Hashing It Out
Hashing It Out

Episode 57 · 3 years ago

Hashing It Out #57 - Consensys Lab's Tachyon - Gabriel Anderson

ABOUT THIS EPISODE

You want $150k? Have an idea? Is it Web 3.0? Check out Tachyon. Gabriel Anderson come on today to discuss the accelerator program by Consensys Labs, what it's like to transition from engineer to entrepreneur, the common features investors look for in an early stage startup, and the avoidable roadblocks and pitfalls that startups encounter. Check out Tachyon here: https://labs.consensys.net/tachyon/ and submit your application!

Tachyon - https://labs.consensys.net/tachyon/

Consensys Labs - http://labs.consensys.net

Tachyon FAQ -https://docs.google.com/document/d/1bTc17Oz9WdO9KcBZUsfU_b9_x5Y855z8sElo7Yiw8fY/edit

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Entering forecast work. Welcome to hashing it out, a podcast where we talked to the tech innovators behind blocked in infrastructure and decentralized networks. We dive into the weeds to get at why and how people build this technology and the problems they face along the way. Come listen and learn from the best in the business so you can join their ranks. All right, everybody, welcome back hashing it out. As all eight time, your host Dark Corey Petty, and we can Welcome Back My cohost Colin Cache. So what's up everybody, Colin? What's up everybody, Colin? Guys, got the old the old team back. Today we're going to bring you a different maybe content same same style, not as developer focus, but kind of developer focused. We have Gabriel Anderson from consensus Tachy, on part of consensus labs, discuss what it's like to make the jump between I'm an engineer, I want to start a business. Shit. Okay, but why don't you give us a great quick introduction as to like how'd you got introduced into the space and what we're working on now? Sure, for sure, yeah, yeah, and I can definitely relate with that. Oh Shit moment, that's for sure. Yeah, I'm managing director of Tachyon, which is the blockchain focus accelerator for early stage start ups in the ecosystem. It's part of the ventures arm at consensus and yeah, I would say you know how I got into the space. What, truthfully, they're. There are two versions of this story. There's the not suitable for adult version and then there's the PG thirteen version. I'll stick to the pier the PG thirteen version of this for now. I I spent years of them misspent youth and in finance at Admiral Lynch in the institutial cash management desk and and then I left and started my first couple of companies. The first two filled miserably. One was a fintake Finta company, that was a retach company, and my third company finally got a little bit of traction. So you know, I've been kind of in the startup scene for quite a long time and then and then spent the last six and a half years kind of entrepreneur and residents at a company called Vyner, at spinner media and doing a lot of early stage startup growth type of stuff for our our venture back portfolio and one of my good friends who's now today the one of the partners of consensus labs, is a guy named Sawn Chang, just a phenomenal human being, you know, the kind of guy that that is really good about, you know, finding people who are curious about things and always, always there to lend a hand and give give a valuable resource. So Shaun I we're having dinner one night and I was highly, highly skeptical of the crypto space, at least from like a financial asset standpoint. So Shane was my buddy that I would go too and we would have these really late night conversations, and so one in particularly over tie food and a ton of wine, you know, we started talking about a couple of aspects of blockchain that I was really curious and so so blockchain was something that I was kind of pecking around the edges come during my nights and weekends, and he goes, well, you know what makes you what are you interested in? Like what part of Blockchain is most interesting to you? And I was really, really interested in in tokenizing world assets and and and market discovery for hard to value assets. And so he dropped a white paper on me. I think it was, if I remember correctly, is the Dharma White Paper. Just as I'm heading to to Toronto's my girlfriend for the weekend and I ended up hold into a into our airbb living room for the entire weekend reading white papers. I came back to the Ken and I was a hey, you know, all right, I'm kind of Hyke. Let's let's let's talk about this. I've been at consensus for since January and and now running our adventures accelerator program attacking on. All right, well, I don't me give a quick trajection as to what Tech Yon is like. What's that? What's like? The offer that tagion provides that we did different than everything else? Sure, yeah, so tachy on. I'm assuming your audience probably knows consensus, but can everyone's consensus? Okay, several one of my audiants, I think. Okay. So within consensus we have a venture, armed ventures, arm, which is consensus labs. We've incubated and invested in north of a hundred projects. Some of the key pillars are in the ecosystem and Fura, met A, mass and trouble, sweet peg, assist, new O, etc. Tachyon is our full time toll. We could sell their program this upcoming track is...

...dedicated to founders in open finance who are building more open, interoperable and programmable financial systems and services. And so as a part of the program we have just a laundry list of just really stellar both internal mentors within the consensus network, but also external networks to really help our companies, are startups, you know, open up their network and and help them get them first couple of customers. We give access to capital. So we invest a hundred fifty thousand dollars into these companies in exchange for seven percent and we just give them an unlimited amount of network support over that twelve week program mostly through mentorship, one on ones and getting them ready ultimately to come out of the program ready to scale and grow and be successful, including getting them ready for any investor conversations that they'll be having. So there's this a local program. People have to move to New York to do this effect. It is yes, so that was one of the really big learnings coming out of our first two programs. We originally had a remote program and one of the things that our founders told us time and time again is is the thing that the program really lacked as a remote program was that intensity, that focus in that and that connection to the network. And so, as a part of the redesign for Tachi on three, we decided we wanted to make this a local program and so we increase the amount of capital that will put into companies, just because we understand, you know, living expenditures and etcetera, and in York can be a little expensive. But but just knowing that, we need to create a very intense program for these companies, get them into a room with one the the customers, the stakeholders that they'll be in, interacting with the mentors that they'll be accessing, but also just with one another. I mean studying a company is really, really ridiculously fucking hard. I've done in the number of times, and and so being able to be in the trenches with other people who are in the program who are building, working on their vision, working on their company, and being able to reach out for help and the mentor network, I think is something that we were really excited about as a part of this, this redesign, and it's been one of the court tenants of the program and and in fact some of the some of the founders in wanted to reach out said wow, we really love the way that you guys redesign this program. We're we're really excited about this. We've got several of them coming back to mentor, including of a Roun from the new Oh team and semple others. So yeah, I've talked with the seas in the past and more off the not but interested most is the process in which you have to try and decide what type of thing you're going to invest him and then how you filter through all the stuff that's currently available to find teams that you think are gonna give you the the highest return, if you will like. But Ye, what are you trying? What are you trying to enable, and then how do you find teams to enable those things? Yep, yeah, I think so. Yes, you know, if I if we put our venture investor hat on, you know it is about finding teams and project that will be be successful. But you know, I've been on the other side of that equation and there's nothing worse in the world than working on something for several months, several years sometimes, especially if you're investing all of your knights and weekends hours into it, and it not turning into anything. I've done that a couple times and and yeah, that's heartbreaking for for everybody involved. So I think the key is, and we do a lot of this advising even with some some companies that come into the program they have an idea. We help them reevaluate their idea, we help them really be divid reevaluate their market place. I think you know, to answer the question, the thing that we look for more than anything are ambitious founders who have technical skills but also, especially today, some business instincts. And I think you know, as we step back and look at the key variables that time and time again, predict whether or not a team or a project or a company will succeed. It comes down to, I think, for key variables. The first is the team, right, so a team that has the grit and the persistent and has a bias towards action and execution. From there we look at the product that they've built right and and we really want to take a good look under the hood and make sure that you know you're working on something that is viable. But products don't exist in the vacuum. So the third thing that we look at is the market that you're trying to sell that product into. And so there's all kinds of it is an alphabet soup of things that we could talk about, you know, from Tom's to Sam's psalms, you know, which is basically just looking at, you know, the the market that you've identified, the set of customers that your product solves, that that you're servicing. Is this what's called the product market? Do you have product market fit? Is this the is this the right idea of the right solution for this set of customers in their particular problems? And then, lastly, where I've spent years of my careers, looking at traction. Can't you know,...

...are you able to get people to use your products and give you feedback? Are you able to get traction in the market that your product is serving? And so I think those are the four key variables. There's a fifth. At all investors or venture capitalist or accelerator programs look at which is which is the kind of the investment terms, what your cap table looks like, but at this stage of companies it's really those are the key variables that that really matter. What about timing? So one of the things that I noticed what when? When? For instance, let me just skip past my own anecdote and just go straight to like you'd there were three youtubes before Youtube, and that's right. And, like you know, it's all about timing and the thing that made the difference is the fact that the technology was actually there to support the idea. So, yeah, yeah, yeah, you can have the team, you can have you can have the ability to gain traction, meaning that they were actually gaining users for the time, but the you know, the time was also such that the users didn't scale because they didn't have broadbanded yet, they didn't have big data storage or video processing technology wasn't fleshed out that well. You know, these kind of was even like big data. When Youtube, I think, first came out, it was just well, did they run off, hoop whatever. The point is that, like timing, is also a huge part. Yeah, he's off the ground. It's like almost the most important part from I've seen you know. So what did you yeah, calling your still right. I was one of the early, early users to Red Cam. I don't know if you robbed them. Yeah, I got one of our one of our start, one of our clients, over a million views on Redcam, which, you know, if if it was an advertising model, right, that would have been worth tens of thousands of advertite free advertising dollars, and those those views, those impressions, it became with nothing when Youtube really dominated the market place. Calling your hanging on such an important point. I think we we get to timing by understanding the market, the product, the market and the product, and we really help teams kind of evaluate are it's called the the I call the goldilocks zone. Right, you don't want to be too early. You don't want to be too late because the incumbents are already there and they're dominating, especially if you've got network effects built into the business. But but you're exactly right. Timing is such an important variable for any team. And Yeah, we try to flush that out by looking at the product in the market that you're competing in, evaluating the market place, your total addressable market, your serviceable addressable market, and then and then peeling back that onion a little bit to make sure that you're kind of in that sweet spot, not too early, not too late, but that your and nobody gets it right. Right. It's like, well, the total visions around the idea. It's almost always around the end of ideas. Beautiful. We have this grand idea, we can come things I've learned. These are diamond does. I mean they really are. I hate to say it, like I know everybody thinks your idea bluely, but like just my ideas are fucking wonderful. When you're talking about yeah, they could be wonderful, but again it's not about the ideas, about the execution, and execution is almost always like it's not not just liking, it's mostly about timing. I would say that if you have a great enough idea and the timings right and you're using the right stuff, you will find people who can execute on your behalf, where you can just walk away from it. It will still get launched. Here's the thing called and we have and I'm guilty of this year. I bet you're guilty of this. I Beg Corey is guilty of this. We all think our ideas are wonderful, the greatest thing since sliced bread. And what founders typically do is they fall in love with the idea. They don't fall in love with the customer. I see this especially in this ecosystem. Time and time again there there is, there has been up into this point, a lack of focus on the end customer and your customer can be developers, your customer can be enterprises, they can be the in consumers, but you've got to put your customer at the core of your product or your idea and solve an actual problem for them. If you don't do that, you know we all roomanticize a better ideas. I had tons of ideas that I spend tons of time on that went absolutely nowhere. My very first company. I right now today in two thousand and nineteen. The idea that I originally had is just now starting to get legs. That's how early I was. I didn't have the technical chops and I was way too early to the idea. It's just now starting starting to get traction it. I know how that feels. It's tire that's what and I got into the decentral dation space is because I realized that the key components, like it's like it's like I was trying to build a youtube before everybody have brought up in you know, the infrastructure wasn't there to support it. Not only that, but I was trying to build a youtube before everybody had, you know, before you have like the ability to do mascille distributed. You know, file storts. You know I mean on demand, you know, like road scale, your storage fathers and all these things like Cassandra and stuff like. They didn't exist when some of these original Youtube I guess, came out. Well, mine was the same way. So I think, I think one of the problems I'm also noticing and one of the things I've seen quite a bit, and I was wondering if you could speak to this real briefly, the idea of putting the platform before the APP, so...

...kind of the cart before the horse, and that everybody wants to build a platform. Everybody wants to build a platform, but Amazon started out as a bookstore. Yeah, they didn't stay a bookstore, they didn't stay, you know, Barnes and noble, but they started out as a bookstore. And the important part of that, and the reason is ties into what you're saying earlier, is because it's about the customer and you need to and my opinion, kind of need to start on a focused group to test that idea. How do you see people who approach you and say I have this grand idea for a platform and they have absolutely no customer in mind? Yeah, it happens all the time. So here's the thing with building a platform or building a marketplace business, which I would argue you know Amazon, is if you have a number of companies that are market place businesses, market place businesses, once that flywheel gets going, then network effects create like a virtuous cycle, right. So as you bring, especially when you're doing market matching, you're bringing either to customers together on your platform or multisided market place, you really should to benefit from network effects. Equates a virtual cycle and a flywheel. But boots shopping and ecosystem like that is extremely insanely fucking difficult. Is everybody cuts up the big idea at first like one day we're going to be the X Y Z of you know, film in the blank and and those are great ambitions and I think every founder needs to have a really big, ambitious vision of what the world's going to look like when they when they finish their product and when they get it there. But what I sell founders all the time. I spent the first six months at consensus consulting most of our most of the starts within the market place or within our ecosystem and portfolio, and I tell them all the time if you if you want to get big. Get Small First, find either niche markets or a small feature. That is not your entire idea. It's one element of the idea, but try multiple iterations of it to that initial customer base and see if you can get traction, if you get tracked. Like even if you're even within our space. You know, even if I'm you know, if I'm you know, a decentralized lender in the ecosystem, you know you might want to bootstrap on market place by first being the backstop, by being the lender of last resort for small group of borrowers who are borrowing against your your protocol right, and there's nothing like that. We we can have really big ambitions and we should have really big ambitions, but you you need to get real market feedback from from customers or who you think your potential customers are, in order to validate the idea once at least the core feature, if you think it's the killer feature, test it, find the the lowest hang through the the MVP version within your market at Your Business that you can test and put in from the customer and and get validation first. Once you've got validation, I think then we can talk about growing the the market place of going the idea and and there's a lot of ways to do so. I want to want to cry. Okay, good, sorry, call and gets carried away really easily. I love it a lot. Also, he's like, I don't know, I think cal also has a lot of experience in this and so he has a lot of like feelings and passion around it, which is really good. But I want to I want to kind of, before we move on from that, say that, yeah, you need to focus on a specific part in order to get that traction, to get that boot trapping, but in order to grow, you need to do it in such a way in which it can expand quickly, like it needs to be scalable from the start, or generalizable enough from a start that you can then capture multiple markets outside of the one you're initiated with, right, and I think that's I think that's most people, at least in this space that I've seen, are starting out way too broad and then not never going narrow. They're just trying to do it all at once, as opposed to narrowing your focus and getting that initial kind of like boot trapping and then and then refinement of how it works and then expanding into the like what you're what you like. We're kind of what you just said, what your initial idea was set out to do. Yeah, I think, Coy, that I'm you nailed it right. Like it's very easy to find those coillary markets or adjacent markets next to the one that you've kind of tapped into, and you can expand your platform from there. They're tons of great case days. Pay Pal, you did it calling you bought an Amazon earlier. They started out in books, right, papal started out and beanie babies. They were. They were to pay the solutions for biny babies. I don't know if you guys never those Le Your whole business model like evolved on that because they could set links to Ebay, people, that's right, and chairs. That's how they hold hold the part literally links to people and Ebay. That's how effects like, by the way, we are we're completely dating ourselves on this podcast. The yes, I mean that was their entire business for like a year and a half and then they found the...

...ancillary markets around it and they kept nibbling. And here's the thing. Right, like, and I love well, I got captured by the way. They got their capture which was good. Correct. That's in central like you gotta know your customer. That's right. Yeah, and they learned who their customer was and they built products that the customer really wanted. I think, Um, it is really it's a lot easier to get deep market penetration into a small market place than it is to go really, really broad and and try to peel off small, smaller, smaller market share when you're incumbents are already there. Yet when you're start up, your incumbents can outspend you because they are well capitalized, they're well organized, they have much bigger teams than you, they have armies of developers and it's really, really hard to go after really big, broad market places. But it you can find a really small market place. I Love Finding Mike Plays, by the way, that are underserved, where my incumbents just don't give a shit about them. There, you know, they're the whiners of the bitchers, the you know, the the the forum posters. I love those industrial customers. I love trying to build build products and services around them, because nobody build products and services around them. Can I get an example of that? Yeah, I mean I think if you look at them lending club is great grays. I've got a good friend who was who was that winning club when they first BOOT shopped? They were going after subprime lenders. No traditional banks wanted to talk to subprime lenders and they were building the peer to peer network for that, for that subpime personal loans ecosystem. Yeah, that's that's a perfect example and you know, correlated to to what word? I think what we're trying to do with in the open finance community on on a theorem. But yeah, I mean it's trying to find it's trying to think about your market place and find customer segments that are either underserved or or where your incomements are not spending a lot of time. There's an issue with that that I think a lot of people face. Most of the people, at least, if we keep ourselves, could find within the cryptocurrency or dealt your blockchain space. Sure, our engineers and lack of the requisite skills to do stuff like that. Yeah, how do we fix that? I mean there we don't need to reinvent the wheel. Right there, there are lots of their, lots of things that we can borrow from Web to trying to find the CO founder who is, you know, technical but growth oriented, or customer acquisition oriented or Business Development oriented, going to meet ups and and trying to find, you know, corallary ancillary companies where you can where you can trade customers or trade email list or true, you know, you work in a consortium way and you scratch my back out, stratch yours. There are lots of ways to try to try to get that done. It really depends on it depends on the the developers, that depends on the founder. I mean the one of the hardest things to do is to go from thinking about being a developer and thinking about your your product and being product focused to starting to build a company. And I would argue the difference between a product and a company is a customer. And so making that transition you've got to find you've got to find your most natural path to strange to transition to company building when you start getting into the the startup ecosystem, trying to thick on, how I trying to ruinate a lot, a bit the difference between product and a company. As the customer, elaborate that on. That sort of misted that whole time. I forgot what I was going to say now because I'm so frustrated. Anyway. Yeah, go ahead, corry, okay, elaborate. Yeah, yeah, there are so many aspects that go into building a company, right, and when you're in the early stages, you know you're you're in fun, unless you're bootstrapping your you've got to think about fundraising. You've got to think about your product development. You've got to think about you the state and the stage of your product and how you get initial customers. You've got to think about your company formation and what goes into that and would which is, you know, legal. You've got to think about your accounting and and what's going to go into that. You know, there's so many elements that go into building a company that are very different than building a product and you those are just things that you need to you need to consider. But at the heart of all of that, unless you're in pure rd at the heart of that is the customer, because the customers the one paying the bills, right, the customers the one that's exchanging money or value for whatever good or service your product provides. And so I would argue, the customers at the core, at the...

...center of of Your Company, which is making that transition from being product oriented to customer oriented is it's a weird feeling. It's a weird transition for for most people who who are not used to building companies or in being involved in the rop ecosystem. So if you don't have that skill set yourself, I would say find a co founder who does have that and not just has it but like, actually likes it. I think it's extremely, extremely important, and we see that's the thing. Is Like finding the cofounder like every so here's the my experience. Every single person who has thatats tends to want an engineer more than the engineers want them. Yeah, you need that. There's like for every solid engineer with a good product of majority to execute, there's about ten business guys willing to throw them. Yeah, yeah, trying to tell you that you're the next big you know, Bill Gate, motherfucker. That's OK. You like and and like you're sitting there. I mean like. So there's two things I want to ask. What do you want for Co founder? And, more importantly, I believe, yeah, prior to get it your cofounder. I believe that as an engineer, if you're going to start a company, what do you look for in a mentor? Because Mentor has lower risk and you that a higher quality cofounder, which would take a higher equity stake it would have more risk associated with it. Yeah, okay, all right, so you're actually hitting on a really, really good point. So for so for your first question, what's look for it? You're asolutely way. I don't know why that dynamic is. Why are there two ten business guys for everyone's very hardcore engineer? It's a lot more work to become a good engineer, that's true. Yeah, that's a company and of itself. We should try to figure out to solve that problem. Dat Excite. They have them like bets. Can only talk with the business cord and her. I think, I I this is my personal pain and I am biased. I think. I think you should not start a company with somebody unless you have multiple cycles of working with them and building things with them and there's a lot of trust there and that you know this person is going this is somebody that you want to have your back in the trenches with you. I don't know, flicks, what you said earlier and see this is a problem. Why the engineers don't socialize with the guys you're asking them to socialize. Well, so then we get to your second question. So I went to answer the the first one, which is I think I think trust is probably the biggest variable. secondarily would be you need complimentary skill sets and and so that that's kind of the ideal match. But if, if you and your cofounder are both technical and nature, I think, as opposed to looking for a business oriented cofounder, I think you can get a lot of leverage from a mentor or Advisor. And that was that's such a great point called. I'm glad you brought that up. I think a a mentor and or advisor who truly believes in in your idea should should do this without and sense of mechanism. Obviously you can bring them on as an advisor and compensate them in equity and if that's something that you choose to do later on and down the road, but I think you want to find mentors of advisors who won have traveled down the path that you're looking to travel down. You don't want, I don't think you want, to find a mentor advisor, at least in the early stages. That's too far ahead of you. I think it's really good defined advisors and mentors who are maybe three or four steps ahead of where you are. It's just really hard to go back remember what it's like when you, like, were just getting going and you didn't have traction and you didn't know what you were doing. I think, I think a you know, an advisor who is is three or four steps ahead of you. They remember it. They were just there, you know, three years ago or four years ago, five years ago, and they remember what steps and in what sequence you need to take in order to get to where you're going. I think a really good mentor has a network. They can open doors right and and that really speaks to whether or not they think you've got a good idea. If you've got an advisor on board and they're not opening their network to you, it means they don't want to have the relationship risk, which means they yeah, they don't really think either the team or the product or the market is the right fit. So I you know, a good mentor or advisor is somebody who has a role of decks and can open up that roll of decks to you and actively tries to open up that roll of DEX for you. I think, you know, beyond that, there there are other things that that that a good mentor advisor can bring to the table. But that really helps kind of grease the wheels for technical founders who lack a little bit of that business acumen, that that's something that you can learn on the job. I mean, you know, if you can learn, you know, job script or python or any any coding language, you know you can learn business operations, you can learn, you know, Delaware...

LC's, you can learn right cat table management. If these are things are not outside of your your potential to learn and a part of that knowledge, you just might need a little bit of guidance and help. And so yeah, I'm really glad you about that. That's a great point, I think. I think in the cofounded that the cofounder thing is the thing that you want to get first if you're going to have a cofounder. And now I'm a big believer that company building because it's so fucking hard and so lonely and so so difficult, I think it's good to have a CO founder. I think it's really, really important that you have somebody that that you really trust and obviously they've got to have skill sets, but I think trust is probably the biggest variable there and we've seen time and time again. You know, founder match making fall apart when Shit starts to hit the fan, and always does because there there there weren't enough cycles of those founders having gone through this together to know that they could trust one another, to know the other person was going to be the through, through thick and thin. Yeah, and it's such just about the CRETENT. It's just about are they competent? Like like, so in cittimization models are built so that you don't have to worry so much, yeah, about thicker thing, like if they're in fifteen percent, they believe in the idea, then then they're going to want to eximize their profit potential. Ideally. I know it doesn't work necessarily like that practice, but are they? Are they? Are they? Like competence, it's just something you want to believe in, you know, you want to believe in this person you're working with. I think is probably a yeah, I have seen a number of teams in in companies that have both been successful and a lot who have been who have been unsuccessful, where the founders are both competent but they hate each other's fucking guts. And and money. Money really was a thing. Was the thing that got in the way. And No, I'm not naming names, but but that incentive mechanism didn't solve that and and you saw what could have been a really great company not reach its full potential because the founders didn't trust one another and the the the money, the Cap table issues actually exacerbated the problems and exacerbated the distrust. So I you know, I'd actually I'd probably push back on that a little bit. You're right, you do want somebody that's competent, but if you're building a company and you and you're going to invest the next five to seven years of your life into something, I would argue you want to do it with somebody that you that you trust, that's going to be in the trenches with you. I got you, I get you, so you gotta like them. In other words, you gotta like you work with I think that makes a lot of sense. And Trust is the foundation about like, yeah, yeah, Um, if you hate, if you hate working with them, you're not going to wait. So you're much because really, I get it. There's a card calling. How are your in couries relationship, and is this is this something that where, of course, a brother Guy's fun of a bitch. You could move this guy. This guy the best. This guy always leaves the toilet seat down. It drives me absolutely crazy down what people want. Only if you're a woman, a woman to you, cory, no comments or of court, wrong conversation for this day and age. Anyway. Um, now, I I think you know, our relationships section really, really good. We've we've kind of commuter like you. But yeah, we got a report and it's helpful, so means it definitely cause it allows us to bypass friction. Yeah, the having that report in the decisionmaking process. Yeah, you can hear just in the way that you guys interact, and I think people can can sniff that out, especially if you're on the investor vc set of the table. You can smell when a founding team isn't really getting along. That's sense. Yeah, and out. I will tell you there there have been companies that I've seen. You know I'm part of this. I was at a company called the interats and and is running growth for some incubated companies. And there are companies that I have seen where I've seen I've seen the managing director making partner walk away from writing a check into them because you could tell that the founders were not getting along and and money would definitely only exacerbate the problem. And look at if you're if you're on the investment side of the equation, you're you're trying to de risk your your investment right. So yeah, it's I think it's a it's a massively undervalued component to start up success. So something that that I think you could do like a five to ten minute crash course on. Maybe that would. It's scary two engineers, I feel is the you know, the difference in things like common and preferred stock and what the the funding cycles are. And since most of our audience as engineers, a lot of them might know this, but a lot of the might not, and it might be very helpful to them to just get a quick run down on that stuff. Yeah, I probably wouldn't get too deep into the mechanics. There's tons of resources out there and and accelerators aren't aren't necessarily just investment vehicles. That they're really they're built around...

...mentorship and programming and and helping helping companies go from zero to one. I would say at you know, if we if we just keep it Thirtyzero foot view, you know, you've got. You've got your common prefer you've got your common ssaries and you've got your preferred shares. The preferred typically is higher up in the in the capital stack, right before the debt component, there's any deck component, and so typically venture capitalists will write underwrite notes into the company that convert into preferred shares as you move into your fallow one. Funding them. There's there's there's a couple of really great resources. In fact, I can pull them up and send them to you guys who want to include them in the show now, that'd be great. Yeah, I'll make sure I do that coming off the back of this, so we can include that for your audience. You know that means. But, but accelerators are really you know, and well, I can speak about tacken. I just I won't talk about everybody. You're also talking to a guy. It turned down to accelerator programs. Fair enough, for thirty grand did not feel right. I should we told definitely have this discussion, because I you know, I'll dog though what I'm what I'm saying. I understand your customer tachyons program we invest a hundred and fifty thousand dollars into a company exchange for seven percent. That's that's kind of like high level how our program works. It's a it's a twelve week program and then, coming out of the program we introduce you to investors that we think could be good, good fits and and kind of get you ready for your first fundraising series, a fundraising. So yeah, but yeah, I would love to understand calling why you've turned down accelerators. What what was the it was the key, key reason. Um, okay. So if I go to accelerator and I go what are you giving me, and they go, we are going to give you free hosting, I go, okay, that's that's that's a nice one. But yeah, that's nice. Do you know how much hose to I actually need? They go no, and I got okay. Well, I'm actually looking at storing, you know, several terabytes of files, right, and you know, globally. And then they know we can support that, no problem. And I go do you know what that means? And they go no, okay, and they're asking for eight, eight to ten percent of my company. One was eight, one was ten. Both were offering thirty grand. I now I got these offers as a result of winning first place in the startup competition. Well, one of the officers are ruled to start up cup petition. Yeah, and so there's like four hundred entrance. I got first place. All right, yeah, maybe awesome, right, but, like you know, it's a it's a it's a pitch elevator pitch competition. So there we're only interested in like you know, can you? Can you make people excited for twelve seconds? Right, it yeah, a minute. So you know, that's cute and all. But like, so then you go to them, okay, well, what else do you have to offer? And they go, well, we have legal team. I go, okay, what's your legal teams like like background, and they go well, start up. So they go, okay, what kind of start up having? Yeah, so really what it comes down to is, like most accelerator programs are absolute fucking Shit. Yeah, and if you're experience, I'm gonna go ahead and name names. It it might get me in Trib man. I want them to do it this. I was not a big fan of what hatch was doing in two thousand and thirteen. I cannot speak to what they're doing now. Cool. So I will say that at that at that time period, I was kind of like not into it. And I'm sure that they are a very good, good fit for other programs, but for me they were not. And so there's other things that, like, you know, sometimes an accelerator program doesn't necessarily like if somebody's coming to you with something that might side way like use like a payment mechanism that's a theorium or something like that, but they also got this other thing. It's like if there's like a small part and yet they're coming into like your accelerator program or anything, it con sens us like that would be kind of like not a good fit for what they're doing. And so I had another one which I didn't actually get the offer from them, which is good for them. They should not. It was mock thirty three, but I did get to final round. So it's, you know, things like that. I'm sorry, Mark Thirty three, Mark Thirty one, whatever. They are a security based like a accelerator program at a DC area funded through CT so they are they're really good program I really like what I'm doing if you're a security person. So there's a lot of reasons why you don't take an accelerator program and it has very little to do with like well, I will say the eight percent for thirty grand. If you have a billion dollar idea, that's worst deal on the planet, feels like. If you feel like you have a billion dollar idea, problems. Most people don't, and so there's like yeah, okay, so...

...you're hitting on a really important point and and I'm just going to I'm going to Shill our program quickly. I'm a follow up question. You're under are based on your okay, okay, accelerators, founders come to accelerated programs for two things, and we really two things only. The first is capital, right and and everybody who has access to capital can can write that check. The second thing that founders, I think, come to accelery programs for is a network, a network of experts to understand the ecosystem that you're playing in, that have the contacts, that have the advisors, that have the subject matter experts that can help you go from zero to one. I mean, if you look, if you're if your audience goes to our website, the technd website, they'll see our list of mentors. I mean people like Eric Tang, cofounder ct of life, peer, Alex soon, Co founder of set protocol, Jack Party Research Annel. List of ATM, sorry that I oh, David Morin, Co founder of Covin. I mean not only the internal experts. I know you guys had them, Steve From cdilly on not too long ago. Consider, consider this diligence. Really, I guess it's act internal baseball. I mean, you know, into end throughout the entire ecosystem. I don't care if you're if you're as long as you're building and then and eftherium or cross chain company that's focused on open finances. I can I can talk to what open finance means into end, whether your customer is enterprise or the developer community, if you're building on layer two, layer three, layer four, and we have the expertise, and that expertise is extremely helpful when you're at an early stage and you need to go from zero to one, eight at and then a network opens doors where where it could take you months or years to get that door open, and that's really the value of any accelerator program so I will stop showing tack Ham for a second, but I have a question based on that. Like yes, you actually answered it exact way I want. I wanted you to answer it because my question is what you just said is perfect for marketing. You have all of these people can since this definitely has the expertise, but I know a lot of those people and they're very busy. How much bandwidth can they allocate to you for various startups, especially if you start to grow? Yeah, so the way that our program is built to it's around three stages and we drop in the experts depending on where your company is, what stage of company, what stage of the cycle you're in and what we need band with. Really we have our mentor network, with Internal Natural Mentor Network, come in and a number of different ways. Some of them really work with companies based on one on one mentoring situation. So those are weekly phone calls. Okay, what's going on, where are you? What's happening? which challenges are you having? Okay, here's what I think you should do, etceter other. Of Our mentors come in. You know, Ce day comes in, when consensus diligence comes in, when there's a specific question around. You know your security token that you need answered or you need assistance going through. You know you're on test net and and you need some security audits, and so we'll bring in see billy at that point for that specific use case or need. We have other founders who have gone through number one. They are happy to introduce you to their vcs who invested in them. Hopefully you talk to the consensus ventures as well, but but who have gone through how you position your startup and what that pitch deeck needs to look like for this particular vc that you've got a meeting with next week or in two weeks, and then we'll go through rounds of pitch practice. So the bandwidth is not set bandwidth. It's not, you know, one size fits all. It's really we built and curated a program around pulling in the the the various people within our network based on where that particular company is and what's needed. As far as how the program is structured, it's really structured in three phases. The first is we sit down with teams and really understand coming through the door. You know what's the what's the problem, what's the market and what's your solution within, within within that market, and really spend a lot of time to make sure founders understand their market, understand the customers, what the pain points are for that particular customer base within that market, make sure that it's a large enough addressable market. And then once we once we feel like, and that's done with the teens, it's some of the various mentors within the network, once we once we feel like we've kind of crossed that phase and we move into traction and growth, we spend a lot of time with these companies making sure that they don't build in a bubble but that they're actually getting out of the building, talking to their customers and starting to get early signs of traction and Growth. Lastly, coming into phase three, we spend a lot of time with their founders on the the fundraising side of things, storytelling, pitch practice,...

...preparing your deck and getting ready to go raise a professional capital. I mean, if you're going to be in this ecosystem, you need you need any want, I think external market signals. I mean, I a lot of what Tachyon has been built around is helping really smart technical founders get external validation, and there's a lot of ways that you can get external validation. Sometimes it's to your customers, sometimes it's through mentors and advisors, since sometimes it's through your ability to raise capital and continue to grow and scale your company. But I think especially in this ecosystem. We've turned the corner and a lot of the companies that I think are that you're starting to see get a lot of progress in traction have build valuable solutions for real customers, and I think that's that's really at the heart of really any company, but especially our ecosystem. I. I. I think we we're definitely there. We've turned that corner. That's that's actually a ruminate. Then, like I would say, or would you say, a good portion of all of the ICOS have failed to deliver because they didn't go through this process. They raised the tremendous amount of funding and a short amount of time that gave them a potentially long runway, depending on how they use those funds, that they didn't have all of the extra things outside of capital to then execute that vision. So it was a it was it was one. It was a beautiful shift into crowdsourcing your potential customer base, potentially bootstrapping that customer basis getting funding for then building that thing, but you didn't have all the extra things required to then execute on it appropriately. And then we've moved kind of maybe through the narrative of regulation, back into that VC thing. That happened beforehand, which is how you typically raise things, and they got things built in the first place. Is that the middle ground or was the ICO phase of raising capital just dumb? So I know, I know our our PR team and love it if I would say no comment, but I'll give you a personal icos are I think Fred Wilson wrote a great piece around this. I seos are helpful in attracting a lot of capital into an ecosystem so that you can build the build the ecosystem and develop around it. But it is speculative in nature, right. I mean that's that's I think a lot of the icos that we saw were speculative in nature. I think you know, as as those speculative mechanisms tried to tamper down because of because of the market mechanisms. I think what you see is there needs to there starts to be a shift and a focus on. Okay, outside of, you know, the the you know, the opportunity for me to get rich here via this ICO, what can we actually use this technology for? What is it good for? Are there real other real market segments where blockchain has an unfair competitive advantage or a token has an unfair competitive advantage relative to my options and and what are those unfair competitive advantages? And then how do you build a company around them or how do you build a product around those unfair competitive advantages? And so I think, I think what we saw through the ICO craze was, and again, this is my personal opinion, but I think we saw a lot of a lot of people coming into the ecosystem who saw this as a way to get rich and it was all driven, a lot of it was driven by speculation. And there's nothing wrong with speculation. I I have, you know, no opinion one one way or the other with speculation, but you know, as somebody who's spent a large part of his career trying to build companies, I think you've we've got to turn the corner and start thinking about what are the what are the products services that we can create using the technology, the underlying technology, that can add value to real customers. That's my personal opinion. Speaking of some technology stuff, I have one. I have a hard stop but at a little bit, but I I really I'm sorry about that, but I really won't question that was kind of a major barrier to me and I think it might be a you're buried a subset of our audience, all the most of them might not be. WHAT IS THE VALUE OF PATENTS? So one of the questions I was asked very frequently. And if you go watch if you grew up watching, like if you watch shark tank or something like that, I guess people now are going to be growing up watching that. That's stuff in the kestrange. I agree. But one of the things they ask is is pattents and I still actually believe that patents I value. I'm one of those people that believe that they were set up for reason and I still think they have value. But one of the things that like investors would ask is like do you have a patent for this? But the problem is that if you file a patent for something in the United States, it is not protected internationally, and when you have an internet company that internationally part matters because they can just spin it up in a still ya. So what I...

...want to know is, like, what do you feel about patents as somebody who's in the, you know, investment side of things, knowing that it takes a hundred and Fiftyzero to get, like most technology stacks patent at fifty grand free patents. You know I mean what is? What do you think? I'm a big believer and proponent and open source. You know, I think you know. I think I'll myself and a lot of people included in consensus, in and even outside consensus within this ecosystem, are big believers in in open source and in Commons and systems and infrastructure that you know, that are that are value you add without without creating artificial barriers to entry, and so I I personally don't have a strong opinion on on patents, but I but I do believe in the open source ecosystem and movement. I think it's, it's said, a lot more good and there are a number of like, really solid enterprise companies that you can look at that are that are open source. Last thing comes to mind, but obviously. But yeah, I don't have a I'm not a lawyer. I don't play one on podcasts and TV, so I don't I don't have a legal opinion on patents, but my personal opinion is is I'm a big believer and in open source and I think there are ways that you can value capture even in an open source community. I'd make that reasonable just based on like I don't know the way. I mean a lot of people say that as a lot of technology. You know, once you give it away, that's the sum of your product. You know, it is the product. You know what I mean? And that's that's kind of where it's like. It's like, okay, you come up with so, for instance, yeah, you can up with new way to package, like I'm trying to do something more concrete. So a new way to package something. Okay, you could do something very similar in software, for it is protect people. Yeah, but I would argue, I'd argue that what's has the persons who's dealt with this more. What's more uncommon a person that can do something or the thing that they built. Like, in my opinion, based on the way technology is moved, it isn't about the technology that you have, it is the person that can implement it or the team that can perform it. And more often than not, it's better to be the professional that's capable of doing something then to own the thing that they built. Patents, to me is the again, personal pinning here. Patents to me is the equivalent of if a founder comes to me and says, Hey, I got this great idea it's absolutely mindboggling. Great, it's going to blow your fucking mind. Before I tell you about it, I need you to sign an NDA and you know, to your point earlier calling, I think it was you, Colina, said, you know, ideas are diamond dozen. Execution is everything and maybe patents are a limited subset of execution. It's the reason you can talk about it. So you don't need to sign an NBA. Yeah, I mean again, I have one. I'm never going to use it. There's a lot of damage to patents to we talked with Andrew Polstra and he said the you know, the main reason everything is built on UCDSA was because Snorre shivatures was patented for so long and people couldn't, people couldn't create open source libraries of it when, potentially short Snorre stanvatures are just a much better technology. Yeah, yeah, again. I I don't have a strong opinion on patents. I'm just not the biggest fan of artificial barriers to entry. I understand why they're necessary and I understand why people why they served good and why people use them and and have used them in the past. But you know, I I like I like natural market mechanisms more than more than artificial barriers to fine person makes sense be too. Yeah, a lot of investors ask me that question. So like okay, I have to get apparently. Yeah, from the investor standpoint, I think the thing that that investors really really struggle with our you know, how do you value capture when you're building them on the back? I don't competition of this biness movie. I can't someone just spend this off the exact same there? Or why can't I, based on listening right and just told me, why can't I fork this thing and write and spend up my own version? So you know, there are there are a lot of challenges when we start thinking about, you know, the web to, you know, VC, value capture mechanisms and how they apply within this ecosystem. But I think he got to compete, like all right, let's let's let we can freaking probably start to wrap this up. Mental call and has to lead. So I'll probably just give you like the chip question. Sorry, I screwed up with my room reservation here. Put It on my personal counter instead of one...

...of that, so I had to ask the guy you actually booked it, if you would think about out that that means I don't get the extr fifteen minutes I had on there. So, yeah, okay, if you could give maybe like a some ideas as to big problems people have when trying to make the leap from I have an idea to I need to build a business around it, like some just some high level things, like you need to do this. Most people screw this up. Um, yeah, I think first I would see, really understand the market. Right. This goes back to something that we're talking about earlier and I hate to keep harping on it, but it but it really is that important. You need to really understand the market that you are in, who the customers are in that market, what their problems really are, and not the ones that they might tell you they are, the solutions that they think you should solve for them, but like what's what's the core underlying problem? And there's a whole alphabet soup of like understanding this. You can, you know, look at the Tan that you're in, the SAM, the Psalm. I don't think any of that is important. But coming out of that, I think really the most important thing is you got to get out of the building your the velocity of interactions that you have with customers is probably the most valuable thing that you can do, and so I think that's the biggest thing that I see early stage startups and founders. The biggest mistake that they make is they don't spend enough time getting out of the building, having those customer interactions, understanding those problems and understanding how they're going to create a solution for those customers and then really validating those ideas as early and as as often as possible. Yep, we build tools for people. You know, that's such a great planning it. Yes, that's exactly right. It's gonna Guess that's definitely the way you look at it. At the at the end of your technology is a person usually, and and I think you need to build around that. Run. UH, my obvious. My last question that I tend to ask people. Is there something that you would have liked me to ask you that I didn't Oh, man, I don't know. We would all around the board. That's how it goes. We had to and now I this has been a lot of fun, I think. Yeah, I really enjoyed this conversation. I think. I think we had on a lot of things that maybe the last thing is where people can find out more information about attacking one would be the last thing. Yeah, you can find us that labstock consensus dotnet, tacky on Ta Hyoh, and we've got office hours. If you're interested in in that and finding out more. There's only on our website. We can set up profits hours. He's been a little bit of time with with the team. I asked some questions. When you will in study finding on and steading to performers here what they want, a couping the thanks for time. Thanks appreciate a CA.

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