(9th July) Co-founder of TensorFlow building a smart BI platform + ex-Quora exec. building the future of real-time ML infrastructure
++ Why Many Web3 Startups are a Farce
Welcome to the 29th edition of the Geeks Of The Valley (GOTV) Newsletter, where we share exciting ideas/insights on web3 + interesting early-stage/pre-funded companies every 1-2 times per week. If you enjoy and want to keep abreast with insights and interesting early-stage startups before they go big, subscribe to this newsletter ✌️.
Geeks of the week
Startup name: Inference.io
One-liner: Rebuilding BI, with Intelligence.
Founder(s) background: Co-founded Google’s TensorFlow & founding member @ Google Brain, ex-VP of Product & Engineering @ Tableau.
Startup name: Fennel AI
One-liner: Fennel AI offers a real-time ML Platform that can be used to build and ship production-grade ranking, recommendation, fraud, and other ML systems.
Founder(s) background: ex-Senior Engineering Manager @ Facebook, ex-Head of Platform & Infrastructure @ Quora, early engineer @ Libra blockchain, founding engineer @ Rocket Fuel (acq.)
Startup name: Superblocks
One-liner: AWS for internal tooling.
Founder(s) background: ex-YC founders, ex-Sequoia scout (focused on enterprise software), ex-Senior Director of PM @ Datadog, ex-senior engineer @ Morgan Stanley.
Startup name: Eisen
One-liner: Eisen is building embedded crypto infrastructure for fintech companies.
Founder(s) background: ex-PM @ Coinbase, ex-engineer @ Two Sigma.
Into the 🐰🕳️
(This article was originally written by TayMo)
Why Many Web3 Startups are a Farce
If you’ve been keeping up with the ever-evolving tech landscape (and institutional investment activity swarming it), you’re likely familiar with the following buzzwords: Web3, Creator Economy, Blockchain, Tokenization…the list goes on and on.
However, the growing sentiment that the startup and investment activity into Web3 supports this is that the notion of Web3 (centrally-managed) startups is, at best, a bubble; at worst, it’s a total farce.
Why? Because many of these young startups, excluding those building products on the blockchain, have declared missions that are fundamentally at odds with the nature of Web3: namely, that they are striving to centralize what, by definition, is intended to be decentralized.
I have a few thoughts on this, and they are as follows:
While centralized exchanges and online wallets have risen to prominence, and the few first movers are likely to prevail, this can hardly be considered Web3. (As a reminder, the ethos of Web3 — in evolving from the information economy ushered in by ‘Web2’ — is to disintermediate.
My latter point is further affirmed by the fact that the most successful startups in the Web3 space seek not to intermediate but rather augment the activities of Web3. (See: OpenSea, Fractal, Crucible, GameStake, and others). [Note: this excludes those companies developing primary Web3 protocols, game platforms, and other primary products]
Particularly apt readers of this article will note that in the aforementioned list of examples, I deliberately excluded companies like BitClout, HumanIPO, and other companies seeking to centralize the activity of tokenization of individuals facilitated on the blockchain.
If there’s one takeaway from this article, it’s that third point — the one about companies seeking to facilitate the tokenization of individuals — that ought to stand out as the most egregious transgression of the very nature of Web3.
Why, you might ask? The answer is simple. Such ‘tokenization’ of celebrities as a means of crowdfunding or to grant exclusive access to token-holders (rewards-based) is fundamentally flawed and doomed to impede technological advancements for several reasons.
First, tokenization is predicated on peer-to-peer governance, as it is not legally binding. And you wonder why BitClout is made available exclusively to celebrities? There’s no legal remedy for recouping your investment if a listed celeb fails to make good on any promises to his/her token holders other than the threat to their social credibility — or CLOUT!
It should also speak volumes that BitClout still doesn’t have an ‘offramp’, meaning a mechanism by which the celebs who tokenize themselves can ‘cash out’.
Again, in a manner antithetical to the DeFi infrastructure enabled by the blockchain, it’s nothing short of curious that not only is this enforcement mechanism (threat of lost credibility) ostensibly effective when it is those individuals raising money/tokenizing who are likely in the least need of it. Folks, there’s a reason why Steven Spielberg has Executive Producers, as opposed to going to the ‘crowd’, for capital needs.
This is because these tokenization companies seek to centralize and form companies around the activities delivered by decentralized-finance lending pools and, as of recent emergence, DAOs.
This, my fellow technophiles and Web3 compadres, are the real solutions that sites like BitClout and HumanIPO are seeking to deliver but will inevitably fail in doing so. (I will revisit my prediction in a year’s time, but I do feel quite strongly about this; I’d love to hear others’ thoughts in the comments).
At GameStake, the world’s first crowdfunding platform for up-and-coming amateur Esports players to raise capital from fans and everyday investors in exchange for a share in future revenue (while also offering a suite of talent incubation benefits to accelerate these promising gamers’ path from passion to the profession), our business roadmap, amongst other things like frugality and deliberation, is governed by a firm belief that our long-term success will be achieved only by positioning ourselves as a service provider that serves as an augmentation to Web3 and the individuals involved in its activities.
In closing, if you’re intent on investing or building in Web3, be careful not to commit the great sin of seeking to, as stated, disintermediate that which by its very design is meant to be decentralized and disintermediated.
Failure to heed this caution will see to it that your company or investment will pop with the rest of the Web3 bubble, its legacy reduced to all but an investment note or incorporation document sitting at a state’s registrar's office.