Business Insider today published a very good interview with Fred Wilson, a managing partner at Union Square Ventures, and perhaps the most well-known New York City venture capitalist today.
At 6,600 words, not counting the intro, the interview is a beast. So if you don’t have time to make it all the way through, I’m here to do the dirty work for you. Here are five of the most interesting revelations from Alyson Shontell’s Q&A:
Why Tumblr’s $1.1 billion sale to Yahoo didn’t excite the New York tech scene like Instagram’s sale to Facebook did in Silicon Valley:
I think people understood that the sale of Tumblr in some ways was a reflection of the fact that Tumblr struggled to become a business.
The product is still hugely successful. If you look at the numbers in terms of number of active participants on the network and pageviews, all of that keeps going up even after Yahoo bought it. It’s never, ever slowed down.
But Tumblr really struggled to build a business, a sustainable business that could make it an independent company the way that Twitter successfully did, the way that LinkedIn successfully did, the way that Facebook successfully did. The sale to Yahoo in some ways was, I think, a reflection of the fact that they ran out of time on that.
Whether New York City’s startup scene has lost its luster:
I think that there are a bunch of companies that have been around for a while in New York. Tumblr is an example of that. Foursquare is an example of that. Etsy’s an example of that. Kickstarter’s an example of that. Gilt could go on and on and on. These are not new stories and haven’t been new stories in a long time. They’re doing really well and soaking up a lot of the talent.
But what’s an example of a company in New York that has come out of the gate in the last few years and really made a name for itself? Another company’s Warby Parker, but Warby Parker’s been around for four, five years. I’m just trying to think. It feels like the breakouts that we were having in New York in the 2008, 2009, 2010 period produced a lot of interesting companies.
Kickstarter’s going to be 100 employees probably by the end of this year. Etsy’s going to be 500 employees. MongoDB, Foursquare have 200 employees. So these are all big companies now. Has there been a breakout? I don’t know.
Why his one-time hot investment Turntable.fm ended up flopping:
Well, I think we made a bunch of mistakes there, some of which I would blame on the board and some of which I would blame on the company. But in general I think we did not react to the data. The problem with that service was people churned out of it very quickly.
People would come in, fall in love with it and then six to eight weeks later, they were done with it. We knew that pretty early on, but it was hidden by the fact that the number of people who were coming on board every day was higher than the number of people who were churning out. It looked good, but we actually knew that there was something about the service.
I think the problem was that it was too demanding. You had to be in it. It was too social of an experience. What I think we could have done, if we had moved quickly, is that we could have created a passive listening experience…If there was a way to just put a Turntable room on and listen to it in the background, I think we could have built an interesting business. But we didn’t move to do that. We just stuck with it too long and it fizzled out.
Why he fell in love with bitcoin:
The thing that was always amazing about the Internet is that anybody could put a Web server on the Internet and then anybody anywhere in the world could open up their browser and connect to that Web server and nothing else had to happen. That was the only thing that had to happen. Bitcoin’s kind of the same way. It’s a completely open system. Nobody controls it. It’s not owned by a company. It just is. It’s Bitcoin.
I think as a platform to build stuff on, the way that the Internet was in the early ‘90s, it’s just amazing. I think the architecture with these blockchains is going to get replicated for lots of different applications. It won’t be Bitcoin. It’ll be Namecoin for identity, it’ll be Mastercoin for exchanges. There’s all these new blockchains that are coming up that support different use cases. I think this architecture is really, really important. That’s what got me excited about it.
How Snapchat has stolen Instagram’s thunder:
A lot of the stuff that was on Instagram has now moved to Snapchat. It doesn’t mean that people are not using Instagram, but if I go back and look at my Instagram feed a year ago versus today, there’s a lot of people who were in my Instagram feed a year ago who aren’t there today. They’ve been replaced by brands.
So now my Instagram feed is full of things like the New York Knicks and restaurants posting amazing photos of food. The young Facebook user base who left Facebook to go to Instagram has now seemingly moved mostly to Snapchat and my generation plus brands are what’s on Instagram now. That’s in the U.S. I think outside the U.S. might be a very different story.