Event Recap: Exploring Entrepreneurship in the Open Internet Boom
The teams behind funded startups building on the Internet Computer share insights from their experience creating services for the open web.
The open internet holds new promise for entrepreneurs and developers to realize opportunities and business models that previously didn’t exist. Decentralized technologies are enabling talent from around the world to build new services and apps without depending on legacy IT, such as proprietary cloud services, server machines, and database systems. Open economies and marketplaces will emerge, defining a new paradigm for technology startups.
As a result, the startup playbook is being flipped on its head. To examine this moment and some of the venture-backed startups that are already building on open infrastructure, the DFINITY Foundation hosted a virtual event that explored how the open internet boom is changing conventional Silicon Valley narratives around entrepreneurship. The entrepreneurs behind Fleek, Capsule, Tacen, and LinkedUp described their company-building strategies and what it means to take open-source code to market.
How do the concepts of equity and exiting a company look different for tokenized startups building on the Internet Computer? How early does a crypto investor need to see a proof of concept? How much capital do DeFi startups need to successfully launch? These and other questions are discussed in detail in the following segments.
The Open Internet Boom: The Next Generational Shift in Entrepreneurship
TechCrunch Editor-at-Large Mike Butcher joins DFINITY Founder and Chief Scientist Dominic Williams for a discussion about the entrepreneurial opportunities being unlocked on the open internet. “When you change the platform paradigm, when you change the computing paradigm, you also inevitably change the business paradigm,” Williams says. “Pretty much the entire web ecosystem is going to be reimagined around this model.”
“Silicon Valley became big because it was all about the proximity of people,” says Butcher. “I remember speaking to a VC who would only invest in startups he could skateboard to.”
“One of the biggest challenges I hope we can fix is that today is that only a small fraction of the world’s potential talent is able to have a shot at building an internet service,” Williams notes. “The Internet Computer can help level the playing field so that the other 99 percent of the world’s talent has a shot at building the internet of the future.”
Williams and Butcher explore how building on public blockchains such as the Internet Computer will enable the deployment of tamper-proof software that can be autonomous, permissionless, and interoperable — expanding the scope of what is possible.
Selling Shovels During the Open Internet Gold Rush: A conversation with Fleek
Fleek has raised $4 million to make it easy for people to create websites and apps on the open internet. The idea, which mimics traditional web infrastructure, is similar to that of Cloudflare or Netlify but built for the open web: permissionless, trustless, and free of centralized gatekeepers. Most of the apps in the Ethereum space use Fleek for hosting, and most projects in the non-fungible token (NFT) space are using Fleek for storage, according to co-founder Harrison Hines.
Fleek will enable 11,000 traditional and blockchain-based websites to transition and run on the Internet Computer’s public network while helping websites built on the legacy Web 2.0 stack also seamlessly transition to Web3 — and participate in the emerging open internet boom.
Hines describes how open internet infrastructure allows businesses to serve users “without any friction” or concern over how to scale. “You just have to worry about writing your app logic and outsource the infrastructure piece to the [Internet Computer] network and let it automatically and infinitely scale to what your app actually needs,” he says. He also discusses how the unique advantages of network scale and of not restricting your business vision to a particular geography gives startups a competitive edge in user adoption and overall growth when building on the open internet.
How a Founder Scored $1.5 Million From a Tweet: A conversation with Capsule
Within weeks of tweeting his intent to build a decentralized social media platform, Nadim Kobeissi found himself with $1.5 million in funding and press coverage of his nascent startup, Capsule. The funding from the Beacon Fund, a dedicated crypto fund by Polychain Capital focused on startups building on the Internet Computer, puts Capsule at a paper valuation of $10 million. To Kobeissi, this early traction reflects the community’s appetite for decentralized social media products.
In this talk, Kobeissi discusses the state of Facebook, Twitter, and centralized social media as we know it — deplatforming, advertising, community management. Kobeissi has expressed concern about giant private corporations having unilateral power to shape internet speech — whether takedown decisions are being made by Twitter’s trust and safety lead or Amazon Web Services revoking access to the public internet. He explains how Capsule is approaching these big issues as it works toward developing a prototype of its decentralized social platform on the Internet Computer’s open infrastructure.
“Looking at something like a decentralized social network and saying that it’s going to have the same adoption as Facebook or Twitter or Instagram is like saying that a vegetarian restaurant is going to have the same allure as McDonald’s,” he says, suggesting that decentralized social networks can present new options to users based on entirely different principles.
How to Pitch Your Open Internet Startup to VCs: A conversation with Polychain Capital
One of the first questions on a founder’s mind is how to secure venture capital. In most cases, the first step is formulating your pitch. Polychain Capital founder Olaf Carlson-Wee, who was also the first employee at Coinbase, and general partner Tekin Salimi discuss how founders building on open internet platforms like the Internet Computer should prepare to explain total addressable market (TAM), how the process of “exiting” in the blockchain world is different from a traditional venture-backed startup, and how equity translates back to founders and investors.
In this panel, Carlson-Wee and Salimi give tactical advice on developing a strategic vision, making your first hires, and prioritizing capital deployment once it’s secured. The general partners begin the conversation with an overview of how a blockchain startup’s pitch deck diverges from that of a Web 2 startup. “In the traditional startup world, a pitch deck would sell what the lifetime value of a customer would be — or it’s LTV. It’ll look at stats like the cost of user acquisition and basic business metrics to understand what are the unit economics of this business,” says Salimi. For open internet startups, he explains, “instead of convincing investors of a financial model, you’re actually trying to convince them of a whole economic system that will drive value to all participants that come on board.”
“Think from first principles about how you could enable a new type of behavior that’s unprecedented, but uniquely made possible through the characteristics of one of these open web platforms,” advises Carlson-Wee. “There are no limits to the potential of what could be built here.”
Technical Demo: OpenChat
Earlier this year, concerns arose around WhatsApp’s updated privacy policy, which required users to accept that their information may be shared with other Facebook-owned properties. This resulted in the privacy-focused messaging app Signal being one of the most downloaded apps on Android and iOS, as well as messaging platform Telegram surpassing 500 million active users, with 25 million new users signing up for Telegram on the App Store within a period of 72 hours.
The market opportunity is clear. OpenChat is a decentralized, encrypted messaging service that is capable of scaling to millions of users. OpenChat is similar in functionality to WhatsApp, Signal, and Telegram, but under the hood it runs on the Internet Computer as an autonomous app. This means that the code is public. Instead of being owned by a single entity, users who hold its governance tokens will have the final say on any changes to the app.
In this demo, developers Hamish Peebles and Matt Grogan walk through Open Chat and explain how developers can deploy an app by hosting its front-end and back-end architecture on the Internet Computer.
Claiming Self-Sovereign Identity in the Brave New Social World: A conversation with LinkedUp
LinkedUp began as a demonstration at the World Economic Forum at Davos of an open professional network that was running on the Internet Computer. Now, a team spearheaded by chief product officer Andra Georgescu and chief technology officer Vidor Gencel has taken this open-source technology and is working on bringing a new application to market. In this talk, the LinkedUp team discusses the potential of self-sovereign identity to enable users to claim ownership over their data, and describes the process of turning open-source code into a startup.
“There’s a lot of positive things that a professional social media network can do for the world, but we don’t need to pay for all those benefits with our data and our privacy,” says Georgescu. “We can actually have them, enjoy them, and have the dignity of owning our data and the power of controlling those platforms.”
Launching a Decentralized Exchange on the Internet Computer: A conversation with Tacen
Tacen is one of the first startups building a decentralized exchange on the Internet Computer — and it has raised $2.3 million to date. In this panel, Tacen Founder and CEO Jae Yang and Clarence Liu, the company’s chief of product, speculate on whether DeFi startup trends will match the rise of fintech, and discuss how much venture capital funding DeFi startups actually need. The Tacen team also comments on outages and other issues that financial companies like Robinhood have faced, and explains how Tacen is learning from these pioneering mistakes in adjacent tech verticals as an early stage DeFi startup.
—
You can find more educational materials on DFINITY’s YouTube channel. We hope this event will inspire broader conversations about entrepreneurship on the open internet. There are lessons to be learned from the pioneering class building out the open internet — and these founders are leading the way.
