Put aside the difficult terminology and technical discussions of blockchain, let’s talk about what the technology means as a grassroots movement.
A year of change
It has been a year of rapid advancement for us at Forbole. We have evolved and dealt with change, and even our pitch deck has been revised from time to time.
However what we know is that human nature has not and will never change. It starts with greed and ends with fear.
Looking back to Nov 2017, people were lost in the hype surrounding ICO’s. It was thought that ICO’s would fundamentally disrupt traditional startup financing. However we soon learned that we were wrong. What ICO’s in fact created were new kinds of intermediaries and centralizations, which set a high barrier for startups trying to access the ICO ecosystem.
The unavoidable truth of this time is that information asymmetry creates intermediaries. Intermediaries will evolve into centralized authorities. This evolution is inevitable regardless of the underlying technology, no matter if it is block-chain or block-rope. To make matters worse, blockchain has created a large information asymmetry due to its inherent difficulty. The result is a hotbed of scams and industry spam. Suddenly countless people have become “crypto investors”, “ICO experts”, “family office” investors and “venture capitalists”.
Luckily for us, two core messages could be pulled from this that helped keep us on track.
In early September of this year, a friend told me there was a 5-day tour being organized in mainland China. Participants would be given the opportunity to connect with various famous VCs. The fee? Not cheap. USD8,500 per person. The tour didn’t even disclose the names of the representatives for those VCs. I had no idea of the potential ROI for this trip, but one thing I knew for sure was that I didn’t have the money. We already had a trip planned to Shanghai in the same month. Despite my friend’s opinion that the cost was in fact cheap when compared with other similar events in the crypto space, I gently declined applying for that tour.
During the Shanghai trip, we directly connected with the co-founders and key people in some of the leading blockchain projects such as Cosmos, IRISnet and Polkadot. We also connected directly with some of the most well known VCs in the crypto space, some of which were even listed in the above USD8,500 tour.
I finally came to the realization that crypto hype has twisted people’s minds. Startups are asked to pay large sums of money for just a small chance (not even a guarantee) of getting in front of the right people who have access to funds. This is akin to farmers in the Middle Ages who were forced to pay tariffs just to enter the castle to sell wheat.
What’s really striking to me is that people think this is normal.
Here’s the second message: A friend tried to refer us to another potential angel investor – before we even had the chance to send our deck, our friend delivered the investor’s reply: “These are all outright scams. Don’t waste my time.”
Honestly, I thought this was a reasonable response. People should be skeptical: No tractions, no finished product. That’s it. Period. (Later I found out that the angel investor was a bitcoin maximalist – lesson learnt.)
Back on track
Why do people think that paying a considerable intermediary fee is normal? Why do people think all these projects are scams? While seemingly negative, these experiences have in fact helped us clear our minds and focus on our mission. Our initiative is to disrupt the centralized business models of social networks. We need to first disrupt ourselves through a ground-up movement, a grassroots movement.
Most startups fail because the founders quit. Founders quit mostly because they are starving. With two co-founders that have a combined skill set of coding, hardware, design, coaching, finance, marketing and sales, all we need is to survive long enough to gain tractions and hit our targeted growth metrics. To accomplish this, we have hit some key milestones:
- Raised funds from individuals again
- Restructured the business of previous venture to provide passive income
- Assembled a team of talented professionals to moonlight for us
- Explored the opportunity of becoming validators (Cosmos and Polkadot, then Tezos & IRISnet)
The above measures provide us with a 12-18 month runway. We will also earn validation income once those mainnets have launched. As Adam Draper of Boost VC put it, be the nuclear cockroach.