I was sitting with an investor friend earlier this week, describing the kinds of things that USV likes to invest in. She asked if USV invested much in SaaS (Software as a Service), and I said no, not really. But yes, in certain cases, especially where there is a network to be had, and I mentioned that one kind of network we like to invest in is a system-of-record style network.
The canonical example is our portfolio company Carta, which is certainly SaaS, but really, it's system-of-record, grounded in ownership interests (starting with equity ownership in startups) as the foundation record that binds the system together. From there, many stakeholders can engage and collaborate, all based on the shared interest in the records at the heart of the system.
Since the beginning of USV, we have always asked the question: "is this a tool, or can it become a network?" In the early days of Carta (f/k/a eShares), you could look at it as a tool for managing cap tables, or you could look at it as a network of assets and stakeholders.
The system-of-record network effect is also at heart of why blockchains are interesting. They are, by definition, ledgers that track the relationship between digital assets (money, date, etc) and a wide variety of stakeholders.
With any system of record, the more data and records that the system holds, and the more stakeholder identities that interact with it, the more valuable it gets. It's no surprise that the enterprise ERP systems (eg., SAP, Oracle, Microsoft, Salesforce, etc) that form the systems-of-record for most large companies are extremely highly valued and long-term durable.
Perhaps all of this is obvious. But it has proven to be a helpful frame for us as we continue to consider software applications in a wider variety of contexts. For example, CarbonChain is building a system-of-record around carbon accounting, and Odyssey is building a system-of-record around financing and operations of distributed energy resources in emerging markets.
The middle of a crypto (and broader financial) market meltdown is perhaps an apropos moment to introduce my second podcast guest: Muneeb Ali, the co-founder of Stacks.
Stacks is a "Bitcoin L2", meaning a system for scaling and expanding the usefulness of the bitcoin network, by making it less expensive and more programmable.
The "Slow Hunch" that Muneeb has followed for over a decade is the idea that blockchain networks can and will be used for more than just financial transactions.
USV invested in the the precursor to the Stacks project back in 2014 -- at that time, the focus was a project called OneName, which can be thought of as an "app" (for digital identity) on top of what would become the Stacks "platform".
We believed then, as we do now, that cryptonetworks and blockchain technology are not just financial technology but also "internet" technology and will, over time, change the way that many internet applications are built.
1/ I'm starting a podcast series along the same theme as this blog. The Slow Hunch Podcast will dive into the twists and turns, ups and downs, near misses, minor miracles, and personal plights behind the stories of "overnight successes", big breakthroughs, and ideas that in hindsight seem obvious but weren't always that way.
2/ Could not be more thrilled to welcome my first guest on the pod, my old friend Fraser Kelton.
Fraser and I first worked together a decade ago when USV invested in his last company Koko: an AI company focused on mental health that was ultimately acquired by Airbnb. My time working on the Koko board was a major introduction for me to the ML / AI tools & techniques of that earlier era. During Fraser's time at Airbnb, OpenAI
I was sitting with an investor friend earlier this week, describing the kinds of things that USV likes to invest in. She asked if USV invested much in SaaS (Software as a Service), and I said no, not really. But yes, in certain cases, especially where there is a network to be had, and I mentioned that one kind of network we like to invest in is a system-of-record style network.
The canonical example is our portfolio company Carta, which is certainly SaaS, but really, it's system-of-record, grounded in ownership interests (starting with equity ownership in startups) as the foundation record that binds the system together. From there, many stakeholders can engage and collaborate, all based on the shared interest in the records at the heart of the system.
Since the beginning of USV, we have always asked the question: "is this a tool, or can it become a network?" In the early days of Carta (f/k/a eShares), you could look at it as a tool for managing cap tables, or you could look at it as a network of assets and stakeholders.
The system-of-record network effect is also at heart of why blockchains are interesting. They are, by definition, ledgers that track the relationship between digital assets (money, date, etc) and a wide variety of stakeholders.
With any system of record, the more data and records that the system holds, and the more stakeholder identities that interact with it, the more valuable it gets. It's no surprise that the enterprise ERP systems (eg., SAP, Oracle, Microsoft, Salesforce, etc) that form the systems-of-record for most large companies are extremely highly valued and long-term durable.
Perhaps all of this is obvious. But it has proven to be a helpful frame for us as we continue to consider software applications in a wider variety of contexts. For example, CarbonChain is building a system-of-record around carbon accounting, and Odyssey is building a system-of-record around financing and operations of distributed energy resources in emerging markets.
The middle of a crypto (and broader financial) market meltdown is perhaps an apropos moment to introduce my second podcast guest: Muneeb Ali, the co-founder of Stacks.
Stacks is a "Bitcoin L2", meaning a system for scaling and expanding the usefulness of the bitcoin network, by making it less expensive and more programmable.
The "Slow Hunch" that Muneeb has followed for over a decade is the idea that blockchain networks can and will be used for more than just financial transactions.
USV invested in the the precursor to the Stacks project back in 2014 -- at that time, the focus was a project called OneName, which can be thought of as an "app" (for digital identity) on top of what would become the Stacks "platform".
We believed then, as we do now, that cryptonetworks and blockchain technology are not just financial technology but also "internet" technology and will, over time, change the way that many internet applications are built.
1/ I'm starting a podcast series along the same theme as this blog. The Slow Hunch Podcast will dive into the twists and turns, ups and downs, near misses, minor miracles, and personal plights behind the stories of "overnight successes", big breakthroughs, and ideas that in hindsight seem obvious but weren't always that way.
2/ Could not be more thrilled to welcome my first guest on the pod, my old friend Fraser Kelton.
Fraser and I first worked together a decade ago when USV invested in his last company Koko: an AI company focused on mental health that was ultimately acquired by Airbnb. My time working on the Koko board was a major introduction for me to the ML / AI tools & techniques of that earlier era. During Fraser's time at Airbnb, OpenAI
The Slow Hunch by Nick Grossman
Investing @ USV. Student of cities and the internet.
The Slow Hunch by Nick Grossman
Investing @ USV. Student of cities and the internet.
Becoming a system of record is not easy -- it requires placing oneself at the center of someone else's workflow and digital life. Open source solutions (e.g., blockchains) are well suited to it because bring a high level of transparency and trust. Digitizing an asset type that was previously analog and making it 100x more useful is another way to generate enough momentum to get there.
And with that, I will hit publish, and as I do so, this post will get recorded -- permanently -- in the arweave blockchain which provides the system-of-record datastore for this blog!
hunch so far. In 2014, the technology infrastructure was so far away from supporting consumer use cases in a smooth way. One could argue that that's still true today, a decade later -- though the advances, especially in the last 2 years, have been remarkable.
Aside from the "if" of this slow hunch, there is the "how". In 2015, Ethereum launched on very much the same thesis of a highly programmable blockchain. And over the years since, it has used an "L2" (aka Layer 2) approach to scaling -- with a highly secure, but slow and expensive base layer, paired with an ecosystem of faster/cheaper L2s on top.
Where the Stacks project has differed is in this approach -- believing that Bitcoin makes more sense as the base layer, given its simpler approach and more reliable security. Muneeb and the Stacks team believe that this approach is more consistent with the "stack" of internet protocols, built around the highly simple, but extremely durable, IP protocol.
that paved the way for what we now think of as modern AI / LLMs. Inspired by this advance, Fraser joined OpenAI as Head of Product and was part of the team that launched ChatGPT and changed everything. He's now a partner at
, on a mission to support founders on their journeys of discovery.
I hope you enjoy the conversation. You can find the podcast here, which includes links to Apple and Spotify for audio. And you can find the full video conversation on Youtube, and embedded below.
Becoming a system of record is not easy -- it requires placing oneself at the center of someone else's workflow and digital life. Open source solutions (e.g., blockchains) are well suited to it because bring a high level of transparency and trust. Digitizing an asset type that was previously analog and making it 100x more useful is another way to generate enough momentum to get there.
And with that, I will hit publish, and as I do so, this post will get recorded -- permanently -- in the arweave blockchain which provides the system-of-record datastore for this blog!
hunch so far. In 2014, the technology infrastructure was so far away from supporting consumer use cases in a smooth way. One could argue that that's still true today, a decade later -- though the advances, especially in the last 2 years, have been remarkable.
Aside from the "if" of this slow hunch, there is the "how". In 2015, Ethereum launched on very much the same thesis of a highly programmable blockchain. And over the years since, it has used an "L2" (aka Layer 2) approach to scaling -- with a highly secure, but slow and expensive base layer, paired with an ecosystem of faster/cheaper L2s on top.
Where the Stacks project has differed is in this approach -- believing that Bitcoin makes more sense as the base layer, given its simpler approach and more reliable security. Muneeb and the Stacks team believe that this approach is more consistent with the "stack" of internet protocols, built around the highly simple, but extremely durable, IP protocol.
that paved the way for what we now think of as modern AI / LLMs. Inspired by this advance, Fraser joined OpenAI as Head of Product and was part of the team that launched ChatGPT and changed everything. He's now a partner at
, on a mission to support founders on their journeys of discovery.
I hope you enjoy the conversation. You can find the podcast here, which includes links to Apple and Spotify for audio. And you can find the full video conversation on Youtube, and embedded below.
