#32 Mini-Essays

on crypto, persistence, failure, our obsession with money, and more..

We’re trying a different format this week. I’ve been writing daily “mini-essays” over the past week on a variety of subjects. I’ve found them to be a great way to share ideas quickly without spending hours writing a long-form post. I’d love feedback on my writings and this format. If you’d like to see more of these, please let me know!

1. Security Deposit Boxes

When I was growing up, my parents had a security deposit box (SDB) at our local bank. We didn’t have much in there (maybe a few pieces of jewelry and a bit of cash), but for some reason, I weirdly have clear recollections of our visits. Perhaps the vault felt like it was straight out of a bank robbery movie, but looking back on it now, I think it was something different. SDBs democratized access to a safe/vault for middle class families like ours by combining the safety of the bank with self-custody of assets (via our key). In many ways, SDBs were the Google Authenticator of its time, which democratized 2FA without needing custom hardware or software.

SDBs have faded in relevance largely because they are a relic of when your most valuable assets were physical, not digital or digitized. As digital assets rise in value and popularity, I suspect there will be a growing desire for a digital-native SDB, which beyond being able to house digital assets has digital-first properties such as 24/7 global accessibility. As sexy as self-custody is to crypto-natives, it’s ultimately not what most people want (its why most people don’t own safes in their houses). I’m excited to see crypto-powered innovation along the lines of Coinbase’s MPC solution or smart contract wallets (Argent) with social recovery features here.

2. Shots Missed

Kareem Abdul-Jabbar wrote a piece yesterday sharing what he admired the most about the late Kobe Bryant. It wasn’t the championships or the career accomplishments, it was he’s the all-time leader in missed shots. To him, it showed that unlike many, Kobe wasn’t intimidated by failing. Rather, he continued to probe & push to something beyond what exists today in pursuit of accomplishing something beyond what you can imagine. As a result, the pursuit was really about reaching one’s fullest potential — anything that comes with that (winning, fame, money, etc) are just byproducts.

This framing came at a good time for me. 2022 has personally been a year of shots missed so far, between launching two crypto companies (and failing), fundraising (and failing), and now exploring new career frontiers in crypto VC. There are times when I’m incredibly tempted to go back to safer confines to make some shots. It would feel good in the short-term, but isn’t gonna enable the best version of myself. And that’s what life should really be about.

3. Staking

A few months ago, the infamous (famous?) Cobie wrote about the death of staking. The initial intent of staking was for users to provide collateral to secure a PoS network such as ETH2, and earn rewards by doing so. However, the term has let’s say been “generously re-purposed” to earning rewards for locking your tokens, even when your locked tokens aren’t doing anything meaningful. We’ve seen this play out in protocols such as Olympus or LooksRare which offer incredibly high APYs rewards for users to stake, as well as NFT projects including $APE and MoonBirds nesting. Idealists claim staking represents innovation to reward holders in new & unique ways (MoonBirds socks, anyone?). Cynics claim that it’s a way to prevent selling and provide exit liquidity to insiders.

I’m curious to see how this plays out. Will staking become the web3 equivalent of dividends where some protocols (esp the ones that generate revenue) reward holders in some mix of stablecoin and native token? Will it go away entirely as it’s just as simple to airdrop to the addresses who own your tokens? Will there be innovation either financially (e.g. compounded returns based on how long you’ve staked, similar to re-investing your dividends) or around ownership experience (meaningful perks for those who have staked the longest)? Let the experiments begin.

4. Money Culture

Something I obsess over is money. If I had to rank everything I’ve spent time thinking about over the past 10 years, it would be #1 by a wide margin. I grew up in a lower-middle-class immigrant family, and the goal of having more money was something extra ingrained into me at an early age. But popping up a level, money (and the pursuit of it) is fairly ingrained in American society writ large. When asked if someone is successful or when we compare ourselves with others, 99% of us would use money/assets as the definitive measure.

Looking at this cynically, the importance of money feels like a genetic hack by society, the same way our DNA has hardwired mating into our behavior to keep itself alive (via replication). The more we care about money, the more ambition we have, the more society progresses. Feels like a win-win, right? Well, when you sit down and ask older people (60+) about money, their answer is inevitably the same (assuming they have enough to survive): it’s not really top of mind and in fact, they wish they took more chances when they were younger even if it means less $$ now. Not sure if that’s wisdom or mortality speaking, or if breaking out of this cycle is net-good. Curious to hear other people’s thoughts and experiences.

5. Customer Obsession

During my 4+ years at Amazon, customer obsession was probably the most important leadership principle at the company. It’s worth sharing the principle here verbatim:

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

I’ve spent a lot of time pondering about how this applies to the crypto/web3 landscape. On some fundamental level, no one building a “pure” web3 app is truly customer obsessed because their #1 priority isn’t user experience — it’s decentralization. It’s the immovable constraint. Now, one can argue that the long-term benefit for users in web3 (network ownership, etc) will ultimately be there, and what we have now are simply growing pains. However, it’s no accident that the most popular crypto applications (Coinbase, OpenSea) have sacrificed elements of decentralization for user experience. They are often derogatorily referred to as web2.5 applications b/c of this “original sin”, with the implied notion that a pure web3 application will inevitably supplant it.

I think we do ourselves a dis-service here. I’d like to see more of our community (founders especially) more actively strive to be customer obsessed and be OK making reasonable trade-offs, as long as they aren’t materially sacrificing the long-term vision. If we can build a culture where customer need and trust is paramount (vs. the crypto community’s approval), we’ll have a much better chance of success.

6. Failure

Failure is often glamorized — although noticeably not by the ones who have failed, but by the ones who have failed and then succeeded (similar to how history is written by the winners). I’ve always been a big proponent of failure and believe that if you aren’t failing, you aren’t trying hard enough. However, personal experience and wisdom have made the cost of failure tangible & real to me: opportunity cost, emotional + mental health cost, risk of stability to name a few. While failure is the best catalyst to growth, it’s not the only one — especially for the many who don’t achieve the vindication of success. I’m beginning to realize that taking the road more commonly travelled and knowingly sidestepping the landmines of failure is OK. It doesn’t make you any less of a person. It simply means you’re not willing to sacrifice your inner peace — at least in this current moment of time. Maybe there will be a future fork in the road where your decision will be different. Maybe there won’t. All that matters is that you’re mindful of your personal journey and you continue to move forward.

7. Non-Obvious

Every revolutionary technology has obvious and non-obvious implications. Cars made getting from point A to point B faster (obvious), while facilitating the growth of suburbs, countries with oil reserves, and the radio (non-obvious). The internet made it easier to communicate with someone via email/chat (obvious), while revolutionizing commerce and media (non-obvious). Mobile made it possible to communicate on the go (obvious), while changing how we behave and experience via social and other GPS / camera-powered apps (non-obvious). It’s important to point out that the obvious implications have positive intentions, the non-obvious are unpredictable & can be negative (eg social media’s impact on mental health esp for teenage girls)

The obvious implications for web3 is being able to own digital identity and assets. My predictions for the non-obvious:

• Seismic re-organization of social and business structures via the ability for internet citizens to more easily coordinate and pool capital (Balaji’s network states, group ownership of assets, etc)

• The emergence of great thinkers & builders from “developing” nations. I believe 33%+ of the ten most valuable companies/networks in 25 years will be started from countries we don’t consider to be tech-savvy (e.g. non-US/India/China)

• Mental health challenges as people find it increasingly difficult to cope b/w their digital & physical lives. COVID was the beginning, but I suspect it’ll get worse.

8. Defining Experiences

Each era of computing has a singular defining experience for end users:

• The early PC era had a black MS-DOS terminal for users to type in text commands like dir

• The desktop era was defined by Windows (with the occasional blue screen of death 😂)

• The early Internet era was defined by a web browser to get content in near real-time 🤯.

• The modern Internet era (~2000-2010) was defined by Google and the ability to literally find anything you were looking for with a click

• The social era (~2010-present) has Instagram and the ability for mobile phones and an algorithmic feed to build a billion person network.

What defining experience will the web3 era product? Many people predict it will be a metaverse / virtual world one, but I don’t believe it’ll be screen-based. Rather, I suspect the defining user experience for web3 will center around active participation. Instead of being a consumer in prior eras, users will be empowered to actively contribute, own and govern the networks, protocols, platforms, and applications they care about. Looking back on this era, we’ll see this as a hard left turn away from hyper-consumerism and towards a rebirth to dynamism. I’m excited — are you?