Chasing a Perfect Storm

Posted on August 3, 2018. Filed under: Uncategorized |

Every few years a deep change in technology, capital markets, society, or regulation catalyzes meaningful flow of power and value from large incumbents to new market entrants. These catalysts are the lifeblood of venture capital returns and the beginning of every thesis I have ever had as an early stage technology investor. As a general rule, my approach is to look for the “native” systems and companies created in a catalyst’s wake that could not have existed prior to it’s occurrence. These native systems are the purest expression of the underlying change and are often the most valuable when they grow up. Today, we are in a moment of deep flux. As of October 2017, it is possible that not only has a single catalyst emerged along one of the above axis, but rather that we are in a perfect storm where deep change is present in all four of these catalyzing realms, simultaneously.

From a technology standpoint, the advent of blockchain technology looks like a fundamental development that has and will enable multiple $10B+ market cap systems to develop where they could not have previously. Recent technical catalysts on the magnitude of this development might include the advent of social networking technology in 2002 (~$1 Trillion of value creation/capture), the development of the iPhone and mainstream mobile computing in 2007 (well over $1 Trillion of value creation/capture), and not much else.

This technical breakthrough not only challenges the large, centralized incumbents that dominate the technology landscape today, but importantly also the capital markets that surround them. A new financing mechanism, business model, and organizational structure has emerged around blockchain technology, known as tokens, and their issuance and behavior has impacted the early stage capital markets on as fundamental a level as, say the accelerator model and Y-combinator did in the early 2000’s. Venture Capital firms, hedge funds, angel investors, and entrepreneurs are reeling and reorganizing in response to this development and new entrants are capitalizing on de novo market positions built from scratch for this new reality.

From a societal perspective, both domestically and internationally, bottom up dissatisfaction and lack of trust in the powers that be, coupled with modern communication tools assisting in self organization and public communication, has led to a state of social instability. Tensions between the “haves”, the “have nots”, and the “used to haves” are at a boiling point and existing societal systems and infrastructure are being challenged daily and with ever increasing veracity. Further, we have entered a “post truth” world where we can no longer take an image, a public figure, or a piece of content at face value. Many of the upstack systems built on a premise that facts exist can and will be rewritten. The crowd, whatever faction of which you choose, wants change and increasingly has the tools to exert force against our organizing systems, namely private enterprises and government structures. These tools, to date, have largely been social media and messaging platforms that have organized and amplified voices, whereas Blockchain represents a new ability to align and coordinate economic force within these now networked and organized segments of the population. With coordinated information, behavior, and economics, incumbent challenging ideas, movements, and services stand to accelerate the flow of value toward new entrants and those that finance them.

From a regulatory standpoint, the United States has an administration that is ripping up the carpet on which we have stood for over almost a decade. Value promises to change hands in highly regulated arenas such as insurance, healthcare, transportation and energy, as well as tangential markets that feel the ripple effects of administrative 180s. In addition, new regulation around capital markets and cryptocurrencies is being written and defined in real time. Decisions made here will have a profound effect on the early stage capital markets, themselves, as well as the very formation of entities that birth new technology.

Exciting times!

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On $80M Series A rounds…

Posted on July 11, 2018. Filed under: Uncategorized |

I read Dan Primack’s term sheet email most days. Increasingly I read things like “xx startup raised $80M Series A” and I’ve been trying to make sense of it. I am an early stage investor. I love the beginning and I love thinking about the future with people in their first years of building and testing and learning. When I started working in venture capital in 2006, the standard high profile Series A deal was $3-5M, split between two well regarded firms. A competitive seed round in 2008 was $500-700K at $4 or $5 Pre. Obviously, things have changed. I’m not the first to suggest that constraints and sobriety yield success in the nascent stages of development. USV and others have been singing that song forever, and I tend to agree. I’ve also lived raising $10M when I should have raised $3M and I’ve seen what happens when the money gets ahead of the stage of development. I think the purest early stage investor in me believes that less is more and the discipline that comes with is healthy, but the market is the market, and a founder rightly questions this position. “Why would I raise $5M when for the same dilution I could raise $10M?” There are some arguments around valuations getting ahead of you, and down rounds, and limited outcome options when you do this, but if you are upside thinking, the $10M is attractive. Extrapolate that out, and the $30M, $50M, $80M war chest at onset can also be attractive.

Increasing fund sizes for early stage investors is driving this early stage round bloat. Most marquee firms are raising $1 Billion+ funds now and a $10M early stage check from a % of fund standpoint, economically feels to them like writing $3-5M in a past company in a past smaller fund at the same stage of development. Yes, the outcomes might be increasing in size, and this behavior might be justifiable both for scaled firms and aggressive entrepreneurs, but it leaves me wondering if and how you can play the purist, sober game while everyone else is buying into the creep.

If you have been in venture for a while, you know that these dynamics move in cycles as opposed to straight lines. Normal 5 years ago, isn’t normal today, and what’s normal today won’t be normal 5 years from now. It’s not clear to me when the market is getting ahead of itself on the risk/reward curve whether or not holding the line on what you know is healthy and normal is the right approach or not. There’s an argument that you have to invest through all stages in the cycle and a smaller check size product is “off market” in today’s terms. And there’s an argument for not chasing the inflated financings, staying disciplined, slowing down if need be, and allowing for self selection in the founders and companies with whom you work. i don’t think there’s a right answer to this question, but a $50M or $80M Series A round is something I want no part of. I don’t care if Softbank, or A16Z, or whoever else does…

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Team Design

Posted on May 10, 2018. Filed under: Uncategorized |

I don’t hear people talk about building a team as a design problem, but I think it is. It’s not just butts in seats for sure, but it’s more than that. When i design teams, I tend to look at each candidate as a specific shape. The challenge is to design a group where all the shapes fit together and align with the goals and strategy for the group. I think this concept often gets simplified into “culture fit” but I don’t think culture is a homogenous constant…rather I see it as an amalgamation of individual personalities and aptitudes. Something I’ve come to realize is that there is more than one construction of shapes that get you to your desired end state. I’ve learned not to be attached to an initial design, to assemble one piece at a team, and then evolve the design as the shapes come together. I try to anticipate a few moves ahead. I ask myself, is this a shape that fits well with many other shapes, or is it a “pointy shape” that fits with a much smaller set. Ideally, I try to sequence the pieces so that flexible shapes come in first, and pointy shapes later. Both can be hugely valuable, but adding pointy shapes at the beginning limits the pool of subsequent additions. Pointy shapes don’t feel foundational to me, and a strong foundation is everything when attracting the right talent to accomplish something special.

I love the design challenge of building early teams. It doesn’t feel like recruiting to me. It feels like searching for puzzle pieces that fit together. When working on a puzzle, I always start by sifting through the entire box and finding the four corners. That’s my foundation. Yes, I’ll sort a bit and start to group things as I see them, but I won’t start assembling anything until I’ve got the corners. They orient you. After the corners come the border, which further solidifies the foundation of all future work. From there, you can work on different pieces of the puzzle simultaneously…make progress, but not become attached to finding a specific piece for a specific section at a specific time. I’ve come to realize that designing a team is fluid. When you become attached to a specific construction or a specific outcome the design challenge becomes intractable.

Actually, as I think about it, I feel like the design challenge looks more like taking two puzzles, mixing up all the pieces, and then trying to complete one of them from the combined set. No matter how beautiful, not every piece is going to be right for the puzzle at hand. Sometimes you have to sift through both boxes, recognize a piece, see that it’s attractive or high value, but be ok if it’s from a puzzle you may or may not get to once you complete the one at hand.

Sometimes it can be emotional, finding a corner and realizing it’s from the wrong puzzle, but life is long and orienting outside of your immediate focus is valuable too. Building teams is a career long pursuit. You will or won’t get to the puzzle that needs that corner, but it’s good to know where corners are independent of which one your working on.

I think it takes practice to see people’s true shape and extrapolate out what they and you together are capable of. That’s experience and craft and is tough to learn without seeing a lot…but when you get over the hurdle, it’s like turning the light on after you’ve been working in the dark.

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Amazing people

Posted on April 25, 2018. Filed under: Uncategorized |

Yesterday I went for a run on the west side highway with my wife Olivia. For those of you who don’t live in New York, the running path along the west side highway is on the Hudson River and there’s a beautiful park that goes from the tip of manhattan up to the George Washington Bridge. I’d guess hundreds of thousands of people run or walk or cycle there everyday.

As we were making our way south on yesterday’s run, a cyclist started riding alongside us as we ran, and he looked over to my wife and said “you are an amazing person.” She was taken back for a moment, and then we realized he had been riding behind us for a while and then it made sense. You see, when we run along the river, my wife will break off from our pace whenever she sees a piece of plastic or an empty water bottle…she’ll swoop down and pick up someone else’s garbage and run with it until we pass a trash can where she disposes of it and catches back up with me.

Olivia is a student of sustainability. She cares deeply about the health of our environment, and the thought of more plastic washing into the ocean is just too much for her to stomach…so she cleans it up…every time…without hesitation. Sometimes I wonder why I don’t help her…the answer is partly because my vision isn’t as good as hers, so she always spots the plastic first and zips off to get it, and partly it’s because while she is focussed on the well being of the planet and all beings that inhabit it, I’m in my head, thinking about whatever is going on in my life or my work…and I just am not conscious of it until she disappears from my side and reappears with someone else’s crumpled starbucks cup in her hand.

My wife is selfless. I interact with amazing people all day long. We all revere the people who found Ethereum or run Amazon as incredible…unique…one of one type people…but amazing comes in many forms…and I agree with the cyclist…my wife is unusual and unique and absolutely an amazing person. Somewhere along the way Olivia’s selflessness became so routine that I normalized it…that’s just who she is…but this unusual interaction with the cyclist on the path reminded me just how unusual and one of one and incredible she is. I guess you could say I’m married to the Jeff Bezos of selflessness…and I’m pretty proud of that 🙂

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Is this bear ever gonna hibernate?

Posted on April 19, 2018. Filed under: Uncategorized |

I had a beer last night with a friend who has been instrumental in the formation of a number of well known blockchain protocols, and he asked me a question that I thought worth writing about. He basically said that we’ve been in a bear market for 4 or 5 months, and it reminds him of other bear markets in crypto (i.e. 2014-2016), and he was wondering if I thought this would be a similar duration to the prior, or if mainstream investors would buoy the aggregate market cap of crypto in the near term. My response, was that, despite recent runs, it feels to me like all participants in the ecosystem that are focussed on the here and now, have pulled back and will stay on the sidelines until some other catalyst pulls them back in. I don’t think the droves of new Coinbase and Robinhood users are going to take the price of Bitcoin from $8200 to $20,000. I also think that most of the crypto hedge funds that spun up opportunistically to capture LP demand are here and now focussed, losing money, and have pulled back in a similar way. I don’t see these cryptofunds driving the market into a bull scenario either.

So here and now thinkers have their foot closer to the break than the gas, but engineers, and builders, and venture capitalists in the business of investing on a 10 year time horizon are still flooring it…even more so than 6 months ago. This is almost certainly a more healthy dynamic for a nascent technology and ecosystem, and the investments that these longer time horizon participants are making, be they labor or capital investments, are undoubtedly going to grow the total value of this space on a 5-10 year timescale.

I think the here and now thinkers trying to time the next run should be looking more to institutional inflows to reverse a bear market…which is not a new idea. There has long been the narrative than institutional money is coming in as soon as custody and some other surrounding infrastructure problems are solved, and I think it was largely posited that those inflows would accrue to “large market cap” coins like Bitcoin and Ethereum. In practice, I think that shape of institutional money is still largely on the sidelines, while venture capital institutions represent the most significant institutional inflows to the space so far. Interestingly, venture capital is not flowing to large market cap coins because it’s very difficult to persuade LPs that venture managers are or should be in the business of buying public securities (or public non-securities depending on where you net out from a regulatory standpoint). Every top tier VC just got finished convincing LPs to let them buy tokens instead of equity, but surely they still must be in the business of proprietary access and early deal making. That requirement to “buy privately” and a requirement for funds ranging in size form $300M-$2B to put enough capital to work in any given investment to “move the needle”, has led to a clear bubble in what I’d call the “2nd presale” where hot projects are raising tens to hundreds of millions of dollars pre-float, at valuations that have not yet reconciled with the recent haircut in publicly traded tokens. Going forward, I expect these venture inflows to get more sophisticated and confident in how and where they build their ownership positions. I think the “2nd presale” will cool meaningfully and it’s likely that venture capital will accrue to publicly traded tokens going forward…it’s just not happening yet (with a few exceptions).

So I think that redistribution of institutional venture capital out of the private bubble and into a forward rationalized public market, if not already rationalized, coupled with the sovereign fund, pension fund, endowment type inflows that have long been posited, is the most likely path to the next bull market, at which point, as always, retail and mainstream investors will follow and amplify the run, and I have no idea on what timeframe that happens, but it feels at least a year out from now. X factors like geopolitical instability, public equity market corrections, government currency manipulation, and the like, I think are also reasonable candidates to catalyze another run, but it’s pretty hard to count on those events.

I am not a here and now investor, I’m not in it for a quick buck, I don’t actively trade crypto, and I have an incomplete view of the wall st side of this market, so take all this with a grain of salt, but high level it does appear to me that the right long term human and financial capital is flowing deeply into the crypto ecosystem, and therefore on some longer time frame, meaningful value is going to come out the other side. I would not want to be in the business of giving my LPs near term exposure to this space, because you are a genius one year and a complete flop the next, but I feel pretty good about assembling the right 5-10 year exposure. That’s how I’ve allocated my personal capital and it’s how I’d do it for others if they asked me to.

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Society is Breaking

Posted on April 11, 2018. Filed under: Uncategorized |

This is a disorienting moment where society is reeling to adjust to significant contextual changes to the way things have been. Change happens all the time, driven by technology and regulation and capital markets and media and a host of other factors, but it doesn’t always happen at a layer that is fundamental to our concepts of self and reality. There are many implications of having a completely networked society, where information flows quickly and to far reaches, but perhaps the most salient is that we are not equipped to process the volume and velocity of what is coming at us today. That’s a narrative that you’ve heard for a number of years, as expressed by such concepts as internet addiction, but perhaps less talked about is our inability to process the transparency that comes with this data-abundent reality. It used to be that there was a set of things or premises that we could simply accept or take for granted, and another set that we knew were variable or in flux or unknown. With the base of what we could take for granted, the variable was processable to degrees. Today, however, people are reeling, in large part, because almost everything that we were blissfully ignorant to accept as true, is now in question. Everything is variable. There is no truth. And if there is no truth, certainly we can’t have a foundation of premises and beliefs that are static enough to process the variable. We can’t take it at face value that the government is stable. We can’t take it at face value that a publicly trusted figure is trustworthy. We can’t take it at face value that an article or an image or anything is as it seems. Everything is degrees of probability now. We see the bubbles we live in more clearly. We are aware of confirmation bias, what’s on the otherside of it, and increasingly the data and truths of that other side, and we can’t say for sure that things are the way they are anymore. These changes to how we see and understand the world are very low down in the stack. So many upstack systems, and social structures, and infrastructural elements, and applications, and products and services, are rooted in the notion that there is truth and that what most people believe to be true is…and when that belief is called into question or breaks, everything upstack breaks with it. I think this is the most disorienting moment in my 36 years on earth. I think we are all more disoriented than we even realize, and I think we are increasingly numbing this disorientation with pictures of our friends vacations and babies (and even those we are starting to understand don’t represent the truth of their lives). The good news is society tends to respond and reshape around big changes in context. It’s incredibly painful to those who lived in the old and now must transition to the new, but the out generations will develop different upstack systems to reflect the ambiguity and multifaceted nature of truth. As I watched the Zuckerberg senate hearing yesterday, all I could think about was this new reality, and how much people are suffering as they are forced to question that which they thought true. The upshot is that when systems break, and society responds, value tends to transfer from the incumbents of the old reality to the native products and companies of the new reality…and that’s a good thing for founders and entrepreneurs…if that’s any consolation.

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Hack: Ethereum vs. the NRA

Posted on February 23, 2018. Filed under: Uncategorized |

So I’ve been obsessed with this idea of distributed lobbying on the blockchain. Basically, I think it’s bullshit that the top 50 companies in the US have an efficient way to put capital against influencing legislation and judicial outcomes, but we as a self organized and distributed population of individuals don’t have an equal ability. We can protest (now more effectively than ever as a result of communication tools like Facebook and encrypted messaging apps that let us self organize), we can vote, we can speak (now louder than ever as a result of communication tools like Twitter that help us self organize our voice), but money talks…and we as a group don’t have an efficient tool for self organizing our capital to push against the organizing forces in our country. I’ve seen more money pooled in the crypto space around theoretical projects than the entire pharmaceutical industry, oil and gas industry, etc…spend through lobbying in a year. It’s doable to exert force against legislation if we can create a trust model that allows us to self organize our capital. Here’s an experiment I’ve decided to run in this vein:

put whatever amount of eth you want to use to fight the NRA into this address 0x33Bd9F7419296a4400F81057b59EA054474C3CCC (anybody can audit the amount of funds and changes in account balance via https://etherscan.io/address/0x33bd9f7419296a4400f81057b59ea054474c3ccc).

It’s not a donation. It’s not an investment. It’s not a pledge. It’s something inbetween the three. It’s a decision to financially join a collective that is alligned around impact and economics.

As the administrator of this collective, i promise to deploy the capital to further the fight against the NRA. I don’t know yet all of the most efficient channels but likely candidates include: independent lobbyists, lobbying firms, direct campaign contributions, surrounding awareness campaigns, and whatever other channels help to translate capital into political and legislative influence.

I promise to report to you how and when i allocate the money.

I will use a private telegram group as the primary channel for reporting and being accountable to you and also for hosting a dialogue and planning forum amongst our community of contributors. This is how we will organize collective thought and action, but ultimately it will be my job to listen to the community and act in our shared interest when deploying capital.

i promise to send you back your % of the remaining capital at any time if you are unhappy with the way i’m deploying it. If you put in $100 worth of eth and decide 6 months later that i’m doing a bad job advancing our cause, if in that time the pool has spent 20% of the capital raised, you can walk way with your remaining $80. If you are happy with our work, keep your money in and help to grow the collective by recruiting like-minded others and their capital

I wish i could make a bonding curve for this pool such that the order that you send eth in will determine the % of the total pool you can take out in a way that financially rewards early participation and support of a growing movement, but I can’t administratively handle that just socially hacking on an eth wallet. As a hack to this, i am going to take 5% of all eth sent in and put it into a bonus pool, and on a discretionary basis dole it out to the earliest and most meaningful supporters of the project as defined by the amount and date they put in, their actions in growing the capital base, their ideas and actions in the private telegram channel, etc. I will report all bonus transactions with links to such transactions in the public telegram group. Basically if you are responsible for increasing the impact of this pool in combatting the NRA, you have some claim to the bonus pool and I’ll do my best to recognize contributions fairly and administer it accordingly.

To participate, send eth to this address and then immediately email jordan.cooper@gmail.com with the public address you sent it from (and if you are sending from Coinbase, also the amount of your contribution b/c public addy gets obscured in the transaction). your email must be timestamped ahead of the block that your transaction shows up on so as to prevent false claims. I will reply with confirmation and a link to join the telegram group. If you don’t want to claim your contribution with your identity, that’s cool but you’ll forgo your ability to redeem your contribution or earn any of the bonus pool. Basically, in the absence of being able to codify this rule set at the smart contract level, i’m using communication tools like email and telegram to handle redemption requests and other messages btwn you the contributor and me the administrator.

you shouldn’t have to take counterparty risk in this agreement, but this is a hack

you shouldn’t have to trust me to do the right thing, but this is a hack. for this experiment you can use my online reputation, my decade of writing on this blog with a deep focus on ethics, and whatever social cred I’ve earned in the technology community and calibrate the risk of me being a fraud as an input into your decision to contribute.

you shouldn’t have to trust my discretion and bonus pool mechanic but this is a hack. the size and vintage of your economic support should dictate your claim to an outsized portion of the pool upon exit, independent of my judgement. If discretion or judgement is needed to quantify non-economic contributions to our collective goal (i.e. referrals, awareness, etc), we should have governance to make those allocations together, or at least you should have recourse to remove me if I’m not fair…but this is a hack.

but there’s no generalized platform or smart contracts available to help me administer this experiment without trust and hacks. I want that platform. it’s why i’m doing this experiment. I care about fighting the NRA. you care about electric vehicle tax credits, someone else cares about animal rights legislation…every cause, whether socially, economically, or some combination therein motivated, deserves the ability to harness self organized capital as a tool to advance it’s political agenda. the 50 biggest companies in the US do this all the time via lobbying to the tune of hundreds of millions of dollars per year…democracy talks when electing officials, but unfortunately money talks when it comes down to votes. if we are to achieve collective economic force in a truly distributed and self organized way, the trust model between contributors of capital (aka a constituency) and the administrator(s) of that capital needs to evolve. We need to redefine concepts of decision making, accountability, recourse, and even economic gain associated with such efforts, and the blockchain is a perfect place to do that.

So consider this a campaign to fight the NRA w our collective ETH

Consider this a commitment on my part to put time and energy into efficiently deploying our collective capital

Consider this an experiment, or proof of concept, or proof of need for a more generalized framework for self organizing our capital as a tool of force (with a true and honest recognition that you cannot decouple the concepts of profit/wealth and capital regardless of it existing in a social or political context)

Consider this a call to design and build the generalized and trustless version of this experiment that will enable anyone, regardless of their reputation or social reach, to harness the capital of a widely distributed community or constituency and both ask for and earn the right to point it at the political institutions both government and surrounding, that shape legislation, judicial decisions, and as a result the way our society operates and is organized. I’l happily invest in you to work on this problem and help you design it and build it: jordan.cooper@gmail.com

I’ll start by putting in $5000 worth of eth. To be very transparent: Although philosophically I believe it’s a stronger design if I am eligible for the bonus pool that I will be administering, I commit to not pay myself from the bonus pool for hygiene and simplicity in this experiment. I say it’s a stronger design because part of the point of redefining how we self-organize capital via the blockchain is to explore new points of optimization btwn things like impact and wealth creation to create “organizations” or “collectives” that look different than the way we organize work and capital today. In doing so, if we find the right ones, we have the potential to draw in more work, better people, more capital, thereby leveling the playing field when competing against the existing organizing forces of private enterprise and government institutions that currently shape our society and day to day. So yea, if my contribution is the biggest and the first and this effort grows in size and scope and impact and capital raised, I should stand to profit along the way…by design. In practice, again, I won’t allocate any of the bonus pool to myself, but I don’t expect that people using the generalized form of this experiment (i.e. organizers/administrators) would or should recuse themselves from the economic upside of a successful campaign or movement.

1) I think I have a sense for the amount of effort that will go into running this experiment, processing transactions and administering our capital in a way that is impactful, but if it turns out to be a massive effort i reserve the right to send you your ETH back at my discretion, or whatever portion of it the collective hasn’t spent.
2) I have a pretty in depth understanding of the security and custodial mechanics of crypto and will adhere to best possible practices…but I reserve the right to apologize with no further recourse if something bad happens…

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Out on a limb

Posted on February 15, 2018. Filed under: Uncategorized |

It’s feb 15th, 2018 and for the first time in quite some time i feel myself out on a limb. My entire career I’ve oscillated between periods of running hard at big goals and then chilling and decompressing when i either definitely have achieved them or missed them. This past year has been a restorative one. That’s not to say I haven’t been working hard. Despite not being accountable to anyone else, I get up at 6:15AM and get to my office by 9, put in full days of mostly reading and learning and investing in blockchain projects, but I wouldn’t say i’ve been stretching or reaching at all. It’s very comfortable, I push myself to the point of fatigue, but right where discomfort sets in, I take the pedal of the gas and go for a run or a long weekend or whatever I need to stay in that restorative zone. If there’s a project I love and want to invest in but it’s just out of reach…”ok…fine letting it go.” If there’s a person I really want to think with but they’re just out of reach…”no problem, i’ll focus elsewhere.” It’s not laziness, but in a restorative state, it’s just not worth it to reach…to make yourself vulnerable…to be uncomfortable and strive and maybe get what you want but possibly fail at something you are emotionally committed to.

Recently I have pushed up against a moment where discomfort was imminent, and rather than stepping off the gas and dropping back into that restorative zone, I found myself leaning in, exposing myself, absorbing the discomfort and choosing to move into it. As it was happening, I found myself thinking “ah, this is a familiar feeling…this is what I’ve been missing for the past year.” I know that’s odd, to be missing discomfort…but really what I was missing was the presence of something I cared enough about to want to reach again. As it turns out, I think that’s a pretty good litmus test for whether or not something is worth pursuing. The best things come when you open yourself up, step out of what’s comfortable, agree to exist in a state of vulnerability, and then bond with whatever is on the other side of it…be it a person or a project or a vision or an identity or anything else…I think there’s plenty of advancement in what you already know and where you are most comfortable, but the fundamental and defining elements of life come when your out on a limb…by definition they are the things that are truly worth it.

Nobody ever fell in love by playing it safe. Nobody ever built something special without embracing a state of self-doubt. Nobody ever became self aware without a struggle. In these and all arenas, there are periods of restoration, mild growth, and being in a safe state, and then there are periods of reach and challenge and discomfort that completely change your plane of existence. I think these moments of reach become less frequent as you get older. When you are young, you take these giant hacks at your existence and relationships and identity…you’re incredibly resiliant to vulnerable moments and discomfort and the periods of oscillation between reach and restore are quite short. I think once you’ve gotten through all the big hacks, developed a real sense of self and values and interests and identity, you have to listen harder for those moments worth reaching for. It’s no longer this broad experimentation that haphazardly lands you at your forward self…it becomes much more deliberate and therefore infrequent…I think it’s a fallacy to ascribe this phenomenon to the stakes getting higher as you advance. On the surface it might appear that you risk more by stepping out on a limb when you’re higher up on the tree. But in the arena I truly care about, which would be becoming who I am or finding wisdom or enlightenment or whatever the end state of my life looks like, each reach feels equal…just different. I don’t think I’ll ever stop reaching…if nothing else life feels richer in the moments where you do.

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Bubble-Gazing in San Francisco this Winter

Posted on January 2, 2018. Filed under: Uncategorized |

In 48 hours my wife and I are headed to the Bay Area for the winter. New York is just getting frigid in a way that makes your body clench up the minute you step outside, and everybody is walking around in a post New Years haze that will turn to hustle in a day or two. In California, our Airbnb is starting to amass parcels for things that were cheaper to buy again and ship for free through Amazon as opposed to box and ship across the country ourselves. My attention has been focussed on logistics ranging from getting our car and our dog across the country to rerouting my Soylent and New York Times subscriptions to our new address…so much so that I haven’t really has a chance to reflect on what I hope to accomplish once we’re there.

A lot of people have asked if we are going to stay in California permanently. My answer is “no”…Olivia’s answer is “i’d be up for it.” Last time I lived in San Francisco was a 4 month stint that I had to do when we sold Hyperpublic to Groupon. I didn’t have a great time then…but I guess it was also a time of pretty extreme transition for me, and maybe not representative of where we are today.

Olivia and I spend a ton of time in the car, driving to nature where we can hike with our dog and be outdoors. Part of our decision to live in Marin was to test out a chapter of life living in a house with a yard close to nature, vs an apartment in the heart of one of the busiest cities in the world. I think we are happy when we can get outdoors easily, and living 10 minutes from the Tennessee Valley Trailhead is going to be awesome. We spent a bunch of time this past year looking at places an hour outside of new york that would give us this kind of live in nature / work in the city setup, but ultimately decided we weren’t ready to make the move…so maybe this is some kind of trial run. I plan to find an office somewhere in downtown SF and commute to work by ferry ~4 days a week which i think will be fun and different.

I have a mix of excitement and anxiety around professional pursuits out west. I think subconsciously I wanted to experience life in the Bay Area during a proper bubble, and I’m both looking forward to and terrified to touch that energy in a space I’ve developed a real understanding of over the past two years. I get hints of the SF cryptomania via media and some geographically distributed Telegram groups that I’m in, but something tells me that no matter what else I accomplish, hanging out in the valley during bubble time will be educational in the context of the next 30 or 40 years of my venture capital life. Call it forensic tourism…

Bubble-gazing aside, I’m looking forward to spending real in person time with a bunch of people with whom I typically only get to see via spotty google hangouts or the occasional “i’m in town lunch or tea.” Some of the people I respect most live in and work in SF, and I’m excited about seeing them more often, while also getting to know new folks. I’ve been investing pretty actively in blockchain protocols and projects over the past few years, and I’ll be dedicating a lot of my time to angel investing in local projects while out in SF. I don’t claim to be an expert here, but I am and have been a dedicated student and would be glad to help think through early protocol and application designs where I can be helpful (jordan.cooper@gmail.com).

Beyond closer collaboration with my west coast friends, I’m excited to diversify my dataset a bit, learn what non-blockchain focussed investors and founders are passionate about, and generally I’m excited to hear some versions of the future that people are trying to make happen that have nothing to do with decentralization, cryptocurrencies, and the like. I do think hanging out in SF is giving up a bit of the inspiration that comes from New York’s diversity, but in the absence of that energy, hopefully I can diversify a bit within the technology and ideas I’m living and breathing day to day.

Crypto Club meetings in New York are on a bit of a hiatus given our normal Washington Sq Park venue is freezing cold at the moment, but the conversation has ported nicely to Telegram which should hold our reading group over until Spring. For those that don’t know, Crypto Club is a whitepaper reading group, where anybody can attend as long as they commit to reading an entire whitepaper or two and coming with questions and thoughts for the group. It’s been an important part of my learning in the space and a nice way to find community and share thoughts with one another over the past few years. I think we’ll do a Crypto Club lunch every few weeks this winter in SF (jordan.cooper@gmail.com if your not yet on the west coast list).

Overall, if we can get some good nature in with our dog, find intellectual fulfillment and close collaborators, make it up to Tahoe once or twice, and eat some good Mexican food I think the winter in Marin will be a success. Now to go knocking on doors in my building to see who’s kids are willing to keep our plants alive while we’re gone…

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What Wall St Wants

Posted on December 14, 2017. Filed under: Uncategorized |

Earlier today someone who I frequently invest alongside and think with in the blockchain world told me about a company he talked to that makes it easier for wall street to participate in the crypto markets. If you’ve been paying attention, “the herd is coming,” and there is no shortage of friction or nascent solutions between here and it’s arrival. Hedge funds, pension funds, endowments, etc. all have an interest in owning cryptocurrency, but the infrastructure that enables them to do so in a familiar, comfortable and compliant way doesn’t totally exist yet. Their frustration and demands are becoming a louder voice in the crypto world.

So there’s this narrative around Bitcoin, and the next pick your number of “alternative currencies,” which goes something like “unlike other bubbles where institutions got in first, in crypto retail investors got in first, and it’s not the taxi driver who’s coming in next to really drive up the price, but rather the fancy institutional money…and when they come in…and when all these surrounding services and products enable ‘an institutional way of doing things’ the floodgates will open, incredible buy side volume will follow, and all the early nerds and retail investors who listened to their family’s nerd at Thanksgiving, will be rewarded handsomely.”

I don’t take issue with this narrative…from the hedge funds and endowments I’ve talked to, it’s true…whether or not this dynamic is already priced into the market or not is debatable, but there’s no question that greasing the skids for large pools of professionally managed money to enter the crypto market will be good for early holders. What I do take issue with is the distraction…the capital markets are a necessary and valuable actor in a number of the novel systems being built on the blockchain…they enable shortcuts to liquid networks, a point of exchange for value accrued in a system applied to debts owed outside of the system, and you don’t get a lot of the most interesting coin governed systems without hooking the networks’ unit of value up to the secondary market where these institutions can buy their piece of the future your building…but I see very talented people increasingly viewing wall street as their user or customer, and letting wall st’s voice influence what within the blockchain ecosystem they choose to build or spend time on.

The premise that you could design a network that organizes people or businesses into a behavior that wasn’t possible without the blockchain, and that you could get rich doing it by owning the coin which governs it, seems to be slipping in expected value relative to designing the service that let’s the billions of dollars at Blackrock or Point72 buy top 20 market cap coins efficiently and without regulatory or LP headaches. Don’t get me wrong, I love bitcoin and think there are a lot of important reasons why these pools of capital will strengthen the likelihood that it achieves it’s ultimate destiny, whatever version of it’s destiny you choose to believe, but I think the much more interesting picks and shovels work, in the future that I want to see, will be done by projects that contemplate developers and individuals, as opposed to financial institutions, as their user…i feel like the ethos that attracted me to the blockchain was this energy around bottom up self organization…and a redistribution of power from those that held it to all beneath them…and now we are falling all over ourselves for Goldman Sachs or Tiger Global to come hang out with us.

It’s hard not to get sucked into the solutions that bring wall st to crypto…the near term economic opportunity, especially in a bull market such as this, are undeniable…but from a venture perspective, investing in these slivers of institutional grease feels largely like investing in optimizations as opposed to revolutions in a moment where revolutions are surely being built…or at least gestating in the minds of those that could give two shits about what Lloyd Blankfein thinks of their work.

I am guilty of the same greed as everyone else…i want the institutional volume, i want the money…but if that narrative comes true…and it seems it might…it will be to the benefit of work I did years ago…and not work that I am doing right now and going forward. There is more out there to be discovered…brand new economies to be formed…new jobs to be created…new social structures, work structures, software structures…and yes economic structures…that will be attractive to wall street by virtue of their merit, and not FOMO or easy arb opportunities as they exploit the seems of a nascent market that hasn’t been abused, and therefor hardened, as badly as public equities or the like.

Refreshing coinmarketcap every 10 minutes is not making progress. Watching the talking head on CNBC call BTC $100K per coin is not making progress…and building the products and services that enable the herd to get here quicker doesn’t feel much like progress either…not in the context of what’s actually being built behind the 3 letter tickers and 30% daily swings that everyone is so fucking obsessed with right now. The frenzy and the fast money is distracting us from what is possible…

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Closing out the bullseye

Posted on October 26, 2017. Filed under: Uncategorized |

About a year ago, I sat down at my computer and drafted an offering memorandum for a venture capital firm that I was calling Manifest Capital. I wrote it by myself, in a vacuum, in what was objectively more of a down than an up in my life. I sent it to 3 people I’ve known for a long time and who I knew believed in me at some level…they all disliked it. It was basically the sum of everything I had observed and thought and learned while at General Catalyst, Lerer Ventures (now Lerer Hippeau Ventures), and my 3 startups…overlaid with a big fat dose of defensiveness. I read early memo’s from Spark Capital, Founders Fund, and a few others, and tried to fit my experience and narrative into the tone and structure of those documents. It wasn’t me, it wasn’t organic…it was the first dart thrown that doesn’t even hit the board.

After a little reflection, I decided that I wasn’t ready to build a new firm just then. I buried that memorandum deep in my Quip archive and decided I would focus on becoming more technical in fields that i cared about while not forcing my next big professional step unnaturally. I started taking classes in genomics and studying the blockchain more deeply and made a bunch of angel and crypto investments as I learned, without much thought toward my goal of building a firm. Part of me was waiting for Union Square Ventures to pick up the phone and invite me into their partnership, and part of me was waiting for my dream cofounder to leave his or her firm and come build a new one with me, but fast forward a few months and neither of those things happened…so I just kept going deeper and deeper into the world of crypto. It was intellectually so exciting that I felt fulfilled at “work.” There were days I felt alone, not having a team to build or think with, but the kind folks at Box Group lent me some space so I had smart people around to think and hang out with.

Somewhere along the way, my interest in blockchain went from esoteric in the venture capital world, to entirely in focus, and I had something new and interesting to explore with my friends around the ecosystem. 18 months ago I would tweet out ideas around crypto and get back a wall of blank stares and crickets…whereas now the “cryptolikes” flow from even the most unlikely of people. To really get beneath the hood and know what’s going on in blockchain, it’s a tremendous up front investment of time and energy. Not by accident, but fortunately by interest, while I was waiting for my long term goals to materialize, I managed to amass thousands of hours of learning in something that appears, at least to me, fundamental to the future of technology and the capital markets.

About 2 months ago, Olivia (my wife) basically shook me and asked me why I hadn’t raised a fund yet to go after this market? She knew I had been approached by a few crypto hedge funds starting up, and also that some of my friends from the venture capital world were looking to allocate capital to this space, and she couldn’t understand why I was still puttering around, reading papers, investing small amounts when their were hundreds of millions waiting to be deployed. Part of my answer was that these crypto hedge funds and early structures felt temporal and not enduring to me….like they were built to take advantage of a moment in time, but not in a foundational way that would beget a 20+ year enduring platform. And the other part of my answer was that I still didn’t have anyone with whom I wanted to build a firm.

I did listen to her, though, and pulled my head up from the whitepapers and protocol sketches to start thinking about how to scale my efforts. My interest was in building a venture capital firm with a blockchain thesis as opposed to a crypto hedge fund. I wanted to orient around 10 year funds, long term thinking, and a brand that would outlast any technology of capital markets cycle. I sat down to “update” my Manifest Capital document to reflect my work in blockchain, but in reading through it, I realized it didn’t at all reflect what I had come to believe in a post-blockchain world. So I sat down and designed something completely new…a thesis…on how I could grow a firm on the back of my developing knowledge and genuine belief in this fundamental technology (and it’s downstream markets).

The thesis I think is on point. After a round of feedback from some of the same folks who read my first try, and some new folks with different backgrounds and domain expertise, it feels like this dart is squarely on the board. There are some structural challenges, timing nuances and so on, that are keeping it from the bulls eye’s promised land, but I think I know what those things are, how to solve for them, and I’ve got this next dart in my hand that’s feeling pretty good. Strangely, rather than attacking those last solves and going out to make it happen ASAP, i find myself recessing a bit back into the whitepapers and the stack of reading that has piled up while I crafted this new thesis…something is still missing…it’s a feeling more than a strategic angle or point of feasibility…but I’m not quite sure what it is. My sense is it may be a team…I miss the people who I have built with in the past. Doug, Etang, Kenny, Ben…big shoes to fill for a founding moment…but I am not sure if that’s it or not…

Perhaps what’s missing is simply a deep breath before the dart’s release…inhaled…that steadies the mind and sharpens the focus…the life breath…the energy…the soul of the thing…present in the ether…waiting to be embodied.

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Clearest and most in depth podcast I’ve seen on Crypto

Posted on October 4, 2017. Filed under: Uncategorized |

This post is more for friends and family than anything else. I spend a lot of time sharing my interest in blockhain and cryptocoins with the people in my life. There’s a lot of explanation and q&a and I love this dialogue because it keeps me honest about what I truly understand and what I need to understand better.  That said, when people ask where they can learn more, I either point them to some surface level blogpost or trial by fire right into the Ethereum whitepaper…and in reality, there’s probably a lot inbetween that would be helpful (despite my genuine belief that you will never get to a true understanding by consuming other people’s synthesis and blogposts in this space).  The below Podcast called Investor’s Field Guide is the first really good, in depth, detailed and yet consumable exploration of crypto that I have come across.  I am biased because I somehow snuck into Episode 2 despite being the only guide NOT running a crypto hedge fund with hundreds of millions of dollars behind me, but genuinely Patrick does a fantastic job of covering the technology, economics, and investment knowledge you need to go from level 0 to level 2 in crypto.  There’s a 3rd and final episode coming that goes deeper into protocol design, but these will get you started in a really clear way.  Interestingly, this was recorded about 2 months ago, and present day I feel like I have way more interesting things to discuss than simply how to fundamentally value cryptocoins, but such is life. enjoy 🙂


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An update on Crypto Club and notes from last meeting

Posted on October 2, 2017. Filed under: Uncategorized |

For the better part of the past year, i’ve been getting together with engineers, product managers, venture capitalists and wall st folks to explore new blockchain protocols. It used to be called the Crypto Investment Club, and it’s since shortened to just be Crypto Club. We experimented with the format initially, and then settled into a cadence that orients around a deep reading of one or two whitepapers per meeting. Everybody comes with questions and thoughts that range from the very high level (i.e. is this going to work?) to very granular examinations of specific economic design elements or technical mechanics. We usually meet at this fountain in Washington Square Park and find a quiet corner of the park to eat lunch and discuss. The only requirement for attendance is a commitment to make it completely through the papers we are discussing. Beyond that no questions is dumb and we welcome people from all backgrounds.

This forum attracts substantive and genuinely interested participants and tends to weed out speculative traders, volatility addicts, and the like. We do discuss the value of the coins that govern these protocols, and particularly the drivers of that value. We look to flush out demand side drivers for the coin, and usually we get to a pretty clear picture of what behaviors will influence it’s price and the likelihood that the incentives built into the protocol will induce such behaviors. But that discussion is largely rooted in the success of the design and it’s long term viability, as opposed to, for example, what a specific token issuance schedule is going to do to the price of a coin during it’s initial coin offering.

A few months ago, it became apparent that this format, while really valuable to me in my explorations through cryptoland, didn’t scale to the many folks around the country and even the world who were looking for a similar forum. I considered various online tools to extend the Crypto Club beyond geographic borders, but the intimacy of the discussion didn’t seem achievable in say a live video forum with hundreds of participants. In the absence of an online solution, I got on a plane to San Francisco and brought the Crypto Club out there with the help of a friend, Sarah Tavel, at Benchmark Capital. I think this was a good solution, and now Sarah is a shepherd for the group out west. I’d like to do the same thing in LA, and a few other geographies, but still there’s some good learning happening each meeting that should be accessible to all.

Recently, I started sending discussion notes from our meetings to the creators of the protocols that we discuss. At some point, technical projects need to communicate very clearly with a wider audience than the active blockchain developer community, and I figured the Crypto Club’s analysis, questions, and thoughts would serve as a good proxy for what this next concentric circle of “interested parties” could absorb via a paper. As I sent my most recent notes on the ZeppelinOS whitepaper to it’s founders, I realized that even in an abbreviated form, outside investors, developers considering working to earn the ZEP coin, and crypto projects considering building their platforms on top of Zeppelin’s secure smart contract kernel, would all appreciate a few bullet points on how to think about the project. So, without a lot of prep or editing, and without the benefit of a narrative overlay available to early creators who might want more details, I’m just gonna start publishing notes from the sessions. Here are the notes on ZeppelinOS. The discussion ran long so although we also read Aragon’s paper focussed on “decentralized governence as service,” these notes only cover Zeppelin. Enjoy, and keep an eye on this blog for future project notes.

Oh, and if you are working on a protocol and paper that is either published or still in private draft, we are always looking for interesting candidates for the group and happy to provide feedback to you: jordan.cooper@gmail.com.

Zeppelin Notes

15 people, mix of engineers, data scientists, venture capitalists

1) there was a narrative around the value of zep behaving like a basket of other coins. basic logic: if price of coins governeing underlying portocols in zep users dapps goes up/down, demand for ZEP will follow those aggregate moves as developers have to maintain a balance large enough to fund their dapp running

2) there was a lot of push back around whether zep gets to hold metacoin position vs say 0x and other similar functions. some talk of developer tools being a wedge to this position.

3) some of the engineers pushed on the difficulty to build out all of the off chain compents articulated in the paper. didn’t seem realistic to do so much

4) fair amount of discussion around reason to hold ZEP…either people bought into it’s value from a governence and development community participation standpoint, or they didn’t.

5) some interesting discussion around whether ZEP and your developer compensation structure couldn’t capture budgets from the balance sheets of other big projects looking to fund development of collectively needed solutions…

6) overall, people were more positive on owning ZEP relative to the average paper we read

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Venture Capital in a “post-blockchain” world

Posted on September 22, 2017. Filed under: Uncategorized |

Hey, i did 15 minutes on the role of venture capital in a “post-blockchain” world. Also covered some previous capital markets wrinkles courtesy of Y-Combinator, Andreesen, Ron Conway, etc…and outline a bit of what the settled state early stage financing landscape looks like say 18 months from now. (P.S. i may have misused the word “dislocation” as it’s applied to financial markets…did I?”

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Crypto in the context of online classifieds

Posted on September 11, 2017. Filed under: Uncategorized |

Peer to peer transactions are not a new thing. In the offline world they have been around forever. I killed this chicken, I go to the market, I sell it to you for $10, and there is nobody between us ensuring that the $10 bill you give me is good, that the chicken I give you is delicious, or that in the exchange, once I hand over the chicken, you don’t just run away without giving me the $10. In a sense our physical proximity, and if I really think about it, the threat of physical violence is probably what enforces that our peer to peer transaction goes off smoothly. In more advanced societies, I suppose there is also the threat of law enforcement that governs certain bad scenarios in that transaction (specifically the last one), but still there is no one between us. The opposite of this peer to peer transaction would be an intermediated transaction…rather than selling direct to you, I could sell my chicken to a grocery store, they could ensure you of quality, safety, delivery, etc…and in doing so take a portion of the value in our transaction.

In the online world, peer to peer transactions can be dicier. If I can’t physically authenticate the goods or services being exchanged…if I can’t see the chicken I’m buying with my own eyes, if I can’t run and tackle you for slipping me a bad $10 bill…it can be harder to establish peer to peer trust when transacting. Online, the middle man like, say, Ebay, plays a more important role in our transaciton than the grocery store would offline. Both parties come to trust the middleman, their brand, their fraud policies, their handling of payment, etc…and a class of transactions that might not feel safe on say, Craigslist (which doesn’t provide much in the way of intermediary trust), begins to feel safe on Ebay.

Not all peer to peer transactions are the same. Certain classes, where say the economic value exchanged is low or the risk of physical harm is low, can achieve high liquidity online even in low trust environments. As the stakes rise, or the liklihood of fraud rises, liquidity and trust hold enjoy an inverse relationship.

Before 2004, trust in the context of online peer to peer transactions really only existed in two ways. Either…you would conduct your exchange with someone through a trusted (and expensive) intermediary…or you could transact in a platform that attempted to strengthen trust between strangers primarily through reviews. Reviews, seller ratings, etc…were a way for the people at the market to share information and experiences about transacting at the market. I don’t have data on this, but I assume that seller/buyer reviews significantly increased liquidity in certain classifieds verticals relative to what was happening in say Craigslist alone.

Reviews had (and have) their weaknesses. How do I trust the reviewer?…especially when reviews are anonymous or pseudonymous…well…enter the social web. In ~2004 social networks emerged and gained widespread adoption in the subsequent few years. For the purposes of the post, I’d suggest that the advent of the social web and social graphs was a technical breakthrough (although technically i suppose it was more of a social or design breakthrough)…but obviously Facebook and the concept of social graphs online was a fundamental invention that changed every application of the internet that followed.

Investing in social in 2004 would have lead you to direct investments in social networks like Facebook, Myspace, Bebo, and the thousand other vertical networks that largely spawned and died around that time. I don’t think people really considered at that time the downstream implications of social graphs on online identity, and the subsequent penetration of these graphs into many sectors and classes of application that appeared initially to have nothing to do with “social” as an invention.

But, sure enough people figured out that by porting my known social graph from say Facebook, into a trustless peer to peer transaction in a place like Craigslist, I could increase the feeling of safety in transacting directly with strangers, and therefore improve liquidity in some of the less liquid verticals of peer to peer transactions. If you figured that out early as a VC you would have started to invest in “social classifieds” verticals…maybe you would have made bets on social graph enabled dating (friend of a friend liquidity in things like Zoosk), or even in marketplaces that overlaid reviewer’s social graphs in order to give reviews that were already contributing to trust more credibility. If I could find a reviewer on on facebook or twitter and establish their legitimacy, that would make it easier to trust their view of the stranger with whom I was about to transact.

And while you might have made some $ investing in social classifieds with this newfound trust layer penetrating existing peer to peer transactions, what you wouldn’t have seen coming was a completely new form of peer to peer transaction, that didn’t exist prior to the social web…and that would have been Airbnb. Letting a stranger stay in my spare room at home, or letting a stranger stay a few days alone in my home is a form of peer to peer transaction that had virtually no liquidity relative to what we see today. The use case didn’t exist. I would argue Airbnb could have never existed without the trust layer that it borrowed from the advent of the social web…Airbnb was and is an application that is native to the technical advance of social network technology…it isn’t an optimization of an existing use case or class of transaction…it’s something entirely new that was unlocked.

There are still many existing peer to peer transactions where reviews or social identity still don’t enable a level of trust to adequate to achieve deep liquidity online. I subscribe to the belief that the blockchain, and coin governed systems specifically, represents an opportunity to create new and strengthened trust in some of these classes of transaction. If you believe that there are certain transactions where I feel comfortable screwing a stranger who knows my friend, but not screwing a stranger when doing so would cost me $1000, than you should agree that economic incentives for good behavior codified into a blockchain based protocol governing such transactions can improve trust and liquidity in those instances. And if you are a VC or angel investor or crypto investor today, you might be looking for those existing low trust peer to peer verticals…even more interesting, however, is to ask what are the ways that we aren’t yet transacting at all…what are the native peer to peer transactions that can only emerge with strong, economically enforced trust, and can I buy the coin that governs that trust? Personally, I’m looking for both and would welcome the opportunity to help flush out protocol designs in this realm. I have time, thought, and capital to support this type of thinking. Jordan.cooper@gmail.com

p.s. i’m not really a web historian…feel free to correct dates, point out contra cases, etc…

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An experiment in “open presence”

Posted on August 29, 2017. Filed under: Uncategorized |

I’ve always enjoyed experimenting with communication channels and public access. Whether it’s writing this blog, or tweeting, or video blogging, or printing my email address on a hooded sweatshirt…i have always tried to be as open as possible to strangers and I love the feeling of making the world smaller by putting ideas out into the world and receiving ideas and thoughts and interactions back in response. There is just such a tremendous feeling of opportunity in the idea that 7 billion people are out there, and at anytime, any one of them could find you, reach you, and change the arc of your life…or simply entertain you, or bore you, or teach you, or whatever…I have always felt that some of my deepest relationships and interactions are with people I barely know. My wife once asked me to invite new people over for dinner in an effort to expand our friend group, and my first thought was to ask my barista Carl…who i share no context with whatsoever except simply that the universe, by sheer geography, happened to make him my caffeine dealer. Some of my closest professional relationships today are with strangers i got to know on twitter or in the comments section of my blog when comments on a blog were still a thing. I am always interested in lowering the friction to find and explore these connections. I was ideologically obsessed with the randomness and seamless access of chatroulette, and I was so hopeful and excited about the branding and positioning of Airtime version one. My friend Andy Weissman loves the idea of increasing your chances of serendipity, and I think I subscribe to that in some ways as well.

So a few weeks ago, I watched a community call for a blockchain project called Livepeer. They used a tool called Appear.in which is basically an open video room where anyone can show up and participate in a multiperson skype-like video experience. No invites, no dial ins…just hit the link and your dropped into video chat. It kind of has a Houseparty vibe i guess…but I loved the idea that you can just publish this link, no app required, and have an open video line to the randomness and opportunity of the other 7 billion people who might happen to find you. I remembed hearing my friend Tim talk about how he endured his long distance relationship by keeping an always on, always open skype video chat going with his girlfriend in Boston. It would just be running, they would live their lives, and be able to look over at any moment and say “hey babe” even if they weren’t intentionally talking…it was a sort of shared presence that was running in the background of their day to day that kept them connected even when there was no intention behind their communication.

I thought it would be fun to apply that type of presence to my work day through the appear.in tool I mentioned, so I claimed this room: https://appear.in/jordancooper and put a link to it in my Twitter bio. I was curious who of my twitter friends would stop in to say hi, what strangers would want to talk about, and I loved the idea of putting faces to the many twitter strangers i’ve interacted with over the years…I just open the room when I sit down to my desk…it’s an open line…anyone can come in and say hi…and if i’m focussed on something or can’t talk…i just leave it on mute… Obviously you might be thinking that this architecture for access is quite flawed. I had the same thoughts. How would I handle permissions for entry, and what if I am overwhelmed with interruptions…turns out the real problem is people don’t tend to visit, or when they do I’m away from my desk…etc. Something about this experiment that I thought would lower the friction to communicate seems to actually increase it…maybe people don’t know what to say, maybe face to face in live video is scarier than the cold emails and reach outs that are the norm when you publish your email address on your blog…I am a little surprised that this experiment didn’t lead to more interesting outcomes…to more serendipity…but it obviously needs tweaking…I haven’t decided what levers to pull…but i’m thinking more focussed topics and time windows might be fun. For now, i’m gonna leave the link live because why not, but I think there’s a more interesting product and user experience to be designed that could harness this “open presence” and would love to try out other products that have attempted to address this use case. jordan.cooper@gmail.com if you’ve found something fun…OR if it’s not too scary, tell me about it here: https://appear.in/jordancooper during normal work hours, or just tell me about something else you’re working on, or ask me a question about the blockchain or cryptocurrencies or venture capital, or say hi even if I had coffee with you last week and we are friends…my office is kind of empty last week in August…participate in my experiment 🙂

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sat down to write a normal blogpost and a baby protocol came out

Posted on July 26, 2017. Filed under: Uncategorized |

If you have been following the blockchain world over the past few years, you’ll notice that some of the best protocol designs to date have involved computational work. Whether the protocol defines the behavior of computers as it relates to file storage, processing power, or otherwise…these systems tend to outline economic incentives that govern how a network of computers (and their owners) will behave and work. Part of the reason why these early labor systems tend to center around the labor of computers and not people, is because machine work is easier to authenticate…and the authentication of work is important when distributing economics between labor and capital in a trustless system. I’ve invested in a number of projects with this shape, but my interest as it relates to the future of blockchain based systems is much much broader…I find myself gravitating toward systems that try to govern the behavior of human nodes as opposed to machine nodes…and when dealing in that realm…there are some promising solutions and mechanics to govern offline/human work that are starting to emerge.

Two potentially fundamental mechanics that I see popping up across fledgling protocols are stake and oracles. The designs around these two elements vary quite a bit from project to project with little if any standardization. In my exploration of these two mechanics, I made a baby protocol design attempting to govern trustless transactions around physical contract jobs (think construction, home repair, etc), and attempted to replace the role of General Contractor (she who organizes and engages subcontractors, ensures quality of work, and btw takes a healthy cut for doing so) with a blockchain based protocol governed by the coin GCC…there’s a second tier of coin in the system that rides on top of GCC that addresses the concept of credentials and skilled labor (SCC) and together these two coins live in a system that maybe would allow a home owner and subcontractor to transact directly with each other while cutting out the middle man general contractor. In theory, one of the promises of the blockchain is to take the margin captured by middle men or top down organizations like a general contracting business, and to redistribute it to the edges (customers and labor) in a way that lowers cost for buyers while also improving economics for labor or sellers.

Obviously this design is 1 page and not a 30 page paper. Designing blockchain protocols requires technical architecture design, economic design, and governance design. Special projects emerge when they nail all 3 individually, and also the interaction between these 3 layers. Here I don’t touch the technical layer, I barely touch the governence layer, and I focus on the economic layer.

In order to grok this design I assume familiarity with the below two concepts:

1) stake: economic value posted as collateral that is programmatically subject to forfiture upon bad action
2) oracles: actors in a system that serve to report on or provide off chain information as an input to on chain functions within a blockchain based system

General Contractor Coin

High level architecture

  • 2 tiers of coin
    • general contractor coin (GCC) is the low level protocol coin that governs the good faith completion of work and payment for services in physical contractor based transactions.
    • skilled subcontractor coin (SCC) is the skill specific coin that can be exchanged 1 for 1 with GCC, but holds a specific credential that signifies ability to take on jobs that require that skill.
      • example of an SCC coin might be “electrical work coin” or “floor guy coin”
  • Likely only GCC floats and connects to public exchange. SCC must be converted into GCC before moving to FIAT. GCC’s value is driven by customer demand for contract projects requiring any and all SCC skills, and jobs are paid in GCC.
  • As long as contractor holds a single SCC coin for a given skill, they may stake completely in SCC or by combining SCC with GCC against the value of a job, so long as the SCC is always at stake for a job that requires it.

EXAMPLE USE CASE AND BABY PROTOCOL DESIGN: Construction job between home owner and flooring specialist…

  • homeowner posts request for floor repair with payment for job denominated in GCC and specifies job is open to contractors holding the SCC “floor guy” coin.
  • not all contractors can take job
  • in order for a contractor to take job he must hold “floor guy” coin
  • floor guy must receive floor guy coin by having skills/training evaluated offline (or by undergoing training and receiving coin upon completion of training)
    • can likely decentralize acreditation by empowering any holder of floor guy coin to credential another. acreditation becomes a job in the system same as doing the actual flooring work to earn coin.
    • To credential others, accreditor must post floor guy coin as stake…if someone you credential loses credential as result of challenge/oracle process described below, he who accredited the violator loses partial stake…2 strikes you lose full stake and are out as accreditor.
    • Similarly training plus accreditation can be higher paid job/role in system. same requirements of credentialed stake to train as to accredit.
  • once contractor posts floor guy coin as stake, job is matched, homeowner payment and contractor stake held in smart contract that’s created to govern work
  • work is done offline
  • both floor guy and home owner must sign transaction when job is completed to release stake and payment from smart contract
  • if home owner challenges adequate completion, smart contract creates new oracle job, borrows funds held in contract to pay oracle/inspector, and broadcasts existence of available oracle/inspection job to network w requirement that contractor that take job hold the SCC coin “floor guy” in order to accept.
  • oracle/inspector job only available to holder of “floor guy coin.” He must post stake in “floorguy coin” in order to take oracle job
  • home owner must post additional stake to challenge work and both homeowner’s and contractor’s stake pays oracle/inspector for time/visit
  • oracle visits job site to determine outcome of challenge.
  • oracle decision final. if work is adequate, payment released to floor guy. also, home owner’s additional stake covers full cost of oracle payment, contractor’s “floor guy coin” returned to him.
  • if flooring work inadequate, contractor stake covers full oracle payment. Contractor either chooses to post additional stake to make initial job stake whole post-oracle payment and completes work to satisfaction of homeowner/oracle or forfeits his “floor guy coin” to homeowner and receives no payment for services.
  • if contractor cedes his SCC “floor guy coin” to homeowner, he can never acquire “floor guy coin” again through accreditation system.

So yea, I know there are MANY opportunities to make this design more elegant, and i’m sure there are vulnerabilities in this sketch that can be exploited and need to be solved for, but I’m excited to meet with folks who are working on stake based trust models in traditional classifieds verticals…cool explorations of oracle process and offline work authentication, and in general people who are attempting to design systems that govern human behavior, not just machine behavior, via creative economic thinking via coins. I have found it more rewarding to engage with early creators when their systems and papers are very much in draft form with lot’s of placeholders and unsolved components. If you’re working on something cool, i’m jordan.cooper@gmail.com

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Paradoxical Protocols

Posted on July 13, 2017. Filed under: Uncategorized |

We learn early in life that money isn’t everything. My 4 year old niece, operating her first lemonade stand, gets schooled that kindness is more important than profit. At some point…when we grow up a little bit…we face the reality that money may not be everything…but it is obviously something…and it’s something that we tend to want. Each person searches for balance in the tension between doing good and attaining wealth…and everyone lands somewhere on what seems to be a spectrum with those two goals at opposite ends. Yes, there are plenty of companies that crop up, especially these days, that “do well by doing good” or impact investors that use constructs like “good for me and good for the world”…but almost always there feels to be some level of compromise where they are still picking some place on the line that is not a true maximization of both doing good and getting rich simultaneously.

There are many reasons why these two goals sit so far apart on the spectrum, but recently i’ve been thinking a lot about the societal, and more importantly government issued structural paradigms that we use to organize our work. When I graduated from college with my newfound skills, not only was I choosing a market to enter, i was choosing a structure to work in, and my choice would dictate where I sat on this spectrum. Either, I was interested in non-profit work, in which case I was looking for NGOs (non governmental ogranizations like the Red Cross, etc.), or I was looking for corporations, or partnerships, or even government jobs. There was this implicit reality that if I chose NGO to further a cause I’d be forgoing personal wealth, or if I chose a corporate gig I’d be positioning for personal wealth but not advancing causes as deeply as I could.

High level, a corporation’s goal is to maximize profits (both for the entity, and in turn for all those that work for it) and an NGO’s goal is to maximize impact toward it’s cause…but what if there was an organization that existed somewhere inbetween…well, it turns out there is! It’s called a B-Corp, and it’s become quite popular for mission driven companies like say Warby Parker or Etsy, to organize, in the eyes of the government and in turn their employees, shareholders, etc…around principles that optimize for something inbetween profit and impact. In this structure, a graduating senior from college can perhaps escape the tension between wealth creation and impact…but in doing so, i think still chooses something of a compromise as opposed to a rocket ship toward either goal.

One of the most interesting things to me about the blockchain, is that it presents the opportunity to organize work in many more flavors than are available and issued by the government or other societal bodies. It allows you to ask “Can I design a system that optimizes for impact AND tremendous wealth creation for early contributors of work.” It allows you to ask, for example, if it’s ok for the people who begin a deeply impactful mission driven project to become insanely wealth…in fact, is that optimization a key feature that catalyzes early effort and labor in the absense of a brand, large budget, or successful metrics? There is something both fopaux and legally questionable about early contributors to an NGO becoming millionaires in the process…because we already share an understanding of what NGO SHOULD be optimizing for…but it turns out, I can design I system on the blockchain which chooses different optimizations…that lives outside of the 5 flavors of orgnization that the government or society offers me…and you don’t have to like it in order for it to achieve it’s optimal state..the rules are clear…they are encoded into the protocol…they cannot change (at least without going through whatever governence structure i define), and the project will only succeed if there are enough people (you included or not included) who are willing to work for it or fund it…who agree that this unusual optimization shape is possibly impactful, or lucrative, or both…and if there are…liquidity of behavior can be achieved…nobody will get rich if the system doesn’t work…capital investors (in the loosest definition of the word that in this case maybe can include actors that are something between donors and investors) will flow in on speculation and flow out if ineffective/non-useful…early contributors of work will flow in on speculation, both of impact and wealth creation, and flow out if their goals are not being met…and the project will grow in fundraising ability, further speculation from capital markets, and in turn work, if things are accomplished and the system works…and guess what…the earliest workers in the system…rewarded with say a token that appreciates in value as the project succeeds in capital raising, may be getting rich in the process…and that in and of itself…is not a frictional input to liquidity of behavior…

I’ve been sketching out designs for protocols focussed on the organization and administration of mission/ideology driven work that seek to bend the norms of wealth creation and impact…they tend to center around issuing coin for early contribution that appreciates in value with the fundraising success of the project at hand…and they vary in how much of the administrative functions of a traditional org they take on, vs very simple foundational protocol mechanics that can be the infra for some of these upstack functions, but I haven’t landed on a super clean design yet. I’ve also been thinking about the role of that coin as a bridge to the needs and use cases of participants in the capital markets…also bending typical optimizations found in that space, and potentially introducing unique mechanics again at the protocol layer that would feel like new financial products from far away that specifically interact with organizations running on the afforementioned protocol…but again…sketches…not bulletproof thoughts.

I AM very interested in talking to blockchain founders and early contributors who are playing with the structural dimensions of how we organize work, especially where the systems being designed optimize for factors that don’t typically exist alongside one another…maybe i could call this shape of project “paradoxical protocols.” If you are working in the space in the broadest sense…questioning the choices of how we organize and what the systems and structures we work in choose to optimize for, and/or the paths that lead to those optimizations, i’d love to think with you, design with you, and maybe invest alongside you…please be in touch at jordan.cooper@gmail.com

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“Show me one good application built on the blockchain” and other such challenges

Posted on June 7, 2017. Filed under: Uncategorized |

“Show me the newly enabled applications that provide unique user value, and that aren’t being sold on novelty of the blockchain.” – Sam Gertzenstang, ex-Andreesen Horowitz, Imgur, Lerer Ventures, Sidewalk labs)

“It was a great way to make money, and that’s all. No startup was made. The world does not have a new wonderful thing created in it. Just $.”Nabeel Hyatt, General Partner at Spark Capital, on Etherium

This challenge is not unique to Sam or Nabeel (both of whom i truly respect). It’s the elephant in the room when looking to the blockchain space from far away. All this money is coming in, people are getting rich, they’re talking about it all the time, but what does the world have to show for it? What applications have been built? Decentralized or otherwise? There are the believers who are building out the low level infrastructure to make this space viable, and then there are the impatient who refuse to accept this investment of time and money without an easily understandable, clearly visible real world application that they can wrap their heads around.

Investors…especially venture capital investors, like to understand opportunities in reference to things they have already learned and understood in the past. It’s a shortcut…rather than relearning the fundamentals and mechanics of every new business from the ground up, they just match the dynamics of one market or product or approach they deeply understand to a new thing they have just come across, and then tend to ask questions around potential incongruences or congruences to calibrate their analysis. There is absolutely nothing wrong with this approach.

When faced with new technologies or opportunities without clear reference points or prior understanding, I have found myself forced to choose whether or not to invest time and energy in understanding the fundamentals of that thing from the ground up. Personally, I get bored by things that are easily referenceable and understandable (even if valuable) and tend to gravitate toward the new. I look for opportunities to think and create on first principles, and the blockchain is ripe in this regard. The upfront investment to get to first principles thinking in this space is incredibly high. Higher than most other markets or technologies that I have learned in the past…and for those not willing or interested in putting in the time, it is easy to throw your hands up and say “show me the application so i can easily reference this new thing with other applications I understand already.” We are not yet in the stage of development in the ecosystem where investors can shortcut their way to understanding this space, and as a result you either have a choice whether you want to work toward building a thesis and understanding from messy, not perfectly articulated (let alone built) product and business articulations, or you can wait for those messy building blocks to be synthesized and expressed in a neater format…and both are totally reasonable approaches. What is less reasonable, is thinking that the ecosystem and it’s participants somehow owe you a clear product expression…on your timeline…simply because they are excited about it and have chosen to invest their time and potentially money in the messiness.

Personally, I have the luxury of time, I’m not sitting on a $700M fund that needs to be deployed today, and I’ve chosen not only to embrace the messiness, but to try to clarify and even design upstack protocols and applications to push my understanding and also help the ecosystem to build on whatever synthesis I can contribute. I feel good about that. It’s not vapid profit seeking. I’m not talking about all the money i’ve made in the space, and I am deeply confident that the building blocks that I am understanding can and will be assembled into things that satisfy the hand-throwers on Twitter and otherwise…

It’s not my job to defend this space, although recently I have been feeling like I am put in that position sometimes because of my time investment in it. I don’t have a blockchain company, I don’t stand to profit from other’s believing in the applications that are on the horizon, but I do care about it, and irrationally feel a bit attacked when the hand-throwers burst out. I guess that means I am a part of the community.

P.S. I started out writing this post to bullet point the unique properties of blockchain projects that unlock applications that previously could not exist (which is an ongoing and messy but improving framework that I have been building over the past few months), but I guess I’ll save that for future post(s).

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Crypto Investment Club #2 (evolved)

Posted on June 1, 2017. Filed under: Uncategorized |

Last month I organized a small and informal “crypto investment club” gathering in washington sq park. About 10 people showed up to talk about investing in the blockchain and cryptocoin space. My hope was that I could share some of my theses around coins like Bitcoin and Etherium as well as more emergent “altcoins” like Augur, Zcash, and hopefully some that hadn’t even become “public” via initial coin offerings yet (“pre-ICO”). I think the first meeting was pretty successful insofar as high quality vcs, wall st people, developers, and founders all came together to share their interest and ideas in the space. I wasn’t sure that the “crypto investment club” would have more than one gathering, but I find myself continuing to seek community and depth of thought in this area, where many of the folks I know and tend to think with are either no so interested or interested but really only at the surface level.

In thinking about how to create a productive gathering, I want to evolve from “show up and jam on whatever” to something a bit more like a white paper reading group. Most blockchain projects that are planning to or that have already ICO’d write a pretty meaty paper that outlines the nature and details of the protocol they are building, and to date it’s one of the only substantive inputs available into an investment decision on a coin. So my thought is for the next and maybe all meetings going forward, we will start reading these papers together, and discuss the strengths and weaknesses of new coins with a specific project and paper anchoring the conversation. I’ve found that reading these papers thoroughly sheds light on broader concepts and key learning that is relevant to an understanding of the space in general, and I think questions and discussion around the blockchain/crypto space as a whole will naturally emanate from focussed discussion on a specific project each meeting. A complete reading of the white paper at hand feels like a reasonable requirement for attendance and meaningful participation, and I think it’s also the only way people can leave with an actionable perspective on whether or not to invest in a coin or project.

I feel a little hesitant to evolve the structure in this way because it adds some friction to interested but less technical or experienced folks, but I assure you getting through these papers is a matter of focus and effort that I think is accessible to more folks than you would think. Coming with questions is as valuable as coming with answers around these papers.

So, if you want to attend the second “crypto investment club” brown bag lunch or others going forward, we’re gonna do it again at Washington Sq Park next Thursday, 6/8, 12:30-1:30PM. Email me to join the list: jordan.cooper@gmail.com.

There’s no requirement to put capital to work, and I don’t see that becoming a structural component of the group…just fyi

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    I’m a NYC based investor and entrepreneur. I think there is one metric that can be used to measure the value of a human life and that’s impact. How did you change things? How many people did you touch? How different is the world because you lived in it and how positive was the change that you affected? (p.s. i don’t use spell check…deal with it) You can email me at Jordan.Cooper@gmail.com


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