A VC - Latest Comments in http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Gavin Starks — Mon, 18 May 2009 17:46:17 -0000

No problem - I'm glad that was useful.

Rather than try and address the entire issue in a blog reply, I'll offer a few personal opinions - which are entirely based on my own understanding and interactions with people in the space, and my own research.

Firstly, the science and data that I've seen convinced me over 5 years ago that not only is this a real issue, with a real basis, but most of it is under-estimating the outcomes. I've also met many of the researchers, including those behind the Stern Report, and would not question their integrity. FYI, my background is in Astrophysics, 18 yrs internet and 10 years business.

Secondly the politics. I've met many politicians and civil servants and have yet to meet one who isn't genuinely concerned - and trying to navigate an extremely difficult set of options that are difficult to grasp. Most of them would like to try to do more but feel constrained by the potential economic and social impacts. I would disagree strongly that there is any overarching "sinister" plot or conspiracy. Apart from anything else, we're just not that clever.

Finally on the markets. I've met people who created some of the carbon markets. My understanding is that all markets are "buggy" and subject to gross exploitation (e.g. sub-prime). However, my personal interaction with these people have left me with the impression that a they have a geniune desire to create instruments that drive change. That they have to bridge a divide between economics and sustainability is a "damned if you do / damned if you don't" position. I believe you have to use market forces to drive change - and build in the checks and balances to enable audit, transparency and accountability. All these systems need improvement so that the guys at the hedge fund desks are pushed to make the "right" decision - some of this requires systemic change, but it's coming to all our financial institutions.

Ultimately we all have massive issues to address around sustainability, and GHG emissions are both a part of the mix, and an excellent "catalyst" for change. I always encourage keeping a healthy cynicism, however I would like to ask that you embrace and help us navigate the transition to a sustainably, transparent future that will enable us to thrive.

From another perspective, you may be interested to read my post here where I frame some of this conflict: http://radar.oreilly.com/ga... (although the comments on that post went off on a bit of a tangent!)

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

kidmercury — Sun, 17 May 2009 17:51:30 -0000

hi gavin,

thanks for your comment. sincere apologies if i missed the links earlier, that clarifies a lot. thanks.

given the nature of your business, i imagine you have heard concerns that carbon tracking is useless, as well as more sinister allegations that it is really part of an agenda for greater centralized control of society. below is a search results page that might be of relevance in terms of what i am talking about:

http://www.google.com/searc...

if you guys are ever able to address those issues i'd appreciate it. specifically, there are many scientists who agree with the view that carbon emissions is irrelevant and a politically motivated agenda, nothing to do with the environment or making a better world or anything like that. if you can debunk them, i imagine it would help the cause of your business, as well as unite people on this divisive and potentially controversial issue.

sorry again if i missed those links before, and thanks for taking the time to comment.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Gavin Starks — Fri, 15 May 2009 16:50:13 -0000

Hello. Am a bit puzzled by your comment, but hope these links will help.

Our home page http://www,amee.com has the following links:
About our team: http://www.amee.com/?page_i...
There is a link there that says "AMEE News and Blogs" http://www.amee.com/news
And our contact page: http://www.amee.com/contact which has email and twitter contacts. My twitter handle is @agentGav.

We also have a page on how cap & trade relates to AMEE http://www.amee.com/?page_i...

In addition, given AMEE's role to bring transparency to the carbon space, our wiki not only displays all the methodologies and links to the data, but the "discussion" tab is available on every page. http://wiki.amee.com

Our role in the emerging world of carbon/environmental reporting is to bring together the many methodologies, policies, factors, etc. into a neutral platform that enables clarity, auditability, coherence and portability.

We believe there are many solutions that can reduce energy consumption, increase efficiency and decrease the environmental impact of our actions. Many varied actions are needed to sustain our increasing population. and demands on resource.Our role is to help collect, reveal and connect the data that will help make that possible.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

kidmercury — Thu, 14 May 2009 12:50:57 -0000

well, unlike amee, i'm eager to have a discussion about this issue, so if you really believe in the legitimacy of carbon emissions tracking/controlling, why not outline your case in a blog post, and then i can present the other side in the comments? of course amee is the one who really should be having this conversation, but unlike i think every other company in your portfolio, they dont have a blog, or any type of conversational format, so unfortunately i cant have a chat with them about this (whoever "them" might be, as they refuse to disclose their identities)

all i seek is the truth, and the truth never fears investigation.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Thu, 14 May 2009 10:25:44 -0000

Good crtiticisms. I don't share your view that carbon is a bullshit issue. But the critiques are spot on

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

kidmercury — Tue, 12 May 2009 22:20:38 -0000

if by "like amee" you mean companies that are leveraging open systems, i hope you fund more stuff like that too (so i can benefit from the API :) ). and i suspect you will, as you always drop it like it's hot in that department. that's why you're the boss, boss!

but if by "like amee" you mean companies that profit based on lies and refuse to look at the truth, i hope you'll find more compelling opportunities that will yield you even greater returns and the rest of us real social benefit. or if i am wrong, and if amee is delivering a solution that benefits the world, all they have to do is explain how tracking carbon emissions is necessary, useful, and does any good at all. not a single mention of this on their web site, i guess we're just supposed to have blind faith. as the UN has already called for a global carbon tax, and as cap and trade essentially is a carbon tax, i'm inclined to think there are other motivations aside from benevolent environmental concern.

and for a company that claims to understand the openness of the web, i find it humorously disappointing that there is literally no information about who is running that company. i go to unionsquareventures.com i see pictures and bios. i go to etsy.com i even get to do handwriting analysis of the whole freakin' company! shouldn't the environmental crusaders at amee who are here to save the world from mass extinction step up to the plate and introduce themselves? after all they certainly deserve credit if their aspirations are as noble as they would like to portray.

not hatin' on you boss, i know you're a cool dude. but it does kinda suck that the carbon tax is going to hurt me and the whole economy without yielding any benefit. just like how patent trolls suck for you and rob you and your companies of wealth (and by extension, all of us in the technology community) without giving anything back aside from flimsy lies they may try in court.

or if i'm wrong (meaning if all the scientists and journalists with impeccable track records who offer compelling evidence against the carbon fraud that i repeat are wrong), all amee has to do is step up and prove it, at which point i will sincerely apologize and shut up.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:26:38 -0000

I think VC is going 'back to the future'

Smaller funds, smaller deals, smaller partnerships

But with very specific domain focus, which is not how it was done in the past

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:26:37 -0000

I'm not optimistic on that last point. I see companies that are copying our portfolio companies getting funded by our competitors. Several in the past week alone. Sheese!

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:26:36 -0000

Totally agree

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:24:34 -0000

Thanks

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:23:29 -0000

I think the perception is changing. Open source has been a big win for VCs and that is largely a dev tools play

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Tue, 12 May 2009 21:23:26 -0000

I'd like to fund more stuff like amee

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

MikePLewis — Mon, 11 May 2009 21:38:23 -0000

Good post and thanks for the book recommendation. I loved Post American World. Also, i just read Daemon on Craig Newmark's recommendation and it proved was a fast and exciting read. You don't seem to read much fiction but i think you'll like this one. They say it's a lot like early Tom Clancy except about the internet.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

dineshn — Mon, 11 May 2009 13:39:00 -0000

Fred:

The whole developer tools area is unfortunately overlooked by the venture community because of the small TAM perception, sometimes great ideas that can change the industry originate from that sector -- case in point, VMWare started off primarily as a developer tool company, and look where it is today.

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

kidmercury — Mon, 11 May 2009 13:04:54 -0000

lol, i love amee, that is my favorite investment of yours boss....always provides me with an excuse to drop truth

http://www.google.com/searc...

my favorite is how amee is an acronym for "avoiding mass extinction extinctions engine".....and the youngsters say i'm a fear mongerer! hahahaha

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Steve Kane — Mon, 11 May 2009 09:27:57 -0000

namaste!

;)

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 09:12:20 -0000

I think jeff Jarvis said "small is the new big" and I just reblogged it

This blog is a rolling conversation, as you well know steve, and each post is a part of a larger discussion

So the post in illiquidity premium should be seen in light of all the other posts I've been doing about venture capital as an asset class lately

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Steve Kane — Mon, 11 May 2009 08:57:53 -0000

re #3 - this is where I thought your earlier post on the "illiquidity premium" was going (but all the comments were more or less academic math discussion)

the point is, there is likely no worthwhile "illiquidity premium" in VC (and maybe in LBO and other "althernative investments") if your job is to manage an investment pool like an endowment or pension that has as its core a social contract with its own investors/contributors

for years investment committees at pensions and endowments have been distracted by the ostensible longterm gains being made harvard and yale ("ostensible" because they didn't actually last longterm as evidenced by current situation), and so went headlong into highly risky longterm illiquid assets they should not have.

now they are seeing their portfolios radically reduced in valuations, all the while their cashflows are in the doghouse because of illiquidity (plus they now seriously doubt the illiquid assets will even pay off in the longterm)

of course, their social obligations haven't decreased commensurately -- no, they have increased, as disbursement requirements naturally grow over time (unless somehow the retirees or university operating budgets spending needs decrease, and that ain't gonna happen often)

any case, this is all good news for those who care about venture and entrepreneurs and innovation. the vc asset class is a bloated sloppy drunk, with people getting way overcompensated for managing poorly performing funds and inventors being drowned in a sea of too easy capital chasing copycat ideas

fred, i think it was you who said, small is the new big?

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 08:46:16 -0000

Yes, but twitter is hard to use at the start. The 'out of the box experience' needs to improve

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 08:38:25 -0000

Sure. But emotion drives markets more than anything else. And with Krugman and Roubini saying that banks are all insolvent and must be nationalized, we get panic

Now that we know most banks are solvent and likely to remain so, we can move forward calmly and rationally

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 08:15:10 -0000

I agree that more people are becoming developers as it becomes easier. I know designers who code, mathemeticians who code, stock traders who code, bloggers who code, and even VCs who code

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 08:03:19 -0000

Yes it is hard to justify. But you do certain things in a marriage

But what I'd like to know is if a nine hour drive in a car is more carbon efficient than a flight on a full to the brim 50 seat regional airplane

I guess I'll have to get amee.com on the case

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

fredwilson — Mon, 11 May 2009 08:00:14 -0000

Thanks druce. I'll take a look

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

Druce Vertes — Mon, 11 May 2009 07:42:12 -0000

2 stories on reinventing education

Aplia learning software used by 25% of econ intro courses - http://www.washingtonpost.c...

Harlem charter schools - http://www.nytimes.com/2009...

Re: http://www.avc.com/a_vc/2009/05/thoughts-from-25000-feet.html

James — Mon, 11 May 2009 02:15:25 -0000

Flying for a 'long weekend getaway' - bit difficult to justify from a climate perspective, don't you think?