Fat Protocol thinking
Ever since Joel Monegro coined the phrase “fat protocols” in his astute blog post on blockchain value it has become a useful way for people to reframe thinking about how technology value will be created and captured in the blockchain space. This reframing is important. It is a very different model from the traditional ways to think about how value accrues to builders, investors, and ecosystem participants.
But for builders, it creates a lot of room for confusion about how quality projects will be built. I suspect that early teams building blockchain applications will benefit from investing real time in figuring out the first useful applications and use-cases for their protocols and building those apps with an eye toward the eventual protocol that will support the killer app. …
“Money is the most successful story ever invented by humans, because it is the only story everybody believes.” — Yuval Noah Harai
This story is being rewritten right now with technology.
I believe shared public ledgers are a core technology innovation that enables a new platform shift — so while this is about money, but it’s not just about money. It moves us into a new era of permissionless technology innovation which is not dominated by any of the large technology players. Further, it is structurally so different that it’s hard for incumbents to marshall their resources to address these opportunities. Permissionless innovation is foundational to the exciting technology, software, and Internet trends that have been at the core of my professional career to date. …
I hear lots of people asking “are we in a bubble in crypto assets”?
I think Erik Voorhees said it best this at #consensus2017:
Unfortunately, slow and steady in any financial market is actually impossible. If you see a market that has slow and steady growth long enough you’ll start to front-run it and that slow and steady growth will start turning into steeper growth and that will accelerate the process.
You cannot have an asset that goes up in price 1% every month or 1% every six months or every day without people starting to start thinking it’ll do the same tomorrow so that’s why these bubbles form.
They are inevitable and they will happen in every asset, but especially in these crypto assets that are so small still.
It causes people to imagine a startup emerging from out of the vast, foggy netherworld of primordial soup and leaping fully-formed from the mind of the founder into a machine of growth.
I was actually a big fan of the “Zero to One” idea for startups when I first read the Stanford CS183 lectures documented by Blake Masters. But I’ve since realized that the terminology can cause confusion and it does a disservice to many new entrepreneurs looking to forge a path.
The reality is, almost every startup that ever got big was actually more like “0.5 …
Then the founder goes off and spends a year or two in the weeds grinding out the details of finding product-market fit and making a business work.
When it comes time to do a series A pitch this talented founder tries to share all the details of what she has done every day to push this rock up the hill — everyone feels better getting credit for all the hard work they’re doing. Pushing through the daily struggle is valuable.
But when it comes time to raise a series A it’s time to context switch back to selling the dream. Very few series A’s are fully traction based. At the time many companies raise their series A investors are still primarily betting on the team and the market. …
I’ve seen hundreds of pitches from early stage startups. I’ve invested in some of these startups. I’ve pitched my own companies dozens of times as an entrepreneur. When an entrepreneur can articulate a clear vision for how the future will play out it’s actually quite easy to get behind that.
However, sometimes while articulating a vision for the future, an entrepreneur uses certain phrases or details that I think make a seed stage pitch sound weak.
Here’s a list of things I hear from time to time that I think should generally be avoided in seed stage pitches:
You don’t need to bluster your whole pitch, but establishing a sense of confidence can go a long way here. When you use the phrase “trying to raise” it sounds like you’re not quite sure if it’s going to happen and you’re testing the waters. …
I’ve been watching with curiosity as several text message storytelling apps have emerged to top the free charts on iOS/Android. Most notably Hooked was #1 across all free apps on the US App Store yesterday and other similar apps such as Yarn have been rising quickly in the rankings and are within spitting distance.
I think there’s a possibility that a new kind of publishing format and content format could be created that is pretty unique to how content would be consumed on a mobile phone. …
I’ve spent a lot of time meeting and angel investing in consumer Internet companies at the pre-product and idea stage. I’m endlessly fascinated by new consumer behaviors and I love to squint and try to see the future alongside an insightful, ambitious founder.
However, it’s easy to get lost in the details of various use-cases, the excitement around building the technology, the talent or pedigree of the team, or some other aspect that doesn’t really move the needle closer to actual success in serving consumers.
The best founders can always articulate a great startup idea quite simply — so simply that it can be written as a tweet. …
A physical retailer has never before had the opportunity to be a critical part of the Internet’s connective tissue. The core of how a fast casual restaurant works should get rebuilt from scratch to serve the needs of a world built around transportation as an Internet connected service.
I’m reminded of a tweet by Benedict Evans:
Historically we’ve seen the Internet largely upend retail’s core advantages and commoditize search, discovery, and fulfillment of products. This hasn’t happened in the fast casual restaurant market (e.g. Starbucks, Chipotle, etc…). …
Historically, every large product on the consumer Internet has nailed an end-to-end consumer experience from the very beginning. I think the future will continue to have such winners (most likely in communication tools, at least). But there’s a new, non-obvious approach to serving consumers that I think will emerge: a focus on gaining a deep advantage by serving a layer of an ecosystem today and earning the privilege to build a consumer brand later.
1. Stripe & Affirm
Stripe is an example of a company that has an unintentional cross-over opportunity to serve consumers. The company was built on serving an infrastructure need that small startups had. Some of those startups are now big startups. Stripe also won larger scale enterprise partners. As Stripe continues to scale there’s a possibility that they could build a consumer brand by earning visibility in their partner payment flows. If I see Stripe in the checkout flow of a brand I trust, I may have more confidence giving my credit card information to a lesser-known online business that also uses Stripe to accept payments. If Stripe captures consumer trust in their brand, there’s no limit to how big they could be. Someday we could all be using online credit cards or payment identities managed by Stripe. …