Copy
A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig of Lightspeed.

View this email in your browser

2d27d2d4-d496-412c-b1fa-ff8ee6cc3c65.png

A weekly(-ish) newsletter on commerce, media, science, tech, investing, & internet culture by Alex Taussig. I am a partner at Lightspeed in Silicon Valley.

Follow along with Alex:

Drinking from the Firehose #151

8a3cfcad-7c42-41e9-96d6-331334a913c0.png

As we enter 2020, social media has finally turned old enough to get its driver's permit.

Facebook* was founded in 2004. It went public in 2012, a watershed moment for consumer internet companies. The IPOs of Twitter (2013), Snap* (2017), and Pinterest (2019) followed within the next 7 years. The first two are worth ~$20B each, and the latter is worth ~$10B. While Instagram (acq. for $1B in 2012) or WhatsApp (acq. for $19B in 2014) eventually became part of Facebook, each would likely be worth tens of billions if independently owned. Looking at this group alone demonstrates that U.S.-domiciled social networks other than Facebook generated nearly $100B of value in the last 7 years or so.

Yet, many consumer internet investors are growing impatient. Web, mobile, and messaging platforms laid the infrastructure for social networks to function and grow. The obvious question to ask is, "What is the next platform shift in consumer, and when is it coming?" Virtual reality (Facebook's Oculus), augmented reality (Apple's TBD headset), conversational audio (Amazon's Alexa), and massively multiplayer games hosted in the cloud and delivered over 5G networks (Google's Stadia) are all candidates, but in relatively early stages of adoption.

At Lightspeed, we recently discussed whether waiting for a platform shift is the right strategy to find the next great social network. A number of compelling startups have come through our doors building different kinds of online communities. Some have a physical component; others focus on a specific life stage, demographic, or preference; still others merge content, commerce, and gaming in unique ways that foster social interaction. All this is bubbling up not because of a technology platform shift, but because the legacy social networks have become so ubiquitous that they no longer deliver the same delightful experience to users.

This week I was delighted to see that Sam Lessin came to a similar conclusion independently. In his recent piece in The Information, he offers four potential paths forward for social products, only one of which is the conventional "platform shift." I found Sam's framework to nicely map to our internal conversations at Lightspeed and encourage you all to read through it.

08241afe-9f99-4944-bc82-371bf8bc1356.png

Four paths forward for 'Social Products'

Few people think that mainstays like Facebook, Snap, Instagram and Twitter are going anywhere (I certainly don’t). But many, including myself, believe that we face a future where people are going to be engaged in more networks simultaneously. This creates ample opportunity for new networks to grow. The question, of course, is where exactly these new social products will come from.

cc18d40c-f3f9-4ae4-9267-514c08bf87ea.png
4b368b87-a682-4d7d-83f7-29bd2daa69be.png
fdb596a9-9072-4640-935f-e9265eaceb68.png

#commerce

DTC starter kit.

Aaron Orendorff of Shopify* put together a nifty tweetstorm that features some great resources on running a DTC company. I'm flattered that includes the Lightspeed Standardized E-commerce Model, which is the most comprehensive financial template I've seen in the wild.

Rationalizing Amtrak (video).

Wendover Productions produced a video on Amtrak's new plan for profitability, which it claims it will achieve by 2020. Its new CEO formerly executed the turnaround of Delta Airlines and is now applying his "wartime CEO" skills to the government-owned entity that runs most of the domestic consumer rail lines. That means better, faster service in popular corridors like Boston to NYC, but at the expense of cutting wildly unprofitable long-haul trips.

#media

Ready, aim, meme.

Richard Dawkins defined memes as "units of culture" spread through generations. Post the 2016 election cycle, memes aren't so innocent anymore. This article in Tech Review highlights some of the ways in which memes get weaponized to achieve political goals. 

Super duper.

Joker was produced with a $55 million budget and has now grossed over $1 billion worldwide, the first R-rated film to cross that threshold. It served as a welcome exception to the lately lackluster performance of DC Universe characters.

The most disappointing of all is the most iconic superhero of them all -- Superman. This Forbes piece breaks down why the Man of Steel is so difficult to adapt to modern audiences.

"And that’s the thing about Superman; he’s not cool. He’s not funny. He’s not edgy. Unlike Captain America, he was never one of us. Like Wonder Woman, he is meant to be a beacon of hope in a dreary world. But he’s significantly sillier than Wonder Woman, just as silly as Thor and Shazam, but unable to pull off the irony....

And in this crowded superhero landscape, Superman doesn’t offer anything unique. He preceded and inspired many of these characters, but nowadays, he feels like a relic from a bygone age, a time when a pair of glasses could be considered a disguise."

#tech

FOMO angels.

For most people, angel investing is a horrible way to make money. The vast majority of people should stick to index funds.

Yet, in Silicon Valley, everyone with means seems to be angel investing to some degree. Those without means are either Scouts for a venture fund, or are waiting for their big payday to start.

Alex Danco wrote that this "social subsidy" in Silicon Valley is part of what makes it such a vibrant ecosystem for funding startups. It's almost as if there's social pressure to be involved with the next big thing:

"The inherent uncertainty and contrarian zeitgeist of the startup world plays an important part. It’s famously like Hollywood: no one really knows what’s going on. No one can really predict what startups will succeed or fail, no one can really predict what trends are real or illusions, to any genuine degree of confidence. But everyone has to get up every morning and put on a bit of a show: that you are perceptive, you are brilliant, you are contrarian, and you are right. The result is that everybody walks around all day in a perpetual state of anxiety, worrying that everyone else sees and understands what’s going on, but not you. 
 

In an environment like this, angel investments are the ultimate flex. They’re the universally permissible bragging format: half “I saw this potential when none of you did” and half “I was invited to this deal and none of you were.” I don’t mean to say here that all angel investment is social posturing – some angel investors are among the kindest, most humble and helpful people I know. But the social returns to angel investment aren’t just a happy side effect. They’re often the main thing people are really after."

#science

Why your kid loves garbage trucks.

My toddlers freak out when the garbage, recycling, and compost trucks come on Thursday morning. (Yes, in SF, we have 3 separate trucks for refuse.) The Atlantic talked to some professionals about why kids have this reaction to garbage trucks.

The prevailing wisdom is that kids of a certain age love routine and ritual. They find it comforting to meet the driver each week, early in the morning. Kids also enjoy making a mess and seeing a machine that actually does that in a way that's sanctioned by adults. In addition, garbage trucks have unique movements compared to other vehicles. According to one driver interviewed for the piece, "For a toddler, it probably feels like a Transformer has come to visit." 

#culture

Do it for the clout.

New York Times profiled a 15-year old named Rowan who is prolific at building internet businesses. His specialty is a meme account on Instagram with over 1 million followers. The sheer amount of work and hustle that goes into maintaining an account at this level constitutes a full-time extracurricular activity for a high school student.

Scar tissue (podcast).

Malcolm Gladwell sat down for a live interview with Flea from the Red Hot Chili Peppers. Flea just published Acid for the Children, which chronicles his early life and the formation of his iconic band. The highlight for me was his discussion of his close relationships with his bandmates.

Disclaimer: * indicates a Lightspeed portfolio company, or other company in which I have economic interest. I also own stock directly in AAPL, ADBE, AMZN, CRM, FB, FTCH, GOOG/GOOGL, NFLX, SHOP, SNAP, SPOT, SQ, and TWLO.

Lightspeed Venture Partners, 2200 Sand Hill Rd, Ste 100, Menlo Park, CA 94025 USA Sent to ataussig@gmail.com — Unsubscribe