Tag: Venture Capital

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Internet Culture Startups

Day 1421 and Culture Clashes

I sit in between half a dozen different community nodes thanks to my interests in open source software, decentralization, crypto, and autonomous systems technology.

This set of interest covers a lot of ground from ecosystem level collaboration in financial organizations like DAOs and to player versus AI agents coordination to peripheral control of drones and machinery.

Many different demographics are attracted to these frontiers for different reasons. Hackers have a very different mentality than mercenary technologists looking for maximum margin.

Open source has traditionally struggled more from a lack of financialization than from an obsession with it. Which seems less true in the crypto era than in previous more academic and defense oriented eras.

There are classic open source business models and anyone with age and experience in startups has some opinions which I leave as an exercise to the reader. They occasionally fail and an open core loses more than they’d like to professional services. I am writing on WordPress.

One strange aspect of what drives these frontier spaces to interact is that depending on how much leverage you find in building a network you may have different incentives than other builders and users. Expanding out to scaled use may drive a lot more value than the resources required. How the surplus gets divided is always contentious.

For some, the most crucial cultural goals is expanding access to automation and ripping away as many of the services and middle men as is feasible.

Decentralized systems make it harder for middle men to maintain monopolies. Thats its own goal for true believers. For others the goal massive financialization that drives network connectivity is the benefit. Self interest driving common goals is perfectly acceptable.

As I watch the current season of hyper self interested memecoin cryptomania engage with the academic utopian open source artificial intelligence community, I am reminded of so many of the classic issues we have in financing and sharing in the spoils of common infrastructure. Who benefits is a question we should all be asking more regularly

Categories
Preparedness Startups

Day 1419 and Know A Guy

Running a startup, for all its supposed glamour, is mostly an exercise in learning how little you know.

Sure there are playbooks for some of what you will do. As the technology industry has grown and startups have become an appealing career choice we’ve filled out how-to guides for everything from fundraising to operations.

Alas all advice is specific to the giver’s experience and untangling biases to make advice relevant to your specific needs is quite hard. That’s where it helps to have more experienced operators on hand to call bullshit.

At chaotic.capital we pride ourselves on being investors who “have a guy” for even the most esoteric possible requests. Playbooks can only you so far when you need an expert.

Just in the last two days we’ve worked through how one hires a chief of staff, what to do when letting go of counsel who made a mistake, installing appropriate security procedures for digital footprints, and the resale brokers for a rare commodity.

We like to problem solve and the weirder the problem the more fun it can be. Removing obstacles and clearing bottlenecks is satisfying work. And knowing guy who knows a guy is a heck of a fun game of social geography.

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Media Startups

Day 1381 and Radical Responsibility

I thought the discourse around “founder mode” had died down but Kim Scott the author of the best selling book Radical Candor decided to link the meme to what she considers a so-called rise of “neo-authoritarianism” in Silicon Valley culture in an op-ed in the New York Times. Naturally it’s about Trump too.

My read on her thesis is that she has decided to use a technique she disavows in her own work; the frame of the piece is manipulative insincerity. It’s an unclear criticism being used for political gain.

She works to convince the reader that actually the most libertarian and individualistic demographic, who regularly decries state power (especially its use of coercion to drive censorship, limit transactions and restrict compute), are in fact, actually vouching for totalitarianism.

Gift Link to New York Times “How Founder Mode Explains the Rise of Trump in Silicon Valley

Even the graphic hints at the supposed appreciation of neo-monarchy as a nod to nRX intellectual Curtis Yarvin.

I fear she firmly missed the point of founder mode for her insincere political framing. Despite her clear understanding of our values.

In that original recipe, venture capitalists invested in founders rebelling against established hierarchy and building great products. And when those rebels themselves became too hierarchical, venture capitalists turned to new founders aspiring to overtake the old order.

She is right about we prefer to work as an industry and how we see our efforts. “Many of Silicon Valley’s greatest products were originally intended to liberate, not to control people.”

And yet missed she missed that founder mode is about liberating our founding teams from the suffocation of professional management. It’s got nothing at all to do with justifying tyrannical founders.

Rather founder mode is about limiting the tyranny of managers who can stymie progress despite having little personal responsibility for the success of the firm. In another world, she might have written a sequel called Radical Responsibility about fixing this problem.

Larger firms have a pantheon of corporate departments to ensure smooth governance from legal, to HR, to corporate communications in order to comply with state expectations.

As regulations have ballooned so too have the specialties required by the middle managers. We must be in compliance. We must take everything and every view into account. We must do things by the book.

Founder mode isn’t about running ripshod over your people. It’s certainly not about Trumpian declarations of what must be done. She’s absolutely correct that “emotional dysregulation, bullying and bloviating are not leadership attributes”

I find her criticism to be manipulative insincerity. She’s deliberately missed the point of the original Paul Graham essay, inserted her own political insinuations about how Silicon Valley is hiding their true preferences for authoritarians while herself advocating for a pass the buck culture. It’s not fit for Radical Candor and I’d expect better from someone of her stature.

Categories
Media Politics

Day 1379 and Dodge and Weave

A lot is going on and I have little concentration in me today so I’ll keep this to a few tidbits of things I have on my radar.

The artificial intelligence x-risk Doomers are doing absolutely nothing to beat the charges that California SB 1047 was all about their fear of an imagined apocalypse and had absolutely nothing to do with useful policy or regulation.

Frankly I’d expect better from Scott Alexander and I’ll warn the Effective Altruist and Open Philanthropy crowd that if you willing to parlay with socialists don’t be surprised if those who advocate for broad state powers feel fine about using the state monopoly on violence on you when your interests no longer align. Liberals get the boot too.

But nobody listens to a cranky old libertarian like me in this multi-polar world. Though if you are inclined to listen to me please do read my investor report for the quarter. We are raising for our next fund and I’d be delighted to pitch you if you are the sort who has a spare 100K to invest in atomics, databases, decentralized compute and other oddball world changers.

In other bits of frustrating press narratives the New Yorker can soak up 34 minutes of your time with a “Silicon Valley matters in politics now more than ever” piece which is about how politico Chris Lehane is doing his job and representing the interests of an industry that still has enough money to pay his fees.

Perhaps politicians will consider not killing the golden goose that is the information economy and try listening to the folks who still make enough money to be considered good targets for more taxation about how we can keep making them tax money.

But I’m guessing if I ask Detroit how that ask to the government ends I won’t like the answer. I could ask Baltimore but Frank Sobotka and the Key Bridge are no more.

I truly thought one was supposed to get mellower in one’s old age but my politics seem to be rooted deeper than I realized. I just believe in markets and the prosperity that comes from free asssociation.

Categories
Finance Startups

Day 1376 and Q3 2024 Investor Update & Market Analysis for Chaotic Capital

Welcome to the Q3 2024 update for chaotic.capital LPs. I’m choosing to post a selection of our reporting publicly so prospective founders and LPs can see our thinking.

You may be invested in chaotic.capital because we invest in ideas that adapt humanity to our new chaotic era.

Enabling resilience in the face of unexpected & rapid change is our lodestar. It’s a simple heuristic that yields a complex thesis: that technology is a tool for increasing leverage. 

In addition to these investor letters, 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 any time.

Q3 was another strong quarter for chaotic.capital. Our ability to identify and back founders early remains core to our success and we’re seeing it both with the inbound flow from founders (as seen in the two new deals we did this quarter) as well as the progress from our existing portfolio, with four new markups this quarter and substantial business progress on those and others.

The markets are increasingly focused on power and compute. What was once a contrarian focus on energy, infrastructure, crypto, and artificial intelligence has now become a core narrative among informed investors.

We believe the future of compute—particularly in relation to crypto and AI—will increasingly be viewed as a basic right, not a privilege, as these technologies scale to mass adoption. 

As governments grow more cautious about debt and monetary risk, individuals and organizations will turn to trustless systems to ensure secure transactions and autonomy.

This is why we focus our investments in the space on foundational layers that will power the next generation of applications.

With portfolio companies like Squads providing on-chain economy tooling, Kuzco reducing reliance on intermediaries while creating an open market, SFCompute pricing compute and creating spot markets, and Chroma becoming the go-to choice for open source vector databases, we see the intersection of crypto and AI creating secure, scalable systems for individuals and organizations alike.

Access to compute is quickly becoming synonymous with freedom of speech and, ultimately, the freedom to transact. 

These open trustless systems enable efficient transactions and verification, a crucial development as geopolitical multipolarity continues to rise, and more people need to ensure their interactions are secure without reliance on the state.

While Americans might not yet fully appreciate this, we’re seeing growing demand for these alternative systems and open models from those who are navigating increasing regulatory pressures and instability.

Europeans, whose governments are deploying strict limits on AI models are beginning to understand, those from countries facing geopolitical uncertainty (e.g., Israel, Ukraine), live it already, and those in countries with unreliable currencies and legal systems have been navigating anarcho-tyranny for decades.

But it can be precarious in the US as well, in California it was only the intervention of a veto from Gavin Newsom that prevented SB-1047 from restricting compute and hobbling the development of open source models.

Looking forward, this ability to access compute at scale may well parallel the right to transact. As nations confront their own risks, network state behaviors will become more prevalent, driven by the need for secure, decentralized systems that ensure autonomy in an increasingly unpredictable world.

We’re excited about the future of chaotic.capital and the opportunities ahead. As always, I’d love to talk about any of this with your discussions with you, so feel free to reach out. We’re just getting started, and there’s much more to come.

Categories
Internet Culture Politics

Day 1369 and California SB-1047 Vetoed

Last night I received a push alert and then a flurry of excited text messages and phone calls. California Governor Gavin Newsom vetoed the controversial SB-1047 artificial intelligence bill.

Gavin Newsom vetoes California’s contentious AI “safety” bill SB-1047

Twitter lit up with joyful streams of relief and praise for this decision. Everyone from politicians, economists, researchers, academic luminaries, open source collectives, founders and venture capitalists.

It was a bad bill that lacked the necessary clarity and focus to even begin the task of regulating the nascent field of artificial intelligence.

We can and will do better in finding regulatory frameworks for safety and competitiveness but this bill wasn’t it. It was especially concerning as they say so goes California so goes the world.

I have been banging on about the #FreedomToCompute and math’s crucial role in our constitutional right to free speech in America. This must be considered in all future attempts at regulation in America.

Math and computing power are as essential as speech. In today’s world, they ARE speech. We may speak in natural language, but the way we extend ourselves, build things, and grow as a species is through our tools. Computation is a tool.

These tools are extensions of the human mind. Consider that the first computers were just regular humans counting. We may have started with our fingers and toes as our first tools. And it wasn’t quick progress as the evolution from the abacus to modern computing took us nearly 4,000 years.

We’ve made an astonishing amount of progress in the last hundred years. We’ve gone from thousands of computations per second in the 1940s to 200 quadrillion calculations per second with modern super computers.

Consumer devices are better too. The computer I’m using to write this post has more power than the computers we used to send man to the moon. It’s 100,000 times faster with seven million times more memory.

Alas, as tools get more powerful the powerful get nervous. This isn’t the first bad artificial intelligence bill we’ve seen. We have Europe to thank for that. And it likely won’t be the last.

But defeating SB-1047 is a rare moment of bipartisan cooperation not only in California but across the world as the entire compute space came together to make its voice heard. And Gavin Newsom listened.

We should celebrate this rare consensus as we look towards better policy in our future.

Categories
Aesthetics Culture

Day 1345 and Class Consciousness

I have written about classism, class anxiety, and class status as part of my interest in how we form group identities. Searching just for the world “class” turns up 504 mentions on this blog.

That seems like a lot but I’d argue that no other identity marker (even race & gender) determines quite so much about your life and trajectory as your class. Yes, even in America. Perhaps especially so in America. If you aren’t read up on the topic I recommend Paul Fussel’s Class: A Guide Through America’s Status System.

Yesterday I happened to be sitting next to a trio of twenty somethings during transit. After glancing at their outfits and listening to their animated discussions, it seemed clear they were either upper class or professional management class. Being both curious and nosy (and having no way out of listening in) I rudely but playfully asked:

Ok I’ve got to ask, are you business school classmates or cosplaying as extras from Industry?

This intrusive question seemed to amuse them and we fell into a long conversation. It turns out they had in fact become friends while getting their MBA from a top European business school. I didn’t inquire into their private family lives obviously but I’d guess that means I was right about both class buckets.

We had a chat about hoe business school was the best decision they could have ever made for their social lives in particular. The class work was fine but it was the friendships that made it worthwhile. Business schools provide an entirely different sort of class experience if catch my drift.

I found it quite pleasant to be in a random IRL social situation where discussion ranged from Biden’s opposition to the US Steel acquisition to the implications of Paul Graham’s Founder Mode essay for the professional management class. Usually that requires Twitter or a Bloomberg podcast (they were fans of Odd Lots).

Naturally this begs the question as to how much I am aware of my own class consciousness and how much I do or don’t fit into my own class (having made the journey through multiple classes).

Do people prefer to socialize within their own classes? I found it relaxing to discuss some class coded topics without fear of looking like a privileged asshole.

Which isn’t to say I think of myself primarily in class terms. Last weekend I attended a gathering of friends & internet mutuals with significant class diversity including lower, working, middle and full on class-opt outs. It was there I realized I was the only person I knew who ever publicly discusses cross-class relationships. This despite cross-class relationships being a significant factor in upward mobility.

I assume it’s as normal as any other kind of cross-identity relationship but now I’m not so sure. Do you socialize outside your own class? Do you even think about it? And most amusingly, is it déclassé to discuss one’s class?

Categories
Startups

Day 1334 and Heads Down

I had a couple days of flare in my autoimmune condition that had struggling last week. Down time in bed, especially when you are in pain, can be a bit dangerous when the news cycle is popping off. Pain and American politics are a terrible combination.

I do pay attention to politics alas as I am involved in a number of issues (#FreedomToCompute, regulatory reform, and housing) so it’s easy to over do it with being extremely online. My nervous system doesn’t need any additional stimulation.

I was relieved to be back on my feet today as it felt good to be heads down at work. I’m excited about how my seed investing has been going over the past few years and I’m taking the next steps to evolve the fund. I’m so optimistic about what can be achieved. Founders are particularly motivated to build. Ingenuity sparks when things are darkest.

Categories
Community Startups

Day 1321 and Credit Where Credit Is Due

I can’t get into the details but I learned today that there is an internal metric at an institution based around work I was personally responsible for achieving.

Literally none of the credit has accrued to me because ultimately the thing didn’t really work but the downstream effects of the social credibility I brought really benefit someone I am not sure I’d have wanted to benefit. If I’d had a choice which I very much didn’t. Sometimes your social capital accrues to people you don’t even like.

I like having social capital to spare but I didn’t realize that someone was profiting off of it to such an intense degree till today. Power laws rule everything around me and it’s actually good. Just funny how little credit you month get for something and how much it might benefit someone else.

I don’t even know if I can even politely point it out simply because it’s déclassé to do so. I’ll have to enjoy the the little irony on my own. And believe me I am. Maybe it gets shared in a small circle of folks for whom making money for jerks it’s a fact of life. But I’ll take the credit privately.

Categories
Emotional Work Startups

Day 1320 and Being “You-er”

You may recall the old aphorism about marriage. Men and women have very different goals for the institution and how it will or won’t change them.

“Men marry women with the hope they will never change. Women marry men with the hope they will change. Invariably they are both disappointed”

I don’t recall having any ambitions for changing my husband when we got married ten years ago. I thought quite highly of him when we got married. I still do.

The irony is that we have both changed significantly not because of any goal the other has for each other but because of the work we do together. Fast growing startups simply demand so much emotional change from their people.

A recent piece in the New York Times discussed how coaching has become the hack that drove emotional chances

Venture-backed startups simply must scale faster than all but the rarest of human beings can acquire emotional intelligence. As a result, startup founders and chief executives, many of whom are trained not in management but in software engineering, face extraordinary risk of coming unglued in ways that vaporize immense amounts of capital.

How Coaching Became Silicon Valley’s Hack for Therapy

Acquiring emotional intelligence quickly becomes a “do or die” skill in startups. And most of us do die. Ego death in mediation like jhanna are within reach because failure and rebirth are such common experiences for the technologists that build quickly moving companies.

Both my husband Alex and I have done family systems therapy as well as multiple forms of professional and personal coaching. If Alex didn’t want change from me as his wife then he is surely disappointed. As his wife if I wanted change from him I very much did get it.

Neither one of us is disappointed, aphorisms aside. If anything, as we’ve done more work to acquire the emotional intelligence required of us to growth and thrive in our work, we’ve become more ourselves.

There is a real joy in becoming “you-er” as essential personality, skills and ambitions become clearer. It’s well worth investing in therapy and coaching to become yourself. Being “you-er” is quite freeing. It’s hard to be disappointed by that outcome.