This is the inaugural edition of Digital Dives: The Crypto Plunge, so a brief introduction is warranted. Over 2,500 years ago, a Greek philosopher, Heraclitus, proclaimed that no one ever steps in the same river twicebecause both the person and the waterway are everchanging. The digital asset landscape is an endless stream of disruption. Observing it can be overwhelming, but if you dip in with curiosity, then the experience can refresh and enlighten. These notes, which you’ll receive from us on a weekly basis, are inspired by my own jump into the currents of web3. As I make sense of what’s going on, I hope to engage you in conversation so we can share our perspectives and experience.
Now, for our first plunge…
There’s a noticeable new theme occupying my social media pages. Growing crowds have announced their departure from traditional corporate jobs to go work in web3/crypto. Full disclosure: I recently resigned from my position as an equity derivatives salesperson and have been dabbling in Decentralized Autonomous Organizations (DAOs) for a bit, so it’s possible that this is sampling bias from my echo chamber. Nevertheless, the shift is evident. Here’s a thread from BanklessDAO’s Samantha Marin:
In these early days, DAOs are comprised of entrepreneurs. In exchange for a safety net of health benefits and a regular salary, members roll up their sleeves and get to have an immediate impact on the projects of their choice. These communities are brimming with hustle. Samantha started her Bankless journey composing articles and essays in exchange for crypto. In time, her responsibilities have evolved to include talent scout and general coordinator. When deciding to go at it full-time, she was motivated by her passion for “working with writers from around the world to build a whole new paradigm in publishing”. The perceived rewards of effecting change outweighed the risks.
If you read any of the “Future of Labour” papers published by big management consultancies, you might come away with the impression that enabling remote work is the big issue of the day. While the pandemic has clearly shifted expectations towards flexibility of when and where a job gets done, the underlying forces driving this are more interesting. Consider these recent results from a BCG poll:
Work-life balance has been a top priority for over a decade. As social beings, relationships matter, so it’s not surprising to see those elements rank highly. Enjoying how you earn a living and the people you do that with seems like a pretty good setup for a happy life. Are these factors so elusive in a traditional corporate gig?
Alex Kotliarskyi is a software engineer who, after eight years, left Facebook (Meta) to join a startup called Replit. Inspired by discussions with friends who’d gone through a similar process, he blogged about the experience to help other would-be career changers. Facebook is committed to paying salaries in the top 5% of its peer group. The benefits package is lavish and there’s a certain prestige associated with working at one of the world’s most innovative tech giants too. What rational person would walk away from that? Alex explains:
The equilibrium being sought wasn’t so much about having more time to spend with loved ones etc. He was looking for the satisfaction derived from solving problems he cared about. Facebook is nearly a trillion-dollar enterprise. Over the course of its development, the challenges Alex was tasked with became issues of internal organization and whether a project could scale sufficiently to move the needle.
The “Great Resignation” has been explained as a shift in employee preferences; mostly driven by younger generations. However, the NY Times article referenced below features several high-profile moves into web3 at the executive level. The author seems to suggest that the pull towards crypto is mainly driven by financial gain, but most of the quotes within the piece relate to an opportunity to build the future.
Hayden Capital’s Fred Liu and Dennis Hong from ShawSpring are rising stars on the investment scene. The pair circulate investor letters that outline their capital allocation processes in detail. Their tech-heavy and concentrated portfolios have surely taken a beating in the recent market rout, but both have long-term perspectives underpinned by deep conviction. I saw an interview featuring both PMs last year and something they discussed has stuck with me since:
Portfolio Managers today will tell you that because information flows so freely, the game has changed. Outperformance requires a novel and dynamic approach. Fred and Dennis seek to uncover misunderstood opportunities in the stock market and part of their analysis when trying to identify “the next big thing” comes from watching talent flows. The former stated: “I don't have any views on crypto. It gives me a headache. No laser eyes here.” But the latter is a Coinbase investor and published a deep dive here. Unsurprisingly, this was one of his thesis points:
If it’s so hard to find an edge, then why are these investors giving away their roadmap? Data has been commoditized, but the synthesis of information remains elusive. Tom Morgan’s “The Attention Span” delivers exceptional multi-disciplinary musings. He ties together scores of content to help readers make sense of our increasingly complex world. Not long ago, Tom wrote about the speculative fervor in asset markets and how irrationality can be a good thing because often what seems crazy today, makes total sense in a future rear-view mirror:
Stepping away from a safe career path to devote oneself to an obscure project might seem foolish. However, if we consider that entrepreneurs want to feel like they’re driving change and that upstart organizations offer more opportunity in this regard, then these deviations from the easy road start to make sense. Observing so many builders take the plunge into web3 could be interpreted as a powerful signal. Their early experiments will set the foundation for subsequent growth. Providers of capital to this emergent ecosystem can expect bumps along the way, but some of their investments will fuel dramatic change and be rewarded with spectacular returns.
Whether you’re a builder, analyst, or investor, web3 provides an epic opportunity to drive change. I’m excited to be experiencing this with you. Aquanow is growing rapidly, so we’re on the look for curious and motivated folks to join our team. Feel free to reach out directly or check out the current openings here.
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