Dalton Caldwell

Partner @ Y Combinator

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Bitcoin adoption in 2015

The chart related to bitcoin that I find most interesting is not price, but instead Estimated USD Transaction Volume from Blockchain.info:

Screenshot 2014-12-20 17.35.06.png

The reason I find this chart useful is that it seems a decent proxy for the amount of value being transacted through the network irrespective of bitcoin price fluctuations.

By way of comparison, here is a chart of the USD market price of bitcoin over the same period:

Screenshot 2014-12-20 17.38.49.png

And here is a chart of the number of daily transactions over the same time period:

Screenshot 2014-12-20 17.42.10.png

Taking these three charts together, the relatively static USD transaction value per day metric in 2014 appears to be the result of the falling market price of bitcoin being offset by increased transaction volume.

Perhaps this is all just a coincidence, but it appears that 2014 was a year of relatively static demand for transacting value through bitcoin. Static demand implies that either 1) the...

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Pinterest vs Snapchat: Purchase intent and valuation

Online advertising is all about purchase intent, right? To quantify just how valuable the purchase intent of search is, it’s worth thinking about revenue per search. In 2006 Google’s revenue per 1000 searches was $45, in 2009 it was $35. (I’d like to put in a more recent datapoint, but my cursory Googling is coming up short.)

Keep in mind that Google search ads are non-interruptive units. By way of contrast, let’s talk about advertising on YouTube. These units either make you wait to watch the video, or takeover part of the video player while it is playing. Despite the fact these ads are designed to be more “engaging”, eCPMs for video are far lower vs search. Here are some approximations of revenue from top publishers on YouTube according to Peter Kafka:

[M]any big publishers say that after YouTube takes its 45 percent cut of the ads it sells, they frequently end up keeping about...

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The Economics of The Magazine

Why Isn’t The Magazine Free With Ads? Volume.

To achieve [current subscription revenue] consistently, The Magazine would have to sell ads at $2.66 CPM on 13 million page views a month, which means we would probably need 20 million page views to make those numbers.

Is our modest fortnightly periodical going to attract 20 million page views against 150 or so articles every month? Unlikely. Can we attract enough subscribers on an ongoing basis to bring in revenue that lets us pay writers well and sustain our operations? Yes.

Also worth mentioning this excellent post from Seth Sternberg, former CEO of Meebo.

I was at an event the other day in San Francisco and ran into a friend. He’s running a business many of you have heard of. We got to talking, and early on he said “I’m never doing an advertising business again!” My gut reaction: “no kidding”.

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The tech industry: one or many?

After reading How Zynga went from social gaming powerhouse to has-been, most would be convinced that the “social gaming bubble” has popped.

It’s interesting that “the tech industry” can be large enough such that a significant sub-industry can go through a full boom and bust cycle without materially affecting other sub-industries.

In the past few years we have witnessed the rise and fall of several sub-industries including social gaming, subscription commerce, and group buying. But that hasn’t slowed down what people think of as “tech” as a whole. Perhaps the ups and downs from each sub-industry are like waves at different phases, and if there are enough of them they start to cancel each other out.

I once had a conversation with someone who ran a publicly traded technology company during the 2000 crash. He told me that one day, customers who had already signed purchase orders for...

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Response to Brennan Novak, part II

On August 10, 2012, I published a blogpost entitled “A response to Brennan Novak”. In that post, I stated that App.net would support a number of interoperable web technologies.

As the one-year anniversary of my blogpost approaches, I’d like to highlight how App.net supports those technologies.

Following through is important.

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Where will Google Reader traffic go?

Unless something dramatic happens, Google Reader is shutting down July 1.

A few days ago, I posed the question:

Has anyone written up their expectations/projections re:how the Google Reader shutdown will affect traffic to blogs?

For comparison, when Google makes an algorithm change to Google Search results, it can make or break a business. For a publisher on the web, having an significant source of daily referrals go dark one day is likely to have at least as dramatic an effect as a Google Search algorithm change.

Frankly, I have no idea what will happen, but I will present three possible scenarios regarding what will happen from a traffic perspective.

Scenario One: “The New Age of Innovation”

As a consequence of the creative destruction brought upon by the demise of Google Reader, a new class of excellent feed reading software is being created. This is a Good Thing from the...

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Y Combinator

From the official Y Combinator blog:

We also have five new part-time partners: Michael Seibel, Steve Huffman, Dalton Caldwell, and Andrew Mason. As the name suggests, part-time partners advise startups like regular partners, but part-time. Michael was cofounder of Socialcam (YC W12) and now works at Autodesk, which acquired it last year. Steve is cofounder of Hipmunk (YC S10) and before that was cofounder of Reddit (YC S05). Dalton is cofounder of App.net and before that was cofounder of Imeem. Andrew was cofounder of Groupon and till recently its CEO. We’ve known all these guys for years and we can already tell it will be great to work with them.

I’m proud to say that I have accepted a “part-time partner” role at Y Combinator. I have known PG & Jessica for years, and have tremendous respect for them. The upshot of taking this role is that I’m going to be spending a few hours a...

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Apps vs. Platforms

Some interesting analysis on “apps” vs. “platforms” from Ben Thompson:

An app can afford to be prescriptive about the user experience and means of interaction; in fact, the best apps have a point of view on how the user ought to use their service.

Platforms, on the other hand, are just that: a stage for actors (i.e. apps) of the user’s choosing to create a wholly unique experience that is particular for every individual user.

It follows, of course, that no successful platform can be built on advertising. Advertising demands eyeballs; platform success demands the ability to fade into the background as said unique experiences take center stage.

(via Daring Fireball)

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Sine waves

One thing I have noticed studying web traffic logs is that daily human behavior at scale resembles a sine wave:


Over the years, my mind’s eye has constructed an image of the daily ebb and flow of web traffic resembling the ebb and flow of ocean tides. I’ve learned that code tends to break at the “high tide”, and the best time to do site maintenance is at “low tide”.

So why does human behavior at scale look like a sine wave? It’s because of our daily cycles of waking and sleeping. In other words, we have a 24 hour cycle because of circadian rhythms, which occur because of the cycles of darkness and light caused by planetary movement.

And why do we have a tidal system? It’s largely caused by the gravitational pull of the moon.

It only recently occurred to me that the unconscious link I felt between tides and web traffic wasn’t a lazy cognitive crutch, rather, they are both causally...

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Touring by yourself

In 2002 I went to see a live show at the coffee house on my college campus. The show featured the band The Microphones.

“The Microphones” was a somewhat confusing name for the band because there was only one member: Phil Elvrum.

I went to the show early, and watched Phil personally haul in his own gear. He then proceeded to take out a marker and white butcher paper and make some larger-than-life drawings. Once completed, he hung his drawings behind the stage as scenery. Next, he set up his microphone and amp and played a show. When it was over he gave away the drawings to audience members and stood next to the stage to sell LPs and T-shirts. Each LP had original hand-drawn art on it. I bought one and talked to him for a minute.

Phil Elvrum was 23 when that show happened, and in retrospect, it is difficult for me to imagine what it must have been like to be in his shoes. He seemed...

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