Community x Capital

Pt. 2: The collision of financial value, cultural value, community value.

How do financial institutions survive in the age of Community x Capital?

On last week’s episode, we covered how asset ownership has changed. What happens to markets when people have 💎🤲 (diamond hands)?

We ended Part 1 on a cliff hanger, asking how do traditional financial institutions and emerging companies think about underwriting new types of assets in order to enable investor to access liquidity.
 

In Part 2, we ask the questions about how companies can transition to the world of Web3.

Just...

Pt. 1: The collision of financial value, cultural value, community value.

Worlds are colliding. When culture becomes finance and when community is at the center of culture, the meaning of asset ownership changes. 

Financial value, cultural value, and community value have now merged together.

Owning certain assets that have community value or sentimental value, like CryptoPunks or Bored Apes (BAYC) or sports cards, may drive a different type of behavior around asset ownership.

Will holders of a certain rare sports card sell because they can achieve financial returns? Possibly, but now sentimental v...

In a world where community-driven investing is now a defining feature of the retail investing world in equities and crypto, how should people create an investment framework?

Perhaps the framework for investing becomes different in a world where any asset in the world can be investable and tradable. 

A modern day investment thesis looks a lot different in a world where memes matter and riches are made from primary research on Reddit rather than by roaming retail stores to understand consumer behavior (as many hedge funds would do). 

Crypto has unlocked the ability fo...

Twitter, Discord, and Time. 

When Bitcoin was pushing $20,000 in late December 2017, people asked: “are we late?”

When Ethereum was approaching $4,000 in August 2021, people asked: “are we late?”

When NFT sales hit a record-breaking $900M in the month of August, people asked: “are we late?”

Maybe we are late, but long-term early.

Yes, the early adopters may benefit most from being truly early - buying Bitcoin in 2010 or taking part in the Ethereum pre-sale in 2014 - but there will always be those who are earlier than others. And it doesn’t mean we are l...

We want to own what others own, says Rene Girard.

Human desire is based on the desire of others, with no regard.

Why are people willing to pay millions of dollars for a JPEG?

Maybe because it’s more than just a JPEG.

What if it’s a movement? What if it has beauty? What if it has utility?

We’ve reached the point where cultural assets have become financial assets. Art has always had cultural and financial value, but something feels different this time. 

Cultu...

Why has gold been valuable for as long as time?

Gold is chemically uninteresting - it barely reacts with other elements. Yes it’s scarce, but not incredibly rare. And yes, unlike silver, it doesn’t tarnish so it will maintain value thousands of years later.

Sure, gold is a store of value and an inflation hedge. But the big reason why gold is so valuable? It’s the stuff of stories. 

Gold is beautiful, which is a narrative that has been carried through generations. 

It’s aesthetically pleasing nature makes it somethi...

The competition for consumers' attention.

The bar has been raised.

As culture collides with finance, the stakes are higher to compete for consumers’ attention.

And in a world where everything has been gamified, and where every platform has to compete for attention, it is user experience that becomes the critical feature.

User experience changes everything. 

We have already discussed the first step to creating a better user experience - access. That’s been unlocked as finance has been democratized and investing has gone into the mainstream.

Now, as fi...

It’s time to read the meme leaves. 

Doge, GameStop, AMC are but a few recent examples that have proven that the memeification of financial services is real. 

Memes, in large part due to their representation of culture, have dramatically influenced how many people invest. 

And financial services could do well to learn from powerful features of consumer social. Features that have enabled online communities to be born for people to interact, create online identities, and build trust.

There are features of online communities that make people more comfortable trusting strangers on th...

“A master in the art of living draws no sharp distinction between his work and his play; his labor and his leisure; his mind and his body; his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence through whatever he is doing, and leaves others to determine whether he is working or playing. To himself, he appears to be doing both.” - Yvon Chouinard, Let My People Go Surfing: The Education of a Reluctant Businessman.

What is work? What is play? 

What if people could live in a...

The internet has profoundly changed the human experience by bringing us together in ways unimaginable. 

Investing might have been later to the party, but now investors are joining the party (rounds).

“Investing has become a team sport that you play with your friends on the internet.” Jesse Walden’s prescient quote kicked off our episode on how community - and the internet - play such an important role in investing.

The big question is how do we get everyone in the stadium? 

We talk about traditional financial rails and how the transiti...

From 776 launching their new venture fund with a diverse community of LPs and founders to incumbent financial institution Goldman Sachs running their own Clubhouse room, community is the fabric that brings us together.

How can we understand the value of communities?

In finance, we can no longer avoid community. People aggregate themselves and their views in ways that can change markets. 

In startups, we can no longer avoid community. Customers are more likely to engage with a company or product that they feel an affinity towards.

How can companies learn from n...

Financializing signal? Monetizing engagement? Get ready for the new world. There’s no stopping it now with the creation of NFTs.

Crypto has the potential to change the world by unlocking monetary freedom and giving creators control over their relationships with their communities and fans.

It seems as if we’ve finally reached the point of the mainstreaming of crypto - people are transacting on platforms like Sorare in fiat while using crypto rails.

We covered a lot of ground on this podcast from crypto to cards to counterfactuals:

With Miami taking up much of the conversation in startupland’s Twitterverse as it tries to brand itself the “capitol of capital,” we wanted to dive deeper into what it means to create a startup ecosystem in the age of online communities. 

What does it take to build a great startup ecosystem?

What comes first - Community, which creates highly engaged networks of operators, or Capital, which brings the investors to fund promising new ideas?

Why does reputation matter more than geography in the golden age of online identity?

What about the str...

On this holiday weekend, we want to release a special episode about the power of community.

Communities have the power to shape movements.

This episode was recorded a few weeks ago. Our recording was scheduled for 5 pm ET on the day of the George Floyd verdict. At 4:55 pm ET, the George Floyd verdict was announced. We felt that it was only appropriate to start with the news and see where it took us. 

From the Colin Kaepernick jerseys hanging on Alexis’ office wall to the European Super League, we covered a number of top...

Venture Capital is changing before our eyes. 

What does it mean to be a venture capitalist in today’s world?

Is the industry of venture immune to the tsunami of software and technology? Or do VCs need to innovate their own businesses in order to be the best performing investors?

How can software transform how VCs service their companies? What’s the balance between VC as a services business vs. VC as a product business?

We talk about all this and more on the latest episode of Community x Capital. And, of co...

Cards are about community. Cards are about capital. Cards are about culture … so we decided to write a few words to accompany this episode.

What's in a card?
That's why putting it into words can be so hard.

Cards are about culture.
Yeah, sure there will be vultures,
Trying to make it just about capital.
But there's a reason why President Biden has a Topps card on his desk right near the Capitol.

That 1953 Topps Satchel Paige,
It was from a time where black athletes were fighting for eq...

“If this is not the epitome of Community x Capital, I don’t know what is.”
 

What is the value of memes? Of money? Of mastery of a subject in an online world?

On one hand, as long as a big enough community of people believe in something, it can have value.

On the other hand, if something has no fundamental value - or if the community no longer believes in its value - then what is it worth?

Oh, and we now have sound effects 🔥

You can...

This episode opens with: “Coinbase, is that a thing?”

Should Coinbase go into traditional financial services or should they go deeper down the crypto rabbit hole?

Alexis says why not just build the new world order?

Michael says wait, what about institutions? How do they keep one foot in the traditional world while gaining exposure to the cryptoeconomy?

With the IPO of Coinbase tomorrow and Alexis being one of Coinbase’s earliest investors in their initial Seed round, we thought it would only be fitting to stick to the news and discus...