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ADP Acquires WorkMarket1

ADP announced this morning that they have acquired our portfolio company WorkMarket. This is a bittersweet moment for me. WorkMarket has been a big part of my personal portfolio for almost eight years. USV and Spark seeded WorkMarket in June 2010, backing two serial entrepreneurs Jeff Leventhal and Jeff Wald. The idea was to create a cloud based SAAS application to allow enterprises to manage their contingent workforces which were growing in size and complexity. It seemed like a timely opportunity at the time and it was. Eight years later the SAAS contingent workforce management market is in the hundreds of millions of dollars annually and WorkMarket is the creator and leader of it. But like all startups, the WorkMarket story has a number of twists and turns. The market was a bit slower to develop than we had initially hoped and it wasn’t until the last few years that big companies started to include contingent workforce management in their SAAS budgets. We also lost one of the two founders, Jeff Leventhal, when he stepped aside at the end of 2014 and was replaced as CEO by Stephen DeWitt who was recruited to the opportunity by Jordan Levy, who has been everything you could ask for in a co-investor. The last few years at WorkMarket have been amazing. The senior team that Stephen and Jeff Wald built is among the best that I have had the opportunity to work with. And the contingent workforce market really exploded in 2016 and 2017. But like all exploding markets, the expanding opportunity brought a lot of new entrants and buyers interested in getting into it. And one of those big companies, ADP, made us an offer we could not refuse, both in terms of the financial opportunity and the fit with their business. ADP has been helping enterprises, large and small, with human capital management solutions for decades and has the customer base, market knowledge, and capital to lean into this opportunity in a way that a venture backed startup never could. So WorkMarket is now part of ADP and I am pleased with that outcome. Jeff Wald will take over leading WorkMarket for its next phase and he is well suited and deserving of that role. He has been the one constant for the eight years that I have worked on WorkMarket. Everyone else who was there at the start has come and gone. But Jeff and I saw it through from start to finish and I appreciate that very much. I also want to acknowledge Stephen and the senior team of Grady Leno, Jim Chou, Marcy Shinder, and Tom Benton. As I said, this is an amazing team and it has been a pleasure to watch them build the product, market, and customer base. They are all superstars in my book. This is the way of the VC business. You get inspired by an idea and a couple founders. You spend a lot of time helping them build something. You give a piece of yourself to the business. And one day, you are done. That day, for me and WorkMarket, is today and I have enjoyed the ride very much.

Why you should invest in Crypto in 2018

Most folks look at investing in crypto in a one dimension fashion. Investing a portion of your financial net worth isn’t the only way to invest in new technology and reap great returns. Investing your time could pay off wonderfully well in the long run too. And, I’d like to make the case that it is well worth your while to invest in understanding crypto in 2018. We’re on the brink of something historic… In his post reflecting on what happened in 2017, venture capitalist Fred Wilson shared the Perez Technological Surge Cycle. This is a framework by Carlota Perez — a Venezuan scholar on technology development. If you look at the Carlota Perez technology surge cycle chart, which is a framework I like to use when thinking about new technologies, you will see that a frenzy develops when a new technology enters the material phase of the installation period. The frenzy funds the installation of the technology. 2017 is the year when crypto/blockchain entered the frenzy phase. Over $3.7bn was raised by various crypto teams/projects to build out the infrastructure of Internet 3.0 (the decentralized Internet). To put that number into context, that is about equal to the total seed/angel investment in the US in 2017. Clearly, not all of that money will be used well, maybe very little of it will be used well. But, like the late 90s frenzy in Internet 1.0 (the dialup Internet) provided the capital to build out the broadband infrastructure that was necessary for Internet 2.0 (the broadband/mobile Internet), the frenzy in the crypto/blockchain sector will provide the capital to build out the infrastructure for the decentralized Internet. And we need that infrastructure badly. Transaction clearing times on public, open, scaled blockchains (BTC and ETH, for example) remind me of the 14.4 dialup period of the Internet. You can get a taste of what things will be like, but you can’t really use the technology yet. It just doesn’t work at scale. But it will and the money that is getting invested via the frenzy we are in is going to make that happen. Fred has been bullish on crypto since he started investing in it in 2017. So, it makes sense that he’s calling it the next phase. Or, are we? Let’s consider the counter point — there was an interesting article on Hacker Noon recently that said the blockchain is most likely useless. Below are the headlines — Everyone says the blockchain, the technology underpinning cryptocurrencies such as bitcoin, is going to change EVERYTHING. And yet, after years of tireless effort and billions of dollars invested, nobody has actually come up with a use for the blockchain — besides currency speculation and illegal transactions. Each purported use case — from payments to legal documents, from escrow to voting systems — amounts to a set of contortions to add a distributed, encrypted, anonymous ledger where none was needed. What if there isn’t actually any use for a distributed ledger at all? What if, ten years after it was invented, the reason nobody has adopted a distributed ledger at scale is because nobody wants it? The blogger takes all the use cases discussed so far and takes apart the rationale for a blockchain based solution. It is a fun read. Similarly, “Mr. Money Mustache,” one of the top personal finance bloggers on the internet had a post on “Why Bitcoin is stupid.” In it, he says — The Cryptocurrency bubble is really a replay of the past: A good percentage of Humans are prone to mass delusions which lead to irrational behavior. This is a known bug in our operating system, and we have designed some parts of our society to protect us against it. These days, stocks are regulated by the SEC, precisely because in the olden days, there were many, many stocks issued that were much like Bitcoin. Marketed to unsophisticated investors as a get-rich-quick scheme. The very definition of an unsophisticated investor is “Being more willing to buy something, the more its price goes up.” Don’t be one of these fools. Reconciling these points of view. Most of us come at problems with a selfish question — what’s in it for me? Or, put differently, is it worth investing in this? Given this, here’s how I’d break it down. There are two investments we can make in new technology — money and time. Let’s deal with money. There are tens of thousands of crypto tokens out in the wild. Many of them are nonsensical and some are ludicrous. All save a few will likely go down to zero in value in the next five years. Unless you are a crypto expert, it makes little sense to invest in “Initial Coin Offerings.” And, if you are an expert, you’re likely not reading this post anyway. There are a few mainstream coins that are in the news — primarily Bitcoin and Ethereum. If you have tens of millions of dollars in net worth, buying a few Bitcoin — assuming it is in the low single digits of your net worth — may be an interesting experiment right about now. But, it’d still be an experiment. Investing in Bitcoin is what institutional investors and Billionaires are putting their money in right about now. So, for most of the rest of us, the time has passed. In that sense, I agree with Mr Money Mustache’s premise — this isn’t the time to invest in crypto unless you’re open to speculating and experimenting with a sizeable portion of your wealth. But, calling the blockchain worthless misses the point. It takes multiple decades for a technology to get mainstream adoption. The foundations of the internet were set in the mid 1960s. Commercial use began in 1989. HTML and the idea of a webpage came by in 1994. And, yet, it is only now that the consumer internet is mainstream. Businesses, on the other hand, are still moving to the cloud. So, it might be 6 decades for the internet to become mainstream from when it was conceptualized and it will likely be 3 after promising infrastructure was built. These things take time. If you want to understand why blockchains matter, think about databases. We live in a data economy. The largest companies on the planet today own vast amounts of data in centralized databases. Their ability to use this data in more and more powerful ways (using tools like machine learning) is what makes them seemingly insurmountable today. The core technology innovation underpinning the blockchain has made it possible to have decentralized databases. This was not possible before. Thus, we can now build networks around these decentralized databases and create new incentive structures. In today’s world, the value of your data goes to a few large corporations. In theory, this would not be the case in a blockchain based world. That’s because anyone who contributes to a network would earn tokens based on a governance system created by the token creators. Does this mean everything will be decentralized? Probably not. There is still value to centralization in many contexts. But, it doesn’t mean centralization is applicable everywhere either. We live in a world controlled by a few large corporations largely because we don’t have an alternative. Blockchains promise a world where that might be different. They promise to take us down a path we’ve walked over the past century as we adopted newer pieces of information technology — more democratization and more permission-less innovation. That’s why they matter. And, that’s why it is worth investing your time in understanding them better in 2018. PS: Of course, we’ll be spending plenty of time digging into crypto in future weeks. Links for additional reading (with 5 of the notes mentioned above) What happened in 2017? — on Fred Wilson’s blog Why Bitcoin is Stupid — on Mr Money Mustache’s blog Ten years on, the Blockchain is useless — on Medium Centralization and Decentralization — on Notes by Ada On Institutional Investor’s take on crypto assets — by John Pfeffer on Medium Share this: Facebook Twitter LinkedIn Like this: Like Loading... Related

Cyber Monday 201754

The Oatmeal Cyber Monday Sale Use discount code CYBER25 and get 25% off your entire order Exploding Kittens - Party Pack Edition A new expanded version that supports up to ten players. It also plays party music, in case that's your thing. This product is not available on Amazon! Normally $30.00 HOLIDAY PRICE: $22.50 View Party Pack Source:

Multiplicative Idiocy13

Want to print this out and hang it up? Download the free PDF. Further reading (function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) return; js = d.createElement(s); = id; js.src = "//"; fjs.parentNode.insertBefore(js, fjs); }(document, 'script', 'facebook-jssdk')); The Oatmeal Share this   Latest Things Random Comics Browse more comics >> Home Comics Blog Quizzes About Contact All artwork and content on this site is Copyright © 2016 Matthew Inman. Please don't steal. var gaJsHost = (("https:" == document.location.protocol) ? "https://ssl." : "http://www."); document.write(unescape("%3Cscript src='" + gaJsHost + "' type='text/javascript'%3E%3C/script%3E")); try { var pageTracker = _gat._getTracker("UA-9487849-1"); pageTracker._trackPageview(); } catch(err) {} Source:

Pacific Time

It’s that time of year again. The Gotham Gal and I are spending the rest of the winter out west. Blog posts will start coming in around 6am PT/9am ET. We plan to spend this winter in Utah (where I am now), LA, and I will also be in the Bay Area a fair bit. I find this time of year to be particularly invigorating for me. Getting out in the fresh air and skiing, biking, and that sort of thing always gets me going. But it’s mostly about reducing the back to back to back meeting grind that my work day in NYC has become and replacing it with reading, writing, thinking, and dreaming that I find so helpful. The Gotham Gal and I are going to go out and ski the 16″ of new powder that we have gotten in the past 48 hours this morning and then go see some great indie films this afternoon. Should be a great Sunday.