Jamie Burke - Outlier Ventures: The Worlds Most Active Web3 Investor

Full transcript: Jamie Burke on London Real

2:26 This is London Real. I am Brian Rose. My guest today is Jamie Burke, the business leader, investor and Web3 entrepreneur. You are the founder and CEO of Outlier Ventures, the number one Web3 accelerator that is forged a reputation as the go-to authority for founders, investors and enterprises with the vision to help shape the future of the metaverse. You first invested in crypto over a decade ago and form Outlier with the belief that decentralized technologies would introduce a new standard for the web and create a more open economic system.

3:08 Today your portfolio includes over 220 startups from every corner of the globe and has helped raise over 350 million in seed funding across your various accelerator programs. Your mission is to create an ecosystem that can onboard one billion users into an open and inclusive metaverse. Jamie, welcome to London Real. Thanks for having me. Great intro, you nailed it there.

3:30 There you go. Look, I can’t wait to get started here, and so I want to jump in. I saw one of your tweets was pinned from April 3rd and said this: so it’s official, we are now not just the world’s most active accelerator for Web3, but the most active Web3 investor, full stop. Based on Q1 data and you said that’s still investing in sub three percent of applications. You said a huge congratulations to the whole Outlier Ventures crew on getting us there.

3:56 Those are big milestones. I was wondering if you could tell us kind of what is the state of the union of Outlier and maybe a little bit about this 10-year journey to get to where you are right now? Yeah, well, yes, it’s a real kind of point of reflection, that tweet. Especially the kind of year that got us to that. Because historically we kind of floated around anything from 25 to 30 people across various cycles, and we went into last year, what’s that, 22?

4:30 Yeah, I always get confused. So we went into last year, 22, knowing that there was going to be a correction. Of course we didn’t know, you know, how violent it would be and how much leverage there was in the system that had to kind of unwind, let alone all the malpractice. But you know, it’s not our first rodeo, right? So we knew we had enough data points to understand that things were getting very, very frothy.

4:55 And there would be a correction. And so, you know, we had a choice at that point. Do we dial things back down? We’d grown a little bit more than we usually into the headcount and operations, or do we really lean into it? And we decided to lean into it, which turned out to be the right thing to do, but when you’re in it, in the middle of it, so we were scaling the number of people.

5:25 Market was correcting down the whole way. Implosion after implosion was going off. Venture capital was drying up, you know, and our job is to help founders raise money. But things were getting a lot harder for founders, and we knew that, right? That money would dry up, it would be that much harder to launch a startup.

5:46 And, well, if we didn’t do it, if we didn’t lean into that to help bring new founders into the space, to help them onboard, close money, find product market fit, then nobody would, and the industry would be set back, you know, several years. So we decided to lean into it. I know, in life that’s pretty painful, you know, scaling a company in that market environment. It’s very challenging, but we went through those growing pains, and we came out the other side in Q1 of this year.

6:18 It really felt like almost a new company in a way, with all the learning, the institutional learning of a near decade now, but really kind of primed to be a leader, you know, in the space. We actually didn’t know that we were. So we knew the goal was to be the number one accelerator by deal activity, but we didn’t know that would actually make us number one by investments, full stop, within the investor category. And even outside of Web3, I think we’re top three seed investor globally, putting aside Web3 and anything else So there was a Herculean effort by the team, you know.

7:04 Really got a great management team, leadership team And you know, we’re just that much better now at helping founders at scale. I think you mentioned three percent, sub three percent of applications that we were; it’s actually lower now. I think it’s about 1.5 percent, which for us shows that you can scale while still having, you know, quality control. A lot of people always say, okay, yeah, well, if you’re the most active, you’re doing these level of investments, surely you’re kind of letting your quality, you’ve started getting lower?

7:40 But the interesting thing is, and this was another part of the intuition at the prior year was that the founders we were seeing coming into space were orders of magnitude more competent, seasoned founders pouring out a big tech, multiple exits, deep domain expertise. You know, these were not just technologists looking for a problem. You know, these were people that had a deep understanding of that particular use case, market, industry. And we also saw the number of founders that were coming to space growing, and so we thought, well, look, if we can operate somewhere between one to three percent of the market, and the market’s growing, then we’ll just grow with the market.

8:25 So that’s been the strategy. It’s been working so far. And yeah, you know, it’s strange to think how far the industry’s come now over near a decade of being in the space, I think you could probably call as an industry now, you know, properly now. And so when you had to go all in in 22, is that about capital reserves? I mean, because you have to give seed funding to these companies, you have to staff your entire business to accelerate these companies, and I’ll get into how you do that with these 12-week programs later.

9:03 Yeah, but, which takes, that’s money. Obviously all the overhead. I mean, is it about, wow, we actually have some capital reserves and we’re going to put them to use as opposed to just hold our breath and scale down like everybody else did? Yeah, so one of the unique things about Outlier is that we’re not a GP-LP fund. So it’s our own money that we’ve realized from profits, making profitable investments over several cycles.

9:34 Now we still hold the majority of our investments. You know, whether they’re liquid assets or, you know, it’s a liquid equity or it will be converted to traditional assets, on point, you know: equity to digital asset. So in almost all of our investments, 250 plus. Now we still hold the large majority, but you know, because we’re going very early, and we’ve been successful at making investments and managing the associated risk of investing at that stage, almost now an industrial scale.

10:12 You’ve got 100 full-time people across 360 of disciplines that you need to look at. There’s so it’s token design, regulatory compliance, business model, domain expertise, technical analysts looking at how they’ve configured their stack so we’ve got a lot of eyes, a lot of experience, data points to have an understanding of the usual stuff about what makes a good founder, that kind of grit But then also, you know, looking at the TAM, total addressable market, and everything else, and understanding kind of the technical decisioning. So we’ve been able to be pretty much profitable every year of our existence across cycles for almost a decade in crypto while still retaining the majority of our upside.

11:00 So that’s given us a lot of latitude. We don’t have LPs trying to pull money or dictate thesis. It means we’ve been able to adapt and evolve with the market, like sometimes fundamentally change our thesis on the fly, and be very, very agile. And it means that we can take long-term bets, like the clock’s not ticking. So we can sit on something as long as we think we should sit on it.

11:31 So yeah, so that’s kind of just allowed us, I think, to navigate the market in a way that a lot of other people haven’t been able to. And we are exploring fund structures and everything else alongside us. Now, the capex the capital requirement is much, much larger now than it was. Actually, the landscapes are much more competitive than it was. There’s lots of accelerators popping up, surprisingly, actually, given we’re in a sideways market.

11:59 Normally it’s in a bull market. We’ve got a million competitors all of a sudden, million advisory firms, token advisory firms. They kind of come out of nowhere, but they usually disappear, you know, in markets like these. What’s interesting is there are more accelerators now than ever that people are throwing more and more money. VCs, venture capitalists proper, are coming earlier and earlier.

12:24 Again we didn’t think that would happen. We thought a lot of VCs would just be deploying capital into existing investments to make later stage to make sure they can ride it out, right? Actually they’re coming earlier and earlier and earlier, you know. a16z, he’s got crypto startup schools. All you need to know about a firm that, you know, really is kind of the still seen as the ultimate signal from a venture perspective, and yet they’re going almost pretty accelerator.

12:55 So the market dynamics are changing, and you know, we need to kind of adapt into that. But I’m happy, happy with where we’re at. You know, I’m happy with the space that we occupy, and look, you know, if we’re rejecting, you know, more than 98 to startups. They need acceleration too, so you know, the more the better, right? we’re trying to grow the ecosystem currently.

13:22 Now, last year, when you’re watching your tokens and your equity go down, and then down and down. And I remember last year, and yet you’ve got to payroll of 100 people and you got to give seed capital of a hundred thousand, two hundred thousand, of these startups. Like, where does that cash come from if you’re still invested. If you find a creative way to take a small percentage and divert it, how do you do that? This is the reality that we’ve lived in, going back to when it was me, my underpants, you know, in my flat.

13:54 One person. You know, we, ’14 basically. Yeah, we’ve never had we’ve never had loads of, like, cash. You know, so rewinding back to the kind of the origins of Outlier, so yeah, that would have been ’14, something like that. I used to host little meetups here.

14:15 I think it’s called blockchain Angels or something. Ten people would show up, weirdest group of people you’ve ever met in your life. Nobody’s really investing I was just trying to figure out, somehow they’d come across blockchain, they had a light bulb moment, and they wanted to learn. And this is, you know, in London, which is pretty big. Capital center, big venture capital center, market center Actually, I had a lot of recovering bankers kind of coming along.

14:43 Retired, bored, you know, looking to be stimulated. And so, yeah, I kind of did these really to learn myself, and we’d somehow find one or two startups that would come and present, and they’d be wanting to raise money. But I never really knew what we were doing, what was going on. You know, this is pre-Ethereum pre what was coming along there, in Digital Chamber of Commerce, which kind of brought all the banks and everything else. And so, you know, I knew I was angel investing at the time.

15:19 I knew I wanted to invest. I knew I couldn’t invest alone. I was already, you know, I’m a creative technologist, so I’m used to working with technologists, often trying to help them translate and apply things in a commercial sense. But you know, actually understanding back then, because it was all about infrastructure, you know, cryptography and everything else, or the possibility of smart contracts, when there’s colored coins, then is, you know, could you have something that might then become NFTs at a later date.

15:52 So there was a lot to learn, and you know, I had a little bit of cash myself, not a huge amount. And I kind of found, I think I’d put a message on LinkedIn at the time saying I was looking for a technical fan or a CTO who understand blockchain. I just got like no response. So then I started, like, searching anybody that had blockchain in the title, found my now business partner Aaron von Hammers. I think he was one of 20 people that had blockchain and CTO in his profile on LinkedIn and that you could speak to that actually made sense, that had some experience of deploying meaningful products at scale.

16:39 And so, you know, away we went. But I had like a very small amount of capital to figure it out. I was like, look, I put him on a retainer for a year, and I don’t know what we’re doing, but let’s just play around with the tech and usually break it. Ethereum came along, and like, very quickly you see the potential for smart contracts but also the limitations. Like, there’s no way anyone was going to be building a dApp consumer level, anytime soon.

17:08 So I then did a blog post called 99% of blockchain startups are b******t, which at the time kind of did the rounds, and it was a bit click-baity, but the premise was, look, all these people are coming to us pitching that they have a blockchain startup, and there’s no blockchain there at all. It’s like conceptually it’s a blockchain startup, in actuality it’s just a Web2 a built thing. So, you know, we were kind of just bumbling along, really, and then every so often somebody would come along and say, hey, can I give you like 20 grand, 25 grand, to help me invest in space So we created a partnership, UK LLP partnership, like an LLC in the US, I guess.

17:57 And we grew that partnership, literally one by one. An angel come along somehow, and they’d have their moment, they’d put a little money in, and we’d take that money and we’d deploy it, but it was never material amounts of money that we’re investing. It was just enough to be able to start the conversation. So we had to become a value investor. Everyone talks about being, not in a market sense, in a VC sense or I’m a value-based VC, I’ll bring some value other than the capital, in reality.

18:30 You know, most VCs, or they do in a very limited way, but we really did because we didn’t have much money to get people. So we really had to overcompensate in the value that we could bring. And so we started growing, growing people rather than a capital pool. We started doing a lot of thought leadership that would attract founders to us, and we get on a cap table through advisory primarily. And then, you know, we were lucky to have had some good investments that yielded really well for us, where we were able to almost finance a whole year of operations, and from what investment one, two investments over several years without needing, you know, material external money.

19:17 So it was only last year where we took, for the first time, like, institutional money, kind of a sovereign-grade level, to kind of grow the business, but even then, relative to all the numbers that you see flown around in crypto, is still relatively modest. So because we’ve never really had much money, we’ve always had to be really disciplined with it, and because it’s our money, like we really care about that investment, we care about doing the DD, we care about its long-term success. Often our stakes vest alongside the founders so even if we wanted to, we couldn’t rug pull.

19:56 Like, we’re locked in it with the founder. We’re effectively in a cap table sense, like a co-founder. I would never say we’re a co-founder, because we’re not in, we’re not doing the grind, and as a founder I know the difference. But so that’s kind of been at the core of our DNA over the years. We’ve, you know, especially in the bull markets: okay, should we go and raise a huge fund?

20:19 But we’ve resisted it, you know, because it comes with compromises, and you’re only going to get 25 on that anyway, and you’re at the mercy of the LPs. I think now’s maybe the time where that might make sense. It’s the space is mature enough, but in previous years we would have been murdered, you know, in the downturns, ’18, ’19 winter, proper crypto winter, the more recent one last year. So I’ve had a lot of latitude Business models forged in having to provide value in an advisory sense.

20:58 And yeah, there’s been some very squeaky-bum moments, in that existential, you know, moments, but we’ve always written it through And, you know, fingers crossed, I would say we’re kind of, as an organization, I’m much more mature now about how we manage capital and do treasury and all that kind of stuff. Yeah, but yeah, it’s been a wild ride. Fascinating. It’s kind of bootstrapped your way up through, which means, by definition, you would have had some come-to-Jesus moments where you’re looking in the mirror saying, what are we doing?

21:35 Are we going to make it through this? Yeah. I’ve had a few of those over the years as well, and I think they’re really important because they ingrain your culture, and they show you who you are. They show everybody around you who you are. And then now, come eight, ten years later, when people can throw up a website that looks as nice as yours, throw the word accelerator out there, pop a few logos.

21:56 But if you really look at what Outlier is, it’s because of this ethos that you forged over the years. And so the customer experience, in all these nuanced ways, is someone like you said, who it’s our capital. We care we know how to do this. We’ve done this many, many times, and we’re going to be with you for the next three, four, five, ten years. Yeah, and across cycles, right?

22:16 Across cycles. And now people know that, and that’s in your blood and that, it’s fascinating to me. They always say the customer experience is a lagging indicator of the company culture. I always love that. And so, like, sometimes people see, like, an episode of the show where they’ll see one of your successful startups and they’re like, oh wow, I guess I could do that too.

22:34 But it’s like, you maybe could, but if you want to do it consistently over time, it’s probably built on a lot of things, and I wouldn’t recommend trying, right? Yeah. Easy things to do in life, you know. The Bean accelerator, I can assure you, you know, I would say to that Can you walk me through a case study, perhaps, of what you do? Because I think a lot of people don’t know the difference between, say, an incubator and an accelerator, and maybe we take one of your companies.

22:58 I don’t know, I know you know, something like Fetch.ai is quite famous. Yeah, yeah. I was curious if you could take something like them, and say, okay, how would they meet you? Then what happens next? Then what happens next?

23:07 And then what happens next? Because I think it’d be a really good case study for me and everybody else. Yeah, so actually Fetch.ai is an interesting one in that it also tells our story of how we’ve evolved, what we do and what we don’t do. So actually when we worked with Fetch.ai, which I think was late ’17, maybe a long time, we were the first investor in first check. It was a referral that came to us And back then we would only work with a handful of teams.

23:43 I think we maybe had 15 staff, something like that, and so we’d work with a handful of teams. And we were more closer to an incubator than an accelerator, and I’ll kind of explain the difference. So we’d work with a handful of teams. They’d all be at totally different stages. So some would be more later stage, some would be a little bit earlier.

24:12 And they’d all need slightly different things, and you wouldn’t know what they’d need, you know. It’d just be they’ve hit a hit a problem. It could be, you know, they want help with commercialization, you know, they want to be introduced to the industrial base in Germany, and they want you know how that’s commercially framed to be developed. It could be fundraising with Fetch.ai at that point, you know, they were like everybody at the time, looking to create a layer one.

24:44 You know, it wasn’t obvious to everybody that Ethereum, you know, would continue to be dominant. They were looking at their requirement to leverage blockchains for AI and the current implementation the previous implementation of, if they wouldn’t allow that to happen by design, and so they felt they had to build something, you know, top to bottom. Building one is incredibly hard. we help them on that journey. All the kind of technical decisioning, we were really deeply in the weeds, and we knew that was going to be a multi-year engagement.

25:20 And it didn’t even have an understood beginning and end. It was just like, we’re in it with you, and we got a meaningful share in that. I forget what it was, but call it six percent of the network or something like that, and that would vest over several years you know. And so we’re deeply committed, deeply involved, but it’s very difficult to scale. So we did that with Fetch and a couple of other partners, and we did very well from an investment perspective, relative to making just a handful of bets.

25:58 I think almost all of them came off, bar one, in terms of, you know, 200x plus type returns. And so that really helped us ground our learning and understanding all the way down into the stack, like really deeply technical challenges and problems, all the way up to the commercialization of the technology, like end to end Now we’re still involved with Fetch very deeply. You know, Humayun, very good friend of mine. We’re actually due a catch-up. I’m gonna go to his place, on my place, I think he’s renewing his wedding vows soon.

26:37 We’re friends, you know, very good friends. And what’s interesting is this is now in vogue, right? When we were doing it, 2000, yeah, 17, 18. Our vision, his vision, was that Web3 would be a great infrastructure to coordinate decentralized AI. Now keep in mind, Humayun was the first angel investor into DeepMind.

27:06 His CTO at the time was the first technical hire in DeepMind. And you know, they had DeepMind. DeepMind is the company that Google bought to create its AI competency, and its CEO has now taken over AI in totality at Google, in response to what’s happening with Microsoft and ChatGPT. So he’d already had that vision, and we’d already made a few investments, including Ocean Protocol with McConaghy, who’s also an AI guy came to Web3 as an AI guy, realized it could enable this new data economy, the commodification of data, ultimately to train our models.

27:45 So we were kind of playing around in that. And we knew it was, that was going to be a decade vision. And a lot of the times, you know, we talk to other investors, and I was like, yeah dude, you’re talking 50 years away, and these are deep Web3 investors. They weren’t, you know, traditional investors. And it took a lot of conviction, right?

28:09 And we went both Ocean and Fetch. You know, had the highs and then the 90 losses, crypto winter for two years, couldn’t raise any money, continued to ship product, and survive until 2023. It’s amazing if you think about that founder resilience, right? Both, actually, Ocean Protocol and Fetch.ai, and so that kind of way of working in a relationship is different to how we work with startups now. It’s, I can’t possibly personally be that involved, as I was then.

28:49 But we have that, that’s kind of where we developed a lot of our learnings. like what works, what doesn’t work. Okay, is there a blueprint here that you could repeat to a degree with the Web3 startup? Like, how do you categorize the risks that you’ve got to mitigate? Well, it’s technical risk, business model risk go-to-market risk, regulatory risk.

29:09 Okay, well, how could we create some content programs around that? Of course, they all have to constantly be updated because it’s all evolving. How can we modularize that kind of learning? I know you also do stuff in kind of the e-learning space, right? So it’s productizing learning in a way.

29:31 And then, so what year was it? So we’re ’23 I think after a couple of years, maybe 19, 20. I’m not sure when was covered. Yeah, 20 and 21, I guess. Yeah, so 19.

29:47 ’19 we launched the accelerator. We said, okay, look, we think we’ve got enough learnings now where we can bring in a batch of founders. The first one was a batch of five. we can have a structure. They’re all going to roughly be at the same time in the cycle, and we’re going to take them through a program of three months, and at the end of it they’re going to be ready to kind of close some funding.

30:13 Now, 2019 was in the depths of the crypto winter. Well, we’re kind of just coming out coming to DeFi summer, but often we were helping Web3 startups raise money, saying they weren’t a Web3 startup, so they were leaning into the market, they were leaning into more of an AI company or whatever it is But it worked. We had five teams. You know, several of them are doing really well now. Dear Data launched a network around data oracles, but institutional grades, so you could have a regulated product built on them Still going strong.

30:50 Out of the depths that we’re into, both on Protocol still going strong, launch to network still shipping code for the future of d-commerce. Maybe talk about that a little bit later. Crucible, which is looking at, actually, was our first metaverse investment before we were even calling it metaverse investment. He was actually Ryan, the Crucible was calling it the metabus then, which sat in train my thinking for the metaverse and subsequent iterations of the metaverse thesis but it was very personal.

31:22 Ryan of Crucible, so that was, he was in maybe cohort two or three. Covid hit he’d flown from LA. He was stuck in a flat in his own, I actually moved him into my house, my family house. She lived with me during Covid, which is actually very informative. It’s like watching how my kid was using games at the time, and he’s a bit younger than me, and he was like, oh yeah, that’s like, they’re all doing that.

31:47 So, you know, very intense, very, very personal. But through that we kind of developed this blueprint for success and as an investor, an understanding, beyond the business model, beyond the market, like what’s required for a really successful Web3 founder. Like, psychologically, what’s that profile look like, or what combination of profiles do you need in a a team to kind of complement one another, because it’s more riskier, you know. Burnout happens much quicker, right?

32:21 The highs and the lows are much more extreme, much more volatile. And you fast forward to where we are now, you know, our goal is 200 startups a year. So we’re going to double what’s taken as a decade in a year. So for me personally, I’m spending less time with founders, which I miss, but at the same time my goal now is how do we systemize this to help as many founders as possible, wherever they are in a world. So we’re still virtual.

32:55 Covid made us virtual. We stayed virtual. We operate entirely virtually with founders. That’s hard to do at scale. But we found a way to do it, and we believe that’s really important for us, because ultimately we want to enable Web3 founders wherever they are in the world, whoever they are in the world.

33:17 And the interesting thing is that as Web3 technology begins to converge with AI, which has always been part of our thesis. Published a paper on it in 17, 18 and 19. These things accelerate one another even further. So we now have this thesis, which we’re going to start talking out, actually the first time I’ve ever spoken about it. So there you go, you’ve got some Alpha.

33:45 We’re thinking, what is 100x founder? So when a founder can use something like ChatGPT to have a conversation with an expert on almost anything, as long as there’s enough publicly available data to have trained it. So it’s becoming really niche stuff, but like understanding a market, building a pitch deck, you know, using tooling like Midjourney to develop a logo, brand identity I mean, all these things can be done by one person, solo founder, with no technical knowledge, because they’re creating, you can even do programming with an app now, you know, like a Copilot, to do development work, front and back end.

34:29 So you can basically do everything required to get to product market fit in theory with a solo founder with no technical knowledge. So what does that mean for, as an accelerator, what does that mean to industries and markets? We’re seeing it in a creative industry as well. I get interviewed like you. I have a podcast I bring creators on as well as founders.

34:54 Had a game developer who’s worked, you know, 25 years in gaming Supercell. Is it Rovio, the one that did the Angry Birds game and the franchise? He’s created a 2D click-and-play game entirely using AI. I was like, what can’t you do in that whole development process without anything? Nothing.

35:16 So to develop a game, soon a triple-A game maybe even produce a block with Hollywood, you know, Hollywood blockbuster movie. creates a billion-dollar company. All these things, can, in theory, happen now with one person So the kind of profile of that, I mean, for me that means anybody, anywhere, can be a founder. It also means that there’s going to be startups flying at your left, right and center. We already know no ideas unique anymore.

35:48 The hive mind on Twitter, like, as soon as you’ve thought it, somebody’s tweeted it, like before you’ve even tweeted it. you know, there’s no unique thought. So, no unique thoughts. 100x founders are just gonna get really crazy. I’m excited by it but there’s all the more pressure as well now, in a family, because, you know, there’s like, could be a hundred thousand other founders all around the world, sub-Saharan Africa, Bangalore, the leveling fields, you know, playing field’s lowered.

36:23 And so it’s a lot more competitive to be a founder, but also a lot more inclusive. Yeah, that blows my mind. Yeah, we had a quick Zoom call a couple weeks ago, and you told me that you said I’ve seen the first unicorn, single founder, single employee startup, and you’re like, we can give them a stack of AIs and they can do it all, and I was like my mouth kind of fell. I was like, wow, I hadn’t heard that concept before, and obviously it’s coming from you, and So, you know, and I was like, wow, this is the new future that I hadn’t played out, like you said that’s amazing, but now it lowers the bar, so now or lowers the barriers to entry, I guess, so now anybody can do it in all these countries that you might require.

37:07 Like I said, infrastructure before, but if the tools are there, and then now you’ve just dialed in your model after 10 years, and now someone came in and said guess what, we’re going to make this even different, but you can still use all your IP. It’s just going to have to change a little bit, probably, to cater to these people. Yeah, well, I mean, look, the thing, the challenging thing and the exciting thing about working in the space that we work in is that you know, you need to be, you need to understand capital markets, economics, socioeconomics, politics technology, multiple technology domains.

37:48 You know, so Web3, AI, even things in XR, increasingly And they’re all converging. They’re all accelerating one another. And the brain doesn’t, the human brain doesn’t scale that way, you know. So things like Twitter, for me personally, really help in that. I’m just synthesizing this hive mind.

38:16 It really enables me to kind of navigate what’s happening. But also, as an accelerator, we’re in a really unique position, because we’ll speak to several thousand startups a quarter. And you don’t need to be a genius. It’s pattern recognition, you know. You’ll notice this phrasing’s been used increasingly certain technology sets being applied to certain sectors increasingly, and so that’s, I think, where we’re quite unique.

38:48 Like, rip is we speak to more startups than anybody else on the planet in Web3. We do more due diligence on the business model than their technology than anybody in Web3, and as I said, you know, we’re not far off second most active seed investor globally, full stop. I think seek captain and Y Combinator, in it, and we’re like very close to Y Combinator. I would argue we do, because we do later stage. So we do pre-seed.

39:18 So we did an idea, but we also do all the way up to Series A. So I think we do more DD, because I can’t say it’s a concept. Okay, you’re backing the founders to come in and give it a go. And we do that sometimes, but, you know, we’re looking at people with either an MVP all the way up to a mature product with customers and revenue. So we’ve just got more data points, you know, and if you’re disciplined about how you analyze those, and you kind of track them across the founder life cycle.

39:57 There is a degree of science there. There’s also, it’s also, part art like an intuition of founders. You know, we’re starting to do psychometric tests on founders. Not like hardcore things, just asking certain questions, you know, that reveal I’m less interested in where you studied, and I’m more interested in, like, what was the big thing you overcame in your life in the last five years, personal, professional. I want to see adversity, overcoming adversity, or something like that.

40:26 So this is part art, part science. You’re never going to totally be able to, like, have an AI do what Outlier does just auto-write, you know, investment tickets and point to content modules. I wish. But increasingly, you camera line data and that’s why scale is important. A lot of people still challenge, even internally at Outlier, we have debate, so it’s getting too much, it’s getting too fast.

40:56 I mean, look, it’s all about scale, it’s about network effects, accelerations, network I want those data points. I want more data points. Anybody else? I want a bigger portfolio than anybody else, so I can track progress and associate data points to insights. I think that’s how we win over the next decade.

41:18 Are there synergies in the portfolio too, or not always? Yeah, I mean, so we have like a master thesis, which actually in a way is bigger than Web3 And then that kind of acts as a framework through which we kind of analyze everything else, from very specific things in Web3, like zero knowledge technologies, all the way through to XR, AR, VR, and AI And, you know, there are, it’s actually quite surprising how often we’ve been right. It’s just about timing, right?

42:02 So For me a lot of these things feel like common sense. If you’re just having these conversations, I’m sure same for you, right? If you’re just sitting down with people and having those conversations, you know, you connect dots. Okay, maybe some people are better than others, but I think also if you just do it enough and you know how to ask, her questions, you’re going to develop insight. And I’m very pro-thinking aloud, so you’ll see me just, you know, say things on Twitter without much thought, and I’m okay being wrong.

42:35 Like, I’m inviting people to tell me why I’m wrong. I don’t you know, the goal isn’t to kind of put out this fully formed thing that’s right. It’s the kind of start start conversation, and that’s led us to, you know, things like the convergence thesis. It’s, letters to, I think, as far as I’m aware, we’re the first fund to create, publish a whole paper on token design. 3DS of token design, I think we called it, and developed the discipline called token engineering.

43:08 So how you bring engineering rigor to token systems. So we published that back in, I don’t know, 18, 19. We were the first investor to publish a thesis on the metaverse, in particular the open metaverse. So that was first week of January 21. I think it was before Matthew Ball had been talking about it for a while, but I think we were the first ones to really propose that Web3 would be an operating system for an open metaverse.

43:44 We’ll talk about the recent update to that, which is the open metaverse under attack. Yeah, two years in review to that. So long story short, you know, we’ve kind of, we’ve been ahead of the market because we have to It’s a byproduct of, if you’re investing at pre-seed, seed, you have to be, you have to be early, you have to be earlier than anything else. You have to be prepared and able to go earlier, manage risk of going earlier, ahead of everybody else, because if you can’t, they’re not going to join the accelerator.

44:14 You know, you’ve missed, you’ve missed that one. And if you’re too late. Well, sorry, if you’re too early then, they won’t raise you know, that you can be right, that they could run out of money before you’re right. And if you’re too late, they don’t need an accelerator. So we have to occupy this space of being right on time.

44:38 And that’s hard to do, but if you get it right, there’s a really good ROI. There, you know, a bit stressful. Yeah, and it’s very timely as well. So all right, so last year was 100 companies. This year you’re hoping for 200 companies, and if you’re like one and a half percent rate, call it two percent.

44:58 So one in 50 gets into your process. So 200 times 50, I mean, I guess we do the math. you’re looking at ten thousand companies that will apply, you have data on, and then you’ll decide, whittle those down to the 200. Yeah, I’ll just go ahead and split this up. Then they go through, I think, a 12-week accelerator.

45:15 You have different kinds I think also based on different blockchains, and then at the end, I think, or maybe even in the beginning, you’re giving them seed investment. I don’t know if it’s 100,000 or 200,000. So that’s the process. Is that about right? Yeah Exactly.

45:28 So unlike a Y Combinator, where they run one big program with several hundred in there once a year, they do it. I think they did twice a year. Okay, yeah, but then they filter very hard. So like you can, the large majority of concepts, two founders. They buy it very heavily, tools like Ivy League, you know, type, or you’ve worked at Google, or they were like the original most famous accelerator.

45:52 Yeah, coming out of Silicon Valley, they accelerated Airbnb and all these other stories. Yeah, they started 10, 15 years ago. Yeah, yeah, I mean, maybe, yeah, maybe, maybe one of the founders, he went through Y Combinator, and then he became chief exec or something like that, to make Paul Graham stepped back, who is the founder? Yeah, I mean, look, they are, they’re still in Silicon Valley. It’s still a physical thing in Silicon Valley, which I’m fundamentally opposed to.

46:23 And look, they’ve made great investments. I think they buy us much more towards, like a classic, you know, West Coast understanding of a tech founder. And if you’re not prepared to go to Silicon Valley, well you know, screw you. We’re the exact opposite of that. Like, I want to find wherever you are in the world and I want to know if you’ve got, like, the founder grit and the curiosity and all of those things.

46:48 I’m less, we’re less bothered. I mean, we do get ex-Googlers and everything else coming into the accelerator, increasingly, but that’s not not why they’re there. You know, we select them on different parameters. And we work with them on their terms, wherever they are in the world. It also means you can work with later, like more mature founders as well.

47:06 You know, that they’ve got a whole family, they can’t just uproot and move to Silicon Valley for three months, or even London. But yeah, you know, they’ve been very successful with our model, but they’re a two-year, couple hundred in that program, very early-stage concept, and they filter very hard. So like, they allocate time to those that are succeeding, and those that aren’t, like, very quickly succeeding, they kind of get less of a service level, as I understand it, could be wrong.

47:36 We’re very different. So we actually paralyze what we do, so we’ll work with the same number of teams, but we’ll do them in smaller cohorts, so cohorts of up to 10 I think the average is about seven and a half. I think the most we’ve ever done in a program is 13 startups, and those 13 startups, as you say, will be on a three-month program. It’s intense. But virtual.

48:03 There’s daily check-in, you know. They’ve got their OKRs, and we’re helping them discipline how they and their team manage cascading chaos. And we increasingly come in a little bit later, so it’s not quite concept. You need a product. You need a CTO.

48:21 If you don’t have somebody that can build a Web3 product, there’s no point joining an accelerator, because you’re going to spend the whole time trying to find a CTO. People want to see a shipping product, acquiring users, customers. So we have a scoring process for them to be able to be ready to be accelerated. For those that aren’t ready, we say, hey, look, you know, we try to give as much feedback as we can. Again, like, we deal with thousands of startups, so we’re never able to give as much as we’d like.

48:49 But for those that are really promising, we’re like, hey, look, you know, what if you could do these and these things and come back and apply, you’d be ready to be accelerated. Like, we can, we’re more able to give you value, you know, and you’re not ready for us to help you in the way to the level that we’d like to help you. So Ryan of Crucible, I think applied two times. It’s third time, three times, third time you got accepted over two years, which is great to see.

49:13 People like, really value and understand what we’re doing So anyway, so we paralyzed that. We do that. Those programs historically have been protocol specific. So Polygon, Polkadot, Hedera, Filecoin, IPFS, just launched one with Aptos. just launched one with NEAR Protocol.

49:38 So we accelerate the best teams in their ecosystems. Maybe they’ve received grants, but want to level up, because a grant, you know, is a grant, and a hackathon, a hackathon, like actually creating a high growth startup that can go on and raise money from somebody else, you know, not just rely on your kind of grants means that they’re going to get real network, an option. So we’ve been a very good friend. We’re agnostic to accelerate to protocols. They just need to be scalable, usable, you know, not actually a barrier to mainstream mass adoption of a product or solution.

50:18 Increasingly we do thematic programs now. So we ran a luxury lifestyle and fashion one with, in the metaverse, with Farfetch, and various kind of luxury brands that they’ve brought in We’ve consistently done a DeFi one. We ran a ZK1 with actually 10 ZK protocols, zero knowledge protocols very, very early, still very early, but we believed zero knowledge technology is critical to Web3 mainstreaming. So we have a thesis we work with and through partners, but ultimately it’s within our thesis.

51:00 So with all of our partners, we select the teams that go into those programs. We might, you know, involve them in the process, but they’re coming to us because we’re good investors. Like, we know what we’re doing. We’ve got all this learning. And that allows us to have, like, very concentrated thematic links between teams.

51:24 Overlap, like there’s some commonality in that they’re building on the same technology. They’re going to have some of the same challenges, or they’re having to navigate the tooling and middleware, all there in the same industry, market, or it’s adjacent. So that allows a sense of identity within a cohort but because they’re relatively small in size, it means they just get a lot more love. So it’s a higher bar to get in, I think, than going into something like Y Combinator.

51:54 But once you’re in there, you know, you get full value, and we don’t necessarily disregard because you’re falling behind the other teams. You know, you kind of try to treat everybody as equally as possible. You know, that seems to work for us. It’s also just how we like working. It’s not a sausage factory, you know.

52:17 We want to enjoy working with founders But we also need to scale, because we want to help as many founders as possible, and so it’s that tension I think we got it right, you know. If we’re sub three percent of applications, I think we’re about one and a half. For me, that feels that we are growing with the market but maintaining a high, a high kind of quality control, but also a really high service level. So I think you said it earlier, you know, lots of people putting accelerator on their website, or a fund launching an accelerator, and again that’s great.

52:54 I love seeing it but actually, if you really interrogate what it is, like, what you really get for that, not the money, you know because, you know, we don’t necessarily give the most money. You know, there are other accelerators out there that will give you two, three times the money that we’re going to give you, but relative to the money that we’re going to help you raise at the premium we’re going to help you raise it at. The focus is really on that value, and so I think you look at the staff to founder a ratio that we’ve got.

53:27 It’s like five, seven times higher than we’ve got 100 full-time people full-time employees. So not like mentors, like TechStars does, a very heavily mentor-based. They’ve got great mentors, but like, is a mentor committed, you know, accountable? Not really, you know. And you can get a good mentor and a bad mentor.

53:50 My mentors don’t get fired, you know, and they don’t need that to pay the bill, whilst our staff will get fired if they’re not doing the job, they’re not showing up, they’re not the very best, then they’ll be moved on to new pastures. So that accountability and everything else, you know, there are some people trying to do what we do with DAOs now. Again, like, naturally we’re into those. Try and do what we do with the DAO. Like, good luck.

54:23 I’m in Dallas. Let’s see it shows, you know, like trying to get somebody to do something like, show up and do something and not be distracted with a meme coin, like, you know, mooning It’s really hard. So on the surface we’re quite conventional in how we do acceleration but that’s just because an employment contract is a great way to get somebody to show up and do something, and that’s for us, how we compete with founders. So I’ll be honest with you, we’ve got to do a better job of communicating that, because we still have teams go, oh well, you’re going to give us 100, and these guys are going to give us three, and there’s an implied valuation of Acts on that.

55:04 We’re going to go with this one. Okay, but the valuation. Your next round will be a lot less. And the money you’re going to spend to get to product market fit’s gonna be a lot more and it’s going to be f***ing stressful. So there are shortcuts like what look like shortcuts.

55:24 And then there’s like the long hard grind of being a Web3 founder, and honestly like, I want more Web3 founders, but there are easier things to do. That’s true. And what about the cash? When does that come in? How does it come in when they start, and then when they end, and then also funding?

55:46 Yeah, so the cash that we give them, and it depends on the partners that we’re running the program with. So sometimes the ticket’s bigger, depending upon if that partner is also investing, and sometimes we now have multiple partners. I think in the zero knowledge program we had several protocols, and two, what we call venture partners So these are VCs that have an interest in the space, but it’s especially early for them. They don’t feel that they have the deal flow, the access to the deal flow, or all of the competencies required to DD them or they want to get in early, but they’re normally investing a little bit later.

56:26 So a VC might come in, they’ll put some cash down across the whole program indiscriminately, and then they’ll follow on later for the teams that they like. You know, once they’ve got an understanding, it’s a kind of stage that they’re more comfortable with. So depending on that, you know, the ticket can range, it can be from, you know, 100 up to 250. And you know, that’s usually released pretty early on into the programs. Like we think of it as a cash depend in a way, you know.

56:55 It’s like, here’s some cash to get through the program, so, you know, you just, like, if your, if things are really tight, because we know that if you can get through the program, I don’t have to hand the multiple uplift, from right when you go into the program and when you leave. But it’s material. I think it’s anything from, like, you know, three to 10x, sometimes in valuation uplift. So if you can just get through that program without having to raise until you’re really, really ready to raise.

57:23 Then you’re going to get a better premium. You’re going to get less dilution. So often the cash we give them is to just get them through that program. But again, you know, like people sometimes compare apples and oranges, and I put that on us. We’ve got to do a better job at communicating our value-based proposition, which is not money.

57:44 Right, right. So typical company, they start. I might get a hundred thousand stipend that gets me through those 12 weeks, which I guess is for paying the salaries maybe some tech startup stuff, whatever I’m doing, and at the end of the 12 weeks there is potentially more money coming. or that’s when you try to help them raise? Yeah, so we will then kind of catalyze that investor network You know, we do demo days like everybody else.

58:12 We try to do them thematically, so it’s not necessarily specific to a cohort. Now it’s we’ll run a demo day with teams from across different programs that are somehow grouped. So for the investor, you know, they kind of know that they’re going to go and look at things that are going to be relevant for them. And we also do that at later stages too, so even when they’re graduated from the program, our more mature portfolio, who might be doing like a Series A or even later, you know, we’ll do these kind of days where we’ll invite some investors to come and meet our kind of more mature portfolio, but yeah, they’ll then come and raise some money.

58:51 I think the number you used was 350 million that we’ve helped raise and see value. I actually don’t know what that is. The PR team probably have a better view on it than me. I suspect it’s probably even more than that now, to be honest with you. And you know, in crypto terms, that might not sound like a lot.

59:08 But if you imagine that, that’s like seed tickets, you know, relatively small rounds, a million, a million and a half rounds That’s a lot of rounds closed. Yeah. And valuations will typically be on that 10 million valuations, five million valuations. Yeah, so it fluctuates, and it really depends where we are in the market, obviously, for a number of reasons, not just because, you know, bull markets generally see the valuations inflated at all stages, but especially at seed.

59:40 But it’s also the instrument that they’re using to raise from. So actually what’s interesting is equities come back on the table for the last two years, and that’s primarily because the investors aren’t retail investors anymore. Like ICOs, where you would just raise some retail through SAFE agreement, which is a convertible note. from an unprofessional investor base. It was a seller’s market.

1:00:05 You know, you do a SAFE, the money would be wired and Ethan Bitcoin, where you go, valuations were just, you call them party rounds, rounds would be closed in 24 hours at, you know, 100 million plus valuation. The good old days. Yeah, with a SAFE with no shareholder rights, you know right. Now it’s people want equity. They want to be on the cap table.

1:00:33 They want shareholder rights. They want to know how you’re spending the money. They want the founder to be accountable. very disciplined approach investing, which is great, but then they also want token exposure, so there’ll be some, like, right to a token. It could be pro rata, depending on your share, your equity share of the company, so people are kind of enjoying both the benefits, the safety of equity, and then the upside of tokens, should there be one.

1:00:59 Liquidity takes a little bit longer. Now I think tokens are just starting to be launched again, which is great. I think we’ve got a backlog of about 50 token economies that was launched tomorrow, if the markets are right, you know. They’ve been building for anything from a year to two years, and they’re just waiting for the markets. So all of that kind of feeds into valuation.

1:01:20 So, you know, I think right now the number I heard was between 25 to 30 million average valuation when they leave, post-acceleration, 12 weeks with you. Yeah, it’s really high, and they’re coming in usually significantly lower or hard to evaluate. Yeah, but maybe five million, or, and that’s why you’re saying you want to be with us. Yeah, basically, because on paper you’re making significantly more money, basically. Okay.

1:01:48 Now what I want to be clear about there as well is that that’s not just, like, artificially inflating it, right? It’s being able to justify it to an investor. So ultimately somebody’s still going to make an investment, they’re going to do their own DD. It’s not like somehow we’ve just made it look shinier. It’s that we’ve materially helped them, either hit milestones that they weren’t hitting before, or articulate the value of their business better, and ideally both.

1:02:19 But ultimately, you know, investors, or investors, they’re naturally, they don’t want to overpay, and right now it is still a buyer’s market. Still, the investors dictate the terms. So yeah, there’s a material uplift, and again we’ve got to do a better job of articulating that. Like, that’s really the value of coming through the program. But, you know, we’ll have a bull market at some point, and staffs will probably come into vogue again.

1:02:48 Retail will sneak back into the counter-cap table somehow. And things will get inflated. You know, you kind of, we operate on this concept of being evergreen. So whatever we do today has to work in either a bull market or a bear market. Otherwise, you get pulled into, you get out of shape.

1:03:10 If you become too bearish, you’re not going to be able to realize when there’s an uptick, you know, structurally. And if you’re too bullish, you lose discipline. You do things that you got to cut in a bear market, and that’s never going away, like bull and bear. And I mean, of course, markets generally but in crypto it’s much shorter, it’s much more extreme, and even the smartest people are caught out. So I mean we’re here almost a decade, still going, because we’ve just very disciplined on that evergreen mentality.

1:03:43 So right, okay, and then you take six percent of equity or tokens, depending on what that is, for that 100 grand to put in after 12 weeks you help them get for their investment, but you don’t usually invest at that point. So we might do a bit of follow-on. Okay. But we don’t as of yet have, like, a big follow-on fund. Something we’re looking at, we’re always exploring it.

1:04:08 I think especially now, given the amount of capital that we’re deploying, you know, relative to what we’ve done in the past. And also the fact that, you know, generally it would be safe to say that the venture capital market, proper, and kind of the wider tech market has structurally changed. You know, this kind of the consequence of free money that led to these overvaluations and tech stock, and people pricing future growth versus you know, revenue and income and stuff.

1:04:45 I think that’s changed, you know. I mean, even Zuckerberg was under pressure on his metaverse strategy, and I mean, he can do what he wants, you know, through special share class. So if even he’s having to, you know, rein in vision for what I’m sure he understands is very much an existential threat or opportunity for Meta, then that’s true for tech stock, you know, generally. Maybe AI will create a whole new cycle and change that. I don’t know, but our assumption is teams will need more money, they’ll need longer multi-year runways.

1:05:23 And so we’re probably gonna want to play a little bit more And with equity, we want to avoid dilution. In the past, if you just have a percentage of token supply will token supplies fixed generally? So six percent is six percent, and that’s great. We don’t need to follow on anymore with equity, you know, in the good teams you want to follow on, so we’ll have to develop fund structures to kind of allow us to navigate or operate in a maybe it’s a maturing market.

1:05:58 Maybe it’s not changing, it’s shifting, maybe just maturing. Okay, and you’ll have to come up with 20 million dollars of cash this year. Okay, gotcha. All right. Yeah, plus maybe because you might give them more than 100 depending on your team and what’s happening.

1:06:11 Yeah, okay. And we’ve got our opex, right, as well, and your people, right? Not cheap, people in Web3 as well. Nobody’s cheap in Web3. There’s this famous line where, like, Michael Bisping in the UFC.

1:06:20 He looks at the camera and he says, so you want to be a fighter? So I want you to look at the camera and say, so you want to be an accelerator? Yeah, right. So this is what you’re doing. All right.

1:06:29 AI, talk to me about the state of AI. You recently interviewed Sam Altman on your podcast? Yes, or an AI version of him. I mean, literally, you’ve been in this space for a long time. I mean, Fetch.ai back in ’17.

1:06:42 Yeah, you’ve been writing papers about it for a while. Where are we right now? Sure. So look, I kind of prefaced this with, I’m not an AI expert. I mean, any more than I’m an expert on cryptography and, you know, some of the kind of foundational primitives I work through, but I understand it enough.

1:07:00 I understand the principles enough. And I understand the direction of it, I think, enough, and again because I can lean on people and Outlier I can lean on the founders in our portfolio that are very much deep in the weeds. You kind of just pick it up. It’s a unique resource you have. Like, we’re talking about data, everybody throws that term around, but having the data of everybody applying.

1:07:23 Yeah, it’s, I mean, that’s priceless data, and then having the data of all your portfolio companies, like this kind of hive mind. I mean, nobody else has that data. Big VCs don’t have that data. No, yeah, well So you’re right, we’ve got several thousand startups a quarter applying from all around the world. 100 full-time staff across every discipline that you need, from regulatory to, you know, people who are experts in CeFi roll-ups or like, you know, whatever else, DeFi.

1:07:53 And then 250 founders and growing, which we’re going to double this year, so those three sources of insight are, yeah, I think pretty unique to us, and the rate that we’re growing, that I think it’s going to be very difficult for somebody to catch up. They can throw more money at things than us, for sure, for now. But yeah, those kind of hard data points are really valuable. So yeah, so I, you know, very much developed the kind of AI thesis, having worked with people like Humayun of Fetch.ai, Trent of Ocean and several others more recently.

1:08:34 An interesting thing was the premise, going all the way back to Fetch, was that, for AI to scale, it needs, it can’t be through a monolithic platform to achieve anything close to, like, a generalized form of intelligence, because you just need to know too many things, right? And most things are quite specialist. And so their proposition was you need agent-based systems. I mean, Asia Bay systems aren’t anything new, they’ve been around for decades, but the idea is that you have these relatively narrow specialist agents that are, especially, in a very, very, very particular thing but in aggregate, if they can communicate, coordinate, and their premise was transact which is why they believed you need Web3, ultimately, in terms of micro transactions, billions, trillions of microtransactions between agents, where they can negotiate.

1:09:39 They can form markets bottom up. They can do price discovery between themselves on anything and anything Then that’s an agent-based system. And so, well, okay, how do you coordinate that? It has to be in a distributed form or decentralized, and there’s some distinctions between the two, but on the whole it’s not going to be like command and control. There’s no way that’s going to get you to AGI, you know, generalized intelligence, and it won’t scale any more than a company can scale.

1:10:16 An individual company can scale So for me that was the red pill, you know, and I couldn’t get that out of my head. And then you talk to people like Trent McConaghy of Ocean. He was an AI guy again coming into Web3 and saying, well, hey, wouldn’t, like, what does AI need? It needs data And again, he’s really specialized data, not generalized data. Well, where’s that sit?

1:10:49 Well, it sits all over the place. It’s like siloed in organizations. It’s siloed in, you know, your, on your local computer or in your browser, like whatever it is. Well, what’s incentive for all these people to share their data, individual consumers or enterprise? How can you, literally, we talk about data as a new oil, but it’s not been commodified yet.

1:11:17 It’s been just captured in a couple of, you know, platforms, and even then it’s it’s still quite generalized, or it’s really, really specific. So his premises, well, Web3 can help solve that. You can tokenize data sets. You can allow for price discovery if they’re consumed or used to train AI models. You know, there’s kind of royalties on data sets.

1:11:42 And then there will be technologies where you can run computation on a data set without revealing the underlying data set, so we’re seeing that with ZK technologies now, multi-party computation. So these kind of conversations planted the seed for me to go, okay well, I mean, Web3 is the only way that AI can scale and get close to realizing its potential across all the specialisms, but then actually to something like a generalized experience where you can ask an AI anything, and it will give you an answer. So if you look at AI today, you look at something like ChatGPT, and a lot of the OpenAI implementations.

1:12:29 Yes, it’s an API, you know, so it’s kind of open, but it’s still monolithic. It’s their large language models, LLMs. And it’s been trained on open web data, which, by the way, everybody and anybody can access, and also data sets that it probably shouldn’t have been trained on as well. And so they already know that it’s plateauing. You know, they need specialist data if you, if you want to be able to have, like, really nuanced conversations.

1:13:03 And so they’ve got to convince people to give them that data right? Which is why they needed to raise a load of money, because they’re going to have to start paying people for their data sources. And do you really want to give it to OpenAI? You know, if you’re Bosch or Siemens, you’ve got all this data from IoT devices, from health or logistics. They don’t want to just be the things and the internet of things, right?

1:13:26 They’ve already, they already have that existential threat with Google and everything else. So there is no incentive for the people that are sat in organizations that are sat on this data to kind of train somebody else’s proprietary LLM, for-profit proprietary LLM. So, you know, I think now very quickly the narrative has already shifted to agent-based. Even Sam’s been talking about it. CTA’s been talking about it, not Web3 interestingly, just agent-based systems, but again it’s like, okay, well, how are you going to make that operate, and how do they reward one another?

1:14:08 How does your AEA reward my AEA without us coordinating that autonomously, and so it brings you back to the vision of AEAs, which you know, were precursive even to theory, and people were saying, well, if you can conceptually have a smart contract, what if that smart contract was actually smart, and it could carry out, it had economic agencies, autonomous economic agency. So you know, Fetch built that. They actually ended up building on Corda, so rather than try and do their own layer one, they’re kind of like a layer two implementation.

1:14:43 They also work across some Polkadot ecosystems as well. They’ve got bridges, but effectively that the kind of vision is that we will have our own agents. Are sovereign agents, so agents that we know provably by code are there to servers. They’re executing things within certain parameters that we set, we control. They can’t be taken away from us.

1:15:12 They’re not controlled by a platform, and they’ll kind of be like a, they’ll be like an LLM in a way, right? They just know how to talk to you, to the point whereby you get so comfortable conversing with them. It’s like having an Alexa that you don’t mind having on all the time, because it’s not f***ing Amazon listening to you and Jeff Bezos, right? It’s your agent. It’s not doing anything with your data you don’t want it to.

1:15:36 It’s not carrying out transactions that you’re not wanting it to. It’s your best friend, right? So you can trust it to listen to everything and anything. You can read all my WhatsApp messages, you can see all my DMs, you can see my Tinder profile, and like, what off-air we were talking about potential for that. So it will know you.

1:15:56 It will be able to represent you. You’ll be able to talk to it in natural language, increasingly verbal command, you know, like you do. Hey Siri, get me this. You know, hey, whatever Jeeves, get me there. But it won’t have any specialist knowledge other than you.

1:16:11 You’re a specialism, and it will then go out there and outsource tasks to specialist agents. Okay, Jamie wants to go to Japan this summer with his daughter. So she’s into Pokémon, so, you know, is this time period? Go book it all. You’re not going to be able to do that through anything OpenAI is going to build or Google’s gonna build.

1:16:37 Because you can’t trust them, that they’re going to sell you a pseudo sovereign agent I think, is actually talking about giving you a sovereign agent on Meta, like, you know, really But then you’ll have people building AEAs, like programmers going, you know, I’m going to build like the best AEA for tourism in Tokyo, or like really niche sushi shops, and it will, it’ll be able to tell you the best one and the many. And they’ll all transact, and the world will just kind of rearrange around you, and the crazy thing with this is you no longer need search. You could arguably see no longer even needing a website, so you don’t need ads like getting in your way, because your sovereign agent is just going to go right around those to source.

1:17:35 It wants, it wants something to scan the inventory on a website and give you the best price. It doesn’t want to look at anything else. So cheap, as fast as better, whatever. Red. And so your experience of the web is going to be conversational.

1:17:50 You’re going to be communing with the web and these agent-based systems through your sovereign agent. So that changes everything. Yeah, and the really cool thing is if you go one step further, and I’ve had the pleasure of getting very drunk with people at Farfetch and stuff, and you go down rabbit holes. But because these are real-time markets, they’re dynamic, they can adjust. So unlike now, so let’s say I have a flight I gotta catch, but we run over today or the flight’s canceled me or somebody else that has to fix the break, and this is a cascading effect.

1:18:31 So we’ll learn my taxes at that airport, or I’ve got to change, you know, the booking for the night, or like, can I get my refund back or how do I put the claim in for the airline? Currently you have to do all that, or your PA has to do a lot, or like whoever This system will know Jamie’s late for his meeting, or the flight’s been canceled, and it will just reorganize everything else by the way, here’s your new itinerary for the day. So that’s where we’re heading.

1:19:00 And I can’t see any other way of that happening without Web3 infrastructure. Okay. So those transactions will be on the blockchain. They might be, they might be settled right on like the Ethereum network, but they might happen in side chains, you know. So currently you’ve got these innovations where you can kind of batch transactions on layer twos or rollups where you need high throughput, you know, low transaction costs, and everything else.

1:19:32 You might also want privacy, associators, that’s, you don’t want that on chain, on chain And this is the benefit of zero knowledge technologies, that allows all of that. You can have all this stuff happen off chain, off the main chain, and then the outcome is just settled on chain. When do you think this actually starts happening? Time frame, you know, we’re kind of mid-23 right now. Yeah, it’s a good question.

1:19:57 I mean, if you’d asked me a year ago, I would have said a lot longer. But the the dependencies to get there are less now than they were previously, you know, just even advances in large language models, the capital that’s now kind of flooding into that, and the slow realization, what I think will be, the increasingly quick realization is this is just, not all roads lead to Web3. So you’ve got a few pathways, but like honestly, if you sat thinking about it, we’ve been thinking about this for a decade, and okay, you know, maybe there’s some innovation we’ve not thought about, entirely possible, but based on what we currently know.

1:20:47 I can’t see any other way of doing it at scale, and I think that realization will hit people very quickly. And look, Sam Altman’s already building Worldcoin, so he knows about it’s not like he doesn’t know about Web3. It’s interesting that he still chosen to go down this kind of quite monolithic approach with AI, but try to solve for its problems, by the way, with a decentralized network. So we’re going to disrupt all your jobs and the world’s screwed. Gives your eyeballs, will give you identity, and UBI, you know that’s.

1:21:21 I don’t have any equity in OpenAI. I don’t need to, because I’m going to create so much of a f***ing problem. I’m going to monetize what I think is the solution. The solution is decentralized, the problem centralized. You sound like a conspiracy theory, but it’s an interesting point, and you’re making reference to Worldcoin, which is this decentralized play that Sam Altman’s a part of, that is going to help provide UBI once the AI takes all your jobs.

1:21:46 It doesn’t put that part in, and they do that by scanning your iris. I mean, this is like some James Bond biometric data. I mean, it’s just, and what’s worse is it’s a form of digital colonialism, because where they’re rolling it out versus Africa or India, and they’re doing it by giving people free crypto. Give us your biometrics, we’ll give you some free money. Like, I, and I mean, just the whole, even the thing, let’s just look to stop it.

1:22:12 You’re literally holding up an orb. It’s like Stanley Kubrick’s, oh, you open your eyes. Wow. I mean, again, digital colonialism is something that Sue has talked about when he’s in here, and that’s this concept that, you know, we’re giving our information for free, and then these networks are selling it back to us. Yeah, and it’s something that makes reference to maybe maybe what happened with the UK and India back in the day, where we would take their cotton and produce it over here and sell it back to them in these goods, and it’s always being done by the more intelligent or more advanced people.

1:22:43 Yeah, but you know, so what’s interesting is I did a, I spoke at a conference in The Hague It’s a general blockchain conference, and there was a guy that’s been working on identity for a very long time, actually within the World Wide Web Consortium. I think it’s W3C, on identity standards as protocols. So the argument is the web currently doesn’t have an identity protocol in a way that it does, you know, for HTTP or SMTP. We need one for identity and until we have that and it’s trusted, then we rely upon intermediaries to identify ourselves, to attest, to verify who we are, to make our attestations about what we’re doing or what we’ve got.

1:23:31 And that’s where you get capture. You get data capture, data extraction, and that’s what most Web2 platforms are predicated on. That’s the business model, and it’s been a great business model for them, right? And ultimately their goal is to be an AI company. Like if you’re in big tech and you’re not, everything else is leading to be an AI company.

1:23:50 But the problem is, and this great presentation, I wish I could remember his name. I’m just awful with names but maybe in the links we can kind of find it out. So it’s at The Hague. And he said, look, you know, if you look at the country that was the most efficient in identifying and executing Jews during the Holocaust for the Nazis, it was the Netherlands, because they had at the time one of the most sophisticated bureaucratic systems for understanding individuals, how they identified their religion, their race, everything else.

1:24:27 Now, at the time it wasn’t done with any malintent. They were trying to understand immigration flows. Dutch, like the UK, were very kind of globalist in nature, but it was so good that when the Nazis got their hands on it, they were able to be that much more effective and ruthless. And so the question is not even, is Sam benevolent? It’s like, whoever captures the company that has that data, are they benevolent?

1:24:56 And so the big theme in the recent thesis that we updated is The Open Metaverse Under Attack, and one of those key things is the propensity or possibility of state capture of technological infrastructure and data. And that’s, if you’re sat in the UK, you might think, well, come on, you know, really? We do need to be thinking about state capture. You know, we don’t really have that much of a culture of hardcore libertarianism, you know maybe that comes to the West Coast.

1:25:30 But, you know, if you’re sat in other parts of the world, it’s a little bit more obvious. And you know, if we’ve got to trust that a state, a given state, might not knowingly or accidentally, you know, open up this honeypot or use it for the wrong purposes. You know, if we’ve even got that concern, we have a problem. So we should be building neutral technology that can’t be captured. You know, Bitcoin’s, the premise of everything in Web3 comes from that.

1:26:08 And so when you’re looking at anything to do with data, and personal data, and especially biometric data, like, you know, you don’t want that to be near a private company, because they will be captured and coerced the bigger that they get. Twitter Files. Yeah, and you don’t want it on chain. because, you know, then somebody, anybody, can take that data. And, you know, there’s still genocide in Africa right now, you know, in certain parts of Africa, like right now.

1:26:41 And so anything where you’re going to put biometric data on, you know, for a free coin, is just like bad design, poor design, and it’s dystopic. Wow. All right, and you’re talking you’re making reference to this report, which people can go to your website and download a free copy of it, but that’s The Open Metaverse Under Attack. Yeah, go through a bunch of sections and talk about things, risks of Web2.5. The Way Forward.

1:27:04 Obviously you talk about this under pressure. So you’re seeing Web3 being co-opted by private institutions and governments I guess Meta shot the first shot over the bow. Yeah, it said about that, he said it looks as if because of the centralization they won’t be able to pull that off. Yes, which was interesting. But yeah, maybe tell me a little bit more about some of the report.

1:27:27 Yeah, sorry, with that. Yeah, absolutely. Okay. So an interesting concept. So maybe to kind of just base this paper in, it’s kind of predecessors.

1:27:37 So we did the first paper called the open metaverse OS, as in operating system, January 21. And that really laid out, like, a very optimistic perspective on how Web3, and at that time the emergence of NFTs, would allow for an operating system for a more open metaverse. So, you know, direction of travel is the web’s getting more immersive, right? And that doesn’t necessarily require ubiquitous AR glasses from Apple or everybody with a VR headset. But, you know, we are investing more and more time in a digital sense: work, social, play.

1:28:25 Those experiences are becoming much more immersive, and increasingly our income, wealth and well-being is coming from what we would term more broadly as the metaverse. And it was our premise that with innovations, so NFTs. Most people think of NFTs in the context of, like, art or stuff like that. NFTs are just non-fungible assets. So, you know, a Bitcoin is fungible.

1:28:55 You don’t really care which Bitcoin is a Bitcoin, like most commodities, right? But with a non-fungible thing, that’s pretty much everything else in life is non-fungible. Like, you care where it’s come from. You care, there’s specific, the specificity of that, versus, the other thing And so it was a premise that with the innovation and this, the maturing stack of around NFTs, that more and more things that were digital could be unique, could have value and would ultimately lead to digital property rights, which is a fundamental odds with Web2, which is oriented toward platforms and shareholder supremacy.

1:29:39 So we’ve got a platform, and our job is to maximize value for the shareholders, the expense of users, if so be it, or navigating that tension. Facebook’s best example. Don’t need to go into that. Everybody you know, fully appreciates that. Amazon’s another good example, you know.

1:29:59 You’re a seller on Amazon until you’re not, right? until Amazon realizes they can just do it themselves. So, great, perfect user experiences, free product, or whatever else, but But you’re the product. Now, the premise was Web3 changes that. It allows us to turn things that are intangible in a digital sense into tangible value.

1:30:27 So if it’s of value and it’s digital it could be turned into a fungible or non-fungible asset somehow, and you could have peer-to-peer markets where there would be price discovery and value transfer, and as more and more things got understood as having a value, a financial value, then they could be used as collateral in DeFi, and that was kind of the core premise. So, example, I’m a gamer. I’m spending a huge amount of money in gaming, buying game items and assets, and really they’re just digital consumables.

1:31:08 I’m consuming them in that space. I’m not really expecting necessarily that they’re an investment or I’m going to recoup my investments. And generally speaking, if I want to exit that platform, that game, I’m bored or whatever else, like you write off the loss. Technically, a lot of platforms won’t let you, you know, move value off platform or even have, like, a peer-to-peer transaction. They’ll revoke your account.

1:31:34 You know, so you have no digital property rights. Whatever you think of notional wealth in Web2 is at the permission of a platform. And so the promise of Web3 was, in gaming, if those assets were non-fungible I had full control over them. I could freely move them off a platform. I could freely sell them.

1:31:58 I could collateralize them in DeFi. Then all of a sudden you think about how much value is invested by gamers in gaming that becomes officially recognized financial value, and somebody somewhere on the planet would give you a loan on it. Emotionally if it just takes one person to agree it has value. You know, you might have to over-collateralize or whatever else But it will function, and there’s so many other things, so many other examples. Game is just kind of the easier one.

1:32:32 And if you think about all the things that are digital that people know have value, but you go into your bank and say, hey, like, I need a short-term emergency loan. Okay, what do you got? Well, I got some, you know, got a big sword in this game, and I go, yeah, okay, good luck. So a large majority of people, especially the younger and younger you go, are financially excluded from these existing system things that they invest in, time, money, attention, are not acknowledged by the existing financial system.

1:33:03 So our premise was that that the open metaverse will allow that financial inclusion, and because these are open and free markets, things that are transferable, where you have digital property rights, will be valued at a premium versus things that can’t, don’t But it’s very optimistic, you know, and we were seeing that paper was very optimistic. We’re seeing Everything was mooning, action infinities, with play-to-earn was going crazy. People are still in this kind of Covid mindset.

1:33:40 Virtual reality, people are thinking everyone was going to be spending more time virtuality. Anyway, we fast forward two years, right? And we kind of, every so often, we’ll do a this paper, a thesis. We don’t do them every year just for the sake of it. We don’t even necessarily do them at the end or the beginning of the year.

1:34:01 It’s just like when we think there’s something material to say, something’s changed for better or for worse, so often both, right? And kind of, Christmas this year is one of those moments you know, we’d had last year, 22, and everything that went wrong in crypto, and how that kind of really tarnished the industry, I think, wrongly. A lot of the failings were because things weren’t being done within the ethos or the technologies of Web3. But we’d also seen, you know, Operation Choke Point with crypto more generally in the US.

1:34:40 Huge regulatory pressure on fundamental things, around even just open source technology, Tornado Cash you know, that, because it was believed that the North Koreans were using it to kind of use proceeds from hacking to finance state terrorism. Very simple kind of smart contract code somebody got arrested, the developer in the Netherlands. GitHub blocked code. Now this really takes us back to, like, some basic principles around open source code as old as cryptography itself.

1:35:25 You know, I’m sure you’ll remember in the ’90s people were walking around with open source code cryptography on T-shirts, because there’s an export banner in it, and it’s like, okay, well, stop me getting on a plane with a T-shirt with some code on. Free speech argument, you know, applied to code cryptography, and so it’s everything from this regulatory pressure. Is it security? Is it not a security? Everything that’s been going on with Ripple and XRP, Coinbase now, Binance, just the markets level, but then also, you know, banning of privacy coins not being listed.

1:36:07 We’re seeing transactions for stablecoins being censored or reversed. Most people don’t know, but most of the popular stablecoins are regulated in the US with the right letter from the right agency. The operator is obliged to block that wallet address, reverse the transaction. So these are censor, these are not censor-proof technologies We’re seeing trade-offs being made, understandably, by founders that just want to build a good product. They want some of the characteristics of Web3, but they want it to be affordable.

1:36:49 They don’t want people to have to have wallets. They want account abstraction, we call it, so the experience feels like a Web2 experience. You don’t have all these friction points, allows them to acquire return users and grow exponentially. but they then start to make some technical trade-offs for convenience. And again, like, we’re pragmatists.

1:37:11 We preach pragmatism to founders, but when this starts happening in aggregate, you end up with, like, a Web2.5. Now the question is, is that transitory or permanent? And the problem with Web2.5 is that it is not censor-resistant, and so we know already that the US and other jurisdictions are trying to clamp down. You know, MiCA in Europe is banning algorithmic stablecoins outright. So, you know, some of those things, you can kind of understand why they might be concerned.

1:37:50 But actually, the threat is not necessarily Facebook or Meta or Google anymore. It’s the Web3 is stuck in Web2.5, and for every year it’s in Web2.5 it becomes more likely that it never gets to, went through, because it’s, it can be, it can be stopped. It can be captured. It can be acquired, right? So earlier we were talking about Equity being back in vogue has all these benefits of shareholder provisions.

1:38:23 It also means it can be acquired very early on guess what? Harder to raise money now as a startup founder. Somebody comes along, goes, you know what, I’ll just buy it, and we know what incumbents do in tech, you know Facebook’s been great at it. They buy it and they kill it if it’s a threat to the business model. Buy it, kill it, you know, put it in a drawer.

1:38:45 So state capture, corporate capture Especially in these market conditions, especially in this kind of regulatory environment, it’s got very partisan now. I think that’s going to happen in the UK, by the way. I think it’s going to get more and more partisan in the UK as well, you saw a select committee recommendation to the UK government here that crypto should be categorized as gambling, whilst they’re trying to make strides around integrating it into the financial system.

1:39:13 So we’re in a state of flux, and It’s not necessarily like what Facebook’s doing, because I think, as you said, you know, yeah, whoever we’ve seen with Facebook and Facebook Libra, you know, they are not allowed to create the cryptocurrency. You know, they can be stopped in a way that Ethereum couldn’t be stopped. That Pandora’s box is open. It’s going to be forever open. We need more of those happening.

1:39:44 So that’s really the kind of core premise, and we list all these different things: precedence, legal precedence, regulatory precedence, technical decisions that are happening, as people look to obfuscate, you know and Web3 and make it more usable. This is for us. It’s a guide to founders. They’re making decisions every day, and in aggregate that determines the future of the web. And I go beyond that, because what’s not the web now like, the web is increasingly where we socialize, play, find your, you know, romance and life partner, you know, derive an income and so we’ve got to be very careful.

1:40:31 I’m old enough, and maybe young enough, to be native to the Web2 cycle. So I saw the whole social thing happen. I created one of the first social media agencies in the world in Europe. We are very optimistic about that, you know. We saw the Arab Springs happen.

1:40:49 We thought, great, we’re going to do away with this kind of mainstream media controlling political debate. We’re seeing all these democratic uprisings. Like, look where we are now. Is the world better or worse for social media it’s debatable, right? Pros and cons.

1:41:07 So we apply the same kind of mindset with Web3 and the open metaverse, which is look, we think generally it’s a good direction of travel. Like, these are the watch-outs. As a founder, you’re going to be making decisions, and if you end up with a billion user company, that’s going to materially impact the shape of the web. So like, have a think about the kind of consequences, the kind of second, third order consequences of those decisions. So It’s a toolkit for founders, but it’s also in a way a kind of manifesto.

1:41:47 I think it’s, I’ve always been uncomfortable admitting it, but the reality is it’s very difficult to not look at Web3 as kind of a political movement in a way. In the end, it kind of is. Yeah. And I’m not like a raving libertarian, you know, but it just kind of takes you in certain directions. Yeah.

1:42:11 When I started having digital property conversations with, you know, yeah, of Animoca Brands. We’re banging on to democracy almost right after that, and you look at the Bitcoin maxis, and they preach, you know, having this thing that’s not fiat, and pretty much you’re on to freedom of speech and property rights, which all these things, so they’re so linked, and I’m resisting them. I think ultimately in the US, the defense will be the same for cryptography.

1:42:36 It would be freedom of speech. You can’t censor you know, a particular network of participation in it, because that is centering freedom of speech. Code is freedom of speech. Yeah. And I had a conversation with Dan Held, who’s like a hardcore bitcoiner, and he’s like, freedom of speech is a luxury if you don’t have your freedom of property or freedom of ownership of your finances, and he’s got a good point, and So we got into a big dispute with some of the big tech platforms in 2020 about freedom of speech.

1:43:02 Web2 platforms weren’t like saying it, saying certain things, and you really started going down the rabbit hole of what that all means. Yeah, but that’s a luxury when you can eat and you can have a place to put your head, and all these other things. If you saw some of those freedoms taken away in the last year or two, and even G7 countries. So I asked, yeah, and at the end I said, is this the most important fight for humanity, digital property rights and he said yes it is.

1:43:29 Would you agree? Yeah, I mean, look, I think that because they feed into AI, so it’s not just even thinking about the web as it is now. Like, we’re not talking about fixing Web 2. We’re already past that. The rate of innovation that’s happening in AI now is being done in a Web2 platform model.

1:43:54 Is monolithic platforms, proprietary technology And that’s dangerous, but also it’s very limited. It’s very limiting. We just talked about earlier. Like, if you really want to realize the full value of it. If you want it to enable anybody and everybody to participate I mean, maybe we don’t even call it a founder anymore.

1:44:18 Maybe it’s just like what everybody does, to varying degrees, of participating in the digital economy wherever you are in a world, with this kind of fluid, you know, I, I actually think the interesting thing about Web3 is it reconciles certain tensions that have existed since the industrial era. You know, you’ve kind of got the individual and the sovereignty of the individual, you’ve got collectivism And you’ve kind of got free market fundamentalism, and they’ve kind of been at odds with one another for quite a while. To the point whereby, you know, political identities almost you know, defined by it, right?

1:45:02 Polarized by it. The interesting thing about Web3 is it allows you to preserve the sovereignty individual. It allows for fluid collectivism. So when DAOs actually get up and running, I can join it, and I can exit out. I could do multiple DAOs.

1:45:19 I can bestow my wealth and assets into particular DAOs. I can, you know, you can have certain levels of people that will derive value and income on my behalf, by me pulling and, you know, this kind of digital cooperatism that can be enabled by DAOs. So I’m a sovereign individual in a collective context, but without big state. And because of the permissionless nature of the market that I’m operating in, it’s a free market. It’s, you know, there’s free market fundamentalism in there.

1:45:57 Now again, that comes with leisure challenges. So what is antitrust in Web3? Binance has 34% of crypto. They actually just lost, Critter Trading Finances owned by one person. There are no shareholders to balance it.

1:46:14 Now, I quite like CZ but I mean, yeah, you know, so there’s two questions. Is he benevolent or could it be captured? You know, state capture in whatever context you want to look at that A lot of risk associated in one person, for, you know, one third of the market. How is antitrust managed in a decentralized free market? So you do need levels of state participation, but is that on a nation-state context?

1:46:48 Anyway, bit of a side track, but it reconciles some things that have been in tension for a long time, but it also raises other questions. You know, like, do you really want to live in an unbridled market, you know, with no breaks on what’s happening. So there does need to be an interplay between states and I think the arguments for digital property rights and the sovereignty of identity, data, and other forms of wealth, I need to be, I think, need to be hard-coded in the web before AI kicks in, because if it doesn’t, then it’s more dangerous, and it’s actually less interesting.

1:47:29 There’s not much time left for that. You mentioned the UK government. I was in Texas at Consensus, and everyone said, oh wow, you’re from England, where they’re pro-crypto and the government is embracing it, and London is going to be a crypto hub soon, aren’t they as they heard the latest, you know, Gary Gensler rampage against Coinbase, and I looked at him, and I said, well I don’t know if I’ve seen any evidence of that. And obviously this week you see some people talking about it being regulated as a gambling product, which doesn’t seem to be going that way.

1:48:03 Yeah, what is the state of London as a crypto hub? Yeah, well, I know that you feel the same way about this, right? It’s just a huge missed opportunity. The UK is so well placed, has all the ingredients to be a spoke, you know, in the kind of global crypto network. There’s never going to be a Silicon Valley for crypto.

1:48:30 And we’re three, that just doesn’t, it’s not going to exist by virtue, you know, it’s going to operate something akin to, you know, Bitcoin mining. You want it distributed You want everybody else to participate. You want it to be in multiple jurisdictions You want it to be optimizing for where it can derive the most value And you know that’s largely people, and where they choose to kind of migrate or base themselves. You know, London has world-leading capital markets, all the professional services industry that goes around that, you know, legal, tax, accounting English law is preferable in many cases.

1:49:13 People would prefer to sign a contract, you know, if you’re in Russia or you get married, you know, you probably want to have that in their English law. We’ve got English language, you know, which is a huge advantage. We’ve got a great tech scene, you know, even after losing money from Europe As an LP coming into funds, most European funds are still based and operate out of the UK. We’ve got a great creative industry. We’re talking about non-fungible tokens, world-leading gaming industries, into concepts of metaverse.

1:49:49 We’ve got like all the ingredients, not just for crypto, not just for Web3, but for the metaverse. Like we’re set up. And so if there was ever an argument to say, okay, what could you do post-Brexit? It would be really pro-crypto now That doesn’t mean, that doesn’t mean no regulation. That doesn’t mean turning into Wild West.

1:50:16 You know, I’m okay with them giving warnings to retail. Hey, you could lose your money. It’s a risky investment, like, sensible. I’m okay with them requiring operators, with clarity, to know how they’ve got to behave especially with consumers and retail. So, you know, this is obvious, I think, to anybody sat here, and yet it’s not happened.

1:50:45 Now I think you can excuse, you know, the UK generally, up until now, because we’ve been in a state of paralysis. It’s just basically one party that’s ruled for a decade, imploding, and Brexit was just, you know, an offshoot of that. I think we’re kind of through some of the madness now, and, you know, whether it’s Labour or the Tories. I think they’re probably a lot closer than most people would imagine. They seem generally, both sides seem generally sensible.

1:51:24 And they seem able to now develop an industrial strategy. and I think Web3 should be a fundamental part of that. You know, they’re focusing on clean energy. They’re focusing on semiconductors that’s great, but like, the third one should be Web3, and Like a broader matter, this crypto strategy. So I’m waiting for a phone call.

1:51:48 And this is the crazy thing, right? We’re not, it’s technically, we’re a UK company. We operate globally We’ve got people all over the place. We are, percentage-wise, more in the UK than anywhere else. We’ve got people in Dubai, you know, Berlin, Portugal, US.

1:52:08 I’m the only Brit in the leadership team, you know, but we are based here, right? Where the world’s leading accelerator, the world’s leading Web3 investor, by deals done, top three seed investor generally in tech. I’ve never had anybody from any government or any government agency reach out to me and say, hey, if you want to chat, be great to know, like, just what’s going on. You know, this whole tech visa thing that we’ve had that’s been pulled, I think there’s only one entity that can do tech visas now for tech talent in the UK, and I think that’s Brent Hoberman.

1:52:55 Tech Nation just got shut down. It had its funding plugged. But even then Tech Nation weren’t giving, they couldn’t assess a Web3 founder although they really struggled. So I’m here. I could help the UK, you know.

1:53:13 I’m connected here. There’s many reasons why I’m still in the UK, put it that way, not Dubai or somewhere else, as much as I love to buy. We, you know, we work closely with different jurisdictions. Cayman, for example. Cayman Islands invested into Outlier.

1:53:27 I came in tech, invest into Outlier. They see the opportunity of having that link to the UK and all that comes with it, but also how they’ve managed to, you know, navigate capital markets and insurance industry and everything else, domiciling in you know, a much smaller jurisdiction than the UK. So, you know, the opportunities there for the taking. I, I love to talk to have us, you know, gonna help make these decisions. The problem is they’re going to be around long enough to be able to do anything.

1:54:01 And so I was taught very early on, him in my career, especially when I got into crypto, I was meeting with a few pots. I’ve met with lots of people in Europe, from the commission lab all the way down to prime ministers of various, you know, countries within Europe, and I remember took a photo with one. I won’t say who it was. On arrival, I’m greeted, I’m having, you know, lunch with the Prime Minister. I was quite proud of myself for the photo on Twitter.

1:54:31 Anyway, something like, DM me and said, yeah, you know, you probably don’t want to Photoshop with them. And they said, by the way, generally you probably don’t want photos with any politician, because it’s just a matter of time before they do something stupid, and that photo on the wall is like, in the desk. So I’m not too too hopeful for how politicians are going to understand and navigate this stuff, but at the same time, like, you can’t be in this industry, and you can’t have a platform like you’ve got without being prepared to engage.

1:55:09 It’s just very trying. Yeah, I appreciate you saying that. And yeah, I’m a big fan of this country, of the city I love it so much. I need my show after it, right? Yeah, London Real, and I’m still here.

1:55:23 Yeah, but it would be great to see more talent coming here, more companies here. I mean, I can’t name too many off top of my head. I had standing from Ave here. He’s got to play something. Notting Hill, I think, but there’s not that much and we’d be great, like you said, take care of all these resources in this city.

1:55:39 I mean, incredible. I mean, look what fintech did and all the talent. It’d be great to see a little bit of a proactive nature there. So yeah We’ll have to see. And look, you know, the crazy thing is, that, so with the 200 startups that we work with every year, a big part of what we’re working with them on is where they domicile, like where they set up the equity-based commercial business, whether hiring people or paying taxes, the foundation, of the foundation, which looks after the open source code or the treasury for the kind of token economy.

1:56:15 We’re literally helping them decide where that happens, which jurisdiction. We don’t tell them where. We give them help them make an informed decision, and it’s never the same. But that’s why we’re pretty close to Singapore, and we’re pretty close to Dubai. We’re pretty close to Cayman.

1:56:31 Like, we know, we know all the people we should know there, and we’re invited in to talk to them, because they know that we can influence where, you know, these people set up shop. And once you set up shop, you’re most likely to stay there, right? Because very hard to move people around. The interesting thing is within the UAE, they actually announced this. What was it?

1:56:55 Not gross domestic product. It was gross metaverse product GMP, so they’re going to measure economic growth in the context of the metaverse, in order that kind of gives them a north star for industrial strategy, which is great. And then you look at the UK, and it’s like, we’re talking about semiconductors. I mean, yeah, you know, we should, we should make sure we’re not overly dependent on Taiwan, but like semiconductors, like ensuring something that’s in the UK, like it’s not going to help us in any way.

1:57:29 Yeah, well said. I hope someone’s listening to that. I wanted to finish and ask you what makes a good founder. I heard some words come out of your mouth. They’re more like grit, like curiosity.

1:57:41 I think you said a couple other words, and I know a lot of people watching us are founders, maybe want to be founders, maybe looking for founders to invest in, founders, and like you said, in the future maybe all of us in some way are founders and participants of the web of Web3. Yeah, I think you’re right. So everyone probably wants to pay attention, and I’m kind of curious for your answer, but you got more data than most. Yeah, and you have a personal interest in a lot of these.

1:58:09 Obviously they live in your houses sometimes. Yeah. Yeah, so what makes a good one? Yes, that’s it. And again, I think it is important to say, I think anybody can be a founder.

1:58:17 Everyone has the potential to be a founder. There are just certain founders that are better, right? Better in a sense of impact, societal impact, for better or for worse, and like investment return as an investor now. That doesn’t mean you can go and create a really brilliant lifestyle business, never more than a handful of people, and be very purposeful, and the world’s better for you existing. That won’t get venture capital money, you know.

1:58:50 So we’re kind of much more focused on high-growth companies that are focused on, you know, millions, billions of users, customers So just to kind of preface that. So for that kind of founder, that kind of startup requires, it’s very much based on character. So a lot of people will say purpose personally, both from my own experience and working with founders, I think purpose comes from being a founder. A lot of people will put the purpose out there ahead of what they’re doing to justify what they’re doing, but like really I think purpose comes from immersion into solving a problem, which might just start off as an inconvenience and a pain point, but then becomes something bigger, a bigger purpose.

1:59:45 I actually think the things that make founders great is, and it’s a bit nebulous, but it is that kind of grit It helps. There’s a bit of a chip on the shoulder. I’ve got a huge chip on my shoulder really doesn’t show that much. I’m mellowed now, okay, you know, because I’ve maybe felt like I’ve proven something to myself and maybe others, but for a long time, and I still have a bit of a while. I’m like, if I’m, if we’re not listed in a certain report, I’m pissed off, we’ve done all this stuff, and we’re not in that f***ing report, you know.

2:00:21 So I’m still got that chip on my shoulder a little bit. We’re in the UK we’re not taken seriously because we’re not on the West Coast. Or anyway, that’s personal. Great. But that chip on the shoulder, I think, carries a lot of weight, because it’s something you’ve got, something to prove And so they’re okay with, like, the burden of being a founder.

2:00:42 I think that it’s somebody that is able. Ideally they have it out of the gate, wasn’t my case. They can develop a sense of humility so knowing that they need to ask for help, ask questions, more than kind of think that they’ve got the answer. very expensive to think you’re right. Like, decades can be wasted being right, thinking you’re right.

2:01:17 You know, you can bust a company thinking you’re right. So for us that translates to coachability. So there’s an accelerator, there’s just no point in joining us all right, if they’re not coachable. So by virtue we get founders with humility, because just the act is saying I need an accelerator. I’ll be honest with you, I would have never joined an accelerator, because I thought I would want to admit that I didn’t know it all.

2:01:43 To chair elders, because I started being a founder very young and the ego involved. And I would say myself, a lot of pain had I just gone into an accelerator to not certainly ask this of anyone. So, like, humility, and I think that goes a long way And I think there’s a new one, which has been battle tested in Web3 and I think is going to get even more important as we go into this world that we’ve just been describing. These exponential technologies converging and compounding, which is, it’s kind of the ability to stay focused, you know.

2:02:30 I think we all feel our attention spans are under attack constantly, just on a phone or media. Most people struggle watching a movie and not ending up messing around with their phone. That’s just a base example. You work in Web3, you’ve got 24/7 markets where, you know, just by paying attention to a particular server or Discord channel, Telegram, you can make several million. We’re like 10K, you know, some mean coins just popped off and you, 10,000X, and if you’re not paying attention, you’re going to miss it.

2:03:04 It’s over before it started. So there’s this pressure, like, aside from what you’re building, and as a business you’re in this market where, you know, there’s millions, tons of minutes to be made if you just got the attention, and you can’t do that if you’re really focused on scaling your business and solving a particular problem. Well, so the ability to operate in that, not get overwhelmed, stay focused, which is why then the purpose becomes handy, because if you don’t really have that purpose, or you don’t develop that purpose, you’re just going to be following the attention, like everyone else’s attention.

2:03:46 And I think having the maturity to have a balanced life, to be able to be really successful again. I think in my 20s I was my worst enemy, you know. To counter the stress of being a founder, I was burning the candle at both ends, like drinking more than I should, and, you know, going and trying to escape from the day-to-day, being a founder, which made it harder to be a founder. You know, so some people are blasé. You know, they kind of come with that calm, and, you know, they maybe don’t have all the peccadillos of others, vices of others.

2:04:27 Most people have vices. Yeah, and they’re highly successful ones, usually do, right? Because they’re willing to take risks and push it, which means they do the same in their personal life somehow right? And so it’s very hard to be consistently successful without addressing it. So if you’re a founder and you know that, that’s the thing.

2:04:48 You might be successful, but you likely will lose it all. You’ll, it’ll take a couple of false starts before you kind of, you get your home run. A lot of that just comes down to personal setup. And there’s some basic things to that, like, it’s amazing how many people create a startup, the first startup, when they’ve just had a baby. I’m like, what the f***ing are you doing, you know?

2:05:16 You’re quitting a job or the security You’ve now got another baby. You’re gonna have no sleep. But the people do all the time, is weird. It’s I think it’s like a life change. They have, like, a mini crisis, right?

2:05:32 So this is, like, some basic hygiene things. Like, make sure you just got a little bit of cash in the bank, because not everybody has that luxury. But like, going into adventure is going to be harder. It’s going to take longer you’re probably gonna almost bankrupt yourself in the process. You’re not going to be able to get a mortgage alone, you know your credit profile is going to s***.

2:05:53 Having a little bit of money in the bank to know that you’re good for two months’ rent three months’ rent is just going to make it so much easier. Yeah, it’s fascinating, because you have all these, these metrics that aren’t just company metrics. You’ll be social metrics. I mean, I bet you could probably go really deep on this You could probably, maybe this is in your IP, in your 12-week accelerator, the spouses come in week two, and we have a chat with them, you know, or like, oh yeah, well, your spouse is your co-founder, and they need to really understand that, right?

2:06:27 You know. And it can be incredibly powerful if they’re on board, and it can be, I mean, we’ve seen founders, the relationships broken down in the accelerator. It’s not because they’re an accelerator, but like, that’s because the accelerators, like we make, like, a year’s worth of stuff happen in two, three months. So we always say to founders are you ready to join accelerator? If there’s loose ends, they’re going to unravel pretty quickly.

2:06:54 If you’re in an accelerator you didn’t get on with your founder, there’s a found attention, you’re going to split up in the accelerator, right? Wow. So it really brings things to a head. So yeah, it’s, there’s a You’re right, we are making this very much part of how we assess and support founders Because it’s different to, like, being a VC and doing Series A and B. That’s spreadsheets.

2:07:24 If I put a bit more money here, you know, can it, quite a bit more market share there. You can almost be an accountant, and do that really, really well. And we’re kind of like at the other end of the spectrum, in Web3 right? With regulatory risk, technical risk, business small risk. It’s a fascinating pace to be.

2:07:46 What would you say the people that are interested in taking this journey with you, as far as what should they think about before they do it? How would they go about doing this and contacting you? And then also curious on, just, you know, final thoughts? Yeah. So, as I said, we’re not able to accept the large majority of people apply to the accelerator which is a shame to us.

2:08:13 It’s a shame for the founder. So we’re actually developing something called Atlas. So we use this mountain and nearing an allergy. Don’t ask me why it just happened. I’m not a mountain here, so accelerated just called Basecamp.

2:08:24 We have a later-stage one called Descent, and so we kind of just followed that. Norman culture, now it’s Atlas. You know, you’re kind of, you’re starting your journey. And Atlas turns some of the thinking that we do in program and workshops, in program, it makes it publicly available content, and the idea is that founders can level up in certain areas. So we’re getting a lot of people coming from big tech, or they’re not necessarily Web3 and we spend a lot of time in a program, like, catching them up with just a culture, the language of Web3, you know, let alone the tech and the colored logos.

2:09:08 Yeah, you know, all this stuff, you know, it just seems bizarre and alien if you’re not from it. So it helps people, like, just get a sense for Web3, understand some of the core concepts, some of the kind of core decisioning, and hopefully allows them to know what’s, what they need to be ready to apply. It could be to another accelerator, by the way, you know, in the end in order that when they enter the program, like day one, we’re going a thousand miles per hour, and they’re set up to do it.

2:09:45 So that’s on us, and we’re gonna be releasing more and more of our knowledge almost to the point of open sourcing it, like, not quite everything, but like enough enough that if you had the time, you could probably, you could probably not even have to apply to the subject like, if you do apply to this area, it’s going to happen much quicker. And trust me, time is money, but it’s also, hair, and, you know, everything else. So if you want the accelerated version of that, you know, like high octane you join accelerator, but in theory you could take your time over a year, two years, and just do that content.

2:10:28 So that’s a key thing that we’re going to be doing, and so when people apply and they’re not quite ready, we’ll point them to specific content modules. We think you should go here. Maybe you should consider that. So that’s going to be a huge investment of time and effort for us. How people apply?

2:10:44 You just go to outlierventures.io, Basecamp. You’ll see all the different programs that we’re running Don’t worry too much about that. To be honest, you just apply. The relevant teams will figure out how to kind of triage you into, okay, well, this could be a fit or that could be a fit if it’s not obvious. And then if you’re accepted, we’ve got several investment committees where you know, we bring in more and more competencies across the business.

2:11:15 So you remember I said we run this kind of parallel programs. Each has its own investment committee process, and I think in totality, if you made it all the way to the end, they got accepted, it would have had, that one startup, would have had about 25 different eyes on it from across all the, and opportunity to speak to those people as well. Before we kind of pull the trigger on people in a program, we’re always recruiting. Like, we’re always recruiting, so even when we’re running programs, we’re recruiting for the next program.

2:11:49 So even if a program looks like it’s just closed or it’s just started, just apply. It’s never too early to apply. Worst that’s going to happen is, as I said, you know we’ll try and give you some feedback. You can go away and come back, and it’s also never too late to apply. So, I said, you know, I’ve been primarily talking about early stage, pre-seed, seed, but we do have some late stage projects coming to us.

2:12:17 So they are mature businesses, all the way up to corporate enterprise. We’ve done a spin-out from Boeing, a spin-out from Daimler, that have come to us and said, look, you know, we’ve developed this thing, this Web 3 IP or business line. It kind of doesn’t sit neatly within what we’re doing. We don’t really have the competency to to scale it. Can you help us almost spin it out?

2:12:45 So we’ve had teams that have raised 30, 40, 50 million. They’ve got millions of users, but they’re transitioning from a Web2 model to a Web3 model, so they’re a mature Web2 business, but they’re a Web3 startup, and so we even had teams like that. So there is no late. There’s no too late either. So just apply.

2:13:10 And you know, we’ve just got we’ve got some brilliant people out there. I constantly learn. I constantly feel like an idiot most of the time. I’m really very much the show pony. Now they kind of wheel me out to kind of just regurgitate stuff, but like, the real brain power is we’ve got some analysts.

2:13:30 I don’t even know what they’re talking about half the time. I mean, they’re just so hardcore niche into this particular thing, and I’m like, explain it to me. This is why I love doing a podcast, by the way. I don’t know about you, but I get asked stupid questions, like, and they’re not micro. I’m like you know, they’re my question by pretending I’m asking on behalf of the audience, so I gotta.

2:13:48 I also just, you know, love interviewing Web3 founders that are excelling. Stanley mentions a great one get into their brain, learn from them, but as a business we’ve got, yeah, I’m sure, 100 people if we don’t know the answer, like, we know, we don’t, we deeply understand the question, and we’ll help you get to the answer. It’s fantastic. Look, I just want to say I’m just so happy you’re in London, because now we’ve got something we can be proud about here in Web3, and I’m really glad we had you on to really showcase the incredible work.

2:14:23 And I personally kind of like sticking it to the Silicon Valley folks as well, a little bit, you know, and just showing that’s the place. But yeah, look, you know, I’ve been known David chip on my shoulder in the past as well. Yeah. It gets you through some hard times. And so, look, we’re really excited to support you in any way.

2:14:39 In the last 18 months we’ve been investing in companies through London Real Ventures, and what we try to do is, do a value add by putting the founder in the chair and having a conversation like this. We find that when they can really articulate that vision, which I know you work on for those 12 weeks and get it out there at mass scale, amazing things happen, from partnerships to future investments to those kinds of things, and so we’re still new. But since we’re in the same town, and obviously we’re in a similar space, would love to continue this conversation.

2:15:07 And yeah, I just, it’s amazing what you’re doing here, and this interesting business model that has emerged where you have this crazy amount of data at the point we’re in right now, with this emergence of AI and Web3 happening, and at the cusp, it’s really exciting times, and to see you guys go all in last year. I mean, that’s a big amount of respect, to do that, and to consciously do that, and then to be reaping the rewards of that. It’s a big deal. So thanks, you know, congratulations.

2:15:37 Look, it’s appreciated, and I think, you know, back at you. I think, you know, a platform to help founders articulate what they’re doing, to contextualize it again, having long-form media, like taking the time, actually, to really talk things through go beyond sound bites. I think it’s really important with founders, but also for audiences to know the founder, you know, the person that’s really driving that, the integrity or not. And actually, another good test of a good founder is their ability to articulate the problem.

2:16:16 Wow. So, and that’s sometimes learned, but I think, you know, a platform like this is really valuable to space. I really appreciate. You also platforming Web3 consistently And you know, now kind of putting money into it too, right? And beyond the UK.

2:16:36 I think that’s really valuable to kind of legitimize the space. So thanks to you and the team as well for everything you’ve been doing. No, I appreciate it. I have to thank the political forces to be, because when I lost the race to be mayor of London on May 6, 2021. I knew I needed to make a shift, and I looked at DeFi summer, and with my derivatives background I was like, wait a second, this is happening.

2:16:56 So we went all into the space, and I think my 2 million YouTube subscribers for the first six months were like, what is going on, because that’s all I pretty much had, only Web3 people on, six months. But it’s been an amazing adventure. It’s full of incredible people, optimistic view of the future. And yeah, just looking forward to doing more of it going forward. So well, if you run again, you’ve got my vote.

2:17:20 So what a different world it could have been. Hey, yeah, to be continued on that one. I honestly think that the stuff we’re talking about right now, I could probably do more good. Yeah, in that sense, but I do love this town. So to be continued.

2:17:32 Great. Jamie, really appreciate you. People can follow you on Twitter as well. You’re very active, throwing out ideas, retweeting stuff that’s very topical. And then obviously outlierventures.io to apply, Basecamp, to go into that.

2:17:44 And yeah, if you’re accepted then it’s going to be an amazing ride. So yeah, buckle up, it’s intense. Sounds awesome. All right, Jamie, thank you so much, wishing you all the best. Great, thanks very much.

2:17:56 Thank you.