Paratii was born to carve out new revenue streams for content makers, and to enable video applications that can operate independently of the web’s monopolies.
We raised modestly, built bleeding-edge p2p technology, a couple of products and an eager community. We failed to reach enough traction to either achieve profitability, or secure a next round of funding under conditions aimed for.
Paratii is shutting down as a venture-backed, token-driven organisation. It’ll live on as an open source codebase and an unbounded network of collaborators. There was no hack. No legal drama. No fight between egos. What happened?
From late 2016 onwards, we assembled a lean team out of Brazil and Italy, later Egypt and the US. We prototyped what was probably the world’s first video player with an embedded ERC20 wallet. Halfway through 2017, we raised initial funding from a couple angel investors who bet on an alternative p2p technology for video monetisation.
Most startups wait until basic science is done, then develop a specific technology with a use case. They still fail in droves. Starting a business where you don’t know yet if reality allows what you’re seeking to achieve requires a strong stomach with a knack for delusion.
Few people realise, but, specially a couple years ago, that was really the case “in crypto”. We are still in science mode for good part of the time — no wonder why some of the most important projects out there really resemble more research efforts than actual companies. It’s challenging to balance the ingenuity that R&D in the space requires with the assertiveness that business does.
Paratii’s journey to maturity felt that weight. Like others, we swung between a product-first and a platform-first approach — trying to accommodate the needs of hungry end users, those of prospective financial supporters, our strategy and, ultimately, what we felt was right.
🔎 What we achieved
We prototyped a vision of decentralised video applications in two alpha products, garnered few hundreds of testers + close to a thousand videos, and “ventured down the stack” to build what was missing in order to support dApps.
We worked on js-ipfs, enabling browsers to stream heavy files directly to each other without throttling. We spec’d out with Livepeer a path to VoD support, and hacked a set up. We shipped Paratii.JS to aid video developers who rely on IPFS for storage and Ethereum for ownership attribution. We piloted with few publishers a modified Clappr player with built-in wallet and IPFS compatibility. We built the first TCR of videos out there, though still in test net mode.
We foresaw curation would become an important layer of the web3 video stack, and focused efforts in generalising the mechanisms we were prototyping in controlled environments. Video dApps will need ways to filter the content they stream — be it live or on-demand — and we felt that pushing for decentralisation early on could help these applications avoid legal pitfalls as well as scale without resorting to monopolised moderation.
🔮 What (and why) we didn’t achieve?
Businesses make money. It’s (part of) what separates a venture from a project. One must create and capture value, at scale. Even if, early in development, how that will be done, exactly, is still unknown.
We didn’t achieve sustainability. We created value, in shipping code, educational initiatives, contracts, and content, but never captured it. We didn’t want to push through an artificial capitalisation model whose burdens are evident, down the road (it took us long to realise and act accordingly).
Value capture in this industry is a murky topic, still. Remember Gutenberg died broke, and it took 70 years before any business managed to exist on top of the print (besides the Church). In the case of the web, Tim Berners Lee, Vint Cerf and Bob Kahn, combined, probably don’t have 1/1000th the wealth of Mark Zuckerberg.
Distributed, ownerless computing networks haven’t existed at scale before. Business models on top of them are on their early days. Tokens may or may not be part of the innovation. If anyone’s too sure of anything in relation to this, take it with a grain of salt.
Investor storytime
Investor storytime is a plague in the backstage of the internet. Investor storytime is when when investors buy millions in equity of a social media with no revenue model. It’s not questioning the fundamental incentives behind an end-consumer business. It’s built-in, from-the-ground-up bias towards mass surveillance in the web 2.0. It’s building products for investors, rather than users.
I don’t know what are the consequences in web 3.0, but there’s certainly a lot of investor storytime being baked in there, in its own format.
Some will argue investor storytime is an affordable means to a worthy end. We don’t think so. It has driven thousands of tokens to existence, but suboptimal compounded progress across the space.
From a bird’s eye view, the picture is clear: there’s pools of unique talent that could be doing X impact in the advancement of their field and the underlying creation of value, but are doing X/Y impact, instead —where Y is a weird incentive for overlapping work derived from a blind run for lower-level protocols and lack of clarity around value capture.
The fundamental promise we signed up for is to learn to build digital systems that organically make better crowds emerge, and organically become better with time. We didn’t achieve a fine balance between this two goals and the natural requirement for capital.
🔭 Zooming out
In the beginning, it was Bitcoin. Then, came Namecoin, Litecoin, Colored Coins. Today, spotlights are on Ethereum. Tomorrow, it’ll be others.
Cryptoland is in accelerated evolution. Taking a step back to breathe can be a healthy habit. Once down the rabbit hole, one has to understand the bigger forward momentum playing out here.
It’s more than just one currency, or one platform.
It can be the slow reinvention of the firm. It can be temporary autonomous zones. It can be open source bankware, and opt-in jurisdictions. It can be monetary policy at your fingertips, and novel forms of work. It can be a collaboration paradigm shift.
Can be. Web 3 is not inevitable. Maybe we won’t scale to billions of users in the near future. Maybe the goals of web3 will always be just the concern of a niche. The future isn not fixed, as Josh Stark puts it: we have to make the right choices to get the world we want.
The same human problems that exist everywhere exist online, too. We are bullish on the Ethereum community’s efforts to make sure that, this time, constraints on power and control are design requirements, not afterthoughts of the internet.
It’s humbling to be exactly in the right time when this invention cycle took off. If you see a vector in space, you believe in its future, and you’re still at its very beginning, you have the unique chance to do something small that nudges the curve in the right direction, such that the impact gets bolder as things move on and you zoom out. This small thing can be a “yes”, to the right opportunity. It can also be a “no”, to the wrong one.
Paratii has built an amazing team and contributed a good amount of value to the web3 video ecosystem. Hopefully, we’ll keep doing that - distributed around.
Paratii is becoming an open source R&D lab, and you can learn what that means in our next post. Also, join us on Telegram for the freshest news.
