This episode explores the complexities of founder mode in crypto, contrasting it with traditional tech startups, and highlights the unique challenges and opportunities presented by tokens, community engagement, and fundraising in this evolving space.
Founding in Crypto: A Unique Challenge
- Stani Kulechov, founder of Aave and Lens, kicks off the discussion by emphasizing the novelty and complexity of building in the crypto space. He highlights the long-term horizons and dependencies inherent in decentralized communities.
- Kulechov shares his personal journey, starting from experimenting with financial smart contracts in his dorm room to iterating through products like ETHLend before finding success with Aave's pooled liquidity model.
- "My kind of curse is always that I've never been able to achieve anything really good at least in the beginning in the sense that I have to iterate with the product uh quite frequently."
Web2 vs. Crypto: The Three-Company Challenge
- Jack O'Holleran, founder of SKALE, contrasts his decade of experience building Web2 AI/ML SaaS platforms with the unique "three-company" challenge of crypto startups.
- He describes crypto startups as encompassing a traditional company, a tokenized financial entity with legal and governance complexities, and a community-driven marketing engine akin to a "rock band."
- O'Holleran's perspective, based on his transition from Web2 to Web3, highlights the multifaceted nature of crypto entrepreneurship.
The Token Dilemma: Easier or Harder?
- The discussion shifts to the impact of tokens on a founder's journey, with Kulechov and O'Holleran debating whether tokens simplify or complicate the process.
- Kulechov argues that tokens can be a distraction, especially without protocol-market fit, but are valuable tools for distributing governance and ownership in decentralized systems.
- He emphasizes the importance of decentralization for trustless financial systems, but warns against launching tokens prematurely.
Double-Edged Swords and Founder Advice
- O'Holleran advises new founders to understand the "double-edged sword" nature of crypto, where positive aspects like tokens and decentralization can have negative consequences.
- "Crypto is a world of double-edged Swords okay and I think the more you understand that the the more you can get ahead of the other side of the sword."
- He stresses the need for emotional readiness, communication plans, and adaptability to navigate market fluctuations and community feedback.
- Kulechov adds the importance of focus amidst the distractions of the crypto space, urging founders to trust their vision and stay committed to their goals.
Applying Investor Insights to Building
- Santiago Santos, now building a crypto company after years as an investor, shares his perspective on the overlap between founding and investing.
- He emphasizes the shared goal of inspiring people and bringing out their best, whether through a clear vision or leading by example.
- Santos highlights the challenges of building in the open and the importance of attracting talent aligned with the mission.
Balancing Long-Term Vision with Short-Term Narratives
- The conversation addresses the challenge of balancing long-term visions with the short-term, narrative-driven nature of the crypto market.
- Kulechov emphasizes the value of community feedback in building resilient protocols, while acknowledging the noise and difficulty in discerning valuable opinions.
- O'Holleran describes crypto as "two separate animals," requiring both fundamental execution and a strong community presence.
Fundraising in the AI Era: How Much is Enough?
- The discussion turns to fundraising, with O'Holleran and Kulechov questioning the need for mega-rounds in the era of AI-driven efficiency.
- O'Holleran suggests that layer-one projects might not need more than $40-50 million, advocating for a more practical approach to capital allocation.
- Kulechov highlights the potential for automation and efficiency in blockchain, reducing the need for large teams and massive funding rounds.
Choosing the Right Investors: Beyond Capital
- Santos emphasizes the importance of selecting investors who understand the space and can provide valuable guidance, beyond just capital.
- He shares his experience of choosing a lead investor based on their challenging questions and ability to contribute to the team.
- Kulechov warns against the potential for low-quality projects to attract community funding, highlighting the role of VCs in due diligence.
Reflective and Strategic Conclusion:
The episode underscores the evolving nature of crypto entrepreneurship, emphasizing strategic fundraising, community engagement, and the balance between long-term vision and short-term market dynamics. Crypto AI investors and researchers should prioritize adaptable strategies, discerning valuable feedback, and understanding the "double-edged sword" dynamics of this unique space.
