Tag: Social Capital

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Finance Startups

Day 906 and Resilience Tech

I enjoyed a little moment in the sun yesterday when Axios’ Pro Rata featured my pre-seed venture fund chaotic.capital as part of a deep dive on resiliency technology investing. Or if you prefer disaster tech. It was a proud moment for me.

Because I’ve been trained to never miss an opportunity for reasserting who you are and what you stand for I thought I’d publish a portion of the market insights section of my investor letter for the fund. If you want to see the bets, the behind the scenes (hands on is an understatement), and the founders we back I’d welcome accredited investors to see if we’d make sense for you. Slide into my DMs or for the time conserving decisive HNI hop onto AngelList and apply to be an LP in 2 minutes flat.

What is Chaotic Capital?

In an era of institutional distrust, social change, and global instability, we invest in ideas that adapt humanity to our new chaotic era. What does that mean? We like things that help small groups have the impact of big groups and big groups have the agility of small groups. Enabling resilience in the face of unexpected & rapid change is our lodestar.

I publish an investor letter every quarter and you can always visit jfredrickson.com, where I write every single day about whatever I’m thinking about. You are also welcome to DM me on Twitter @AlmostMedia or text me on Signal. My email is julie at chaotic dot capital.

Market Insights on Q223

The rise of cryptography, machine learning, and artificial general intelligence are overlaid onto a geopolitical reality of resource competition in an increasingly multi-polar world. To use an entirely different metaphor, chaos is a ladder that we are here to climb.

Our thesis at chaotic.capital centered on identifying, investing in, and supporting companies that adapt our lives, businesses & systems to the opportunities and challenges that chaos brings. We call it resilience technology.

We believe these companies will generate outsized returns over the next decade as individuals, companies, and societies look to become more flexible, independent, and sustainable. But it’s bigger than that.  

Most builders remain deeply skeptical of Noble Lies, “for your own good” safetyism, regulatory capture, oligopoly control, and the centralized nation state control as the most effective methodology of innovation for a dynamic pluralistic human future. We are having cultural and financial reformations at a frightening speed. It’s beyond future shock now. 

Twitter critics can stroke their chin with practiced skepticism, but if you believe in American Dynamism as I do, you know that our history has shown that it is resilient, flexible, brilliant individuals coming together which defeats the totalitarian and slays the no-win scenario. You have to enable the brilliant weirdos and trust them to solve problems.

Like Captain Kirk once said to Spock, we must make the best guesses we can.

Spock: Mr. Scott cannot give me exact figures, Admiral, so… I will make a guess.

James T. Kirk: A guess? You, Spock? That’s extraordinary.

Spock: [to McCoy] I don’t think he understands.

Leonard McCoy: No, Spock. He means that he feels safer about your guesses than most other people’s facts.

Spock: Then you’re saying… it is a compliment?

Leonard McCoy: It is.

Spock: Ah. Then I will try to make the best guess I can.

Star Trek IV: The Voyage Home

My best guess? As your chosen doomer-optimist, crypto-libertarian. American-patriot, dynamic futurist, pre-seed emerging fund manager, who has plenty of facts but still has the responsibility of making decisions without full information? Tools for everyone wins the future.

It will take all of us coordinating in freedom to defeat Moloch from sacrificing more of us. Uncle Screwtape wants our egos to believe we can deliver safety and control, we know it is a lie. The Ring of Power tempts us to consider “why not me? Don’t I deserve this power?”

Choose your franchise my fellow nerds and chosen ones; because you know the crown is heavy, the ring perverts, and absolute power corrupts absolutely. So what do we do? We band together. And we enable more of us to join our merry band of future builders.

To balance out centralizing forces, institutional preservation and “we had no choice” moralizing malfeasance, we must give the people tools to build because sometimes our best guesses are demonstrably better than other people’s “facts”

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Community Internet Culture

Day 901 and Self Regulation

I don’t know why I chose violence today, but apparently I dropped a chaos grenade onto my Twitter timeline. I hesitated, in extremely soft language, to ask if anyone has noticed that kids from conservative households seem have more pro-social behavior. I phrased it with a lot of ambiguity as I don’t know how I feel either.

Going to float a very controversial observation but anecdotally in my limited experience:
The children of my conservative friends are better behaved & more individuated & well socialized than the children of my liberal friends.
Anyone have takes on why this is the case?

Naturally when something pulls on a thread of social insecurity it will unravel quickly. I am a very gifted shitposter. I step on these third rails on purpose. I am not an activist for any cause so much as comfortable being uncomfortable. Alas I have already hit Godwin’s Law on the Tweet so for my own nervous system I’m done.

But I have noticed that as cultural pendulums swing, there is a distinct lack of appreciation for tolerance of other people’s constant dysfunction. Where we draw the line as to appropriate social behavior is a hugely contested space online. Much as it has ever been in literature and history. I hear Socrates got the death penalty for perverting the youth.

My point in all this is that we all benefit from having youth understand the world and their place in it. Our toddlers cannot be expected to have the fully formed rationality of a legal scholar.

Sometimes the answer is no because Mom or Dad said so. Not every social boundary is bad for us. A child throwing a tantrum is asking for you the adult to help them find the self regulation that their environment isn’t giving them. And it’s absolutely ok to be authoritative. It’s not the same thing as authoritarian.

The general consensus on the thread seems to be that multi-generational and multicultural spaces for consistent socialization combine well with firm boundaries. Knowing when certain behaviors are appropriate can often be a winning combination for learning to individuate into your own person. Feeling safe to be yourself looks different for everyone.

Now I’d read all of this mouthing off from me with a big heaping spoonful of that fucking libertarian-pirate-hippie-Silicon Valley-born-Rocky-Mountain raised salt. I don’t know what I’m doing. I’m just a very American kind of mutt.

I personally have found it helpful to be as accountable as I can be to myself while holding as much empathy for the experiences of other people as I can. I will disagree with you a lot. I’m ok with that because I have firm boundaries too. So don’t be an NPC ok? Let’s make civilization work together.

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Community Startups

Day 854 and Silicon Diaspora

Silicon Valley is a place in Northern California. It’s also accurate to say that Silicon Valley is also a mindset that knows no geographic boundaries. If you will indulge me I’ve coined a term for this syncretic network state. I’m calling it the Silicon Diaspora.

While my family is from Boulder Colorado and I was raised there, because of my father’s startup ambition I ended up being born in Fremont California. It was a low rent neighborhood in Silicon Valley back then. Now it’s got a Tesla factory.

But we didn’t stay. My family and many others. Silicon Valley was such an inspiring landscape we sent missionaries to other cities and our diaspora took hold.

There are many types of nodes of varying sizes cities that include the Silicon Diaspora. And these nodes have a few key ingredients in common which attract the diaspora to them.

It’s worth getting to know some of elements that have allowed previous diasporas to thrive as it tells you how tight knit Silicon Valley social capital systems remain even in decentralized form.

BOULDER

I will start with Boulder. In the 90s, a movement was afoot to turn my hometown into a startup hubs as it was already benefitting from its proximity to several defense & aerospace industry players like Lockheed but also crucially was home to federal science labs like NIST, NCAR and NOAA.

The technical talent was then nurtured by investors at home. Boulder owes a great debt to Brad Feld and everyone at Foundry Group for this community. Boulder was and remains a crucial node in the diaspora.

MIAMI & AUSTIN

We’ve seen Austin and Miami rise during the pandemic years as founders and venture capitalists scrambled from Silicon Valley. Keith Rabois and Mayor Suarez willed Miami’s tech scene into existence almost overnight.

Austin’s history as a startup hub has its roots in semiconductor and hardware like Dell and Texas Instruments. Watch Halt and Catch Fire’s excellent depiction of Texas as a nexus for the Comdex years.

NEW YORK CITY

And lets not forget New York City as the hub in the late aughts and teens. This is where I spent most of my entrepreneurial career. We associate New York with more financial technology but it was a consumer company Foursquare that put New York on the map for venture. They also has a hometown hero fund Union Square Ventures’s theory of network effects. We had political support too. A very helpful mayor in Michael Bloomberg facilitated the growth of the New York node.

NEW NODES

I’m even seeing it now in Montana. Bozeman has a thriving startup scene buttressed by its popularity with some unique demographics like ex-military founders and retired venture capitalists. My husband goes to the weekly Bozeman Startup Slack meetup every Thursday.

Silicon Diaspora has many of its citizens in the mountain west (both Wyoming and Idaho have scenes) as those values align well with crypto, privacy and defense startups. I hope to be a part of nurturing Montana as a future node of the Silicon Diaspora.

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Finance Internet Culture Startups

Day 853 and Alignment on Our Consensus

Some narrative wars are being fought right right. Who owns the future and who gets to decide on what something is worth? That question is rippling through AI communities and crypto DAOs. And then the Federal Reserve raised another quarter point and Balaji explained probabilistic thinking and it went over everyone’s heads. And the beat goes on.

We are all looking at the consensus making in the market and applying our separate projections onto the great stage of guessing if you think you know what other people think everyone knows. What is common knowledge. Turns out calculus is useful!

You’d think the value of an honest days work would be common knowledge. But labor costs sure have gone up. Or maybe a gallon of milk. Politicians don’t know. How much do you get for a dollar? I’d like to know if you think it has changed. These are things you can evaluate yourself. You do not need a fancy expert. Though sometimes economists on Twitter will answer your questions.

But are we aligned on the measurements and valuations being used? What do you value vs Janet Yellen. I believe we have a right to ask for the people and technologies that run our lives to be accountable.

We have to agree on some collective civilization level norm on what we value and what the boundaries are on what things are worth and how we protect those valuable things.

It’s my personal opinion that we are all performing a bit of chaos magic as we ask that we align on a future that can collectively together build the most aligned consensus of agreement. Maybe it happens at the neighborhood level or maybe it’s a whole state. But we need to agree to some terms.

How gets to do that and how do we enable them? Maybe it’s humans. Maybe it’s humans guiding machines to make us more powerful. I myself believe that machines will need a valuation mechanism to sort priorities on our behalf.

People ask if I’m on team AI or team crypto. AI needs crypto to bridge the many different value sets and marketplaces together. Some of these types of value marketplaces may even be cultural values. That’s the goal of the network state. Align with the state that empowers your values. But then these states will also need to coordinate in various states of mistrust, distrust or if we dare trustlessness.

But aligning on how we govern and what rules we must abide by is a hard problem. We’ve relied on national liberty in America for a good while and it has produced many failures along the way.

But occasionally the utopians win a few rounds. Freedom does indeed reign it just takes a lot of fight. But we work to align as many of us as possible toward a consensus. Nobody said civilization was easy to maintain.

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Community Startups Travel

Day 849 and “Oh I Follow You!”

I’ve been in Austin for Coindesk’s Consensus crypto conference. I’m flying home to Montana today after five intense days of work. But if the on the ground reception is any indication, I nailed this year with my talks and vibes. I might actually be good at my job.

Conferences can be tricky if you are a speaker. You’re obligated to hold attention & entertain while also getting across complicated topics like governance contracts. It takes energy and preparation to do it well.

This year I was a bit less academic than last year as Marc Hochstein and I hosted an interactive town hall which was spicy as hell and my loud carnival barker voice carried. A bit bigger than just a talk and I think it was a hit.

By the end the room was packed with folks passing by and stopped to see what we were discussing. A bunch of smiling energetic faces and a loud lady in a full length dress is a bit eye catching out on a convention floor stage. I got so much positive feedback.

Heck, I was in a bathroom where I overhead an attendee discussing the panel the next day with a gentleman who was also panelist. The attendee raved to the panelist and said “that chick” really held everyone’s attention on topic. A good performance all around.

I called Consensus a “summer camp for adults” as it all your crypto friends get together for it. An expensive paid conference with a lot of talent and speakers makes for excellent serendipity. I felt like I made new connections and even a new friend or two.

It felt easy as in a small community someone like me gets to enjoy the benefits of niche fringe micro-celebrity. I kept hearing over and over “I follow you on Twitter” along with “she’s so funny on Twitter she says the shit you are thinking.” I’ve got to admit it feels good.

And I think it was fun for Alex who spent part of the week hearing folks tell him that while he’s great (and everyone loves his homesteading adventures) but they are really more excited to meet his wife. Dare I say I’m a trophy wife?

It’s super fun when your internet frens and parasocial relationships come together in actual reality. We were all happily saying “oh I follow you” to each other all week. I miss everyone already. But I’m happy to be home in Montana.

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Community Internet Culture Startups

Day 848 and Summer Camp

I’m not a camp kid. I’m told there exists a group of kids whose formative summer experiences are at summer camp and I’ve watched enough American television to have the gist of the genre. It looks fun.

Professional conferences appear to offer a similar experience to adults. You have a yearly event or two that gets together various sets of old colleagues and professional teams that then overlap with social and affinity groups. I’ve been at Consensus which is one of crypto’s many conferences but somehow one of its most inclusive.

It’s a bit of a crossover event where a lot of different factions put aside their differences and ask why the fuck are we here and what the fuck are we even building anyway. And the answer seems to be every kind of kid you’d expect at summer camp. We are building a pretty inclusive place with a lot of weirdos.

You’ve got the academic nuanced protocol dorks, the tradfi to defi chads, the solar punk regenerative commons open source projects, developer tool companies, analytics firms and graph data scientists, privacy and OpSec nerds, and even the baroque online misogynists. And me, who is, I guess, a chaos magic witch or a pre-seed venture investor if you are nasty.

Crypto is for everybody and sometimes we aren’t thrilled by everyone who shows up but we do our best to make sure everyone is included in the effort. Maybe we even help cool down the radicals and maximalists right? Maybe we can reach a consensus?

Everyone who is here this year is down for the fight. There are a millions reasons why skepticism of centralizing authority and panopticon states is good. Mostly it comes down to insisting on finding a trust layer that we can all agree on. Even if you are a racist weirdo online.

And I’d imagine most marginalized identities can understand the basic skepticism how big institutions. I’ve only got a few issues (disability and gender come to mind) and even I see how institutions turn a blind eye to our needs if we don’t stand up. So we’ve got to agree on a common set of civilizational rules. If a state can’t do that then we better build alternatives fast. Trust layers matter.

So I’m glad that I’m in an aligned fight for those basic ideals. We are fighting for a consensus in a pluralistic world. Because that’s one where we can all prosper. And speaking as someone at summer camp for utopians, it feels pretty good to be optimistic. Just give us a decade or two to keep fucking around and finding out. With enough of us competing we will get there.

Categories
Community Startups

Day 847 and Erasure

I hosted an interactive town hall for Consensus this afternoon. The topic was the path forward for building communities online, offline and IRL with cryptocurrency, decentralized autonomous organizations and maybe even network states.

I’ve been working on this town hall for several months. I worked with Marc Hochstein to refine the thesis question, build the flow and topics, bring together speakers from unique ecosystems and projects, and horse trade the various bit of social capital required to get interesting content out the door. I worked hard on it. I felt I was one of the owners of the panel.

Builders of new types of communities – online, IRL, and hybrids – roll up their sleeves and discuss how they’ve addressed challenges from 60,000-foot strategy to immediate on-the-ground tactics in a zero-trust world with high trust expectations. Topics include: governance and accountability; organic scaling through consensus (who and what decides on whether it is achieved); the architecture of sustaining and driving loyalty; navigating regulatory hurdles; uncertainty around novel governance structures; and managing information and workflows around who and what is trusted.

I was proud of my first question as I felt qualified to ask having once been the founder and leader of an organization. Conway’s Law is a familiar adage in software design. Simply put, what we build is a reflection of who we are and how we communicate with each other. So I opened the town hall with this as the thirty thousand foot view.

If what we build is a reflection of the organizations that build it, then crypto is a reflection of this room. Assuming you believe our goal is economic and monetary solutions for everyone willing to align with our reformation, are we living up to this ambition?

We had a lot of ground to cover. Issues of institutional distrust, transparency, governance, and decentralization’s promises for inclusion. But reactivity means we go to base emotions. An older woman asked the panel (not me though) why there weren’t more women on the panel. Needlessly to say I took that personally. Ain’t I a panelist?

I just brought the hammer down on this poor woman who wanted to call my panel a “manel” because lady it’s fucking erasure I worked for months to bring this group together, I’m on the stage as an expert, and you think don’t I count?

She said I was the moderator. Which like yeah it’s my fucking show because I have the expertise to bring the leaders together as I’m a peer. I shut it down as we had deeper questions on what inclusion means than Boomer feminism or Girlbossing woke-ism can manage.

The beauty of Bitcoin and Ethereum and the ecosystem of L2s like Stacks is any of us can validate what’s going on. There is no “man” or patriarchy or systemic oppression keeping you out of learning and using the tools. Maybe they reflect their builders who haven’t always been inclusive but now all of us together can earn and build like anyone else. We can make our tools reflect us by insisting on being seen.

I regularly have my background and expertise and existence questioned by everyone. And I just keep showing up. So I’d like to say sticking a girl on a panel does nothing for inclusion. But being a woman who organized a serious (ly) weird town hall on community should also mean my experience counts as much as anyone else’s.

I want everyone to count. You count. I count. Your gender or sexual orientation doesn’t discount you unless you discount yourself first. I regularly make sure I’m seen and I want you seen too.

The way to count is by speaking up and making sure that men aren’t the only ones who contribute. Don’t want to make your gender or sex a thing?

Go ignore gender & sex and & identity entirely and be an anon with a Milady pfp. I came to crypto to be a sovereign of my own body and choices. It’s your choice. None of us are victims.

I was amused as dozens of women came up to me after with enthusiasm about how we do inclusion in crypto because we don’t need to be restricted by Girlbossing or Boomer feminism. We include ourselves as the system is inclusive by design.

Decentralized systems include us all. And that’s a future they can’t exclude us from. Do you want to categorize every identity into perfect little corporate identities and slogans? I don’t. We can build a future where we are free to be you and me. Ok Boomer?

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Startups

Day 826 and Alignment

I think there is this persistent fantasy in startup life that people will always agree with your bets. We forget the discord of every hype cycle but it’s not always clear who is winning and what outcome is certain. Only hindsight is 20/20.

You do get occasional moments of vindication but it’s rare that they ever clearly overlap with a trend or a moment that everyone is paying attention. Media hype cycles and innovation hype cycles are not the same thing. Trust me I’m a pretty good publicist for a hobby.

Your deals aren’t always going to get attention though and a lot of founders want to keep things quiet so you can’t always talk your commitments.

This is a problem that investing has in common with fashion. I earned my stripes making shit cool for money. It’s actually hard. I call it the The Thursday Styles. The problem with tend forecasting is knowing what’s going to be trendy is a temporal bet as well as a cultural adoption one.

It’s a thing happening over time that is unevenly distributed. I learned that from William Gibson. Some of us live in the future but you can’t be too far out because then it’s just you speculating. You got to be right on the thing and on the timing to make any money.

It’s honestly way harder than it looks and anyone who is any good at taking a bet on what the future looks like has to take some variant of this bet. It’s probably why Dune is such a canonical text for nerds. He predicts the future dimly and is also a messiah time lord? Sign me up that sounds like venture capital to me. The sheer hubris of this comparison is honestly nauseating.

Like fuck all the way off you ain’t Maud’Dib. You’ve got to be very skeptical about the charismatic pull of a messiah my friends. That said I bet you’d believe me if I told you I was a Bene Geserit right? Anyways. My point is you don’t always get it right and you don’t usually get to take credit till the end. And mercenaries can co-opt anything. Your shit might hit the skids.

But sometimes one of your deals looks hot and everyone is paying attention and you get to feel like you were cool. You spotted the band. You saw the runway show. The media is hyped about it at the same time and your friends noticed on Twitter. It’s a nice feeling. And yes I invested in the Chroma seed round. I think Jeff and Anton are cool.

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Finance Startups

Day 820 and Ripped Off

I like doing favors because I don’t care for being overly transactional. I’d rather cultivate something over time to build trust than put a firm price and set of boundaries on what I’ll deliver up front.

And I’d prefer a similar stance from you. Intangibles are hard to price and I’d usually prefer a little time before I settle on them. It’s a trust thing. Everyone gets a fairer deal that way and I only do business if I think it’s win-win.

But once I trust you I generally assume that you won’t fuck me over because I’ve shown that I won’t fuck you over. I’ll value your resources as my own. And I expect you to value my resources similarly.

It sounds a bit old school but I believe we should respect people’s unique styles and contributions. Doing so requires trust and delicacy. We must believe others use us well and we shall use them well.

I find this trust necessary because if I do business with you I’ll use my social capital. Because spending social capital is what gets things done. You make think it’s money, but I can assure you fiat is just a convenience.

Capitalism’s wheels are greased by social capital. If there is too much tension in the system you will never achieve the necessary momentum with only one type of capital. The money is just a stand in for trust. It’s one reason some parties yearn for trustless systems. Because everyone is setting different prices for different currencies and no one likes getting scalped on a forex favor trade. It’s a dick move to undercut social capital.

I’ve found crypto people are some of the worst at understanding this basic social rule as they are the ones most desperate to make all markets legible. The indignation you see across much of technical cultures in general is dismissal of forms of capital that are harder to make legible.

I recently felt ripped off by a transaction I thought I’d priced appropriately to an incentive alignment. It turned out the other side of the deal didn’t have the same understanding of the intangibles. It made me feel like they don’t value my time and work. They’d asked for something, I trusted someone, and then another actor they had vetted spent it in such a careless way I was briefly incensed.

Now you can argue it’s my problem. I priced it wrong. And I had pricing signals coming in negatively from everywhere. I told my counter part this and they took it in stride. And then they went and demonstrated to me exactly why I was getting negative signaling. So I know it’s a risky use of social capital.

Now I’m not sure if it’s a bad trade yet. Maybe I have the tolerance for the volatility. But I’d be remiss if I didn’t look at what the numbers were telling me. Someone ripped me off. Reality says it’s probably just as much me as it was them. Which is, I believe, what you call a lose lose. And that means I’ve got to change the odds if I want to run the trade. But it’s hard to justify it to yourself after you feel like you got ripped off.

Categories
Startups

Day 817 and RIP SVB

I hadn’t expected to grieve the death of a bank. It sounds so preposterous. Who the fuck feels sad about a bank failing? But I am genuinely sad that the Silicon Valley Bank name doesn’t appear be living on with its new owner First Citizens Bank.

I guess I look forward to banking with First Citizen. They seem like nice enough folks. And maybe a bank is just a bank. But as I look back on the firsts that Silicon Valley Bank gave me I realize I will miss it. I’m sad they are gone.

The first check I saw with more than one comma was from Silicon Valley Bank. My very first company was acquired by a startup that banked with them. Ironically, right before the 2008 crisis was beginning to come onto the scene. I had a small window of fleeting security where I enjoyed a steady paycheck every two weeks with payroll done by Silicon Valley Bank. I remember thinking I was so rich. Even though I was super pissed my cofounder had a better salary than me as Silicon Valley culture dictated at the time that engineers make more.

If you are a fan of history then you will enjoy knowing that yes I did get fired during the infamous RIP good times affair. Thanks Sequoia! They were our main investors. Still I appreciated the opportunities as I was so young I wasn’t very good yet. I’ll forever have loyalty to my CEO for having treated me much better than I thought I deserved.

I also I also really loved the steady paychecks from Silicon Valley Bank. Now I think to myself why didn’t I take any pictures of it? Why don’t I have that moment recorded anywhere but my memory? Why am I now recounting this fifteen years later.

I’ll never get another check from Silicon Valley Bank again. I just didn’t have the expectations in life that I’d be the sort of person with a bank account with more than a million dollars. Let alone that I’d be in control of one and entrusted to do something responsible with it. Which has now happened multiple times at Silicon Valley bank over the years for me. Guess no one wants to have more than $250,000 in a bank right now though huh?

So goodbye Silicon Valley Bank. I’m so sad I’ve got nothing to remember you but. I didn’t take a screen shot of the bank app on the day Stowaway’s first round closed but I should have. I spent a lot of time in their banking application over the years running my cosmetics startups P&L. I remember being so proud to be the sort of person that even needed to deal with the bank. And I trusted Silicon Valley Bank with my employees because I’d seen it treat me well when I was an employee.

It seems so silly to mourn not taking a picture of a check or a screen shot of a mobile banking app but I don’t really know how to mourn a bank that failed. We failed them. They failed us. And it’s dead and I’ll never ever get a chance to do it all over again, and even if they are a villain, I remember when they were the hero in my life.