All of 2018 up until about a month ago — all everyone could talk about was the price. We hit the high of ~$830B market cap and it has been in a steady decline losing more than 70% of that value as of today. Well thats isn’t fun to talk about. Luckily the #buidl meme started and people got back to work. Focused on creating products and core infrastructure for this decentralized world. The world, crypto community included, got caught up in the vanity metrics — PRICE. The #buidlers are getting back to what really matters — USAGE. The #buidl meme is no stronger than in the Dapp community.
Dapp: An abbreviated form for decentralized application. A Dapp has its backend code running on a decentralized peer-to-peer network. Contrast this with an app where the backend code is running on centralized servers.
I am firm believer that cryptocurrency as a Store of Value (SoV) use case is very clear. Bitcoin, Zcash, Monero, Grin and a few others are doing this well. I see this as a defined product market fit: censorship resistant SoV/money. Outside of that — we enter a bit more uncertainty around what use cases will arrive next for crypto. This decentralized application layer has thousands of projects all working on different products for users whether it be exchange, games, governance and more. Current usage of top 10 here.
VERY low user bases. Why?
As a VC who invests in crypto — my job is to meet and talk to investors, founders, devs and enthusiasts who are active in the crypto space. A month ago I started asking most of the people I meet if they have tried the latest Dapps. Conversations 95% of the time went:
Have you tried Augur? No. Have you tried Aragon? No. Have you tried MakerDAO? No. Have you tried Lightning? No.
You get the picture. Well technically a lot said they did buy a Cryptokitty so 👏 to the AxiomZen team.
Enter Dapp Night
With the incredible Boost VC crypto network we’ve built at my fingertips, I realized I had the perfect community who would be excited to demo DApps. Founders volunteered to demo and walk through the experience with the group. I had to make sure that at the very least, I could answer YES when someone asked “Have you tried XYZ Dapp?”
Since then we have hosted two Dapp Nights and have done live demos of Aragon, Augur, Livepeer, Deconet, Lightning, Decentraland and MakerDAO. The goal was to be informal, collaborative and hold open discussions around the good and bad: product/market fit, usability, design, role of the token — with each of the nights going over 2 hours.
Product Market Fit / Positioning
- FOCUS. Traditional startup products tend to have very specific target use cases at first. Start with a small focus and then grow from there. Think eBay starting with collectibles, Amazon with books, Facebook with Harvard directory. Crypto projects, like traditional startups, can fall prey to becoming an open ended, generic, unspecific platform where customers are left confused and unhappy (See: Paradox of Choice.) Right now we need to see crypto projects proving their value by having 1 clear, very specific use case and by making 1 clear, very specific customer incredibly happy.
- Education is required. Why am I here? What value will this add to my life? What is the token? There are countless questions that arose through the walkthroughs of each Dapp. And the main issue was these answers weren’t able to be found the majority of the time. Dapps are new. Tokens are new. We need to build education into products from the start.
- Slow blockchains make poor products. A huge issue while using Dapps was when you sent a confirmation to do a task, there was almost always this period where you weren’t exactly sure what happened. Did it go through? Did it work? What’s next? We constantly found ourselves reloading pages and checking Etherscan. Something needs to be built into the UI/UX for these transaction times.
- Addresses need clarity. This is more an industry problem than anything. Simple things like using the words Ethereum vs Ether matter and were confusing to the non-crypto people in the room. Then showing addresses present a more complicated issue. Sometimes its the address you need to send to, sometimes its your balance and sometimes its just another participant in the network. Each of these are are very different and we need to come up with some UI/UX best practices to differentiate.
- Why does this project have a token? This question was the main question surrounding the two Dapp nights. This is again a large educational issue if used throughout the flow. However there were times the projects token was never used. Sometimes ETH is used, sometimes not. And this of course all assumes you already have wallets with tokens/ETH inside ready to go.
- Gas prices and token costs make products expensive. We need low barriers to entry to try new products. Deploying contracts that cost $30+ or even simple transactions with $0.25+ costs are enough to stay away. This isn’t a Dapp problem but a reminder the base tech is still in its infancy. Know that you must solve a huge problem or allow someone to do something they couldn’t do before if they will need to pay these costs.
- Infrastructure for Dapps is key. Through these over 4 hours of walkthroughs we realized the most valuable projects/companies out there were Etherscan, Metamask and the exchanges/brokerages. The simple things like obtaining, storing and tracking crypto are the most important pieces. These will continue to simplify which is a huge win for all Dapps.
- Don’t reinvent every wheel. The crypto world came to being to replace the banks. Then it was to replace all centralized entities. This is awesome. However, let’s not start from scratch replacing. Let’s take from learnings from the past. Lot of product best practices and user flows out there to learn from. Will save you a lot of time and make your users’ lives much easier.
- Stop announcing partnerships. Every day two new projects are creating partnerships. That is easy. Creating products people use is hard. Partnerships are not traction. During the demo’s we kept bringing up the partnerships they had but never saw any mention during the products. It actually caused more confusion than anything.
Time to Keep #Buidling!
We are in the first inning still. A long way to go. To sum up:
- Solve real problems for real people.
- Build products understanding where the technology is at today.
- Incorporate best practices from traditional products.
- #Buidl On!
What is exciting though is how much green field is left to explore and create in. If you are looking to just get started solving some of the problems mentioned above, we are continuing to invest heavily at Boost VC — and reached at firstname.lastname@example.org. If you are looking to jump into crypto come join one of our more than 100 teams we have backed — crypto portfolio and some job listings.
Disclaimer: Either Boost VC or myself are invested in Aragon, Decentraland, Augur, MakerDAO, Etherscan, Deconet.