We have also occasionally been ask to hold closed-door “Growth Days” for some of the top VC’s in Silicon Valley, like Andressen Horowitz and KPCB, where they invite their portfolio companies to get a Growth overview and spend one on one time with us working through specific ideas they have.

We also have given keynotes at the Growth Hacker Conference, but we have never let those talks be broadcast.  We have given one interview on Growth Hacker TV.

When we open our conference NFX, we also typically share some of the ideas and frameworks we have for thinking about growth.  This Techcrunch article summarizes a bit of this.

Part of the information and thinking we share with these companies we put in this presentation that Loic Lemur asked us to give at LeWeb Paris 2013.  Here’s the video.

I’ve been fascinated with the nature of money, since 1993, when I read a history book which mentioned that prior to the US Civil War, there were thousands of private institutions that were issuing paper money notes… and people used them effectively.  I realized then that money is simply a collective belief that “something” can be exchanged for value in the future.  Confidence.  Belief.  Self-fulfilling group trance.

In 2004, thinking that creating a global digital currency was a good idea, I bought the URL Blue.com, which I have to this day.  The logic was that US money is green, so maybe the global currency should be named after the dominant color of our planet.

In 2005 I joined the board of SecondLife, a company with an internal economy in virtual Linden Dollars and a free floating exchange rate between Linden Dollars and US dollars. The magnitude of that internal economy eventually reached the equivalent of US$750 million.  Very real virtual dollars.

In 2009, Philip Rosedale — the CEO of SecondLife and a true visionary — Bill Tai, Stan Chudnovsky, Mitch Kapor and I spend several brainstorming sessions trying to come up with a plan to create a world digital currency, either by spinning out Linden Dollars or by creating something new, and calling it Blue.  Our plan came down to a BitTorrent-like system for an encrypted currency, open sourced software, currency units to be programmable, a floating exchange rate with all other currencies, and it even included a disappearing founder.  In other words, it was very close to what BitCoin actually pulled off while we were just talking about it.  There were two main differences: we hadn’t come up with mining as a mechanism to compensate the operators of the distributed network, and we never really believed we could keep our identities secret and thus “disappear” — something we knew was critical to building confidence in the currency.  So we never did anything.

In 2009, that same year, at David Hornik’s tech gathering The Lobby in Hawaii, Philip Rosedale and I led a group discussion called “One Currency to Rule Them All” where we discussed the potential for the creation of a digital currency that would live outside a virtual world like SecondLife in our real world.

So in 2011, when I first heard about BitCoin late, I immediately recognized it for what it is.  Since then, Stan and I have been playing with it and following it.  This lead to me running the BitCoin discussion at The Lobby in 2013, and the BitCoin panel at LeWeb in December 2013.   Here’s the video.  It is probably best viewed as a BitCoin 101 for your friends who want to understand the fascination with Digital Currencies and BitCoin.   Obviously, the next forty years will be interesting for money in general, and BitCoin is clearly the first shot, not the last.

As I put it to my Dad over the holidays: When humans had metal technology, we made money out of metal.  When we had printing technology, we made money out of paper.  Now we have software technology, we’re going to make money out of it, and BitCoin is the first potentially viable instance of that natural evolution.

In May 2013, we held our first NFX conference.  It brought together 120 of the top CEO, VP Product and CTO’s of the top marketplaces and networks.  It was held in the Network Effects Club House in Palo Alto, CA.   People even came from Boston, LA, NYC, Europe and Asia for the half-day event.  It was invitation-only, and completely off the record.

It took us only four weeks to pull together from start to finish, because we had help from friends Josh Elman at Greylock,  Mike Maples and Ann Miura-Ko at Floodgate., Todd Lutwak at AH, Saar Gur at CRV, Jeremy Levine, Ethan Kurzweil and Sunil Ragaraj at Bessemer Venture Partners,  Alfred Lin, at Sequoia,  Michiel Kotting at Accel, and of course  Sunil Rajaraman the CEO of Scripted.

We had 14 speakers on stage with short presentations including Todd Lutwak from eBay and Andressen Horowitz, who perhaps knows more than anyone on the planet about online marketplaces. Manish Chandra from Poshmark — it was the second time Manish had spoken in public about his now-often-cloned fashion marketplace.  Gary Swart of ODesk.  Seth Sternberg of Meebo now Google.  Aaron Hirschhorn of DogVacay.  Chris Hulls of LIfe360.  Of course the two Ooga guys spoke.  I opened and spoke about Marketplaces and Networks and Stan Chudnovsky spoke about Growth.  Josh Elman spoke and Sunil Rajaraman from Scripted spoke.

It was a torrent of product-centric, tactical lessons about growth for marketplaces and networks.

In the audience, in between the speakers, we had people who could easily have been on stage speaking… telling jokes.  People like DJ Patil from Greylock and RelateIQ, Rob Goldman from Facebook, Oren Jacob from ToyTalk, Ron Hirson from BOKU and Docusign, David Hornik from August Capital (who introduced Stan and me in 2000), etc.  Not telling jokes were people like our friends Ev Williams from Blogger and Twitter and Medium, Drew Houston from Dropbox, Nirav Tolia from NextDoor.

We had wine when people arrived at the door at 1 pm, a long intermission to connect and talk, and food and wine afterwards into the evening.  Needless to say we had  a blast.  We thank everyone for coming, and we hope to do it again sometime!

Over the last 13 years, Stan and I have found ourselves drawn to focus on businesses that have network effects.  It started intuitively, then became explicit in 2003. Since then, we’ve started or advised over 25 companies whose core business was either 1) building a network of people who wanted to communicate, or 2) a network of buyers and sellers who wanted to transact.  Some of these companies have both.

There are others who have admitted a similar affection for these businesses, including David Sze and Reid Hoffman of Greylock, Fred Wilson of Union Square, Bill Gurley and Matt Cohler of Benchmark, Jeremy Levine of Bessemer.  And no wonder.  If you look at the biggest tech returns of the last 15 years, many of them were either marketplaces or networks, and if you consider companies that became worth more than $10B, nearly all of them fall in this category.  We’ve done a detailed analysis of this ourselves, and recently, James Slavet, also of Greylock, published similar findings.

So why isn’t everyone focused on these?  Increasingly, they are, of course.  But the fact remains, they’re f**king hard to pull off.  There’s a lot of art/luck in them, and that’s hard to predict and thus hard to invest in.  Over the years, we’ve watched/stumbled into/invented many tactics to manufacture a two sided network, to A/B test your way to virility, to foster liquidity and tipping points, to buy your network inexpensively, to iterate until you find the right subject matter or value proposition, build the right retention and feedback loops, etc.  These lessons can be applied today to increase the chance of successfully creating a functioning marketplace or network, or both.

The first step is even realizing you are attempting to develop a business that fits in this cohort of companies, and that there are now lessons to learn from prior successes.

I met Michael Mandel at 500 Startups in February.  He’s a former commercial real estate broker in Manhattan.  Been iterating away with his co-founder CTO Vadim Belobrovka and his  Chief Product Officer Jeff Domke for a couple years, refining a information marketplace to serve that market.  Compstak.

I love that market.  “When it comes to wealth creation, there’s real estate, and then there’s everything else.”  And the Commercial real estate side is even more underserved by the tech community that Residential real estate.  I think because fewer technical people have direct experience in commercial.

They have line of sight to liquidity in their marketplace, a great team, and a viable path and the vision to being ginormous.  It’s our only the second time in 10 years we’ve gotten involved in a company in NYC, and the distance certainly presents some challenges, which is why we don’t make it a habit. But these guys are the exception.

The Ooga portfolio grew this week.  Scripted, a mediated marketplace for writing and photos, helping companies produce and publish digital content to support their content marketing efforts.

Sunil Rajaraman and Ryan Buckley are the Co-Founders.  We were introduced to them by two different friends in the same week, and when we met them, we fell for them.  Great guys, working on a shoestring budget, real clients, a growing market.   I see lots of fun ahead.

During the conversation, I connected for him the idea of initiative in the work place, to a positive comment my mom made about my wife, which is that my wife always knows how to fold into whatever is going on in the house and help out.  In other words, when we go to visit my parents, my wife takes initiative in the right way.  And for my mom, who is in charge of her house, she really appreciates my wife’s ability to do that.

It’s similar in the work environment.  What managers most appreciate about their teammates is for them to come in, see what’s going on, think of something that would help the process in the existing direction, and take the initiative to do it at the right level of detail.  The key here is taking the initiative without being asked.

The second key is “in existing direction.”  Many people come into an organization and immediately suggest new initiatives they think the organization should be going in.  This is rarely helpful, and usually a distraction.  You might be right, but the organization has a life and momentum, and typically has to play through what it’s doing to get to the next phase.   The third key is doing it at the right level, not too detailed, and not too superficially.

Two examples of employee initiative that made a difference for me from just last week.  1) Without being asked, an engineer wrote up a list of questions he wanted answered during a product meeting that was coming up so he could know how to configure part of the back end.  I hadn’t asked him to do this, and he handed me the list before the meeting.  We ended up structuring our discussion around his list, rather than the product manager’s list, and it produced a breakthrough in thinking for the team.

2) In another case, we were having a discussion about some operating metrics and why they were moving down.  We didn’t come to any conclusion, but the next day, without being asked, one of the engineers sent us an analysis of the data to explore various scenarios.  It was the right level of analysis, not to detailed and to too superficial, and it perfectly addressed the question at hand, letting us plan our next step better.

Sure I could have asked each of these people for these things, detailing how I wanted each report or list done.  I could have given them a deadline to get them done, checking in with them to check on progress, etc.  But in any non-government job, and in a start-up in particular, there’s not enough time in the day to manage and schedule everything.  Each member of the team has to take initiative, and they have to do it in the right direction and in the right way.   If you can get a small team where everyone does that, you’re gold.  My advice is to learn how to be one of those people.

I’ve often seen the reverse, that many of the best consumer products were fast, good and cheap to create.  Those products were created by people who were very talented or very focused, and certainly none of them were dragging around this self limiting belief that you have to pick only two.

But also hold that idea loosely, and be able to let it go in a few minutes.  That allows ideas to flow and the best option to be adopted by the team.

For this to work, there must be trust among the members of your team, each must realize their ideas are not always the best, and each person must make the mental switch from “I want to be right” to “I want us to be right.”