Denis Nazarov The former Andreessen Horowitz partner is working to build what can be described as a crypto publishing platform, not unlike Medium or Substack. In the new model, readers help fund writers in exchange for NFTs. Mirror.xyz recently raised $10 million from Union Square Ventures, Andresseen Horowitz, and others at a $100 million valuation .
Union Square Ventures Values Crypto Publishing Tool Mirror at $100 Million June 1, 2021 ...... Union Square Ventures, an early backer of the cryptocurrency exchange Coinbase, has invested in crypto publishing tool Mirror.xyz at a $100 million valuation ...... The one-year-old startup has raised at least $10 million across two recent seed financings from investors including USV and Andreessen Horowitz ...... Founded by former Andreessen Horowitz crypto partner Denis Nazarov, Mirror resembles Medium, the blogging tool used for essays and newsletters. It goes a step further by providing tools for writers to crowdfund their projects through the sale of non-fungible tokens, the one-of-a-kind digital items verified via the blockchain. Some writers on Mirror, such as USV co-founder Fred Wilson, have said they like the idea that content on a distributed digital ledger can’t be removed by a tech platform. .
Fred Wilson:
Mirror
Scaling The Ethereum Ecosystem Hiding all of this complexity for the end-user is definitely one of the big opportunities in web3 right now.
Competing To Win Deals Many of these rules are counter intuitive. But they work well for my partners and me. You might say they will only work for you if you are a top tier investor. That may well be true, but you have to act like a top tier investor to become one. So you might as well play the game that way from the start.
Keeping It Simple The point of these stories is that aha moments come around every so often and you just need to let them grab you and take you to a foundational investment. You don’t need to do much due diligence on these. I did none on Twitter, Coinbase, or Dapper. What I did do is use the products, get in the game, feel the power, and get conviction. ....... We publish our investment memos for the world to see. When you read them you will notice that they are basically an articulation of a big idea, what could happen, and in these cases, what did happen. That’s all. No technical diligence (had we done any on Twitter, we would have passed on it), no financial models, no talking to industry experts. Just an aha moment and an idea of what could happen.
The Benefits Of Venture Capital In Web3 Bitcoin did not have or need venture capital. Ethereum did not have or need venture capital. ...... There are many alternatives to venture capital these days, particularly in web3, but there are few, if any, alternatives that stick with you, when times are tough, when a global pandemic hits and you have weeks of cash left, when everything seems lost and you are at rock bottom. .
A Return To Fundamentals Business models need to be sustainable. Teams need to stick together and ship things. The fundamentals need to be in place for a business to succeed. All the money in the world at eye-popping valuations won’t do that for you....... businesses that focus on the fundamentals will succeed in any market, up or down .
A Blistering Pace In the last two years, the VC business has been operating at a blistering pace, the fastest I’ve witnessed in my 35 years in the business (including the 99/00 era). Whether that is because of the opportunity set or the changing dynamics of fundraising (in-person to zoom, endless capital) we will only know in time. ....... Venture investments take many years to unfold. It is a buy and hold business. It is a invest and help business. It is seeding not harvesting. If you start a marathon with a sprint, you are gonna be puking by mile ten. And that’s my concern right now. .
NFPs The first, and most important, NFP is the founder. The person who originally conceived of the opportunity, recruited the first few team members, scoped (and often built) the first product, brings immense value to the business, mostly around long-term vision, setting the culture and values, and knowing when something is “off.” Retaining the founder’s interest in and involvement with the business is critical. There are times when the founder is bringing more difficulty to the business than value and they should depart. But those situations are to be avoided if possible because of how important a founder is to the business. ....... NFPs are usually individual contributors, not managers. The management function is much easier to replace than a uniquely skilled individual. ........ A classic role for an NFP is the CTO of the business. In this role, the person sets the overall technology direction of the business, makes the hardest technical decisions, builds technology themselves, but does not manage the engineering function. In many companies, the CTO has no direct reports. ......... You can find NFPs in any part of the company. They are not limited to technical functions. You can have an NFP in customer service, finance, legal, marketing, really anywhere. The key is to identify them and recognize them, reward them, compensate them, and retain them. ....... I am seeing more and more companies recognize that simply compensating people on the basis of their management level is incorrect and leads to their best people moving into management, underperforming in that role, and departing. ....... NFPs are pretty rare. Most people are easily replaceable given sufficient time to do a proper search. But there are always a few people who are not replaceable. Identifying them and retaining them should be a key goal of the management of the business. .
Why Web3? And web3 enthusiasts, particularly on Twitter, remind me of missionaries trying to recruit the unwashed to their belief system. ....... The tooling is getting better. It reminds me of the early days of web2 in 2001/2002/2003, when we started USV. That was also a time of great cynicism. We almost did not get our first fund raised. Nobody was buying the story we were telling. But of course, that story turned out to be true. And I am confident this one will too.
Web3/Crypto: Why Bother? The first PCs were worse computers than every existing machine. They had less memory, less storage, slower CPUs, less software, couldn’t multitask, etc. But they were better at one dimension: they were cheap. ......... A blockchain is a worse database. It is slower, requires way more storage and compute, doesn’t have customer support, etc. And yet it has one dimension along which it is radically different. No single entity or small group of entities controls it – something people try to convey, albeit poorly, by saying it is “decentralized.” ......... much of the power held by large companies (and by governments) comes from the fact that they operate and control databases ......... When (now Sir) Tim Berners-Lee invented the HyperText Transfer Protocol (HTTP) he unleashed what we now think of as permissionless publishing. Anyone can put up a web page and anyone with a browser can access it. This was an amazing breakthrough, as pretty much all publishing previously had required going through a publisher of some kind, who decided what should and should not be published. ......... As a first approximation all the big powerful internet companies are really database providers. Facebook is a database of people’s profiles, their friend graphs and their status updates. Paypal is a database of people’s account balances. Amazon is a database of SKUs, payment credentials and purchase histories. Google is a database of web pages and query histories. .......... it turned out that permissionless publishing alone was insufficient. We also need permissionless data. .......... pretty much everyone hates their cable company and their electric utility. ....... Web3 can, if properly developed and with the right kind of regulation, provide a meaningful shift in power back to individuals and communities. ....... Web3 will be a platform for innovation that would never come from Facebook, Amazon, Google .
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Denis Nazarov @ A16Z
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Measuring the Success of Mirror Crowdfunding
Investment-backed crypto publishing platform Mirror.xyz aims to change the way writers connect with their audience
