Juan Benet I Building Web3 Startups | Protocol Labs I Pragma Tokyo 2023

foreign [Music] Juan is the founder of protocol labs and similar to the theme that we have planned for the rest of the day we want to talk about how things got started from some people and organizations to figure a lot of things out for the first time to Now set the path forward for others to to follow and learn from in this space we're going to talk about how protocol Labs filecoin ipfs started how they had to navigate through a lot of tough challenges from their initial beginnings and how we can use all those learnings to think about what does it mean to start a startup now in crypto so without further Ado please welcome Juan on stage [Applause] thanks for having me really excited to be here uh just always fantastic to meet a lot of the people in the East Global Community this is the strongest community in all of web 3 that is creating the future so as we saw from Master's presentation just now um secured finance and so many other major projects in web3 have started in youth Global hackathons and events and so on so look forward to meeting all of you and seeing what you are going to go and build so that's you know what I'm here to talk about stop okay well I want to talk about a lot of how things started and what we can do to apply all those principles and learnings to to people who are thinking about starting companies take us back to 10 years ago when you were at Stanford and you wanted to build a interplanetary file system yeah uh so I got into the crypto space fairly early um like I had seen Bitcoin come through uh while I was a student in Stanford uh as an undergrad I along with many other people mined a bunch of it in like computer clusters and so on um lost all of it like I don't know where it ended up uh like probably some wallet file uh sitting in some old computer somewhere um and that was kind of like in 2010 or so on 2019 2010 but I'd seen many other cryptocurrencies come and go um they're just always remain Fringe um and it wasn't really until 2013 2012 2013 when Bitcoin started um uh growing a lot and breaking through a bunch of the barriers that I got more uh more involved uh so I've been working on a lot of different kinds of things for a while like I've been working in distributed systems had done some Wireless research I had been um always super inspired by peer-to-peer networks I'd seen the successes of things like BitTorrent and Skype and show that showed enormous promise in being able to leverage all of the resources in large-scale networks but it seemed like they always had these problems around markets like they um it was always kind of a sharing economy structure that allowed a lot of freeloading and there were lots of really great papers showing that the basic game theory of these systems didn't quite work out and Skype was especially interesting example because it enabled a whole massive telephony Network at a massive company level to be built out of this peer-to-peer systems and they used it by by leveraging bandwidth uh in an uneven way um they the nodes that Skype users ran in corporate networks ended up doing most of the traffic load but none of those users got compensated because they weren't using a market structure it was just kind of freeloading and so that always struck me as something that needed to be fixed without with a good Market structure but anyway so um I've been working on these kind of distributed systems for moving around information and especially with machine learning data sets I was really interested in machine learning data sets are enormous uh moving around even today moving around models and data sets is difficult um and that pushed me to kind of combine a bunch of the ideas that ended up leading to ipfs the interplanetary file system it was just kind of like a hey what if you could merge git with BitTorrent you know how hard could this be let's go build it and you know 10 years in like we're still like doing an enormous amount of work um but yeah it was kind of like the the beginning and as Bitcoin was starting to take off um I wanted to kind of uh imbue the ipfs network with the ability to have a market associated with it but it was very clear that these had to be two separate protocols that ipfs and Falcon had to be two separate things because you wanted the ability to address and move content independent of the incentive structure uh and so falcoin began as a separate project could you explain that a bit more deeply like what does that mean as an example and and why is that distinction important yeah so ipfs uh gives you a set of rules for how you model data and how you move the data but really enables any incentive to enable the data to move so for example you might use um you know a set of programs and software to move data just in your own computers so you don't want to have to like transact with yourself and pay yourself for moving around files within your own devices and sometimes you end up in Sharing structures that work really well and you want to just enable that kind of incentive structured work or you might just want to be able to hire somebody without using crypto to store your stuff so think of the normal centralized Cloud systems being able to use content addressing and use the power of ipfs without having to use crypto so think of ipfs as mapping to http it's just a way of kind of addressing the data and moving it and then filecoin is a layer on top of that that says okay great like let's build a crypto incentivized Network to backup all of your data and serve it to users and so on so it's kind of like the equivalent of Amazon S3 it's kind of the surveys that stores and distributes your data on top of on that provide with us that's very helpful so my next natural question is well this is where we are now but when we're thinking about all these things did you not see what other projects were around like why why did you choose to start something on your own like what made you actually decide that I need to do this thing because nobody else is doing again what was that moment yeah so so this was very early like um into any 2013 um 2012 2013 ethereum didn't quite exist yet uh like vitalik was like crashing in my house uh while he was going around pitching uh uh Bitcoin colored coins to people and like just starting noodling on on ethereum um so it was clear that Bitcoin and surrounding projects were really powerful and had opened up the door to cryptocurrencies and digital assets and so on and there was a couple decades of really good literature on what you could do with um with these kinds of markets especially the agoric papers from Mark Miller and Eric Drexler and others so that kind of pioneered a ton of the thinking for what eventually our entire industry is making um but there weren't like Breakthrough projects I think ethereum was like the first one that really um started to succeed in in a major way like well beyond what what Bitcoin and other surrounding projects uh plan to do but kind of by that point like the the thing that sort of set Falcon and its own path to be us uh its own network um were two things one is the the proof-of-work structure of Bitcoin is is extremely useful as a way to collect tons of resources around the world it's just that um ideally you should be doing something useful and valuable and so the the kind of core consensus mechanism of falcoin required the proof of work structure but applied to using some having some useful work so you know there's two answers to the proof of work is wasteful problem one is get rid of it and move to proof of stake the other is use that structure to do something really valuable and really useful and that's kind of the path that that falcoin took the other reason is like for a while we considered um kind of building filecoin as what what we call the virtual chain this is way before L2 Square thing on top of ethereum but then we calculated how many transactions we would need and and the the load that we would put in the ethereum chain and we were over all of the total ethereum bandwidth capacity so we just like that wasn't an option so we ended up having to um split out into into a separate chain but who knows in the future like my prediction is that most of these chains are gonna recombine in super interesting ways and they'll like re-home like some l1s will turn into L2 some l2s will turn into l1s and it won't matter that much in the long term that's a very interesting I want to dig more into that later but um so one side effect of that approach is that you basically have to figure a lot of it out on your own and uh you've been pioneering a lot of r d a lot of massive open source projects likely P2P of course ipfs and a handful of other actually I want you to answer that tell me what you have to invent to get to here yeah so yeah um we tend to spawn a ton of projects so protocolabs is that well named and that we just you know start investigating and creating new tons of new protocols lipidappy is one of them one collection of protocols that came out of ipfs uh to build like this peer-to-peer stack that a lot of other users could use now ethereum is built on it uh it's one of one great win after um sort of like many years uh there's other protocols like a more recent one is drand um so D Rand is a a Randomness Beacon uh that's using threshold cryptography to give you secure random numbers um the fotcoin main chain is is secured by dran's Randomness um and you know there's a bunch of other other protocols that we've we built over space time guarantees yeah oh yeah so Justin falcoin alone there were so many innovations that we had to build so we had to solve this really hard problem in cryptography where you want to be able to prove that a user you know that a source provider has a particular set of data like files that they're storing for users but you want to prove that they're not kind of um you want to prove independence of replicas where you you ideally want to um hire the same Source provider to store multiple copies of the same thing or sorry you want to hire many Source providers to store the copies of the same thing and you want them to not collude and just store one um because you want redundancy in the network and there's a bunch of different purchases doing this and one of the key features for us was that also made sure to to use resources and was incompressible and this is required for the consensus piece and that led us down a path of proofs of space and for sort of durability and eventually coming up with a new type of proof that we named proof of replication and so there's a whole field of cryptography study now around proofs of replication that we had to like invent uh that didn't exist before uh that we had to come up with and had to um uh structure in order to kind of do this and as part of that included uh figuring out how to do these efficiently how to apply zero knowledge proofs to be able to do these um you know in at the throughput required for filecoin and so there's an enormous amount of kind of innovation invention required in just getting the basics of of file going off the ground let alone kind of like how do you create a market like a storage Market with like uh deals between storage providers and clients and how do you think about um uh doing and maintaining those proofs over time uh how do you uh enable like lots of different uh data to be either commingled in different sectors and so on so yeah a lot of a lot of things got developed this is the Carl Sagan quota to to create a perfect apple pie you have to invent the universe yeah that's right yeah yeah and uh well that's just on the technical stuff there's a lot of things that you figure out on all the other pieces um to share some of the other logistical legal regulatory yeah incorporate all those things that you basically pave the path for the rest of the ecosystem and what went into all those decision making yeah so in kind of like in 20 16 2017 um we had to sort of like chart a pathway to being able to there were a lot of kind of um public token sales and so on happening um it was really not clear like what the regulatory status of them was I think even today like um the world has been ping-ponging you back and forth between um uh you know Clarity on this and so on and especially in some areas it Still Remains pretty unclear but we have to sort of like thread the needle between a lot of concerns and try to find a really solid and sound way to do it and so we ended up having to do a bunch of legal research and end up inventing a thing called the Saft uh which is now an instrument that tons of other organizations and networks have used to sort of uh fundraise uh to be able to launch their launch their networks and so and then we had to build an entire um fundraising platform that we uh the coin list I'm sure people have probably heard about it and or seen it and that entire thing got invented and built at PL um as part of the as part of launching uh launching falcoin and so yeah it was a lot of all you wanted to do was store files okay all I wanted to do was to you know move around some machine learning data sets with like Git Version Control level of fidelity so well I think it's wonderful because now those have become somewhat standards and people get to use it and this is a perfect segue for us to talk about what somebody starting a company now doesn't have to do or figure out and uh and what I want to do is kind of start off by kind of getting your take on what is the current opportunity in this space are you still excited to build things in what three yeah has everything invented yet so look I think I think um there are two big things happening in like the two most important movements happening in the world right now um are the AI machine learning movement and crypto and web3 so like those two areas are the most transformative branches of all of what humanity is doing um and and I say that because they're going to radically reshape how our entire um social structures and economies and organize stations work so sort of like the leverage there is like you know taking the nth derivative of everything else it's like it's it's you end up having super powerful Primitives that end up reshaping how so many other fields or Industries or groups of people are going to organize and do things and so it's an extremely exciting exciting time uh the way I sort of think about web3 and kind of where we are um is that the sort of like for a bunch of reasons um some of them technical some of them social some of them um kind of product oriented or economics oriented um crypto web 3 have taken a lot longer than say web2 and it's sort of a closer web3 is kind of ending up closer to kind of the web one and web 2 segments put together in that the ways sort of think of web3 today um is kind of like a 97 or 90 1998 era where you had seen a bunch of things that sort of worked and scaled and worked but everything is still like really janky like things still don't work super smoothly um things are really slow like I don't know if you raise your hand if like you you tried using the internet in like 95 or 97 or whatever um you know I don't even know how many people weren't alive at that point um I'm old uh so if you remember like this was like pretty painful right like you tried to load a web page and it would take a while to like stream down and load line by line jpeg yeah exactly like uh line by jpeg you try to search for something and you have to go to like page 16 and Alta Vista or something it was just awful um and but but yet it was so magical and powerful and everybody kind of saw how powerful it was it was just not quite there um and it was not at all obvious what it would be like and this is like Primo pretty smartphones and pre-iphone pre all the social networks free the big search engines pre-dsl pre-dsl pre Amazon so all of those really major things that we can now see as like the internet Giants came way after that so I think in web3 we're kind of in a similar time period where a lot of the really important breakthrough things are going to be built over the next five to 15 years not not like the next two or three five to fifteen years we'll still see major things being built five to ten years out that are going to reshape the world so so let's dig into more of that so is that an argument for you're saying that things just need to be faster we just need better or safer infrastructure are you saying we haven't seen some Primitives that we will invent that will end up letting us do more things creatively yeah I think it's a lot of things I think it's major things in the infrastructure have to improve so one of them is scalability like analogous to the web one era things have to get really fast and really smooth user experiences have to get dramatically better you know the web one user experiences were pretty terrible the web 2 user experience has got dramatically better accessibility needs to improve a lot um people couldn't predict that the web was really going to change once people got the smartphones like it was a huge shift once smartphones got diffused all of the web applications and web services Drew dramatically like you they went from tens of millions to then suddenly hundreds of millions or billions of users um and with lots of activity daily um and so the the notion of putting the internet in your pocket we need some kind of equivalent thing to that for crypto where accessibility has to um shift from from the how it is now to something like dramatically easier structure to then enable uh billions of people around the world to use all these Primitives like what we have today is like just not good enough there's a lot of work to do there and then beyond that I think that there's lots of different applications that are use case specific that haven't been invented yet so things like um you know things like Netflix and all the social networks and so on like all those were answers to concrete problems and concrete product instantiations will have a whole wave of things like that in the web 3 and crypto space we still don't have super strong web3 social networks yet right like they're they're just starting they're still very small they're still like kind of clunky like they don't work perfectly and so those once they arrive they're gonna radically shift how things work um and we'll see a whole bunch of other other kinds of applications like that I think games are an interesting area where um I think we now have the right Primitives to be able to build some really compelling game experiences where the currencies and the smart contracts and so on have a strong reason to be there where like the governance of these worlds of these Virtual Worlds um can be done like well and correctly and according to the community playing the playing the game and so I think those environments are kind of like we're just now reaching the cusp of them being being possible so I think there's gonna be a lot of stuff there you've kind of already started talking about this thing so so maybe let's uh talk more about what are some other interesting themes or opportunities in kind of the subcategories that you see that either are under addressed or things that you think are just too crowded that people should not spend too much time on second one is a bit harder but also you start with the first so I think um and I'll speak maybe like the a lot of the problems that that I know a lot about and then maybe some about things that I know less about so I think on the infrastructure layer um we still haven't seen the kind of um like data transfer networks really take off so we have helium and like that's probably the strongest one um but I think we're going to get to build infrastructure that is going to enable all of the connectivity for like the lower layer of the internet to be governed by uh smart contracts and crypto Primitives and just the utility of just replacing the old way of doing things with this structure is just dramatically better um that plus like wireless mesh networks or satellite networks think of like a starling type of equivalent but that's crypto powered and crypto financed um then things like getting to chain scalability so today um we're you know reaching for tens of thousands or hundreds of thousands of transactions per second on each chain we need to be reaching for billions or trillions of transactions per second that's the real Benchmark the moment where you can have something like all of Twitter built on chain not off chain and do this like super complex stance of like off chain and Australian on-chain data I'm talking about all of Twitter Twitter every single tweet every single like every single View and recording that there was a view all of that state tracked with the certainty of a blockchain that's the kind of scalability that we need and most people will be like that's impossible like no it's totally possible um scaling laws work the the current centralized Cloud systems have structures that are similar um and they make it work uh it's just a kind of nuanced way of how you get to it so I think like there's lots of layer stuff in the infrastructure layer um then kind of more in the applications area um especially around um I think there's a lot of opportunities to build um really strong computational networks around data so we haven't yet seen um lots of lots of applications where you can run arbitrary compute jobs over over data so think of things like Amazon Lambda or easy to or you know kubernetes and so on like those projects are just beginning and those computational networks I think are going to be big this year and next year I think we're going to see number of projects start in that area um some of those will have zero knowledge involved so think of like so your knowledge Amazon Lambda style things this is a project called lurk that's aiming to do this like CK Zeke Lambda um and there's a project called back allow that's trying to do um kind of like this computer data sort of stuff but there's going to be many of these many of these kinds of networks just think of being able to do everything you do today in like a normal Cloud systems but in a crypto powered way so that also includes databases nobody has really tried hard to do a um a crypto native database from scratch what does it look like to build a super scalable database with like SQL level capabilities but all over uh crypto data like once we have something like that you then are able to build all kinds of other applications um on top and becomes easy to build things like Twitter so I guess out of curiosity what would be the features of a crypto native database that's relational or yeah so I think yeah it depends on how you could always build it like non-relational inside and build relational top or vice versa um what you want like there's just a standard traditional um database semantics of like asset which is atomicity um consistency Integrity um forgot what the data is data availability maybe I'm not sure plus you want like very large scalability so you want to be able to have the same kind of semantics as bigtable and in Google cloud or or other similar databases where it really is infinitely scalable just scale to as many machines as you add into it um and with low latency retrieval so in low latency consistency so you should be able to write to it and be able to read out um with consistency within in less than a second um and so like that's hard hard problem especially with at high scale but if we can do that then you can build things like um you know Twitter or um all the social networks games entire Virtual Worlds and so on because if you have those parameters underneath you can layer all of the other SQL like semantics on top and then you get to translate all of the stuff that people have built so far in kind of the web 2 world directly on top of web3 and now you can have you know the you know Instagrams of the world and so on be fully powered by what we're Primitives so that's that thing of that area is like I think super super important so when you talk about something like this thing are we are we compromising on things still being decentralized or is it just the fact that we distinct we distinguish on chain which to me is more of a comment in auditability versus it being an open network no I think I think that um you don't have to compromise on this being sort of off chain or on chain um or you don't have to compromise in the centralization I think the way you get to super high scalability in terms of throughput and load latency is that you apply um uh just zoning and regions to the problem um and you um model the you model the cost and risk of being in a region that's very small so I'll describe an approach that we're taking data centers yeah exactly so so you sort of like match the you have to match the the structure um of physics right at the end of the day like whatever virtual world model you have has to leverage the utility of the physical world um the way that we think about it in ipfs is I think all the interplanetary principle like your network should work just as well between Earth and Mars as it does in between a phone and a Data Center and so on um and so just because you have Assist like you shouldn't have to wait until a transaction clears in Mars to be able to use it while you're on earth right like that's a you know four to eight minute delay depending on the year on the time of year um and so like that's just totally unacceptable and like unfortunately that's where blockchains are today you have to wait four to eight minutes it's totally bogus right and so we need to get dramatically better here um and you can do this by breaking up into regions and connecting these things so you have different levels of consistency depending on where you're writing and reading from um so we're talking about interplanetary and intra-planetary file systems yeah exactly yeah so funny story we have we're working on a project trying to tackle some of these things called interplanetary consensus and we didn't start with that name but we ended up like renaming it that way because it just sort of like fit the model of like oh you should be able to have consensus on Earth and like um you know Asia and Japan and Tokyo specifically uh and just kind of think of a you know fractal structure uh so let's focus on the founders here what do you see as an opportunity for Founders to build interesting companies in Japan so yeah great question so um I have a ton of affinity for Japan and Japanese culture and so on I sort of grew up um with lots of different aspects of Japanese culture uh influencing me and like my life and so on uh just a lot massive amounts of creativity when it comes to things like all the different games all the different media stories um dedications are like excellent craftsmanship um extremely good experiences and so I think um right as cryptos getting into the cusp of being able to do games this is a moment where um that like that whole skill set that has been well honed in Japan could be massively applicable so we're talking about building Next Generation games in Virtual Worlds and so on um that are now web 3 and blockchain powered so I think that's one whole area another area I think is around D5 and just all of the areas of Finance as myself was just saying like most of D5 today is just about one small segment of um of money markets around simple loans we haven't even touched all of the other kinds of stacks of financial products that could be built and the things that can give a great Capital stack for organizations and corporations and so on so Japan has a tremendously Rich history in terms of creating structures for organizations has some of the most successful companies on the planet many many interesting ways of organizing like the keratsu which is a structure for corporations that are related to each other in a large supply chain like you can model all of those things with crypto and you can do that across borders and in with a new kind of jurisdiction so I think everything relating to defy and um and just the capital stack I think Japan could be extremely well positioned for um and then other kinds of media so of course all of the kind of music and video production all of those areas are super rich and vibrant in in Japan and I think um that could be a super strong area here too so this translates well to nfts and maybe even mixing with generative AI where you think of being able to enable creators with just super powerful tools to be able to create media that is super compelling and super super interesting to experience uh so yeah I think all those areas are super viable for um mixing the skill set now of course dependence also great at a bunch of the other things so those are just some that came to came to mind you usually talk to a lot of companies or Founders that are thinking about starting companies what are kind of common things or patterns that you notice where either they're stuck or you want to kind of tell them that they shouldn't spend extra time on this one versus focusing on X um any general advice we can start off with and we'll kind of focus on what specifically applies to Japan yes I think um so maybe speaking generally first for a moment um and then yeah and then we'll sort of think about Japan specifically um when starting a a new project that can turn into a startup um I think I think it's pretty important to do a couple things one is learn an enormous amount and just become a super learner where no matter what problem you might be facing you have to get really good at figuring out how to solve it how to look up online how to solve that problem and then doing it and just kind of being able to do this on a really fast iteration Loop is is I think one of the most critical entrepreneurial skill sets that you can develop because you will face thousands or tens of thousands of problems all of which are themselves not that hard some of them are might be hard but you just have to figure out how to solve them solve them you know just good enough to to kind of move on and solve the next one so I think that's one key thing um then when you think about projects just think about the the identical sort of like model this is a pipeline where you kind of start by kind of in early stages thinking about potential ideas and you're kind of bouncing around ideas either just yourself or with friends or colleagues and you're thinking about potential things that could turn into compelling projects or you're just playing around and hacking on something and then suddenly you realize that something is valuable just kind of be open-minded and explore a lot of possible paths and keep kind of breaking down why they may or may not work and you kind of want to get to something that just feels super compelling that you can see will work and seems maybe counterintuitive it's just kind of in the cusp of it's not going to be super crowded so it's not so obvious that there are you know a thousand other people trying to do the same thing um but not so um rare and difficult that it's going to be almost impossible to pull it off and so there's kind of this sweet spot where it just became possible or maybe you have a nuanced approach or kind of a secret on how um why this might be really valuable and really possible now um and or an approach on how to do do it like that's kind of The Sweet Spot of an idea that that maybe has a potential um uh has legs and you want to think about kind of the the the scale of where it could be where it could apply right so some projects have um small scales and projects have large scale and you should decide where what kind of project you want to build like startups are meant for really fast large-scale types of things there are other really valuable projects and contributions that you can make that are not startups and so um just how you approach your project sort of depends a little bit on the scale so think of like an indie game um I would say something like Minecraft massively successful was not a startup right at the very beginning was kind of a labor of love that um in the approach that um uh that I took to build something like Minecraft was not the same approach that you would take to build um kind of a startup oriented projects so I think like figure out what kind of project you want to build to then follow an approach that that might work once you kind of experiment with ideas you can get into kind of like trying to build early prototypes in early versions this is where hackathons are crucial hackathons give you the opportunity to build a thing with in a limited time you don't have time to kind of like be make the perfect version you have to do something by a deadline and then you have to make it compelling to other people you have to like make a thing that other people will look at and say oh yeah that's interesting that's cool like I kind of want to try that and and so hackathons give you this perfect version of kind of testing out your idea you have to build a thing end to end you have to be able to to sell it to other people in terms of sell the vision for it and you have to present it well and has to work it has to be a demo of like something that you could you could actually use and so once that I think hackathons are a great way to try things that might turn into startups and then from there you can find something that could be really compelling um and you can decide whether or not to kind of pursue it further and and then go into deeper validation of saying hey is there actually a product here could this be could this serve a market could could this get into um uh kind of could this learning to like a minimum viable product that a lot of people might want to use to then turn into a larger project that you could then spend many months or years of your life actually building and then from there you have like now what could make um could make a startup uh no those are those two this actually goes right into my next question which was I think oftentimes people misunderstand what MVP means could you share more about what is a good framework to understand what a minimal viable product is and what it isn't but also if you are in a position where you kind of feel like you have something or 10 people really like it how do you know that this is worth spending time on yeah so um minimum viable product right so it has to be a product it has to be a thing that you can point to and use and it's going to like do something useful for somebody it has to solve a problem for someone and and hopefully for a lot of people but ideally for a small community at first it has to be um viable which means that it has to be able to solve the problem well enough that people want to use it that bar is actually surprisingly High the viability thing is is actually quite hard to get to Once once you once you have that viability you can sort of like see it and measure it by when people try to use the product they start um they really kind of have to keep using the product even though it might be like really ugly or janky or painful even they might have like huge gas fees uh or like be very hard to use and painful it's just like so valuable to them that they they have to keep using it um and then kind of like a minimum part it's about letting you um relax and not build like the maximum viable product or or something that's really hard to build it just forces you to just get enough of the Bare Bones right so I tend to approach this for by trying to build a minimum product that's not yet valuable first like it's just a very Bare Bones end-to-end thing that has just enough of each component to actually work um often this might mean like a good facade but then the the back end of the project yeah exactly a hackathon project uh you know interesting story here uh stripe uh was first like this really nice front end in front of another payment processor behind the scenes and so it had like it really was like a like a minimum viable product and they had just gotten the right experience but everything underneath like they didn't had hadn't built out uh but that was good enough to get started um and so I think think of it kind of like that you you build a thing end to end um you don't let yourself try to get to completion on anything because it's going to take you so long it's going to take you months or years to build that so instead you kind of want to time bound it and say what can you build in a weekend what can you build in a week what can you build in a month that will be kind of like good enough on on several aspects to just get close enough to solving the problem well enough for a group like initially you might solve your own problem you might solve a problem for yourself or for a community that you know really well and initially it might be such that like you're solving a problem for one out of a thousand people that means like you know 999 people just don't want to use a product well enough yet but that one person like sees the promise in this thing and that gives you a hook to to then be able to expand that from a minimum product into a minimum viable product and that difference is once you start getting sort of like a threshold or a percentage conversion and people experiencing the product and wanting to stick with it and wanting to use it so once you sort of like reach kind of like a like a you know some some percentage that's you know really specific to each product like products vary in their conversion rates like something like a social network has a much higher conversion rate than you know I don't know some a more dedicated product like a finance app like a finance application or or even like a sharing economy like a ride hailing app or something like that um so it's really kind of tuned what viability means is tuned to the product um but you really kind of want to start with a minimum possible thing and then test it figure out um try it with users get feedback from them like ask like 10 50 100 people to try it and give you feedback and then integrate the common feedback and address that first like initially people will give you a hundred you know 10 to 100 points of feedback if you address all of them you're going to take too long um instead kind of ask a bunch of people and find the common things and solve those first and keep trying and eventually you'll you'll get to like a sweet spot where suddenly it kind of passes this threshold of utility where suddenly people start sticking with it and say oh like it's still like it's still not great but now it's sort of like good enough for me to actually use it and actually solve a problem that I have and that's when you start getting product Market fit and the deeper you go into that and the more and more people want to use it you have like stronger viability and you you have stronger product Market fit and like that's the that's the difference between kind of an early hackathon project and something that is now kind of startup ready is is finding that kind of like minimum product to like starting to have the minimum viable products many startups start before they truly have something with great product Market fit but they have kind of like an early version of a minimum viable product um or at least kind of like a very strong concept for one um and and that's kind of like the sweet spot for for when you can really start a startup and then from there like the first year or two usually is about getting to that product Market fit so you have built precisely what the market needs to be able to to actually solve their problem I think that's really good advice in terms of a good framework to think about it uh you've been part of Y combinator and there's a lot of things that they instill on just make something people want yes and that is such stage advice by the way like it's just kind of baffling how amazingly simple and straightforward and good advice that is make something people want like it's just as simple as that like that's the the most valuable piece of advice about building a startup ever um and you have to make something that people want like when they get exposed to it they have to like it's not just that they might need it they actually have to want to use it they have to like want to seek it and like that is really key sorry to interrupt you uh the the I guess the one challenge that I think we face in our in our space is oftentimes compared to kind of web 2 we don't really have a lot of exact mappings that apply uh if you end up inventing uh 100x runtime multiplier on some ZK computational thing maybe you can figure out a way to kind of how to productize it but if you're playing with some new primitive or just a new concept of like I gotta now tell people what a new organization type is uh you don't really have a lot of things to learn from so what advice you have for Founders where they're in a situation where they have to decide between figuring it on their own the hard way and seeing if they get to create a vertical or as new industry versus just copying something that someone has done before or just repeating something that they've seen work in this space and is there a good framework that you have yeah to think between those two it's a great question so um the way to sort of think about is like think of it like an optimization problem or another way to put it put it is like think of a you know a a large surface like a you know landscape with Hills and Valleys and so on and sort of like the world is stuck somewhere think of like water um and you can imagine some way in which the world could be better and you can kind of visualize a different Valley where like the water wants to flow down into but there's a bunch of activation energy in pushing like the water up a hill so that it can flow down or in like digging a valley into the mountain to be able to allow the water to flow down and all that takes effort if there's a huge mountain range it'll take you many months or years to like tunnel through if it's like a small enough thing it might just not be obvious to a lot of people and you have stumbled into a secret or there was like a huge tectonic shift that suddenly made something possible and not a lot of people have noticed it yet and so just think about it visualizing that visualizing that way um and because in some cases there might be a lot of effort but the world will be so much better that it's worth taking on this huge amount of effort to do it in other cases the world is not going to be that much better and there's going to have a huge amount of effort to do it so like don't do that in other cases you'll find like small amounts of efforts that will get you pretty far and kind of the the best model here is to kind of think of ways where you can like tunnel down to like a slightly better world and bring a community with you and then keep doing this iteratively and that's that's kind of like recruiting different user bases or communities that will help build something over time and so you know the the space of possibility is really large you could build a new you know ZK acceleration uh primitive or something like that um or or a fundamental new branch of cryptography or computer science that might take five to ten years to take on um but the value there could be is just so big that you should just go and do that but you have to kind of understand and visualize why it's going to be so compelling and so valuable down the road like the early zero knowledge proofs work um you know 10 20 years ago um the the authors and inventors knew when understood this was going to be a really important primitive down the road it just maybe took a lot longer to realize and they may have expected you can be off by decades sometimes and decades uh centuries sometimes like the the key math enable enabling uh pairing cryptography yeah yeah the field stuff and it was like early elliptic curves came from like early Greeks and then the the the the the the veil pairing was in like the early 1940s or something or 19 like around then and it wasn't used until like early you know 2000s with like BLS signatures and then um eventually in threshold crypto and and so on So like um it's not always clear how something is going to end up being really valuable um but especially when you're in the realm of startups you have a short timeline you don't have a century to for this to take on like that's not a startup that's more academic work or um creating a movement or something like that um when you're building a startup you have a very short limited time you have months maybe a year or two to get the thing working well enough and so you have to kind of pick your your problem well to know that you're going to have enough traction and success to show value to a whole Community such that you can then kind of either raise funding to to to um then kind of build a product or you can start which is even better get early Revenue that can then funnel and fund the creation of this one really cool thing about crypto is that our community understands the value of public goods way more than many other communities way more than kind of all of the private Venture Capital world and so you can now create the equivalent of kind of public goods oriented startups in our community this is super new this is not a kind of traditional Tech thing this is not traditional Silicon Valley thing this is very different you can you can now create the equivalent of startups that are building public goods funded at those scales it is super new super interesting um it's just kind of like you're saying new kinds of organizational structures not quite a lot figured out and you're going to have to be like solving a bunch of side 10 gentle problems along the way so it's kind of new and valuable but you're going to have to spend a bunch of energy on defining new things like all of the groups doing dowel oriented things like building Dallas is very different than building companies and it comes with different kinds of challenges some benefits some con some um negatives and it's just a different thing and it's not a well-trodden path so it's not really well figured out and so if you choose to go that path um you have to understand like what you're getting yourself into and why it's better for your particular thing and same goes for any kind of new organizational structure when you're building a server you want to kind of limit the amount of time that you're going to spend not solving the core problem because you're going to encounter so much stuff to do that you want to kind of try and severely limit the amount of effort they have to put in to get really successful things now in some cases it might be really worth it like a new organizational type is sort of required for your thing but only do that if it's really truly required if it's a nice to have you have to cut it like you it prioritize your time and be able to cut out the things that are not not essential uh if anybody has any questions for Juan please line up here we're gonna start taking a few questions in a minute one question before we go into the audience is at this point the the space exists which wasn't true 10 years ago or even seven years ago yet to still explain to AVC what blockchain is and uh now we have a whole separate New World um yeah I remember having to go around pitching people on like oh yeah we'll create a currency and we will take a stake in that currency and then that'll be valuable and like that was like seen as like a like I was like I was crazy I remember having conversations with A6 and Z of all of all groups and and you know that was like a foreign foreign concept at the time but we're no longer in that world uh what are some resources that Founders can take advantage of now to actually anywhere from bootstrap to Kickstart this uh this process of starting companies in what three yeah so um I would sort of map a whole bunch of programs associated with the pipeline so first off uh hackathons I would start there this is a great place to try building your things um and just experiment build uh try out different products eventually you'll find one that you think is really compelling it could be different takes on the same idea idea or it could be a bunch of different ideas hackathons also help you connect and find other people that you might click with and form a team with especially in remote in the remote World especially in web 3 hackathons give you a really good equivalent to what might have been classes in a university or something like that which is kind of like a common way by which a lot of startups get started kind of like classmates that got to know each other you can have the sort of similar kind of experience in remote communities of developers and and builders that um that get to know each other and get to build with each other online so hackathon's first then after that I think this area is not really well served that's the kind of like um going from the hackathon to the early startup um this area is where you're trying to to kind of testify ability or something and validate the idea um this is where um there are a bunch of Grants so we um FPL run a program called Next Step grants for projects kind of that are post hackathon phase but before accelerators to just help give people small grants that can enable them to kind of work full-time on this thing for a few weeks just to see if if that'll be um strong enough to get to get to Startup um after that phase uh that's where accelerator programs exist where you can kind of apply to an accelerator um and you give some you know some amount of equity of your um of your idea for some initial funding to be able to work on it full-time for months at a time uh and to validate help fundraise uh turn it into into a proper business or a company or network or protocol or whatever you end up doing there's a number of different accelerators that can apply to you um a you know strong plug for um graph paper cap um graphical capital I think um is a new accelerator that um Gabe who used to run tachyon just started in like that so super compelling um project gave us phenomenal um has helped tons of Founders in the space has helped Masa um and and so many other uh groups in the in the global Community um and also uh long hash um it's a number of other accelerators that um that that uh are in the space and that that are doing tremendously good good work and so I think think of those as the three categories of programs like first hackathons second kind of Grants to help tide you over to help get to kind of accelerate your stage and then accelerators now from there like that's when you know there's a whole other set of stages around kind of fundraising for different rounds like C Series a and so so on and the equivalents in the crypto World which you know don't map to that exactly um but those are kind of like way later so like don't worry about any of that now just kind of worry about these first initial three stages like hackathon Readiness validate the product and then get to kind of like accelerator stage awesome Let's uh let's go to some of our audience questions thanks Juan um Jeff from curve grid super fascinating thanks for sharing your thoughts if I think of public goods uh and decentralized storage ipfs file coin I mean one example of course is the internet archive archive.org and we heard at Devcon last year Brewster Cal the founder of archive.org talk about some of their experiments with ipfs I guess looking to the Future like what are the the things that would it would take to kind of uh you know the Innovations or the things that need to need to be developed to be able to put the 99 petabytes of archive.org data on ipfs and then even looking further than that like if we think even you know further to the Future where where do we go from somebody like literally AWS with S3 moving from their proprietary back end much as companies did you know move from proprietary operating systems and and networks to Linux and the internet what would it take for AWS to move all of S3 onto ipfs in the future and the question is around again Innovation and start like maybe it's not protocol Labs that builds that but what could what things could maybe future Founders be building along that road map yeah um there's like three three to four questions there so I'm gonna like maybe answer a few one um yeah so uh May 1st on the on the internet active one so the interactive is one of the best public goods on the Internet it's like this phenomenal service and project and and community of people who are helping us back up all of the important information on the internet and tons of books and other media as well so it's an amazing Library um of content providing free access um to all this public knowledge for all uh for free forever it's just an amazing probably good um and yeah so we've been working with them for um uh actually just when I started ipfs I immediately went to talk to Rooster uh about all this and he was actually super helpful in helping guide me and other people in our community and how to navigate the landscape so we're actually doing what you just said we're already onboarding the internet archive itself the entire um we're gonna onboard the entire thing but we're you know starting with smaller segments we're onboarding chunks of the inner archive onto Falcon and from there providing access to all of that data through ipfs so that's um we also want to make sure there's many replicas of all of the archives content in a bunch of places in the world um for you know good redundancy reasons uh good faster access in certain areas um and so on and so yeah that that project is is um is ongoing the the next part of that is kind of getting the entire interfaces and uis and so on to shift like that's a much harder problem just moving kind of the data and making the data accessible is like step one um step two is kind of like reshaping the um the applications and whatnot your other question about um uh AWS and so on I wouldn't I don't think it's likely that AWS itself would switch over because it's they're they really enjoy the the having that as a business it's kind of like would um with like Alta Vista has switched over to Google or something like that right and like no like the answer is like they didn't want to kind of give off it was directly competitive and so um it is possible that eventually they might be able it might make sense for them to do it and build a layer on top um but I don't think that'll make sense for a long time um I think what's much more likely is that uh users of S3 migrate off because the the cost of S3 actually has a very large margin Amazon really likes selling this idea that there isn't a margin there and that they run everything down to like the bare minimum and that may be true in some parts of the business definitely not true storage yeah definitely not not true in storage and bandwidth bandwidth especially like they charge through the nose um for for any kind of egress fees like just people like yeah so I think of that just not having that kind of egoist problem it's just the big one of the biggest selling points where people wanted to use filecoin like so many of the users that have lots of data come to filecoin because they they think that's egregious and they're not they don't want to pay that awesome thank you welcome to the next question hey I'm glad we shifted a little to mentioning public goods and I love that you mentioned that it's it's a very web three thing to build public goods and feel like there is attention being paid to it and there is some funding that's funneling down to it so uh I specifically want to ask about hyper certs like how do you envision hyper certs playing a meaningful role in this and what do you what do you want to see built on top of hyper shirts yeah great question so um for everyone in the audience hyper certs are a specific um uh concrete instantiation of a of a of a thing called an impact certificate um which is a way of like describing a certain um impact and creating a token associated with that or like a like a concrete um uh object that you can associate with that impact think of it kind of like how currency bottles utility think of a hyper cert as bottling impact um and so and making it tradable so so for example um you could go and like um plant 10 trees and then mint a certificate that you have done that and then you could sell that and so if you need to money to eat you could sell the fact that you've planted 10 trees as a public good to somebody that cares about that not everyone's going to care about that not everyone in the world is going to want to pay you for planting 10 trees but some people will because some people really care about public goods in certain communities and especially governments and nation states might really care about that so I think like hypersource is one of the most important Innovations in the entire space um and I think it's it's which is kind of like why we're spending a lot of time and effort working in in those projects I think that's an enormous amount of potential and I think it's very early days I think the kinds of things that and you can think of carbon credits as a special case version that worked at scale in the world in the kind of traditional Finance world just hyperservices should work in a very general way um I think what we need right now is we now have the standard we now have implementations of the early versions We just adjusted the pilot with get coin I think next next things that I think will be important is finding something where there's a community that really cares about funding a certain set of work like there's a set of buyers of these hyperserts and there's a sort of parties that want to do the work and where these two communities are different where hyper search are really enabling that market to form like that impact Market to to exist um and so the carbon I wouldn't go after carbon credits because that already exists and it's very difficult to kind of shift that over I would find some other area where there's people that want to cause certain good and and then there's people that want to do that good and they don't have the resources to do it and so like that facilitating creating a market just for that I think would be could be extremely extremely useful um and then just helping helping popularize the idea I think we're very early stages here and so I think just helping a lot more people know about that about it would be would be really good all right so if you contributed to web3 beach we were the first project to Mint hyper certs on optimism I'm really stoked about that so go claim your hyper search awesome if you contributed awesome all right next question so um fence pogolabs for all the Innovations so my question is uh how is fundraising different for like public goods around the startup you mentioned like why committee is super successful but then there's definitely like post and cons so we see models or whatever business yeah great question so um most startups work through private Capital right so that means a money and other financial instruments for the private gain of individuals and small organizations or like funds or kind of groups of people we need an equivalent for public Capital so public Capital exists you have nation states with massive amounts of public Capital being donated to and run and allocated through huge institutions that that fund tons of organizations on the planet like we're talking hundreds of billions of dollars a year in or government grants yeah like take all the budget in all of the governments um and Union and like that's public Capital what we're missing is the in-between layer of how do you go from these massive scale Capital to the individuals or small groups doing the work and building better rails that are kind of like similar to how Venture Capital works and so we need the analog of venture capital to exist for public Capital um uh at pl we think about this as we call it Network capital and so it's kind of like Venture Capital but Network capital of helping networks organize a subset of the resources and fun things that are good for that Network and so it's very localized in terms of it's It's the pool of resources of a network for the purpose of improving that Network um because that's the public good right a public good is not for it's hard to imagine the public good for everyone in the world uh except maybe energy um or sorry not everyone in the universe except maybe energy um you probably go to a really localized to a network it's like they affect a specific Network or a specific group more than they they help others and so that Network usually can pay for the provisioning of that public good and so that's where we need to kind of invent a stack of like funds um we need the equivalent of like an early stage VC fund or a seed fund like a better Co-op structure to kind of help yeah sustain and and we need like the equivalent of carry so you need the equivalent of being able to profit from doing good public goods allocation and like we need that primitive to exist and it would be normal we need to make it to be normal and good to for people to profit a lot from doing good work like today today for whatever reason the world kind of split into like private Capital you can make a lot of money public Capital you must make no money and like you you must have no money if you have any money like you're clearly bad and like uh and like that's a big mistake I think that we need to enable the world we ideally should make it more profitable for people to do good work for the the world right and so we want public Capital to be more more valuable and more profitable for everybody and that'll cause a lot of people to to do more good things the hard part is kind of how do you check that something is really good and really legit awesome let's do our last question and then we'll move on to the next presentation thank you thank you thank you for such inspiring talks um a lot of my questions were actually addressed by the other guys so I want to ask another one um I'm a huge fan of Douglas inglebard and intelligence augmentation and so I wonder what kind of capabilities you might like to see most augmented for the benefit of humanity this is a great question and um Doug Engelbert was super intellectual to me too um read a lot of the early works that the demo was so so influential to me this is there's a thing called the mother of all demos it's on YouTube you can go watch it it's like super influential early 60s where I think early 60s work um showing like the beginning of a lot of the personal Computing stuff um stuff that you know including video conferencing with many parties like multiple cursors like figma was like the first van yeah yeah figma is like the finally like realize that part of a dog angleboard Vision um you know 50 60 years later um so that was influential highly recommend that everyone go see it it's like an hour or two so so important um so talking about wanted to uh wrote this amazing set of papers also go read those about really the promise of computers to um greatly augment Humanity's knowledge and ability to coordinate and so it was all about kind of like augmentation of human coordination and knowledge and so on and he had a thing called like the DKR like the dynamic knowledge repository and and so on um there's lots of really good ideas so I would even start there lots of those ideas have not yet been realized so that's a great area um what I would like to see so what I tend to think about now is that there's probably two two veins I guess three veins of things um one is like all of the machine learning and AI methods and there's gonna be a ton there but I'm gonna leave that out of this this discussion because probably really well covered by Twitter threads on gpd4 right now um just there's a lot of there that I kind of would want to talk about there's a second area that they'll talk about more which is around brain machine interfaces so a really big problem is between how we interface with computers like the keyboards and screens are just too slow we now need to break that barrier and be able to interconnect with computers much faster and so everything relating to like how do we break that barrier I think is super critical so this means funding work for um being able to see a much greater density so like either con like think think of like implants to do like vision of digital media like kind of like full Virtual World level type of media uh so so input and output and then the other output is like how do you interconnect the brain to computers to be able to do output at a much higher rate than you know typing with your thumbs or whatever I think those two things are going to be um the brain machine interfaces has the most promise in ensuring Humanity's survival like I'm just going to describe it that way and then the more Krypton web3 oriented stuff is um I think there's just an enormous amount of potential for good Court better coordination Primitives with really easy to use interfaces I'll throw an idea that I've been thinking about for a while so Twitter the value of Twitter is that you have one platform that a lot of people use that's running the same exact software to visualize the thing and everyone has relatively the same experience using the feed and it has a ton of people in this like highly constrained environment being able to process tons of information right it's a hive mind um Twitter is like the productized version of a huge hype mind being able to have small headlines to then be able to click more and see threads and to kind of signal boost ideas so it's like our first but not at first but like a very valuable Collective brain what Twitter is missing is the way to now turn that into stronger action so today you can do polls pulse is like polls likes and retweets are like The Primitives that you have to be able to interact in that hype mind you can click a link to another interface and that sucks like the conversion rate on that is terrible almost nobody will click through and go do something else instead what I would really like to have is a Twitter where you can embed a widget that has some capabilities and you have some restrictions on what you can do but you have much more accessibility and you make that programmable so you can then build a bunch of coordination tooling that then it would immediately be accessible to billions of people not that like would be accessible behind a click wall login sign up you know that drop-off is terrible instead make it just like a like a pull directly in the in the Euro Atomic yeah exactly I think that could be super valuable and it would enable millions of people to coordinate and take action together like that and I think if we did that now I think tons of problems could be solved much faster awesome thank you very much Juan thank you so much for joining us and looking forward to having more startups going to be built into space yeah thank you so much for having me this was great and you know come talk to me or um James or Ruben who are back there um about starting companies in the space uh we love to support and help um and a number of our team is going to be here throughout the hackathon so I'll go talk to them all right see you thanks everybody [Applause]