VC Needs Web3 More Than Web3 Needs VC 👀

VC money has been focused on automating, streamlining, and scaling incumbent industries built on aging models full of technical debt. This approach has led to some amazing success but had the side effect of leaving little oxygen for genuinely new ideas.

Most of our current industries are inefficient and out-of-sync with today's technology, user needs, and the growing gaps in our ecosystems and cultural needs. Millions of dollars in venture capital are being poured into industries so broken that inefficiency and short-term returns are their only viable paths forward.

Throwing out decades of technical debt isn't easy. And doing so well defending and proving the truth in an insane valuation that throws a dozen zeros after every number, for every round, cheapens products, teams, and ideas. Many of these valuations only make sense in the context of perpetual growth, ignoring the cold hard fact that endless growth is an impossible outcome for any business.

Software, community, and creativity have always been about finding end-users and audiences first, then growing through engagement, passion, and dedication. Priorities shift completely with institutionally funded technology platforms designed to accumulate accounts rather than human users.

There are plenty of companies who've built empires on the idea that they offer a service faster, more conveniently, or more cheaply than their competitors, with the unspoken understanding that their success in the market - and their destruction of alternative products and services - will enable them to increase their fees and bleed a captive audience dry through incrementally increasing prices and decreasing services.

Web3 and metaverse projects will break those industries down to the user level and leave VC money in the dirt; at the user level, we are creating communities instead of companies and building ecosystems instead of industries. A financing structure designed around individual contributions aligned with and augmented by IDOs, ICOs, and limited institutional funding can avoid a web3 landscape filled with investors and companies seeking paper returns rather than dedicated, thriving users and communities.

The myth of overnight million-dollar valuations has been replaced with the hard work of actually building a valuable business process or protocol. Blockchain startups must be valuable to their customers first, prove their value over time, and remain useful to users even as they scale.

We are trying to create an airlock between the present and the future. We want to build what's next but without having to destroy much of what has come before. We want our engineers, designers, product managers, scientists, biologists, musicians - everyone who is excited about the future - to have a place to do their best work. Web3 will provide that, but it will do so through opportunities that may not need the input of incumbent money.

Web3 is filled with people who are bold enough to try new things, admit when they are wrong, and are passionate about what they do. People who can think big picture while being ready to roll up their sleeves and get their hands dirty. People who can connect the dots and turn a little bit of code into a product that delights customers. While distributed ledger technologies were initially mostly ignored by Silicon Valley, some believed it held promise to create entirely new business models around data ownership, privacy, algorithmic trust, and security.

These entrepreneurs saw blockchain technology as an opportunity to restore the balance between business and individual rights, autonomies, and responsibilities. The blockchain space is still in its infancy, though many people tend to forget that when they insist on using the same models that have failed them (and us) so many times before. But one thing is clear; it sits in opposition to the principles of tradfinance and centralized institutional VC. DAOs and founders are rethinking how companies are built, funded, and operated as part of a Web3 stack that will better serve individual motivations as creators and desires as entrepreneurs.

One of these forces - either Web3 or VC - will need to be altered by their ongoing impact on each other, and if you ask me, it'll be the Patagonia crowd who takes the most damage. For years we've been trying to build a distributed technology stack that incorporated and enhanced decentralized models and sustainable technologies while facing little serious interest from existing power brokers.

Now we're here. We are still early, but we are celebrating an explosion of new applications and decentralized organizations that will make Silicon Valley's centralized VC model obsolete.