The End of an Era. (USV’s Investment Thesis update.)

USV’s thought leadership is super amazing (especially their tools like the site circa December 2015), and their ideas are pretty amazing, but I’m not so sure about their practice in formulation-of-pithy-megatrends.

Their investment thesis post has stimulated some significant comment the last couple of days.


My own take is:

It was: big networks. Now it’s: a) specialty networks, b), infrastructure c) blockchain (and Europe, and later stage).

The former thesis was AWESOME. It predicted Twitter, Etsy and…Facebook. And what’s awesome about the new thesis is: it predicts the END of the last thesis.

That is, it’s the end of an era. Winner took all. No more broad social networks. Facebook ate them all.

Now this is a cool thesis (and might be wrong — WeChat and Snapchat think differently).

But the new thesis doesn’t actually have the same focused, powerful insight. I think it shows a firm with amazing dealflow calling out five interesting themes:

a) social is working it’s way into specific categories that don’t want to be a single global 5 billion user platform — vertical networks

b) infrastructure for the next generation of technology and product features that will be widely used. These didn’t used to come to New York or to early stage firms, but now they do? “The next great database” wasn’t a thing people on the East Coast used to invest in. But there has always been a next-great-database (it’s not a new type of deal)

c) blockchain, e.g., “bitcoin is an invention as big as the internet” thesis. Which is totally legit and some fund could entirely focus here if it wanted to bet everything on a 2010-2030 transformational technology on the order of Internet 1990-2010.

d) They are investing more in Europe and not really describing it as a thesis thing. Responding to growth of that market and more visibility for USV into that market.

e) And what about Later Stage mix? It’s about their fund size and opportunity flow. Again not a thesis thing mostly unless you consider the Unicorn/later-stage/IPO-bottleneck/bubble-talk as a thesis (it’s a financial markets thesis not a tech thesis).