Crypto During Coronavirus: Make The Right Decisions Now
It goes without saying that things have been a bit chaotic over the past few weeks. At dlab HQ in New York, our office is one of thousands that are closed amidst a city-wide shutdown the likes of which were difficult to imagine as little as two months ago. As the longer-term reality of the new normal settles in, we’ve been working diligently with our staff and our portfolio companies to figure out how to best navigate this unfamiliar environment. We understand that this is a challenging time for everyone and sincerely hope that all of you are staying safe and healthy. We’ll get through this, and we will be stronger for it. But first we have to survive, and surviving means reprioritizing and adapting.
How long will this situation last? Is COVID-19 a 6-month problem or a two-year problem? How long will recovery take, both operationally and economically? What does it mean for startups in our ecosystem attempting to raise financings this year? It’s honestly hard to know, as we simply don’t have sufficient data; but it’s clear that the effects will be material. This is truly an unprecedented situation and we need to be mindful with our next steps, both as a fund and as a community. It’s important in times like this to slow down before you speed up.
The pandemic’s effects on cryptocurrency and the entire blockchain ecosystem are even harder to pin down. What does life in a post COVID-19 world look like, and what kind of a role will crypto play? We’re going to find out. Here at dlab we continue to be excited about the growth of blockchain technology, its potential for societal change, and its applicability to the challenges that we find ourselves facing in a post-pandemic world. Although we’re certainly concerned about the current seed funding climate, we remain optimistic that great founders, as always, find ways to defy the odds and flourish. Now is as great a time as ever to work on technology that solves real problems the world is facing; problems that will become even more pronounced in the weeks and months ahead. We’re proud that our portfolio includes a number of companies addressing needs in disaster response, supply chain traceability, remote user security, worker credentialing, and employee compensation, among others. We’ve had conversations with dozens of companies for our latest batch who are doing fascinating work applying this technology stack to the healthcare, research, food and agriculture, and supply chain industries. This is work that matters now.
So how do we, as a program, respond to an event like this? At SOSV, we’ve been telling our startups that, first and foremost, they have to survive. This usually means making some difficult decisions: downsizing, focusing, and eliminating distractions. Often it means taking a step back from ambitious new projects in order to support your core. This is true of the companies we back, but it’s also true of us as an investor and as a studio. Our primary responsibility is to our founders, so we’ll be putting a lot of other efforts to the side for the next few months in order to provide additional resources, virtual programming, and hands-on support to them. We’ll be working hard to ensure the best possible outcomes for their businesses, and by extension, for the world around us. In order to focus our energy here, and because of the uncertainty of the next few months, it’s clear that the most responsible thing for us to do is to delay the start of our upcoming accelerator program.
Another change precipitating this delay is the exit of our partner, EMURGO. In this uncertain global situation, they’ve had to make the difficult decision to refocus on their own core business, which means they will no longer be co-investing in new dlab startups at the accelerator stage. They remain fully committed to the success of the ten portfolio companies we have co-invested in together, and we look forward to continuing to work with the EMURGO team as mentors and advisors for future dlab prospects.
The last few weeks have certainly been a time of change and priority re-assessment for everyone. However, it’s hard not to be optimistic when you’re surrounded by the kind of founders, partners, and mentors that we’re lucky to have in our network. Even if we’re all physically isolated for the moment, it’s always a pleasure to see you on a zoom call or in a slack room. The hangouts and virtual coffee conversations have been great so far, even if the actual coffee isn’t as good as the stuff downstairs at Culture Espresso on 36th.
Finally, if you’re a startup who has applied to our upcoming dlab cohort: Please know that we appreciate your patience and understanding during these uncertain times. We’ve been blown away by the quality of the applications we’ve received for this program and we’re truly excited to continue our conversions over the coming months. Please don’t be bashful if we can help in any way; you know where to find us via email or telegram. Likewise, if you’re a pre-seed or seed-stage startup in the space that we haven’t yet spoken with, we’d love to talk with you. We’re currently accepting applications and our current plan (accepting that there are maybe one or two major things outside of our control in these crazy times!) is to make selections in the Fall for a program kickoff in Q4.
Thank you. Please stay healthy, happy, and safe. Make the right decisions. And don’t stop building stuff that matters.