Crypto's Service Industry: A Survival Guide /w Kevin Simback (Delphi Labs)

Transcript

[Music] hello and welcome back to the strange waterer podcast thank you for joining us for today's conversation a few weeks ago I was browsing through Twitter when I saw a post by Deli live Chief Operating Officer Kevin simbach which read over the past two plus years at Deli Labs I've interacted with hundreds of firms who provide various services to web 3 companies and I've got notes on all of them I'm talking law firms accounting and payroll Banks auditing firms outsourced Dev shops market makers

and OTC desks exchanges recruiters marketing agencies custodians kyc providers and many others one benefit you get from being part of an accelerator is the ability to tap into all of this and to save a ton of time not having to research all these various firms and figure out which one is good for you happy to share my notes with Builders who want to save some time on these topics as I read this tweet I was struck by how much goes into building a business that isn't just about bleeding edge technology or or next Generation financial markets building a company is about organizing a specific group of people

skills and assets towards a specific Mission all while operating under a highly constrainted set of resources and time and so inevitably every founder must ask themselves when should I Outsource why should I Outsource and of course how do I out Out Source over the next hour I do my best to pick Kevin's brain on some of the most important rules and pitfalls of working with Professional Services like lawyers accountants and recruiters and is often apt to happen when exploring the bleeding edge of

Technology we'll also look into how blockchain might have huge implications for some of the way not only web 3 companies but all companies May interact with Professional Services in the future one more thing before we begin please do not take Financial advice from this or any podcast ethereum will change the world one day but you can easily lose all of your money between now and then all right let's go to Kevin Kevin thank you so much for joining us

on the strange waterer podcast yeah thanks so much for having me so before we we dive too deep I would love to just hear a little bit about um your background how you found crypto and like what brought you to Deli I come from a pretty conventional background um I'm a good bit older than most people in crypto and I had a pretty long career before I officially got into the space I started off in Tech back in the doc days um got a taste for my first really speculative bubble trading stocks back then and then after the crash I ended up in business school and found my way into finance and from there I went into Consulting um did that for a bunch of years mostly with some big Trad five firms on a bunch of different types of projects then I went into big tech for a

little while I was a fortun 500 executive for a bit and then also worked as a COO at a smaller SAS fintech company so just a bunch of different experiences um leading into crypto I guess the bottom line is sort of I've been around the block in a bunch of different ways and um I guess you know somewhere along that whole journey that I just described I cut wind of Bitcoin probably like 2014 2015 era and the idea of it just really resonated with me on a personal level um but I guess to my financial detriment I didn't take it too seriously U was kind of like early to the space but but not really early to to buy into it and then sort of same thing during the Ico era I was a spectator but again I didn't

really take it too seriously it wasn't until def5 became a thing that it really started to click for me that there was something much bigger here and so I just started falling down the rabbit hole and as you probably know once you get far enough down it's really hard to come back out and so as I was going down there part of my educational process along the way I uh was reading the deli reports and and listening to their podcast among a few others and I had a lot of respect for what those guys were doing and when the deli Labs Founders were looking looking for a COO it just seemed like a really good fit so for the past like say two years and change I've been in that role and um for the listeners that maybe aren't familiar

with Deli there's actually three separate companies they all operate under the same shared brand there's Deli digital that's um the Research Unit and that's where Deli all started there's Deli Ventures that's the the Crypton native VC and then Deli Labs which is essentially a venture Studio where we incubate and accelerate new crypto projects and that's where I spend the majority of my time so after U joining uh you know officially joining into crypto I had the pleasure of um enjoying a few months before the bear cycle started and then you know of course have done a lot of work through that whole bear cycle and now kind of feeling really good about having this conversation on a somewhat important day as Bitcoin is sort of you know tapping along the all-time high so it's been a

pretty wild ride to say the least cool so um thank you for the background on Deli and I think where I'd like to start this conversation is to really like unpack what it means to be a a COO in this industry and at a place like uh Dela and I think um maybe we can start high level for in such an entrepreneurial industry many people might not be aware of what a chief operating officer kind of does on a day-to-day but can you just describe a little bit about like what your job is and how that makes like the deli um Construction like run smoother than if it was like really just about um like Innovation and like moving forward as

opposed to operations so the co role that I play is um a little bit different like there's a aspect of it that is traditional coo responsibilities that's kind of running all the business operations that includes things like Finance and Accounting you know the whole HR process and managing the people you know working on you know various projects working with different service providers so kind of doing all that stuff internally on behalf of of Deli Labs but as a incubator and accelerator you know we create new project teams around what we're building and each of those new project teams ultimately the goal is to have them spin out they'll be their own entity that's funded and we have to go through the sort of setup of

all their business operations as well and some of those might be a little bit different depending on the type of product that they're building some of them have different needs and different Services than than others so part of my role as well is to work with these project teams to help kind of Advance their setup of their business operations and then make sure that they're know fully functional and operational as they move about their life cycle that's super interesting because like not only do you have the um I guess opportunity to like run operations for like your company but you kind of get this opportunity to try new things to iterate and to like be a mini CEO like over and over and over again and and and I guess my question to you is two-prong question one when

you're comparing the work you do in web 3 and in crypto versus the operational roles you had in like web 2 and more traditional Finance um what are like kind of the big differences and I think like the follow-up question to that would be what are some of the like the more nuanced differences that you're starting to pick up because you have this kind of unique opportunity to be a a mini coo for a bunch of different kind of like portfolio companies I I think just having been in the space now a little bit and and seeing it as we've worked with about a dozen companies in the past two plus years like what doesn't get enough credit in crypto is just how truly hard it is to be a Founder in this space like people that

have never done it they just see token prices going crazy and they really just don't appreciate the work that goes into getting there like for a founding team in crypto you have all the struggles that a traditional startup have you got to get get investors you got to hire talents you got to build products you got to find product Market fit all that stuff but with crypto you have this added dimension of managing a token community and you know assuming you have a live token like that's sort of like asking an early stage tech company to go public and then have that startup team manage the process of reporting earnings handling Wall Street analyst calls dealing with shareholders and it's all that much crazier in crypto because it's 247 and so like there's an OB reason why companies don't go public really early

on it's just very consuming and so in crypto it's just really freaking hard and for all the Builders out there I just want to really acknowledge that that it is super hard and and so like that's kind of the macro higher level differences of crypto and you know non- crypto space you asked about some of the nuances in there and I'll just touch on a few like first of all on the hiring side of things I found that hiring people people is just it's a different beast in crypto um the traditional resumés just don't give the the same signals as they would often in in non- crypto Industries I've seen people that have you know liabilities in a you know

maybe a traditional context um those can sometimes be Assets in crypto and depending on quality there um so there's just a bunch of different things that you have to do and think about and approach differently for something as basic as hiring Talent on your team and in a non crypto World you'd likely go to recruiters depending on the size of your company maybe you have an internal recruiter or an HR team that handles all that stuff they're going to go out LinkedIn they're going to kind of ping a bunch of people that fit various criteria and they'll just kick off the process that way and that just fundamentally doesn't work in crypto so you have to figure out kind of this new way of hiring I mean it's much more common to get a job in crypto via interacting on Twitter and that's just

something that you don't necessarily see very much outside of crypto so that's just one of the the nuances that you have there the other one is just like from a basic business operational standpoint it can be really hard for some startups to get things like basic bank accounts depends on where the company may be incorporated and the background of the team and things like that but it can often be hard and so just basic things like how do you set up and figure out how you're going to pay your AWS bill or if you've got other tools that you're trying to use you know slack or other you know internal productivity tools who who's paying the credit card bill on that if you don't have a bank account for your you know your your project team because many banks obviously don't want to deal with

crypto projects and so it things like that that should be they're really simple and easy for most regular startups can be challenging for a crypto startup and so it's just a couple of them I mean there's we could you know keep on going down this list but like it it there's not many things that you do that are easier in crypto um on that regard to like running a business than they are in the traditional world so like right off the bat you're at a disadvantage it's just harder kind of goes back to that macro picture of like it's just hard being a builder in crypto well I guess just to push you on this a little bit um I think my question to you is like there has to be some stuff that's like a little bit easier in crypto and the things that I would

imagine are um like on the one hand you have to manage a community on the other hand it's a lot easier to gather a group of people that have like a financial stake than just maybe some sort of brand affiliation uh to that effect like we have access to Capital markets in a way that um you know until you're Behemoth size like you really don't in trfy or are there any like maybe small maybe Nuance maybe even like not that big a deal things but any points where you see like building a company in crypto uh has some advantages yeah I think one of the biggest advant AG is is just how token incentives can work to accelerate a company or a product Beyond like what

you could do in a traditional sense it's very uncommon to find just say a normal Tech startup and to have their early users be such fervent evangelist of what they're building and going out and tweeting every day about the product and the company and the founders and like all of that stuff you just don't see it you don't see that same excitement and it makes sense because they don't have a ton of incentive to do that they're they're paying for a service most likely maybe if they're early they're getting you know a discount or they're getting some Early Access to things but when you throw in the token incentives all of a sudden those early users can be like true evangelist of your product and they can do a lot of the marketing for you

and sometimes that can just help jump start the flywheel like ultimately you're trying to get enough users to prove out if you have product Market fit and in some cases that that can take a couple of years to play out in web 2 but it you could potentially short circuit that and and have it play out in a matter of a couple of weeks or months in crypto because you have such a rapid feedback loop built in because of the incentives with your product and sorry last question before we'll move us into the the services conversation but do you think that this like hyper quiick feedback loop and financialization does this put um crypto Founders on a shorter timeline or or does it not affect the

timeline from a like web 2 or a traditional startup founder in terms of the expectations from VCS yeah I mean comparing crypto to you know traditional Tech investment that the time frame is is definitely shorter I mean people are looking investors are often looking for liquidity events with the token unlock in a matter of a couple of years versus in traditional C web 2 you might have a you know much longer you know 10-year type Horizon um I I do think as a result you know this this space moves super fast and you are probably going to know within a much shorter period of time whether what you're building is actually going to work and is going to create some value for those investors and so generally speaking I think the the

runway tends to be a little bit shorter but it does depend on what you're building I mean somebody that's building something like a truly differentiated or unique infrastructure level type project I mean that can take multiple years could have you know a good bit of R&D up front to trly you know try to try to build and prove that out versus something that is you know a bit more uh simple in concept you know that's something that you know you may be able to deploy and find out within a matter of months whether it's got legs makes sense and I like just a like very quick story like I do know that SRAM Canan of Igan lay was working on pre igen layer it was called layer labs and he was

working on that like before the pandemic even so I think to your point maybe in general our timelines are accelerated but like we also have space for like big ideas and we also have like VCS that understand that like sometimes things just need to cook and um you can always generalize but like it really comes down to like individual stories and people and players and like plays yeah I I agree completely all right so let's uh let's pivot into the meat of this conversation which is about like how crypto companies can um effectively use services companies so um again this is like kind of what you referenced in your Tweet and what I'd love to talk to you about but before we get into like how do

you effectively communicate with like a law firm a recruiting firm an agency these kinds of things let's start with the big question which is like how do I think about which parts of the business I'm trying to build um should be brought inhouse and I should hire people and dedicate my resources towards versus like how do I see a business problem that really should be addressed by a you know like a an external person that I'm just going to pay to take care of this yeah it's a great question and I think every tech company faces the same question not just crypto specific but in general I think early on that founding team needs to be hyperfocused on on building a product and evolving towards

being able to find out if they have product Market fit and everything else that they're doing to run that business if it can be outsourced or procured from a service provider it's probably worthy of consideration and then you know sometimes the cost of going with somebody outside is just doesn't make sense because you could do it in house if you hired somebody and just had them focus on that uh so you know it depends on the situation some areas you absolutely need to go out and get somebody um outside because there you just wouldn't never expect to have that expertise in house like for example when you're early on I mean you're going to go to law firms and accounting firms and Specialists like that to help you um as

you as you evolve so I think again it's very situational it depends on the the project the level of funding that they have and and what they're trying to do but I tend to take a perspective that if it's not really core to your product like if it is not going to be something that you're differentiating on or creating a different type of experience for your users based on it then you might as well just not reinvent the wheel find the best service provider that works for you and bring them in now that said like that takes time it takes effort you have to step away from coding and building and start to look around and say okay um I need to incorporate let's say you know a kyc element like if you're doing something that involves on

or off ramps or the need for kyc are you going to go build a kyc solution from scratch probably not there are other companies that specialize in this so so unless again you're trying to do something in a totally differentiated way it's probably best to go work with one of those service providers and when you do that though like this can be and I've seen this happen many times where Founders sort of get a little bit overwhelmed by that because now they're like okay how do I figure out who are the right firms and then I've got to go reach out to each one of them I've got to learn about their product and how much it cost and you know how they could integrate with us and they've got to go down this whole exploratory um pathway that takes them away from building the

core product that they're trying to build and I I kind of again I'll make the parallel to some of my pre- crypto days where you had oftentimes groups that manage vendors within the company and you would go to them and you say hey we're looking for a provider to do X and they would come back and say okay you know here's the short list of five providers we vetted two of them these three like like they help short circuit that whole process for you but is a small crypto founder trying to build like you've got to go figure F all that stuff out on your own and that's what takes out a lot of time and that's again you know part of why I posted what I did is just that when you work with an accelerator or you partner you know with a A Team like what we do at Deli Labs

you generally get the benefit of all of you know the network of service providers that they've already worked with or or you know explored and can often help save a ton of time by just saying okay if you want to look at kyc providers like here the top three um you know I can reach out make introductions to each one of them get you on a demo call in the next couple of days and then you'll you know be fully up to speed and so that that sort of process I think is what oftentimes um can take a ton of time out of the founders days that that they would otherwise be building product and where I would generally say don't reinvent the wheel just um find somebody who's been there and done that and like

get their knowledge from them and then um pick up from there yeah that makes a lot of sense and I think uh I we're definitely going to spend some time talking about like how to find the right professional for you and spoiler alert it's networking but um before we get to that I just want to like kind of unpack that a little bit more like I I think the perfect example is lawyers right where even the most like sophisticated well the most sophisticated biggest firms like have like entire in-house legal teams but you have to be pretty big in order to like justify that or directly related to legal stuff and so it's like really easy when you're starting a uh a startup to

to make the decision that you know the legal aspects are not part of our core competency and so we're going to go find a trusted lawyer who's going to like basically take care of this for us and and based on everything you said like that totally makes sense to me like awesome but what I'm thinking about are these moments where early on in a company you make it a pragmatic decision because um like you don't know anything about legal you just want to be moving forward you just want to be working on Tech and you don't like put the um like the real time and energy and resources into like managing your external vendor like they're an internal team and so I guess my question to you is like for example when you're thinking

about um hiring an external team like a legal team should you be thinking about also hiring people to like manage those relationships like how how do you think about incorporating your external teams into um like the company you're trying to build and not as like this more just transactional we take something from them we walk away and then when it breaks in six months like what do we do yeah good question I I don't know that there's any just straightforward answer to that because again so much of the stuff is situational teams that have the resources and are funded to a level that they can have people internally that can manage some of those relationships and be able to have the time to go and interact as much with say outside

Council for various strategic conversations that oftentimes you know are are not being had like that's a luxury and not all the teams have that luxury I think law is just a a very unique element of crypto and there's a there's a big gap that we've seen and I'm I'm very thankful to have worked alongside Gabe chapiro who's been the general Council of Deli labs for a while you know he's one of the top crypto lawyers and he's seen this gap for quite some time too and is I'll drop a little bit of alpha here but he's forming a new startup that we're incubating called metalx and it is kind of a combination of where Tech meets law and it is designed to solve in a more repeatable

fashion some of the common challenges that crypto startups face around legal and so you can go get some you know General crypto startup strategy advice but you can also get some products that are going to be predesigned to solve common problems that we believe should be industry standard type solutions for some of this stuff so when it comes to to law and like the gray area around that like you you absolutely as a builder want to have relationships with somebody that you can have General conversations with that understands what you're trying to build and where some of the legal landmines may exist based on what you're building and it could be something as nuanced as who's on the multisig and how is that multisig being

managed if it has say upgrade authority over smart contracts that control user funds so there's some things like that that often teams probably are not thinking about unless they have a really good lawyer who's advising them on strategy not just there to provide a transaction like we have a funding round can you do some term sheet and deal docks for us or you know we need to craft a legal agreement for you know confidentiality or something like that you need to have somebody who can talk to to uh who you can talk to on a legal strategic level now that to me internally like that's not the job of of somebody unless you have a general counsel it's it's that's really the job of the the founding team and probably

the head of product to be involved in those types of conversations so who internally manages some of these external relationships with service providers is going to you know depend a bit on what they're building and the stage and the resources of that that project but I I think it is important to to have those types of relationships that are not as transactional because often times these service providers have seen so many different situations some may be very similar to what you're doing and may often you know have good input on how you're going about doing what you're doing that could save you time or money or some headaches down the road yeah for sure and I totally point taken like in startup world like the name of the game really is scarcity and resources and making and Founders making

decisions and like that's the difference between a make or break startup right it's never the idea it's always the execution and so like I I totally hear you that these are hard problems to solve and like if you have the luxury of dedicating people to manage these relationships you should consider that but that's a luxury I think um so let let's just start progressing through the uh professionals and since we spent so much time talking about legal we'll start here so first on on when we're working with legal professionals like my first start like the the most important question is in crypto how much more important is it to be engaging and working with like lawyers While You're Building you're getting your company off the ground

versus um companies that don't have like an integral tie to a a alternative Financial system I guess my question is like for Founders that are just starting what is your advice to them on like when to start engaging with you know the the protective part of the legal system it as early as possible and I say that meaning as early is you have the resources to engage with good outside Council you want to do so there's just so many GES or landmines that you might face and the further along you get in your journey of a product the more of those things that you're going to be planting along the way that could blow up for you in the future some of that stuff is relation to things like how are you dealing with the equity for the

founders and how are tokens going to be granted in a way that could be tax optimized because I've seen teams that have gotten too far down the path and then it's time for them to get their nice big team allocation of tokens and they realize they've got this massive tax liability that they can't really avoid had they thought about that much earlier in the process they probably could have saved themselves quite a bit of headache and you know being a much better Financial State the same thing goes for developing on the product side um you could Implement your product depending on what you're building only to find out a little bit later that for example the way you've rolled out your decentralized governance has got all sorts of exposure points to potential

regulatory issues and if you engage with somebody early on about how you were going to proceed with decentralizing your protocol you might have found a different pathway that would not you know give you so much exposure on the regulatory side I so I think that's probably one of the most important things that a team and crypto can be doing is just making sure that they have really good legal councel and that legal strategy is something that's not just transactional or point in time base but it's something that you will absorb through multiple interactions over time and it will get you into a mindset of starting to think about like are we creating any sort of legal exposure whenever you try to do something new and

even as simple as hey I'm putting out a road map for my project is that even giving us some regulatory exposure that we should be thinking about I think most teams that that aren't really engaged on the legal side of things tend to miss a lot of this stuff or take it for granted or just kind of have the naivity to not really know that they're creating exposure when you know they they they most likely are yeah I used to work for a a giant company like the second largest uh consumer product goods company in the world and I remember my relationship with lawyers like I love lawyers and I I felt like I was the only one in that whole company that had positive things to say but I feel like if you come to a lawyer with the attitude of this is what I'm going to do

now help me do it in a way that's not illegal versus like oh these guys all they do is say no it like you you can recognize that lawyers are there to help like you're paying them they want to help you and it should be like a collaborative um like this is how we achieve your goals conversation and not like uh like you suck don't do this like I If you want my name on it you're basically going to have to ruin your product and so I think like you're totally right it's about engaging early but it's also about engaging right and and finding like a relationship where like it's the lawyer is supposed to be on your team you should if you ever feel feel like you're fighting with your lawyer like there's a problem there yeah I mean at the end of the day as a

builder and a Founder you're responsible for your decisions legal should be an input and ideally it's a a trusted well-received input um doesn't mean you have to always listen to every bit of legal advice that you get but you should build the Judgment along the way to know when to you know truly follow what they're saying by the word and when to sort of take the principle of what they're trying to tell you and use that as sort of a guiding principle for how you're building and running the company so I I I I guess joked earlier that um well we'll talk about how to find like good lawyers and the answer is networking and I would if you have a better answer than that like I would love to hear it but I think the more

interesting question here is can you help us understand like if you're interviewing law firms or lawyers like what are some things that either in the interview process or down the line like you know um are like major major red flags and like what are the things that you should be like looking out for on the negative side when you're like considering getting into a working relationship with a lawyer when I think about any service provider that you're going to use I mean the the number one thing that I tend to do myself when I'm evaluating them and recommend to other startups to do the same is to ask who else has used them and if you don't know anyone that's used them that should be part of your initial conversation with

them tell me about what other companies in the crypto space have you worked with and if possible get them to introduce you to someone at that firm so that you can get a sense from them directly just like you would do a reference check on somebody you're thinking about hiring you want to reference check vendors you want to find out who's been down in the trenches with them because sometimes when you commit to a solution or you commit to a law firm for example uh it's not easy to just pick up and switch and and go to somebody else so it's just a lot easier to figure out who's been there and had uh time with them and and what were their experiences so that's absolutely number one is is just do that that reference check um you know the

second thing is to understand whether or not the service provider is crypto native or do they happen to serve projects in crypto as like a little niche segment alongside all these other traditional businesses because you ultimately want to know how important are you going to be to this service provider and chances are if you're working with a big company you're not going to be very important unless you are a big well-funded startup and that may not be a big deal but it may if it's something that's time sensitive and you need to get things from them and they're you know prioritizing other customers ahead of you so just understand how important are you going to be to them as a customer and whether or not there's

somebody that's serving the crypto industry in a very specific way meaning they know crypto or just happen to service crypto alongside many other Industries and then again like it depends on the situation but like if you're talking to a law firm that you want to engage in strategy for you know ongoing legal advice as opposed to something like handling a fundraise you you want to know um like do they do they get crypto and you know simple things like asking them personally what are some of the crypto projects that they engage with or you know what are some projects that are exciting to them and just kind of see what they say like is this a a lawyer that I might be

getting ongoing strategic advice from have they been down there and you know are they doing you know D gen things online chain and are they are are they really getting crypto or or they just happen to be you know performing law for crypto companies so that's another thing as well like how how well do they know crypto and and some of the unique aspects of what you're probably going to you know bring to them so I'd love for you to answer this question in the context of like law firms but also just in general and you'll see it's not that applicable to like uh Tech Integrations but when you're interviewing a service provider do you think about interviewing the company or the firm or do you think

about interviewing like the individual that you're going to be working with it's a little bit of both I mean if you're let's say looking for um a good accountant somebody that can help you you know file what might be fairly complicated taxes involving crypto and whatever jurisdiction you're in it's really going to come down to whoever's your contact that's going to be doing your taxes the firm is probably a little less important than it is the person other things like if you're you know I metion mentioned earlier the you know a kyc vendor if you're going to use a product that you're going to integrate into what your offering is and and especially if it has any bearing on the customer experience of what you're trying to deliver then it's much more about the

firm and the product and and what they're going to offer you versus the person often times you know probably interacted with your customer success managers or your service representative from you know one of these web 2 productivity type uh products they will interchange those every six months to a year like it's just it really doesn't matter who's in that role you just need to go ask a question I can't do this what what's the problem or or how can you help me do this as long as somebody answers that question you're fine but when you're talking about s of bespoke services that you know I think like law and accounting uh fit into that you really want to get the right person and that's where it's important so I think

this is a good Pivot Point to move on to the next service which is a accountants or or accounting and I think that um for this first question you've already given us a lot of answers in this in the previous segment but I would like to know what does it mean what is a good crypto accountant and how do you find one and I'll remind you and remind the audience that so far what we already know is we start with references we start with our Network and then we look to make sure that these firms are you know focus on crypto or crypto native and not just like this is like one pet project of one guy there that like he's willing to do it for you so with his background like what do you look for when you're looking for a crypto

accountant yeah I mean I think you kind of Hit the general idea there um somebody that's going to be doing your accounting a lot of times they're just going to say all right send me the general ledger you know send me your p&l and balance sheet and then they'll go off and they'll do some stuff and then they'll put some draft statements back in front of you and you kind of hope that that's all good and you sign off and and get submitted in in crypto like just producing a general ledger if you've got a bunch of onchain transactions like if you've got a treasury that you're managing on chain and you've got different forms of potential income on that treasury you've got transactions in crypto how are you generating an integrated general ledger that includes your banking Financial uh

transactions and your crypto transactions in a way that's decipherable to somebody that's going to do your your accounting I like that that some times is two different people or at least two different sets of work that you have to have done you got to do the general ledger first uh part of it and then you've got to you know have somebody run the the accounting for it um I I if any of the listeners know great recommendations on the accounting side I'm always you know open for it you're probably not going to get this from you know the big four it's just not their core business unless you're a really you know big crypto company you know that that you could afford you know one of them you're most likely going

with a small shop that's specialized in whatever jurisdiction where you're located and Incorporated and you can sometimes get recommendations from your Law Firm like that's a a good source they usually are connected with accountants so they may be a good place to start and ask for some recommendations and again you know go through your network and and see you know who's got some good recommendations I will say uh accounting firms tend to be the most uh capacity constrained of all the service providers they obviously have a lot of bulk of their work is being done in you know a portion of the year and it's very very common particularly any that have crypto knowledge to just say we're not taking

on new clients right now just because we've got so much business they they can you only have a small team to handle it I'm not even going to bother to ask you like for a personal recommendation because I am very aware that there's like six crypto accountants on this planet and all of them have like decades long weight list but I I do think that um I I I guess my question to you is I I have my own perspective on this but like when you think about hiring an accountant um is that kind of just like a cost that needs to be done and you kind of like deprioritize it just make sure it gets done or when you think about finding a good accountant is that like something that's critically

important like the best accountant is that like 100x contributor like how important is this decision for building the business this really isn't that important and especially for early stage smaller startups it's really not I mean chances are your financial statements are going to be fairly simple um you're probably going to have some onchain activities so the most timec consuming part is just going to be putting them together into a general ledger and then at that point you know you give it to somebody they can do it for you it's not a game changer for you I think the only thing that you want to really be aware of is just making sure you're not creating any sort of financial liabilities as you go about doing things and not understanding

the tax consequences that might come from certain actions and so that you're not hit with a liability after the year is over that you now have no way of dealing with other than you know paying the tax B so the last um piece of the puzzle on the finance side that I wanted to talk to you about is banking and like this is just like the very traditional bread and butter like my company is going to make some Revenue it needs to go somewhere that Revenue needs to like pay out to you know cogs it needs to pay out to my employees it needs to pay out to insurance that eventually gets turned into income which we're in startup world so that'll probably be reinvested um but maybe not so much

today in March 2024 but at different points it has been incredibly difficult for crypto related Enterprises to like have access to the banking system so first question is do you think that uh just like the ease and the willingness of banks to deal with us is changing it all and um to to follow that up like what do you think it means to find a good crypto Bank well that landscape changed quite dramatically last year and I I went through that personally because one of the banks the primary banks that we used at Deli Labs was part of that set within the US that that got sort of shut down um you know in that whole spring time frame last year and so it

was a challenging situation for us just seeing very suddenly that a banking partner that we use is is no longer going to be available and now we've got to go find another one and depending on where you're Incorporated it can take quite a while to get set up on a bank particularly one that's on us rails so I think it is something that is um is really underappreciated is how hard it is to get a banking partner just to do basic things but what I'm also seeing is that after in the wake of you the the the svb and some of the others that that crashed you had a couple of banks in the US at least step up that said hey we'll service this Niche because we saw how you know important that business was to

those previous Banks um so those stepped up which was great to see at the same time I think we're starting to see service providers that will enable projects to spend almost everything on chain and then they'll handle the conversion to Fiat rails so for example if you're a project you get funded in let's say usdc you hold it in a multisig or in some custodian you can link that up to some service providers now that will allow you to generally you know prefunds from that you can send USD wire and a payments from that uh most of them are working on International wire capabilities and so you can very soon in

in some cases already can operate without a bank account as a project in this space all you need is the ability to prefunds with stables in in usdc so there's many more solutions like that that are available today that weren't available a year or two years ago so I think now this it's becoming easier but it is just a function of kind of understanding the landscape of who offers those types to Services what's the process for getting set up would they service you based on where you're located and um and how you're set up but I I think it's probably um the better option to go with if you're a young startup than trying to go down the path of getting you know traditional US bank account especially if you're not

Incorporated in the US if you're Incorporated in the US then it's usually pretty straightforward so um I'm kind of excited and this is a space that I keep my eyes open for our projects that are building to enable crypto companies to be able to transact in both Fiat and and in various you know International um tradire rails without ever having to have like a traditional Fiat bank account so sorry let me repeat back to you just to make sure I got it are you saying that if you're a US Incorporated company like yeah maybe you'll have to argue with a few Bankers but honestly it's not that big of a deal even if you're a crypto company and if whether or not you're us incorporated or not like we're starting to get to a point where there's a lot of other um

like banking adjacent solutions that can solve all your needs but isn't like part of this like regulated and b-regulated I mean anti- crypto uh Financial system yeah that's right I mean if you're let's say the standard Delaware C Corp you can go get a bank uh within a day or two it's it's a fairly simple process if you have all your company docks in order some banks might not want you because they'll ask you what you do and you know you'll have to provide some information about the company then they might see oh you know they're doing crypto we don't want crypto customers so you might have to go to a couple different banks but it's not a hard process if you're say Incorporated in you know BVI or the Cayman or you know somewhere in one of these offshore jurisdictions it's

generally a lot trickier and the options are much smaller to get a traditional bank account and it takes a lot longer I mean like weeks or months as opposed to a couple of days and then you know again it depends if you're Incorporated in um you know Hong Kong or Singapore there are banking Partners out there that locally specialize when working with crypto companies so again it depends on where you're located but all that said if you're located anywhere you can use some of these banking adjacent services that will give you most of the functionality that you may need just to do you know basic Financial operations and we've been pretty careful 45 minutes into this recording to not like call out any individuals but I'm going to just

because I think they're in a class of Their Own what do you think about Solutions like Anchorage which are like natively crypto banks that like were created specifically to service our industry one do you think that they're providing a differentiated service that like whether or not you can get in is like interesting for crypto companies but to do you see that this is the way that we're going that we're going to start to see some like dedicated crypto Banks or do you think it's more likely that every Bank starts to come up with like a crypto arm and a cryto strategy and crypto Services yeah you know I can't speak to Anchorage specifically because I haven't worked with them so um but I'm kind of bearish on seeing crypto native Banks I just think that that's a

really challenging middle ground for a a regulated Bank to try to walk and I think what's much more likely is these banking adjacent Services become better and better and uh cheaper and easier and kind of eliminate the need to have a Crypton native bank so you would be left with two options I can go with a general bank and you know there's some banks like Mercury that service or kind of cater to startups and so you know you could go down that path or you could go with one of these banking adjacent services I don't really I don't really see that these you know crypto native banks are are really going to uh find a um a footing in this industry but I I could be proven wrong and would be happy

to see that they do yeah for sure and that's the best part about this space is like prove me wrong and we all win right cool okay so at the last like 10ish minutes here um I would love to Pivot outside of kind of like the finance and just like the the least sexy part of building business and into like more of the growth uh parts of the business so the the big ones on my head are in um growth marketing specifically like uh marketing agencies like this kind of uh thing we see a lot more in the Trad world and also which you've already kind of touched on it and how it's not really working yet in our world but is recruiting so um let let's start with

marketing uh first as just like a setting the base like do you see that we're starting to get uh Mar crypto specific marketing agencies um in this industry that are like built directly to to Outsource and support startups in their marketing effort oh yeah we absolutely do we we have a whole sort of cottage industry of of web 3 Crypton native marketing firms and I think many of them do a really good job because they understand the space pretty well and they could be you know really used to your advantage depending on what your needs are around marketing and what you have inous versus you know what you you know have gaps that you need need help with but I think that it's absolutely

critical when you want to get into the growth stage and I tweeted about this I think earlier today just kind of um I'm a big believer in the concept of the the attention economy and I previously thought you can just build the best product you put it out there and that best product is going to win because users are going to see it and they're going to you know love your product but in reality um you know especially in a world full of memes and things that you know Drive attention it's really distribution that is so important and marketing is what's going to often help you get really good distribution or at least get you somewhere you know um that puts you in a position to have good distribution so I'm a big big believer in you know getting a good marketing

partner and the very least talk to some of these outside marketing agencies and you'll start to get a sense for what services do they provide and what are you capable of doing within your own team and then you know how big of a gap that is and so you know you don't know what you don't know until you start talking with some of these firms and they you talk about some past engagements that they've done and and you're like wow you know I never could pull that off on my own so that's where you you know you'll need the help for these agencies like so so we've taken all of our insights from the last 45 minutes we we've used our Network we've talked to the people that we're going to be in the trenches with we've we're confident we've identified the best possible uh agency partners were ready

to go um talk to me about like as if I were a Founder asking you Kevin should we sign this deal with this agency like when are the moments that like you know you're in a growth phase like this is a good place to be putting your money versus like one are the moments you would tell a Founder like hey I know you're super excited to for everyone to be talking about this but you're not really there yet like how how as a Founder can I figure out like when it's time to start thinking about um you know growing so fast that we need external Partners to help yeah um great question I I guess I'll start by giving some like Boomer management advice uh which is just like if you can't measure it then

you really can't manage it so if you're talking with a marketing firm for example and trying to understand should we go with this proposal they put in front of us you have to think about what are the metrics that you're trying to drive like very specifically are you trying to drive up your social engagement if so what channels and what types of metrics are you looking to get are you trying to focus more on you know unique token holders or you know what are the metrics that are most important to you monthly active users daily active users users Etc and make sure that the proposal or whatever you're considering is actually tied back to those metrics if not directly at least the the elements of the campaign are going to address the most likely behaviors to

drive those metrics where you want them to be and get a baseline for where you are set some targets be aggressive with it figure out you know what you think is going to get you to where you want to go and then make sure you're measuring the work that they're doing against those metrics to see if they're adding the real value that you need so I think again like whatever you're trying to do um you're going to want to try to ascribe some value that you're going to get from whatever you're paying and the time it's taking to engage with this outside firm and so the more you can quantify and have metrics around that the better you're going to be to to to know if you're getting good value or not yeah I love that and you can call it Boomer advice if you want but I think

that that's like one of those truisms that like maybe you pick up like from a Mentor or from business school or whatever and like it it's becomes one of those things that's so obvious that like you don't even say it but I do think it's one of those things that in this industry where half of our Founders are high school kids who never had a real job like it it is worth it to understand that like you really shouldn't be spending money towards a goal if you can't measure if that goal was achieved and so um you know that's like particularly important in marketing where it's easy to like do something something flashy and like a sexy animation and get you really excited and like then maybe walk away without thinking through like wait what was the

point of that but with marketing in particular but with everything like if you're ever spending money just know why and then know how to measure it absolutely and same same goes with market makers if you get to a situation where you're engaging market makers because you've got multiple trading venues or you're trying to you know release a token on multiple trading venues you get very specific with the metrics that you want them to do because they're going to ask for a lot and you're going to want to have really quantification on what they're delivering and be able to assess whether that's getting you the right value in exchange for what you're giving them man okay we're going to take a hard left turn and then I want to end us on recruiting but let's talk about market makers real quick so I've never been a

founder of a like super finance-based protocol so I I haven't had the pleasure of um you know interacting and like trying to uh ink a deal with a market maker but real briefly can you just talk through like what are the like traps in pitfalls and like what are the things that make a good Market maker a good Market maker and what are some of the things that a bad Market maker is going to tell you that may seem like signal for good but really is a problematic well there's a bunch of market makers out there that service this space and and you know a lot of them kind of operate under similar approaches um so you kind of need to know going in that like there's two common ways you engage a market maker you either pay him a monthly retainer or you give them um a

generally a loan of your native token and then alongs side of that comes either a call option or warrant for the market maker to purchase those tokens at some future date at some set price and so um when you when you know that going in then it really is a matter of understanding what they're going to do for you and and what um the metrics are going to be and and should that be a good you know value invest M for you and your team because it's going to be a big investment either way you're going to want to make sure that that you you know choose very carefully um the thing with like engaging market makers and why I I think it's important for if you have advisers that have been through this to to pull them into this process because

as a Founder like maybe you go through that process once maybe twice if you're lucky to have you know two projects that kind of get a token to the point where it's you know worthy of Market maker action so you're usually figuring out how this all works for the first time and you don't want to have the market makers educate you you want an advisor or somebody who's been through that process to educate you because the market makers are obviously going to try to get a good deal for them and what um what I think differentiates a lot of them is is just uh whether or not like they are going to work for you or if you're just going to be one of hundreds of token issuers that they're going to

be suppor in and so you know like a lot of service providers you'll get a bunch of activity up front you know they're really engaged they want to uh you know sell you on you know their firm um but then you know you may not be very important to them and therefore once you've Inked the deal and you go live you find that you just you know don't get the responsiveness that you want but um like the one of the warning signs I would definitely you know think about here is you know how much of your token Supply are they asking for and and how much um incentive are they going to have to dump that token and you know that's something that you want to be very cautious of is at some point in the

future uh market makers are going to look to take profit on the deal that they've made with you and one of the ways they can take that profit is by dumping the token and so understanding what their incentives are going to be at different scenarios in the down the road and whether or not that becomes a PVP type of situation that's what you want to really look to avoid so um you know beyond that uh you want to have somebody that's been there to sanity check some of the metrics that they're proposing like the depth and and you know some of the commitments around providing liquidity um make sure that those are in line with market Standard yeah and again this is not my space like I just want to talk about like cryptography and like ZK

stuff right but my question to you is is it possible to have a long longterm like positive sum relationship with a market maker or at the end of the day do they need to take your profit their profit that profits always going to come out of your community and therefore like you kind of need to have this more adversarial relationship with your Market maker or is that not really how it works no no it absolutely can can be kind of constructed as a partnership and I think that there are market makers out there that they want to provide um a good result and a good outcome for the project team and and they obviously want to make money for what they're doing as well because they they do take a certain element of risk they're going to hedge whatever they can hedge but but they're

taking some amount of risk in working with you so you want to be a good outcome for both sides and you'll find some projects that really want to work with you in a in a very collaborative way because they know if they provide a good outcome for you you may become a Founder again and have another token to bring to them you may you know tell your friends your fellow Builders and refer them so I mean that that's another way that they can differentiate themselves so I I I I absolutely think that it doesn't have to be a PVP type situation but if not kind of constructed carefully it could end up that way all right so man I I pushed us right to the end here but I have to ask you about this last topic which is recruiting and I I find it very um interesting because one you

know I'm I've gone through this process like I understand uh how recruiting works both in crypto and without and I think like there's a lot of opportunity but I guess the first question is are you see seeing um this ecosystem of like recruiter and like sourcing Talent through these like back channels and and kind of like private networks if you will um are are you starting to see that take shape in in a similar way that it happens in trafi or and sorry in Trad business or do you think that there's something special about our industry and the way we organize over Twitter and Discord and Telegram and just the permissionless of it all that means that

what our industry is not going to look the same peoplewise as it does um everywhere else I definitely think it's different than everywhere else and some of those reasons I mentioned earlier about you know that there different signals um in in crypto that I think um are just not really as accepted in the traditional world that that can be good in crypto uh I I have mostly been since I've entered this space and I've worked with many recruiters in my pre- crypto days and generally that's what you do you know you interact with an internal or an external recruiter you give them a job description you tell them kind of what you're looking for profiles they'll go out and sift through Linkedin and their own internal databases and they'll send you a bunch of rums and that's

common you you'd end up usually hiring somebody from the batch that they brought back to you but um in crypto I found that most recruiters that try to operate that way they don't produce good candidates I mean they produced some okay candidates but nothing that I felt like was any better than the people we we're getting through our own personal Network the problem with our own personal network is it's you know it's always limited um versus you know what you you know the candidate pool that's out there I will say in the past couple of months I've been impressed with a few crypto native recruiters that I think are taking um a much more like crypto view into how they're finding and and sourcing Talent it's not the traditional

like let me go search around LinkedIn it's much more about um looking more analytically at gith hubs it's more about you know going to conferences and hosting seminars participating or being involved in hackathons and identifying people and sort of building that proprietary pipeline of candidates that are already in crypto and so I'm I'm I'm more optimistic that we've got a recruiter set that's sort of graduating into a true crypto native mindset and offering services that I think are going to be you know more likely to produce good candidates for teams that are hiring in crypto um I'm also thinking and I and I'm seeing a few attempts at this I I I think there's an opportunity for somebody to create a true web 3

solution with an incentive model that could address kind of the the common you know situation you have a two-sided Marketplace you have people looking for candidates and you have candidates looking for jobs and so in the middle sits recruiters or job boards there's definitely an opportunity there for a web 3 Type approach to come and disintermediate the the middlemen there and probably create incentives that could allow anyone to effectively be a recruiter and could reward both sides of the marketplace for taking certain actions I'm seeing a few projects that are addressing you know some parts of that so I'm kind of optimistic that maybe in addition to having some recruiters that are much more crypto native um we'll also have some solutions

that that might you know use true like web 3 differentiating elements to to solve this problem too that's super super cool because you know when I think about like what the whole purpose of like the recruiter industry is it's trust right like companies don't trust that all these like thousands of resumés that come in when they put a job application are like real or like good people or quality people or whatever and so they like need to go spend money to someone they trust to go solve this problem for them and like say what you will about crypto but like the one thing that I think we all can agree that agree that we're solving for is Trust lessness and so like I can totally see what

however it looks but like some sort of solution that leverages blockchain that does all of the coordination but instead of through the traditional trusted just find a centralized firm to do this for you through like the untrusted decentralized magic of crypto and so man I have not heard one single person talking about how to use blockchain for recruiting until right now but I'm really excited that's very very cool yeah I I think this is an area that will see you know some more stuff emerge in this cycle it it doesn't it's not as sexy as Defi and some of the other you know gaming and uh and fun stuff we produce in crypto but I think there's there's real opportunity for it and there was one project I won't name them right now but um I met with them

recently and they had taken they had taken electric capital's database of crypto companies and then they went and downloaded the repos for all of those companies and then they were able to identify something like 25,00 th000 unique developers and they could with pretty good confidence tell if that person was a full-time worker at that project or just a you know maybe an external contributor to it and you start to get data sets like that that you can use and then bring in both sides of that Marketplace you now have a much more trustless solution where you can have companies that can have some candidates that are already prev vetted in certain ways based on what they've done and the contributions they've made on chain and you can have you know candidates that

can come in kind to have a profile that's already got them you know some some credibility elements to it that makes it a lot easier for them to stand out so that's just one such example I think there'll be many more and I'm kind of optimistic if anybody's listening and is is building or interested in that space I I've talked to a bunch of teams and and continue to kind of look for for ones that are doing something interesting in that space yeah I know man super exciting and that's why I love like blockchain because it's Although our conversation is entirely about like Finance um I really believe that what we're building here is like so this is about computation and like as we see in the real world in 2024 computation is about literally everything and so I think that

like yes we'll see some more financial stuff of course but like we're going to start seeing stuff that is not related to finance like as we've been promising since dentacoin in 2015 but um I think like we're here and I'm excited for it and like whether it's this behind the scenes stuff of recruiting like you're talking about or like much more like consumer facing stuff like you know uh generative AI with some like security whatever right like the point is is that we're we're here and um the technology is like finally capable of doing something more interesting than swapping shitcoin so very exciting and in order to actually achieve that Vision we're

going to need to build not protocols but actual companies to like get us there and um Kevin I'm just so thankful for like the work that you've done to to Shepherd all of your companies forward but in that like developing this like deep experience that um that is so relevant but more importantly that you're willing to share with the community on how to deal with professional so I just uh I'll take this opportunity to wrap the this up and just say Kevin thank you so much for um sharing your insights and I hope that in the future as this industry matures we can keep checking in with you and figure out like are there uh best-in-class recruiters are there new services that we haven't even talked about yet is the

legal industry changing to support us better and on and on but um for the sake of your schedule and our and all of our attention spans all cut us off here so again Kevin thank you and uh really appreciate it yeah I really enjoyed the discussion thanks for having me of course and Before I Let You Go um can you just share with the audience where they can find you uh I guess where they can find Deli and if they're interested in like just like learning a little bit more and how to like take their startup uh down the path of like legitimate company like what are the best places to like start finding resources for that yeah for me personally I'm pretty active on on X so you can get me there uh okay Sim back uh I'm also playing around a

little bit with farter so you can find me there as well and then Deli labs and you know the other Deli Brands all have Twitter accounts as well or X accounts so that's usually where we put out a lot of our content in terms of you know where to find all all this other great information I mean I think you know if you're a project team and your building in your early stage really I would advise you to consider an accelerator type program it doesn't necessarily need to be Deli Labs but there plenty of other good accelerators out there I think they really do add a lot of value and can help you kind of cut through a lot of the noise of the things that we talked about today and then you know beyond that just have some good advisors they can help short circuit some of this

stuff for you so you don't have to to spend so much of your time dealing with all these you know fun topics that we just explored here yeah awesome yeah advisor aren't just so you can put their name up on a slide and raise more money like they're here to help like just share their experience and their knowledge in these kinds of things with you very much cool well Kevin thank you so much once again and um have a great rest of your day thank you n