Read more about how we’re thinking and where we’re investing here.

Today marks my first full year in VC at Version One. Over this time, I have grown so much and am happy to report that being an investor is still very much aligned with my core values. As I reflect on the past year, I want to share what I have discovered about these 3 core values: learning, compassion, and freedom.

A community can make or break a marketplace. I owe much of the success of my former company, <a href="http://www.abebooks.com">AbeBooks</a>, to the passionate community of book lovers that came to our site. Considering more than 1/3 of Version One’s portfolio are marketplaces, I appreciate just how much a strong community can be one of the most powerful differentiators and growth drivers for marketplaces. When a group of users starts spreading the word and engaging with your site beyond pure utility (i.e. comes to chat with other users, not just make a transaction), then that community can help build and scale your marketplace. Early <a href="http://www.ebay.com">eBay</a>, <a class="zem_slink" title="Etsy" href="http://www.etsy.com/" rel="homepage">Etsy</a>, and <a class="zem_slink" title="Airbnb" href="http://www.airbnb.com/" rel="homepage">AirBnB</a> are all great examples of this. Yet while community can be a marketplace’s biggest asset, it can also be its biggest liability. A marketplace company needs to strike a careful balance between giving up some control to the community, without being overrun by it. For example, much of <a class="zem_slink" title="Digg" href="http://www.digg.com/users/DiggUnderground" rel="homepage">Digg</a>’s downfall is attributed to just how much it listened to is hard core fanatical user base…i.e rolling out new features, then quickly rolling them back when their more vocal users complained. How can you best manage a community so it contributes to your growth? Here are a few tips: 1. Give up some control: You can’t let Digg’s story scare you into taking a 100% dictatorship approach to managing community. Your community wants to be a part of something; you’ll need to give up some control to let them participate. For example, you can listen to product feedback, ask for beta testers, and consult with them on community rules. 2. Listen to the whole range of your users: If you want to build a marketplace for a broad user base, you need to listen to everybody…and not just your vocal power users. Find ways to capture input from a diverse representation: from the vocal power users to the silent majority. Your more vocal users will make themselves heard through user forums, but you may need offline events, client advisory groups and 1:1 conversations to tap into the thoughts of everyone else. 3. Publish community values and rules: It’s best to define the values and rules for the community you are trying to build early on. This way everyone understands the ground rules from the start and you have terms to refer back to if the need arises. Ebay did a great job of defining and living by <a href="http://pages.ebay.co.uk/help/community/values.html">their values</a>. 4. Invest in community managers: In many ways, communities are self-organizing, but they still require active administration and moderation. A good community manager will play both a reactive and proactive role: first to respond to any poor behavior that might drive away other participants and second to draw out the best level of contribution from everyone. 5. Always take the ultimate decision: while it’s important to engage with and listen to your community, keep in mind that you have the ultimate decision in all matters. It is impossible to make everyone happy and companies can run into big trouble when they try. You need to have a strong sense of your company’s core values and then you can weigh user feedback within the framework of your own convictions.

A community can make or break a marketplace. I owe much of the success of my former company, AbeBooks, to the passionate community of book lovers that came to our site. Considering more than 1/3 of Version One’s portfolio are marketplaces, I appreciate just how much a strong community can be one of the most powerful differentiators and growth drivers for marketplaces.

<a class="zem_slink" title="Faceboo" href="http://www.facebook.com" rel="homepage">Facebook</a>, <a class="zem_slink" title="Google" href="http://www.google.com" rel="homepage">Google</a>, <a class="zem_slink" title="Salesforce.com" href="http://www.salesforce.com/" rel="homepage">Salesforce</a>, Twitter…all the top players in Silicon Valley want to get their hands on the best talent around. That’s why we’ve seen example after example of "acqui-hires" in the past few years as well as some very large acquisitions where a big driver was the talent behind a start-up (e.g. Nest, Beats). However, only a few big companies have truly figured out how to keep founders around after the acquisition. In most cases, as <a href="http://go.bloomberg.com/tech-deals/2012-04-17-zyngas-acquired-founders-where-are-they-now/">Bloomberg detailed with Zynga</a>, the founder leaves 1-2 years after acquisition. After all, someone founds a company because they want to be a leader, not a follower. Entrepreneurs have a difficult time when the acquiring company tries telling them how to run the business they have created and grown. When the acquiring company is successful at getting the founder to stick around, it’s typically because they’ve learned to give their founders the latitude to run their start-up as an independent unit within the business. You’ll hear these founders say, “I work for Marc [Benioff]” or “I work for Jeff [Bezos]” rather than “I work for Salesforce” or “I work for Amazon.” And the start-up founders get direct access to the CEOs. Nothing changes for the start-up except who owns the company. It is no surprise that the companies that best understand how founders tick are the ones that have still their founders at the helm: Google, Facebook, Salesforce, Amazon, etc. The companies that have figured out how to keep founders around can leverage their knowledge and expertise over time…and thus pay much higher acquisition prices than those companies that fear that acquired founders will leave as soon as they can, because they hate to get bogged down in bureaucracy and a big corporation. &nbsp; <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul zemanta-article-ul-image" style="margin: 0; padding: 0; overflow: hidden;"> <li class="zemanta-article-ul-li-image zemanta-article-ul-li" style="padding: 0; background: none; list-style: none; display: block; float: left; vertical-align: top; text-align: left; width: 84px; font-size: 11px; margin: 2px 10px 10px 2px;"><a style="display: block; overflow: hidden; text-decoration: none; line-height: 12pt; height: 83px; padding: 5px 2px 0 2px; background-image: none;" href="http://venturebeat.com/2014/07/12/why-salesforce-needed-to-buy-relateiq/" target="_blank">Why Salesforce needed to buy RelateIQ</a></li> </ul>

Facebook, Google, Salesforce, Twitter…all the top players in Silicon Valley want to get their hands on the best talent around. That’s why we’ve seen example after example of “acqui-hires” in the past few years as well as some very large acquisitions where a big driver was the talent behind a start-up (e.g. Nest, Beats).

Over the past few years, we have seen an explosion of start-up activity as the traditional barriers to entry have come down. The ability to raise money no longer determines one’s fate. With lowered costs to build and run websites, acquire and retain users, virtually anybody can pick up coding and start a tech company. At the same time, funding opportunities have expanded for early-stage start-ups. More money is flowing in from a new crop of angels, newly wealthy from a number of tech IPOs. <a href="https://angel.co">AngelList</a> makes it easier for founders to reach angels and there are hundreds of accelerators and incubators to choose from. On top of all this, crowdfunding has now become a viable funding option for many start-ups, particularly those hardware projects that have had a tough time getting funding from the VC circles. But this boom landscape might change soon. While the top of the funnel has grown with all the angel and early-stage activity, the bottom of the funnel is still roughly the same size (about 10-20 billion dollar companies/year). We have all heard about the <a href="http://recode.net/2014/04/01/the-seed-valley-of-death-caught-between-19b-and-series-a-crunch/">Series A crunch</a> in the Valley (there might actually be <a href="https://twitter.com/daniellemorrill/status/489231587385409538">up to 2000 companies in the Series A pipeline</a> right now), and perhaps there’s a <a href="http://www.pehub.com/2014/02/fretting-about-the-series-b-crunch/">Series B crunch</a> now too. Additionally, we need to watch out for two developments on the horizon. First, there will be a consolidation in the accelerator space, with the net effect of reducing the number of available spaces for start-ups. And, we should expect angel activity to drop as new angels discover that returns from their seed investments aren’t so easy to come by. Any entrepreneur trying to navigate the financing landscape should be aware of the over-abundance of angel money compared with subsequent rounds. You need to assess early on if your business is venture-fundable. Is your opportunity at least $100M? If not, revenue from your customers will be your best source of financing. That’s okay: many great companies have been built by bootstrapping. There’s a lot of “easy” early-stage money floating around right now, but don’t get fooled into taking seed money if you don’t have a viable path for later rounds. It will just be leading you down the wrong track.

Over the past few years, we have seen an explosion of start-up activity as the traditional barriers to entry have come down. The ability to raise money no longer determines one’s fate. With lowered costs to build and run websites, acquire and retain users, virtually anybody can pick up coding and start a tech company.

Over the past few years, we have seen an explosion of start-up activity as the traditional barriers to entry have come down. The ability to raise money no longer determines one’s fate. With lowered costs to build and run websites, acquire and retain users, virtually anybody can pick up coding and start a tech company.

Lately, we have seen a growing number of entrepreneurs taking aim to solve the key issues facing our local and global communities. From improving transportation to optimizing neighborhood water usage and encouraging investments in municipal bonds, innovative start-ups are trying to make a difference. Along these lines, we are thrilled to announce our investment in <a href="http://handup.us">HandUp</a>, a platform that lets you donate directly to a person in need simply by sending a text. San Francisco-based web designer Rose Broome and mobile developer Zac Witte created the app to address two key challenges in the current system: <ul> <li>While individuals and households donate $26 billion to human services like shelters and food banks, there is little transparency as to how effective these donations are, and how much of it actually goes to those in-need. We often hear stories about the high overhead associated with many non-profit organizations.</li> <li>We all want to directly and immediately help those in need within our community - for example, when we see a panhandler standing on the street corner. However, it’s hard to know if this is the best way to help that person and if the cash will go to the wrong purchases.</li> </ul> HandUp solves both of these issues. People in-need sign up for a HandUp membership through nonprofit partners already working in the community. Donors can contribute to a specific member through their web profile or SMS. Funds can only be used at a HandUp partner organization (i.e. <a href="http://www.projecthomelessconnect.com">Project Homeless Connect</a>) for food, medical care, gift cards to grocery stores and pharmacies, and other basic needs. HandUp is currently working in San Francisco and plans to expand into other cities by end of the year. The company has been featured on <a href="https://www.youtube.com/watch?v=u5RRbFQtlE8">CNN</a> and <a href="http://www.bloomberg.com/video/tech-gives-handup-to-san-francisco-homeless-BVdeNLvLRJaZHZj0knASAw.html">Bloomberg News</a>, and was named one of <a href="http://www.fastcompany.com/3016094/most-innovative-companies/todays-most-innovative-company-handup-aims-to-leverage-text-messag">Fast Company’s most innovative startups</a>. Rose and Zac are alumni of <a href="http://www.tumml.org/">Tumml</a>, the first urban ventures accelerator. We’re incredibly excited to be working with them on this important mission. Version One is co-investing alongside SV Angel and some prominent angels. The beauty of HandUp’s approach is that it’s simple, personal, and yields virtually instantaneous results. It fits into Version One’s investment thesis that civic startups need to innovate and get traction outside of the current system (Boris earlier <a href="https://www.versionone.vc/untapped-open-data-opportunity-will-unlock-government-data/">blogged about the opportunities to disrupt government earlier</a>). To learn more, visit <a href="http://handup.us">http://handup.us</a> or follow @HandUp on <a href="https://twitter.com/handup">Twitter</a>.

Lately, we have seen a growing number of entrepreneurs taking aim to solve the key issues facing our local and global communities. From improving transportation to optimizing neighborhood water usage and encouraging investments in municipal bonds, innovative start-ups are trying to make a difference.

The big debate among tech circles has always been if it’s possible to build a “Silicon Valley” company outside of the Valley. Is Silicon Valley a physical place or a <a href="http://avc.com/2014/07/silicon-valley-a-place-or-a-state-of-mind/">state of mind</a>? Can upstart ecosystems in New York, Los Angeles, Toronto, or Seattle churn out tomorrow’s billion dollar tech companies? Considering a large proportion of Version One’s portfolio is located outside Silicon Valley, I absolutely believe that major tech companies can emerge outside of the Silicon Valley bubble. But there are some considerations… When it comes to hiring, start-ups located outside of Silicon Valley have an initial advantage, because there’s a lot less competition for engineers. Smaller start-ups in Silicon Valley, particularly those in un-sexy markets, have a tough time drawing in top engineers and designers. A start-up located near a strong university system, like Toronto-Waterloo, has great access to talent without having to compete with 20 other companies and ballooning pay scales. As a result, they can get the talent they need while keeping their payroll expenses relatively low. Starting a company is one thing, but scaling is much tougher outside of Silicon Valley. While smaller ecosystems provide a strong pool of engineers and designers, they’re lacking senior talent. It’s relatively easy for a company to scale to 20-25 employees in Seattle, but when a start-up is ready to find its first VP of Sales or Marketing, it often needs to look beyond the local area. In many cases, a start-up will either need to relocate or open a second office in order to attract the right senior level talent. The other consideration is the type of business. B2C start-ups typically have more flexibility for where they can be located, while enterprise oriented startups need to be where the customers are...and that means Silicon Valley. B2B start-ups need to have at least sales and marketing based in the valley, if not their entire operation. Keep in mind that SaaS and consumerization of IT are changing this dynamic slightly. Today, it's a major advantage to be able to drive down 101 to meet your customers, but just 5-10 years ago, it was mandatory. Of course, all these points are generalizations. The truth is that a great company can be built anywhere, just as building a viable tech start-up is tough no matter where you are. In many cases, success comes down to the founder’s ambition and mindset. Today we’re seeing more founders start a business on their home turf, come to Silicon Valley for an accelerated program like <a href="http://www.ycombinator.com">Y Combinator</a>, then bring the Valley mindset back home. As more Valley-based investors and incubators reach out to assist founders across other ecosystems, the Valley can just be a state of mind. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul zemanta-article-ul-image" style="margin: 0; padding: 0; overflow: hidden;"> <li class="zemanta-article-ul-li-image zemanta-article-ul-li" style="padding: 0; background: none; list-style: none; display: block; float: left; vertical-align: top; text-align: left; width: 84px; font-size: 11px; margin: 2px 10px 10px 2px;"><a style="display: block; overflow: hidden; text-decoration: none; line-height: 12pt; height: 83px; padding: 5px 2px 0 2px; background-image: none;" href="http://techcrunch.com/2012/04/10/startup-genome-compares-top-startup-hubs/" target="_blank" rel="noopener noreferrer">Silicon Valley, London, NYC: Startup Genome Data Reveals How The World's Top Tech Hubs Stack Up</a></li> <li class="zemanta-article-ul-li-image zemanta-article-ul-li" style="padding: 0; background: none; list-style: none; display: block; float: left; vertical-align: top; text-align: left; width: 84px; font-size: 11px; margin: 2px 10px 10px 2px;"><a style="display: block; overflow: hidden; text-decoration: none; line-height: 12pt; height: 83px; padding: 5px 2px 0 2px; background-image: none;" href="http://vator.tv/news/2014-06-13-silicon-valley-needs-to-step-outside-silicon-valley" target="_blank" rel="noopener noreferrer">Silicon Valley needs to step outside Silicon Valley</a></li> </ul>

The big debate among tech circles has always been if it’s possible to build a “Silicon Valley” company outside of the Valley. Is Silicon Valley a physical place or a state of mind? Can upstart ecosystems in New York, Los Angeles, Toronto, or Seattle churn out tomorrow’s billion dollar tech companies? Considering a large proportion of Version One’s portfolio is located outside Silicon Valley, I absolutely believe that major tech companies can emerge outside of the Silicon Valley bubble. But there are some considerations…

Last December, we published our thoughts on the healthcare market in a VentureBeat article: “<a href="http://venturebeat.com/2013/12/11/the-health-tech-booster-shot-bringing-health-care-into-the-21st-century/"><em>The health-tech booster shot: bringing health care into the 21st century</em></a><em>.”</em> That was December 2013, and digital health funding for the year exceeded $19B with 195 venture deals (where over $2M was raised). These numbers were up 39% compared with 2012, and a staggering 119% compared with 2011. If you’re interested in more facts and figures, check out <a href="http://rockhealth.com/resources/rock-reports/">Rock Health’s annual report</a> where statistics are segmented by stage, geography, and more. Now that we’re halfway through 2014, we continue to see venture capital pour into the healthcare sector.  Large raises in recent months include Doximity ($54M), One Medical Group ($40M), and Omada Health ($23M). So what has Version One been up to amidst this whirlwind of VC activity? While we have yet to invest in a second healthcare startup since <a href="https://www.versionone.vc/new-investment-figure1/">Figure 1</a>, we have actively refined our thesis to focus on two key opportunities:  1) patient-to-expert networks, and 2) patient health data. <strong>1)  Patient-to-Expert Networks</strong> When we get sick or feel pain, the first thing we do is Google our symptoms. After all, self-diagnosing with a few keystrokes is faster, easier, and cheaper than heading out to the doctor’s office. Traditionally, Google has returned search results from WebMD, Mayo Clinic, and other websites where the medical information is delivered from the “top-down.” The content is static, non-personalized (i.e. everyone typing in “I have a headache” will get relatively the same results), and can be inconsistent. This traditional online “diagnosis” is being disrupted by a wave of crowdsourced communities.  More and more, we are seeing patients connect with other patients for support and information sharing (i.e. <a href="https://crohnology.com">Crohnology</a> and <a href="http://www.patientslikeme.com">PatientsLikeMe</a>). We’re also seeing platforms that connect physicians in an effort to democratize medical knowledge (i.e. the photo sharing app, <a href="https://figure1.com">Figure 1</a>). But what about a platform that connects patients with doctors? To date, we have seen crowdsourced communities like <a href="https://www.crowdmed.com">CrowdMed</a> and <a href="https://www.healthtap.com/">HealthTap</a> gain great traction with both parties.  Patients are able to receive opinions free-of-charge and doctors are happy to share their knowledge for both altruistic and lead generation purposes.  We have also seen a rise in <a href="http://continuations.com/post/78435730534/healthcare-commerce-before-marketplace">marketplaces</a> from search and booking engines like <a href="http://www.zocdoc.com">ZocDoc</a> and <a href="https://betterdoctor.com">BetterDoctor</a>, which help grow a doctor’s pipeline of patients, to on-demand general practice like <a href="http://www.doctorondemand.com">Doctor On Demand</a> (via video) and <a href="http://firstopinionapp.com/">First Opinion</a> (via text) as well as specialists – namely dermatology (via images) and <a href="http://fermi.vc/post/79390031809/therapy-at-web-scale-and-other-innovation-in-mental">psychology</a>. In addition, there are concierge services like <a href="https://www.medicast.co/">Medicast</a> (an “Uber” for doctors) and destination healthcare marketplaces that focus on dental surgery, plastic surgery, LASIK, and joint replacements. These examples are a few of many that validate how technology can increase affordability of care and provide more accurate diagnoses without a loss in quality.  It will be exciting to see if there will be one company that <a href="https://www.versionone.vc/type-market-operating/">“wins it all”, or whether there will be many winners</a>.  And how will the winner(s) look? We feel that the leader in this category will be capable of scaling triage or diagnosis much faster with machine learning and/or the unlocking of shared medical knowledge from the network that would have to be built into this platform. <strong>2)  Patient Health Data</strong> When it comes to patient data, there are two trends at play. First, with the Quantified Self movement, data is being gathered for anything and everything from caloric intake to number of steps taken, oxygen levels, REM sleep, and much, much more. At the same time, the industry is also starting to move away from the data silos that have historically locked patient data within a hospital or practice. The government and its <a href="http://www.healthit.gov/providers-professionals/meaningful-use-definition-objectives">Meaningful Use</a> initiatives is a key driver behind this. With all this new data, there’s an enormous opportunity for someone to become the “<a href="https://www.mint.com/">Mint</a>.com” of health data. However, the key questions are how do we get data collection to cross over into the mainstream? How do we encourage people to track their health data, whether it’s self-collected or doctor-collected? To date, we have seen two “forcing functions”: <em>a) Hospital/Enterprise-driven:</em> physicians, hospitals, employers, and insurers are encouraging patients to look at their lab results and share their self-collected data on their patient portals. <a href="https://validic.com">Validic</a> and <a href="http://humanapi.co">HumanAPI</a> sit on the backend of these portals, connecting clinical and fitness wearables, apps and in-home devices to an EMR. <em>b) Patient-driven: </em>There is a growing number of web and mobile apps that give patients a secure and convenient way to collect, consolidate, analyze, and store information on medications, allergies and lab results, across and from all different EMRs. Given that we have a better understanding of business models that <a href="https://www.versionone.vc/selling-enterprise-sell-vs-sell-many/">sell directly to the end user</a>, we naturally gravitate towards companies taking the second approach.  So far, we have seen that people with chronic diseases and health concerns are quick to adopt technology: having all of your medical information digitized and accessible through your smartphone or tablet is far more convenient than carrying a physical binder of lab results from one doctor’s office to another.  We look forward to seeing these users champion these apps and ultimately inspire everyone to own their health data. <strong>Final thoughts</strong> As the population ages and healthcare costs continue to grow, there will be a greater emphasis on technology’s role in managing health and wellness. While patient-to-expert networks and patient data are the two areas we are currently focused on, our thesis is ever evolving. Are there any other areas or companies that should be on our radar? What do you think the go-to health app will be?

Last December, we published our thoughts on the healthcare market in a VentureBeat article: “The health-tech booster shot: bringing health care into the 21st century.”

Sometimes, you need to wait a long time for the chance to invest in an outstanding founder. I met Adam Doppelt five years ago. He’s the co-founder of <a href="http://www.urbanspoon.com">Urbanspoon</a>, the popular restaurant review site and app. He also co-founded Cubeduel, a site that lets you rank your co-workers and Strangeberry, a digital media startup that was acquired by <a class="zem_slink" title="NASDAQ: TIVO" href="http://www.google.com/finance?q=NASDAQ:TIVO" rel="googlefinance">TiVo</a> in 2004. Unfortunately for myself and other investors, Adam never took outside money to build his companies. But finally the day has come and I’m happy to announce that Version One – together with our friends at <a class="zem_slink" title="Maveron" href="http://www.maveron.com" rel="homepage">Maveron</a> – is leading the seed round for <a href="http://www.dwellable.com">Dwellable</a>, Adam’s latest gig. Dwellable helps people find private vacation properties to rent, targeting a market defined by <a class="zem_slink" title="NASDAQ: AWAY" href="http://www.google.com/finance?q=NASDAQ:AWAY" rel="googlefinance">HomeAway</a>, <a class="zem_slink" title="VRBO" href="http://www.VRBO.com" rel="homepage">VRBO</a>, and to some extent, <a class="zem_slink" title="Airbnb" href="http://www.airbnb.com/" rel="homepage">AirBnB</a>. What makes Dwellable different is that it provides the best mobile experience. Anybody who has ever tried to find a vacation rental online knows how terrible the system is… terrible looking sites, clumsy navigation, out-of-date or inaccurate calendar information, bad photos, etc. Dwellable’s listing pages are cleanly laid out and intuitive. The calendar information is included right in the listing body (so you know right away if a place is available for your vacation or not). In addition, Dwellable is the only company to provide a <a href="https://itunes.apple.com/ca/app/dwellable-vacation-rentals/id507215257?mt=8">dedicated tablet app</a>. What’s really smart is that Adam hired <a href="http://www.crunchbase.com/person/kirby-winfield">Kirby Winfield</a> as CEO to help build a big company, while Adam can focus on building a great product. It will still take some time for Dwellable to build out its selection of listings, but I am truly excited about the state of the current product, the product that is to come, and the opportunity to work with Adam and Kirby in building an amazing company in the travel space. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://www.geekwire.com/2014/app-week-find-vacation-destination-dwellable/">App of the Week: Find a vacation rental with Dwellable</a> (geekwire.com)</li> <li class="zemanta-article-ul-li"><a href="http://www.geekwire.com/2013/vacation-rental-service-dwellable-takes-homeaway-pace-10m-bookings-2013/">Vacation rental service Dwellable takes on HomeAway, on pace for $10M in bookings in 2013</a> (geekwire.com)</li> </ul>

Sometimes, you need to wait a long time for the chance to invest in an outstanding founder.

We’re all too familiar with the very real gender gap within the tech community. Women are underrepresented as engineers, management, investors, and founders. A commonly cited statistic is that only <a href="http://www.entrepreneur.com/article/232167">7 percent</a> of U.S. venture capital deals go to women founders and CEOs. <a href="http://www.businessinsider.com/sv-vcs-who-invest-in-female-founders-2014-5">Business Insider</a> recently crunched the numbers behind 26 of the top venture capital funds in Silicon Valley and learned that the percentage of female-founded startups in their portfolios ranged from a high of 19% to a low of just 4%. However, there are signs that the situation, at least when it comes to female founders, is improving. At Version One, we’re seeing an increasing number of pitches from female entrepreneurs. Three out of our six investments in 2014 are female-led companies (<a href="http://www.crunchbase.com/person/danielle-morrill">Danielle Morrill</a> at <a href="https://www.versionone.vc/introducing-latest-investment-mattermark-big-data-comes-vc/">Mattermark</a> and two unannounced deals) - which means that 25% of our portfolio companies of now 20 companies have female founders. What’s even more telling are the types of companies involved. In the past, female CEOs were largely limited to those areas where they have a distinct advantage over their male counterparts (i.e. selling primarily to a female audience). But today we’re seeing women building companies across all sectors and areas. Some of this trend might be due to the favorable environment for first-time entrepreneurs. The rise of the cloud and SaaS has eliminated many of the upfront expenditures needed for a tech start-up, creating opportunities for a more diverse range of entrepreneurs, including women, to bring their ideas to market. This is a very positive development, as the broader the entrepreneurial base the better. Gender diversity, as with diversity of any kind, results in a fuller range of ideas, perspectives, and approaches to problems. And an <a href="http://www.businessweek.com/articles/2013-02-20/women-who-run-tech-startups-are-catching-up">interesting study</a> found that women-run private tech companies are more capital-efficient and bring in a 35% higher return on investment (and 12% higher when venture backed). Yet while I’m happy that gender diversity is on the upswing in tech, the truth of the matter is that we’re still talking about female founders as the exception. There are no articles, blogs, conferences, or reports focused on the number of male founders. Hopefully, 2014 will be the year we don’t have to talk anymore about female founders. Then we’ll know that real progress was made. &nbsp; <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://www.businessinsider.com/sv-vcs-who-invest-in-female-founders-2014-5">The Silicon Valley Investors Who Actually Support Women In Tech - And Those Who Don't</a> (businessinsider.com)</li> </ul>

As I’ve <a href="https://gigaom.com/2014/01/11/the-next-big-thing-in-hardware-commoditizing-production-and-distribution-platforms/">written before</a>, I’m bullish on hardware. Yet even I was blown away by how far the hardware renaissance has come over the past year. Version One recently spent a few days at <a href="http://solidcon.com/solid2014">Solid</a>, Tim O’Reilly’s new conference that focuses on the intersection of hardware and software, where I led a panel on scaling hardware companies. The panel brought together some of Version One’s early hardware bets - <a href="https://www.indiegogo.com">Indiegogo</a>, <a href="https://www.tindie.com">Tindie</a>, and <a href="https://upverter.com">Upverter</a>. Whether it’s by providing help with funding, selling, or developing, all three start-ups enable hardware creators to build their products and companies. Essentially, they make hardware less “hard.” With the emergence of SaaS, we got a completely new way for software to be developed and distributed and now hardware is going through a similar disruption. From changes in the supply chain, prototyping, and production, physical things are undergoing a major transformation. Here are three trends that struck me the most at Solid: 1. <strong>Enthusiasm for hardware is at an all-time high</strong>: For decades, software has been the preferred path to success in Silicon Valley, while hardware has taken a back seat. Yet at Solid, I met tons of smart people (including both entrepreneurs and investors) who are all looking to get more engaged in physical products. 2. <strong>Big names are entering the space: </strong>Look back just two years ago and the majority of hardware activity was driven by startups and hackers…aka “The Maker Movement.” But now, the GEs and Samsungs of the world are taking note and looking at hardware in a whole new light. 3. <strong>A new twist on old themes: </strong>Some of the key underlying themes for the hardware movement are still around, but are gaining more traction in new ways. For example, 3D printing is hardly a new theme, but now it’s getting rolled out in industrial applications. Arduino and <a class="zem_slink" title="Raspberry Pi" href="http://www.raspberrypi.org" rel="homepage">Raspberry Pi</a> have been present for years, but their adoption is still accelerating today. And then, there are also robots, drones, the Internet of Things…. We were bullish about the hardware movement prior to Solid, but the conference has validated, even strengthened our commitment to this merging of software and physical products. This will be an exciting year for hardware start-ups and investments. &nbsp; <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://blog.upverter.com/what-is-hardware-20">What is Hardware 2.0</a> (upverter.com)</li> <li class="zemanta-article-ul-li"><a href="http://gigaom.com/2014/01/11/the-next-big-thing-in-hardware-commoditizing-production-and-distribution-platforms/">The next big thing in hardware: Commoditizing production and distribution platforms</a> (gigaom.com)</li> <li class="zemanta-article-ul-li"><a href="http://www.wired.com/2014/05/tindie-says-forget-kickstarter/">Next Big Thing You Missed: Inside Tindie, a Thriving New Marketplace for DIY Gadgets</a> (wired.com)</li> <li class="zemanta-article-ul-li"><a href="https://www.versionone.vc/new-investment-upverter/">New investment: Upverter, a cloud-based platform for the hardware revolution</a> (version1v.wpengine.com)</li> </ul>

There is not doubt that Bitcoin / the blockchain is a revolutionary technology. Once implemented, the blockchain might be able to disrupt many verticals that are built around managing the transfer of ownership by replacing a centralized approach with a decentralized (and hence usually more efficient) approach. While the blockchain can be applied to a <a href="http://ledracapital.com/blog/2014/3/11/bitcoin-series-24-the-mega-master-blockchain-list">range of verticals</a>, from passports to wills, vacation rental keys and movie tickets, most of the start-up activity to date has focused on using Bitcoin for payments. After some initial excitement, anecdotal evidence shows that <a href="http://blog.samaltman.com/bitcoin-price-pressure">Bitcoin transaction levels are declining</a>. This is partly due to the fact that it is not quite clear what problem Bitcoin solves for the North American consumer wanting to buy something online or in a store (credit cards actually work very well in this case), partly due to the strong existing network effects of current payment systems. Ben Thompson had a great post <a href="http://stratechery.com/2014/problem-payments/">(The Problem with Payments)</a> a few days ago outlining why it is so hard to build a payment solution outside of the existing system in the US. In order to succeed in a market with existing strong network effects (such as the payment structure in North America), you need to focus on an underserved niche where your product provides something that hasn’t been possible before. Then if you get enough traction in the niche, you might be able to expand into the mainstream market over time. <a title="PayPal" href="http://www.paypal.com" rel="homepage">PayPal</a> is a perfect example. The company managed to succeed because it helped <a title="NASDAQ: EBAY" href="http://www.google.com/finance?q=NASDAQ:EBAY" rel="googlefinance">eBay</a> buyers and sellers complete their transactions in a more efficient and trustworthy way during a time when P2P commerce was exploding. PayPal later went on to actually replace many credit card payments as users became accustomed to the service and had money in their PayPal wallets that they were ready to spend. So instead of trying to replace credit cards and other established payment methods, Bitcoin start-ups should think more about where Bitcoin has a competitive advantage. Traditionally, this has been in cash-based businesses (gambling, “getting money out of China”) where Bitcoin has seen some impressive initial traction. However, more interesting areas are those where current payment fees are very high (e.g. remittances), consumers are underserved (the “unbanked”), or existing payment infrastructure is weak (e.g. in some developing countries). And the real opportunity might even lie in completely new use cases. The block chain is a powerful technology but getting traction beyond initial excitement from early adopters might be challenging given the strong network effects of the existing structures that the Blockchain tries to replace. We all see the end goal but getting there is a tricky question. I am rooting for the entrepreneurs that will figure out how to put the blockchain into real action. <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://www.businessinsider.com/10-most-promising-blockchain-companies-2014-5">The 10 Most Promising Startups Building Stuff With Blockchain Technology</a> (businessinsider.com)</li> <li class="zemanta-article-ul-li"><a href="http://blogs.hbr.org/2014/04/bitcoins-promise-goes-far-beyond-payments/">Bitcoin's Promise Goes Far Beyond Payments</a> (blogs.hbr.org)</li> </ul>

I’m fascinated by the <a class="zem_slink" title="Open data" href="http://en.wikipedia.org/wiki/Open_data" rel="wikipedia">Open Data</a> movement, particularly when it comes to government where the concept of open data hinges on the belief that data is a public asset – just like highways and parks – and should be made available to all. We’ve already seen compelling examples of people hacking into this available data for the public good. For example, at the recent <a href="http://eaves.ca/2014/03/02/great-hacks-from-the-open-data-in-vancouver/">Open Data Day</a> here in Vancouver, projects ranged from a visualization of Vancouver’s budget to an analysis of test scores at local schools. One project even took Vancouver’s open elevation data to recreate the city in <a class="zem_slink" title="Minecraft" href="http://www.minecraft.net" rel="homepage">MineCraft</a>. Making data available, discoverable, and usable will help improve the effectiveness of governments, strengthen our democracy, as well as create opportunities to improve everyone’s quality of life. Open data encourages innovation from both the inside and outside: <ul> <li><i><span style="text-decoration: underline;">Innovation from the outside</span></i><i>: </i>Putting information in the hands of the public makes it possible for innovative citizens and companies to create groundbreaking solutions and improvements to some of the biggest challenges facing the community. For example, on a small scale, one website <a href="http://bentframe.org/bikes">monitors and analyzes Vancouver’s bike accidents</a>, revealing the trend that bike accidents decline along roads with bike lanes and increase where bike lanes end.</li> </ul> <ul> <li><i><span style="text-decoration: underline;">Innovation from the inside</span></i><i>: </i>When government data is accessible and easily usable, other governments and government agencies are able to compare experiences and share best practices. Although government data is public today, most state and city governments do not readily share information. The Open Data movement can unlock this data, so local governments don’t necessarily have to recreate the wheel. They can look at examples and models of what has already worked.</li> </ul> <strong>Where are the start-ups to take on this opportunity?</strong> Making data publicly available is just a first step. In order for the Open Data movement to truly bring about change in government, that data needs to be searchable, discoverable, and usable. But so far companies have mainly focused on helping governments transform data (usually financial data) into actionable information. For example, there’s <a title="http://www.opengov.com/" href="http://www.opengov.com/">OpenGov</a>, <a title="https://opendatasoft.com" href="https://opendatasoft.com/">Open Data Soft</a>, and <a title="http://www.junar.com/" href="http://www.junar.com/">Junar</a>. In addition to these players, we need applications and websites that put the data into something useful for both governments and citizens – whether by visualization, integration, or notification. We need a company that can take all the existing public datasets and make them accessible and comparable through a single platform… similar to what <a href="https://clever.com/">Clever</a> does in education. It’s an incredible opportunity to make a significant difference: the question is who will lead the way? <h6 class="zemanta-related-title" style="font-size: 1em;">Related articles</h6> <ul class="zemanta-article-ul"> <li class="zemanta-article-ul-li"><a href="http://radar.oreilly.com/2012/08/palo-alto-looks-to-use-open-data-to-embrace-city-as-a-platform.html">Palo Alto looks to use open data to embrace 'city as a platform'</a> (radar.oreilly.com)</li> <li class="zemanta-article-ul-li"><a href="http://blogs.vancouversun.com/2013/02/20/open-data-day-at-vancouver-city-hall-this-saturday/">Open Data Day at Vancouver City Hall this Saturday</a> (blogs.vancouversun.com)</li> </ul>