The Blockworks Origin Story | Michael & Jason

Transcript

you should be actively excited about this time because it's going to be easier to team build and ship products than it will be during the bull market it's kind of like what I would imagine it is to be an investor training yourself to get excited when assets sell off um there's probably just like a little bit of mental reframing that you need to go through you mean like masochism like massive like because it is right [Music] hey everyone uh welcome back to Empire so now we we we're doing a little bit of a interesting setup here we have Michael from framework hey Michael um and we're interviewing Jason and Michael um who obviously need no introduction but they are the co-founders of block works

and you know full disclosure you know recently framework myself and 10t we all put some money in in a block works and at least for me and I think also Michael uh tell me if I'm speaking on hand but you know we've been working with these guys for a bit of time we've been doing the podcast and they've made a lot of sense at least for me to just get involved have a little bit more skin in the game and in this process it's been great to get to know these guys get to know the business so figured hey why not actually have a pot where we talk about the inside story of a lot of what we share in Empires you know founder stories and so I think it's going to be a good one so guys welcome to the show [Laughter]

um so look I mean I think a lot of times when when we people look at a business they see wow it's been so successful and they don't really understand what went on the process from you know A to B and hopefully we get to share those stories so why don't we just start in you guys telling us how all this came about you know tell us a little bit about the story of block works and um how it uh in the early the early days I always I always say blockworks is all Jason's fault so Jason you tell the story better than me you you do the honors just lead us off yeah I mean um Mike and our buddies from from college we both went to school down in Atlanta I'm from San Francisco he's from Boston met down in Atlanta we both moved to New

York together we were both uh living in the same kind of crappy New York apartment right after school together and uh I was uh I was I was pretty into I was gonna say crypto but it wasn't even crypto at the time it's just Bitcoin um it was pretty into Bitcoin and then uh I remember Sunday afternoon I went to this uh I went to this kind of like meet up to go learn about this thing called ethereum and it was the uh it was Amanda Gutterman uh who is now the who now runs serotonin who used to be the CMO of consensus and she was giving this talk on on uh on ethereum and I got there mistakenly an hour early I think it was a 3 P.M event I got there at 2 p.m and I heard this talk from this guy share this

story about like building a consulting firm and I was like all right like I heard this talk about building a consulting firm for like an hour then going to this thing learn about ethereum and I come back and uh living with a couple guys and Mike was one of them and I was like all right fellas we're uh we're creating a consulting firm to help big Enterprises get into ethereum you know not even really knowing what that meant this is when I don't know if you guys remember this like you know Walmart putting their supply chain on the blockchain and kind of all those Enterprise you know blockchain type things and uh yeah exactly and this was this meeting was 2017 and I don't know if Mike remembers it the same I actually remember Mike being into it for 24 hours and then the

next time I was not into it is not a good idea actually and explain why but Mike what is your memory that was the I had a slightly yeah my memory was like I don't think this is a good idea so I was working in a consulting firm at the time and it was it's a small consulting firm and we were always up we had the same prices as like McKinsey and Bain and BCG and we would compete for business with these guys and the big thing that you're selling when you're selling at consulting firm is like trust and experience and preferably that should come from a guy with a bunch of gray hair and like some War stories about you know mistakes they've made and all this stuff and it's just very tough to do especially Jason and I were 23 when we started this and we had no

business uh doing anything like that so but that was the that was the planting of what eventually would become block works because we were the two guys in our friend group who actually started to take this stuff seriously and so we would we kind of fell down the same rabbit hole that I feel like people still fall down today which was for us it was really podcasts and I do have this very specific memory of listening to a Tim Ferriss Naval ravacon podcast Jason and I just like picked up kava to go and sat around our living room playing it and boy like pause did you understand that no did you want do you know what an order book is should we

Google that too and we just like went through this like two-hour long Tim Ferriss podcast and and that was the beginning of the journey was Cava good back then fire yeah it is until until the IPO until maybe okay maybe you should just sort of invested in common as opposed to like this stupid crypto thing you probably would have made more money I mean so we got a lot wrong in the early days but one thing that Mike and I got really right so we so we so we started listening to these podcasts and then what we started doing is I was kind of going to these meetings already I started bringing Mike to these meetings and these events and I don't know if you guys remember these 2017 events it was like starting to get into the kind of Ico boom like Bitcoin had Pat you know started at like a

thousand bucks had hit five thousand then ten thousand the events were like we're honestly very scammy and kind of scheme and like like just not great Vibes but once in a while you would hear and someone on stage or you'd meet someone who you were like they get it that's that's a kernel of Truth in in all of this noise and um I think we got a lot wrong in the early days but one thing that we really got right was that we believed in crypto and we believe that crypto would eventually become this huge asset class and that the number of people who would who would come into the industry would grow by orders of magnitude and those people were going to demand a much much higher quality source of information and so what we did is we said let's go we went to an event and

actually the keynote speaker was uh none other than Alex moshinsky and we're like first person I ever heard spoke uh talk about we were like this guy seems really shady actually I think we had a good gut sense there but um we were looking around in the room that we're like there's 200 people here and they all paid like a hundred bucks to go maybe we could start hosting events to make some money as we get the consulting firm off the ground and that's a good way to build trust too uh and so we started hosting events in our first event was February 2018 and uh yeah we got like 250 people to come Mike and I would wake up every single morning before we still had day jobs we'd wake up at like I don't know 4 a.m rip out like 300 messages a day on LinkedIn half

the people don't even open it half the you know maybe five percent of them ten percent of them reply to your message and one percent of those people end up actually buying a ticket do that enough 300 for me 300 for Mike 600 messages a day 30 days we got 250 people in the room um I think we made like I don't know five years similar to the consensus you would charge for these um events and who would show who would be talking like what would these events be like we got Adam healthgott who now who runs a company called mad Hive we got these guys from Crescent crypto who oh yeah fellas yeah I don't think they still I don't think there's I think they're still around in the industry but the Crescent crypto doesn't still exist and then my boss

because shout out Ryan it was still a very good friend of mine uh but the I was trying to convince him to hey we should do something with blockchain you know it was blockchain not crypto back then and I actually uh my current employer sponsored the event and he spoke about he actually spoke about moving from white paper into action which he came up with that like on the Fly I actually think that'd be a pretty good talk right now um yeah but yeah so one one question I I kind of want to dig in is actually going back a little bit and like did you guys always know you know like from an early age or you know in college that you wanted to build something versus have a job or where did this like kernel of Entrepreneurship come from

[Music] yeah one of us did one of us did I I my I mean I don't think I was ever really gonna work a nine to five I mean I did after school but like my the dream always was to go build something I mean I remember actually I don't fully remember this but my mom tells me stories of I used to buy um I used to buy trading cards on eBay that I would find and they would have bad marketing so I'd find trading cards where like someone took a bad picture the copy was all bad I would buy the trading card take better photos of it re-upload it to eBay with just better marketing copy and make the Arbitrage there just with better marketing so I think I was like always trying to build something and um I had a bunch of failed ideas that I

pulled Mike into some of them and he lost money on all of them and then uh I think blockworks is the first thing that I've ever gotten Mike into that he's ever made money on so I think he's happy about that yeah I actually lost money following Jason into a very early Mev searching scheme which is that when tickets get dropped in the primary Market uh you then go scoop up tickets and then resell them on StubHub or something like that and I actually remember Jason had a friend who did this full-time and he told us about this sure thing that was coming up like sure thing gotta buy these tickets as soon as they go up so Jerry Seinfeld uh Jerry Seinfeld stand up in Manitoba in February and I was like it sounds it sounds uh controversial I'm

gonna do it I'm gonna get like eight tickets and I lost a thousand bucks I never resold those tickets so yeah I've lost money that was my only uh attempt Mev searching in real life maybe still do it for Taylor Swift I mean yeah yeah your buddy's probably breaking it in we should hit him up Jason but absolutely uh Jason I had no interest in I was actually you know my dad's a very smart guy he hit a a good career but he did um he did this one thing was he so he used to be an investment banker in Boston and he left to start his own firm a boutique Investment Banking firm in late 2007. so you can imagine that was just about the worst time that you could have done and I had kind of this memory

of this financial stress at this very formative time in my life and so I was like I'm not going to do this I but the pro the consulting firm that I worked at was uh consultant half Consulting have private Equity I was like I'm gonna do this I'm gonna move into private Equity I'm just gonna do the safe easy thing and that lasted about 16 months so honestly it was in the blood at some point but yeah I was uh not planning on doing that and what was it about Yano that convinced you to join up with him have you seen this by Facebook I don't know you know Leno has a lot of superpowers and I really appreciate the one of the one of the best is is um what we're talking about here just the

ability to network and like just build these connections anyone who's met Jason you know knows that but that's the one nice thing I'll say about you on this podcast go ahead I was gonna say you know obviously the business sounds like started as an event um kind of thing and then it morphed into something more than that which is now you know media and then now you've launched research um I'm sure along the way you like I want to understand kind of the process by which you then decided to go into these different categories because a lot of times you could you can

get pulled in a million directions especially in crypto right which is so early and like you can think about like trying to boil the ocean right but um yeah maybe talk to us a little bit about that Journey yeah we like to joke that we've basically built a media company ass backwards and what what I mean by that is uh if you look at how most media companies are built they typically start with um with content first they typically start with like a sub stack or a newsletter or maybe a podcast and it's like a very content driven person kick you know kind of kicking it off and then maybe a year in or 18 months in they they kind of have this realization like oh crap we got to monetize this thing um and so what they start doing is they

say how do we monetize oh look we've got an audience why don't we go host like a live podcast or like an event or something or uh why don't we go sell some sponsorships on this on this podcast we didn't have the luxury of doing that because we didn't go raise a whole bunch of money from day one like a lot of the companies I mean you guys were busy funding them like we didn't do that route we didn't go raise a bunch of venture money we bootstrapped the first five years of block works so we had to do things that made money from day one and I can tell you that like you know uh like I don't know putting putting out content from day one was not a super profitable thing to do so what we did was we started with events and we

figured out how to make the events via cash flow positive business once we figure out how to do that we got into the next thing which was podcasts but even with podcasts we didn't get into creating our own shows for I think it took three years right I think so the first what we the first podcast we ever did was with uh was with pomp Anthony pompliano and um we helped him build his podcast he didn't have a podcast and then he kind of said I need I want to create a podcast we did it with him then we did it with Melton and Jill if you had like Malcolm Demers and Joe Carlson then we did one with celkis then we did one with Charlie schrem and then once those were spitting off enough cash flow we then invested in our own content and

we kind of did that like step by step by step and it wasn't until actually kind of this huge crisis probably the biggest crisis moment of the company which was kovid that we said look this it's either now or never we either go full-blown Media Company launch a launch a do a new website spend all the money we have and uh hire reporters and editors and and get into the news business or or I don't know what we're doing here um and that's really good so I want to get into covid I think that's going to be a really interesting subject kind of in general but I'm also curious like what other things did you guys come up with any good hair brand ideas or random thoughts that you attempted and never followed through it

yeah unfortunately we followed through some of them yeah yeah we had a before we did anything related to our own content we had a influencer marketing business where we would connect sponsors with like hey you know if you want tenant counts to tweet about you or something like that we would kind of connect them and we tried that for a couple months it was never really a big thing for us but it was a nightmare it was I still have like I feel stressful just even for talking about that it's actually really embarrassing some so some people did it like some of the kind of influencers you see on Twitter like they did it but some like we didn't really understand who were like the real

big names like the important people versus not the important people we were just like oh they have 200 000 Twitter followers so sometimes I'll go message someone like Santi I'd be surprised if if you scroll to the top of our DMS if there's not like hey Santi got a brand that wants to pay you no no funny you mentioned that because uh I I remember uh I I was a parafai and I reached out to you guys said hey we should do a podcast on defy and both of you laughed at me and said what the hell is D5 like go go go do your normal job and remember this I remember that too well you know what's Auntie do you wanna know the real story of that was hey we didn't understand D5 like you did back then and we didn't realize it was going to be as

big but B we were everything had to make money every single thing had to make money and I actually remember that conversation really well it was this woman Gina who's our first salesperson she was like I have this weird opportunity they want to create a podcast I was like what are they going to pay us for it and you guys were like we're not paying you to go create a podcast we're like well then we don't want to do it and then like I don't know if it's a regret Mike I don't know if you'd call this a regret or just a necessity but like we did things in the early days that really weren't IP they weren't valuable to the business like we hosted other we hosted The multi-coin Summit for multi-coin for years we uh you know we did this influencer thing we hosted other

people's events like and we didn't invest in our own content and looking back it's easy to say like oh we should have just invested in our own content from day one but it's uh we did those things because we had to say DNA thing it's a DNA thing that I wouldn't trade honestly I think a lot of companies in crypto have too long-term of a mindset and they don't focus on building sustainable businesses and that puts them in bad spots so well yeah yeah I mean you have to make that transition though right you have to be able to say hey instead of just gonna go off and and you know make the Bucks here I gotta take this and reinvest it build my own IP you know all the things you're doing now but that is a transition I

would imagine it is yeah and that that for us was coped yeah did you guys like before Kobe because I mean I gotta assume that dear events businesses evaporated overnight but before we get there like during the Ico craziness did you ever think about raising money because like everyone Under the Sun was being thrown money at and if you would have like talked to Investments today we're generating money I assume some of your competitors raised a bunch of money was that ever a thing that you guys thought about so you gotta uh so to kind of line up the timeline of block works on top of the timeline of the Ico boom and that and that in that cycle we launched the business the third

week of December which if you look at coing Gecko we literally you you could put the founding of block works on the literal top of Bitcoin and for the first like two and a half years of block works it was the price was down only so it's not like we had block Works in 2016 Market starts ripping we could go launch a token or something it was just down only um and so like I don't think we really even thought about that because I don't think that opportunity existed but also I think um again I'm sure Mike and I got a lot wrong over the years but like we one thing we got right was like just gut sense around like what fundamentally makes sense as a business and what people make sense to do business with and so I think we've avoided a lot of

like the scammers the scams we've done things for the business that like logically makes sense and maybe weren't as like exciting and didn't have the fireworks but is the reason that block works is you know we're coming up on six years soon so covid it's March 2020. all set to go and have all the all the many events I'm sure you had scheduled I mean I I remember going to the first framework event with Vance in Chicago that was hosted by blockworks that was more of like a fun one I mean you guys were doing all kinds of events um and I just remember seeing you know by block Horse by blockworks for every

single thing that we were you know thinking of attending um I'm sure it was a major business line what happened yeah um I'm just reliving some of the pain of that particular period of time that was a mental low Point uh because you know to take you back there we didn't have any media business we had two lines of business we had events that we hosted and that was 70 of the revenue or something like that and then we had these outsourced podcasts that we were a production in Salesforce for and we had a REV share on and when covet happened I Viv I vividly remember this it was it was right before New York blockchain week for folks who will remember what that is and

we actually made the first call to shut our conference down uh before like consensus and token Summit and whatever else used to be hosted during that week and I think there was just a sense of like what are we gonna do because that you know if you if you look at the intersection of sectors that got hit by crypto because remember it took a while for Bitcoin to rip so simultaneously we were at this this Nexus or like this Venn diagram of like industries that got impacted by covid which was like crypto and conferences it was like we were like right at the center of where you did not want to be and it really it was an existential it was definitely an existential

conversation and I think we just for the first time you know it's very easy in a startup land to just get one foot in front of the other go chase the money go do this thing but we didn't have anything to go chase our whole business just got ripped out from under us so it actually kind of gave us this chance to sit down and think what are we actually building here and what do we want to build and what makes sense so what we actually did was um Jason and I and our um our our CEO of Julie muraff she we we all went to New York we did this like three-day in-depth kind of like what do we want to do as a business

and we didn't actually figure it out then but we moved the ball forward and eventually what that became was this like it happened over a span of like two months of these just like really tough meetings where like it seemed like we were disagreeing and we weren't saying the same thing but we moved one important thing and what we found was that we wanted to do a B2B media model that was the model that we saw that made sense b2c being like you create a really large top of funnel like CNBC all the people that are in there are very general and kind of commoditized and you sell that to like a big um media agency or B2B is like very industry specific and you sell these kind of more bespoke contracts and we just set and we just literally

set about building that um I don't know if you remember it any differently you know but that was kind of no I mean we just got in a room together we I mean we looked at everything I still have this media spreadsheet of I think every single media business in the world basically and how much revenue do they have employees and then I'll just reach out to people who worked at these media companies like Politico and I'd be like hey you have Politico Pro they do like 50 million in subscription Revenue probably even more at this point how that how does that business work what does that look like and then we would so we would have those conversations and then we would talk to our customers and for us our customers at that point were just people who kind of we like knew and

they attended our like their attendee conferences uh attendees of our conferences and we were like what do you guys need and one thing that kept coming up was like uh there are editorial sites in crypto but none of them do an incredible job like you have a couple of Brands but like no one's doing a world-class job of covering the industry and I think at one point Mike and I and Julie looked at each other and said like why can't we do that um and so we said all right what do we need we need a new website took us about nine months to fully redesign Rebrand we used to be blockworks group to block works and build this new website we hired our we hired three we launched with three reporters and one editor and uh and we were Off to the Races that was

January 12 2021. and mind you at this time you already had what I think are your biggest competitors already existed at the time the block uh yeah coin desk and then yeah coindesk had been around you know since 2018 14 or 15 decrypt launch 2018 the block launch 2018 um cointelegraph yeah so a lot of times when when I meet a Founder Michael you probably you always ask them about competition and I don't have a good sense like there's not like a uniform answer of what I want to hear but what I don't want to hear is someone that says oh there's no competition uh because then I think that means a huge red flag if the

Founder's just like you know oblivious or whatever how did you guys but I remember like that could be also I'm curious to understand like from your perspective those businesses were probably already a bit more far along than you guys so what did you what gave you the conviction that this was something that you had an edge over these guys and you said hey we do a better job I mean you certainly can do a better job than Bloomberg and all the other idiots it just portray the industry like terribly but like what made you think that you could do a better job than the crypto Focus specific media groups what we did well is we had one target at all times we didn't say like hey there's like seven companies who are competitors we

said we there's one company they're the competitor and we're gonna go after them and for us and I think that's a helpful framework for businesses and for us the 800 pound gorilla and media was coindesk back at the time and we said what is coindesks they have like 10 times the amount of employees that we have 10 probably 100 times the amount of funding because you know Barry and dcg and stuff what is their weakness and for them their weakness was actually something that I didn't realize at the time was a weakness of a lot of other crypto companies but they made the mistake that I think a lot of other crypto companies end up making which is they hit a certain level of scale and then they said we need to go higher from from tradfi or for them it was from traditional media so coindesk I have

like a ridiculous amount of respect for coin asking people who work there and I think their news team is amazing they made this crucial mistake which is they went and you know they probably hit like 50 employees and said we need to scale how do we do that we're going to hire from Bloomberg and CNBC and the second they did that and brought on the new executive team of you know people who didn't really understand crypto that's when their back was against the wall I don't know if they knew that but I think that's that I'm not even sure this is true but that's what we saw and we said that that's our opening so I mean like I want to understand that point a little bit more like what is wrong with hiring people from those places I think it's a big I'd be curious you

guys might bump into this or Founders might ask you about this there's a real challenge that happens I think in scaling a crypto company where it's very rare to get sort of a senior leader who both has deep domain expertise but also treats crypto as a real thing what is much more common is you achieve some amount of success in crypto with crypto natives then you say hey we should look at for instance the bloombergs of the world that have done this extremely well and take the lessons that that they have and bring it in here and so you do that and it doesn't have to

just be Bloomberg or I actually think Bloomberg does a pretty good job but um but but other you know could be a really senior marketer or really senior sales guy or something like that and that person comes in they don't have a real belief in the industry and they say this is what has worked in the past and I'm just going to carbon copy this right onto this company and like I'm gonna crush it and it never works it it like to a t like very very rarely seems to work and I'm not really sure why that is I'm not sure if crypto is just its own Beast or if it's too early for a lot of the stuff that eventually will make sense to work but you see these kind of seasoned Executives try to take what worked for

them in another industry and carbon copy it onto this one and it just doesn't it just doesn't seem to work and we the simple Insight that Jason is talking about was at this point we actually built block works with like a thesis that was semi-right and semi-rong um about talk like who we wanted to speak to and we had learned kind of at this point that the people that really knew what they were talking about weren't I don't want to offend anyone it it was really like the developers and the builders that were like at the front lines those are the people that we talked to and had our socks blown off and we're like wow these are really new interesting ideas and like they deeply

know what they're talking about it wasn't who you would kind of like the rightly the slightly older people and the the suits and they're they're really good reasons um and like contributions they make but they weren't the people that knew what was going on and knew what was important so Jason and I saw our competitors hire a slew of these people and we were like that seems like the wrong move I like that just doesn't seem right uh based on what we think but I think the other element to Santa is like I don't know if this is a good founder answer that you'd look for if this is a big red flag that you should have asked me before but there's not really a good answer you know there's always competition they have more money than us we just here's here's the unfortunately we could do it yeah that's

that's the real the unfortunate answer that I would love to figure out if you guys have figured out how to assess this out is like especially in media it comes down to execution can you execute like and uh I think media businesses are a little different than actually this was probably Mike and I had a lot of debate Mike probably some of our bigger debates or arguments have come from this um which is there are in software businesses a lot of times you have to like out innovate someone in media you have to out execute someone and so I think I would look at other businesses in maybe the early days Mike I don't know if you would agree with this or not but like I'd be like hey they're doing this let's just go do that but execute it in crypto and execute better and Mike

would be like well we can't they're already doing that I'm like yeah but we can execute better and I think in media that's that like that's how you win now it's a new muscle that we need to learn how to flex as we're building our software business which is our research in data and governance platform because you can't just out execute you have to like out innovate and think farther ahead than your competitors that's a different muscle but for media yeah it's an execution game what's your criteria for hiring like when you talk about like not hiring a suit from Bloomberg or CNBC or whatever but you clearly have hired I don't know how many people you know 60 plus yeah but do you do you get involved in every hiring decision like a lot like Sergey and Larry from Google

yeah Mike or I still touch every every higher at this point yeah I mean it might not be it's probably at the like you know in the final round or something but Mike and I are still Hands-On yeah and people will talk about this fluffy thing called culture and whatnot and what would you define like a common denominator framework of things that you look for in people especially like a make or break where you say no you know what like might be super talented but no not a good cut for this place also just to say there are there are very few organizations in crypto that are 60 people Plus and so thinking about it from that respect where you have to be able to build teams sub teams have managers and all the while maintaining the same

perspective that you just described which is a crypto Nativity I think that's you know hats off but also you know would be very curious to hear more about how you've done that I will open it up a little bit and just say uh I when we launch block works I thought the hardest thing that we're gonna have to do was build our website or go sell a six-figure sponsorship the hardest thing by far and it's not even close by orders of magnitude is building a team and scaling a team um I don't know if you would agree with that mic but like that is getting I think you have like three roles as a founder set the strategy push the speed push things to go faster than they would you know things would get shipped if they

weren't if you weren't there and the third get people rowing together and uh honestly at this point like Mike and I spend a lot of time on that third bucket getting people to row together and um yeah I think it starts with like who you think about hiring um all the way to like your yeah your culture and your values and things like that I mean I I have two traits I look for when hiring like one is um nice people honestly like this that sounds really fluffy but like we have this airport test if you're at the airport with someone and your plane gets canceled like are you gonna be stoked to go sit at the bar and have a beer with them for eight hours or are you gonna be like oh my God I have to go sit with Santi for eight hours like brutal and we

have the same testimony we've never actually met in person so we don't really know this I mean we did we even talked about that when we're talking about Investors like we didn't want people who are like oh they have money but you know we don't actually enjoy them and and the reason for that and why it's so important in crypto is there are so many people who have made so much money that it can go to their head really quickly and we want like I think we have a very like empathetic kind and like generous and nice team and that was really important for us the other thing was um that I look for is curiosity above above pretty much everything else outside of kindness is um curiosity and there's a real reason for that which is crypto moves far far too quickly to uh to not be

curious and if you're not if you're not naturally curious you're not going down like weird Wikipedia rabbit holes and weird Reddit and Twitter rabbit holes like you will just get blown in the dust like if you think about what people were talking about in crypto and let's say 2019 2019 was like Prime brokerage institution institutional custody fire blocks one year later boom D5 summer if you aren't paying attention you get completely knocked on your ass um and so I look for curiosity Mike what do you think I would say we have a filter I agree with everything that you just said we have a filter absolute red line if we catch a whiff of arrogance it's curtains I think that's actually probably been

the most successful hiring trait like we have said no to some extremely successful extremely qualified people that we were sure could have done the job very well but you can you can sense it even in an interview setting and we just do not allow those people in the block works as media business uh to your point uh Yano you get to understand maybe the narratives and the evolution of that and what's like percolating um I've heard both of you say recently that you haven't been as excited like this is the moment where you've been the most excited uh which you know a lot of people might disagree with

what are you seeing um and what have you like when you put it in perspective of all the different hype that has existed in the industry and you covering it from the media side like what's different today than maybe perhaps a year ago two years ago um I don't know if that question makes sense I think in a funny way there there actually was a great podcast that Kobe gave like years ago I was during the bull market and you know this kind of secret to making it in crypto and it was just find a way to stay interested during this period of time really easy to say when everything is ripping and you can say you're interested in it but

really you just want the number to go up and you're just checking your your metamask or coing gecko or whatever it is and uh uh it was it's very difficult at that period of time to parse out the signal from the noise you also have a lot of people that are frankly making really bad decisions in real time that are getting rewarded for it and it's very difficult to Fair it out which ideas make sense which Protocols are real what is worth spending my time on the gift that you've been given now is there is very there's way less fluff and hype and the people that are still here are serious people there's no reason to be here if you're not serious and committed

and one other thing that's changed in the last year and a half is that people are actually focused on solving real bottlenecks and I don't think that was the case before it was you know the nth decks or borrow lend protocol with like one little parameter tweaked and it just wasn't particularly exciting whereas it's just much more engaging to learn about stuff that's solving actual problems I would say and that's that's what it's been for me I think so maybe along those same lines you know you've got this team of 60 people you're also having to keep everybody interested you're running with all the different narratives and as a media business you know deciding how to engage and where to

engage and where to invest time and resources like how do you keep everybody excited and engaged and not everybody's going to be excited about the bear Market as we are who have lived through multiple Cycles but like do you spend time you know trying to get them to row in this direction or or how do you think about that you know maintaining excitement and engagement from the team I think that's really tough because everyone needs something slightly different everyone is different on their stage of the particular journey and they need something different and there's only really so much that you can do but I think one of the things that this is my own mental model for this like the bet that you're taking on crypto the reason you stomach this volatility that

sucks to deal with because it does it sucks um it's painful in both directions it would be better if it just went up in a straight line but the reason that you stomach that volatility is because what you get is a slope of growth that is much higher once you level out the volatile up and down and what at least I have tried to do is show people that that's the bet that you're making right and like Jason I have showed this little squiggly line that goes up like this right like this is what the industry does there is a line that goes through it be the line that goes through it and what that means during these crappy times are you have to find a way to remain

interested understand that this is not the end of the world and that this is actually you should be actively excited about this time because it's going to be easier to team build and ship products than it will be during the bull market it's kind of like what I would imagine it is to be an investor training yourself to get excited when assets sell off um is probably just like a little bit of mental reframing that you need to go through you mean like masochism like massive like straight massacres yeah as it is right yeah yeah I think it's easier as an investor right because you're looking at the prices and you're saying okay I was able to buy this at X yeah exactly but you don't have that immediate feedback in the media business maybe instead of you know how you think about the team and you know kind of

getting the excitement and engagement from the team how do you think about the business you know where where are some of the some of the bets that you're making you know now as you look to the Future so the big thing that we've been focused on for the last year is building the research part of our business and the data part of our business and the way this all fits together is we started as a pure play media company which looks like a funnel and great media companies have something at the bottom of that funnel and for us that's research and this is the part to Jason's point where this is where you need to get a little bit strategic because you're investing in like r d in the form of engineering and a strategy or that's like much harder to just pivot

um instead of like being a media company and I think the the Insight that we had for our for our research product was that if you if you talk to people that there was a period of time in crypto where it's reasonable to say I'm going to be a One-Stop shop for all data and analytics and crypto right that was a reasonable thing at one point but it's it's not actually a reasonable thing now it's for like a whole bunch of different reasons it's first of all crypto moves too fast and there's too much stuff to cover well but the engineering lift of doing that is immense it's extremely extremely expensive to build a product like that and so a lot of companies initially their value proposition was we're going to be One-Stop shop and then you've made

this promise to your customer and you've sold yourself on that value proposition you've locked yourself into a bet that doesn't really make sense so we we had this idea of starting Niche we were like instead of covering all of these different sectors and everything this was where it was a gift we had limited resources we didn't even have the opportunity to do that if we wanted to so we had to pick one Niche and we just wanted to do it really really well and this is another point where I think there's kind of like an art and a science of like when do you listen how many times have you been told just ask your customers like just talk to your customers and you kind of have to do that and you have to listen to your customers but you also need to know when to not listen to

them and to have a thesis on the way that this industry is going to play out and arthi we had like two Theses which is one start narrow instead of Broad and then allow yourself to grow into it but then the other thing was that eventually crypto is going to shift from Mostly a trend following investing space to one which is more based on fundamentals and those were the two big Theses that we had in terms of building out the research product and it's allowed us to be like Tighter and get the the quality the content and the data and analytics and the governance stuff better for our little sphere of the universe and then we can expand out from there but that's what we've been doubling down and and really building aggressively

and and connecting the two sides of the business right because this is this brand new core competency for us brand new platform um and for the first year they were kind of like they were kind of separated right you had like the media business and then you had the research business and now going into year two um we are connecting those two businesses so that this proverbial like media funnel that Mike talked about then shoots into right we might have like millions of people who hit our website every month for the you know to read our news stories then maybe you know you know a couple hundred thousand on the newsletter then maybe like 5 000 at the conferences we need to then convert you know another 10 of those people into the research platform so like I think our

research platform the last three months have been like up only growth like biggest months that we've ever had on the research platform we have no sales people on Research yet we have no B2B sellers we have no sales people we've no no research marketers that's all just from this like media funnel going down and converting people you know someone might read a news story about D5 and block works then they see that we have a podcast called bell curve on Mev they listen to bell curve then they see that there's permission list coming up they attend permissionless then they see our like research booth on site or something like that like that's this funnel that we talk about that is actually starting to work in real time so that that's like I think Mike is spending a lot of time on the platform like what is the

research like what do fundamentals in crypto look like and then I'm spending a lot of time on like the design and the engineering of the product and then connecting those two businesses together now we're on Trends I am curious to understand where like who's your audience like where do they come from are they institutions how is that trend line change and the composition of your of the people that are visiting your site listening to our podcast and whatnot like who are they who are these people I would say we had two I'm gonna let Mike take this so we had two Theses at the beginning one was that crypto would eventually grow to be this huge asset class number of people who came into the industry would grow exponentially they

would demand much better information that thesis was right the thesis that I think Mike and I are thinking about whether it was right or wrong and probably wasn't right was that one thing that we would always say at the beginning was like we block Works puts crypto into the language of Institutions we don't talk about these ZK Tech roll-up things we we put it into the language that institutions can understand that is what I'd call like the old block works the new block works is like we are pushing deeper into the dark Forest of crypto and like if you look at even just the content that we're putting out it's like zero the two recent podcasts that we launched the RX research and bell curve and and Lightspeed as well like we are going deeper into crypto and because of that

our audience is evolving and I would say our audience of the first you know maybe one to three to four years of lockworks was like very trad-fy institutional audience dipping their toes into crypto and we were this like safe place for them to go now our audience is becoming I guess I'd call them like power deep power crypto users and people who like work in the industry full-time Mike I don't know if you would agree with that of kind of adjustment or evolving I do agree with it I have stopped I found it one of the interesting things about crypto is that the most sophisticated users of crypto are not necessarily Trad five people actually that's often not the case and in if you

were building a media business in finance in regular Finance you'd have a really clean easy job of uh cutting up your audience because it would be retail which is very unsophisticated and wants to consume CNBC type content and then very sophisticated institutional players in crypto it's this weird mishmash where actually sometimes the smaller funds or power users those are the most sophisticated people in the space so I find it more useful to carve up our audience into sophisticated and less sophisticated and if you fit in that bucket of sophisticated users of crypto then our content is for you and sometimes that's you guys Michael and Santi like you got like crypto native

VCS sometimes it's Visa you know Visa is a great example of a more traditional institution that I would say is like exactly they're really sophisticated yeah so but that's where it's it's tougher for me to be like oh yeah it's this demographic or this age or whatever it's we the the content that we want to create and where we feel like we can add value is on The Cutting Edge of crypto in this industry uh because eventually there's going to be sophisticated Market structure and assets and all the same kind of stuff that exists in finance and some of the old finance incumbents will pivot and some of them I think probably won't or won't be involved this seriously but that is less of who our customer is

hey everyone we'll get back to Empire in just a minute but before we do that I want to let you know that we have permissionless coming up permissionless is Big conference that block works and Bank lists put on together it is the biggest the best defy conference in crypto this year it is in Austin Texas September 11th through 13th if you've been in crypto for a while you know that bear Market conferences are the best kind of conferences we have a phenomenal lineup of speakers a lot of the guests that you hear on Empire are both going to be speaking there you will have the opportunity to meet them there and a lot of the topics that we cover on Empire ZK attack roll ups account abstraction Mev app chain thesis a lot of that kind of

stuff that will all be discussed at permissionless this year so because you are a listener of Empire you get a special discount that's right Santi and I negotiated with our marketing team you get 30 off if you go to blockworks.com forward slash permissionless Empire 30 is going to get you 30 off your ticket today when I'm recording this that's about 300 off your ticket so type in Empire 30 when buying your permissionless ticket you get about 300 bucks off click the link at the bottom of this episode it's in the show notes do it quickly because prices go up all the time and if you are going to permissionless hit me up let me know shoot me a DM on Twitter I would love to meet up with you there so kind of along the same lines I mean

and obviously with uh you know a mystical ball of prediction um where do you see that changing over the next five or ten years like the audience demographic breaking down and then like how are you thinking of moving in that direction or serving that audience so I have like a couple couple of different answers there um this is this is more like okay with the revised Theses that you just described you know one being correct one being wrong like what are the new Theses about where you know you see that changing could be right to be wrong eventually but curious so I think so again one one more like sort of mental model framework for you is we at different layers of our funnel we have different content so like our

editorial content at the top of our funnel is kind of the most broad the podcasts are one layer deeper which tend to get a little bit more in the weeds and then the research is only for very technical folks on the very technical folks level I think one of the bigger changes that you'll see happen in that audience is I think the like proverbial winners or the folks that will make the transition best from Trad Phi or the high frequency trading firms like they're the ones that understand microstructure uh in regular tradify markets and you already see them a lot of them are very active but there's a very directly transferable skill set to Market making uh on a very short time scale in Trad Phi and all of the stuff that's happening in in you

know Mev and building blocks and all that kind of thing so I think they're probably it will become a more I think there's going to be a lot of migration actually from Trad fight at that level into kind of like that would be the audience for our research sort of content on the podcast side of things I actually don't think the audience is going to change that much in the next five years I think it'll be roughly like what it is now on the broader audience I this is where timing is the really tough thing Michael I actually really like the thesis that you and Vance have around gaming I think there will be one or two big consumer apps that bring people in maybe it's nfts maybe it's gaming maybe it's something like that but I think

that audience gets a lot more Normie on the top of our funnel if I had to guess like that's that's how I see the audience changing over the next like five years I don't know yeah I know if you think differently no I agree and I think one of our challenges is gonna be I will I I can confidently say that block Works covers and puts out research about D5 better than anyone else in the industry as the industry gets a much larger top of funnel than it has today I think that's going to be a decision that we have to make is do we go you know do we go launch an nft section on our site or gaming or do we start to cover crypto games on the research platform that's going to be I would assume a decision we have to make in you know 12 to 18 months

from now um I think I speak for the industry where you've all in one way shape or form been frustrated in how this industry gets portrayed by traditional media and that was a large impetus for me to do the podcast after I left verify because I said look I think education but more like pure education like because I think people are really lost in this journey there's like a big divide between a lot of noise and bad portrayal and traditional media and then all the influencers out there that are always trying to Shell and sell you stuff but like kind of like under the hood of we're educating and then

there's like what I think you guys are doing which is more genuine content without an agenda but like do you ever do you ever feel the need or that like to make this the Bloomberg of crypto uh like really go out and try to I don't know like convince the more mainstream narrative and like control that because I've heard you say all throughout this podcast we want to be Niche we want to be really focused on our core audience and like and maybe that was true for since Inception like just for better for worse you just have to focus on a few things but as you have more resources you keep growing like do you ever see a place in the world where you become that huge

media like media conglomerate that really starts to influence uh you know the millions out there that are getting fed pretty bad information about this industry I will my mom has the saying which is you can't make anyone do anything and she says that to illustrate the point that my sister and I were hellions in high school and put her through a lot uh she couldn't make us do what she wanted she wanted us to do but I think it applies in this situation a little bit you can't this was where Jason and I aired in the original thesis for Block works you cannot make someone who does not care

about something Care by putting it in different language they simply have to come to crypto within their own frame of thought and frankly a lot of the ways that people start becoming interested in the space are wrong I was a consultant I did supply chain Consulting and I was really interested in that it took me a year to find out that that was completely useless and everyone is going to come to crypto in their own individual way and I've actually stopped worrying about that and I just believe that it's going to happen organically and the best thing that we can do internally as an industry is just create products that people want once people are primed and interested

and using this stuff that is where I see block Works shining and winning and helping move our move us in the right direction but I don't I don't think it's possible to go out into the world and change people's perceptions the industry needs to do stuff create products that people want solve real problems and change the narrative that way and then we can talk about it in a fair way I do think traditional media has put itself at a disadvantage it has covered it so publicly so loudly and so wrongly for such a long period of time that all we have to do the way that at least I viewed is we just have to wait for this

industry to indisputably prove itself and then block Works will be positioned the internet terribly right you've seen all those interviews are like uh you know Bill Gates are like why would you want to build this and like yeah so I guess that's a great Point around like consumers I have one more thought I have one more thought on that have you guys have you guys read the Bloomberg biography it's it's called Bloomberg by Bloomberg it's a really good book for anyone who's like building in data or Media or anything like that Bloomberg people think of so like who are the big media behemoths today in finance it's uh it's Wall Street Journal and Bloomberg right those are like the two probably creme de la crème's and if you're in Europe maybe Reuters as well um back then in the 80s it was uh in 90s

it was it was Reuters and Wall Street Journal um the journal in the in the US Reuters in Europe the way that Bloomberg be got on that you know pedestal as it became one of those like the Power Players they didn't just go like try to compete with them from day one there were actually a lot of interesting Partnerships that they did so the first thing that Bloomberg ever did was they supplied their bond pricing to Reuters then they supplied their Braun pricing to the journal then they syndicated their real-time like breaking news stories to different Financial outlets and I think like for us like I don't see Bloomberg I'm not like boom the the bad guys Bloomberg right now I'm like no let's if we can give investors better information about crypto we will partner

with Bloomberg one day I could see us competing but right now like if you go on the terminal you'll see blockworks information you'll see blockworks news very soon hopefully you'll see blockworks research stuff and that's like my they are I think we can be helpful to them right now one day we'll compete but I think we can be helpful that's a great point and Michael back to your point and I want to ask you both maybe Michael you as well but like just curious like what do you see as the more promising consumer products and applications I mean you talk about gaming obviously framework you guys invested a ton in that as well but from your Vantage Point guys you cover this and you break the stories and you make the research where do you see the most amount of interest and where you see these the

categories that you think are going to have the most amount of legs the next cycle um it's very hard to get the broad I think that's the question we're all asking right which is what is the app that's going to get product Market fit and bring 50 million people into this space if I had to guess it would be something around gaming or nfts I just think it it will be I do think there is probably a different definition of product Market fit for defy that is less about strictly the number of users that they have and it probably has to do more with tvl and cash flow and real profits being extracted right like an example of that would be uniswap turning on the fee

switch or something like that and just by the way uniswap itself is an unbelievable success story I mean they've taken the entire vertically integrating you know they've taken the wallet layer you know they've got their front end and the app they've got the aggregation layer with x the liquidity layer with four and they'll probably launch their own chain at some point and get settlement too I mean it's a I think there are success stories like that I I also think um I was actually having I had a long drinks with a guy this week and people have been talking about the kill you know so in the internet people were like what is the killer app gonna be and people from the very beginning kind of had it right it was like social media it was e-commerce you know they didn't really get uh the the platform business

model but they had the ideas in the beginning and we've got non-sovereign money you know we've got we've got a platform that you can build apps on permissionlessly I mean these are not nothing things these are already 100 billion dollar outcomes I sort of feel like there's this existential question about what are these things gonna be I think we're looking at a lot of the killer use cases already they're just not mature so not enough people are using them yet and we're really worried about it I would guess we're already looking at most a lot of the major use cases to be honest with you um that's that's kind of how I feel and then you just need to be patient and and wait that people will eventually use these things um and I believe they will I'm really

optimistic about that I would agree with that I think we've got it with defy right now like Defy is it but I think what people get wrong is D5 is a B2B business it's not a B to C um business and uh so we've got these like incredible what almost look like like it's like the crypto version of B2B SAS businesses it's like defy it has now like a dozen protocols that spit off a bunch of cash flow they're sustainable they've got massive businesses on top of them and funds that sit on top of them and it's this like interoperable ecosystem For Better or For Worse uh but then like actually this weekend someone posted this question on Twitter being like what apps would you miss the most if they left or something and the first

things that came to mind for me it was actually blur and open C like those are probably the two uh the two apps that I go go on the most um is like blur and open C just for nft so I've got to assume like it's something that we can't see yet but it's gonna be some nft thing in 2025 probably I mean stable coins right I was just interviewing Jesse from from uh coinbase uh yet again and God I mean the whole vision of bass is makes me incredibly excited as as a catalyst with account abstraction with uscc as that conduit like holy like you know he was talking about like a re like a a restaurant points like a program that is deploying on base

and you're like yeah you could see the vision right you know restaurants issue an nft that's your loyalty you get points and you pay with ustc you don't even whip out Apple pay none of that jazz like it's just everything just works right and yeah I think coinbase might just become that like everything app uh and it's incredibly exciting well only thing I'll add to that um is I totally agree I think you know Mike you said it well people have the original ideas for what would ultimately end up working on the internet the one the one thing that I would add to that is it took catalyzing events for those things to become real like SSL to make e-commerce actually work and like the ability to take digital photos and

upload them to make social media actually work like I think that there's going to be sort of extraneous you know third-party events that make all these things real uh and it's really hard to predict what those events will be and it's more you know a social prediction than a than a technological one in a lot of Senses but I think we have the ideas of what will work it'll just be something that happens you know because some random event makes it possible yeah I totally agree you know who I think gets this really well is the Solana ecosystem and this kind of like this D pin I think you can squint at d-pin which is um and and see how this space might end up evolving it's like stuff that takes place on crypto actually leverages

hardware and might eventually influence hardware and then actions that people take in real life I actually think it's clearly not where it ultimately needs to be but I think you can squint at that and see a very attractive future for crypto actually and it actually might solve this big problem of like how do you incentivize gig workers and give them upside which would be pretty cool but that's a little further out there because I have a I have a question for you guys actually about block Works um here we go here we go this is the part where Santa is really awesome third degree yeah yeah exactly um you guys see a bunch of like bunch of businesses and pass on a bunch of businesses I'm actually curious because

never really asked you guys this like why did you invest in Block works what was the what was the reason I mean I'll reverse I think you know Santiago said this at the start um first and foremost getting to know you guys and having that happen even long before there was uh even you know the idea of an investment opportunity um having the podcast together listening to all the content seeing the maturation of the business like I said Vance and I literally went to you know whatever that Chicago uh event was fun oh yeah what we were literally talking about fire blocks and you know custody and all the all the unsexy stuff

um but no in watching the progression of everything um and you know just having people on the Frameworks team framework team um who can understand sort of the trajectories of media in the industry at a deeper level than than maybe like Vance and I would be paying attention to and and you know Adam on our team talking about you guys and recognizing all of the the crazy stuff that was going on simultaneously and how everything was lining up and then you know talking about the potential of the research platform and and frankly like the question that I thought was the most telling was okay you know everybody has a research platform everybody's working on this which one do you use and the answer is like well I really kind of

don't and it's because there isn't one that has all of the encapsulated information in a digestible Manner and there is an opportunity to build that um and sharing that Vision I think you know all of those things coinciding um was what made it obvious for us uh yeah I would definitely agree with all that uh yeah people I mean I invest in people but like I'll give you more concrete answer I think media is counter cyclical like as I think in my portfolio like you guys crank out news in any Market environment probably more in the bear market like engagement probably is higher in the bear Market and so I think it is a kind of a defensive position in my portfolio because people you look at all these

conferences people still go to these conferences uh in Bear Market and it is a very simplistic bet on the growth of the industry you said earlier right if you believe this industry is going to be 10 trillion plus then someone's gonna have to cover that and I think you guys have a pretty interesting Diversified business model across events which is backup right uh you have the research platform which is it I didn't give any credit to that candidly like okay it's it's option value but nonetheless like just just events can be highly lucrative um because it is an industry that people need to go to these events I I had to go to these events to truly understand and connect with these Special heck that's

where I met stani had I not gone to Defcon in Osaka I wouldn't have met Sonny would have made the best investment of my career in crypto probably one of the best and so I fundamentally believe that it is investing and just this industry requires social interaction and there's no better way to do that than just going to these events and so and so that combined with the the fact that I was doing this podcast right and just seeing engagement and you know uh so but but I think as a as a and the last kind of piece which is a bet that I I don't know how it's going to play out but I do think that the media business and I don't I don't not an expert on on media I mean by any stretch of the imagination but I do think that

operating a media business in crypto allows you to do so many interesting things that haven't been explored by traditional media companies meaning from a retention standpoint from an engagement standpoint there's a lot the that and I think the design space will continue to open up not particularly for you guys as we get more regulatory clarity of how do you make your subscribers your listeners your viewers even from just different type of subscription models um to different types of just ownership and referral programs and all that stuff and look I mean the newspapers kind of went through his transition right

um you know the New York Times was kind of ahead of its game but some others weren't ahead and then they just died going from like traditional print to like online and then like shifting your business model so I think it was an incredible opportunity for a media business to leverage and harness a lot of the tools that crypto provides from nfts to D5 to micro payments to all the stuff that I at some point you would have gotten really excited and then laughed out of the room because it didn't work but I think it will work it has to like I think the the early Clues are there and the breadcrumbs are there to give you a lot of indication that you guys can do so much and you haven't even started exploring that

because you've been too focused on just building quality content and stayed in your lane and I and I look at that and I think okay now I think it's a different inflection point I think it made sense to raise money at a time where you can really blow this out in an interesting way yeah you know it's funny you mentioned that Santi that last piece about I don't know about D5 and micro payments but I also think there will be a great media business built leveraging nfts it's there because you know if you if you're actually if you're a Founder at all you know the pain of trying to put something out there and getting people to care this is Elon musk's great magic is that he can make people care about things and

nfts have this very I actually like the way Luca Nets talks about this I got pudgy penguin pilled but it's it's this like small Core group of people that really really really care and that isn't something that you can sell millions of dollars of sponsorships against but it's valuable it's really valuable um one of the other categories I'm really excited is prediction markets and so them being like oracles for True information and you're just kind of seeing I mean buy some investment poly Market obviously but like so like it's really fascinating the way that like you're surfacing a lot of information without having to corrupt and I think

Chris Dixon talks about this a lot in the Journey of an influencer it starts with really authentic content it gets you that first thirty thousand hundred thousand followers and then at some point in that curve you realize that you need to corrupt yourself for better and these people I'm not saying these people are bad I'm just saying because the platforms don't give them and don't share enough resources don't a lot of the monetization that they get from selling ads they have to sign sponsorships and do all this stuff and the quality of the content degrades and I think you guys have an opportunity to do things differently because crypto allows you I mean all the token model allows you to share more equitably with creators and so you think about having

an organization like maybe it's not hiring another a thousand reporters maybe it is servicing Insight from the masses and then somehow having a way to curate that and rewarding people in a way through nfts or whatever you know I'm speaking out of my ass here but just these are some ideas that I think you guys it's not going to be me right because I'm a terrible Builder I I don't have a good enough imagination but you guys do and I think there's a lot of potential to to harness a lot of these things right to really change how information gets surfaced and also reported to increase the veracity of that information I agree with a lot of what you just said but let me just poke at that one thing about sponsorship being the thing that degrades the quality of the content the

thing that I think especially influencers fall prey to is this audience capture which is you get a reputation and a following and a brand saying it's usually like one small set of things the things that work the thing that works on social media are very small simple repetition speaking directly to a group of people and then you see this all the time people try to once they get like 150 or 200 000 followers break out of that mold and say different things and they're following turns on them so I I don't think it's I don't think it's the business model it's this it's the way the algorithms reward you and then

you're you build up a following in a business that might be dependent on that audience and then you can't say different things because they will turn on you and just look at like Bitcoin for a great example of that you know I mean that's that's what happens over there so I don't know I think that's the over there in those Corners over there but I like Bitcoin a lot I do but I can't it's hard it's so hard to engage it's so hard to engage now you know no I mean I I've noticed the frustration look I think a lot of the changes that has happened in Twitter now X have been good like subscriptions and sharing payments or whatever

but it's also the you can see and in real time how changing the algorithm and how many likes you have it's just like it's it's very confusing and it's frustrating and I can't imagine how frustrating it would be for someone that their livelihood depends on connecting with their audience yeah for me I don't know but like for other people it's it's their it's their livelihood and these platforms change the algorithm on a whim and then your your Royal screwed like you have to go back to ground zero and like reinvent your model so anyways a little bit of a tangent but no I think you guys are really primed to to take things a different level and show the industry what is possible engaging with like and Reporting and

creating quality like at the end of the day surfacing truth and parsing signal through noise from noise and just I think there's an interesting way to do that with the right incentives agreed what has been the worst mistake and how much do you think about it I have a an answer for you that's a mistake we've made like multiple times and will and we'll probably keep on making Mike's like I made this mistake yesterday uh which is not checking for rats in the podcast room yeah

yeah I still remember this time we did have a plant that died once and that was pretty terrible too but no I think it's it is underestimating the complexity that happens at higher numbers of people like Jason said I kind of had this idea that you'd come up with strategy but like you get this from listening to a loud podcasts which you can probably tell I do but you know the way people tell talk about it on stories is you have this inspiration or this idea and you go do this thing and that's not really what it is at all and really most of like managing people is just hard people problems and like listening to people and talking to them and organizing them and moving them in a direction and at

every single juncture where we've done real aggressive amounts of hiring Jason and I think we've underestimated the amount of time it would take to integrate more people and get them bought into the same thing that you are bought into so I don't know if there's any one drastic like oh we did Zig when we should have zagged but it's these it's this small thing of underestimating the amount of work that that is yeah I I would I was gonna say the exact same thing it's like sub 10 people is the entrepreneurial stage right things are super informal super fluid pre-covered we're all in an office together just like you could shout at someone that's that's the first stage second stage is 10 to 50 people that's

like the delegation stage where like Mike and I had to learn how to like get things off our plate and like we couldn't actually do everything um and like the two challenges there become like communication and coordination I think and then we're in the like what I would call the professionalization stage which is for the first time we need like standardization and like product like processes and procedures which breed this phase I was like we'll never have that that's what slows companies down like and now here we are we need it and I totally see why it happens and then the next stage I guess I'm sure as soon as we get this stage figured out we're gonna be at 100 people and that's the next stage is like 100 to 500 which I guess you could probably call like the

specialization stage like and that the challenge there is like silos form and like communication collaboration between departments gets super hard and then you figure that out and then you become and then and then you hit the your bureaucracy stage which I'm assuming just like agility becomes the main pain point there but communication yeah yeah it sounds like you have a deeper appreciation for organizational growth and challenges um does that make you more or less bullish on Dows and government on chain government that's a phenomenal question yeah Mike you go first I think

dows doubts have been like a very broad brush which is let's let's just start with what doesn't work totally flat hierarchy doesn't matter what kind of organization you are it should be flat I think everyone agrees at this point that that doesn't work except but yeah okay except for Ray so what I what I now think is that there's going to be a broad the style of governance that you have to have needs to fit the product that you're making and what it what I mean by that is like something like ethereum actually needs to be extremely decentralized right like that is the base layer of how all of this stuff works the value prop is Proposition is

that it's credibly neutral Etc one layer up from that Lido Lido needs to almost be as decentralized as ethereum itself and that Santi is you know it's actually a part of the value proposition if Lido isn't very decentralized and everyone's going to be worried about the ability to co-opt it through the governance token and really mess with how ethereum works and secures itself so the way that light out can actually gain more market share is by decentralizing its governance implementing the staking router dual governance Steve ldo that kind of thing all the way up here at like a game does that need to be that decentralized I don't think so I mean that doesn't that's not critical infrastructure that

I think people depend on and actually the analogy if you want to look at it is kind of like different layers of regulation in companies in the world so the government is has to be really fair and transparent one layer up from that is maybe like utilities you know and they don't get to make a lot of money because everyone really depends on them like Health Care financials all these different things I think what we've the mistake that we've made is to try to paint a broad brush and apply the same level of uh decentralization that ethereum needs to every little Dao and that doesn't make much sense so I think what will probably happen over the coming years is we'll get more of an understanding of

okay for a decentralization or for a decentralized exchange you know these core things need to be decentralized but a lot of the product stuff you can actually just organize that like a company and that's okay completely agree with that good take yeah I agree cool guys this has been fun what else should we do anything else do you hate us already um I have a question for you guys um what percentage of your portfolio companies send investor updates and are they monthly quarterly and how useful do you actually find them hmm

and does it depend if you're the lead versus like just participating if you're sending an update you're sending an update um I would say most do it also depends on which stage like okay we're talking about a protocol like an Ave or you know something that's yeah scaled and you can follow along the governance forums and that's going to be the best place to get the updates if it's something that hasn't launched yet um or isn't really scaling yet definitely um basically if there's no way of understanding from the outside looking in what's going on definitely um and whether that's a protocol or a company um how useful

they're useful it's important to understand where things are how things are trending any things that are coming up that you don't know about that could be negative how you're going to have to deal with it that type of stuff um how how we should be thinking about fundraising like there's all kinds of stuff that gets put in there um it's more it's less like I I hate it personally when you just get the constant everything's positive everything's great here we go like what you want to put in there is here's the things that aren't going well and here's the things that I think in the next three months aren't going to go well but we're gonna find out just to be able to understand um I don't know my personal perspective I think uh the best Founders know how to utilize your investor base at the right

time the worst ping you all the time and or too little too late and I think you the best Rhymes have an appreciation that like yeah you can ping me on telegram but I'm getting a hundred thousand messages on Telegram but it's also nice to to get the update because I'll read the update and I think it's I can go back to that update and then revisit it over time I also think writing is an incredible tool to organize your thought process especially as a Founder in crypto I mean you guys even mentioned it throughout this podcast it is chaotic out there and I think the probability for a Founder to stay focused but also really get really get the help of investors at the

end of the day it is a partnership and I think the best way to do that is really communicating um well and I think the best channel for me is getting an update uh it was pushback it's like hey how much time should I spend on this like it doesn't have to be perfect but if you do it consistently in the right format you know this is what we wanted to accomplish these are the hypotheses low lights like things that didn't go well things that we need help on and call to actions and like things that went well right like that format like my brain's already conditioned to like read it like that and I sometimes I just jump to the very bottom where they need help and I think I would highly highly encourage as much as I hate bureaucracy

and added work take it take it 30 minutes to an hour to write it out and send it to your investors I think it's incredibly valuable and there's there's a lot of upside to doing that and to your other point you know Cadence really is it just depends on when you're going to have a media update if there's nothing that changed between one month or another you know wait another month yep but even send you could just send that guys no material update this month on to the next one like you're simple as that um that's a really good point Santi yeah cool guys it's been great especially in this environment sometimes you understand hey these guys are alive like uh look guys like 20 over a I think now at

this point a third of the companies in the cohort between 20 and 30 percent of like just close shop there's a way to do that let me ask you guys from your investor seat from your entrepreneur seat as you know the head of framework or how do you talk to people who are losing faith or how do you like how do you talk to people or like uh is this Market ever gonna come back like am I does this really make sense I mean geez everyone's losing all this money in D5 I mean what do you say to people who have that perspective I think as we've been talking about you have the green shoots of innovation that

are actually starting to work we talked about you know a self-sovereign money five trillion dollars or whatever the number is now of you know stable coins have been settled on chain you've got D5 scaling you've got three or four different protocols within D5 that are cash flow positive um you've got this consistent interest you know it Ebbs and flows over a month or two but consistent interest in nfts is a consumer product whether that manifests itself in games or artwork or Loyalty Rewards like that I truly believe nfts will be in some format of a consumer application that scales to hundreds of millions of consumers um all that stuff is happening and if you just play back the tape and think about what it was like in 2018 2019 you know when all of us were really kind of

uh cutting our teeth on this industry uh there was no hope there was nothing that was really kind of dreamshaped D5 didn't exist stable coins sort of existed but you you have to reinvent the entire of um and so I'm I'm a very strong believer in you know the things that uh don't kill you ultimately make you uh Stronger from and from an industry perspective and and I think you know we're gonna we're gonna be able to prove that out over this next cycle um and also it's not really I mean yes we've we've definitely inflicted some of our own wounds this go around and I'm actually really happy to see the charlatans and Drifters get get pushed out um and I think that that cleansing is also really healthy

um so you know there's there's positives and we've gotten rid of negatives and you know from that perspective it feels obvious I was thinking about that over the weekend just today like there is especially as a result of interviewing someone like Jesse at coinbase like if you go and talk to builders I think most of them today are actually really optimistic and and motivated the real ones and all it takes is join and of course someone say wait a minute but you get to talk to Founders but I you know I'm ignoring me how do I do that joint Discord groups they're bombing synthetics Discord group was a party town in the lowest point but there was like an inverse correlation

between the level of excitement from real people that were like using this stuff that ultimately ended up doing extremely well because they they were at the ground level at the end the lowest point of the token literally which is what probably we're framework by anyways uh if you go and talk and so I think I always as an investor like maybe I'm trying to under like create a framework here of like you know at what point in the cycle you are when there's a very big disparity between the level of excitement from a builder and investors and I think we are at that point we're at a low point for sure um indicator what was that first it's the conference indicator it's like if there are a bunch of developers you buy

if it's a bunch of investors you say like ECC right I mean bombing right um and so so yeah I mean I think that's one you said it also Michael I'm not here to convince people like trying to pull them in right I ultimately think we do have to deliver on beautiful botanics faster better cheaper products I think we'll get there um Twitter this weekend about like adoption like work infrastructure we can't blame infrastructure this time around but to your point Michael from framework something you said is really great which is we're now debating which use cases and what's gonna what's real and what's

not there is nothing in 2018 like literally it was just white papers and so the existential risk of this industry in my mind has gone away it's more of a question now and I think you do re revisit history and you say the internet lived through this moment and so and we lived through this and so I think it's again like think about like in 2001 like who imagined that you would have had a smartphone and then everything else that happened after that no one literally no one and that wasn't too long ago and so I yeah I don't know I I feel obviously it's not easy

there's been a lot of pain the the sheer aggregate value destruction temporary or is is hard to process um but uh I think uh for me I I you know I'm solo shop so I just talked to Founders if there's a day that I feel like God yeah no I mean it's just really like a balls and all this crap you're like God damn it again just I go talk to builders and to me that's always the best reminder of yeah okay smartest people I know are here and look there's been a number of times since I've been a part of this industry more than three or four where I'm like

you know what I'm just gonna pack up my go like like this is too much like I have trouble seeing you do in that song how many times have I heard I've said this to you many times like this is why guys sorry I'm gonna say it I hate going to conferences for this reason because the the normal conference is like God man at the peak of every bull market it's like that scene in like the big short where they go to Vegas in the mortgage Association and they leave them there like literally just shortly at all Bitcoin Miami was just like one of those where you're like good Lord or breakpoint 2021 breakpoint was uh yeah

like oh my God and so those are the hardest moments to be fair it said nah so anyways like it's a reminder we're all human of course like anyone that says that crypto is easy cat spent another month or two and you'll realize that it's not it's not easy and I think it's just a virtue we're very early so you know you're not going to convince people that don't want convincing and so I sort of just Michael that was a great beer advice to your mom gives it I'll take that otherwise she definitely sounds like one and so uh that's my biggest learning this podcast you know I think more energy should be focused on pushing Founders to to execute on delivering beautiful products

like there's really no excuse at this time I think with account abstraction with all the l2s like we we can really we have a really good opportunity in the next two three years to deliver things take time but now's the time I think the infra is ready yeah well thanks guys appreciate you guys uh great flip it around yeah he does that a lot that's awesome guys uh everyone here is gonna be a permissionless oh yeah oh yeah good stuff be there we always have to plug permissionless

you know there's a huge purple bands someone asked me what's the biggest difference now that you have investors versus not I'm like well now that Santi is an equity owner of blockworks he finally shows permissionless so uh for a year and a half I'm like coffee little thing never once now pumping it more than I am you know what you know what the biggest change is now as an investor I get to go now for free to permission I'm a speaker and he said you were paying for your ticket I'm like wait a minute this is why these guys have been bootstrapped for five years they even charged speakers Jesus Christ gotta keep the lights on Santi gotta keep the

lights on yeah me too man for listening [Music]