Nathaniel Whittemore

Circuses. Dancers. Hucksters, hawkers, and harlequins. All bathed in the iridescent blue-green glow of the marvelous city.

To some, cities are monuments of commerce. To others, they are monuments of freedom and escape from the drudgery, predictability and homogeneity of the place one started. For those who feel capital-D Different, cities are a refuge and a temple. 

It is for this reason that so much of a city’s character in our imagine is determined by its particular flavor of avant garde: changing, impermanent, and occasionally caught in time and codified into the cannon of human expression. Greenwhich Village in the 1950s. Haight-Ashbury in the late 1960s. 

Paris’ Montmartre district in the 1880s and 1890s was such a place. During those decades, an essential core of the artists who would become associated with the Post-Impressionist period took up residence, adding to a Bohemian tapestry whose decadence and creativity were fueled by a new era in public lighting and a number of prominent night clubs including the Moulin Rouge.

No artist is more connected with Montmarte in our collective consciousness than Henri de Toulouse-Lautrec. His favorite subjects were the denizens of the night, and his paintings are full of strange angles and warped lighting that capture what it might have felt like to flit through the streets of Paris drunk on Absinthe and opportunity. 

I love Toulouse-Lautrec. I’ve always been interested in what lies at the very core of things and there is something captivating about the way he himself - estranged from mainstream society by an unknown genetic disorder that left him unable to grow adult-sized legs after two hip breaks in his early teens - embodied the otherness of the world he strove to depict. 

When I studied art in high school, a pattern emerged again and again: I was attracted to art that was real, but in which the artist warped that reality to try to capture some underlying feeling. I especially loved it when what the artist was trying to capture was one of those feelings that, when it hits you at the right moment, seems like a secret truth, revealed after hiding in plain sight. 

I remember reading about Constanin Brancusi, a Romanian-born French sculptor who worked in the early 20th century. Brancusi was obsessed with Plato - and particularly the idea of Platonic “Forms.” In Plato’s estimation, everything that existed on earth had a perfect Form from which it drew its character. So, for example, the chair you’re sitting in while reading this is simply one representation of the Platonic Form of a chair, which has all of the characteristics that any chair on earth could ever have. 

In Brancusi’s view, the idea of Forms condemned representative art. If everything on earth was, already, simply a representation of something more pure and complete, why would artists strive to represent that representation? Instead, he dedicated himself to trying to represent not the version of the things he saw, but the forms from which they drew their essence. 

I love this idea of Forms. Not because I think that there’s a big celestial pile of super cool stuff from which my new TV and tumbler set somehow originated, but because there is something magnificent about the idea that in each of us there is a unique essence - full of good and bad but ultimately ours all our own. This essence is the thing we get to spend our lives trying to discover, and perhaps even more wonderful, the thing we get to get to sometimes chose to share with those people around us. I wonder to what extent our most profound relationships - romantic or otherwise - are those cosmic collisions which reveal more of our essential selves to us, and even more, actually change the shape of those selves. 

I like the analogy of art for the life’s work of discovering our essence. Artists strive to capture, represent, and reveal, but how easy it is for this striving to feel like an act of futility - a quest that by definition can’t be completed because of the sheer magnitude of the world’s complexity. It’s no wonder that so many are afflicted by madness.

Likewise, I’ve always been skeptical of self-help gurus who would have us believe that the act of self-discovery and self-improvement (in whatever form they’re selling) is something that can somehow be completed, rather than an ever-ongoing effort, meant to be appreciated not because it gets finished but because each progression brings its own joy and new challenges.

There is also a shared vulnerability in each of these acts. Artists not only take on the difficult work of trying to reveal the hidden; they have almost no control over how their audience will engage with their attempt. When their work leaves their hands, they are left bare, naked for all to see. Trying to truly understand oneself is by similar measure an act that requires surrendering control to the possibility that we learn something we wish we hadn’t and won’t be able, ever, to unlearn.

In the popular Eragon fantasy novels, every person has two names. They have the name that everyone knows them by, and then a true name hidden deep inside. A true name can only be spoken in the ancient, mostly forgotten language, and embodies the totality of who a person is. While much of one’s true name remains the same from birth, the way one interacts with the world can change it. Because of this, learning one’s true name is an act of deep meditation and honest reflection that few ever set out to attempt, and fewer still accomplish. 

In that world, there is no more profound act of trust than to share one’s true name, for when one knows your true name, there is nothing you can hide from them. The act of sharing one’s name, like all true acts of love, is an act of ultimate terror and ultimate liberation. 

One of the most common tropes of literature and film about cities is the yin and yang of being both surrounded by and connected to people and yet, somehow separate. I think this may not a truth about cities, but about life. 

We are at once alone and connected in unimaginably deep ways. It is up to each of us to see this as a contradiction, or instead to choose to see it as a beautiful paradox - and a chance to learn, over and over again, how to find joy in uncovering and weaving together the stories of who we are. 

Art: 

Henri de Toulouse-Lautric - “In the Salon of the Rue des Moulins” - 1894

Constantin Brancusi - ”Golden Bird” - 1919/1920

I became single last year and a strange thing happened: I started dancing. This may seem like a banal thing to notice, but it took me by surprise. 

Dancing is an interesting phenomenon. Every child dances. Even before we can stand, we kick our legs and wave our arms and giggle in ways we won’t again until our psychedelic experimenting phase in high school. Before we can talk, we express happiness kinesthetically - through expressions and through body movements. 

As we grow, however, our center of emphasis shifts from our feet up to our heads. We learn to think and talk with our minds and mouths instead of our bodies, and for many of us, our bodies become simply the container for our brains. 

This was certainly the case for me, to the extreme. I’ve always been cerebral - happy to spend hours inside my own brain, absorbing new information and trying, thought by thought, to construct an understanding of the universe. That, combined with the fact that my body simply did not seem to respect the brutality with which young America treats being overweight led me to view my not-brain self with something between boredom and outright contempt. 

The one exception - the one time my body and I joined forces - was at hardcore punk and metal shows. I was obsessed with the mosh pit. I loved the way heavy music set the emotional tenor of the entire room, grabbing with a furious hand each and every heart and swirling them into an unstoppable melee in which angst and joy became an inseparable motion. Although it seems weird to people who have never experienced it, it never surprised me that the first thing you do when a song ends is hug the person you’ve been pounding the crap out of the past 2 minutes and 15 seconds. As violent as it seems, it is ultimately an act of communion that can’t be undertaken without other people. 

As high school and my hardcore days ended, I began a new relationship with my body. After years of viewing it as the enemy, I found ways to work with it, and in my freshman year lost 150 pounds. The magnitude of the goal reset my brain, putting it in a place of calm wandering rather than its default state of furious intellectual pursuit. Although I had establish a new respect for my body, it was still a subordinate entity to my mind - an inconvenient other that might rear its worst tendencies at any moment. 

Fast forward to 2011. The last 7 years have been project after initiative after organization after…7 years of questing, first to understand the world, then to absolve its injustice, then ultimately to understand what my place in all of it was and what happiness - not in general but in the very specific context of me - meant. 

There was no balance between body and brain - no respect for movement that didn’t advance an intellectual or entrepreneurial goal. And it showed, as 100 of those original pounds I lost came back. Eventually, I ended up lost, unhappy, and unsure, a slave to a brain which wouldn’t let itself return to calm wandering. I didn’t dance the whole time. 

The end of a 5 year relationship created the event horizon for me to finally begin climbing out. 2011 began, if sad and overweight, with both the solitary space to reconsider my relationship with myself, as well as with the very real pressure to get back down to dating weight. 

The first event in my rebirth was Summit At Sea, a cruise in the Bahamas with unlimited alcohol and unlimited inspiration in the form of 1500 of the more amazing young thinkers, artists, leaders, entrepreneurs and creators of our generation. Most people who were there will remember it as one of the most epic shitshows of all time. But I’ll remember Summit At Sea as the time when Axwell taught me how to dance again. 

I had been sitting for hours on the last evening drinking whiskeys in the old 50s style singers bar. I had just seen Imogen Heap perform a piano set from 5 feet away, and was feeling good about one more drink and bed when I remembered that Axwell, one third of the Swedish House Mafia and one of DJ Mag’s top 10 DJs in the world was performing. I figured it was worth checking out. 

…and then he murdered me. For those of you who have never seen Swedish House Mafia perform, try to imagine what it would be like if Zeus invented speakers loud enough to hear on earth from Mt. Olympus, and a thousand coked up hamsters got into the lighting supply for the Times Square New Years Eve Party. 

When you start to move, it is almost impossible to remember that you exist. Physically, you know you are there, as you’re watching your limbs move through space, refracting from light and sound. But in the moment of an amazing dance show, your mind is so wholly consumed with firing the neurons that will allow you to keep moving that you just can’t think normal rational thoughts. It is, at its best, a transcendent experience that reconnects you not only with your body, but tens of thousands of years of other cultures who discovered the joy of physical apotheosis. 

In his famous first TED talk, education expert Sir Ken Robinson told the story of Gillian Lynne. On the cusp of being diagnosed with attention deficit disorder, a perceptive doctor noticed that the young girl couldn’t stay still in class because she wanted to dance. Instead of medicating her, she was put into dance classes. She went on to become one of the last centuries most celebrated choreographers, behind the movement in plays you might have heard of like Cats and Phantom of the Opera. His point was that our culture - from our professional world to our schooling - is mind driven, and forgets that we are born as complete creatures - body, soul, and mind together. 

David Foster Wallace made the point even more dramatically. In his brilliant commencement speech at Kenyon University in 2005, he wrote: “Think of the old cliche about “the mind being an excellent servant but a terrible master.” This, like many cliches, so lame and unexciting on the surface, actually expresses a great and terrible truth. It is not the least bit coincidental that adults who commit suicide with firearms almost always shoot themselves in: the head. They shoot the terrible master. And the truth is that most of these suicides are actually dead long before they pull the trigger.”

The Axwell set that night unleashed an irrepressible urge for me to dance. As I began to climb out of myself - out of the pain of the ended relationship, out of the despair of a physical appearance that was slowly but surely returning to what I wanted it to be - dancing was the way I celebrated the feeling of becoming my whole self again - or perhaps, for the first time. More than once, I went out to a dance party on a mission to do what single people do and couple off with some cute young minx, only to find myself sweaty and destroyed as the lights came back on at 2am, having completely forgotten to give even one shit about anything other than moving. 

For me, dancing is like a physical expression of joy. It’s as though the love that I have for the world - as it is and as it could be - and more particularly, my small slice of it, with its people and passions and pursuits and promise - simply has to worm its way out into physical existence. It, more than anything, is the way I escape from what DFW would have called the “tiny skull-sized kingdom” in my head. 

The point is this: next time you want to dance, you know who to call. Or, as Axwell put it that night on the boat, “should you fail to become geniuses…should you fail to become CEOs…you can always become dancers.”

A few weeks back, a friend I was chatting with made an interesting assertion. He suggested that every one has some musician or band that is the foundation and genesis for their subsequent taste. No matter how diverse a person’s taste becomes, he suggested, there was some common ancestor that shaped their taste. 

At first I didn’t really buy it. My taste in music is so fuckingoddamn weird that I couldn’t imagine their being a single ancestor. What combined my love of extreme hardcore metal, shitty fist-pumping European house, and country pop? But here we are in a universe where gravity and electromagnetism were once the same thing, so maybe I just needed to think harder. 

I started by trying to identify the common characteristics of music I loved that spanned genres. Great melodies were absolutely consistent. Even in my heaviest metal period, I loved bands like Slipknot and System Of A Down that combined screaming with singing the most (thank god I grew up in that 3-4 year period where “nu-metal” was a thing, huh?). A combination of lighting fast verses with great big break-downs also seemed to come up a lot - from the straight edge east coast hardcore that made me wear electric tape X’s on my hands in middle school to the Skrillex-ified dubstep that I literally can’t get enough of now. Sonically and lyrically, I had a little penchant for the emo nostalgia. Okay. I was getting closer. 

I then tried to think about what I didn’t really listen to, even though I didn’t necessarily dislike it. Rock of all genres? Nope, had that. Electronic music? Would you like trance or drum’n’bass today? Country? Bluegrass? Classical? Bollywood? South African ecstatic Mbira recordings from the mid 20th century? Yes, yes, yes, yes, yes please. 

But hip-hop? Rap? Not so much. Sure I can throw down with a like Jay or Ye on occasion, but it’s never first in line. Interesting. 

Finally, I went on to Rdio - the social music streaming service. I looked at what was on “Heavy Rotation” across all of my friends. Living in San Francisco with what I would argue is a pretty hip group of friends, it was sort of what you’d expect - brilliant orchestral indie-electro (M83), atmospheric underground electronica for long entrepreneurial workdays (Tycho), lo fi indie hipster cred (Girls), a hip hop act so we get points for being diverse and cultured (J Dilla). 

Then, I noticed that I could switch and see what was on heavy rotation just on *my* Rdio. Oh boy.

Instead of looking like a 27 year old professional San Francisco pseudo-hipster, my heavy rotation looks like a bunch of 16 year old girls with duct tape wallets, lip rings, and pretend angst (cause really their parents love them and support this phase they’re going through) took over the Macbook. Because on my Rdio, apparently, there is only one thing on heavy rotation:

Pop. Punk. 

Forever the Sickest Kids. Fall Out Boy. Chunk! No Captain Chunk! Over and over and over and over and over again. 

Then, like an expensive breakthrough in therapy, it hit me. I was transported back to late 1993 early 1994. I was in 4th grade then, and coming off of a 3rd grade year where my older friends (For some reason, I was always friends with the older kids) had gotten me way into gangsta rap. That year we had passed around tapes of all the latest, dopest shit: “Slam” by Onyx, “Regulate” by Warren G (Holy EFF Regulate by Warren G), and of course, Snoop’s seminal “Doggystyle” (which, by the way, was a term that I had no idea referred to something other than Snoop Doggy Dogg’s musical style). 

It was a little tough to be into that genre as a 9 year old. Representative story: I’m at the local mall record store. My mom has gone into Macy’s or whatever gross mom store was right next to it and had, against all parental rules, left me to browse the tape racks. I had saved some allowance and was ready to rock out with a fresh new tape that had all the tracks - with ALL the swears - rather than just the ones I had been fast enough to record the second half of when they came on Jammin 94.5. 

I grabbed Doggstyle and walked confidently to the counter to check out, at which point the 29 year old store manager looked at me like I was fully and completely insane, and politely informed me that he was just not able to let a kid who was probably still wearing Thundercats underwear buy an album whose cover prominently featured cartoon titties larger than my head. 

But I was an adaptable kid, and moved undeterred to my plan B: House Of Pain’s “Jump Around.” I was foiled again, as it had that same damn “Parental Advisory” tag (thanks a lot, Tipper Gore), and ended up taking home Tag Team’s “Whomp There It Is.” Talk about can’t get no satisfaction. 

Regardless of these difficulties, I began 4th grade confident about my musical selection and looking forward to what the next school year of awesome rap would bring. Every Saturday, I got up early and walked down to my friend James’ house to watch MTV’s Top 20 Countdown (this was when Music Television still played music). We’d wait through all the stupid Boyz II Men pop hits for the occasional killer rap joint, busting out our bling like only 9 year olds from Maine could. Then one week, it happened. 

A video from a group I had never heard of started. Four great big chords from a guitar that sounded like nothing I had ever heard, a hi hat count in, and then a melody I instantly wanted to sing - I was hooked. I mean, it was like the hand of God reached down and held me in the seat, letting this manna from heaven wash over my ears and forever change what I wanted from a song. The video was just a set of dudes walking through a city at night but I was spellbound. 

Over the next few weeks, that song shot up the charts, and with every position it gained, it pushed my former love of rap further and further from my brain. My weekly pilgrimage down the street to James’ took on new meaning as I waited for the inevitable, and when that song - Green Day’s “When I Come Around” - hit number one, the world changed forever. A few weeks later, it was pushed back down by some shitty Madonna comeback track, but it didn’t matter: the change in me was complete and my destiny was forever altered. 

A few weeks later, after much prodding, my mom bought me the full album - Dookie - for Valentine’s Day. In addition to the awesome pop punk longing on “When I Come Around,” I got the blistering neurosis of “Basket Case,” the weird sexuality of “All By Myself,” and the ‘you’re not the only one who’s nuts’ of “Longview.” And with “She,” I first felt how a song could be more than a song, but a declaration to the universe that you. will. not. be. controlled. 

She…

She’s figured out

All her doubts were someone else’s point of view

Waking up this time

To smash the silence with the brick of self-control 

Soon, it wasn’t just Green Day that was changing me, but Offspring “Self-Esteem,” Smashing Pumpkins “Bullet With Butterfly Wings,” and Nirvana. Oh my god, Nirvana. My first AOL screenname was KurtCFreak. Within a couple years, I had dug into industrial - Nine Inch Nails “Closer” and of course, the epochal “Antichrist Superstar” by Marilyn Manson. By 1997/1998 I was bridging into metal and even heavier hardcore, listening to everything from Limp Bizkit to Hatebreed, and listening to the third wave of awesome ska like Less Than Jake. This was the period where I had frequent flyer miles to the Warped Tour and Ozzfest.

Music, for me, was and is a place where emotion was given life and power to shape the world; a place where I could find common cause in the midst of growing up in a world where I often felt insane because of how different things seemed and felt to me from the friends and people I knew around me. This is music’s great power. When something made by people far away, who we’ve never met, seems to tell our story, it makes us feel connected to something bigger than ourselves. 

In the nearly 18 years since I got that Green Day tape, nearly every thing in my life has changed. For example, I am 27 now where I was 9 then. But literally every day since that day, I have had some experience where a song lets me get outside of the tiny skull-sized kingdom in my brain and transports me somewhere else, or else allows me to be in the moment as I never quite can left to the incessant banter of my own mind. In retrospect, it is no surprise that - whether it was New Found Glory, or Fall Out Boy, or Forever The Sickest Kids, I have always had some Green Day-esque band at the top of the queue, to harken back to that Original Liberation. 

Here’s an experience that every aspiring guitarist has had: After weeks of anticipation, full of mirror air jam sessions and dreams of stadium solos, you buy your first busted guitar - almost certainly a Stratocaster or Les Paul knock off. You find an instructor and begin lessons, starting slowly with learning about notes and chords. 

But pretty soon, you - as much as you hate to admit it - get a little bored, and start to spend less and less time trying to learn note names and the difference between a sharp and a seventh. Instead, you head to the wide chaotic world of the internet, where tab sites do away with all of theory and just tell you where to put your damn fingers to rock out. Within minutes, you’re pounding along to Green Day (or Forever The Sickest Kids, depending on your era), pushing your practice amp to the limit, and reveling in the majesty of your own badassitude.

This is the Pop Punk Power Chord Model of Learning.

The principal is simple: people learn new skills because of the things they can do once they have that skill. The faster they get to do those things - even if they totally suck at them - the more likely to stay engaged with the learning process they are. 

This is not the way most of our formal learning systems are set up. Instead of quickly and meaningfully introducing people to the value of having a particular domain of knowledge or skill set, most formal curriculums are organized in a linear fashion which progresses slowly from unit of learning to unit of learning without paying attention to context or giving people the payoff of engaging with the outcomes of the skills being taught. 

There are two major problems with this organization of learning. The first is that is fails to contextualize why one would want to learn. The point of learning grammar isn’t just to look like you’re in the top half of the population on online dating sites, but to be able to convey and capture meaning and nuance in the pursuit of understanding ideas. (Okay, fine, it can be both). The point of learning science and math isn’t to improve your scores on problem sets, but to be able to interact with and modify the natural world to achieve incredible things. 

The second problem is that it’s not clear that a rigidly linear approach to learning is the most effective. While it is true that every knowledge domain has foundational ideas and skills necessary to working with more advanced topics, we underestimate the value of throwing people into more advanced work that better reflects the real authentic use case of their knowledge, and we underestimate people’s capacity to struggle and work backwards to unlock concepts they don’t yet understand. 

More and more, the old linear model of learning is being challenged in both formal and informal settings. Charter schools like San Diego’s marquee High Tech High - which has a 100% college acceptance rate - are shining examples of the opportunity of project-based learning, in which students learn new concepts in the context of applying that knowledge to the real-world (for example, instead of learning physics through book-problems about rockets, they actually build rockets). 

In web-based education platforms, there is a major shift in traditional linear education to learning in which the tutorials are the lessons. The dominant modality for self-taught learners of creative software platforms like the Adobe Creative Suite or music-production software like Ableton Live is one in which learners forgo sequential formal lesson packages for Youtube-delivered tutorials from practitioners explaining how to do the things one wants to do with the software in the real world. This means for example that instead of walking through dozens of mini-tutorials about every intricacy of the software before ever having used it, learners instead jump straight into eArtrash’s Dubstep tutorial and work backwards, figuring out the software by manipulating in the same ways that they would if they actually knew what they were doing. 

This authentic, non-simulatated, asynchronous apprentice style learning is beginning to find its way into the core design of online education platforms. Our portfolio company Verbling, for example, enables on-demand video chatting for native speakers trying to learn each other’s language. In the code learning space, companies like Bloc and Codecademy are try to break down the distance between learning objects and real-world objects, organizing learning so that people are producing real products from their very first session. 

In the next few years, more and more of the next generation of skills education will move online, and the lines between informal and formal learning will increasingly blur. As this happens, we’ll see more and more learning platforms inverting the paradigm of linear learning, starting with authentic experiences that allow learners to engage with the outcome of that learning right away. 

(Any resemblance between my seventh-grade self and the kid in the photo above is STRICTLY intentional)

Cyberoptix Tie Lab founder & maker in chief, Bethany Shorb

It’s election season, which means flame wars, broken promises, and skull-numbing cable new commentary. It also means an endless parade of paeans to capital-S capital-B Small Business. Democrats and Republicans alike anchor economic policy (at least for the sake of stump speeches) on providing the right climate for small business, which, as they love to tell you, is the heart of America. 

Yet for the last half-century or more, “small business” has been fundamentally changing. The emergence first of big box stores and mega retailers and later internet-driven e-commerce platforms gave shoppers options to buy the things they needed with greater selection, cheaper prices, and ultimately greater convenience. In this climate, local business has been preserved largely by brand equity - the joy that a unique experience and different feel of a local establishment can provide and the esprit de corps that they have with small business owners who seem an awful lot like them. Even this, however, has not been able to change the fact that being a small business has gotten progressively harder, not easier. 

Today, however, what we know as small business is undergoing a seismic shift, and the consequences have implications for the entire structure of economic productivity and wealth creation in this country. Emerging is a new class of entrepreneurial small business that is proactively taking advantage of rather than simply reacting to new internet technology. These businesses are using a new world of transaction, marketing, distribution, financing, and soon materials creation platforms to reactivate a thriving entrepreneurial sector. 

The Shifts:

Four main shifts characterize this sector: Local to global(ly enabled); distributor to creator; accessible & affordable uniqueness and novelty, and a new class of collaborative consumption businesses. 

Local to Globaba(ly Enabled): The classic small business of American lore was the corner store, the barber, the baker; your town’s version of the person that every other town had, as well. What’s happening now is that small business entrepreneurs are blowing up proximity as a constraining factor for defining their markets. Cyberoptix Tie Lab, an unbelievably awesome screen-printed tie studio out of Detroit, doesn’t just have to sell to Detroit, but can find kids like me in San Francisco who like the idea of whiskey labels or turntables on their formal wear. 

Distributor to Creator: It used to be that a huge portion of small business was simply about providing distribution for other (larger) company’s products. With the explosion of proximity as a constraint, the small business entrepreneurs who are creators have a much greater ability to discover and define economically viable markets, creating momentum towards creation. While it has gotten harder to be a distributor (competing with big box stores or online retailers), or even a service provider (competing with low cost national and global chains), it has gotten easier to be a creator. 

Accessible & Affordable Uniqueness and Novelty: As it has gotten easier to acquire the things that everyone has, and harder and harder to find truly differentiated consumption experiences, there is a growing premium on uniqueness and novelty. The emergence of a new class of product-creation small businesses is speaking to this need. 

A New Class of Collaborative Consumption Businesses: Markets were born to allow people to trade the things they had a surplus of for the things they had a shortage of. In the last two years, there has been an explosion of businesses - led famously by Airbnb - who are re-imaging the kind of resources people can share their excess supply of, from space to baby clothes to time to help with dog care. 

The Enabling Landscape:

The landscape that has enabled this shift includes new platforms for distribution, marketing, transactions, financing, resource sharing, materials creation, and curation.

Distribution: There is a new class of platforms that have made it radically easier for the new class of small business entrepreneurs to connect with the markets of buyers who like the particular things they’re created. Etsy, for example, has greatly expanded the ability of craftspeople to connect with buyers, creating the worlds greatest distributed craft fair and making what was once hard to make more than a hobby a viable business-creation opportunity. 

Marketing: The platforms that have reshaped marketing for big business have also reshaped marketing for small business. Twitter and Facebook allow makers and creators to communicate with their fans and buyers like never before, enabling the distributed nature of the new small business entrepreneurship to preserve some of the feel of local even between people far away. 

Transactions: For people selling things on the web, there is an ever-improving set of transaction platforms (the first and most famous being PayPal) that make it easier to collect dollars. In the last couple years, even more of the innovation has been around mobile and physical payments. Square is now being used by more than a million sellers around the country, including every seller at every craft fair I’ve been to for the last year. 

Funding: Most of the businesses in this new class of entrepreneurial small business don’t aspire to venture-backable scale. At the same time, small business loans have not been redesigned for this new generation of companies. Luckily, an emerging class of new funding platforms - particularly crowdfunding platforms - have emerged to fill the gap. Perhaps the best known is Kickstarter, which helps people fund creative products as well as new products by giving friends, family, and other interested parties the ability to contribute small dollars. This has effectively become the go-to pre-sales platform for small product companies. 

Resource Sharing: When eBay launched in the 1990s, it brought garage sales online and forever changed how people bought and sold used items. The generation of collaborative consumption and resource sharing emerging today - led by Airbnb - is transforming not only the scale at which people access surplus resources, but fundamentally changing the nature of the resources they have access to. 

Materials Creation: We’re at the cusp of affordable 3D printing technology. As that comes online and becomes economical at an individual consumer level, we’ll see more and more new small businesses being created on top of the platform of 3D printing. 

Curation: Finally, as this market expands, it will get harder for the average consumer to quickly wade through the products being created by the new generation of entrepreneurial small businesses. In response, we will see the emergence of curation companies whose whole job is to surface the absolute best. Fab.com is the first platform to show the potential of next generation creator curation, and its runaway success (from gay social network to pivoted curated design marketplace on a $100m revenue run rate inside a year) portends great things for the field as a whole. 

The Next Great (Investment) Opportunity

I believe that in the next few years, we’ll see not only more and more of these entrepreneurial small businesses coming online, but an explosion in the set of services tailored to them. These services will not only serve the ecosystem of companies that exists currently, but add additional momentum to new company creation. Etsy didn’t just serve people selling their crafts; they made it more viable for people to even consider selling their crafts. Put simply, these services will not just capture but create the market. 

The single most exciting opportunity to me is a more robust and diversified funding ecosystem. If I had $50 million dollars right now, I would create an entrepreneurial small business loan with a venture capital heart. Small dollar amounts, expansion and startup capital, better terms for the lender for riskier investments, but caps on the amount of upside captured by the financier versus the entrepreneur, deep partnerships with the curators and distribution platforms to help lend energy towards success. This would enable an incredible amount of entrepreneurial energy, and make an incredible amount of money, so if you or your friends have some a milli or two to share, feel free to ping me. 

The implications of the emergence of this economy are profound. If the economics of modernity is about trying to capture the productive elements of creative destruction while minimizing the pain and suffering of change, these shifts represent a transformational opportunity to unlock creativity and capacity everywhere.

Note: There is an entirely separate class of small businesses around food where the trends have looked different, and where the differentiated quality of hyper-local has commanded a consumer premium. In a later post, I’ll explore how these two momentums are interacting with one another. 

Yesterday, Techcrunch broke the news that Soundcloud had raised a new Series B round of $50m dollars, led by Kleiner Perkins, at something like a $200m valuation. This is an awesome bet for KPCB, because Soundcloud is the most interesting startup in the world, and further suggests that 2012 is the year of the music startup. 

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As I was writing my top ten trends to shape VC in 2012 post, one of the predictions that just missed the list was that in 2012, music startups will achieve platform levels that allows for a totally different level of dynamism and robustness in the startup ecosystem. This platform-ization will come across every part of the music experience:

Access to major label tracks: Spotify’s big announcement from a few weeks back was the opening of their platform API to allow 3rd party developers to build apps on top of their repository of tracks. This will create big new opportunities for music discovery, sharing, integration, etc. 

Access to concert information: There are a number of players pushing hard in this space, but Songkick seems to be opening a lead in the on-demand concert information segment. If they (or one of their competitors) consolidate their lead and become a platform, there are tons of apps - from ticketing to video sales to merch and beyond - that could be built on top. 

Band social media engagement: Facebook has replaced Myspace as the go-to place for musicians, aided by tools like BandPage that are making it easier than ever for musicians to engage and interact with their fans in real time. 

Music education: I’m not sure you’ll see a pure platform winner in the music learning space in 2012 (or ever), but there are an increasing number of awesome apps pushing music ed into the next century. I’m biased, but I think our portfolio company Chromatik will become the standard way that bands, choirs and other groups of musicians learn music together. 

In this landscape then, what makes Soundcloud so different and so special? 

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The promise of the generation of the social internet that started in mid-2000s was a fundamental shift from consumption to creation. It’s easy to forget that not that many years ago, the only way we interacted with things online was to read them, see them, watch them, or listen to them, with no ability to share them, remix them, or create our own versions of things like them. 

Soundcloud often says that it intends to do for sound what Youtube did for video. In a world where startups are constantly making “we’re the x for y” analogies, it’s important to recognize just how profound that could be. Youtube is not just the platform that launched a thousand memes. It is the platform that enabled Warhol’s 15 minutes of fame prophecy to be truer for a larger number of people than ever before; the platform that saved the music video, and changed how talent is discovered; the platform that enabled for totally new forms of activism like the “It Gets Better” series; and on and on and on. It is the platform that lived up to the meritocratic promise of the internet and blurred the line between professional and amateur more than any before it. 

Soundcloud’s promise to do the same for sound that Youtube did for video comes at a moment in which we are undergoing a fundamental shift in how we engage with music. The two factors that define this shift are 1) the lowered cost of consumption of music and 2) the lowered cost of creation of music. 

The lowered cost of consumption of music began with Napster (followed by Kazaa and the dozens of other music downloading tools that grew up in its wake), was aided incrementally by iTunes (which, if still on a pay-per-song model, made a breadth of music available that no individual record store could ever match), and is coming to completion in the era of Spotify (which I desperately hope buys Rdio instead of just driving them out of business and steals their UI). The result is that it’s dramatically easier to experiment with new artists to find things you like, diversifying the palette’s of listeners in a way that simply wasn’t viable before. 

The lowered cost of creation of music has been driven by the relentless improvement of both the software and hardware used to perform and create music. Even a decade ago, the only option for most bands to record music was saving their pennies for expensive studio time. Now anyone with a Mac and a mic can record and mix high quality tracks. 

In no genre has this shift been more apparent than in electronic music, which is growing, diversifying, and remixing itself so fast as to make the pace of innovation in every genre look tortoise-like. A few weeks ago, Skrillex (the 23 year old conquering hero of dubstep) was working on a remix of a track by Avicii (the 21 year old super hero of big European house). He finished it on his laptop in his hotel room, causing him to be a couple minutes late to his gig downstairs in Sheffield, England. He played the track for the crowd just a few minutes later, and within hours, a video of it was up on Youtube, and quickly thereafter making the rounds on the music blogs. By the next day, amateur DJs had created bootleg versions of it by imitating the sounds they heard with their own copies of Massive - a tool for making synthesizer sounds. And just a couple weeks after that, it was formally released on Avicii’s remix single of the track. 

2011 was the year electronic music ate the world. Hip hop and pop music came to be dominated by European house producers (think Pitbull’s “Tonight (Give Me Everything)” - produced by Afrojack, Rihanna’s “We Found Love” produced by Calvin Harris, and, um, everything by Guetta). Heavy music became both influenced by (see Korn’s most recent album, all produced with extreme electronic producers like Excision, Downlink, and Noisa) and supplanted in the favor of 15 year olds by the drop of dubstep, led by Skrillex (who recently garnered 5 Grammy nominations, including “Best New Artist” - a first for an electronic musician). 

Part of this popularity can be explained in how well electronic music - in its creation, consumption, fast evolution, youthful energy, and fundamentally collaborative creation - reflects the Zeitgeist of this remix era. It is no surprise that Soundcloud’s early traction was with electronic musicians and producers, who flocked to it both as a utility to upload everything from new tracks to full sets and playlists, as well as a social vehicle to build fan repertoires and share their music with the world.

As a set of code, Soundcloud is the best utility for sharing audio with the world of people and I’m sure that as it grows it won’t just be music that is shared there. As a cultural artifact, however, it captures something much more profound: the transition of music from a world of highly-controlled, highly-produced, professional acts, to a world of explosive creativity, genre blending, experimentation, and just-a-minute-ago-amateur superherodom. 

The point is that Soundcloud is not simply housing and sharing sounds, but liberating sound from millions of creative minds around the world. I can’t wait to see what they do with this new injection of resources, and even more, I can’t wait to see what the next generation of kids late-night recording for-the-love-of-it do with the platform next. 

Yesterday, I published the first half of a list of trends that I believe will shape venture investing in the upcoming year. Here’s the second half of that list.

6. There will be more new alternatives to venture financing for different types of businesses 

The trends towards entrepreneurship across the country is a reflection of both a structural shift in the economics of wealth creation and capture, and a generational prerogative towards creativity, dynamism, flexibility and collaboration. We’re at the tip of the iceberg for what the next generation of entrepreneurship looks like. The internet, still itself in its infancy, is creating the architecture for dozens of new types of entrepreneurship (eBay, Airbnb, Etsy). What’s more, new technology like 3D printing is likely to unleash a totally new era of physical product entrepreneurs. Not all of these companies will make sense for venture backing, but many of them will still need risky capital that small business loans won’t be able to cover. One promising shift to help these companies is the growth of crowdfunding. Kickstarter had a monster year, tripling traffic according to Quantcast up to 3 million visitors per month and becoming an essential element of both fundraising and marketing for creative products and cultural artifacts. A slate of crowdfunding bills have been working through Congress and the Senate and would relax restrictions on average citizens making small investments in new companies. In 2012, I think we’ll see experiments with new funding apparatuses that channel the supply of small risk dollars with the demand of more aligned funding for the next generation of product companies and small businesses. 

7. There will be more consolidation around multi-stage mega funds 

There is a quiet cull in venture land right now, in which the pressure from below of super angels is combining with subpar historic returns for all but the very top tier of venture funds and general global economic insecurity to make it harder and harder for venture firms to raise limited partner dollars. As this shakes out, more and more of the big institution dollars interested in the class will try to work there way towards the top performers. I think that as that happens, more funds will aspire toward the multi-stage mega fund model that Andreessen Horowitz has been loudly building in the last couple years. These funds will range from early deals to later stage mezzanine funding to even, perhaps, private equity style acquisitions and turn arounds. Basically, as more of the dollars for the class head to the smartest investors, those investors will feel empowered to experiment with non-traditional approaches to value capture. some of them will flop, but some of them will stick, reshaping the next generation of venture investing in the process.

8. Whatever “bubble” there is will dissipate slightly and change, but it won’t pop

Regardless of your position on whether it constitutes a bubble or not, it is undeniably true that valuations (particularly in Silicon Valley) have been on the rise for the past couple years. Part of this is here to stay, and simply reflects the decreased cost of starting up and increased power of founders. Part of it is driven by a particular investment thesis that says that all that matters is getting in the best deals, regardless of class. The part of it that will change is the over-exuberance of the increased valuations that incubators warrant. I think a small handful (including the obvious Y Combinator and Techstars) will continue to command significantly premium valuations, and I think some of the pack now (Excelerate Labs in Chicago and Dreamit Ventures in Philly, for example) could rise to even more prominence. But I think that the general inflationary pressure that incubators have had on pricing will ease off a bit. I think this will be compounded by the perceived difficulty of companies to get Series A dollars in. So in short, I think valuations will remain higher, but their high peaks will be reserved for a very specific company profile. 

9. The Founders Fund view of venture is going to get more and more resonant 

2011 saw the Founders Fund come out swinging. Peter Thiel was in the news every other week for some initiative he was launching or funding (including notably the 20 Under 20 Fellowship) and Sean Parker burst back into public prominence in a major way, as well. But even more than either of those guys individually, the Fund articulated a raison d’etre that was clear, compelling, and provocative. Right now, their home page reads “We wanted flying cars. We got 140 characters.” The quote comes from the manifesto they published this year titled “What Happened To The Future?” which basically argues that venture capital has lost its way in a world of apps and needs to get back to making big, structural, economy shifting bets. The notion has struck a chord with many in Silicon Valley, and I think that in 2012 we’ll see a lot more oxygen sucked up by company founders trying crazy-big, nutty-sounding things.  With a new $625 million fund just closed, Founders Fund will be in a position to fund much of that activity. 

10. We’re entering the era of the VC-mogul, and the face of venture investing will continue to reorient towards the Young Turks of the Valley & Alley

The Doerrs, Moritzs, and old guard of Silicon Valley investors are still extremely influential, but it is undeniable that the last half decade has seen the rise of a whole new class of Young Turk investors who are dominating the conversation and creating huge gravitational pull around themselves for young entrepreneurs. These are people like Reid Hoffman, Paul Graham, Dave McClure, Chris Sacca, Fred Wilson, Chris Dixon, Ben Lerer, Josh Kushner, Naval Ravikant, Dave Morin, and Shervin Pishevar who are not just investing, but experimenting with new structures for investing, new approaches to building deal flow, and generally reshaping the industry in their image. Many of these investors have a certain mogul quality, in which their investing is just one part of a broad portfolio of engagement with startups - that engagement ranging from actual operational roles to political involvement to nonprofit leadership and beyond. Beyond this crew, there is a whole slew of 20-something and 30-something entrepreneurs who have had some success and are starting to dip their toes into investing. Like the rest of Gen Y, this cohort feels alive when it has its hands in lots of pots and can make connections across industry borders, and over the next five years I expect to see this influence spread across the landscape of startup financing. 

Sean Parker (Founders Fund) and Shervin Pishevar (Menlo Ventures) at Le Web. 

Nothing says the end of December like prognostications for the new year. In 2011, the breakneck pace of early stage investing continued to grow, with new market segments like “collaborative consumption” (think “Airbnb for…”) and box-mail services (Birchbox, Blissmo, Trunk Club) tickling the fancy of investors. NYC continued its rise, and between Groupon, LinkedIn, and Zynga, 2011 will be remembered as the year that the tech IPO got its swagger (or at least pulse) back.  So what’s in store in 2012?

In no particular order, here are ten trends that will shape venture capital in the coming year:

1. Differentiation will be the name of the LP fundraising game, and VCs will get more aggressive about seeking out international opportunities 

Investing internationally is a double-edged sword for VCs. On the one hand, emerging startup markets offer fresh terrain in which to scoop the biggest and most interesting deals at more reasonable valuations than in the US. On the other, investing internationally is hard. Understanding not only legal but cultural differences takes time and work; understanding differences in the market opportunity takes work. Still, as companies like recent TC Disrupt winner Shaker continue to push foreign-born startups into the limelight, and as more dollars try to press into the very top tier of firms and VCs feel increased pressure from LPs to differentiate themselves, creating strategies around frontier markets is going to become more and more appealing. 

2. There will be massive competition for the most promising companies in areas where software hasn’t yet eaten an obvious and important industry (such as politics, pets, and education)

Maybe the most read startup content of the year was Marc Andreessen’s essay “Why Software is Eating the World,” published in the Wall Street Journal. The point of the piece was simply that it was only a matter of time software and internet services had disrupted every single industry and activity space on the planet. 2012 will be a year in which you see intense competition among investors to get into deals in companies in spaces where software has still had only modest influence (at least relative to the opportunity). Three of my top bets for the industries where this will happen:

• Politics - as much as we like to talk about how much social media changed politics in 2008, there is so much more opportunity. It’s already happening, with companies like Electionear are poised to completely change field organizing for campaigns, and Change.org - a company having immense influence shifting day-to-day policy in business and government - is quietly becoming an 8 figure revenue company. 
• Pets - the lack of activity in the pet space is insane. $10 billion spent on pet supplies, $3.5 on per services, and nearly $500m on pet insurance. These are big, big markets with highly inelastic demand and very little in the way of great startups. This will change. Check out Dogvacay for an example of how. 
• Education - Education is more than 8% of our annual GDP. More than a trillion dollar US (and about 3x that worldwide) industry, with an incredible flowering of innovative for-profit companies building products and services that engage with formal learning as its currently constituted as well as shifting the nature of formal learning all together. 2011 definitely saw an uptick in general VC interest in the space (a notable example is Greylock & Benchmark’s co-led 15m investment in social learning platform Edmodo), but 2012 will be the year when investors flock in. 

3. New York will carve out even more mindshare with young entrepreneurs

New York continues its ass-kicking entrepreneurial ascent. It’s no longer just Foursquare - but a whole host of companies - from Tumblr to Etsy to Kickstarter to Skillshare and beyond - that are making the Big Apple home. Warby Parker has exploded on to the scene as one of the most talked about startups in the world. General Assembly (in the LearnCapital portfolio) is one of the coolest startup spaces in the world and their startup education programs are second to none. Union Square Ventures continues to command incredible mindshare among early stage entrepreneurs, and Lerer Ventures and Thrive Capital are quickly becoming sought after by entrepreneurs on both coasts. In 2012, I think you’ll see more and more startups on the West Coast carving out space in their rounds for NYC investors. What’s more, I think you’ll see continued gravitational pull towards the city for young entrepreneurs trying to decide where to base their companies. 

4. Series A (and later) funds will grab more and more of the conversation and “cool” that has recently belonged to the angel investors 

On the backs of a massive uptick in incubators and seed investors, the last couple years have seen a startup Cambrian explosion. 2012 will see more and more of those companies running out of cash and coming to the all important proving ground of Series A. As that happens, you’ll see “the hot” funds become the coolest funds doing Series A and later deals with the most interesting companies. And my guess is that a lot of the investors that grab this attention won’t be the Sequoia’s and KPCB’s, but the Lightbanks, Menlos, Founders Funds and Andreesseens. It will be interesting to see if and what impact any shift in “what’s hot” when it comes to a VC trickles to people who have come into the field as angels in the last couple years. I wouldn’t be surprised to see some of the better known solo angels or partners at seed funds jump to bigger firms. 

5. E-commerce will be the investment vertical that looks the most different from the past couple years (and look out for the “We are the Fab.com of x…” analogies)

The past couple years have been the years of the flash deal sites, culminating with the Groupon IPO. And if some of the wind has gone out of the space’s collective sails, it has and still commands incredible attention (not to mention revenue and investment dollars). 2012, however, will be about a fundamentally different type of e-commerce, anchored in quality and curation rather than discounts. Fab.com is for sure the poster boy of this - with tens of millions of new dollars in the bank, 100,000 orders a monthly and a nearly $100m revenue run rate already - but there will be many many more as online retailers try to move away from the feel of walking into a big box store or coupon flyer in a newspaper, and instead tap into the feel of walking into an awesome boutique where everything looks awesome. 

Interested in the rest of the trends that will shape VC in the coming year? Check back in at the beginning of next week for part 2

This post by Fab.com founder Jason Goldberg is phenomenally fucking brilliant. 

Here’s the gist of it: In their latest funding round, instead of the insane back-and-forth clusterf that is the venture funding process, they just let the data talk. The company picked the set of firms and partners they thought would be interesting and actually gave them access to all of their metrics. Like, everything. They asked the VCs to actually get to know the company and reach back out if they were interested. 

What this did, effectively, is completely refine the pool to investors who understood exactly what was happening with the business and were excited about it. Then all the parties got to focus on actually finding a fit based on culture, team, and vision for the future. The result for Fab.com was that they got exactly what they want in an investor with an incredibly small amount of time (relative to normal) spent fundraising. 

As an unbelievably great site with explosive growth, Fab.com had more of an ability to write its own ticket than most. That said, the lesson to just tie your pitch to data would be so well taken by any entrepreneur. 

One of the worst sins a writer can commit is “burying the lede.” This means obfuscating the main point they’re trying to get across in a sea of exposition or language or general noise. 

The lede in any venture pitch is the numbers. How are users growing, how is that growth accelerating, how is it driven, what does it cost to drive it, how many of them are converting, how many of them are coming back, how long are they staying, etc. etc. etc. 

Companies have to *own* these numbers. I think most entrepreneurs worry that unless they’re Facebook, sharing numbers will doom them. The truth is that one of the greatest strengths of good pitches we see is that the entrepreneurs know everything about the numbers. When they’re good, they know why and how to build on top of them. When they’re bad, they have plans for how to fix them. And in the real world, almost every interesting early company has both good and bad numbers. 

Knowing numbers - even the ones you wish were better - inspires confidence because it shows investors that you get what you’re doing. Don’t get nervous. Don’t bury the lede. Kill the noise. Pitch the numbers. 

This morning, social learning platform Edmodo announced $15m in new funding, co-led by Benchmark and Greylock. Matt Cohler from Benchmark and Reid Hoffman from Greylock will be joining Edmodo’s board. 

The deal is a huge one for the company and for our firm, LearnCapital. Reid Hoffman - the founder of LinkedIn and investor in everyone from Facebook to Zynga and beyond - and Matt Cohler - one of Facebook’s first employees - are some of the most important entrepreneurs and investors in the rise of the social internet over the last five years. Their investment is not only an affirmation of how central the social experience can be for learning, but an affirmation of the growing venture community interest in next generation learning platforms. 

Edmodo is a social learning network which gives teachers the ability to bring content from the web into a safe and secure communication platform for their classes. On the investment, Hoffman said: “Both Matt and I have seen networks grow spectacularly once they hit their tipping point. It’s clear to us that Edmodo is well on its way to becoming one of the key networks in our lives. Just as LinkedIn is the professional graph for work and Facebook is the social graph for your friends, Edmodo is the educational graph for learning. The graph provides the platform for teachers to bring selections of the web to the classroom…Edmodo is the third social graph network that Greylock has invested in, after Linkedin and Facebook.” (from TechCrunch)

The investment isn’t just important for Edmodo or Learn, but a huge win for an educational technology space that is quickly maturing. This space is not a scary futuristic world in which teachers are replaces by machines and students are reduced to fact-reducing automatons, but a space in which technology gives teachers the resources to actually engage students with different learning styles; in which it becomes easier to hone in on specific problem areas, increasing student mastery and confidence; in which new vehicles for collaboration between parents, teachers and students become normal rather than exceptional; in which the cornucopia of information and knowledge beyond the classroom can find its way into the formal education experience, helping students understand why they’re learning what they’re learning. Ultimately, the new generation of education technology is about enabling our education system to live up to its promise of unleashing the talent and capacity of every student to do and achieve more. 

The opportunities that come with this emerging world are what drive our firm to invest in learning technology, and we’re glad to have Greylock and Benchmark join us in unlocking that vision. Congrats to the entire Edmodo team.