it's time to sophisticate ourselves

Welcome to my weekly consumer crypto-focused braindump of things I'm thinking about and have bumped into during my internet travels.

Here's what I found interesting this week...

We kicked the show off this week with Hunter from Bags App. I’ve been following them for quite a while since the product was nothing but a gamified waitlist, and when I finally got access to their beta a couple of months ago it was very obvious the team was talented. 

A theme of the newsletter this week is going to be a demand for us as an industry to get significantly more sophisticated bringing consumer products to market, but Hunter is one of the few here that this doesn’t need to apply to. He’s been building consumer apps used by many millions of people for years.

Bags is a “financial messenger” built on the insight that retail trading is becoming a fundamentally social experience, and memecoins and other cultural crypto assets are only accelerating this changing consumer behavior.

By natively integrating asset discovery and trading into a social messenger product they hope to better serve all the latent demand that is inefficiently using telegram and twitter to serve these desires today.

We had a great chat digging into his background, core insights from building multiple viral products, their wildly successful OG membership sale, and what the future of Bags App looks like. 

You can watch the full conversation here, and sign up for bags here.

We were also joined by Ryan from Slow Rodeo who came out of our SC07 cohort. They’re building a network of Full Stack Brands (apparel + social network + token), and are releasing their debut capsule collection from Court Date, their first tennis-focused brand, next week at a pop up they’re hosting around the US Open. I got a sneak peek of it and the stuff is so sick. 

Everyone is still sleeping on the massive opportunity these guys are seeing (read my full stack brands post linked above), and with their experience creative directing for artists like Kendrick / Drake / Lil Wayne / Doja Cat and brands like Red Bull / Nike / ESPN / Volkswagen they have the talent to be the ones that carve the trail.

I’m also selfishly most excited for them to go use their mainstream cultural relevance and storytelling abilities to help more people realize how cool tokens are. 

We talked more about the full stack brand opportunity, their plans for court date and how tokens fit in, and how to build aspirational worlds that people really want to be a part of. Listen to our chat here.

As you all surely know, a podcast with Nikita Bier dropped on Sunday. I’m not going to recap it because 1) you’ve probably already listened to it, and 2) there are plenty of good summaries floating around twitter (here’s the best).

The thing I’m more interested in exploring here is how we get more people operating at this level of sophistication in consumer crypto. 

Our industry has so many properties that makes it a ripe breeding ground for innovative products; new technology with the power to radically change how people behave, a subculture of people already living in an alternate future, and abundant capital to fund new companies. 

But the thing we're admittedly light on is the volume of sophisticated founders with real insights into the non-obvious but transformative products that can now be built. This is where the real breakthroughs will come from, and the vast majority of people are working on minor iterations of the things that are kind of working right now (memecoin launchpads and prediction markets).

This isn’t shade on the founders that are here by any means, it took Nikita 5 years of fucking around to learn enough to have success with TBH, but more just a recognition of what it’s really going to take for consumer crypto products to go mainstream. It sure isn’t just posting on twitter.

It’s also useful to just zoom out and remember how long it often takes for founders to figure out the right product and package for their insights. I tweeted yesterday that most of the breakout consumer web2 products took years and pivots before seeing traction, and we’ve really only had the tools to build reasonably good consumer crypto products for like 6 months.

So I’m as confident as ever, but we need to both get more sophisticated and also just trust the process. 

I stumbled on Soundmap this week which is like Pokemon Go for music fans. You walk around, find song drops, and trade them to build your collection. You can do artist quests to show your fandom, battles against other users over who’s song is better, and even predictions for how many streams an artist will have over the next week. Activity earns you coins you can use across the app, and you can buy more if you want to progress faster.

It has had viral adoption over the past month and grown to 1M+ users. It’s a great crypto use case with user numbers we’ve all been dying to see out of a consumer crypto product, except… it’s not a crypto app.

This has of course got me thinking. How would the experience and adoption compare if it was built on crypto rails? If the drops were NFTs that you actually owned, if the predictions were prediction markets, if the coins were tokens?

And the reality is that it would probably make very little difference short term. The songs being Music NFTs would be cool for people that wanted to be able to show them off across crypto experiences, but the vast majority of people don’t yet see the value in that. The predictions being prediction markets would be cool if people wanted to bet real money, but most people probably wouldn’t. The coins being tokens would be cool for people wanting to speculate, but again that’s probably only something crypto people would want to do.

These things not being onchain certainly degrades the experience for me personally, but how many people like me are users.

On the flip side though the tooling is now good enough that you could build this product on crypto rails without having to make user experience sacrifices. You could abstract the onchain elements for the people that don’t care, and let the people that do have more expansive experiences with the product and its assets.

And you’d be in a great position to start progressively introducing people to the value of digital asset ownership, interoperability, and tokens, and reveal to them these new ways of existing on the internet.

And if you did that successfully this could grow into a bustling music fan ecosystem that is so much more than a singular product experience. 

But that would take some vision into what crypto unlocks long term. And evidently, and understandably, the people that are getting viral products to market today don’t have it. 

So what’s it gonna take for the people that do have the vision to figure out how to build viral products? To have products that teach more people the radical new experiences unlocked by blockchains? For the tipping point to arrive where it feels janky and restricting to your average person when things aren’t interoperable?

We gotta get more sophisticated.

I tweeted out an idea I was noodling on this week around long term prediction markets being a better starting point for a product serving music fans wanting exposure to the success of an artist, and Jon Moore brought up a great question asking whether hyper fans and traders can sustainably co exist within the same product.

It’s also a question I was thinking about re: Soundmap above. If the Music NFTs  / coins were onchain and unlocking opportunities to speculate, how would that impact the experience of all the people that are there for the purity of discovering new music and expressing their fandom.

Then coincidentally Sterling sent me this clip of Mitch Lasky on Invest Like The Best talking about the Three Body Problem that crypto introduces into gaming talking about this exact thing. I found it to be a really useful framing of the challenge.

He describes that in gaming you typically have two core participants; the developer and the user. But when you foreground crypto and make it a core part of the experience, you introduce The Speculator as a third participant. This introduces a Three Body Problem (borrowing a name from the gravitational physics concept) which is inherently unstable and significantly more complex than a relationship between two bodies.

He thinks it’s possible to design a game and experiences that solve it in a mutually reinforcing way where these three parties don’t feel antagonistic, but states how early we are early in exploring that.

We see this problem everywhere in crypto so it’s a fun one to think about. I’m also very optimistic it’s solvable, but it’s a good reminder about how intentional you need to be about designing your experiences around each archetype of participant.

This is also core to our interest around new token models and mechanisms (like Baseline) as our current ones often just allow speculators to run rampant without providing the right guarantees and value accrual to true believers.

Finally, a lot happened in NFTs this week.

Magic Eden launched a new NFT product this week that aggregates all mints happening across eth mainnet, base, and polygon and puts them into a pump fun like interface. It’s weird, I don’t really know what to make of it. NFTs as a broad category require an additional layer of storytelling to give them meaning that memecoins don’t need, and the product completely strips it away. I don’t really find it compelling at all.

Black Dave, a musician who’s been experimenting with NFTs for a while, wrote a good post exploring why he’s still here. NFTs broadly are in a weird spot, and music NFTs even more so. His conclusion is that the state of platforms suck, the state of interest sucks, and the state of artists sucks, but he’s still here trying to figure it out. There’s so much alpha in being optimistic.

I caught up with the Sofamon team this week and they were very pumped on how their new Gacha machine release mechanism (vs their previous bonding curve drops) worked last week. I called the top on bonding curves a month ago, think there’s mass fatigue, so it’s awesome to see people experimenting with what’s next. They said to me that “non crypto natives would rather play games where they can be lucky and not have to worry about being early” which I loved.

I really like this Creature World drop using the ERC404 standard. Using 404s allows anyone to be able to re-roll to get a new cube if they don’t like the one they pulled, use the NFTs whenever NFTs are useful, and use the ERC20s whenever fungies are useful. A large reason NFTs are down bad right now is because very few people are doing anything interesting with them. This is interesting.

Then of course we have the Opensea Wells Notice extravaganza. Ben had the best take here. Oh the joys of building at frontiers.

Thanks for reading ❤