Live Long and Prosper
Live Long and Prosper
By?Keith Teare???Issue #315?
Netflix announced 300 layoffs and Brex pulled the rug on its small business customers. But LocalGlobe raised $500m, InFarm announced two new farms and eBay bought NFT firm KnownOrigin. Making the right choices will help us all to live long and prosper. Web 3 seems to still be a good choice.?
Contents
Editorial
Another week full of ambiguity - just to keep me on my feet. The easiest thing to do at times like this is to filter out everything disagreeable and only focus on events that confirm one’s biases. That however would be short-sighted and lead to bad outcomes.
So I am keeping the Good News/Bad News format of this newsletter in order to guarantee balance.
But, I want to focus on NFTs here, and more broadly Web 3. The lead this week is provided by Packy McCormick from?Not Boringwho writes a lengthy essay about the likely persistence of NFTs.
Today, as it stands,?NFTs are a real use case?in the way that Instagram is a real use case or art is a real use case or even gambling is a real use case. Simply, NFTs give physical properties to digital items, making them unique, ownable, and tradeable, in addition to digital properties like programmability and composability. Over time, NFTs will represent things that are more useful than the things they represent today, but even today, the collectibles use case is a real one.?
That same chart that I showed above to highlight the slowdown in NFT sales can be interpreted more positively, too: on OpenSea alone, 1.8 million accounts have?purchased $31.9 billion worth of Ethereum-based NFTs, $31.3 billion of which occurred in the last year alone.?
Do some people account for multiple of those 1.8 million accounts? Sure. Is some of that volume wash trading? Sure. Is some of the art ugly? That’s in the eye of the beholder, but yes. Is a good chunk of the buying speculation? Of course.?
But NFTs are a broad category, and within it, there are fascinating models emerging.?
This statement is the beginning of Packy’s case that there are valid use cases for web3 and crypto. And his is joined this week by Tomasz Tunguz, one of the essay’s of the week. In?The Web 3 Marketing Stack?he says:
There’s an entire marketing ecosystem for startups to build - and it will explode as all the venture dollars web3 startups have raised rushes to find new users.
This is another real use case.
During my week I engaged with two entrepreneurs focused on web3. One is using NFTs in the context of property ownership and the other is a famous photographer wanting to use NFTs to provide use and payment services for stock photos, challenging last-generation services like Getty Images.
It is clear that despite the public markets innovation around new architectures and business models is not slowing down. It seems clear to me that NFTs are an especially pertinent example of this as they provide a means whereby assets - digital or real - can be bought and sold with proof of ownership. I cannot imagine this will be anything other than a very large business opportunity for all layers of the stack across a very large number of use cases.
That said, Netflix laid off 300 workers this week and it was reported that Sequoia Capital has taken a hit for holding public company shares through the correction while Accel is lowering the size of its individual investments.
So as we adjust to new realities there are many short-term casualties who in order to live long and prosper will have to focus on the new green shoots popping up amidst the ruins of the last few months.
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Live Long and Prosper
With Bored Apes and CryptoPunks beaming from Times Square billboards and thousands of collectors and creators meeting in person for the first time, last November’s NFT.NYC was described in the?New York Times?as a coming-out party for the Web3 world.
Seven months later, blockchain aficionados are descending upon Manhattan for the fourth annual NFT.NYC conference under sharply different circumstances: what even the biggest bulls are?calling crypto winter. Despite that, the party rages on this week, with daytime panels and networking giving way to?Deadmau5 concerts?at night. Times Square is once again home to massive digital billboards from MoonPay, Coinbase NFT and Rubber Duckz, among others.
We don’t talk about winter, no, no. “At NFT.NYC, the circles I’m in aren’t talking about prices,”?tweeted?Chris Cantino, a partner at venture capital firm Color Capital. “Aren’t talking about leaving crypto. Aren’t talking about the next fad or flip. They’re talking about the future, and how they are going to build it.”
NFT.NYC showcased both crypto’s optimism and its eccentricity. There are plenty of panels with names like “Intellectual Property Considerations Raised by NFTs.” Then there was the “God Hates NFTs” protest/marketing stunt and a?Snoop Dogg impersonator?going by Doop Snogg.
Coinbase is not alone in expanding its NFT business, despite the downturn. Yesterday, eBay said it had bought NFT marketplace KnownOrigin for an undisclosed sum. VCs, whose job it is to predict the trends, are still bullish as well. NFT-focused startups have raised $2.9 billion in the first five months of the year, according to?PitchBook, outpacing the investment of 2021, despite values falling. No one knows when, or how, this crypto winter will end, but for now, NFT fans are still putting the “fun” in “fungible.”
Essays of the Week
Facebook has been investigating Sheryl Sandberg since at least the fall for the possible misuse of corporate resources.
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For web3 startups to thrive, their marketing teams will need to spend marketing dollars to acquire users efficiently. Existing marketing technology won’t work for web3.
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Jumping Back Into the Web3 Debate
Good News of the Week
So far, Surge had a maximum investment ceiling of $2 million to invest in seed deals across India and Southeast Asia (SEA) but the Menlo Park- headquartered venture capital firm will take it up to $3 million with no minimum cap.
London-based LocalGlobe has closed on a?$500 million fund and changed its name to Phoenix Court Group. The rebrand centers around the firm’s desire to still focus on seed but have vehicles to be an investor in those startups at all stages.
In 2022, investors have poured over $24B into Series B deals; higher than the full-year total for three of the past five calendar years.
In May, 13 companies joined The Crunchbase Emerging Unicorn Board. The board now has 330 companies collectively valued at more than $200B.
Amsterdam, The Netherlands, June 22, 2022 – Infarm, the rapidly growing global urban farming company, today announced the establishment of its third Growing Center in the US and the largest Infarm Growing Center to date.
The commerce site has acquired NFT marketplace KnownOrigin, which bills itself as a destination for rare digital art. Terms were not disclosed.
How the Substack network is helping writers grow.
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Boston-based Electric Hydrogen closed a $198 million Series B—a mix of equity and venture debt—led by Fifth Wall Climate Tech.
Bad News of the Week
While Accel’s recent dealmaking has been consistent, the total dollar amounts of those investments seems to illustrate the bumpiness in venture funding today, according to Crunchbase data.
Netflix has been reducing its workforce since it reported disastrous Q1 earnings in April showing the platform had lost 200,000 subscribers globally in the fist quarter of 2022. In April, Netflix laid off employees from its entertainment site Tudum. In May, it let go of about 150 employees and additional contractors.
Brex’s announcement last week that it would stop serving small-to-medium-sized businesses shocked — and upset — many in its suddenness and delivery. The fintech decacorn, which started its life as a provider of cards to startups and SMBs, began notifying customers last week that they would be cut off from Brex’s services as of August […]
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Sequoia Capital still maintains massive public positions in Unity and DoorDash whose stocks have plummeted 80% and 75% respectively from their all-time highs
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Startup of the Week
Slack’s huddles are about to get a Zoom-like upgrade, with the ability to turn on video, screen-share and threaded chat.?
It’s been a year since Slack first launched the “huddle,” an audio-only chat space you can turn on or off in channels and direct messages. Huddles became the fastest-adopted feature in Slack’s history, according to the company. “Our customers have loved the ease of use and simplicity of huddles,” said Katie Steigman, a director of Product Management. “It was really cool to see even a few months in that the median length of a huddle is about 10 minutes.”
Huddles were meant to?enable?casual, ad hoc conversations, riding the wave of audio chat made popular by?Discord?and?Clubhouse?in 2021. Steigman emphasized that the spontaneous nature of huddles is still at the heart of the feature. They’ll be audio-only by default, so users can keep using huddles the way they always do.?
The new huddles are not meant to replace videoconferencing, Steigman clarified: They’re not meant for formal, planned meetings. “This will build on what people already use huddles for: impromptu coworking sessions,” Steigman said. “You’ll just be able to use video when you want to.” People will also be able to share screens in one huddle at the same time, and start a message thread if someone wants to share a link or tag a co-worker to join the huddle. You have Slack’s full selection of emojis at your disposal for reactions.?
Steigman’s favorite new feature is the ability to add a topic. If you’re huddling in a public channel, you can name the huddle “Beyoncé’s new single” so your co-workers — and fellow Beyoncé fans — know to join.?
The revamped huddles will be available to all Slack customers in fall 2022. Slack is also officially launching GovSlack, a more secure version of the app for government agencies and the private companies they work with, in July. Slack first?announced?GovSlack back in September 2021, laying out some of the compliance requirements it needed to fulfill. It’s still pursuing FedRAMP High and DoD IL4 certification.?
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The 'spock' in the wheel of NFT?