Albert Wenger, Union Square Ventures

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In the Know with Amol Sarva
In the Know with Amol Sarva
Albert Wenger, Union Square Ventures
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Welcome to my series on OG NY Tech — celebrating 30 years of NY tech ecosystem, from 1995 to now.

Albert Wenger tells me about his 20 years at USV, and how NY went from apps-mostly to deep and infra.

🎙️ In the Know — OG NY Tech

Guest: Albert Wenger (Union Square Ventures)
Theme: 30 years of New York tech — personal origin story, early ecosystem formation, iconic USV bets, and future-facing frameworks (crypto + AI).

00:00–03:00 — Cold Open & Framing

  • Playful cold open bumping into Fred Wilson; teasing a broader oral history of OG New York tech.
  • Framing: 2025 ≈ 30 years since the “start” of modern tech (1995 milestones: Netscape IPO, Amazon founded, Yahoo incorporates, etc.).
  • Establishes the podcast arc: reconstructing how New York became a real tech ecosystem.

03:00–07:30 — Discovering the Web (MIT Years)

  • Albert discovers the web via Mosaic browser in an MIT lab.
  • Describes the visceral “I’ve seen the future” moment and early intuition that newspapers would be disrupted (timing optimistic, direction correct).
  • Nice color on early internet UX and accidental discovery.

07:30–10:00 — First Startup: W3 Health

  • Doing a startup and a PhD simultaneously (strongly not recommended).
  • W3 Health tackled patient data interoperability — still largely unsolved today.
  • Learns he’s not a great CEO; brings in operators.
  • Finishes dissertation, graduates MIT (1999), moves permanently to NYC.

10:00–13:30 — Fintech Detour + Bubble-Era Incubation

  • Joins internet bank (Telebank → E*Trade Bank).
  • Raises $25M for incubator LC39 at the peak of the dot-com bubble.
  • Near-merger with a European internet vehicle collapses when the bubble bursts.
  • Returns ~90¢ on the dollar to investors — rare mercy in that era.
  • Early relationship with Brad Burnham (board member).

13:30–18:30 — Nuclear Winter & Almost Buying a Trucking Software Company

  • Post-bubble funding freeze (2000–2002).
  • Almost acquires TMW Systems (trucking software in Cleveland); deal collapses over tax issues.
  • In retrospect, a lucky escape.
  • Meanwhile Brad + Fred form Union Square Ventures (first fund raised ~2003–2004).

18:30–28:30 — Delicious: Social Tagging, Early Web Culture

  • Meets Joshua Schachter; Delicious becomes one of USV’s earliest investments.
  • Social bookmarking + tagging as foundational internet primitives (proto-hashtags).
  • Yahoo acquisition happens quickly; secondaries didn’t exist yet, forcing early exit.
  • Pushback on Yahoo bureaucracy; avoids west-coast relocation; first real liquidity moment.
  • Theme: influence vs financial outcome — cultural impact exceeds exit value.

28:30–34:30 — Angel Investing → Tumblr & Etsy

  • Starts hanging around USV; angels into Tumblr and Etsy.
  • Etsy thesis: highly engaged sellers + low fees rejected by West Coast VCs.
  • USV style crystallizes: large networks of engaged users, differentiated by user experience.
  • Pattern recognition over fashionable narratives.

34:30–41:30 — New York vs Silicon Valley Narratives

  • Stereotype debate: “taste vs engineering.”
  • MongoDB as proof that deep infrastructure can emerge in NYC.
  • LP skepticism toward NYC as a tech hub in mid-2000s.
  • USV flies constantly to SF while nurturing NYC companies.

41:30–50:30 — Foursquare: When Too Much Money Breaks a Company

  • Andreessen Horowitz forces entry by dramatically increasing valuation.
  • Overcapitalization causes bloat, loss of product discipline, slow execution.
  • Facebook clones features; Instagram ultimately captures the category.
  • Lesson: capital velocity can destroy product velocity.

50:30–55:30 — Tumblr, Pinterest Miss, and Product Geometry

  • Pinterest originally incubated in NYC; misread as “too similar” to Tumblr.
  • Key insight missed: flow (Tumblr) vs stack/board (Pinterest).
  • Small UX topology differences create massive outcome divergence.

55:30–01:04:30 — E-commerce, Network Effects & What USV Avoided

  • Vertical e-commerce lacked strong network effects.
  • USV generally avoided pure “sell stuff online” models (Etsy exception).
  • Preference for compounding networks over margin arbitrage.

01:04:30–01:09:30 — Tech “Mafias,” Google’s Gift to NYC

  • NYC historically lost talent after acquisitions forced westward relocation.
  • Google’s NYC engineering presence reverses brain drain.
  • Alumni effects begin to seed local startups.
  • Bloomberg’s closed culture inhibited entrepreneurial spinouts.

01:09:30–01:12:30 — Crypto: Stablecoins as the Quiet Killer App

  • Stablecoins transforming cross-border trade, especially emerging markets.
  • New rails replacing old banking infrastructure.
  • NYC initially constrained by regulatory friction and legacy finance antibodies.

01:12:30–01:16:30 — AI: The Four Futures Framework

  • Two axes: speed of AI improvement × openness of models → four futures.
  • Possibility of massive closed-model monopolies vs open chaotic ecosystems.
  • Crypto potentially essential for machine-to-machine economies.
  • Existential risk acknowledged without theatrics.

01:16:30–01:19:30 — Physical AI & Deep Tech in NYC

  • Portfolio example: Veeam (robotics / physical AI) founded by MongoDB alumni.
  • NYC strength in biotech + robotics + applied AI despite weaker infra dominance.
  • Convergence of AI, physical systems, and biology as next frontier.

01:19:30–01:22:30 — Looking Forward: Bubbles, Cycles, Curiosity

  • Comparing AI hype curve vs dot-com timeline.
  • Reminder: dot-com valuations were far more extreme than today’s AI multiples.
  • Closing reflections on curiosity, long-term compounding, and ecosystem evolution.

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