The Web3 Founder’s Playbook | Imran Khan, Qiao Wang, AllianceDAO

Transcript

this episode is brought to you by paris swap the leading aggregator to find best prices across various dexes we'll hear more about them later in the show all right everyone we have chao and imran from alliance dao uh two of a the top mines in crypto who have kind of a front row seat to the latest trends and developments in web 3 but also two of my favorite people they are back uh we did an episode with them in january of this year about six months ago when they announced alliance dao's 50 million raise for those of you who don't know alliance dow they are the most powerful accelerator in crypto um they've had i might botch these numbers but i think it's 80 plus startups maybe 90 startups over 13 billion dollars in combined

combined value go through their accelerator program uh their dow community has 120 mentors over 400 network members ciao imran welcome to ampargas thanks for having me thanks for having me how did i do on that intro did we uh did we get some of the numbers right i have no idea i i don't know what the latest number is good we've had about 140 startups um 140 i'll tell you that all of the numbers were right amazing amazing all right guys so here's what i want to do with this episode is i really want to give some advice to founders and builders as to how to handle the markets um we're recording this on june 1st the

market is uh what feels like we're maybe six months into a bear market a lot of people are maybe saying do we have three months to go do we have six months to go do we have 18 months to go how should i should i cut my burn like crazy should i do layoffs like how should i handle this market and so i want to get your guys's feedback there but before we get into that i thought it would be helpful to just start with almost a state of the market to get your guys viewpoints uh as to where we are right now so ciao i think i'd throw this first question to you like what is your state of the market today this is a very tough question because like no no well i think first of all no one has a crystal ball as to where the

market is going but it's safe to say that um this is the first cycle cryptocycle where um our industry is very much uh intertwined with the rest of the micro economy so you know if the macro goals should you know everything will trickle down into crypto from the public market public stock markets all the way down to publix crypto markets all the way down to venture markets private markets right it's a snowball effect all the way down from from the top so in that sense it's very hard to predict but you know the advice that um i see a lot of you know traditional uh funds give to their startups

the consensus that everyone should um and all the founders should tighten their belt stay lean try to have you know at least a year or two worth of runway um you know in a market like this i can't disagree with that advice like it's the prudent thing to do like i i like to be contrarian but for something like this it's does not make sense to it to be contrary like if the market does not give you the opportunity to raise at a very favorable valuation over the next 12 months or so which is a big possibility then you should try to stay lean because startups are path dependent if you die you die if you run out of money you die there's no way

to come back so i think it's prudent for founders to stay lean that said the advice that i give to our founders is extremely case by case it's specific to the situation of every startup because some startups have raised a ton of money they have a ton of runway which actually makes it a good opportunity to to really go aggressive and to expand their market share in a market like this because a lot of our competitors will give up right but there's other startups that haven't raised a lot of money that have like maybe six months of runway left in which case it makes more sense

to to cut the fat and to stay lean but the exact number of like when you when you should start raising how much you should start raising how much you should cut that kind of stuff is extremely case by case i really hate to give like a generic advice to all the founders but um in general that's that's how i think about this i'm curious how you think because you and i have been like firefighting a lot for our founders right like different different startups but i'm curious what you think as well yeah um and it also a lot depends on what stage the founders are in right so if you're a pre-seed pre-idea stage then ultimately you have a different set of parameters that you're dealing with whereas you have a founder maybe you have a team that's built a product and

is looking at traction and there's a different set of parameters that they have to deal with so dealing with the first which is a precede but an idea phase primarily speaking founders are looking up looking to go out and raise capital uh they're looking to validate the community and etc and what we found is that you know uh investors are more diligent in regards to the type of idea they want back uh they want to see some traction they want to see an mvp uh and they want to see how the founders think about hiring and recruiting as well in this landscape so investors and and every everyone around it are becoming more diligent in regards to how they should be backing these startups the ones that have raised capital in the

past and now are firefighting um with them it's becoming much much harder to raise capital uh at the at the valuations that they were looking at in fact some of the founders that that i've been working with have uh brought their valuation down uh by at least one order of magnitude just so that they can close out the round and get the capital they need for the next two to three years and in those cases you know i what i tell founders is it isn't about you know uh the valuation it isn't about your ego you just need to uh raise the capital close around and get back to work and that's what we've been telling founders on both both of those stages yeah go default alive right instead of default dead ciao you mentioned one interesting

point there which is um this is the first time that crypto's been so intertwined with with macro and just with the global macro markets and one thing that comes to mind there is that uh a lot of folks in crypto say this is just another cycle right every couple years we go through another cycle uh but the the counter argument there is that this is actually the first time in history that crypto's been fighting the fed and fighting the kind of global global macro markets right we've been right crypto since what january 2009 has been riding this like massive global macro bull market and for the first time in history we're going into what feels like a kind of global macro bear market i don't know if it's a year long two years long i don't know if it looks like you know the

great depression or the 2000.com bubble or the 2009 great great financial crisis global financial crisis i don't know what it looks like but it does feel like macros turning around so chow does this make you think uh differently about how this bear market could play out in terms of either the intensity or the duration of it yeah i mean i think there is a very strong likelihood that this is the last cycle um in the traditional cryptocycle sense um but but also like do you even consider this one as a full cycle because um last cycle we went from uh like around um was it 1200 to

20 000 right so like call it like 20x whereas this cycle went from 20 000 to 60 000. it says 3x like the magnitude of increase is much smaller than the last cycle do you even call this a cycle right so um maybe the cycle hasn't ended maybe this is the last cycle maybe this was not a cycle at all right um i think going forward it it's very likely that you know crypto is going to trade like nasdaq probably with a lot of alpha still like a lot of uh potential outperformance compared to elf uh converted nasdaq but cycle wise it's quite likely to to trade alongside the rest of the risk risk assets

does that make crypto less exciting from an investment perspective um so i mean if we use the language of uh traditional finance like beta versus alpha the beta is yes beta has become a lot less exciting and a lot less predictable right like the last few cycles were actually fairly predictable at least in hindsight like at every single one of past cycles were we had a blow off top these things are extremely predictable if you study like history of markets right so the beta was very predictable was very uh large in magnitude whereas this current cycle and going forward beta is a lot less exciting but

the alpha is still there like unless you think that there's no more growth no more new innovation in crypto um you know there's a lot of opportunities for investors to pick uh outperforming assets in this in this market emery do you look at it the same way kind of minimizing cycles as time goes on and that each maybe cycle is less violent uh than than the last one or do you agree with chow that maybe this is the last cycle what what's your view on this i think you know we're part i agree with chow um but i also think that we're you know we're uh for every cycle that we go through we

are bringing more and more participants into the ecosystem and which would make it you know less and less volatile over a fixed period of time and so i do think we're in a phase right now where we're growing up uh especially given the fact that you know institutions are thinking about crypto as a part of their uh investment strategy uh product strategy and then even thinking about like where they will exist in the next decade two decades so we're starting to see that already and so i i do think we're at a period where crypto's going up and a lot of it's going to start to correlate with like traditional markets but i also think that you know um just because we're growing up doesn't mean that there is an opportunity for growth uh and i do think there are still

incredible startups that are being built right now that will ultimately uh take people off guard um we could talk about you know stephen and others that have really came out of nowhere and started to uh you know build partnerships with large like shoe brands and i think we're gonna see many many uh use cases like that that will come really out of the left field and it will start to kind of grow tremendously so i do think there's a lot of opportunities though left in the market starting to get into the the founder advice type of things side of things how do you advise folks who are maybe on the earlier stage let's say 10 15 20 employees right now who are thinking about maybe launching a new product maybe thinking about releasing

their token like do you do you pull back do you pause right now or do you actually just continue forward this is probably uh the best time to launch a token or a product um there's a lot of noise during the bull market where you confuse you know token price with the traction of a company um and you've seen this happen you know many many times throughout the this last bull cycle and when and when uh when things like when reality hits for these startups and they and people the community start to see what really the startup is the token price ends up going down there's no product traction and then there's a lot of pointy fingers that like different influencers and community members on why

they bought the token or may have used a product so there's a lot of confusion that ends up happening so what we always tell founders is in fact that this is probably the best time to build a product and um this is probably the best time to launch as well because you get to actually get the real metrics in regards to the product that you're building and start to get like tighter feedback loops and then start to grow from there uh and so in fact i always tell founders this is probably the best time to launch products you had this post back in march uh march of 2022 about three months ago talking about customer acquisition cost and why merging investors and customers into one group is i think you put it like it's akin to customer acquisition

cost cac on leverage can you just kind of expand on these thoughts as as we start to talk about kind of i want to talk about token vesting composability partnerships and i think one good place to start is just customer acquisition cost as we head into a market where maybe it's a little tougher to acquire customers than in the past yeah um customer acquisition cost is you know in the web 2 space is ultimately you set aside a budget and you use that budget as a way to use facebook ads you use twitter ads and you try to get customers to start to use your product it's like a a recruiting funnel for for customers uh in the web3 standpoint you know we don't really we can't really advertise

on twitter or facebook because you know ultimately you have to be cr crypto native and so token ends up becoming this kind of customer acquisition strategy where you're able to attract your early customers your early investors believe in your product that use your product then ultimately you know how the goal is to hope to make them you know wealthier or better off by using the product but the problem with this is that you know um and as i mentioned before this is like cac on leverage which is like it's a great way to attract customers and investors to back your your startup but it also could hurt them because if the product isn't sustainable or what you're building isn't working um you could have the opposite effect um you know case in point is luna right um

people were very excited about you know the decentralized stablecoin uh but when the product didn't end up working out the way it should have you know all the people that invested or believed in the product ended up getting hurt uh and so cac is a very important tool for crypto startups what we advise our startups is don't use token don't launch a token or don't use a token as a way to attract users early on what you want to do is you want to use your product your product should be your go to market strategy and and it should be a foundational layer for your community because without product or traction the token in itself is just going to create more noise in both directions in a very wrong way

uh and so i'll point to a case study um dydx they launched they started back in 2016 or 2017 they ended up releasing their product around 2018 and around 2020 or 2021 they launched a token i think 2021. so it took them like four years before they even launched a token and by then they were already like all very close to being competitive unit swap in terms of trading volume then they dropped the token and they surpassed uniso and so token should be used as a way to double down on your growth strategy it shouldn't be your only growth strategy yeah i mean i think you've seen a lot of the layer twos do this as well right

look at someone like optimism optimism built an incredible product and then and say a lot of the layer two a lot of the scaling solutions have done the same thing right they didn't actually launch a token they built a product that people love and that people actually use and then they're releasing a token um ciao how do you think about when is the right time to do a dow and i think maybe it'd be interesting to look at some of the numbers of alliance dow if you just know anything off the top of your head like how many of the port codes if you if you have a hundred port codes uh or 50 port codes in the nuke in the new cohort or i don't know how many are in the new cohort how many are structured like a dow from day one um and do you

think that those numbers are right like should people should founders think about structuring as a dow from day one is it structured as a dao but don't actually be too decentralized like how do you think about that right now um i i think we uh we might have talked about this in our lab last time i i came out here but my view hasn't changed is um don't don't do a doubt don't do a doubt initially um said from alliance dow yeah um we i mean we were not like alliance now we're not about three years ago when we first started we talked about it and we knew that it was going to be very

difficult and even today even even though we're called align style um a lot of our uh internal you know uh governance or decision making or interactions between the various members uh like it does not follow like what you typically see on those like you know governance forums which i believe is um extremely inefficient for and it's just totally nonsensical for the vast majority of of uh products um i think dows could make sense for a very small category of uh products which are um

i guess uh some sort of fairly low level protocols all right everyone quick break from the show to share a big update from our friends at paraswap the best platform to stake swap trade farm and more periswap just launched gas refunds based on how much you stake you can now get up to 100 of your gas refunded on all of your swaps on paris swap this is huge for anyone who has spent a lot of time in d fire maybe it's just starting out you know how egregiously expensive the gas transactions can get the gas fees are ridiculous at some points in time and now you can get those entirely refunded on pair swap to

participate all you need to do is stake a minimum of 500 psp big shout out to the pair swap dow for making these refunds possible really it's just it's tough to be pair swap right now they give you the best prices uh they save you money you've got this gas refund if you stake psp they've got a smooth and really user-friendly interface fast swapping it's really everything that you'd want from a d5 platform if you don't use them already check out paraswap today at pariswap.io now let's get back to the show why do we even need dows i guess in the first place if all of this is kind of just going back to what something like a board of directors looks like where you've got people who vote on a board

and then the board makes decisions at the company like very high level decisions at the company usually capital allocation large capital allocation decisions and then you've got a bunch of teams like a vp of marketing a vp of sales a vp of engineering who just actually execute everything uh it seems like that model is actually working pretty well right now and it seems like that's where your thesis on where dows go back to so uh but on but on the other end i hear you saying like dows one day will have a trillion dollars of capital uh in their treasury so obviously you're quite optimistic about dows so the question is why do we even need dials if the traditional company structure works so well if it works at all yeah yeah um there's a couple of uh

um reasons um one is um dals are digitally native and borderless um starting a company that is borderless and transnational is extremely difficult when you work with multiple jurisdictions at the same time so so that'll remove that barrier um two is imagine you know in the early days of uber if uber wanted to incentivize these drivers with uber equity right it was not possible because you would have to ask like 10 000 like uber drivers to sign paperwork imagine the the amount of um legal legal friction behind that so dallas uh removed that kind of legal

friction as well in terms of incentivizing early um contributors so basically the point of vows is actually very analogous to nfts to like the point of dallas is to remove frictions associated with traditional legal framework right like people also talk about nfts as a digital native intellectual property right which completely removes the traditional legal framework from it and that that possibly enables a bunch of new use cases so that is fundamentally the the the value proposition of dallas compared to traditional companies imran when if a founder comes to you today and says look we've got four people right now we've

got this amazing idea we've got our mvp built out we just raised our seed million dollar seed and we're a dow what's your advice to them uh my biggest advice is build up uh build a product and build a an early community around the product it's the same advice i gave i give about the token as well if startup was to announce a token because there's no point in building um a community without a without a product that community is attracted to the product could be anything right but if there isn't like early traction in regards to why communities are coming together for a for certain reason there's there's no point in building it down um is my number one like response to

what i hear uh and so what i tell founders early on is like build out the product find out who your first users are and double down on those users by building more and more uh you know set of products that allows them to attract even a larger community and then from that community you can start to think about ways to decentralize certain operations in a way that could be very scalable for for the founder and the startup itself i'll talk about maker down actually maker dao first started off as a dao they tracked an incredible amount of talent and they realized that um you know they can't continue to scale or grow without being centralized so they announced the product back uh in 2018 and then they also called out to become

a foundation they want to revert back to becoming a foundation so they put a vote out and they brought everyone back in from a dao to a centralized organization and from 2018 to 2021 they built out this incredible growth marketing strategy where their biggest goal was to integrate die into as many protocols as possible so if you look at the grow to market team or their marketing team they had maybe like i don't know 20 25 people once they felt like they've hit critical mass they put out another vote and they became they killed the foundation and they became a dow so all of the like marketing teams and the business teams and the risk team

they ended up becoming sub-dials or dao's with its own branding nothing associated with maker dial and now like all of those teams are running very very efficiently because they have a very clear protocol on how to uh how to propose vote changes into maker dial and how that should be run moving forward and so and it took maker down launched in 2014 like their uh their white paper launched in 2014 and now coming up to almost 2022 they just became a dow again so like i said like you can't just go out raise money and become adopted it just doesn't work that way you have to build a product you have to build an

incredible engine that allows you to support the data support the product over a long period of time build a long-term sustainable community that loves the product and that will do anything and get up in the morning and build on a product and then over time you let it go and you allow the community to take over and allow them to kind of think about what they think the product should be moving forward does this change how you think about growing and scaling a team and maybe just to broader questions like how is growing and scaling a team in web 2 different than web 3.

um yeah it does actually um like even for us the way we're thinking about building our team it's very lean um you know 20 and 30 people max is the way we're thinking about it because ultimately what you want to think about is where can certain parts of our uh business units could be scaled through community is the way we think about it so ultimately in order for us to build the best talent pool we have to bring on the best people that are like ultimately uh founders because founders or ex-founders or like incredible business leaders uh can navigate through ambiguity and so if you look at like even align

style i'd say almost you know 80 to 90 percent of our team is our former founders uh and we did that purposefully because ultimately we're founders we're all going to end up you know taking on certain uh business units and then ultimately like driving that initiative moving forward uh and so you'll see uh our organization you'll probably see like a hierarchy and in this hierarchy you'll see like you know let's say five subunits and it could be business go to market product engineering uh and let's say risk or marketing or regulations and the subunits will ultimately be closed to begin with but i could see our dao opening up a bit to the community

where some of the people that want to contribute to any of these subunits can work with the business leaders to do so and that kind of opens up the community as a way for us to hire some of the best talent that's coming out of the space um and we think by having a semi-open like uh talent pool or community engagement uh funnel this gives us a really good ability to think about what does decentralization looks like over time but i would say in the short to medium term we're going to be closed and in the long term we'll be probably a bit open to the there's a specific um type of dallas uh i just occurred to me there's a specific type of dials for which a dial structure

could make a lot of sense from the get-go uh which is i tweeted about this a few weeks ago it's a it's basically sort of um incubator of creators so it's basically like a line style or y combinator for creators for extremely high risk high reward kind of professionals um and so it could be like youtube tick tock creators it could be like people doing extremely creative work uh like uh like chefs it could be pro gamers right like you know pro gamers could make a lot of money but the career risk is also extremely high

um there's a lot of examples of musicians for example like a dow for musicians that could also make sense and basically the dow would have three roles the first role is to uh scout and to pick and to invest in these um like super high potential uh creators the second role is to build tools to support them and the third role is to market uh these creators to the outside world and the reason why a dell could make a lot of sense for these is because these dials are basically they should be compo

composed of other people successful people who have been in the industry so for instance um it could be the dow could be formed by a bunch of very successful youtube creators or musicians or pro gamers and what they would do initially is they would vote on you know new creators that they would they would want to bring into to the dell this is this is one of the key differences between you know these creator dells versus a startup incubator dials like ours is because for something like like us alliance style we need to be extremely contrarian we cannot let the entire dell

vote out every single startup is never going to work however for something like creators those professionals tend to know who else have the potential to become just like them right so in that sense voting actually makes a lot of sense for these styles so like this is actually analogous to uh like this idea of a token regis token security registry which which was one of the biggest ideas in 2018 and people started surfacing the the idea again but it's basically that like you have token token registered token curated registry is basically a dial that votes on the list any any generic list right and in this specific example of creator dials they vote on a list of other creators

um so i i'm truly excited about about this uh this particular sector like in fact in this in the current alliance style cohort we have at least three startups that build um you know alongside this this uh thesis um and they're they're starting off as dallas basically yeah ciao i remember the token token curated registry thesis and i remember i i mean isn't that what you were working on at missouri right i remember you and selkis writing about the token curated registry back in like 2018 so yeah one narrative that was really really hot last year was the the l1 thesis right and it started to cool down and gave way to some some other narratives uh like scaling and layer twos and things like that what uh we talk a lot about just

like different l1s on empire and from maybe more of the invest investment lens but i'm curious as you guys see so many companies that are actually building uh and making these decisions to build on different l1 what what are the factors that go into advising builders on which l1 and really which tech stack to build on like what are you hearing from founders today how has this changed over the last few months as maybe seoul uh keeps having downtime launch of subnets uh layer two releases things like that yeah um ultimately like um they're gonna be every layer one layer two has its own community and has its own products um and what i tell founders is um look at the the communities and products that

are being built and look at the tech in the background to see if this is something that's gonna align with where you see your company the next two to five years um and and so like if you look at solana you think about you know gaming and nfts when you think about ethereum you think about you know pretty much the sandbox for all of creativity right whether it's d5 nfts uh music nfts etc uh when you think about avalanche you think about gaming when you think about like arbor term and optimism you think about you know doubling down on your growth within ethereum and the community that's been built over time so i think for the most part everyone is in the business of selling block space and the question then becomes is like what types of communities do you want to

compose with what types of products do you want to work and align with is the way to think about this and so what i would tell founders is uh take a step back and you know take the tribalism out of the picture and think about what what do you need fundamentally in order for you to scale your company from zero to one hundred um if you're looking for like transaction throughput you're looking for you know let's say zero knowledge proofs as a way to obfuscate uh you know certain types of data then go with storkwear um so i always leave that up to the founder because the founder ultimately has to decide what tech is going to work best for them but i lay out all of the options and i let the founder decide like you know what types of communities

uh or companies they want to align with in the long run so um uh objectively based on the you know two to three thousand startups that we're seeing on on an annual basis um by far the top three uh layer ones or i should say like uh ecosystems are uh in no particular order solana polygon and avalanche um right now probably probably solana and polygon are top two avalanches is growing over the past few weeks i would say avalanche is growing faster just because they started at a much lower starting point

um and the like the specific advice i give to founders again this is going to piss off a lot of people but the advice i give to founders uh evolves a lot over time like a year ago i would have said to founders you know solana is up and coming there is a huge opportunity for land grab basically anything that that has been proven to to work on ethereum um they're obviously going to work on solana um my advice is different now uh because uh it's a little bit more saturated on solano um the specific advice i give to founders

right now is the following it's probably to start building on avalanche and by the way i have we have zero like i have zero conflict of interest with avalon i don't know i don't own a backs or whatever this is just advice i give to our founders um start building an avalanche and the reason for that is uh it's it's up and coming it's fairly new and if one day avalanche runs into similar problems as salon and polygon which you know you know they are both layers run into bottlenecks and went down quite a few times over the past few months is that

even even if avalanche runs into those problems because it's evm compatible you're going to have a lot of options to migrate onto other evm chains with minimal amount of migration work so it gives you more flexibility more optionality this is the specific advice to i give to two founders currently um the best alternative to avalanche might be you know a ethereum layer too they're slightly less battle tested in my opinion but they're also up and coming so arbitrary optimism are probably also good

um options so that is a very uh politically incorrect advice i i gave to our fathers yeah we'll see how this one uh see how this one does on twitter chow um do you think that capital starts flowing back from some of the l ones back over to ethereum as the as these layer twos get built out and as these layer two start to launch tokens and uh it feels like the narrative is really with the layer twos right now optimism our arbitrarium will capital and by capital i mean like money but also human capital and talent will that start flowing back to l2s uh as the maybe bear market takes some of these alt l

ones down 90 to 95 percent um does that drive the demand for some of these uh just back back to like the quote-unquote main chain back to ethereum and the l2s i'm not really seeing that in in terms of talent so there's still a lot of talent going into solana there's still a lot of talent going into uh non-ethereum non-lithium l2 chains um so i'm not really seeing that in in the very early stage startup however the public market is clearly you know showing signs of that right um i don't know if that will have an effect that that will trickle down into

the private market maybe maybe not but like yeah of course this year is the year of ethereum it's the merge and all the l2 is launching right um but yeah that's just the the the public market what what are you seeing because we see different things yeah like i think the pendulum is swinging right um so like a couple years ago it would have been only eth only right and because of like scaling and you know scaling issues and not being able to get transactions through and or the gas fees founders started to go towards you know other alt layer ones uh and now i think what's happening on the outlayer one side is that they're being battle tested as we speak some are going down some are in some are

experiencing high gas fees and etc so we're starting to see the pendulum swing back into layer twos uh and like other like interesting solutions and with the upcoming like merge and like you know move to e2 there's a lot of momentum going back into eth and i think the pendulum is in a continuous swing back and forth until all of these products all of these layer ones are somewhat battle tested are able to uh take on more and more users and and so i think this is just going to continue to happen uh over the next couple cycles until all of the alt layer ones and ethereum with uh e2 being scaled out i think that's what's going to continue to happen because if you think about it like if you want to replicate all of the internet all of the work that's happening on the

internet today onto on crypto on blockchains you'll need more than one layer one to uh take on all the transactions that are happening and so i do believe in the long run you know we will live in a multi-tuned world the question is how long will it take us to get there and you know what layer ones are going to be ready to take on the influx of the influx of builders as they're looking to build their next product let me switch gears a little bit and go back to thinking about just the next 12 months for builders and maybe give them a little bit of advice i know just reading a lot of the kind of web 2 vcs a lot of their pieces to founders they're really focused on the metrics right focused on arr cac

ltv of the user gross margin free cash flows what are the metrics that you look for in a web 3 business is it uh total value locked is it the trying to look at like the what the company does their core competency for example aves might be lending so you try to figure out the core the core metric for lending maybe loan utilization rate like what is what are the core metrics that you're looking at and telling founders to optimize for over the next 12 months but really just in the course of their building career i would say uh it at one it depends on what product you're building right if you're thinking about d5 you know i think total value locked is a very bad

metric because you know a lot of us incent device through tokens token incentivization so the liquidity isn't really sticky right it's there but you know it could leave in a heartbeat so what we look for there is just like actual transactions what's happening within a d5 protocol are they using it as a product to trade are they using it as a way to um there's some like metrics that we like track within d5 protocols that allows us to think well okay so that is like actual you know crypto kryptonative usage that we're looking for uh so for like an example of unifor ave could be you know how much borrow for ave could be like how much has how much collateral has been collateralized and how much is

being borrowed hard against and at a time certain types of reflexivity within the markets what happens to other the user surviving same thing with maker dial i say even with unit swap you know how much transaction volume is happening um and how is that consistent over a fixed period of time um even dydx and others so for defy i would say like transaction volume i would say lending like what what are the actual metrics within lending etc now looking at like games and things like that i would say you know a good metric for games is how many monthly active users are are using the product itself so and that's pretty easy to capture for like

axe infinity and others so monthly active users daily active users how long are the users staying around for how often are they playing the game etc um and i think that's going to hold true for many of the other products that are going to be in this like that are building space for nfts as an example is like if you're building a marketplace then how much of the fees are being captured how much of your trading volume are you tracking et cetera uh and so i would say like what's probably like common across all that all the the sectors i mentioned is like transaction volume uh how much of the transactions are going through and hitting and how much of the platform is capturing that volume whether it's through fees or it's through engagement chad is there one one metric or two

metrics that you look for when you're talking to founders so we work primarily with super early stage startups so there is no metrics there's no metrics that really matter but depending on the product the one thing the one question i tend to ask founders is uh how many potential customers have you spoken with that question alone tells me a lot about how the founder thinks about market things about product building yeah if you're building a tool for dows how many dabs have you gone out and spoken with exactly and what did you learn from those conversations i like founders who have some very unique insights that i have i've never heard of before

um that that can teach me something is there any other kind of just big advice as we start to think about wrapping this this up is there any other big advice that we're missing here um whether it relates to composability security regulation toke investing anything else that you feel is just really really crucial for founders to know and for founders to be thinking about right now and maybe imran i'd throw this to you first and then ciao i'll toss it to you yeah um there's just there's just a lot of noise in crypto and people often forget like what they're really set out to do which is build a great product for people um you know some people get very lost on the token side and why they should launch a token tokenomics has become an important topic for a lot of founders

and why they need to get it right um and to be quite honest like i don't think we have a tokenomics that's actually worked well yet uh for the protocol for the users itself we're still in this ambiguities phase of like a governance token how does the token capture value et cetera so i don't think no one has really like found the right answer to that yet uh and i would say also like regulations has also stopped a lot of founders for building product and and what i and what we tell what we advise our founders is think about like regulations as a part of finding product market fit which is um understand the regulatory landscape or the regimes that you're operating in and find ways to build something that's

going to align with those regimes in the long run because the last thing you want to do is think about you know the regulators knocking on your door as you're looking to build out product so so just to sum up the three things that i would advise founders moving forward is one is uh don't worry about build a product don't worry about the noise in crypto build a product that will attract your first users tokenomics is not something you need to worry about today and number three is think about regulations and think about it very importantly as part of your product market fit uh and those are probably the three things i would advise ever find right now yeah i agree with those points um especially the the token economics part i you know i've been saying for years

don't don't worry about toke economics until you have product market fit and i think people finally are realizing that um so it's it's the industry is ha you know have realized that you know it's probably a good idea to build a product that people love first before playing these token games um so i like i like to see that but something that came up recently in our founders forum is that someone asked about you know community management um i think this is a topic that confuses a lot of founders and like every week so we do like group office hours weekly on a weekly basis with our founders uh this is a topic that would come up like every other week

like how do we do community management what are some of the metrics that matter um how do you think about community so i have a few very strong opinions here uh number one is i think the vast majority of crypto products are not doing community right every discord that i go into it's filled with bag holders and you know people talking about price and market that kind of stuff just does not add any value to the product that you're building and is often very distractive to founders like i i've had founders ask me like you know in my discord there's so much fun like when the price goes down how do i handle

this right it's so distracting these these um you know uh people in your discord that um are not users of your product so i actually wrote about this a couple months ago the way the main thing to think the main way to think about community is is to think of the community first and foremost as your user base your discord should be your potential users not the back holders and the way you interact with your community is to seek product feedback from them is to give them product updates ask them to try a new feature and give you

feedback on on you know how to improve that is the best way to engage the community while building a great product um so this is something i tell founders all the time there's also a very basic mistake that a lot of founders make is they're too obsessed with numbers such as number of discord number people in your discord number of twitter followers these are some of the worst vanity metrics they don't mean anything so i ask founders to ignore those numbers because oftentimes quality matters more than quantity

if you have like 100 people in your discord who love your product who constantly give you product feedback who are um uh you know net promoters of your product to their friends these matters a lot more than the actual total number of people in discord and telegram and on twitter or whatever yeah i love that yeah we uh we did something new at permissionless this year which is we launched uh our vip tickets were these things held permis which was a collection of 555 nfts and there's a private discord channel just for the permi holders that's token gated right you can get in if you own a permi and after the conference they basically self-organized created a spreadsheet of all the feedback that they have for the

conference then they turn that spreadsheet into a google form all the 500 permis voted on invite uh on on feedback for the conference and then they sent it over in an organized fashion to our blog the block works events team and this was just like i couldn't have orchestrated a better customer feedback thing uh so that was really really cool to see and then they also got uh early access and free access to our research product and now they're starting to give us feedback on the research product so it's been really cool to see that happened so i completely agree with you a couple of rapid fire questions here as we wrap it up not related to founders um jim chanos just said coinbase is tremendously overvalued as the fee feast is set to end ciao i'd throw this to you

coinbase overvalued or undervalued i i tweeted that i bought coinbase last week uh at around 50 i don't know where it is now it's probably up a lot and uh otherwise the day after paradigm announced that or not announced but i guess it was an ssc filing that they bought a like 20 or 40 million dollars worth of coinbase stocks um is is it overvalued now is it undervalued or valued now it's probably still under valued like i don't know what the market market cap is now but like a few a few years from now the venture book of coinbase is going to be worth more than their total market cap now i would have to agree and also it's super funny that that coinbase bonds um

fell to like 50 cents to the on the dollar uh like you have to assume that there's a 50 percent chance that that coinbase is going it's going bankrupt over the next like 10 years which is the expiration um date of the bond which is a ridiculous assumption right yeah i would ha i would have to agree with you there imran uh prediction here robin hood acquired or not acquired by end of year acquired um and i say this because um there's there's some interesting dynamics that are happening in space right now right um robin uh so sam with ftx acquired block folio looking to get you know access to

you know end users they're going to ultimately tap into ftx like training engine uh what's also interesting is that um uh sam just recently acquired like seven or eight percent of robin hood um right after their market like took a downturn uh in the same in parallel to that you know robin hood announced its own metamask competitor uh and so what we're starting to see is the shift right which is like who can come in who can take who's market share sam is going after the traditional markets uh where robin hood is in today and robin hood is trying to get into crypto by going after you know more of the crypto native uh companies like coinbase and and ftx uh i do think though like my this is my

personal opinion that robinhood will probably fail um and in that time you know i think sam will probably have a sizable chunk of robin hood yeah so ftx will uh probably acquire robinhood by the end of the year five years from now who's bigger ftx or coinbase what i'm seeing is coinbase is uh going for crypto native whereas ftx is moving away from being crypto native so coinbase is going to win crypto ftx might win the rest of the market yeah fdx is really going after the institutional regulatory they spent over a billion dollars in acquiring licenses

last year it's an interesting observation i think coinbase would probably be bigger with coinbase cloud and all the other things that are that they're coming out with uh their new staking partnership liquid staking partnership is also super interesting um uh nft market nft market in the last 30 days is down 24 market caps down 24 though that's kind of an arbitrary metric of market cap of nfts total sales is down 26 over the last 30 days uh how much farther maybe ciao i'd start with you here what happens to the nft market over the next six months uh considering the fact that it feels like the nft market is maybe the last place in crypto that hasn't the bottom hasn't completely fallen out from it yeah uh i don't have a strong opinion

but if i had to make a bet because nfts are the furthest along the the risk curve uh they're probably going to follow the uh the rest and they're going to fall more and when the market balances they i would like to think that they're going to bounce after the majors maybe either for imran or chow why is the nft market hanging on uh wow the rest of crypto has fallen so much i feel like again this is not a very strong opinion but i feel like the the quote-unquote blue chip nfts that you know that that really matter like their unit price is so high that their holders are fairly pricing sensitive

um so when the rest of their portfolio like for these people right these nft holders when the rest because they're already pretty wealthy when the rest of their portfolio drops like 30 you know it's not gonna matter it's not going to hurt their life they wouldn't sell their nfts right but if the the rest of the portfolio crashes to like i don't know there's there is a point at which you start feeling the pain and um you want to liquidate your riskiest asset uh into the the most risk of ones right but again like it's not a super strong opinion i would also say that um some of this is being uh if you look at

like art sales during like the financial crisis and others um it hasn't really taken a big hit compared to like asset prices and i think it's a you know comp there's a couple things reason for for these reasons one is you know illiquidity uh two is that there is a flight to safety and people think that art will outlive all the markets and all the volatility markets so if you look at like janet vart as an example um uh auto glyphs uh even if you look at it today um autoglyphs has done pretty well um it bottomed uh six months ago uh at around like 115th and it's roughly at about 189 eth uh and there was two three sales that happened within the past couple weeks

uh and so people are buying the bottom for these like high quality generative art i'd say for the most part like pfps and other like you know art i would classify under like community um i think they'll take bigger hits because they're more volatile in nature because they're more speculative in nature as it is um but i do think gender of art like vedenzas ringers and autoglyphs will hold value over the long term last question here ciao i'd toss this one to you the lido has been on an absolute tear in terms of just the percentage of heath that is staked in lido today it's sitting at 32 percent a year from now is this

above or below 50 percent of eth staked in lido a year from now probably above uh five years from now probably much lower why is that because the market will demand more decentralization and um and just to touch on that is um there's a company called oboe i don't know if you're following them but oval essentially allows any validator to uh that hits a certain threshold to automatically delegate that their excess of assets to other validators uh through something called uh secret keys and so what this means is that you know over time the community will ask for decentralization through validate

through validators and uh oboe is probably best in class in order for that to happen uh and so take a look at oboe they're uh they've been funded by coinbase and us as align style and many others and they want to kind of help decentralize validators move forward obi-l or obaa obl obol all right cool we'll put a link in the show notes oh awesome guys uh this has been great any last thoughts that you guys want to share um eat well exercise sleep ciao i saw your uh your nutrition levels your vitals came back at record record highs or should i say record lows very happy for you thank you what are you doing to to track uh all of the vitals um so i do a couple of things i i have a

local doctor which is like uh who practices like a functional medicine so they order a bunch of tests for me and the other thing i use is inside tracker not not affiliated i just use them so combine i attract probably like a couple hundred um biomarkers but like the vast majority of them don't matter like there's maybe only 10 20 that actually matters i mean i just use my apple watch and i feel like i need more than that i use inside tracker as well i like it inside okay i need to use it yeah it's good yeah my only advice to founders is um you know if you have an idea that that's worth validating reach out to us um you can find us on telegram if you go on our linkedin page

go on our website apply any idea that you have ping us we'll help you validate it and then help you get to the mvp this has been great guys uh really love the work you guys are doing uh proud and excited to be a supporter and um yeah hopefully folks found this episode helpful and yeah i'll we'll put links to your guys show notes and links to the website links to your guys twitter in the show notes links to the website in the show notes and yeah thanks again for coming on [Music] you