My partner Fred has come out in support of taxing carried interest as income instead of capital gains. I agree with Fred’s position because I do not believe that this change will result in less investment in startups. Taxes generally cause distortions and as a first approximation, taxing something at a higher rate tends to lead to less activity. Sometimes that is the desired outcome. For instance, if the US were to tax CO2 emissions we would expect to see companies attempt to reduce their emi...

The Deepwater Horizon accident is a terrible lesson in not testing backup plans. Yes, it is probably impossible to test the various way of trying to stop a well under exact conditions (i.e. with a gushing well), but the constant refrain of “this has not been tried at this depth” is deeply disheartening. That’s like hearing from your operations team that they have only ever practiced restoring a single development machine and never anything in the production environment. At this point I am wit...

Historically in the software business high gross margins were considered essential. It is not clear to me that the same logic will apply for cloud-based services. Their cost structure might wind up being quite different. Much smaller development teams can accomplish amazing things on top of a cloud stack substantially reducing the fixed cost component. On the other hand, COGS may increase significantly as the underlying cloud services are paid on a variable basis. With that in mind, it could ...

I saw on Twitter this morning that Apple has passed Microsoft in market cap. This is a momentous occasion and a testament to the extraordinary talent and vision of Steve Jobs. But the real challenge starts now for both companies. Apple needs to unveil a cloud strategy fast. I have written about this before (sorry, no links this morning - I am on Blackberry only), but with the progress on Android and its improving cloud to device capabilities this is critical. The fact that a brand new iPad ha...

A decade ago I was in the heat of a deal negotiation with a large company when they suddenly went silent for a week. I was furious. I thought they were trying to string us (startup) along to see if we might back off from some of our deal terms as the deal dragged on. Only much later did I learn that their deal team simply got pulled into a 50x bigger deal. And no-one bothered to let us know the reason for the delay (maybe there was some concern about rumors of a larger deal leaking). It was t...

So thanks to Google, since Thursday I have been playing around with an HTC EVO on the Sprint network. I have come away impressed and it has nothing to do with the EVO theoretically supporting 4G. I have mostly had 4G turned off - apparently it is a huge battery hog and the few times I did turn it on, I did not seem to be in a 4G coverage area. In any case, 3G speed has been fine for me on my new BlackBerry Bold on T-Mobile (my old one got wet). The first reason I am impressed is that the EVO ...

Yesterday, a major barrier was crossed with the creation of the first artificial lifeform. Craig Venter and his team created a cell from scratch. Well not exactly from scratch: they created the DNA and inserted into an emptied cell. This is very similar to programming a computer – the hardware is the same but the software tells it what to do. When I explained this to my kids this morning, they surprisingly immediately grasped some of the potential consequences as my older son blurted out “the...

Probably the most interesting exchange on yesterday’s VC Panel at Google I/O was around how investors think about open versus closed systems. Dave McClure got the most memorable line of the day with “Open is for losers." Dave was obviously being provocative on purpose. My own thinking here was captured by comments from Chris Dixon and Brad Feld. Chris pointed out that open is the basis for more overall consumer surplus generation (i.e. more total net benefit to society), while closed is the b...

A few times over the last couple of months I have been asked what government could do to help startups. I believe there are five different areas that could really make a difference. The first two are specific to the kind of startups that we invest in at Union Square Ventures, but the other three apply across the board. 1. Net Neutrality By this I mean a clear commitment to separating bandwidth, devices and applications. Once I have bought a certain chunk of bandwidth (whether wired or wireles...

My partner Fred has come out in support of taxing carried interest as income instead of capital gains. I agree with Fred’s position because I do not believe that this change will result in less investment in startups. Taxes generally cause distortions and as a first approximation, taxing something at a higher rate tends to lead to less activity. Sometimes that is the desired outcome. For instance, if the US were to tax CO2 emissions we would expect to see companies attempt to reduce their emi...

The Deepwater Horizon accident is a terrible lesson in not testing backup plans. Yes, it is probably impossible to test the various way of trying to stop a well under exact conditions (i.e. with a gushing well), but the constant refrain of “this has not been tried at this depth” is deeply disheartening. That’s like hearing from your operations team that they have only ever practiced restoring a single development machine and never anything in the production environment. At this point I am wit...

Historically in the software business high gross margins were considered essential. It is not clear to me that the same logic will apply for cloud-based services. Their cost structure might wind up being quite different. Much smaller development teams can accomplish amazing things on top of a cloud stack substantially reducing the fixed cost component. On the other hand, COGS may increase significantly as the underlying cloud services are paid on a variable basis. With that in mind, it could ...

I saw on Twitter this morning that Apple has passed Microsoft in market cap. This is a momentous occasion and a testament to the extraordinary talent and vision of Steve Jobs. But the real challenge starts now for both companies. Apple needs to unveil a cloud strategy fast. I have written about this before (sorry, no links this morning - I am on Blackberry only), but with the progress on Android and its improving cloud to device capabilities this is critical. The fact that a brand new iPad ha...

A decade ago I was in the heat of a deal negotiation with a large company when they suddenly went silent for a week. I was furious. I thought they were trying to string us (startup) along to see if we might back off from some of our deal terms as the deal dragged on. Only much later did I learn that their deal team simply got pulled into a 50x bigger deal. And no-one bothered to let us know the reason for the delay (maybe there was some concern about rumors of a larger deal leaking). It was t...

So thanks to Google, since Thursday I have been playing around with an HTC EVO on the Sprint network. I have come away impressed and it has nothing to do with the EVO theoretically supporting 4G. I have mostly had 4G turned off - apparently it is a huge battery hog and the few times I did turn it on, I did not seem to be in a 4G coverage area. In any case, 3G speed has been fine for me on my new BlackBerry Bold on T-Mobile (my old one got wet). The first reason I am impressed is that the EVO ...

Yesterday, a major barrier was crossed with the creation of the first artificial lifeform. Craig Venter and his team created a cell from scratch. Well not exactly from scratch: they created the DNA and inserted into an emptied cell. This is very similar to programming a computer – the hardware is the same but the software tells it what to do. When I explained this to my kids this morning, they surprisingly immediately grasped some of the potential consequences as my older son blurted out “the...

Probably the most interesting exchange on yesterday’s VC Panel at Google I/O was around how investors think about open versus closed systems. Dave McClure got the most memorable line of the day with “Open is for losers." Dave was obviously being provocative on purpose. My own thinking here was captured by comments from Chris Dixon and Brad Feld. Chris pointed out that open is the basis for more overall consumer surplus generation (i.e. more total net benefit to society), while closed is the b...