The Exchanges

Q So first of all, I love this idea. Like, I feel like it's one of those ideas that would work, like just would work with a high probability that it would work. How would, how would you go about starting this? Like what, what steps would you take if you actually wanted to start this?

A If I actually wanted to start this, you need the, I mean, you need a doctor and you need a, this is a perfect celebrity business, right? So you need a doctor and you need a celebrity. And I don't think what you, so there's the, there's some Chicago bears, middle linebacker who got hair transplants, bald guy, I forget his name. Um, and he was like plastered all over the billboards. I don't think you need those celebrities. The first thing I would do is I would go get a, you gotta get a doctor. So I looked this up. You need a doctor and you need two assistants basically. Because the way it works is they take the hair out of the back of your head, put it on the front of your head. So you need like the doctor to do that and the assistants to help with that. So that's three employees that you need. You need a physical space. So let's say you're paying a doctor to hunt, you know, maybe let's say 300 K a year. Each assistant is a hundred K years. That's 500 K a year. Uh, maybe you need space in person in New York. So it's 20 K a month. So it's another two 50 years. So that's 750 K a year right there of costs. And then I think what you need is a celebrity. That's like big on Tech Twitter. So I would pick like, uh, you know, you have great hair, but if you were balding, I'd go to a Greg Eisenberg or I'd go to Sam Parr or Austin reef or Kevin Rose, or, you know, maybe I'd go to Tim Ferri…

AI assessment note: “The first thing I would do is I would go get a, you gotta get a doctor.”

Q Could you just using Blockworks as an example? Can you just share like the scale of where you are at? How many people are, are visiting the properties? How big is the audience? How much revenue did you drive from maybe an average user? Just so people get a sense of like similar, what they could expect for building a B to B niche business.

A So Blockworks launched May, 2018. We just started kind of side hustle, ideating on it, December, 2017 officially. Quit our jobs and launched May, 2018. First year of business, 250 K of revenue. Second year of business, two million of revenue. Third year of business, three and a half million. Fourth year, 12 and a half million. Fifth year, 25 and a half million. So, and we, and we didn't raise any venture that whole time. So that was, we had no, so we had no product at the bottom of the funnel. It was all advertising and sponsorship dollars, conferences, podcasts, newsletters, And news. And so that was basically, that was the scale of the media business. Once we hit that scale, we said, and we were spitting off enough cashflow. We said, boom, let's go build a product and raise our first round. So now, so then in May or April, 20, 23, about a year ago, we raised twelve million at a one 35 post money valuation. And that was to basically say, look, we've got this product at the bottom of the funnel. It's growing. Tremendously. We've never spent a dollar on marketing because we already own the relationship with the audience. Let's go put some fuel on the fire and go hire more engineers and, you know, analysts and things like that. So that's basically our business model. And that's some of the, like, I guess the behind the scenes of some of the numbers.

AI assessment note: “First year of business, 250 K of revenue. Second year of business, two million”

Q around DeFi and stuff like that. But yeah, I think there's a lot of opportunities, but then at the same time, I'm like seeing all these like meme coin stuff and it like, to me, it takes away from the industry to take it seriously. So I'm curious, what are your thoughts on meme coins in general? And like, do you consider meme coins of, you know, a venture opportunity?

A Yeah, I'm here, here, I'll give you the, I'll give you both sides of the argument, I think. Here's the meme coin suck argument. Meme coin suck because there's all this attention on crypto now that Bitcoin just broke through its all time high. People are looking back at, at crypto at, you know, there's the Bitcoin halving this week. BlackRock and Fidelity have their Bitcoin ETFs. Like the space is clearly coming back and we're entering another bull market. So all these eyes are on crypto and all we see are these stupid meme coins. That's the, And it's like, guys, like, come like you're doing what we thought you kids would do playing in your stupid little crypto sandbox. You're creating these stupid meme coins. That's the, that's the, that's the meme coins are stupid argument. The meme coins are good argument is just that, um, marketing is harder than ever in today's world. Like finding attention on the internet is nearly impossible today. You can get these quick little hits, maybe a viral tweet or something. If you're, if you're Greg and you know how to tweet, but like for most people, marketing is impossible. And what you're about to see are a lot of meme coins actually turn into real businesses. So you're going to see like the way I think about meme coins right now is there's like the meme coins that you can just kind of speculate on whatever. Everyone's going to have fun with…

AI assessment note: “you're about to see are a lot of meme coins actually turn into real businesses”

Q Yeah. I call that niche of a niche of a niche. Like I, I call it a super niche. So it's like you pick your niche and then Okay. You gotta go deeper. So what's your super niche? The interesting thing is the super niche that you pick turns out it was probably one of the highest value super, like niche of a niche or super niche, right?

A Like if you would have, we got, we got remarkably lucky, lucky, right? Like one of the biggest learnings of this is I think it's much better to be a mediocre entrepreneur or have mediocre products in the, in a extremely fast growing rocket ship industry, then try to be the best entrepreneur In a really bad industry where the, the growth rate is zero, right? Cause when the growth rate's zero, you're basically playing a zero sum game. You're, you're eating away at someone else's business. Crypto grows every year. So the pot, the whole pie is expanding. Um, but yeah, I mean, we, we got, we got lucky picking like the, I mean, the fastest growing industry in the world for the last couple of years.

AI assessment note: “we got lucky picking like the, I mean, the fastest growing industry in the world”

Q And why COO versus, you know, data scientist or CFO or what, what, what makes you think that COO is the most interesting place to start?

A The problem that exists, I'm, I'm only speaking from personal knowledge here is cause block works is the first, you know, I've been running block works for six and a half years. And it was really the first like quotes around this real business. But the problem that we have is, uh, is again, the coordination and communication problem as the company scales. So what I ended up dealing with a lot, and I know other executives and leaders and just other people at the company deal with a lot, Is, hey, what is this person working on this week? Hey, is anyone here working on this? Hey, do we have a document that shows the product roadmap? Hey, do you have any idea what the, um, you know, the ARR was in Q two compared to Q one? What I found is when I step away, let's say someone messages me. I have a tendency to message. I respond very quickly on Slack. If I don't respond for like a day, the problem usually gets solved in some way. And so I think that there's a lot of time that people end up spending inside of companies, just answering these like Menial little questions where, uh, that usually the solution is a company wiki. So what's evolved is like a company wiki. Um, there's some tools for this. I think a lot of people now with startups do it on notion, but that doesn't really solve it because notions pages, even though I want to love them, they end up oftentimes sucking and there's l…

AI assessment note: “the problem that we have is, uh, is again, the coordination and communication problem”

Q Um, what's your, what's your favorite idea on this list? Let's go, let's go to that one.

A There are a couple ideas that I would do if, I think I'd tee this up by basically saying, I think I've seen you talk a lot about this on Twitter and stuff like the nature of building a business is changing today, right? We're at a, we're at a turning point in building companies. And I've seen you tweet about, you know, how I think it makes a lot of sense not to take venture money today. And I think all of that, I completely agree with a lot of those takes. So a lot of these are built on the back of this idea that look in 2008, if you knew how to code, you probably had a better chance of building a SAS product in a space you Maybe didn't know much about compared with someone with deep expertise because you knew how to code and because you could go build this SaaS product because software is just such a powerful thing. But today, because it is so easy to just spin up a company with these SaaS products and with these AI tools, I think deep domain expertise is now actually popular and powerful again. And I think you're going to see this, like this entire generation of founders who basically take that belief that it's super easy to build a company today. And this idea that like maybe the original idea of, Hey, we don't have to be profitable. You know, everyone said we don't have to be profitable. Look at Amazon. There's a whole generation of VCs that invest in companies on that one …

AI assessment note: “So some of the ideas that I really like, there's probably two here.”