Audio Of The Week: A16Z's Alex Rampell
I found this wide ranging interview quite interesting.
Alex has been an entrepreneur and is now an investor.
He is operating at the intersection of traditional fintech and crypto, which is a place USV also often occupies.
is this an actual one-to-one interview, or one of those syndicated formats I remember from radio 1.0 where the voices of interviewer and interviewee were edited together (for maximum distribution across many territories at minimum cost)?’Internet We’.
Sounded like an interview to me?
Thanks for the link.Nice characterization for the lack of understanding of the use cases (few) for blockchain (not withstanding his lack of understanding for the use case of bitcoin as a asset class (how many Main Street or institutional investors would be investors without the the expedition or 100x returns ).Great points of the importance for distribution for any startup.
Well, for the banks FinTech was the first punch, and Crypto is the 2nd punch.
Last time I checked banks are a long long way from a knockout. Has anyone even landed a punch?
Yup. PayPal, Apple Pay, Alipay and scores of FinTech companies have been nibbling at them for years.
In Africa the champ (banks) is stumbling about to go down. They are out in the street trying to get customers. cards and cash are on the way out See Mpesa https://en.m.wikipedia.org/…
Mpesa is a centralized ledger though, yes?You need your phone, you are absolutely paying that bill….so why not use that transaction platform as a financial clearinghouse?Makes sense, but not decentralized or anonymous.
Doesn’t support the one two punch story
This is one of my Top 3 favorite 20MinVC episodes, along with Brian Singerman of Founders Fund and Michael Dearing.
Really liked this episode.
Ok, seriously, is this guy arguing for my side or yours?He has two use cases: organizations that do not want centralized governance & longevity of institutions.Let’s take longevity first, because de-centralized is going to be a firehose. Batter up!The English common law had a solution for longevity of institutions before the English had steam engines. If you think that somehow a major, multi-century intention to preserve monstrous amounts of wealth will go crypto over a trust, that’s great.Lots of innovators use ‘because’ as their main sales pitch. None of them meet with success though.The personalized, legally mandated fiduciary duty of care of managing a trust (enforced by every common law Law Society ever, anywhere) has a moat the size of the English Channel around it.How does anonymity trump a firm, a person and a professional community with centuries of historical credibility when it comes to executing this fiduciary duty?OK de-centralized governance, take the ring off the lumber and drop the rosin bag over there in the on-deck circle. You are next Sluggo.Alex cites VISA as an example of a de-centralized organization that would totes be 100x more awesome if it were Blockchain in the Membrane.OK, here’s the Visa story, for those of you who are interested, as told by the main driver of the organization, Dee Hock: https://www.amazon.com/One-…Yes, its true, I damn well have read a book about every interesting thing in startups in the last 50 years.Here’s the bad news. Alex’s example, VISA, is the only example. VISA is the only Chaordic Organization. No one has ever built any other large organization in this fashion. Yes, there are lots of Coops out there, but the coops are not at all about decentralized governance. They are all about pooling buying power (or, infrequently, supply chain marketing power).And, they are all about centrally governed standards as a requirement for membership in the co-operative. So, credit cards are, literally not figuratively, the only example of this happening in a big way.$6.5T in payment cleared annually, 2.9B users, 40M merchants, 17,000 banks – The Grandmother of all Freaking Unicorns.Oh yeah, one last thing. VISA incorporated in 2007 and bought out Visa Europe in 2016. Its a regular old company. That’s mostly window-dressing. VISA has always been a coop with a centralized, standardized, control based governance model.So, Alex actually does not have an example for one of his two big use cases.And, just for fun…….It seems to me that there is a simple, time tested reason for that outcome. If people had a lot of $ on the line – or the prospect of a lot of $ coming over the transom – they decided that CONTROL OF THE ORGANZATION seemed liked a pretty good idea.In the early days, credit cards were a gong show. People’s dogs got cards mailed to them, verified, credit limits on them, ready to roll. A big reason the banks didn’t want to be on the hook was that they didn’t trust 80% of the other banks not to blow the whole thing up.But once they ironed out the kinks and it blew up, different story.(Expletive deleted here) people – I was 4 startups deep, working my way through a serious series of broken founders and clueless money weasels (and being a startup moron myself) before I got close enough to the BoD of one these clown cars to realize THAT THE SINGLE MOST IMPORTANT THING TO EVERY INVESTOR EVER IS CONTROL OF THE ORGANIZATION.Hell, you can’t drive alignment of interests without control of the organization.You can’t punt the CEO or ‘visionary’ founder without control of the organization.You can’t protect yourself against punitive later financings without control of the organization.How did @fredwilson build the 50,000 MAU of this site anyway?Mainly by lifting the veil on the 100’s of dirty secrets that VCs used, to maintain control of the organization or their investment.No one’s going to use Blockchain to unleash a wave of de-centralized chaos corporations – its techie nirvana rapture. There is zero demand.The $ flooding blockchain is speculative goober cash. In 12 months, that capital will return to its rightful owner.
.World class rant.Well played.JLMwww.themusingsofthebigredca…
This guy is A16Z.Between them & USV, you are talking about creme de la creme world class VC tech investors (lots of other top flight firms are on this too).And, they have nothing to show market demand.Its amazing.I think its fear of a Boogey Man competitor for the finance people and rapture for the true believer ‘tech can change human nature’ folks.Its mind boggling to watch.Or, if you are a cynic, they know they will be first out in the Bigger Fool race.
Wish I could double up-vote.Network Law 1: All networks tend toward centralization even as pure centralization is never sustainable as we know from history. They collapse from the edge in or the core out (or some combination of the two).Network Law 2: Everything is a network.Socrates et al were already discussing these things 2400 years ago without referring to them as networks. Thankfully Plato transcribed it all and gave it a catchy name: The Republic. Incidentally, the concept of network effects was first raised in 1974 at Bell Labs in a paper by Jeffrey Rohlfs http://bit.ly/2DUVwXn some 2350+ years later.
a quick open question based on Alex’s distribution point.If we look at Ethereum and ERC20 ICO tokens and apply Alex’s point about distribution do we see a problem with the Ethereum model going forward?
The one thing they have going for them is insanely easy distribution of the financial vehicle.That is juxtaposed against there total lack of any distribution traction with dapp users.
CONTRIBUTORS:The host (Interviewer) Harry Stebbings takes Brand Ambassador to an entirely different level almost gave up on the interview because of the two minute placement advertisements.Alex Rampell is smart, engaging and easy to follow. The reason he was chosen. He didn’t choose them they chose him. (Smart money has access to talent before the rest of us)Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT
Yes, please do. I regretted not starting on time. Please do as soon as you can