Founder Stories: New Kids on the Blockchain — Silicon Valley’s Sinking Ship
Co-founder of Aragon Luis Cuende embodies the new class of rising cryptocurrency stars, extremely young and driven, simultaneously raised all over the world and by Reddit, and having a healthy amount of rebellion towards the current systems of governance.
This article is the first in a series of Founder Stories by OpenOcean, highlighting impressive people in the decentralization, AI, and devops spaces.
Famed venture capitalist Fred Wilson recently tweeted the following: “The two greatest & most disruptive startups of the last ten years (BTC $40bn & ETH $20bn) did not emanate from SV[.] They represent the future.” Maybe using the word “startup” to describe these two cryptocurrencies is not fair, maybe making reference to the crumbling Silicon Valley is an overused tactic to get more likes, but 21-year-old co-founder of Aragon Luis Cuende embodies this tweet perfectly, born in a small village in Spain and skipping out on college. The irony of course is that before Aragon, Luis and his even younger Aragon co-founder Jorge Izquierdo moved from Spain to Palo Alto, pitched to Wilson’s firm Union Square Ventures, and were quickly rejected. Luis and Jorge were working on a blockchain company called Unpatent at the time which focused on fighting patent trolls, entities that buy up patents and sue companies for breaching them.
“Me and Jorge were moving each month,” Luis said. “I burned all of my savings in the Valley. It was hard times. We were eating like shit. You have to be strong to deal with these ups and downs. It’s hard because at our age your personality is still being built in some ways. On the other hand, we have all the energy in the world to do this. I couldn’t see myself doing this if I was 50.”
While in Palo Alto, in addition to USV, Luis and Jorge were turned down by every venture capitalist they talked to when trying to raise some seed money. This, coupled with Trump winning the election, encouraged them to move back to Spain to start Aragon. Instead of relying on traditional funding, Aragon opted for a token sale, building a decentralized governance structure for their own company. The company is owned by the community, and by issuing tokens, Aragon was able to raise funds from its early adopters and contributors. Aragon’s token sale this past May was at the time the second largest crowdfunding event in the blockchain space, only surpassed by The DAO. The team raised 275,000 ETH in 26 minutes, worth $25 million then and over $50 million now. If that wasn’t enough, in July co-founder of Ethereum Mihai Alisie joined the Aragon team as an advisor. For funding and advice, the Aragon team had sidestepped traditional VCs.
“Being in the Valley was really good for us because we were seeing how the ship was sinking, how the Valley wasn’t like it was supposed to be,” Luis said. “But it was very hard work, and so many top VCs were turning us down. 10 months later we are sitting on a crazy amount of capital without meeting any VCs at all. After the sale, people thought we were opening a champagne bottle in Ibiza or something. But we were very tense on our laptops making sure everything worked, that no money got stolen. I think I aged 14 years in those couple months up to the token sale. But we executed.”
Luis and Jorge began developing Aragon last November, and they currently have a working prototype that is about 5 months away from a full release. Aragon, named after the region in Spain where anarchism stood for the longest recorded time, is a network built on top of Ethereum that lets users build decentralized organizations, offering features like cap table management and voting rights. “We’re so used to these invisible lines of power that determine the relationships that we have,” Luis said, speaking emphatically. “Cryptocurrencies will fix some part of that, but there is also the organizational part, making sure people organize and align their incentives towards the same thing. We started thinking about a way to disintermediate that. For example, there are two people on Reddit who want to create something, a company or nonprofit or whatever. With Aragon they will be able to create a governance model for their organisation. We will disintermediate organisations.”
Luis sees one of the most important use cases of Aragon to be for Open Source projects. “Previously, if you reused something someone else has built, you kind of see it as stealing,” Luis said. “But technically you are making things better and contributing to the community. In the token world, if you build on top of Ethereum for example, you are driving the value of Ethereum up, then if you are successful, you are also driving your value up. I think that’s a breakthrough in how to organize people, closing the loop on incentives for Open Source projects.” If you pitched to fix Open Source projects in the Valley, you would be told that the market is too small. But like the lead founder of Ethereum, 23-year-old Russian-Canadian Vitalik Buterin, Luis’ background and young age means a unique worldview that is spilling over to the products he’s creating.
Luis was born in Oviedo, a small town in Spain, and was first introduced to technology serendipitously at the age of 12. His father, an engineer, left a Linux CD out on top of a computer, and Luis was so bored he tried to install it and see what would happen. It took a week for him to install the software when it should have taken a day. “I was figuring out things,” Luis said. “The first thing I figured out was I have to Google in English for interesting results to appear. That seems like a super stupid kind of thing but a lot of people don’t know how to do that, so they are restrained to a small subset of knowledge in the world.” He did not completely understand Linux, but he was impressed that there was a small group of people making an alternative to the huge Windows behemoth: “I didn’t understand capitalism but I understood that there was something going on there.”
Constantly perusing the Internet when bored at home, Luis discovered the online Linux community, and then Hacker News. (These days he is on a lot of Slack channels, Twitter, and Reddit, especially, r/ethereum and r/ethtrader, although he confesses “ethtrader is just for the lol. I don’t find a lot of a valuable content but I find a lot of valuable memes.”) Before Aragon, Luis had already founded five companies, with some smaller projects mixed in as well.
Jorge was Luis’ most frequent collaborator — their union could very well be its own romantic comedy. When Luis was 15, he was featured in some local Spanish newspapers for his entrepreneurial efforts, and Jorge, who was just learning to code, reached out to him on Twitter. Jorge wanted to buy an iPhone, so he started learning how to build iPhone apps to generate enough revenue to buy one, and was eventually successful.
Luis discovered Bitcoin in 2009 but quickly brushed it off as a scam. Then in 2011, he rediscovered it, read the white paper, and was blown away. Thus began his obsession with cryptocurrency. “The technology itself is awesome,” Luis said. “But the thing that made me realize this was huge was that we were going through the whole subprime crisis. In the US, it peaked in 2008. In Spain, it arrived later, like 2010 or 2011.” When Ethereum released, Luis was impressed — its ability to create smart contracts convinced him to fully jump on board.
A year ago, Luis introduced Jorge to Ethereum, and Jorge quickly devoured everything he could learn about it. At Aragon, Jorge focuses on the technology side of things whereas Luis focuses on everything else. The two have built a team with people from Spain, Finland, Germany, Colombia, and Denmark. When Aragon is deployed for production, Luis and Jorge will transition all power to the Aragon Network, with token holders determining how much they are paid and how to move the company forward. “I think it would be super cool if Aragon was the first example of a post nation or post state world,” Luis said. “Where people are able to organize without any kind of state in the middle.” The world has never seen a company and founding team quite like Aragon. Bitcoin might crash, Ethereum might hard fork, but these young Spaniards are too smart and too persistent to just disappear.