There was a man who fished two hours a day, caught enough fish to feed his family and make a small profit, then enjoyed his free time playing his guitar, dancing with his wife, and chatting with his friends until late into the night.

Then a VC came along and told the man to spend more time at sea, catch as many fish as possible, invest the profits in more boats, then build a cannery, launch a global distribution network, dominate the seafood markets, and change the world!

“By the time you are ready to retire,” said the VC, “You will have made a fortune!” Read More...

I liked Airbnb from the very beginning, and I can tell you exactly why.

First of all, Airbnb is a marketplace that connects guests with landlords. This is a very difficult type of marketplace to make successful, but once you achieve a critical mass of users, it’s incredibly hard to replicate. This is because people looking for places to stay will always gravitate towards the largest selection of spaces, and landlords with space to rent will always post their properties where there are the largest number of potential buyers. The first company to achieve this combination creates an enormous barrier to entry for their competitors. This allows them to monetize the site deeply without fear of losing their customers. Airbnb was a first-mover in opening up a new source of real estate that was untapped by competitors. This gave them a big first-mover advantage.

Airbnb is at a much later stage now, but they enjoy the benefits of the largest marketplace of its type in the world. No one can compete head-on with them. The sheer number of renters and landlords on their platform makes them more attractive than anyone else. Even if competitors offer more features at a lower price, it doesn’t matter. The marketplace itself is the most valuable feature, and Airbnb owns it. Read More...

★ We are flying to Chile this week to give a talk at the big agricultural tech conference: Hortifrut Expo.

★ After Chile, we’ll be on our way to Beijing, Hunan, and Shenzen to work with more startups.

★ We just signed a deal with Seven Stars Innovative Industries to take five top Chinese startups global for IPOs. Read More...

Everyone knows that Facebook has acted irresponsibly with its users’ data, and people are upset. Politicians want to punish Facebook for its actions. Even Chris Hughes, the cofounder of Facebook, has advocated breaking up the company. That’s how bad things have become. But I’m not convinced Facebook should be broken up. Clearly, Facebook needs to be regulated, but breaking it up won’t solve all the problems.

The fact is that all social networks, as they exist today, are pseudo-monopolies. Facebook has managed to purchase Instagram and Whatsapp, giving it a clear dominant position in the US and many other markets. Even if you broke Facebook, Instagram and WhatsApp into three separate companies, you’d still have three pseudo-monopolies, none of which may do a better job at protecting users data and the public’s interests.

The fact is that users cannot simply switch to a new social network. They are locked in. No one wants to leave their friends behind. And without friends, a social network is useless. So competition will always be limited. Read More...