The Next Batch of $100b Companies
I made the mistake of getting my Coinbase debit card shipped to my home address instead of my dorm. On a rainy night last week I was on the phone with my mom after she found my Coinbase debit card in the mail. She was in the middle of one of her mom-lectures (which I’m all too accustomed to), when she brought up the time in middle school where I jailbroke my phone.
She told me that I needed to be careful with this crypto stuff. It’s going to destroy my credit score just like how the jailbreak “destroyed my iPhone”. A few boys in my dorm playing ping pong got a good laugh at the “crypto will destroy your credit score take”, but she wasn’t interested in hearing about what stablecoins were or that Coinbase was a reputable company. Her mind was made up. Crypto was dangerous.
Most of us know that buying a little Ethereum and getting 1% Bitcion back on a debit card is not going to ruin one’s credit score, but this underscores a real concern for the adoption of cryptocurrency, and more broadly, blockchain based applications.
For instance, take a look at these couple of headlines:
To me, it makes some sense where my mom was coming from. The public associates the blockchain with inflated asset prices, unstable currency, a means for illicit transactions, and insanely overvalued JPEGs.
Most techies, VCs, and people in the industry understand that this is a fundamentally wrong, sensationalized take that many would accept as meritless once they did their research. Tech twitter has been abuzz recently with the talk of web3, which can broadly be thought of the next generation of internet. Web1, the first wave of the internet, was read only (like Yahoo), web2 was the shift to read and write (like Facebook), and now we’re on the precipice of web3, which is blockchain/AI based applications.
This is a super exciting trend. The blockchain allows for exciting new foundations for building cool products. DAOs, or decentralized autonomous organizations, are a great example. They’re a way to manage organizations in a completely decentralized way, all through blockchain-based contracts. A charity, for instance, could organize themselves as a DAO in this way:
Donors give money to the charity DAO;
In exchange they receive blockchain tokens that represent fractional ownership of the DAO, proportionate to the amount they donate;
These tokens allow them to influence how the charity operates, proportionate to the amount they donate;
The charity operates without the need for a centralized manager, as it runs in accordance with guidelines built on the blockchain.
This organizational structure solves a lot of problems for current charities and donors, mainly by increasing transparency.
A next generation company, for instance, could be a B2B platform that builds and maintains this sort of DAO for an already existing charity or business.
This represents just one of the many different ways web3 will change the way we create value moving forward. This is the upside VCs and techies alike are so bullish about → the countless new organizations and creations that Web3 will bring into existence.
But when you think about what actually needs to happen for this to jump from dream of Twitter investors to reality, things don’t seem so bright.
The people they need to get to buy-in to the web3 shift are not each other, but are people like my mom. The essential piece to the web3 bull case is mass adoption, which has largely been taken as a given up to this point. This, however, is a fundamentally misled belief. People won’t trust it because they don’t really understand it.
Even a lot of my friends here at school just don’t get it. Although I’m writing this, I too, have a very long way to go until I really understand web3 and its applications, despite actively trying to learn more.
In order to avoid the mass stigmatization of web3 and blockchain, it’s crucial to start with education, and to make sure we don’t leave anyone behind. People are excited, but those on the forefront of web3 need to be intentional about making it accessible. If they don’t, they risk alienating the user base that is essential for web3 to live up to its potential.
The next $100b company will be the one who can bridge this gap between the high impact applications of web3 and the massive knowledge barrier with the general public. The first step though, is getting down from the ivory tower.
If you want to learn more about web3, I highly recommend:
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Also, thanks for making it this far! This is an essay I wrote as a part of an effort to work on efficiently communicating my ideas and, specifically, learning in public. I’d love to start a dialogue, hear other perspectives, and most importantly, learn more!
