Jul 30, 2018 · 28m · 20vc
20VC: Lightspeed Partner Adam Goldberg on Why There Remains No Mass Market Crypto Consumer Product, The Future For The Token Economy, The Good and Bad of Telegram's ICO and Why The Rate of Founder Learning is The Most Important Element A VC Can Assess
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In this episode of The 20 Minute VC, Lightspeed Venture Partners' Adam Goldberg discusses his background in mathematics and venture capital, his core investment thesis on founder learning velocity, and the evolving dynamics of crypto adoption, token economics, and deal structuring.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 36.2% of the talking time here. How this is scored →
Harry as informed peer 4.0 Guest teaching 5.3 Guest disagreement 1.9 Harry pushing back 3.0
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 12:05 Adam rejects trade-off framing as false dichotomies
Adam directly reframes the host's premise by asserting that trade-offs between security and scalability are often false dichotomies that wouldn't be tolerated in traditional software.
Hardest push from Harry ▶ 17:57 Harry demands the skeptical side of the Telegram ICOHarry refuses to let the conversation stay on Telegram's positive metrics and explicitly asks Adam for the reasons for concern and skepticism.
Biggest teaching moment ▶ 13:00 Adam breaks down the convexity problem in token economicsAdam educates the host on a subtle economic flaw in token structures where project reserves deplete precisely as token value increases.
Harry holds his own ▶ 10:44 Harry brings up Kyle Samani's thesis on protocol trade-offsHarry demonstrates deep sector knowledge by quoting Kyle Samani's specific theory on feature copying in crypto to drive a technical discussion.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Adam Goldberg's Journey to Venture Capital | 2 | 5 | 1 | 1 | Harry introduces Adam and asks how he entered venture capital at 22. Adam explains his background entering UC Berkeley at age 13 for math, going to Stanford for computer science, working at Palantir, Dropbox, and Rubrik before joining Lightspeed. | |
| Evaluating Founder Growth Mindset and Career Iteration | 4 | 4 | 1 | 3 | Harry asks insightful follow-up questions regarding leading indicators of rapid learning in founders. Adam explains the concept of slope versus Y-intercept and the growth mindset when facing hardship. | |
| Obstacles to Mass Market Consumer Crypto Adoption | 3 | 7 | 2 | 2 | Harry asks why no mass-market crypto consumer product exists yet. Adam delivers a structured educational response covering throughput bottlenecks, poor game mechanics, lack of stablecoin units of account, and mistaking implementation features for secular trends. | |
| Crypto Trade-Offs, Community Ownership, and Security Tests | 6 | 5 | 3 | 4 | Harry cites Kyle Samani's thesis about trade-offs and asks how one owns a community in crypto. Adam reframes security versus scalability trade-offs as false dichotomies and offers a database substitution test for crypto ideas. | |
| Navigating Token Economics, Convexity, and Deal Structuring | 5 | 6 | 2 | 4 | Adam details token economics and the convexity issue where projects deplete token reserves over time. Harry asks direct questions about Lightspeed's upcoming template term sheet for crypto deals and dual-token mechanisms. | |
| Analyzing Telegram's ICO and Founder Trade-Offs in Crypto | 5 | 6 | 3 | 5 | Harry pushes Adam to explain the counter-thesis and concerns regarding Telegram's massive ICO. Adam lays out trade-offs regarding regulatory risk, engineering versus marketing team balance, and launching tokens prior to product release. | |
| The Shift From Crypto White Papers to Pitch Decks and Pro Formas | 3 | 4 | 1 | 2 | Adam discusses the evolution from white papers to pitch decks and pro forma financial underwriting. Harry transitions into the rapid-fire round covering favorite books, crypto advice, diversity side letters, and quantum computing. |
Statements from this episode (14)
Goldberg: Founder learning speed matters far more than prior experience
“Everyone starts as a first-time founder, so how quickly you learn matters much more than how many times you've done it before.”
Goldberg: CryptoKitties Single-Handedly Clogged the Ethereum Blockchain
“CryptoKitties alone clogged up the Ethereum blockchain.”
Goldberg: Games Can Run Centralized While Storing Cosmetics On-Chain
“You could build a game like Fortnite in a centralized manner while having its cosmetic assets live on the blockchain.”
Goldberg: Stablecoins Are Critical for E-Commerce Adoption in Crypto
“So this is why stable coins are extremely important. It's hard to have an e-commerce or e-commerce use case without a unit of account.”
Goldberg: Crypto Defensibility Requires Owning the Community
“Features can be copied, and that's the nature of most open source worlds, and really what that comes down to is you need to own the community, because in this Blockchain world. Anyone can try to fork away from you.”
Goldberg: Replace 'Blockchain' With 'Database' as a Startup Test
“If you're building something on the blockchain, is it as interesting if you just use the word database instead of ledger or blockchain? And if you do, then you don't need to be building on the blockchain.”
Goldberg: Value in crypto projects accrues to equity or tokens, rarely both
“Value will usually accrue into either equity or a token network. It's very rarely both, but if it is both, it's probably like a 95%, five percent split.”
Lightspeed is drafting a template term sheet for early crypto rounds
“So we haven't released it yet, but we are in processing Of writing up a template term sheet for both fungible token and non fungible token projects at the formation stage.”
Goldberg invested in an unannounced project using a dual-token structure
“One interesting approach that I've seen that's used by at least one of the projects I've invested in, although unfortunately it's one that hasn't announced, is to have two separate tokens. One that's a payment coin, just for the utility of the service itself, …”
Goldberg: Marketing-heavy crypto teams are built for hype, not longevity
“I think that a lot of teams are extremely marketing heavy in this world, and that's generally the wrong approach for long-term success, but that may generate a lot of hype in the short term. I generally bias towards engineering heavy teams because that's how y…”
Goldberg: Crypto Projects Need Pitch Decks Alongside Academic White Papers
“Decks are a very efficient way to communicate, and you still need to iron out all the details of what you're doing, and you should have a white paper, but you need to have a friendlier entry point for investors, employees, and partners alike”
Goldberg: Crypto Operations Will Shift From Token Reserves To Traditional Financial Models
“I think that the days of saying we're going to reserve 30% of the tokens and that will fund our operations for perpetuity or over, I think it will look a lot more like traditional models.”