LP Login

Think Big. Move Fast.

In March 2013 we led the Series A of Whisper, an extraordinarily engaging smartphone app. The app allows users to anonymously share secrets, their text over arresting images. Other users can then read, heart and reply. Here is one on weddings:

 

Here is one on being in the closet:

And here is one about college:

As you can see, anonymity is key to authenticity for these sentiments. This isn’t the sort of stuff you’d put on Facebook or Twitter. And at the same time, it is incredibly compelling stuff to read. Users open the app 8-10 times a day and spend half an hour a day in the app. 45% of users create Whispers, an extraordinary ratio given that the rule of thumb for most user generated content sites is that only 1% create content. Unsurprisingly, this very high engagement leads to very high user retention and user growth.

When we invested in March the company was seeing 500M pageviews/month. Today, six months later, the company is seeing 2.5B pageviews/mth, and is announcing that it is raising a new $21M series B round.

I’m excited to have Roelof Botha from Sequoia join me on the Whisper board. I’ve known Roelof since we were in business school together and was a groomsman in his wedding ten years ago. And when I told him about Whisper a month or so ago, he “got it” right away, and he and his colleagues moved quickly and decisively to lead the new round.

We are doing more than our pro rata on this round and will continue to be the largest investor; we are very excited for the prospects of Whisper. Michael, Brad and the rest of the team are building a truly new social media company at web scale!

Continue Reading ...


In our last post we noted that at least half of all Bitcoin transactions in June 2013 were for online gambling on the gambling site Satoshi Dice.  We were interested to see what has happened since Satoshi Dice was acquired in early July.

Thanks to some useful blockchain data analysis that The Genesis Block shared with us, we now have an answer.  The Bitcoin blockchain is essentially a public ledger of all prior Bitcoin transactions. So The Genesis Block looked at transaction volume for 27 Bitcoin addresses known to be used by Satoshi Dice. They found that since the acquisition, dollar-denominated wager volume on Satoshi Dice has held steady.

In the first chart, we see that dollar-denominated wagers in August 2013 are flat to slightly up since June (dark blue line).

wager volume

At the same time, the number of daily wagers has fallen since April 2013 (light blue line in next chart).

# bets

As can be seen in the next chart, the reason for the slight increase in dollar-denominated volume of wagers is an increase in average wager size denominated in dollars (dark blue line).

avg wager

It is likely that the drop in the number of daily wagers on Satoshi Dice (2nd chart) is due to the growth of new entrants in the Bitcoin online gambling space.  For example, according to an article over at Coindesk , new startups PrimeDice is reportedly processing over a million bets each day and Just-Dice has processed 90 million bets. And they just two of many new Bitcoin gambling startups.

This means that overall, online gambling with Bitcoin has continued to grow since June in dollar-denominated terms.

 

 

Continue Reading ...


Recently we noted that illegal drug purchases are around half a percent of Bitcoin transactions, which is far from the existential threat that it has been made out to be. Instead, the most common usecase for Bitcoin is online gambling.

Satoshi Dice is the most popular Bitcoin denominated online gambling site. Today it checks IP addresses to screen out residents of the US and other jurisdiction where online gambling is illegal, but that has not always been the case. The interesting thing about Satoshi Dice is that it was publicly traded on MPEX, a Bitcoin denominated stock exchange, until it was bought last month for $11M. As such, until being acquired Satoshi Dice reported its financials.

The way that Satoshi Dice works is that there are a number of publicly-known static addresses to which a bettor sends her Bitcoins as a bet.  Each address has known odds and a predetermined winning payout.  For a win, Satoshi Dice sends back the bet amount multiplied by the payout multiplier.  For a loss, Satoshi Dice sends back 0.05% of the original wager as confirmation that the system worked properly.  This means that each Satoshi Dice bet generates 2 transactions on the Bitcoin network.  In June 2013, there were 12.4k daily bets, implying 24.8k transactions on the Bitcoin network.  According to Blockchain.info, there were about 48.4k Bitcoin transactions per day in June. So in June 2013, Satoshi Dice represented 51% of network volume in terms of number of transactions.

That being said, most Satoshi Dice transactions are small. Also according to their financial reports, the average daily volume of BTC bets on Satoshi Dice in June was 10.5k (including initial bet and payout). Again, according to Blockchain.info, the average daily BTC transaction volume in June was 213.8k. So in June 2103, Satoshi Dice represented about 5% of transaction volume denominated in Bitcoin.

There are other online gambling sites, notably Just-Dice, which was launched on June 20th. It has rapidly grown to an average daily volume of 7.8k BTC per day so far in August. Since Satoshi Dice no longer reports transaction volume since being bought, it is hard to tell if Just-Dice is additive to the Satoshi Dice volume or if it has taken share, but in the most aggressive case, it would represent another 4% of all Bitcoin transaction volume. In the last two months, Just Dice had raised over $5M USD worth of investment, suggesting that there are many who believe that online gambling with Bitcoin will continue to have a bright future.

In any event, online gambling represents at least 10x the transaction volume of Silk Road and the other Bitcoin drug marketplaces.

Continue Reading ...


With the backdrop of both Congress and the NY Department of Financial Services launching investigations into Bitcoin, regulation is top of mind for everyone in the Bitcoin ecosystem.

So far the only definitive statement about how Bitcoin will be regulated …

Continue Reading ...


Although many have shown a lot of angst about Bitcoin use on Silk Road, buying drugs is far from a major use of Bitcoin.

As the recent Forbes Article about Dread Pirate Roberts, the man behind Silk Road, …

Continue Reading ...


Growth without retention leads to the dreaded sharksfin curve. If you’re not retaining your users, then it doesn’t matter how quickly you add new users to your product. You have a leaky bucket.  Sooner or later, when you …

Continue Reading ...


PernixData announced the general availability of the Flash Virtualization Platform (FVP) today. Congratulation to Poojan Kumar, Satyam Vaghani and the entire PernixData team for an amazing execution! It’s hard to believe how far the company has come along in …

Continue Reading ...


It’s hard to believe that it has been 4 ½ years since the founding of Bloomreach.  At that time I was working at Bain Capital Ventures, having just moved from Boston to spearhead the launch of their West Coast …

Continue Reading ...


We met Evan and Bobby, the founders of Snapchat, in March 2012. We were mesmerized. They had a vision for how disappearing photo messages would make people more authentic, more silly, more real in their communications with their friends. They …

Continue Reading ...


Over the years, I’ve had the great honor of supporting some truly inspiring entrepreneurs as they have strived to not only disrupt markets, but also improve the world we live in.  Today, I am thrilled to see that one of …

Continue Reading ...