The Solana Incubator: Finding Crypto's Next Breakthrough App | Emon Motamedi

This episode offers a deep dive into the Solana Incubator's strategy for fostering breakthrough applications, revealing Emon Motamedi's approach to navigating the volatile crypto startup landscape and identifying opportunities for real-world adoption.

Introduction to Emon Motamedi and the Solana Incubator

• Jack Cuban, the host, introduces Emon Motamedi, Head of the Solana Incubator.
• The Solana Incubator, run by Solana Labs (the original developers of the Solana blockchain), focuses on nurturing companies building on Solana.
• The incubator recently concluded its second cohort, centered on real-world adoption, and is about to close applications for its third cohort.
• Emon's insights are valuable for understanding how new teams are approaching innovation on Solana.

Post-Accelerate Conference Reflections

• Emon Motamedi shares his positive impressions of Accelerate, Solana's first major US-based conference, highlighting the Solana Foundation's execution.
• He notes the timing was strategic for pushing Solana's presence in America, considering regulatory shifts and ecosystem maturity.
• The launch of the Solana Policy Institute aims to deepen roots in the DC area.
• The conference themes "Scale or Die" (developer-focused) and "Shipper Die" (policy, Web2, VCs, real-world adoption) were key.
• Emon: "Our thought was now is really the moment to push within America from a regulatory standpoint, from a maturity of ecosystem standpoint."
• Jack Cuban echoes the positive sentiment, noting the conference was well-run with high-signal content.
• Jack's key takeaway was a "real feeling that change was in the air," with conventional wisdom shifting.
• Examples: Increased competition, updates to the core Solana consensus protocol (Agave client, Anza), Kraken's tokenized equities announcement, and the Trump memecoin dinner.
• Solana Consensus Protocol: The underlying mechanism by which the Solana network agrees on the state of the blockchain. Changes like the Agave client and Anza signify ongoing evolution and optimization.

Shifting Dynamics and Increased Competition in the Solana Ecosystem

• Emon agrees with Jack's assessment of rapid change, stating it's a sign of a vibrant ecosystem with new perspectives and building methods.
• Emon: "I think that's the sign of a really vibrant ecosystem when tons of people are coming in they have new perspectives on things they build things in different ways and suddenly the world looks very very different than it looked 3 months ago 6 months ago etc."
• The discussion highlights increased competition:
• Jupiter, once a dominant aggregator, now faces numerous competitors.
• Jupiter's move into lending creates competition for established players like Kamino.
• Emon notes that early Solana development focused on "low-hanging fruit" (e.g., first lending protocol, first swap protocol).
• Now, with foundational elements built, innovation is forced towards solving new, unaddressed problems, akin to the evolution of apps on the iPhone after basic utilities were established.
• Strategic Implication for Investors/Researchers: The maturation of the Solana ecosystem means opportunities are shifting from foundational infrastructure to novel applications and solutions for more nuanced problems. Identifying teams tackling these "second-order" problems could be key.

Solana Mobile and Expert Influence

• The conversation touches on the Solana Mobile announcement at Accelerate.
• The Solana Incubator is open to mobile-native applications and actively collaborates with the Solana Mobile team.
• Nikita Bier, known for his expertise in mobile consumer products, is an advisor for Solana Foundation/Labs and engaged with Cohort 2 teams.
• Emon describes Nikita's impact: "I think he kind of gives teams permission to to think about like what it would look like to go 100x, a 1000x from from where their existing thinking is."
• Nikita encourages teams to take "big swings" and rethink their go-to-market strategies for exponential growth, rather than incremental improvements.
• Jack mentions Nikita's prescient tweet about the Believe app, a memecoin launchpad for startups, highlighting his understanding of viral mechanisms.
• Believe App: A platform allowing founders to launch memecoins to gauge market interest in their startup ideas before full-scale development.
• Viral Mechanisms: Features or strategies embedded in a product designed to encourage organic, user-driven growth and spread.

Idea Generation for Startups

• Jack asks Emon about fostering non-derivative ideas in crypto, where trends can lead to many similar applications (e.g., AI agent launchpads).
• Emon notes many incubator teams arrive with fleshed-out ideas, focusing then on finding Product-Market Fit (PMF) – the degree to which a product satisfies strong market demand.
• For idea generation, Emon suggests two paths:
1. The YC (Y Combinator) Path: "Build something you yourself want." This is effective for crypto-native founders who deeply understand unmet needs.
• Y Combinator (YC): A highly influential American technology startup accelerator.
2. Roger Dickey's Framework (former founder of Gigster):
• Heuristics/Themes: Brainstorming ideas around themes like "seven deadly sins" or "stages of a relationship" to explore unconventional sectors.
• Graph/Vector Method: Creating a chart with tech trends (e.g., AI, VR, crypto developments) on the Y-axis and industries (e.g., travel, dating, finance) on the X-axis. Ideas are generated at the intersection of each node.
• Emon: "And so me and my co-founder through both of these approaches, we ended up with something like 3,000 different ideas."
• Actionable Insight for Researchers: Emon's structured idea generation methods can be adapted by researchers looking for novel intersections between AI and various crypto verticals or real-world applications.

Balancing Trends vs. Long-Term Vision in Crypto

• Jack raises the challenge of crypto's rapid trend cycles (e.g., restaking) and the temptation for short-term gains via tokens.
• Emon emphasizes trying not to be "too trend-focused," as many flash-in-the-pan trends lead to unsustainable businesses.
• Emon: "The quicker something grows, the quicker something falls."
• He advocates for building sustainable businesses with long-term vision, focusing on revenues and profitability, not just eyeballs, VC funding, or token appreciation.
• The incubator prioritizes teams building to sustain, even if it means forgoing immediate trend-chasing.
• Strategic Implication for Investors: While trends offer short-term opportunities, Emon's perspective favors due diligence on business fundamentals and long-term sustainability, even for crypto projects. This is particularly relevant for AI in crypto, where hype cycles can be intense.

Finding Product-Market Fit (PMF) Beyond Speculation

• Jack notes the adage that speculation and stablecoins are the primary areas with PMF in crypto, yet the incubator's startups often look beyond these.
• Emon distinguishes between:
• Ideas for the crypto-native audience (often speculation-based).
• Ideas using crypto as infrastructure for a broader audience.
• For the latter, the "speculation/stablecoins only" PMF adage is less true. Crypto acts like AWS – a backend technology supporting diverse applications.
• Emon: "If you look at crypto as just infrastructure that is supporting some broader idea then I think the adage of you know the two things that have PMF are stable coins or or speculation doesn't really hold true as much."
• Cohort 2 focused on real-world use cases where competition is often Web2 companies, not other Web3 projects.
• Actionable Insight for Crypto AI Investors: Projects using crypto as underlying infrastructure for AI applications targeting real-world problems (outside the crypto-native sphere) may find PMF in larger, more traditional markets.

Market Creation vs. Entering Existing Markets

• Jack asks about advising founders on finding and selling into their market, especially in new or tricky spaces.
• Emon emphasizes focusing on the end problem rather than market sizing initially, citing Airbnb as an example of solving a personal problem that uncovered a massive market.
• However, he concedes that entering a large market can be advantageous for pivoting if the initial idea doesn't find PMF, as there are more adjacent problems to solve.
• Emon believes that if a founder genuinely experiences a problem, many others likely do too, justifying building a solution even if the initial perceived market seems small.
• Emon: "The reality is probably many people have that problem solely by virtue of you yourself having that problem."

The Role of Tokens in Crypto Startups

• Jack inquires about advising founders on tokens, especially for teams targeting non-crypto-native audiences.
• Emon identifies two approaches to tokens:
1. Monetary Exit: The token is primarily a financial instrument linked to the project, essentially becoming the project.
2. Utility/Incentive: The token is embedded to solve a tangible problem, like setting up incentive structures.
• Emon strongly favors the second path: "Using the token in support of a sustainable business, I think, is really the key piece."
• He advises against launching tokens purely for speculative pumps.
• Strategic Implication for Investors/Researchers: When evaluating tokenized projects, especially in AI, scrutinize whether the token serves a genuine utility within the ecosystem or primarily functions as a speculative asset. A clear, problem-solving role for the token is a positive signal.

Perspectives on Memecoin Launchpads like Believe

• Jack asks for Emon's thoughts on platforms like Believe, where founders launch memecoins to test market interest.
• Emon is "of two minds":
• Positive: An interesting experiment worth trying; could lead to exciting companies.
• Concerns:
• Prefers founders with deep "founder-market fit" who don't need to crowdsource problem validation.
• Cites the "Steve Jobs piece" that users don't always know what they want, questioning reliance on mass wisdom for complex product decisions. He shares an anecdote from his time at Solana Labs running Realms SPL governance (a DAO platform) where community feedback wasn't always aligned with core needs or technological realities.
• Realms SPL Governance: A platform on Solana for creating and managing Decentralized Autonomous Organizations (DAOs), allowing for on-chain voting and treasury management.
• Emon is observing such models with interest from the sidelines.

Solana Incubator Cohort 2: Real-World Adoption Focus

• Emon explains Cohort 2's focus on real-world use cases was driven by improved regulatory outlook, ecosystem maturity, and technological readiness.
• The cohort's six teams fell into three buckets:
1. Institutional Finance and Real-World Assets (RWAs).
2. Data and Machine Learning.
3. Payments and Stablecoins.
• Learning: Emon states, "Now really is the time" for real-world use cases. Institutions are engaged, data/ML teams are driving revenue, and payments/stablecoin projects are gaining traction.
• All six Cohort 2 teams are reportedly "crushing it," indicating strong appetite for real-world adoption projects.
• The focused theme allowed for synergies, customized support, and cross-pollination among teams (e.g., sharing access to institutional contacts, subject matter experts like ex-PIMCO and Fidelity Digital Assets veterans).
• Relevance for AI Researchers: The Data and Machine Learning bucket is a direct area of interest. Understanding how these startups leverage Solana for AI/ML applications can provide valuable insights into decentralized AI infrastructure and use cases.

Impact of the Changing Regulatory Landscape

• Jack asks if the friendlier regulatory environment (e.g., potential Trump-appointed SEC) has shifted how Emon advises founders.
• Emon notes the biggest difference is geographic:
• Cohort 1 had more international teams (4 out of 6) due to a more challenging US regulatory climate.
• Cohort 2 was US-heavy (5 out of 6), reflecting increased comfort.
• This shift allows for:
• More products targeting US end-consumers and broader real-world use cases.
• Greater diversity of thought from founders with varied backgrounds (e.g., US institutional finance, Asian markets).
• Increased willingness from institutions and Web2 companies to engage with crypto projects.
• Jack observes that a hostile SEC previously incentivized short-term thinking and discouraged real-world businesses. The current environment offers a window to prove crypto's tangible benefits.
• Emon: "It both allows companies to be much more long-term focused and I think some of the narrative around like oh, what if Solana disappears tomorrow... that fear has dissipated as well in a lot of ways."

Solana Policy Institute's Role

• The Solana Policy Institute, led by figures like Kristen Smith and Miller Whitehouse-Levine, aims to give Solana companies a voice in Washington and help remove regulatory roadblocks.
• Miller spoke to Cohort 2, offering direct support to teams facing regulatory questions.

Spotlight on Cohort 2 Startups

• Easy (Payments):
• Addresses high payment processing fees for merchants.
• Unique approach: Consumers pay with existing credit cards. The payment is temporarily converted to stablecoins on-chain to generate yield, which then offsets the merchant's processing fees. The merchant receives their capital as usual.
• Emon: "For the merchant, basically the flow is the same with the benefit of payment processing fees being lowered."
• Found an initial niche in elementary school lunch programs due to the high percentage-based impact of fixed fees on low-ticket items.
• Has since expanded its pipeline significantly, attracting demand from various industries.
• USDM1 (Sovereign Stablecoin):
• A stablecoin with sovereign status from the Marshall Islands.
• This status provides regulatory advantages, such as being the first nettable stablecoin under ISDA (International Swaps and Derivatives Association) – a standard-setting organization for the derivatives market. Nettability simplifies risk management for institutions.
• Aims to be a global, yield-bearing stablecoin.
• Also has potential local use cases within the Marshall Islands, like efficient UBI distribution.
• Strategic Implication for Investors: Sovereign stablecoins like USDM1 represent a novel approach to navigating the complex regulatory landscape of digital currencies, potentially offering unique benefits for institutional adoption and cross-border transactions.

Startup Success Rates and Founder Support

• Emon doesn't have a specific success percentage target for incubator projects.
• The program prioritizes "doing what's best for the founder," which may include giving permission to move on if an idea isn't working and their passion lies elsewhere.
• The ultimate goal is to drive the Solana ecosystem forward, which includes supporting founders in finding impactful work, even if it's not with their initial incubator project.

Solana Incubator Cohort 3 Details

• The Solana Incubator program brings 4-6 teams to New York for three months, offering bespoke support and direct access to Solana Labs' expertise in design, marketing, engineering, etc.
• Emon: "Really at its core, the the sort of biggest benefit of the program is the build alongside Solana Labs experience."
• The small cohort size allows for customized programming based on team needs.
• Benefits include being in the "nexus of the Solana ecosystem," with proximity to Solana Labs, Foundation, Anza, and other key teams like Drift and TipLink.
• Application deadline for Cohort 3: May 30th (likely passed by air date).
• Cohort 3 runs from early September to late November in New York.
• Website: solanaincubator.com; Emon's Twitter: @ImanMTweets.

Conclusion

The Solana Incubator, under Emon Motamedi's guidance, champions sustainable, real-world applications over fleeting trends, leveraging Solana's maturing infrastructure. Crypto AI investors and researchers should monitor its cohorts, particularly in data/ML, for emerging models of decentralized innovation and practical use-case development.