Sep
25
14



Building brands, talent and world class companies here at Redpoint

I’m excited to welcome two new hires to Redpoint to boost our overall bench strength and serve as strategic resources to our portfolio companies. Hadley Wilkins will be leading Marketing for us and Amy Knapp will head up Talent. Between them, Amy and Hadley have a combined thirty-plus years of experience in the Valley leading marketing and talent initiatives for a range of emerging and established enterprise and consumer technology companies.

These are important additions to Redpoint. Throughout its fifteen-year history, our firm has observed firsthand how vital marketing and talent are to separating the good from the great. These strategic elements are also two of the hardest to get right. That is why in addition to helping on firm-wide initiatives, Amy and Hadley will also be resources to our founders and their startups at key moments in time. They will be able to offer everything from strategic counsel to introductions to their marketing, media and talent networks.

Both women bring with them a wealth of exceptional experience, which is why we are committing now to expanding our firm’s capabilities. Hadley, most recently, ran the technology practice for global PR firm Hill + Knowlton, a leadership role that built on the many years she spent defining brands and developing strategic messaging campaigns. Amy brings with her 17 years of talent acquisition and human resource expertise. For the last seven years, she spearheaded efforts to define, grow and execute talent programs at Google, Ning, and, most recently, Chegg.

It is no easy feat to find the right people to grow your team. At Redpoint, we believe we have. Welcome Hadley and Amy to the Redpoint team!


Sep
17
14



There’s a Dragon at the Door

All eyes are focused this week on Alibaba. The Chinese-based ecommerce powerhouse will make its debut as the largest technology initial public offering in history. By the time of the closing bell on its first day of trading, Alibaba could be the fifth most valuable Internet company in the world, sandwiched tightly between fellow behemoths Facebook and Amazon.

This is big news in and of itself. But Alibaba’s IPO is just one of many factors that, taken together, should be viewed as a wake-up call for U.S. tech companies. China is on the move, no longer satisfied by winning in its own markets. The technology landscape from Shanghai to Beijing has shifted and now boasts enough money, talent and entrepreneurial zeal to rival the U.S. establishment in marketplaces around the globe. To think otherwise is naïve, shortsighted –and potentially very costly.

In a recent letter to investors, Alibaba’s charismatic Executive Chairman, Jack Ma, was unequivocal. He wrote: “In the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how much progress we bring to the world.”

Looking around at what is already unfolding, I believe him.

As of a week ago, about a third of the top 20 Internet companies in the world with the highest market capitalizations are Chinese based. This includes Tencent, Baidu, Qihoo360 and others that are lesser known in the West. These companies are aggressive and nimble. They are also innovative, moving away from copying what they see succeed in the U.S. to blazing their own business models that we are now looking to imitate. Tencent, for example, is envied as the global leader successfully selling virtual goods at scale. The company has also racked up huge market share by using free games to lure customers to its apps stores and other services—a strategy Microsoft appears to be adopting with its purchase this week of Mojang AB, the Swedish maker of the wildly popular Minecraft series.

This growing confidence is thanks, in part, to a flourishing community of well-educated entrepreneurs. Many of these folks are as good as any found in the U.S. They are willing to take risk, are relentless in their drive to win, and are immensely hard-working. Even China’s government has had to acknowledge their burgeoning power and contributions to the overall economy. The Ministry of Commerce acknowledged in 2013 that entrepreneurial ventures now account for 75 percent of new jobs annually. No surprise, then, that China is taking steps to make the starting of companies easier and less costly.

Beyond the revving of this Silicon Valley-style creative engine, Chinese Internet companies are moving in ways that make clear their aspirations to be dominant global brands. They are investing their considerable cash more aggressively than ever, particularly in the U.S. In just the last two years, Alibaba and Tencent alone have put big money into 13 U.S.-based early stage companies. Most of the startups have been in the mobile or e-commerce spaces, including Snapchat, Lyft, Tango, Whisper and Kabam. This is in addition to countless other smaller infusions of capital in other enterprises. The Chinese tech giants are also establishing serious outposts in the U.S. and in other markets, like Latin America. It is only a matter of time before we will see important, sizable, brand name acquisitions of U.S.-based tech companies.

The bottom line is that U.S. tech companies should worry as much about what the technology giants in China are doing as they do about Google, Twitter, Amazon or Facebook. WhatsApp, acquired by Facebook earlier this year, is the world’s leading messaging application with 600 million monthly active users. But Tencent’s WeChat is a competing product that draws on some of the lessons learned by WhatsApp, Instagram and others. It offers a unified messaging app that embodies a combination of Facebook, Instagram, Twitter, Viber and Paypal in a single experience. In a very short time, WeChat already boasts almost 450 million monthly active users worldwide. And it has only begun to tap into markets outside of China.

The writing is on the wall. Alibaba’s IPO, while an important milestone, represents much more than just a big day on Wall Street. It is a coming out party for one of the most valuable Internet companies in the world—and a slew of other ambitious China-based players. They may be thousands of miles and multiple times zones away. But make no mistake: They are already at our doorstep.

 

Published on LinkedIn 9/17/14


Sep
5
14



Beepi expands to Los Angeles and Launches “Beepi Prime”

Beepi, the leading peer-to-peer marketplace to buy and sell pre-owned cars online, today announced it is expanding services beyond the Bay Area for sellers, and outside of California for buyers.

While Los Angeles residents have been able to purchase cars through Beepi, they will now be able to seamlessly sell their vehicles online as well. In response to high consumer demand, L.A. sellers will be able to easily schedule an appointment to have their cars inspected and Beepi-certified right in their driveways or at their places of business, get professional car photos taken and receive a guaranteed price and sale in 30-days.

In addition to this expansion, the company is launching Beepi Prime, a premium delivery service, in 140 cities in Arizona, Nevada and Oregon. There, buyers can now take advantage of the same customized service Californians have enjoyed since Beepi’s launch in April. Beepi Prime gives buyers an unparalleled personalized shipping experience in which they are updated about the status of their car every step of the way, culminating in the delivery of a fully detailed car in their driveway in five days or less and a personal car tour from a professional Beepi inspector upon arrival. Should any buyers choose to return a car, Beepi provides a 10-day money-back guarantee. In addition to this total refund, all cars are subject to a three-month, 3,000-mile warranty.

Beepi has already made significant strides in reshaping the antiquated process of buying and selling cars by offering direct sales to customers 100% online. The company is currently receiving 1,000 requests a week to sell the cars of residents in the San Francisco Bay Area alone.  This expansion comes hot on the heels of Beepi’s acceptance of bitcoin as a method of payment. Through Beepi’s partnership with BitPay, a buyer can now purchase a Beepi car using bitcoin while the seller still receives cash. The company also offers prospective buyers immediate pre-approval for loans at checkout. With these initiatives, buyers can pay for any car in the Beepi marketplace with a traditional car loan, a bank transfer, cashier’s check, up to six different credit cards at once or bitcoin.

For more information on cities participating in Beepi Prime, please go to www.beepi.com/beepiprime


Aug
7
14



The Next Evolution in Search

Today we are excited to announce our investment in Vurb.

Vurb’s enormous potential rests on a breakthrough technology that will make searching the Internet smarter, more consistent, and even seamless across desktop and mobile devices. Imagine being able to plan an evening out without having to jump in and out of apps or going back and forth to the search bar to make a restaurant reservation, find movie times, read reviews, and pick a place to meet for drinks afterward—all using the best of breed services or apps, but in one continuous search. You can even start your search on your desktop and finish it on your smartphone without losing anything.  After you’re done, you can share your collection with your friends or just save interesting places you found along the way for another time.

Vurb breaks down the independent search silos offered by today’s search engines. It knows where you have been, helps take you where you want to go, and integrates the services you want to see…complete with social interactions. It is a completely logical experience that matches how our brains work, not how the structure of browsers or apps work. No more typing a query into a blank search box, clicking on a result, and then going back and forth until an acceptable solution is located.

Surfing for information on smart phones is even worse.  Either you’re using a web browser to access many sites that are not optimized for mobile experiences or, more than likely, you’re using one of the popular single purpose apps downloaded on your phone.  Apps are great when you are trying to do a singular function for which the app was originally designed, but they are terrible at traversing functions and for wandering and discovering.  Surfing apps doesn’t work well at all today.

We believe that the transition from a desktop/laptop web world to a mobile/social world necessitates a different, better approach, particularly for core functions like search and navigation. Vurb, with its small, dedicated and talented team, offers that better approach.


Jul
14
14



The Power of Anonymity

All important social platforms start with a context that sets the stage for how people will express themselves and connect on those platforms. Facebook was private, tightly-connected relationships; Twitter was real-time, public discussion; Instagram was visual expression. This initial context is critical in defining the social interactions and reasons for engaging on a platform.

Secret, by orienting around anonymity, taps into raw and honest human emotion and allows people to communicate in ways they can’t on any other network. While I was at Twitter, I saw the incredible role pseudonymity and anonymity played in allowing people to broadcast and express themselves freely. From whistleblowers, to citizen journalists trying to get information out from under oppressive regimes, to the deeply personal, to the funniest parody accounts, anonymity allows expression that wouldn’t have otherwise happened.

But where Twitter is about putting a range of ideas out there for public consumption, Secret is much more about having an unfettered conversation with people closely connected to you, where individuals are free to express themselves without fear of embarrassment or judgment. We think it’s a fundamental and important part of social connectedness and we’re incredibly excited to back David Byttow, Chrys Bader, and the rest of the Secret team.

More importantly, at Redpoint we invest in great teams and we have been blown away by the Secret team’s ability to recruit, build and execute. They are one of the strongest teams we’ve seen and we think it gives them a huge competitive advantage to build and adapt a product to the emerging needs of their community. This is personally one of my first deals since I joined Redpoint and I’m really excited about working closely with the team on realizing the promise ahead of them. They understand and appreciate the power and responsibility that creating an anonymous network brings and we can’t wait to see what they build for their community.


Jul
8
14



Beepi starts Accepting BitCoin today!

 

Beepi has partnered with BitPay to insure buyers are provided with all the payment methods worthy of a 21st century marketplace.

Before Beepi, buying a high quality car involved a nasty trip to one or more car dealers.  Today people can buy a certified, pre-owned car, pay with BitCoin 100% online and have it delivered 48 hours later with a 10 day money back guarantee!

In addition to this news announced today, Beepi launches a site redesign that now features:

1- Redesigned listing page with advanced search, grid view and list view

2- Redesigned car page, with automatic zoom, pictures carrousel, safety ratings provided by the institute for highway safety, fuel economy provided by the EPA, standard and optional features provided by Edmunds

3- Redesigned Checkout with BitCoin integration, financing instant pre-approval connecting with Experian, and the Beepi Garage (which means you can now reserve a vehicle for 48 hours by paying a $300 deposit while organizing your finances)

Beepi continues to lead the way toward the next generation used car marketplace.

 


Jun
16
14



Redpoint Backs BitGo

At Redpoint, we are strong believers in the potential of bitcoin to change the way transactions are conducted, both online and offline.  But this promising system of digital currency is still in its infancy, a reality that has been underscored by a spate of security troubles. In numerous cases, bitcoins have been lost or stolen when wallets have been compromised, when exchanges have been improperly secured, or even when individuals have been careless with their keys.  Bitcoin has relied heavily on people and institutions protecting their own keys, and this has been a point of failure for the currency and technology as a whole.

In other payment and Internet commerce systems, third party security providers have helped resolve these issues.  This includes Verisign for websites as well as the card issuers for credit cards and merchants.  We believe that BitGo has the potential to be that provider for the bitcoin industry, which is why we are excited to announce our investment in the company.

BitGo has built the first-ever, simple to use and enterprise-grade multi-signature technology that works with the existing blockchain.  BitGo requires each account to have three keys – any two of which are required to recreate the private key and participate in a transaction.  Typically, one of these BitGo generated keys is maintained by the owner, one by BitGo, and the third is usually held by a trusted third party or in remote, or offline storage controlled by the owner.  Any transaction requires that two of the three keys be used, just like a bank safety deposit box – no single key is enough to open it. Even if a single key is lost or compromised, the owner’s bitcoin cannot be stolen or accessed.  Indeed, this could only occur if both the user (or his/her wallet) AND BitGo are compromised.  This also allows BitGo to act as a fraud detection and prevention player, helping protect users who are themselves hacked, while still giving the user the ability to access and spend his or her bitcoin without BitGo participating in the transaction.  BitGo is working with many major bitcoin players to implement this technology across the entire bitcoin ecosystem.

BitGo also has an exceptional team behind it. The team has a history of involvement in key technological innovations at some of the most dynamic technology companies, including Google, Facebook, and Big Fish Games. In addition, former VeriSign CEO Stratton Sclavos is a new BitGo investor and board member alongside Redpoint. The involvement of the man whose company made it safe to put credit card numbers on the Internet only adds to BitGo’s reach and credibility.

We are truly excited to join such a pioneering team and company and look forward to the great developments ahead.


Jun
12
14



Redpoint’s Founders Day Re-cap

Redpoint recently hosted “The Anatomy of a Breakthrough Performance.” Held at the innovative Exploratorium museum in San Francisco, it was an event that brought together a lineup of luminaries who have indeed achieved breakthrough performances. From the America’s Cup skipper Jimmy Spithill to Navy Seal Commander Pete Naschak to peak performance guru Andy Walshe, Redpoint asked these extraordinary people to share how they have succeeded where others have failed.

The result was an illuminating and highly entertaining conversation full of valuable insights and life lessons learned through decades of trial and error. Our founders and CEOs in attendance were treated to an out-of-the-box afternoon that saw them drawing with crayons, flinging toy rockets at one another and asking questions about how they, too, can achieve that breakthrough performance.

Redpoint partner Geoff Yang kicked off the event and then handed over the reins to Walshe, the director of Red Bull’s global athletic development program, who has trained Olympians and worked with daredevil Felix Baumgartner on his record-breaking 24-mile free fall from space. Walshe was joined on stage by Spithill, Naschak, IDEO partner Brendan Boyle, SONOS CEO John MacFarlane and data scientist Eric Berlow.

Though each person’s goal requires a unique blueprint, the men stressed some common themes that can help anyone push beyond their perceived limits. Here is a quick summary of those themes:

Failure – Every single speaker highlighted the importance of failure in his quest for success.  It wasn’t so much the ugliness of the defeat itself that mattered most. Rather it was the way in which that defeat led to better, smarter ideas and execution. Failure was educational, inspirational and motivational—and it was essential to the ultimate triumph. Failure for them is not something to fear because it is inevitable with any challenging undertaking. Failure instead is a stepping stone, something to harness and tame, or the proverbial making lemonade from lemons. “Defeat is a great opportunity,” said Spithill.

 

Jimmy Spithill

“Adversity can be one of the best opportunities to learn about yourself and your teammates.” – Jimmy Spithill

 

In his case, Spithill shared some of the “curveballs” that led to last year’s dramatic comeback victory in the America’s Cup. In particular, he noted a day when his $15 million catamaran went into a nosedive and was dragged out miles beyond the Golden Gate Bridge. The damage to the vessel was one thing—and it could be repaired. But Spithill said the way his team handled the situation turned out to be “a real plus” in their ultimate quest. They learned how to be better from the experience and they also strengthened their bonds as individual contributors on a team, gaining greater trust in one another. “Adversity can be one of the best opportunities to learn about yourself and your teammates,” he said. “Champions always come back from adversity.”

Pushing Limits – Underestimating either an individual or a team is a common failing. And this can be costly, particularly for people trying to achieve the seemingly impossible, such as Baumgartner breaking the sound barrier in a free fall. Our panel shared its experiences and viewpoints about how to push people beyond their perceived physical or mental comfort zones—and explained why it is a key ingredient to generating change and optimizing performance.

Seal Commander Naschak recalled taking a group of elite athletes through eight days of rigorous physical and “mentally mind-bending” exercises, exposing them to harsh conditions in varied terrain. Despite many moments of self-doubt, each man made it through the challenges and brain scans compared from before and after the endurance test showed notable improvement. Every man said they came away with more confidence and a new perspective on their own mental and physical capabilities. “You can reset what is possible,” says Naschak.

 

Naschak talks about the changes in the brain when people push past perceived limits.

 

Walshe agreed with that sentiment. He explained that the team behind Baumgartner’s thrilling leap into the record books shared a vision that you can “take the essence of a performance and push beyond all disciplines.” Despite the daunting task at hand, the group drew on the know-how and experiences of the best in the world to overcome the litany of challenges Baumgartner’s quest presented, from designing and building the right space suit to ensuring that Baumgartner would be physically and mentally prepared to withstand the fall.

SONOS’ MacFarlane brought this concept into a more business-like setting. He noted that it’s almost impossible to push strong teams too hard, though you can push individuals too far. Teams, he said, that are comprised of the right mix of people can typically withstand much more stress than any one member can endure. Instead of focusing on individual contributors, MacFarlane says it’s helpful to emphasize clearly defined goals to bring teams together and keep them striving, even when they may feel they are tapped out. “A higher sense of mission drives people in tough times and keeps them focused,” he says.

 

IDEO’s Boyle having a little fun

 

Unleashing creativity – New ideas do not often come without risk. Optimizing the risk –whether it comes by hiring people with a wide array of differing viewpoints and problem-solving skills or by pushing people far outside their comfort zones–is key to generating meaningful change.

IDEO’s Boyle discussed “the trap” some companies, particularly larger, established ones, encounter when they stick too much to like-minded colleagues. “New ideas don’t come from the same place,” he said. People also must be willing to shake up their routines and group mindset.

Just getting our group to find partners, pick up a crayon, and then quickly sketch portraits of each other seemed to prove the point. While Boyle said children do this task gleefully and fearlessly, adults tend to worry about the quality of their drawing or what others might think of it. The takeaway from this exercise is simply that people need to find more ways to relax and enjoy a task for what it is rather than what they think it should be.

Berlow, who is in the midst of a project dubbed “hacking creativity,” also emphasized the need for assembling groups of divergent thinkers and abilities. His team is currently working on a project to identify creativity profiles by studying the creative processes exhibited by 100 of the most well-known and high-achieving people, including Einstein, John Lennon, Andy Warhol and Steve Jobs. The goal is to form connections between people based on the way they think and work.

Culture – In a sense, creating a culture that optimizes performance requires organizations to embrace all the ideas presented by the speakers—from embracing the role of failure to nurturing the creative mind to never underestimating what the right mix of people can achieve.

SONOS’ MacFarlane emphasized the importance of establishing a higher mission that drives people to succeed as well as cultivating an atmosphere in which people feel safe even when they make mistakes. He went so far as to suggest that leaders might reward failure and risk-taking as a way to get people to test unconventional strategies or ideas.

And even when teams are progressing, be prepared for the inevitable roadblocks. Organizations that allow individuals to step away from the daily grind without fear of repercussions outperform all others. Whether drawing pictures with crayons or playing with toy rockets, Boyle recommends adopting strategies that tap into individuals’ creative energy in unconventional ways.

Culture, of course, starts at the top, with leaders most responsible for setting the tone that works best in their own organizations.

The unique event concluded with a dinner by the bay. Appropriately, the attendees were mixed up and assigned to tables with people they didn’t already know.


Jun
10
14



Data-Driven Applications: The Next Generation of Big Data by John Walecka, Scott Raney and Chris Child

In a sign of things to come, a few months ago startup RelateIQ announced that it has raised $40 million in venture financing, the largest amount to date for an emerging class of enterprise applications driven by big data.  These applications combine the flexibility of SaaS with intelligence gleaned from big data that help users make quicker and better decisions in their jobs virtually every day.

It’s a big bet in a space that is just beginning to show its enormous potential. Up to now, big data has been defined by players like Palintir, a leader among companies focused on addressing shortcomings in the enterprise infrastructure. Specifically, these big data infrastructure companies have enabled complex organizations and businesses—from Homeland Security to Wall Street–to analyze and utilize their treasure troves of information. To date, the market for these innovators tops a hefty $16 billion, according to IDC research.

But here’s the thing:  Much of the value derived from these technologies thus far is primarily accessible only through data scientists and engineers. They spend countless hours culling through and then analyzing information to reap the most meaningful insights they can. Business users, charged with making split-second decisions every day affecting everything from sales to marketing to finance, have been left waiting—and wanting.

Until now, RelateIQ is just the latest in a new breed of so-called Data-Driven Application upstarts poised to fill the gap. They are coupling big data with machine learning to fundamentally change the way business users make decisions. In the case of RelateIQ, which targets customer relations management (CRM), the company hopes to make it simple for users to track and manage all their business relationships by analyzing data from call logs, emails and calendars to recommend follow ups, optimal times to reach out, and make sure that no promising relationship is overlooked.

If everything goes as expected, virtually every category of enterprise applications will be transformed by the insights automatically derived from a multitude of data sources. In just the last 12 months, an estimated $150 million has been spent funding startups focusing on everything from security to ITSM to advertising to human resources.

Their missions follow much of the path already blazed by large, consumer-facing Internet companies, such as Facebook, Amazon, Netflix, and LinkedIn. They have leveraged the massive amounts of data they collect and process to provide friend recommendations, personalized content, suggested products, and to help target potential new employers and employees. These processes have led to smarter, faster and more strategic decision-making.

Business users increasingly want the same level of sophisticated, quick insights powered by smarter software. And they are likely to get them from the dozens of companies sprouting up across the country.

This new generation of big data enterprise startups is a natural evolution from what began in the late ‘80s with the emergence of client-server companies. Peoplesoft and Siebel provided packaged software to help companies manage their employees, finances and customers. Then, about a decade ago, SaaS companies like Salesforce and Workday leveraged the Internet to change the way software is consumed and delivered. As powerful as the move to SaaS has been, it is clear that businesses today expect more than just automated processes. They want help making quicker, better and smarter decisions, every day.

That is where the powerful convergence of big data and SaaS comes in. Though virtually every sector will be moving toward these innovative software tools within the next few years, here’s a breakdown of some of the industries most likely to feel—and embrace—the transformation first:

  • Cybersecurity: Security companies have long focused on new technologies to defeat malware, but recently user behavior has come under scrutiny as well.  A new generation of companies like Fortscale is tracking user access logs to find unusual patterns that may show either a compromised computer or an employee with malicious intent, which they call the Snowden problem.
  • Human Resources: HR organizations have long embraced systematic and technological ways to measure employee performance and potential.  Recently, analytics has become part of this. Gild is one company taking a software developer’s entire online presence (including open source code but also social media profiles) and comparing it with known successful engineers at a hiring company. These profiles let them determine if an engineer is not just a good fit professionally, but also culturally.
  • Sales and Marketing: The art of converting marketing leads into sales leads and then bankable deals has always been a bit of black magic practiced by top sales people.  Infer is a company working to bring data science to the problem by building an enormous model of a company’s past leads to close deal conversion, and tying those deals to all kinds of outside data they can track down. Then, they use that model to predict which incoming leads are most likely to convert, and thus, where to allocate salespeople’s time.

The multi-billion-dollar opportunities for this next generation of big data innovators are as immense as the problems they are trying to address. And if they get it right, they will undoubtedly touch not just every function within a company but every person as well.

 

John Walecka and Scott Raney are partners at Redpoint Ventures, a backer of RelateIQ and Infer. Chris Child is a senior associate.


May
13
14



The Case For Censorship In The New Social Age

Intellectuals for centuries have campaigned against censorship. From Ben Franklin to John F. Kennedy to Justice Earl Warren, the argument has been much the same: Censorship is antithetical to democracy. More recently, megastar Jay-Z reiterated the point in his 2011 book, Decoded, writing simply that “we change people through conversation, not through censorship.”

It’s pretty hard to argue with Jay-Z — let alone Franklin, Kennedy and Warren. But I find myself, uncomfortably, thinking more favorably about the concept of censorship as we in Silicon Valley grapple with the emergence of several social networks built around the concept of anonymity. Companies like Whisper and Secret, among several other lesser-knowns, have attracted outsized attention and funding as the next generation of social media platforms. While each has its own unique features, they all allow users to send messages to groups without names attached.

Let me first say that anonymity can be a very good thing. Having the ability to speak freely without fear of repercussions can spark honest discussion about important, delicate or emotionally charged topics. Just being able to share feelings and fears within a supportive network can be a productive mental health exercise and even connect people in meaningful and fun ways. Upstart Secret, for one, has shown strong success in the quality of discourse on its mobile app. It isn’t perfect. I mean, some of it is silly and some of it is a little mean and petty. But overall, it’s much better than I expected. In general, the content is about real emotions, real fears, real aspirations and real desires.

Part of the genuine nature of the conversations on Secret stems from the fact that users are only sharing their personal reflections with people somehow relevant to them, as they come from their personal networks (via phone contacts). Secret is more like going to a masquerade ball with your friends versus being in a completely dark room with a bunch of strangers. You sign on to Secret with a verified identity and then can exchange messages anonymously with other people to whom you are digitally connected to, and who are also on Secret. This is an important distinction and works because the lack of total anonymity on Secret forces users to refrain from sending truly offensive messages they may otherwise send if they were among strangers. Deep down you worry that people might be able to figure out who you are.

I think of Secret as qualified anonymity, and this aspect of a company’s network is hugely important in establishing both credibility and value — and why startups like Secret have a shot at real success. But it is not enough by itself.

Here comes the tough part. As abhorrent as the concept of censorship is to many people who embrace the ideals of anonymity, including me, we need censorship to keep the dimly lit corners of cyberspace safe. It is just too tempting for people under the protection of anonymity to devolve into irresponsible and immoral behavior.

We have all seen how damaging it can be to offer an unbridled platform for the worst kind of human impulses, particularly for teens. Prejudice, bigotry and sheer meanness can easily proliferate, transforming a winning concept into little more than a digital bathroom wall.

That is why any platform leveraging anonymity will have to have some group of moderators that delete inappropriate and dangerous posts in real time — and then banish those posters from the site forever. To be clear, I am only in favor of striking comments that are truly hateful or dangerous. Unpopular or controversial viewpoints that are part of honest discourse should be allowed to flow freely.

Whisper, for one, has already hired dozens of employees whose sole job is to constantly monitor the site for inappropriate content. These are important actions because they ensure consequences for behaviors that deliberately cause harm. To purists, it may inhibit free speech, but to me it’s no different than why we prohibit people from yelling fire in a movie theater when one doesn’t exist.

Neither Franklin nor Jay-Z may like it. But I believe this is the only way these anonymous platforms can survive and thrive. Otherwise they will turn into walls in a New York subway station. And we all know how that will go.

Published on TechCrunch 5/13/14