Kevin Rose on health apps, crypto, and how founders get through this time with their sanity intact
Kevin Rose has been in the spotlight since co-founding the early social news aggregation site Digg in late 2004. A genial whiz kid turned serial entrepreneur, he has since become as well-known for launching a whole lot of slickly designed products, some of them out of his startup incubator Milk (later acquired by Google), and North, an incubator that would later lead him to a site for watch enthusiasts called Hodinkee in New York.
Along the way, Rose has been investing, at times as an angel, for several years as a partner with Google Ventures (now GV), and on behalf of True Ventures, which invited Rose to join as a venture partner three years ago — and where Rose more recently began writing checks as a full-time general partner.
How long it will last is anyone’s guess, given Rose’s penchant for chasing the next. But we were able to catch up with him at his home in Portland, Ore., earlier this week to talk about who is managing his newest apps, why he is still bullish on crypto and what advice he has for founders who might be struggling right now. Our chat has been edited for length.
TC: There has been some fascination over the years with your moves from West to East. Now you’re back on the West Coast in Portland.
I moved to Oregon a couple years ago. We came back to the West Coast from New York. We were going to have our first child, so we knew we wanted to be close to the family, and my family is all up here in Portland. The plan was just to come back, then bounce down to the Bay Area as needed. It’s an hour and 20-minute flight, so it’s really easy to get back down there. and there’s just so much to love about Portland.
I have to make a joke here about whether or not there are as many raccoons up there. I’ll never forget seeing footage of you throwing a raccoon off your dog years ago. We had a raccoon in San Francisco that was very determined to scratch our dog’s eyes out.
It’s no joke that there are actually a lot of dogs that are blind because they get in fights with raccoons, and the raccoons immediately go for the eyes. It was a really scary night.
How are you dealing with COVID-19?
I feel very fortunate in that my daily job is intact and I’m still able to back entrepreneurs and take those meetings. So it’s a very lucky position to be in. But, you know, it’s a scary time. We have two little girls and we have one nanny, and today our nanny came down with a fever, and we sent her home early [because] fevers are no joke these days, even a slight fever. It’s just a little unsettling.
How has sheltering-in-place affected how you’re investing with True?
There are a lot of great people out there right now who have free time to think of new ideas. Whereas I would have thought that on the investing side, there would be a slowdown, I’m still continuing to meet with great entrepreneurs that are coming up with their next big idea, and they’ve got the downtime and the extra cycles now to have that focus to really put in some time to build prototypes. I would say if anything, [the rate at which I’m seeing companies] remains the same or is even a bit higher.
We’ve done a couple deals so far where we have never met the founders face to face, which is a first for us. But it’s all doable. I think you just spend more time on Zoom getting to know the people behind the camera prior to doing a deal.
Have you received any feedback from your LPs saying, ‘Why don’t you guys take a pause while we figure out how our portfolio is shaping up?’
No, we haven’t received any of that feedback. I think that they look at the instruction and the support that we’re giving our entrepreneurs.
One of the things that we do care a lot about is how we can help. We have over 300 different founders who we want to set up support systems and groups to help them get through this — not just financially but, you know, figuring out, for example, how to reopen responsibly. Like, how do you do that? What is the new norm? What does that look like? What are best practices that companies are putting into place? So we’ve been really doubling down on our education component and creating these weekly gatherings where dozens of founders get together via Zoom and communicate how and what they’re doing.
In terms of going back to the office, what are you hearing from True’s startups?
We have entrepreneurs that have storefronts — like actual physical storefronts. We have others who have distributed teams by default, so for them, it’s work as usual, except for figuring out [how to manage] family life [at the same time]. So it’s all over the place, but I would say that most the people who I’ve had a conversation with are being more cautious. They’d rather kind of sit and wait things out a little bit.
I had a friend of mine, Mike Maser, who I’d worked with before — we worked together at Digg — and he actually created a [fitness coaching app] called Fitstar that he sold to Fitbit, so he was really into health and fitness. Then Mike was diagnosed with stage 4 non-Hodgkins lymphoma a little over five years ago, and as part of his treatment with chemotherapy, he was prescribed intermittent fasting; they’re doing fasting now in conjunction with chemo to help the outcomes.
Mike was able to beat back cancer. He is now five years cancer-free, which is amazing. And he’s a fantastic CEO and was the perfect person to take on the project and run with it, because it really started growing so fast. Zero now is adding 25,000 new users a day at zero paid acquisition. Millions of people use it a month. And it’s gotten to the stage where it needed someone who could just focus on it full time and build out a team around it.
Mike created [a holding company called] Big Sky Health with that app along with Oak, my meditation app, and he has also launched a third app called Less that’s about tracking your alcohol consumption and being more mindful about the number of drinks you’re consuming week over week and month over month.
That sounds timely, considering that a lot of people are seemingly wrestling with developing alcohol problems at this strange moment in time.
It’s a real thing. For anyone who likes to drink casually and socially, being cramped up indoors and especially with all of the stress around the things that are happening in the world and your savings accounts and your family and friends . . . unfortunately, it can be a trigger for people to consume more alcohol.
I also wanted to talk to you about cryptocurrency, which is now re-entering the mainstream business conversation, with Andreessen Horowitz having just closed its second crypto-focused fund and this Bitcoin halving event. Is it something you’re tracking closely still?
Yeah, it’s something where I have a personal passion . . . I believe that it is still extremely difficult and not mainstream enough to be used as a currency.
That said, I do believe that there’s no doubt that the future of currency is digital. If you had to create a brand new country today, you wouldn’t go out and start buying printing presses to create your currency; you would issue something digitally. So there will be something that comes into existence that is spendable and easy to understand and is based on some type of blockchain technology. Like, there is no doubt that will be the case. The problem is that 99% of the projects out there and a lot of the people who are behind them are just in this for the pure financial gain. And there’s a lot of garbage out there. And that’s unfortunate because it really drags down the high-quality projects, and it muddies the space quite a bit.
As a partner earlier on with Google’s venture arm, you led an investment in Ripple, which has grown controversial, in part because the co-founder has sold some of his shares and because CEO Brad Garlinghouse has sold some of his shares. It’s also not being used as the company intended. What do you think of what XRP has become and its utility in the future?
When I invested in Ripple, it would have been seven years ago, something like that. But Brad was not running the company. There was a different CEO. The original founders were all still in place. There was a very different world when Ripple was first getting off the ground. And the excitement that I had around Ripple was that cryptocurrency was so raw; there was no way for the enterprise to embrace it in any fashion.
Early Ripple reminded me of a company that could come in, put some standards in place, and have these uptime guarantees and work with commercial banks and create a backbone that was based on blockchain. So that was very exciting. I never really saw the use case for Ripple as a currency. I understood that it was going to be used as a way to handle settlement in some capacity. It’s been quite a few years since I was with Google Ventures and I haven’t tracked it closely, but those many years ago, the excitement was around creating something that commercial banks could understand and get comfortable with, because they weren’t comfortable with just random blockchain technology created by anonymous founders.
Do you think the number of cryptocurrencies needs to shrink before the cryptocurrency can be accepted in a more mainstream way, or is it possible for all these cryptocurrencies to survive ad infinitum?
It’s early days. I think that this is going to be a space that will continue to mature over the next couple of decades. There’s a good chance you won’t even know you’re using cryptocurrency. I could see something like a Square Cash moving to some type of stablecoin underneath the covers, to where we’re still using it today, and it’s connected to our bank accounts, and all of a sudden, all the settlements are happening on the blockchain. Things like that will most likely happen in a really simple and easy-to-use interface by a very trusted brand.
I noticed you tweeting the other day about the next iteration of Epic Games’ game engine, which will support VR. Talking about technologies that have gotten a lot of attention but are further out than anticipated a year or two ago . . .
Yeah, it’s gonna be in the new PlayStation, and the new Xbox. It’s beautiful.
Is VR something that now interests you as an investor?
I got a lot of flack from people because I did a blog post five years ago or so that said I thought the VR was a joke and [I was] basically dismissive of it, and I’ve avoided it altogether.
I don’t want to piss off people [but] It reminds me of when we all got the Nintendo Wii and we had so much fun swinging around the controllers and playing virtual tennis with each other. And then, after a couple weeks, the controllers just ended up in the drawer. You throw on a VR headset, you’re like, ‘Whoa, this is crazy.’ And then you get a little nauseous or get a little sweaty, and all of a sudden, you’re like, ‘I’m just kind of sticky and no one else can see what I was doing, and I look a little awkward.’
I don’t think we should abandon it altogether. I’m not a hater, but look what happened: we went into straight-up lockdown. It was the best possible time for VR sales to go through the roof. And what happened? The Nintendo Switch sold out.
Any advice for founders given that you’ve enjoyed extreme highs and some lows in your own career?
If there’s anything that I’ve learned as an entrepreneur it would be, number one, to seek out mentors and people that you can have an open and honest conversation — and hopefully those should be your investors, as well.
Some of my biggest mistakes [tied to] not admitting that I didn’t know something. I was scared, I thought it was weakness, like, ‘Gosh, they put me on the cover of BusinessWeek; I should know how to do X, Y or Z.’
But we’re all learning constantly, and that should never end. I’m a big advocate of lifelong learning and admitting when you’re wrong. Admitting that you don’t know something is just actually growing.
There’s also no shame in shutting something down. Some people won’t get through this, and they’ll have to start something new. You know, I’ve had many failed companies, tried a bunch of crazy stuff, but if you flip things a bit, that’s the excitement of this all. We’ve got this life to live and we’re going to die soon. Why not go try a bunch of crazy ideas and then [if it doesn’t work] it’s okay to cut bait sometimes and say, ‘I’m done’ and just move on to the next thing.