Nov 14

InSITE Breakfast Series: Andy Weissman of USV

Andy Weissman is clearly smart. He’s a partner at Union Square Ventures, the legendary New York venture firm which just netted at least $720 million on an early investment in Twitter. But a lot of people in tech are smart. Over a casual breakfast in a Flatiron cafe in early November, it becomes apparent that Weissman isn’t just smart, but thoughtful, self-critical, and resistant to fads. And that makes him different from many of Silicon Alley’s self-professed smart guys.

Some of the takeaways from a discussion over eggs and oatmeal:

• Prefer permission-less innovation. USV invests in businesses that don’t need approval from incumbents or regulators to innovate. That’s why they invested in SoundCloud, which has to keep its record-label partners happy. It’s not that USV won’t touch gated or heavily regulated industries like finance or health care — it’s just picky about finding the right business models. Toronto’s Figure1, for example, is very interesting. It’s like Instagram for doctors, allowing physicians to seek peer advice on weird moles, X-rays, and more. And because Figure1 has tools for scrubbing identifying features like faces and tattoos from photos, there are no privacy issues, and thus no objections from the FDA (so far).

• Invest in your successors. Finance is rapidly changing. Tools like Kickstarter connect money-seekers and money-havers without the need for a bank or a broker. AngelList syndicates are a new alternative to traditional venture capital. USV has invested in several alternative financial companies that are orthogonal to its core business, including Kickstarter, Lending Club, and CircleUp.

• Nothing lasts forever. We are now “six years into a world of ever-increasing asset prices,” says Weissman. Business cycles are unpredictable, but nothing goes up forever. A lot of us have already forgotten the trauma of 2008-2009. Similarly, almost everyone who can remember a world of 7% inflation — which last happened in the early ’80s — has left the workforce. This short- sightedness is dangerous, and could have a real impact on business trends. Weissman cites AngelList syndicates, which seem to work very well in a world with 0% inflation, very low borrowing costs, and increasing asset prices. What happens if one of those ceases to be true?

• A company Andy admires? RapGenius. He knew them when they were a wee company, pre-YCombinator and has enormous amounts of respect for the founders and their mission. It is one that few were able to see from the get-go.

In summary, we cannot thank Andy enough for taking the time to chat with InSITE fellows and he continues to be a positive force and role model for the NYC entrepreneurial ecosystem. With models like that, we know that NYC is in good hands.

This post was written by Barrett Sheridan, Columbia MBA 2014

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