Bit of a shorter one this week as we've been buried in SC07 application review and interviews! Get into it...
SC07 Applications
Applications closed at the end of last week for SC07, the 7th cohort of our consumer crypto accelerator, and we spent all of this week reviewing them and interviewing an initial batch of teams. We had hundreds of applications and will likely end up interviewing over 50 teams.
It’s a huge privilege to be able to tap into the brains of this many early stage consumer crypto founders and it gives us a great view of what’s coming down the pipes. I’ll share some cleaner data on the category breakdowns soon, but wanted to quickly look at some clear emerging categories.
Farcaster
We received a TON of applications from founders building specifically for the Farcaster ecosystem, and many more mentioned their intention to natively integrate it. We’re seeing new clients, ad networks, headless marketplaces, frame tooling, and a bunch more.
Memecoins
My relentless shilling of the huge opportunity in building new products and experiences on top of memecoins was well received. We’re seeing new memecoin-centric trading products, launchpads, games, vertical-specific social products, climate action movements, streetwear brands, and live streaming products.
Consumer AI
Crypto x AI, so hot right now. We’re seeing AI-powered games, trading bots, virtual influencers, autonomous agent platforms, subjective oracles, and IP creation products.
Payments
Global payments is one of those clear crypto use cases that will certainly have a massive winner, and we’re seeing a bunch of different swings at it. It’s going to be a brutally competitive market, and you’ll be competing with wallets and many other products that also facilitate it, but the opportunity is there if someone can figure out the right wedge into it.
Music
We’re seeing a bunch of much needed fresh takes on how crypto can improve internet music experiences and unlock monetization options for artists that have nothing to do with music NFTs. They’re ranging from gamified artist discovery products, to new takes on internet radio, to integrating crypto into IRL music experiences.
These are just a few of the categories we’re seeing of course, and we’ve talked to many projects that I wouldn’t even know how to categorize. Ahh the energy in consumer crypto right now is incredible.
Application/Pitch Tips
Another thing that jumps out while we review applications and interview teams is the discrepancy between people who have pitched before and those who haven’t. Presenting an opportunity in a compelling way is hard, but we see so many applications that it can be the difference between standing out and blending into the noise.
We’re planning on doing something more in depth here, but wanted to share some high level tips for people we haven’t interviewed yet or are entering a similar process with VCs or other accelerators. Here are a few:
Be concise. This isn’t the time to detail out all of your plans for the next decade of the company, your goal is to get an interview/call. Get straight to the point of why what you’re building is interesting, how it’s going after a huge market, and why you’re the team to do it. The more we have to work to discover this the more likely we don’t see it.
Nail the hook. We’re constantly flooded with decks and memos, and many are going after the same broad categories. Make it immediately clear that you see the world differently than everyone else to hook us to dive in deeper.
Have a clear wedge. We want to see that you have a clear wedge that will quickly get you meaningful usage. This could be directly serving crypto-natives, building specifically for the farcaster ecosystem, etc. Saying you’re abstracting crypto away to immediately go after the heavily-crowded mass market does not get us excited.
Be focused. Trying to solve multiple problems or go after multiple opportunities at the same time is a guaranteed way to succeed at none of them. Have one clear thing you’re focused on for the foreseeable future, and be able to share ambitious short term milestones you can hit against it.
Consumer Infra Wars
It’s fun watching the consumer infrastructure wars play out. There are a few clear points of immense leverage in the consumer crypto stack where attention, data, or liquidity will get aggregated. We’re going to see some intense competition around these points of leverage over the next year, and the winners that come out the other side will be sitting on massive opportunities.
One of these points of leverage is the social graph, and being the place that people want to nurture and build broad reputation, status, and audience on. Lens and Farcaster have been battling it out over the past couple of years, but Farcaster is pretty clearly pulling away. Most crypto products with social ambitions are natively integrating Farcaster and there’s a bustling developer scene that are building companies to serve needs of the ecosystem. There are immense network effects here, and competing with Farcaster is going to get increasingly difficult.
Another point of leverage is the wealth aggregation points, namely wallets. There aren’t really any strong network effects here and we have a pretty fragmented market as a result. I think that’ll continue.
Finally, and potentially the most interesting one right now, is being the port of entry into crypto. Coinbase has owned this for years as trading has been the dominant use case. People would start slinging coins on their centralized exchange and then graduate off of that into the onchain world, likely using coinbase wallet. But the world is changing as more and more people onboard directly through apps instead of exchanges.
This is putting crypto-native authentication and embedded wallet providers, with Privy as the clear leader, in a powerful position. They’re becoming the base user profile layer across all products which is a massive opportunity that didn’t exist in web2. From there they could introduce fiat on/offramps, swaps, etc and start eating away at market share in other categories. Thirdweb, Dynamic, and I’m sure others are also competing here, and we know Coinbase sees this as a huge risk vector for them. It’ll be interesting to see how they respond.
Crypto x AI
It’s been another massive week for AI and just wanted to consolidate some news around it.
First, the reflexivity of crypto AI tokens to broad AI-related news is hilarious. They’ve been on an absolute tear since OpenAI announced Sora last week, and the Nvidia earnings beat yesterday compounded that. WorldCoin is up 3x since last week because of its narrative-inducing connection to Sam Altman, and Render is up 50% as the “decentralized OpenAI”.
I also liked this tweet outlining the 3 core buckets of AI opportunity in crypto to pay attention to, but it’s missing consumer applications. Derek tweeted this morning that they’ve been working on a piece that I’m sure will cover consumer applications so I’m looking forward to that.
We continue to see a bunch of AI-related deals coming through Seed Club ventures, and a bunch of cool emerging consumer applications of it coming through the accelerator as I mentioned above. Things are going to get weird in a hurry.
Thanks for reading :)
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