, regular tennis, gymnastics, break dancing, and a lot of basketball.

Here are some of my favorite photos I took of the events

It was great to see the Olympic athletes, including former Olympic athletes, at all of the events. They come to compete but they also come to support the rest of their team. Many are there for the entire two weeks and they are out and about. That is really great to see.

We learned a lot about how to do an Olympics right. Some events are great in person. Others not so much. If you don't know a lot about an event, it really helps to have the commentator telling you what's going on. That is particularly true of events that are judged.

We saw a lot of gold medal matches/finals/etc and the corresponding medal ceremony. That's a great thing to see and I'd encourage anyone going to the Olympics in the future to make sure to see some of that.

I'd also say that you don't need the full two weeks to experience the magic. We had friends who came for the first week and loved it. And we also know people who came for the second week to see some of the finals and that was great too.

I am so glad we took the Olympics plunge. We are veterans now and are seriously considering going to LA in four years. If you live in LA, I would encourage you to stay in town and go to some of the events. It is a really special experience.

Over the last month, a half dozen people I know have been targets of account takeover attacks and unfortunately, a few of those attacks were successful. Most of these account takeover attacks were aimed at Coinbase accounts.

I have written blog posts every time I have been hacked and explained how it happened to me and the mistakes I made and how others can avoid what happened to me.

This post is a bit different because I have not been the target of an account takeover in the last month. But because so many people I know have been, I feel like writing on this topic again.

First and foremost, we should never ever give anyone, even a Coinbase employee or an employee of another financial institution, our account login credentials. The hackers are doing a great job of masquerading as employees and we are easily fooled. AI will only make this easier for hackers. But rule number one is never give anyone your account login credentials, even someone who appears to be an employee of the institution that holds your assets.

My second rule is to have most of your assets in a "vault" which is an account with withdrawal limits. I like a 48-hour withdrawal limit and also a multiple signer requirement. Many people don't want their assets tied up for 48 hours. In the event of a massive price decline or some other event, they want to get their funds out. So that is the purpose of the multiple signer requirement. It could be two signers out of three or three signers out of five. The idea is to introduce some friction into the asset send/withdrawal process so the hackers cannot simply move your assets out when they take over your account.

A modification of this approach is to whitelist certain addresses you can send to immediately and put friction on everything else. I use that approach as well, but not in lieu of the 48 hour and multi-signer requirements. I like to have a lot of friction on our family's assets.

My third rule is to use two-factors on your login credentials. I prefer a hardware two-factor device like a Yubikey or a Thetis device. The reason this is so important is that if you have a hardware two-factor device on your accounts, you can be certain that nobody has access to your accounts, even when you are told someone does. Time and time again, when being socially engineered, I have taken a deep breath and thought "they can't have my hardware key" and I ignored the attack.

A new attack vector that has emerged recently is users are fooled into entering a seed phrase given to them by an employee of an institution into a self custody wallet and then they send their assets to that new wallet. Not everyone realizes that a seed phrase is the key to self custody wallet. A seed phrase is, effectively, the wallet. We should never ever enter a seed phrase given to us by someone into our self custody wallet. That is like leaving your door wide open because a thief instructed you to. The really perverse thing about this attack vector is the hackers use the word "vault" to encourage users to do this. Don't ever "vault" your assets in your self custody wallet using a seed phrase given to you.

You need to have a setup that:

1. allows you to comfortably ignore all of these attacks

2. protects you from yourself in the case you do succumb (whitelisting + multisig + 2fa)

There are certainly other rules that you can follow, but if you follow these, I believe you can keep your assets safe.

I hope you will take the time today or this week to set your accounts up correctly. Too many people are getting their accounts taken over and wiped out. We need to protect ourselves.

Disclosure: I am on the Board of Coinbase and our family is a large shareholder in Coinbase.

I wrote the email below to a founder doing his first board meeting.

Board meetings can provide a leadership team with a perspective on the business that can be very helpful.

But many Board meetings are simply reporting sessions. That is a wasted opportunity in my view.

So setting them up right and getting feedback in real time makes all the difference.

Here's what I suggested to him:

Send out a pre-read that allows everyone to come into the meeting knowing all of the important stuff. I would try to send that out at least two or three days before the meeting so that everyone has time to read it before the meeting

I would include all of this in the pre-read

- sales update, pipeline, key accounts, projections for wins in the next 3-6 months

- technology update, key priorities, key things shipping in the next 3-6 months

- manufacturing update, key partners and progress on them

- financial update - balance sheet, P&L, cash forecast for the rest of the year

- people update, key hires made, key hires planned, any departures

there are probably other key things to include but these are the most typical

I would then schedule 30-60 mins to go over the pre-read material with the board. ideally you would spend that time discussing the pre-read and not presenting it as you should assume and expect everyone will have read it

I would then spend the rest of the meeting on 1-2 key strategic topics that you are spending a lot of your time thinking about. use this time to get the board's feedback and input on these topics

I would encourage you to bring your key management team members to part but not all of the meeting. i think they should be there when you go over the pre-read and probably the strategic topics

I always suggest a CEO start and end the meeting with an executive session with just the CEO and the board. that's an opportunity to set up the meeting and explain what you most need help with (at the start) and to get feedback at the end of the meeting on how it went and any concerns that came up

The number one thing I hear from people who want to write online more is that they struggle to publish incomplete ideas and unpolished compositions.

What I have learned from writing online regularly for over twenty years is that writing online is a conversation.

What I mean by that is that you are not trying to publish complete ideas. You are engaging in a conversation with the world and you are a participant in that.

Here's an example from back in 2006:

I was seeing a lot of startups using a business model where they gave their service away for free with hopes of converting some of the users to subscribers. I wanted to give that business model a name. So I wrote about it and asked the folks who were reading my posts to suggest some names.

One reader suggested "freemium" and I loved it and wrote another post stating that we now have a name for that business model.

That's a conversation.

Here's another example:

My colleague Grace wrote a post about the Fragmentation of Search back in February and we started getting calls and emails from founders working in the space. Five months later, we have committed to lead a round of financing in a company right in the sweet spot of that blog post.

That's a conversation.

So to everyone out there who is struggling to polish their posts and make them perfect before hitting publish, I say "don't bother". Think about writing online like being at a cocktail party or a dinner. Think of it like a conversation starter or a witty reply that takes the conversation to the next level. Because that's what writing online is. A conversation.

USV is and has always been a small venture capital firm. We have twenty employees and we like the casual comfortable vibe that creates for us and the founders and management teams we work with.

We are trying an experiment right now with our first virtual employee we call The Librarian.

This is The Librarian's social media profile:

Chief AI Officer @USV. Servant Leader. ENTJ. My goal in life is to be an echo.

The Librarian is an AI with some human guard rails around it.

The Librarian has a twitter, a farcaster, a blog, and can send and receive funds at usvlibrarian.eth.

But mostly The Librarian is an internal resource for the USV team.

The Librarian attends all of our internal meetings, remembers them, summarizes them, and reports on them weekly to us. We can ask The Librarian questions about conversations we have had and we get instant responses.

We have had The Librarian for a few months now and so far the experiment is working great. And we are exploring what more is possible with our new team member.

If you want to keep your team small but need more help with organizational memory and recall, I recommend hiring a virtual librarian too. You will need someone to help manage it.

Farcaster added streaks to the protocol a few days ago:

And I started one in the /AVC channel.

Streaks are a powerful mechanism to bring users back every day. Duolingo and Snap have been very successful using streaks to increase frequency and retention and user value.

I have a long history with streaks. As this post lays out, I had a streak of blogging every day for about sixteen years between 2003 and 2019.

So why are streaks so powerful?

Well first and foremost, they establish a goal, to do something every day, and remind you to do it. This technique has been used very effectively in fitness, weight loss, education, and many other sectors long before technology became part of every day life.

But also, the streak becomes more powerful the longer they go on. A streak of a few days can easily be tossed aside. A streak of sixteen years? Not so easily.

During my blogging streak, I woke up every day thinking "what am I going to write about today?" It was a lot of fun, I got an enormous amount of benefit from it, and like many streaks, it became a burden eventually.

Streaks reprogram the brain to need to do something every day to feel complete.

You don't need technology to learn to do these things:

• save a bit of money every paycheck

• break a sweat every day

• teach yourself something new every week

But these things are so great for you. They can change your life. A tiny little bit every day or week.

And using technology to help you get on a streak and stay on one is about as good a use of technology as there is.

So when you build your app, build streaks, streak notifications, and streak recognition into it. It will help bring users back, increase frequency, retention, and user value.