Our experts (and KOLs ) @MehdiFarooq2 & @0xKDOT
dive deep into what really makes a project successful…
Tech wizards with marketing magic vs marketing muscle for a mediocre product?
This episode of DealFlow cracks the code on investor clout and winning strategies.
Tune in for the recipe to a thriving crypto project!
Timestamps :
00:00 Intro
01:25 Market Relevant Stories
12:06 Looking At Solana W/ Different Perspective
15:06 Importance of Marketing Teams vs. Technical Teams
19:03 Does Famous VCs On Board replace Marketing?
22:29 Mehdi and Kam's Fav VCs
29:08 How Important are KOLs?
37:33 Individual Research & First-Principle Thinking
39:56 Airdrops & Consumer Engagement
Video Credits :
@BoriyaKishan
[Disclaimer: It's important to note that the information provided here does not constitute financial advice. The views and opinions expressed herein are purely personal and do not in any way represent or reflect the official stance or viewpoints of the individuals company]
Our experts (and KOLs ) @MehdiFarooq2 & @0xKDOT
dive deep into what really makes a project successful…
Tech wizards with marketing magic vs marketing muscle for a mediocre product?
This episode of DealFlow cracks the code on investor clout and winning strategies.
Tune in for the recipe to a thriving crypto project!
Timestamps :
00:00 Intro
01:25 Market Relevant Stories
12:06 Looking At Solana W/ Different Perspective
15:06 Importance of Marketing Teams vs. Technical Teams
19:03 Does Famous VCs On Board replace Marketing?
22:29 Mehdi and Kam's Fav VCs
29:08 How Important are KOLs?
37:33 Individual Research & First-Principle Thinking
39:56 Airdrops & Consumer Engagement
Video Credits :
@BoriyaKishan
[Disclaimer: It's important to note that the information provided here does not constitute financial advice. The views and opinions expressed herein are purely personal and do not in any way represent or reflect the official stance or viewpoints of the individuals company]
Hi everyone and welcome to another episode of the DealFlow Podcast. I'm your host, jonny Huang, chief Editor at BSCN, and with me, as ever, are esteemed guests Cam, the founder of both BSCN and leading crypto VC fund, mh Ventures, and Mehdi, who leads investment and partnerships at none other than Animoca Brands. How are we doing?
Speaker 2:very well uh, first time back in the office since uh hong kong, so I'm glad to be back and chatting with you guys amazing.
Speaker 1:for context, cam's been flexing on everybody that he's been to Hong Kong for about the past seven days, so no change there for sure. Mehdi, how are you doing?
Speaker 3:Good, good, really excited about the SA launch, one of our portcode that just launched a couple of hours ago, and excited about Token2049.
Speaker 1:Amazing, amazing. Yeah, we're just having a discussion as to whether we're going to be able to get out there to Dubai, but before we begin, before we begin podcast proper, I need to disclaim. Nothing in this episode is in any way intended to constitute financial advice. Everything is intended for entertainment purposes and opinions expressed herein are just that opinions, but without further ado. Our topic today is crypto marketing. We'll explain a little bit what we really mean by that, but before we do dive into that topic, are there any market relevant stories, topics that we want to touch on? Have a little bit what we what we really mean by that, but before we do dive into that topic, are there any market relevant stories, topics that we want to touch on?
Speaker 2:have a little uh natter about before we dive in we should talk about solana and some of the news that's been coming out of their marginify the ceo. I think we should jump on there. I again, I vaguely looked over it.
Speaker 1:I'm not sure if you guys know a little bit more so I can give a bit of context on that one for sure. So, like you mentioned, I suppose, two issues there, one of which is Solana congestion and the other of which is margin phi, and they're linked from what I understand. So the first one, solana transaction, and Mehdi for the last two, three podcasts. You've been going on about how incredibly performant Solana is, so let's just remind ourselves a bit of context there. But it came out, I think, maybe tail end of last week and it really came from one June analytics dashboard that showed that 75% of non-vote transactions on Solana, so basically just proper transactions, fail right. The congestion at the moment with airdrops, meme coins, yada, yada, yada, yada is is so, so high that literally three quarters of transactions are failing to go through and like it's reflected in user reports and all the rest of it. So that's one issue in and of itself. The solana devs have promised a fix by, I think, april 15th, so literally like three, four days, something like that.
Speaker 1:But then the other issue is margin fly which, as we know, is a big fat, I think, probably the biggest sol Solana native borrowing and lending protocol they had.
Speaker 1:You know, take it back two, three weeks because of a sort of a point airdrop campaign they were running, they managed to accrue I think it was nearly 900 million in TVL, but that is when sort of the issue started to happen.
Speaker 1:So I think going back to mid to late March, effectively stemming from, I think, technically speaking, an Oracle issue, meant that users just flat out couldn't withdraw their funds. So like mass, mass, mass complaints about funds being locked in the protocol, deposits were still live, yada, yada, yada. But I think a lot of the frustration came because they were looking to farm like a point scheme, an airdrop scheme for margin fly, which never really came to fruition. So that in turn has resulted in, let's call it, internal strife. I think a lot of details still to come out there, but their founder and CEO has now resigned, basically rage, quit the project because of all the debacles and the saga going on internally, all the controversy. That in turn has led to a third issue, which is Solend another Solend native DeFi protocol, effectively trying to implement a vampire attack on MarginFi's creditors, the depositors, so to speak, which involves I think Medi correct me if I'm wrong but involves basically rewarding via airdrops and points.
Speaker 2:Maybe they don't, then who Solend? I don't know, is that?
Speaker 1:SLND or something, but regardless they'll have some treasury assets that they could give out for sure. But it's specifically, it's not, you know users that move their funds to Solend. It's users that move their fund, you know, verifiably on-chain out of margin-fied and into Solend. So I mean, I don't really know what the question is from this whole saga.
Speaker 2:But if we go back to square one, so yeah, maybe the question is like is that a good tactic or is that like morally wrong?
Speaker 1:Well, let's check Selen's DeFi.
Speaker 2:Yeah, so while you're doing that, like, what's your thoughts?
Speaker 3:I think it's capitalism at its finest. So, for example, I think we saw this with Uniswap and SushiSwap as well through token incentive. Through token incentive, it's basically like, let's say, apple kind of giving token incentive, like not token incentive but let's say equity incentive to all the people to kind of switch from, let's say, windows computer to basically come and join Apple ecosystem. So I think it's akin to this.
Speaker 2:I think there could be a question about morality in terms of the timing of it, of the timing of it, but I think in terms of principle of vampire attack and using incentive to kind of onboard user, I think it's capitalism at its finest, so I am not opposed to it I think medhi made like gave a great example being uni swap and and sushi swap, where I guess they tried at the very beginning when they when um was it chef no nomi or whatever his name was tried to do that with the, the farming um or whatever it was back in the day, I can't even remember I was in the sushi pools as well.
Speaker 2:Anyway, it didn't last because, as you can see now, like sushi is pretty much a failure from my perspective. They have not really take any great market share across any chains. Really, uniswap has always been innovative and continues to be innovative, hence why everyone forks them or is building on top of them. Sushiswap, I would say, have been left behind, regardless that they've made a ton of money and they probably have a decent treasury, but I just don't really think that they have a really strong team.
Speaker 1:SushiSwap is a really interesting one because yesterday they passed a proposal that basically adopted a labs model did you guys see this? So they passed it. They only passed it with, I think, 62% of the vote, and there was a lot of controversy because there were accusations that the team had, like, created different wallets to maximize their governance rights. But they're going to transition to a labs model. So they were entirely SushiSwap DAO right, making all the decisions, and now they're going to transition to a labs model. So they were entirely sushi swap dao right, making all the decisions, and now they're sending 40 million dollars worth treasury assets to uh sushi lab. Sushi swap labs held uh vault effectively, so they're going down a centralization route, I think in response to the fact that they haven't really proved competitive, especially in the ethereum landscape or or anywhere else really, at the moment and I think that's down to like I'm looking at the decentralized, like dao model, right, like that's what they've tried to be.
Speaker 2:I don't think they really have strong leadership within the team, um, and I think that's like, yeah, the biggest thing. But going back to to the solana side, again, I think that it is good that is happening to solana because, look, solana's been and got where it is to today. They They've never really had any issues. No one's really. It's not been stress tested. This isn't a massive issue. It's a massive issue, but it's not a massive issue. It's not like they've lost funds or you know, there's a big hack on the protocol. This has been stress tested and it's, yeah, it's an issue with, you know, the load that it's been getting because of more people, and if they can fix it, great, that's a great outcome, right? Yeah, it's annoying because I had the wormhole airdrop and I had a ton of wallets, which I'm grateful for, so it was lovely.
Speaker 1:Yeah, I did, I literally dumped the top.
Speaker 2:I'm happy with that. Anyway, I justify that because the FD I'm happy with that. Anyway, look, and you justify that because the FDVN launch was ridiculous and I just didn't see that being sustainable. Anyway, it took me over two hours literally just to claim because it was constantly failing and I was like, can I just up? And I didn't. You know, I'm not like a native Solana. I was trying to up my you know on on, uh, ethereum, like up your guay or whatever, and you can't do that on on solana, but I don't think you can, especially from not for the phantom wallet. So that was like a pain. But I think it's a good thing like this has happened because they can just upgrade or do whatever, fix it. And then on the marginify stuff I heard I don't know, johnny, you probably can jump in here, but were they stealing rewards or was it rewards something from a different protocol? Was because that the issues with solana, because they started the, the snowball effect of this fund, right or not fun?
Speaker 1:but right and I just know that for whatever reason I don't know whether I'm guessing it wasn't anything malicious, otherwise that would have been the central story, but the rewards just weren't making it to the people that it that it should have done, and I think that sort of stemmed from the Oracle issue that they had limiting withdrawals and stuff like that.
Speaker 1:It gets a bit technical at that point. I'm not entirely sure what's going on. But yes, some very, very disgruntled, you know, retail consumers from not just their protocol but also, I think, solblaze as well. So it was slightly systemic, which is maybe like once you've wrote another project maybe the precedent is there where you know vampire attack from Solend kind of fair enough at this point. Also, that's before you even get to the fact that kind of the way that Medi articulated it is maybe pretty accurate and effectively you're just trying to poach disgruntled customers, disgruntled community members, and you probably wouldn't think of it, you know, so controversially if, like like medhi said it was, it was apple versus android or something like that, it's kind of just part of the game at that scale. But because it's like a very community driven, defy solana landscape, maybe just a bit more hostile, but I think, probably ethically not necessarily too much controversy there and then does it just destroy, marginifyify, because their CEO or their founder literally just rage quit.
Speaker 1:No. So this is the thing, right. All the headlines are like oh, 155 mil flows out of Marginify amid founder controversy, internal strife. They're still like 750 mil TVL of DeFi Llama. Like, in terms of percentages, they haven't lost that much. Right Like it's, I mean they have, don't get me wrong. Like 100 to 150 million. They haven't lost that much. Right like it's, I mean they have. Don't get me wrong. Like 100, 100 to 150 million would love that. That's a lot of money. It's a good thing.
Speaker 3:The protocol was able to kind of withstand that 150 mil withdrawal like I kind of think that is a good sign.
Speaker 2:Uh, stress test of both solana as well as that's very true, actually, because, yeah, and the whole point is like, why did the fuds actually start for? Like, what was the main concept of? Why, like this all came about? For him to lead to one of rage quit, like did this go back and date back to however long ago?
Speaker 1:I think withdrawal issues is where it started. Um, there was a serious period. I'm guessing that's over now but why?
Speaker 2:what was that? Some technical or they were just withholding because of the airdrop?
Speaker 1:I think it was an. It was oh, because it's okay, now I get it.
Speaker 2:The solana stuff. Okay, don't hold me to that on a technical front.
Speaker 1:So that's where it causes a big issue, right where, like, we're talking about stress tests and if solana is having the issue of people taking their money out, is causes love so I think the founder resigned because of how the team then dealt with that or decided to deal with that, or probably really big arguments and blow-ups they had internally about what to do and how to reward users and stuff like that so then, as like a founder, right, like I couldn't see myself building a company, but then I guess the company's bigger than the founder at this point, right, whereas you build a company and then you're like, oh, this is not great, I don't like the people I've recruited, so I'm gonna quit myself well, I mean, like you know, the other way to think about it is like a cynical way, which is to say that actually he's definitely made his bags.
Speaker 1:He'll have a bigger allocation than any other one individual. Maybe now it's just chance to get out if he's not doing it right like you. You see a lot of like. Some founders get into a lot of trouble with their community for abandoning projects, whereas this one may be just sort of taking advantage of the fact that right now I can sort of just wash my hands of this. It's not my fault, it's gone badly. I'm so upset and he's going to make off and he's still going to sell his tokens like maybe he starts a vc fund that reminds me of someone it has that, that midlife crisis yeah he's reached the vc stage of life.
Speaker 3:Yeah, exactly yeah, just going back to solana. Uh, yeah, I I think it's very bullish like I'm very such a maxi there is so much demand for the chain I'm not a solana maxi.
Speaker 3:But just I have to like hear me out. So right now, with all of this congestion, we still have seven, seven hundred seven hundred plus transactions happening, even though it's getting clogged by bots. Um, that is more transaction than ethereum and all the l2s combined right now. I think once the parallel fee markets go live, when they have the fee market in order. So, for example, if Cam is trying to do the bridging, from Momo to somewhere wherever.
Speaker 2:Their UX is disgusting.
Speaker 3:If you were charged $10, $5 for that, when there was congestion no-transcript is contrarian bro oh, but like, why was solana set up?
Speaker 1:it was it was. It was like it was. Solana is a solution to uh, scalability issues which it's now suffering from itself. Like, is that not an optical, like a narrative issue for Solana in a really big way, like that's like sort of 2020.
Speaker 3:No, no, it is. It is. I don't disagree. But another lens to look at this is Solana was created to solve the scalability issue, but there is so much demand that it was able to cater to so much demand that it in itself is now facing scalability issue. But there is so much demand that it was able to cater to so much demand that it in itself is now facing scalability issues, which, by the way, also looks uh, solvable.
Speaker 3:So I'm not disagreeing with you there are issues, but the fact that so much demand like the issue is not coming from, uh, the the supply itself, it's coming from demand because there's so much demand from all the meme coins, all the farmers, all the airdrop hunters that sometimes it breaks down.
Speaker 1:So, I think there are a couple of solutions.
Speaker 3:I mean, yeah, that's a fair point, yeah, yeah, there are a couple of solutions. I think, even within our portfolio. I was thinking about a couple of solutions. One is the fee market. I think the fee be some dynamic pricing there. And I think the second issue, especially for bots and AI agent, is something along the lines of humanity protocol. So let's say, if you want a differentiation and try to create a scalable system, maybe you do some sort of attestation that let's say you're human, you get a priority, something like that. So within our portfolio we have humanity protocol, which is kind of solving that scalability from a human standpoint. But I think solana, if it kind of implements couple of these solution, I don't see why it would be a long-term bottleneck it's very much achievable.
Speaker 1:Fair enough, fair enough, I think. Really cool question here, guys. Basically the way I'd phrase this is would you rather invest in a very, very technical team that probably lacks marketing understanding, or would you rather invest in a very, very sort of brand awareness, marketing oriented team, that with maybe a less innovative product? I know that the best projects will have both yada, yada, yada, but I'm talking here really like. Take a project like Algorand back in 2017. It was the OG.
Speaker 1:Ethereum scaling network Technology was sound, so to speak, like Silvio McCarley basically invented zero knowledge from what I understand, um, but obviously never got traction. I think the appeal the community was basically just never, ever there. They never nailed that. Take something like blast, on the other hand, but maybe at a technical level, isn't that innovative in terms of, like the stack it uses, the way that it produces yield? I mean, it may be novel in some ways, but effectively there's no real proprietary technology being implemented there, but very, very crypto savvy marketing side to the team, backed by Paradigm, all the rest of it. Which would you rather go for?
Speaker 3:Yeah, I'll have a crack first. I think this is an internal debate we have all the time in the IC right Like KOL coin versus a professor coin. My sense is so, let's say, if you look at your economies around like not all the time your president or your prime minister are typically the most savviest. They're the best at being good at political maneuvering right and then communication. So for my, my mental model, if a founder has those capability or somebody within the team has those capability, it's more important than technical knowledge because at the end of the day, sometimes these protocols, especially l1s and l2s, we're not going just for a platform, we are kind of going for a nation-like economies like with multiple different verticals, multiple different stakeholders that you have to manage. So for me personally, I would rather go more towards being good at marketing, being good at negotiation, being good at community, and then sometimes, if you're lucky, you get both like one example is emin from avalanche. It's a professor coin, but he's very good at marketing.
Speaker 1:That makes sense. Cam, what about you?
Speaker 2:you're technically minded or marketing oriented they have to go hand in hand. We can see some of the. You know, there's so many products out again in crypto, just in web 2 as well. Like I think marketing always wins. It's an unfortunate thing because there's so many products out again in crypto or just in Web2 as well, like, I think marketing always wins. It's an unfortunate thing because there's some great people who can build some great tech, but you put that besides some mediocre tech that's similar, but they're great at marketing. They're always going to win and that's how and that winning is by, you know, depending on the narrative.
Speaker 2:But, like, it's mainly done because of users, right, mainly done because of users, right, and you draw users and buy great marketing. Um, that's the unfortunate thing. But I think if you're b2b, maybe that's different, but then in crypto, like it, it doesn't matter, because then if you're talking about, if you're aiming, if you are b2b, but then you have a token and the speculation, then you are looking to be marketing to individuals. So I think crypto dynamic is different. But, yeah, I think you need, I would say, maybe 60, maybe 70. Marketing and product is the.
Speaker 1:The remainder, again unfortunate, but it is what it is yeah, you guys both given the same answer and even the examples I gave right algo versus blast, in terms of tech versus marketing, community building, stuff like that. It's like there's a very clear winner out of those two in terms of how the market sits at the moment and however many billion blast still has in tbl but algorand, like I think maybe last bull run had a great marketing uh stunt and then it did.
Speaker 1:It was meant to be the cbdc network for the world. It had, like some football-based partnerships. It like did some interesting stuff, but they, to be fair, that's a unique one because I think they screwed themselves a little bit with their tokenomics at the beginning. Like they launched with the same valuation as Ethereum at the time, which was pretty arrogant, I think, and they've never, ever got that high again. They had to refund people from their pre-sale, so people that got into their ICO, they had to issue refunds and I think they did accelerated vesting for certain investors that weren't happy.
Speaker 1:Maybe that was near, but yes, there were other factors at play there, for sure. But I think probably I'd sit with you guys in the sense that it doesn't matter how good the product is if no one's going to hear about it and the message isn't going to be clear probably a bit of a death sentence in in some ways. Okay, here's a really interesting one and I think I've definitely already got some intuitions in my head about it, but would love to hear what you guys think, being actual institutional investors in the space. But can having certain investor names on a project's list of investors on their cap table kind of replace the need for certain marketing efforts. I mean, like the obvious example is paradigm, but I'm actually talking like beyond that, right, you know, in terms of how you build a cap table, can that do enough for your marketing efforts?
Speaker 2:so I don't know if it's enough, but I would say like it separates the two of are you a top 10 or are you in the rest of the market? That's how I look at it. It's like the cap tables are a huge value, like a massive value add, and I think that it does separate of, like, how well they're going to do, and I would say, of course that is short term, but it just adds a lot of trust, right. Like if someone's building a DeFi protocol or anything, it doesn't really matter, everything's contract based, right. So having those that are backed by, you know the tier ones, then that just adds a huge level of credibility for all the retailers that are looking to deposit their funds or buy their token, etc. Because it just adds trust straight away In comparison to the ones who don't get funding or go for a level three investment.
Speaker 1:Yeah, that's fair, Mehdi. What are your thoughts?
Speaker 3:I have a very long-winded answer. So in terms of my framework, I kind of bifurcate deals into three parts. One is it's an excess deal. Let's say a team comes from Google or Microsoft and has all the tier one VC like Paradigm, multicoin, animoca, whatever. And then you have another side of things where maybe there is one big one or maybe they're all tier 1.5, but the team is still strong and there's a contrarian play. So I kind of like bifurcate this part into like three parts Excess deal, money making deal, because it's contrarian, or you either pass right.
Speaker 3:But in my experience, at least in crypto, what I've seen is, in short, to medium run, if you have tier 1 VC, it makes it easier for you to onboard. Like it's kind of like a self-fulfilling prophecy. At the moment, yeah, it gets easier for you to get tier one kls because the kls are lazy, they don't want to do research and they'll just look at the logos. Then, when it comes to exchange listing and launchpad, they also do not want to do research. They'll just basically follow tier one investor and then because of that, as an investor you do benefit when you have that type of a cap table, but then in some cases you'll have founders and team that gets complacent and stops grinding and stops hustling.
Speaker 3:So I think this is where the hustle, uh, and then the contrarian play comes in. I've also seen multiple teams that didn't have this tier one vc initially, but they hustled, hustle, hustled and got best KOLs, best exchanges, not because of investors, but because of the just like pure grind. I think one example that comes to mind is Portal right, like they did amazing marketing, didn't have any tier one VC logo, but got Binance right. So I think that's how I kind of frame it you are either excess deal or you are basically a contrarian deal in in in crypto and both have, both have merits. If you're looking for a contrarian deal, uh, you need to see ability of the founder to do, to basically hustle and and grind hard yeah, that makes sense.
Speaker 1:That makes a lot of sense, so, all right. So here's a question. I don't know whether you guys want to answer it here, but if you had to pick four crypto VCs which investors make you think really seriously about that project If you had to pick four, yeah, I'll go again.
Speaker 3:Nothing here is financial advice, it's do your own research.
Speaker 1:Yeah, no.
Speaker 3:Like recently. One VC I have a lot of respect for is Multicoin. I kind of find if they are on a cap table it's worth investigating, especially if it's an infra deal on the consumer side, if you have something like club and currency I think that's another name I on the consumer side I can respect a lot.
Speaker 3:yeah, delphi is another one for gaming a delphi and bitcraft I'll of put it in a similar category if it's on gaming, I kind of respect a lot. And then there are a couple of emerging ones like HackVC and DaoFi for infra. If they're on a cap table for infra, it means that this deal might be worth paying attention to. That's pretty cool.
Speaker 1:That's pretty cool, Cam. What would be your thought? I like how many. You split those up into almost like sectors, subsectors, verticals. That was kind of cool. But yeah, Cam, sorry.
Speaker 2:So I'll just quickly split it off. I won't go into too much detail, like Medi, but personally I'll say Electric Capital. I like the founder, super knowledgeable. I like what they're doing in this space Again research-driven as well, such as Mult coin, multi coin, I would say, have huge conviction. They fill rounds, yeah, but they're super early, right like they fill rounds.
Speaker 2:You look at um, some of the deep and that's getting hype. Now they've been shouting that for a while again. If it wasn't, you know the, the right timing, or you know the, the tokenomics for the. The teams weren't done the best way, but they'll fix and sort that out, which they're doing on some of the projects. But they were early and knew that this was going to be a big narrative. I don't know if it is because they were pushing the market inside, like if you go and look, most of multi coin are the ones talking about deep in, like they push really hard and have been pushing really hard recently. But regardless of that, I think multi coin, electric capital are some of the two that I think are good. I'd also say Figment is another. I think Figment are. Again, they started off like they were mainly validators and like back in the day and they were really big on that side.
Speaker 1:That's a cool way to do things, though. That's a really cool way to do things.
Speaker 2:Yeah, I think now it's saturated. It's a great value add, it's saturated, but yeah, that's how they started. So I think, though, when you said three, right, I think those are three other, yeah, and I also, okay, maybe last one again, and you know another big name, uh, but dragonfly dragonfly creed as well.
Speaker 3:Yeah, there's so many good ones out there it's tough.
Speaker 1:This is the thing. It is really tough. It is really tough one that. So I love electric capital and have done for a while almost, because it's just their approach to the space like I like to think that I was reading their developer reports before. They were cool, so to speak. Um, so that's a very cool one.
Speaker 1:One that I've had a crush on for a while is you know one confirmation right? So really quiet vc, like a small, a lot of capital, from what I understand, if you look down their port codes it's pretty awesome. But I just really like their subtle approach. You can tell that they're all network driven. There doesn't seem to be any ego there, which I think in VC there is sometimes some ego, especially in crypto VC. So really like those guys. Not that I've ever met them. Actually ArcStream, one that I know that we know personally, just from knowing those guys, I know how smart they are, I know they like how they navigate the space and like them an awful, awful lot. And then I you know, you know many. You spoke about the consumer side, right, collab and currency. Uh, very good example. I think spermion yep are probably very, very consumer oriented. I'm very, very aware of that, but also animoka. I think I know we're not meant to mention in terms of like this is the guy who said listen, you can't mention animoka.
Speaker 1:And then he mentions animoka I'm the host here, so I get to, I'm in charge, I mean I'm the captain? Yeah, I think another thing.
Speaker 3:Another thing I think um I'm looking out for is VCs which are kind of like small but operating in a niche. I think those are also kind of worth paying attention to because, like some of the names that kind of popped up here are kind of like traditional and big in size. But I think it's also worth paying attention to like sector specific niche VC like which has like 40, $50 million fund.
Speaker 1:Which kind of VCs are you thinking here? In terms of which sector you?
Speaker 3:mentioned a couple of them. Right, like you mentioned a couple of them. Like Collab Currency goes at seed, focuses on seed most primarily and focuses a lot on consumer, so that's like a kind of like a niche. Initially you had Dow 5, a hundred like it was a small fund, not 50 million, but I think a hundred million fund just focused on on infra, not 50 million, but I think 100 million fund just focus on on infra. So I think those are also vc kind of worth, uh, worth kind of paying attention to um, because then they have the potential to be a big one.
Speaker 3:I think this was also the story behind animoka. Like the focus was gaming and nft, that's it. And then all of a sudden you you do become big. So if you have conviction and you have like a sector speciality and you're a niche, I think you also have an edge rather than just being a generalist fund that just looks at everything and becomes too big one day. So I'm also bullish on like small funds that operates in the niche and have like sector specialist knowledge. I think one confirmation is also like that Like it focuses a lot on consumer and and like crypto native stuff. Initially it was like that, it wasn't like.
Speaker 1:I think they did do L1s and stuff like that, like very, very general purpose, but that you know, this was like back 16, 17, 18, I would guess, in terms of yeah, one confirmation, like for me, the investments.
Speaker 3:I remember they made things like OpenSea, were they?
Speaker 1:OpenSea? Yes, I didn't even know. So they've done equity deals. I thought they were mostly token. Maybe they are mostly token, in fact. Now you mentioned OpenSea, one that springs to mind Do you know Gumi Cryptos?
Speaker 3:Yeah, they're good.
Speaker 1:Gumi. I like Gumi and I know that they operate with really, really high conviction. I know they really like to lead rounds, and leading rounds with the scale that they're operating at in really early deals is both cool and it's gone well for them. But also I met just on a call, I think maybe a year or two ago and I don't really know him, um, but I met miko. You know, the founder. I think he's a managing partner and he's cool. I like how he talks about the project.
Speaker 3:So I've hosted him for a podcast as well, like really even apart from very, very knowledgeable in different domains, like I remember we had a long chat about keto diet and how it's good for, uh, longevity and like thinking clearly it's a good guy amazing good advice for portcose, for sure.
Speaker 1:Um, all right. Next question right, actually, this one is definitely one that we need to, that we need to come before we wrap up, really broad question how important are kols for a project success, especially in the early stages, like medhi you've spoken about? You know this vc, you know you and you end up getting really you know the tier one kols without necessarily having these investors on the table, sort of implying that it is really really important. But how important is it? Are there any projects that have done well without it? I think I'll put itcessary evil.
Speaker 3:I think it's just like a marketing engine and distribution. What I don't like is with the KOLs. There's a lot of cyclicality involved In bull market. They become a thing.
Speaker 3:That's everything, though, right it goes away, yeah, yeah, kind of. But I just feel like KOLs become a thing and in bull market, way more they are in the bull market, way more they are in the bear market, while, let's say, the branding from vc kind of stays constant. But I think for retail it helps on the awareness side of things. Uh, they are also like in in web3. It's also different just for allocation.
Speaker 3:They'll do, they'll provide this service rather than fiat. So so, allowing you to have that service from a token rich perspective rather than cashless perspective, I think is is is interesting and important for the space. So I think they they do play a play, an important role. Um, I wouldn't blame kols as much as I would do retail. I think retail also kind of need to like educate themselves in terms of, let's say, whatever kls are saying and whatever valuation they are saying doesn't necessarily mean it's it's true or or necessary, um, but I do think they play an important part in terms of the culture of crypto, the crypto twitter and and kind of like distribution and marketing so my take is again, like uh, you look, it's marketing right.
Speaker 2:So you look at web2. A lot of companies now, especially on, like, the cosmetic side or even clothing side as well, they use Instagram influencers. That's like the best way. And affiliate marketing, etc. That's like the best way for them to gauge a lot of customers and interest. That's how they build their brand these days.
Speaker 2:So, you know, jumping to Web 3 is no different. I guess we just call them KOLs instead of influencers or whatever influencers or whatever. So it's just another fancy word, but, yeah, super important. I don't see why, like it's any different. Everyone should be allowed to do that. However, I think what happens is, um, is that projects just don't just don't look at the quality and I think also k-o-l's just take. They just take things for granted and just don't push. You know the the way they should be. So I think they're good, they should be used, but projects need to look at the quality of who they're using. Again, like, you can get a big name, but some of the big names just won't work as hard as the smaller guys. So how much, you know how much are they pushing? Are they actually pushing it to to their community? Or is it just, you know, a blab that goes around with their name on it because they're on board?
Speaker 3:and also the big guys take advisory.
Speaker 1:They don't want to they have all upside advisory another long investing schedule.
Speaker 3:It's not always another nuance I've I've seen is sometimes in crypto kol. Rather than being seen for marketing project, also kind of see them as a funding mechanism. So I've seen project raised at a very high valuation and raise a lot of money from kols because they kind of feel like it's an easy way to kind of that's interesting versus, let's say um yeah yeah, I think they don't diligence in the same way that a vc will do yeah, it's
Speaker 3:like a process yeah, I think so. I think to my earlier point. If you have a tier one vcs and crypto what typically happens at pre-sale with retail? You go up, like increase the valuation and even with KOLs you massively increase the valuation, just like have a favorable terms, right In terms of vesting. Easier vesting. Yeah, favorable vesting, but I've seen projects that raise more money from KOLs and sometimes retail than, let's say, the tier one VC as well. So I think this is another playbook which has a nuance and kind of veer to Web3.
Speaker 2:So, on that topic, I think there's actually one launchpad I'm not going to name, but they're doing that at the moment. They're pushing for no VCs and pushing to all of their fundraisers, for that project is to have KOLs on board and they'll raise all of their money through that, and then that's when they'll accept them. So, yeah, you're right, it is apparent. Now I don't know how good that is, like how sustainable, I don't know.
Speaker 3:We'll see remember last cycle we saw this project on SoulChicks that raised a lot of their money from launchpads rather than KOLs.
Speaker 2:They literally.
Speaker 1:It's quicker. They were gone in a second.
Speaker 2:They failed instantly.
Speaker 1:Follow-up question. Obviously there's a massive, massive spectrum of influencers and KOLs in terms of quality following, yada, yada, yada. There's a lot of garbage out there. Even ZazakXBT, every month or so. Quality following yada, yada, yada, there's a lot of garbage out there. There's like even zack xbt, every month or so, calls out one of the influencers that's basically been dumping while telling everyone to buy um. So there's definitely a big spectrum, but in terms of one that we actually respect or we think have some degree of meaningful value add, are there any that are up there? Any specific?
Speaker 3:games. I like cam, I like cam, I like myself as a kol. Yeah, jokes apart, jokes apart, I think, um, I think they're like sector, uh, sector specialists now as well, in in terms of kols. You have for gaming, alex becker, for infra and defy and some of the dgen stuff. You have ensim, um. So I think, even in terms of kol, like not only you have tier one, tier two, tier three, you also have like sector bifurcation. You have different kls for infra. Then you also have different kls for nfts. Like with nft, you have someone called uh grail and bling the bling, like I'm kind of butchering the name. But then for gaming, you have people like illiotrade and and alex becker. And then for infra, you have people like what's his name? Like he comes on podcasts as well cintiago, uh, you have ansum people like that, people like them. You have kobe. So you have like different forms of k. Well, depending on sector and also depending on tier, but I think we should.
Speaker 2:Yeah, 100. I'm definitely top of there. My tweets get three impressions zero likes.
Speaker 1:We'll retweet more of them, man.
Speaker 3:Those are organic and part leadership. It's true.
Speaker 2:Key opinion leaders.
Speaker 3:Opinion matters here.
Speaker 1:I love it. Here's one Obviously's kind of influencers that are just guys at home on youtube that have amassed big followings and they throw arrows on charts and yeah, they have zero conviction, yeah, um but are there any that?
Speaker 1:I don't really know how to phrase this, but they're like professional kols, so you might call like hasib koreshi or something would be one of those where they're kind of they. They are in the weeds, they're very well respected, but they almost become KOLs or thought leaders in and off themselves, right Because of where they sit in the space. And there are any like good examples of that. I like James Watt from DFG. He's only got like 27,000 followers should have a lot more but effectively knows what he's doing, has the actual track record and has the understanding that a lot of those sort of call them public figures don't necessarily have. Are there any sort of really good examples that spring to mind other than Cam and Mehdi?
Speaker 2:I would say I think you name a good one being Hasib. I think he's definitely one. I think also, yeah, samani, I think he's super knowledgeable. Someone like you know reading his newsletter or listening to some of his podcasts he's definitely someone to gauge extra knowledge from. Again, going back to Haseeb their podcast that they host I think is great, I think it's super knowledgeable. I think from my side those two Again I need to touch base with doing more of that stuff.
Speaker 3:Again, I've just be in I think let's get Haseeb and Kyle Samani as guests, both together.
Speaker 1:That would be awesome. Another one is what do you think of Arthur Hayes the newsletters? I think they're really cool. They always have interesting high conviction statements in them that make them go.
Speaker 2:I haven't read any of his and I think that is the type of writing doesn't fit for me, so I've never really, yeah, really different strategies right too lengthy to me and like some of this yeah so more trade focused but I'm gonna give a concrete answer here.
Speaker 3:Uh, I used to read a lot like this was like I used to be very particular about my content and die.
Speaker 3:But what I've recently started experimenting is stop reading all of that material and just thinking for first principle with your own opinions I think. I think lately that has worked because, firstly, you don't get biased because at the end of the day they amazing thing is they're good writers. They can sell you their bags and they can sell you their thinking and that can like bias your judgment. So initially I used to just for like consumption and just getting up to up to speed with the space. That was really really important. But I think now in my like the stage of life I'm at, I just feel like it's more important to kind of read the content from first principles, so like read the deck and white paper and then just do your own due diligence and form your thesis with your own understanding of the market pulse. And just discussing it with like some of the people you're close with I think is more important in terms of the way I kind of approach the space now At least. Again, that's just my view.
Speaker 3:I mean, that is the truth that your own research is going to be better, Like ultimately no, I think somebody who's coming into the space and I think their content is amazing and I used to follow them religiously when I joined the space, but lately I've kind of felt like their biases like tend to like creep in. Like you have this. Let's say, you know Kyle Samani is a good investor. Then let's say, his ideas like then kind of interfere with your own first principle thinking at least that's what I felt. So I've like stopped doing that, like I don't pay attention to that much. I think another good example is, rather than reading their stuff, just hosting them for podcasts, like ask them questions that you would want to ask yourself, right? So I think that could be interesting way to consume content makes perfect sense.
Speaker 1:It's a lot of sense, cam. Is there anything you wanted to add there?
Speaker 2:no, I think medhi's like literally accurate. I think that's one of the reasons I've never been a massive reader um, I've never really have been. I'm more more of a video-based guy. Again, not done much of that lately as well, super busy but I'm one of those guys that like to just go out there myself and learn and educate myself and just experiment in, because I think that's like the best way of doing things.
Speaker 1:Definitely true, like without, pretty uncontroversially All right. So here's a question that I feel like I've already got a high conviction answer to it, but I'm desperately curious to hear what you guys think. If, okay, right, so forget centralized projects, forget centralized exchanges, forget b2b businesses. If you are a consumer consumer facing protocol in this industry are you screwed without having an airdrop? Is that it like you? Just it's airdrop or bust? I mean points, whatever call the different mechanisms, but some kind of incentive, reward system where you basically just distribute value for free, is that? Is that a must now?
Speaker 2:I don't know like if airdrop or that matters. I just I do think that it's hard to answer right, I don't know. So I think having a token is definitely needed. I think that's like just cause of speculation. It's great marketing as we've been talking about marketing and I think it just gauges interest throughout the the cycles of the market, whereas if you don't, then you can get forgotten about like very easily unless your marketing is top, top notch. Yeah, I think that would be my answer. I can give some examples, but I think that's in short. I think you just need it again. People will argue like what is the point of? Why do you need a token? I think that in crypto doesn't matter. It's purely just speculation.
Speaker 1:But airdrops are pretty new, and I say pretty new, I'm talking like you know. If you look at the big L1s that were doing ICOs in 2017 via CoinList, they never had airdrops, nothing like that. They had ICOs.
Speaker 3:They had, you know, public sales that were usually gated, whitelisted I think it's a good marketing mechanism where you have headlines that a wormhole made 30 people millionaire. I think it's good for marketing. I think projects are not. So I think there are two ways to look at it. One is like, okay, it's the ethos of web3, I'm giving you money, I'm giving back money to my initial users or my community. And the other way or more cynic, cynical way of kind of thinking about this is this is my marketing budget, which I just gave away, and rather than giving it out in cash, I'm giving it out in equity.
Speaker 3:I also feel like, apart from like these days I'm so busy, I don't engage in that much farming activity. I feel like if you're not long crypto in some shape or form, you're kind of screwed anyways. So in this day and age age, you have to be long. Crypto and being long crypto can come in different shapes and form could be long public market things like solana, ethereum, bitcoin or private deals or airdrop or farming whatever. But I think you have to be yeah, even bitcoin mining company, but I think you have to be long. Web3 because it's, I think, once in a lifetime, generational wealth transfer that's happening, because think about it, like us, dollar is a meme, and we are creating our own memes now I like that yeah that's how I'm gonna put it hey, I there was like the one stat that really just got me onto crypto and like a really big like.
Speaker 1:Effectively, there was a point in I think it was 2020, I think it was near the during covid where 25 so a quarter of all the dollars that had ever existed in the history of the us dollar had been printed in the last six months. Like it was just like. Imagine if a crypto project did that just suddenly inflated supply by a third in the space of, like you know, two, two quarters, but imagine the uproar that would happen. The US government can just do it like that, all right. So that's all from us here on DealFlow podcast this week. Just a friendly reminder again at the end of the podcast that nothing in this episode is in any way financial advice. Everything is for entertainment purposes only and opinions are our own and that's that's it. Yes, thank you so much.