Our Investment in DeForm: Building an On-chain CRM

An interview Q&A with founders Catherine Chang and Kei Yoshikoshi​​

A few weeks ago, Contribution Labs, which is building an on-chain CRM service named DeForm, announced their $4.6 million seed financing led by Kindred Ventures. Founded by Catherine Chang and Kei Yoshikoshi, DeForm aims to be the first and best way for startups, brands, and protocols touching crypto/digital assets to manage the relationship with their users and customers. You can read more about their seed round, early customers which include Coinbase and Farcaster, and their vision for the company directly from the founders’ blog here and from The Block here.

Our interest in working with Catherine and Kei started when we had a product jam session around an experimental project of theirs, which was essentially a NFT “learn to earn” rewards protocol concept they dubbed “Kudos”. Out of this project, they quickly realized something was fundamentally broken in Web3 community management: despite all the excitement and activity in networks, it was still extremely difficult to identify, organize, and communicate with contributors and participants in developer and user communities. Tapping into identity, social graph integration, user-generated data, and wallet/token ownership, the Deform product allows its customers to conduct user surveys, waitlist management, direct product feedback, and general marketing activity, while preserving important decentralized aspects of the network. This made a lot of sense to us as they had spent their past lives building products at Atlassian and Microsoft, two companies that both have a “listening to customers” strength at their core.

As Crypto/Web3 move out of its early speculation markets phase and start to achieve genuine adoption into mainstream markets and society, Catherine and Kei are working to enable any organization using digital assets to better manage the end-to-end relationship with their customers and community members and conduct marketing much more intelligently. We’re excited to partner with them on their journey and to have led their $4.6M seed alongside Linda Xie from Scalar Capital, Elad Gil, Scott Belsky, Naval Ravikant, and many other great funds and angels.

We sat down with Catherine and Kei and asked them a few questions about their history with building software tools, things that inspire them, and some of their insights as founders. Please enjoy the interview below!

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First off, congratulations on your fundraise and shipping to customers! So both of you have worked at big public tech companies, Kei at Microsoft and Catherine at Atlassian. What were some of the most important lessons you took away from your time there, maybe unexpected things?

Catherine: Kei and I get really excited about building tools that help people be more successful in what they do — it’s really the magic of Atlassian and Microsoft at work here. Our experiences as product manager and engineer at these companies trained us to be good at identifying workflow inefficiencies and building easy-to-use and scalable product experiences.

When we saw how various marketing and community leads at crypto companies, communities, and DAOs were painstakingly spending hours and hours creating complex workarounds in order to collect wallet addresses from people, check their on-chain activity, and give out crypto rewards, we knew there was an opportunity.

Yes, this is a problem that happens in every major technology cycle. New customer requirements, workflows, and data models demand new tools. Can we go deeper into those insights and what you’ve learned now in the early days of Contribution Labs?

Catherine: There are three main insights:

Reason 1 was that NFTs are a great marketing tool. Prior to DeForm, Kei and I worked on an NFT minting platform together. It was used 100,000’s of times and was used primarily by community and marketing representatives who wanted to show their love and appreciation for those who were consistently participating and engaging with their communities.

Reason 2 came from both Kei and I having spent many years working on partnerships-based teams and we saw how much companies love co-marketing and building integrations with each other. However, one consistent challenge among these initiatives is the lack of consistent identity systems between companies, which always limited what we were able to do. And blockchain actually solves this! It provides a shared standard among various companies that allow for unlimited co-marketing, distribution, and engagement potential.

Reason 3 is that the major consumer brands like Nike, Starbucks, McDonalds, etc. are all baking crypto elements into their loyalty programs, collabs, and campaigns. It is inevitable that every company’s marketing department will involve crypto-native but user friendly elements into their marketing plans.

All of these reasons combined present an opportunity for us to build tooling that makes crypto-native and highly usable marketing infrastructure more accessible than ever.

When you think of conventional CRM, but in a world where “customers” are also contributors and community members joined onchain, what kind of differentiated functionality do you think protocol networks, brands, and platforms want?

Catherine: The CRM that we’re building is focused on helping our customers:

• understand who their customer prospects are online and onchain based on their socials and wallet presence
• reward their community with digital collectibles and crypto
• communicate with their audience using NFTs and wallet-based messaging methods
• distribute their service or digital assets in a more personalized and targeted way on-chain.

That being said, we’re very focused on making our product as familiar as possible, so we’re building a ton of integrations between our CRM and your “traditional” marketing tools like Google Sheets, Zapier, Mailchimp, and more.

For some B2B startups, the first set of customers need close attention and collaborative development from the company to get the product just right for them. Would you say that’s true for your early set of customers?

Catherine: Absolutely! We create Slack or Telegram channels with each and every single one of our customers and make sure to address feedback within minutes and ship improvements as soon as we can. Actually, last week we helped Dan Romero’s company, Merkle Labs (Farcaster), get set up from end to end in just under 18 minutes!

One of the more involved partnerships we did was with Base (Coinbase’s L2). In order to go live with them on time, we met over Zoom multiple times a week, wrote many product specs, and shared multiple Figma files with each other to make sure they would be successful for launch.

The big takeaway though, is that, if you’re building something valuable to the community, even if the product is just an MVP, people will literally send you product requirements along with their priorities and then pay you to solve their problem.

Today, the intense speculation and noise in crypto has flattened out. Exchanges and marketplaces see little momentum now, with a few exceptions with N-of-1 services like Friend.Tech and Zora. However, at the same time, many brands, gaming studios, and creators seem to be investing heavily into creating digital assets onchain and exploring new community and storytelling experiences for their customers. What do you think is happening here?

Kei: In some senses, the speculative energy in the last few bull runs has allowed the industry to flourish with capital, which I think helped create a lot of the primitives that we rely on today (ex: developer infra and tooling). That being said, bull markets can be confusing for many projects as it’s easy to conflate temporary increased usage (due to bot activity or airdrop hunters) with PMF. I think projects are really feeling this hard during this bear market.

Now that a lot of the noise is gone, I think people are thinking about how to actually create lasting value & utility to users. Many are embracing the fact that the blockchain isn’t just an innovation on the financial system, but also is a standardized identity system. It’s now easier than ever to build an app on top of one’s blockchain identity — the wallet isn’t just a container of how much money you have, but rather a representation of your taste in music, art, interactions with brands, memories, and so much more. You can take these attributes with you throughout the internet, and this allows shared consumer experiences across platforms — something we call ”token-enhanced experiences”.

What are some future customer problems within your crypto-native CRM roadmap that you’d like to solve?

Kei: We want to create a seamless and simple experience for our users from data collection, reward distribution, and communication, so we have a few things ahead of us:

• Automated workflows (i.e. IFTTT) that allows users to configure what should happen based on certain off-chain and on-chain conditions (ex: if you score over X% on your form, you get an NFT and an email notification).
• An easier way to process through customer data so users can decide who is eligible for rewards, with additional onchain data and insights derived via AI
• The ability to perform direct wallet and email-based communications with your audience

Ok, so we’re in the middle of a big turning point for Web3 technology. But I think we can agree that the vision and protocols around decentralization need to be refocused and made more usable, maybe even technologically invisible to the user. What are your predictions for crypto over the next year or so?

Kei: Wallet generation and onboarding infrastructure will improve, and this will lower the barrier of entry for non crypto-native brands or communities to send crypto rewards to their audience (ex: friend.tech used Privy to make it easy to onboard and participate). This will be key for projects that are trying to go upmarket and into the web2 space (since capital within web3 has dried up and many projects have little or zero revenue). Easy and smooth integrations into existing stacks is a must-have, and even then, the challenge will be to convince these existing web2 companies that using the blockchain will be an added benefit to whatever they already have.

At an ecosystem level, there will be consolidation of many chains onto a few protocols. You can already see protocols building on this “superchain” concept, where other chains are built on top of or using technologies from existing chains (ex: Base using Optimism’s OP stack, Astar zkEVM using Polygon’s CDK, etc). Things like Polkadot and Cosmos have existed for a while so this isn’t a new concept but I’m personally excited for this to happen more in the EVM-native world.

I’m hopeful that as more utilities and apps get built on top of specific ecosystems, we’ll start to see network effects show and everyone can win together instead of being divided. As an industry, we’ve only experienced the tip of the iceberg, and I would love nothing more than for those of us who are building the future to work together towards our shared vision of what Web3 can do for the world.

I think consolidation of users and developers onto several chains is very important now. Each of these chains need to have the critical mass of users, developers, and proper tools to make any significant societal impact outside of speculation. Switching gears, what are your favorite books? Favorite album or artist you’ve been jamming to at the office?

Catherine’s favorites:

• Book: Educated by Tara Westover
• Playlist: Stutter House
• Show: Naruto

Kei’s favorites:

• Book: Three Body Problem by Cixin Liu
• Playlist: Top 50 — Japan on Spotify, Blackpink
• Show: One Piece

Sounds like it would be fun to hang out at your office! I can imagine you both hosting an anime and k-pop theme customer meetup happening soon in San Francisco. Thanks for doing this interview, Catherine and Kei.