Thoughts below are my personal opinions as a VC looking to invest in internet startups, and do not reflect any views on Betfair or its strategies, intent, or prospects in regard to the US gambling market.

All forms of online gambling, with the exception of horseracing, have been effectively treated as illegal in the US for the last decade or so. (Before that, they were essentially ignored).

The reasons for this effective illegality were somewhat murky.  After all, gambling is traditionally a state issue, where we leave states to decide what kind of regulation their citizens want.  Utah can ban it, Nevada can permit it, and everybody’s happy.  In 1961, however, Congress passed the Wire Act, in an attempt to control the spread of the mob, who at the time controlled the illegal betting industry.  The Wire act states:

Whoever … Read More »

James McManus recently wrote an excellent summary of unfortunate unraveling of online poker in the US this year.

I remain surprised at how surprised everyone seems to be at the unraveling of the poker ecosystem.  You needed no expertise at all to realize that the legal framework in which PokerStars and FullTilt were operating in was, at the very best, dark gray, and likely explicitly illegal.  Now, you might think, so are speeding and jaywalking, and despite being illegal (or nearly so), you might choose to do it anyway.  Fair enough.

But people were trusting these guys with a lot of money.  McManus reports having close to $20K in PokerStars when assets were frozen, and many people had much, much, more.  People seemed to trust that the operators were ringfencing the client deposits from the operating expenses … Read More »

I’m now a all-electric two timers:  bought (and sold) Tesla Roadster #48 a few years back, and now the proud owner of a Nissan Leaf.  Each with their own merits, though the Leaf has found more “product-market fit”.

The Leaf has a practical range of 80-85 miles, which means a Bay Area commuter like myself must occasionally rely on charging outside the home.  Luckily for me, 120V wall sockets are plentiful at the Matrix West Coast HQ, so I can top it up during the day at work for an anxiety-free ride home.

But what of public charging?  I’d have to guess that the Bay Area is tops in the country, but still locations are precious few.  Palo Alto City Hall has a couple of spots just a block from our office, and I’ve enjoyed a publicly subsidized top off at Oakland … Read More »

As a bunch of you asked for it, my recent discovery on moving large ($10K+)  chunks of money from British Pounds or Euros to Dollars (and back).  (For smaller amounts, I’m told PayPal works well but I haven’t tried it.)

Here’s the challenge I have had:  if I want to move it from a bank in the UK to a bank in the USA, I have to go through a complicated process to initiate the movement – often requiring me to be in the country where the money is, which is rarely where I am.  So I am in the bank’s office in London, or on the phone with them at 3am, and go through an hour of bureacracy (ID checks, paperwork, waiting) until the money is ready to be wired.  Then, they call their exchange desks and … Read More »

I’ve always learned by doing things. Trial-and-error may not be the best way to learn a known answer, but when you’re inventing (as entrepreneurs must do), you gain insights as you go and change the plan accordingly. One of the tough challenges in moving from entrepreneurship to VC is that my actual operating and market experience decays over time. You get a lot of new knowledge from seeing hundreds of presentations from entrepreneurs, and to some extent from the investments you have made, but you don’t accrue a lot of experience from hands-on activity. And there is no pivot in VC: I have to commit upfront to an investment, and back that entrepreneur come what may.

Nevertheless, I think you can learn from experimentation in this job. So I’m going to deliberately try … Read More »

Craiglist has been disrupted, it’s just not obvious yet. And the world will be a better place for it.

Craigslist has fewer unique visitors today than it did at this time in 2009.

Bad sites with network effects show much slower decay in use than they should based on their absolute quality. (think eBay.) Bad sites who price most of their product at free show incredibly slow decay in use. (think Craigslist). But make no mistake, it is happening.

The evidence of their poor quality is so obvious it’s hardly worth stating. Suffice it to say, if I’m looking to rent an apartment, it would be nice not to see the same listing reposted every day, and having to re-read it and figure out if I’ve called them before. It might be even nicer to view them on a map, … Read More »

All the time!

Historically (i.e. before ~2006) this was the explicit role of angel investors in the startup financing ecosystem. Rarely, in fact, would angel investors have an opportunity to invest after a product and revenue were in place.

For consumer internet and SaaS enterprise deals, a lot has changed in the last few years. Technology has moved on, and for a host of reasons a lot more can be accomplished with 1-2 engineers and little or no cash. Now angel investors expect to see product and customers before writing a check, and to an extent, founders expect to own more of the company after that first money comes in. Everybody wins.

As a general rule today, angel investors are expecting to see a product, and customers (or at least users) in place before they invest.

However, there is still a role for angel … Read More »

I thought the internet panic over the new TSA pat-downs and body images was a bit of an overreaction. It turns out that the pat-down may be much better than the alternative, going through the back scatter imaging system. It seems the science is very untested on the risks of this system, and those risks could be quite real.

Check out this letter from concerned scientists to the government urging more testing.

Some key points they make:
– people compare the level of radiation to exposure in a chest x-ray or cosmic rays. But this is a totally different radiation. By design it doesn’t penetrate the skin — so while a chest x-ray just flies through you, this all just stops in the skin.
– all the analysis compares the dosage … Read More »

When I founded my first company, I referred to myself as “founder and CEO”, and in retrospect, I believe it was a mistake. Were I to do it over again, I would de-emphasize my founder status.

The benefit of keeping the founder title accrues more notably to more junior founders: if the company grows and over time people are hired above you, it offers ego compensation to keep that founder tag on your business card alongside “product manager”, if you’ve effectively been demoted from VP of Product. This seems less relevant for a CEO, who should get sufficient ego out of that title alone.

The reason I think it was a mistake to emphasize founder status is that I was essentially implicitly trying to say I was better than the other, non-founder employees. That I was special, and … Read More »

Anyone who knows me well always points me to new deals that look like Swoopo – I have a weakness for things that are clever. A lot of these new deals aren’t great venture investments, some might be good “lifestyle” businesses, but most of them prove to be neither great nor good. In the end, maybe a bit too clever.

But that doesn’t change the fact that the thesis of “entertainment commerce” is a compelling one – buying on eBay was once a thrilling experience where people ended up buying stuff they didn’t need just for the fun of the chase, or overpaying because they couldn’t stand to lose the bidding war. These days, buying on eBay seems a chore to me, and I suspect it does for most users. But the idea of making shopping fun – a mix … Read More »