Separate Piece - Latest Comments

Re: Rise of the machines (decision making when milliseconds matter)

phineasb — Tue, 16 Feb 2010 22:55:01 -0000

Great points on the other areas that will be impacted. Thanks for adding to this post with the insightful comment. Also agree on your point about Rodger's focus and think he will not be the last to zero in on this area.

Re: SneakerheadVC Dunkolicious Christmas

phineasb — Tue, 16 Feb 2010 22:04:16 -0000

We can still get together and talk kicks. Check out #todayskicks on twitter. My favorite hashtag.

Re: SneakerheadVC Dunkolicious Christmas

Kirby Winfield — Tue, 16 Feb 2010 18:46:41 -0000

Love that you're a head. I hit Alife/BAPE/FlightClub whenever I can take time in NY. Too bad you're invested in a competitor of ours, or we could create the fearsome combination "sneakerhead VC/sneakerhead entrepreneur"...like Voltron. Keep up the great blogging.

Re: Rise of the machines (decision making when milliseconds matter)

famolari — Fri, 12 Feb 2010 17:39:32 -0000

Great post and important topic. Real time processing and decision-making will certainly find application beyond fintech and adtech, though those areas have clear and immediate financial implications and thus will drive lots of early innovation.

Milliseconds definitely matter in high frequency trading, which is why you see many firms trying to compete on physics by co-locating. But that’s not inherently alpha-generating and advantages will be arb’d or regulated away (NASDAQ said they may start mandating the length of networking cables, for instance.)

Real-time could do some very cool stuff in gaming as well. Imagine the kick-ass, augmented reality scenarios people could come up with if they could interpret massive amounts of visual, online and bio data all in real-time.

Beyond all the fascinating mining of social graphs and data exhaust that FRC’s been talking about, there are many other verticals, many not consumer facing, that are being enhanced by closing the decision-making and real-time information processing loop. From health care (vitals monitoring, sensor fusion) to cyber security and terrorism prevention (anomaly & intrusion detection, pattern analysis) to energy (smart grid demand-response, dynamic pricing, load balancing), the applications are endless. In all these areas, collecting, monitoring and interpreting massive amounts of real-time data in-line adds tremendous value.

It’s a good time to be in algorithms, information processing and high-performance computing. I expect to see lots of new companies and investment focus aimed at leveraging the above to serve specific business needs. Roger Ehrenberg’s new “big data” fund is an early and excellent example.

Re: Rise of the machines (decision making when milliseconds matter)

Alex Sherstinsky — Tue, 09 Feb 2010 20:07:50 -0000

I agree that the trend that Phineas is describing has the potential to change the data processing stack through its many layers, including the underlying infrastructure. In order for this change to happen, there needs to be a sufficiently broad class of applications that drive and focus these developments around markets. Everyone knows that, which is why in most cases we try to err on the side of developing a minimally viable product and get customer validation. That being said, a lot of us -- at least Eugene and I -- are hoping to get an opportunity -- expressed by customer demand -- to develop a powerful technology like that.

Re: Rise of the machines (decision making when milliseconds matter)

phineasb — Mon, 08 Feb 2010 07:17:04 -0000

I remember the original idea and look forward to seeing where the building blocks of that project lead you in the new one
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: Rise of the machines (decision making when milliseconds matter)

Eugene Mandel — Mon, 08 Feb 2010 01:59:25 -0000

Alex and I are trying a hybrid approach. Remember we talked about our Twitter ad network technology? We stopped doing it (long story :) ), but the tech we developed came very handy for our new project.

Re: Rise of the machines (decision making when milliseconds matter)

phineasb — Sun, 07 Feb 2010 18:09:08 -0000

Yes. Filters will be needed. I wonder if the best filters will be machines (search and recommendation engines) or humans (social recommendations)
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: Rise of the machines (decision making when milliseconds matter)

Eugene Mandel — Sun, 07 Feb 2010 16:49:52 -0000

Excellent post! "Humans do not operate in milliseconds". Also, humans do not operate on the vast amount of data created by the real time web. This does call for machines to be in the stream and make decisions by themselves.
Another class of applications needed is machines processing the stream and making it palatable for human consumption.

Re: Rise of the machines (decision making when milliseconds matter)

phineasb — Sun, 07 Feb 2010 11:22:54 -0000

Sounds good. Look forward to learning more about what you are up to when the time is right

Re: Rise of the machines (decision making when milliseconds matter)

kulsingh — Sun, 07 Feb 2010 11:09:30 -0000

Phin, fantastic post! I agree with your thoughts above and think we will soon move from wisdom of the crowd to wisdom before the crowd (as we have seen in other verticals like financial services via algo trading). The potential applications that can built on this framework will be compelling and exiting. I am working on a new venture (Tickreel) that is working on this infrastructure and is days from a prototype. Our platform hits on many of the themes mentioned above. Great to hear FRC provide insights on their vision, especially since it aligns well with ours. I'll reach out to Josh and Howard when we are ready.

Re: SneakerheadVC Dunkolicious Christmas

Brian Rothenberg — Sun, 31 Jan 2010 16:52:44 -0000

Sent you an invite, let me know if you don't get it.

Re: SneakerheadVC Dunkolicious Christmas

phineasb — Sun, 31 Jan 2010 16:29:00 -0000

Very cool. I think I was a member at one point, but send me a new invite when you can.

Re: SneakerheadVC Dunkolicious Christmas

Brian Rothenberg — Sun, 31 Jan 2010 16:22:54 -0000

Hey Phin - What are the odds that there are two VC sneakerheads in the world? I'm an intern with Canaan Partners in NYC, but I also own www.sneakerplay.com. Give it a look and if it's something you might be into, I'll send you an invite to join (currently invite-only). Great blog!

Re: Before you sign a termsheet, take your VC to the Chiropractor

phineasb — Thu, 28 Jan 2010 01:27:57 -0000

Thanks Carrie. This alignment is similar to what you look for in clients at elise communications.
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: Junior people in VC are gate keepers who add friction to the system

phineasb — Thu, 28 Jan 2010 01:23:07 -0000

Thanks for the note. As Dave points out, I think it applies to all kinds of business development.
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: Before you sign a termsheet, take your VC to the Chiropractor

Carrie — Wed, 27 Jan 2010 23:12:03 -0000

Phin. I really like this post. Not bc I am married to you but really when you talk about your experiences as an entrepreneur, your writing makes sense...and you have a lot to offer new investees.

Re: Junior people in VC are gate keepers who add friction to the system

@sarahmerion — Wed, 27 Jan 2010 20:44:48 -0000

Great article, thanks for the insight.

Re: Before you sign a termsheet, take your VC to the Chiropractor

phineasb — Wed, 27 Jan 2010 10:03:46 -0000

Great addition. Agree #4 touches on it, but like your wording better.

Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: Before you sign a termsheet, take your VC to the Chiropractor

mschoeffler — Wed, 27 Jan 2010 09:47:41 -0000

#6. Hook up with the wrong practitioner and get paralyzed.

May be a restatement of #4, but we need potential owners with useful advice, good connections, and helpful criticism. Every entrepreneur should have a fear of slowing down because of partnering with the wrong investor.

Re: 2010: the year of “game mechanics”

phineasb — Sat, 23 Jan 2010 15:50:50 -0000

The game dynamics can make the virtual goods more valuable--in terms of consumer perception--and motivate more transactions/velocity of transactions.
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: 2010: the year of “game mechanics”

Corey Pierson — Sat, 23 Jan 2010 15:28:01 -0000

Nice. I'm also interested to see if some real-world services start using game mechanics as a means to facilitate micropayments. We see micropayments in actual games now (e.g. buy a new weapon, unlock a new level), and it's a pretty sweet model. When high scorers buy new weapons, the rest of the pack has to make similar purchases in order to keep up.

Adding payments further complicates reaching the UX zen you describe, but it has huge potential if the right experience can be created. Game mechanics combined with micropayments could not only increase acquisition and retention rates, but also increase the amount of cash earned per customer and frequency of purchase. Particularly if you can create the experience you described where each customer can experiment and find his ideal level of engagement. It's an ideal model for grabbing the 'consumer surplus' from each customer.

Re: 2010: the year of “game mechanics”

phineasb — Fri, 22 Jan 2010 17:16:27 -0000

I think rather than making the app more utilitarian, finding ways to build the utility into the game play, to weave them together, is the key
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: 2010: the year of “game mechanics”

phineasb — Fri, 22 Jan 2010 17:11:24 -0000

Thanks. Think utility to the user must move up the list of product features as the length of engagement increases
Phineas Barnes
Principal, First Round Capital
215.327.0849
phin@firstround.com
@phineasb

Re: 2010: the year of “game mechanics”

MattMinoff — Fri, 22 Jan 2010 16:10:57 -0000

I completely agree that game mechanics can drive customer acquisition and initial loyalty, however, the novelty of the game eventually wears off. If you don't build a truly valuable service/product, people will not come back. I really like foursquare but acquiring badges and becoming the "mayor" of venues has started to lose its luster. I look forward to seeing what the foursquare team does to continue making the product utilitarian.

@Nabbr, we are hoping to leverage game mechanics to drive engaged video views and sell products. We will see what happens.