GRTiQ Podcast: 56 Jeff Morris

The following podcast is for informational purposes only. The contents of this podcast do not constitute tax, legal or investment advice. Take responsibility for your own decisions, consult with the proper professionals and do your own research.

Jeff Morris (01:52):

More recently, talking with builders and when you ask them how they plan to go to market, like what data sources they’ll be using, it always comes up the idea of utilizing subgraphs comes up in so many conversations and it just has felt like it’s just become like de facto piece of the web3 builders doc that they always consider using The Graph for some use case.

Nick (02:46):

Welcome to the GRTiQ Podcast. Today, I’m speaking with Jeff Morris, Founding Partner at Chapter One, a venture capital firm that calls itself a first check crypto fund focused on the web3 economy. Prior to founding Chapter One, Jeff was the vice president of product revenue at Tinder, where he helped grow annual revenues from 200 million to several billion.

(03:09):

During our discussion, Jeff talks about how he started his professional career as an aspiring rider, moved into tech and what the experience of building a unicorn was like and the launch of his side hustle passion project, Chapter One. Jeff shares a lot of great insights on web3, how crypto has evolved the venture capital industry and some of the projects he’s currently working with. We then talk about how Jeff first became aware of The Graph, why it caught his attention and how it fits into web3. We started the discussion talking about Jeff’s educational and professional background.

Jeff Morris (03:46):

So, I grew up in the Bay Area and was always interested in technology, but I actually went to school to study English at UCLA and thought I’d be a writer. And then through many twists and turns, ended up working on product teams, mostly in early stage startups. And I guess the big career moment for me was I was the VP of product over at Tinder and focus entirely on monetization, and so joined the team when we were doing about $20 million in revenue. And when I left, we had IPO’ed and was there a couple years post IPO and we were doing about $1.2 billion in revenue. And so, it was a really cool career moment.

(04:24):

And around that time, I was also getting really into crypto around 2017 when we were selling digital products at Tinder to digital goods. And I saw a lot of similarities in terms of what was going on in crypto specifically with NFTs at the time. And so, I kind of went down the rabbit hole and now run a crypto firm called Chapter One.

Nick (04:45):

So, I want to go back to your education in English and wanting to be a writer. So, if things would’ve worked out differently, what would you be writing if you had to guess?

Jeff Morris (04:52):

I’d probably at this point be writing for television and Netflix or Amazon types of series. I was really more interested in independent film and non-commercial storytelling and that unfortunately within the film industry largely no longer exists. And so, most of the great scripted content is made for TV or Netflix now.

Nick (05:17):

So, I’d be curious how somebody with that passion for the arts and writing script and probably really interested in good writing finds themselves in startups and entrepreneurial environments.

Jeff Morris (05:27):

Yeah. For me, I wrote a screenplay that got optioned and did five rewrites where I never got paid for them and thought there would probably be a better way to make a living. And so, I quit screenwriting to go work in digital media, a talent agency called UTA. Our job was to take YouTube creators and help them transition their careers to film or television. So, I was basically getting paid to watch YouTube all day, which is a strange job when you’re just getting out of school. But I was one foot in tech and one foot in entertainment and quickly realized that a better career transition would just be being entirely in tech.

(06:07):

And so, moved back to San Francisco and I really truly didn’t know where I fit in with tech, but became just really interested in how you build products, the creative process to working with designers, engineers, and then also positioning your products in a really compelling way, almost like you position like a film or television show, what does the go-to market look like that gets people really interested in what you’re doing and because there’s just so much noise within tech. And so, yeah, that was my path.

(06:42):

Again, I would not recommend it because there was a lot of moments of doubt along the way and did not have a really clear path to getting where I’m now and there’s just probably easier ways to do things.

Nick (06:55):

Well, you alluded to this in your answer, but I’m always curious in asking guests this followup because so many guests on the podcast have had careers prior to finding themselves in tech or in crypto, but what do you utilize from the perspective of being an aspiring scriptwriter and a writer in the space now do you think informs your process and the way you evaluate things?

Jeff Morris (07:18):

Yeah, definitely on the venture side, so much of what we do is storytelling. You’re trying to imagine a future that you want to help build as an investor and pitch founders on why you’re the best person to help them realize their own dreams within the context of what you’re trying to do, and then also try to convince our investors, limited partners, why you’re the person who will best resonate with entrepreneurs and founders and how you’ll find the best companies.

(07:48):

And so, a lot of it comes down to storytelling. And then also, I think in the context of writing, I always discovered if you didn’t outline things, you would always screw yourself over. There’s no shortcuts. And so, I think on terms of building products, you have to do a lot of pre-work, which is generally known as writing a spec or creating a roadmap. And that’s all an outline to how you’ll get to some really ambitious place which is almost outlining for a screenplay or a story.

Nick (08:21):

I love that overview and I can totally see how it connects. Thanks for sharing that. I want to go back to the experience you shared in your introduction about going to Tinder. Now, Tinder is a huge brand in the United States. I’m sure it’s worldwide. Jeff, I want to ask you about your experience. What was it like working for a company that had a unicorn takeoff in its brand visibility and its user base?

Jeff Morris (08:44):

Yeah, I think the best thing it showed me and taught me was what product market fit really feels like. And I think if you’ve never been a part of that experience as a builder, you’re always just guessing. You’re like, “Oh, this is what product market will feel like.” And maybe you come to the office one day after some high traffic day and you’re asking yourself, “Have we found product market fit?”

(09:05):

And all I can tell founders is like, you will know because all of your servers and services and you’ll have stability issues, you’ll have performance issues. Literally your website should be crashing if you have product market fit and you just don’t know it until you see it. And then I think in the lens of Tinder, a lot of people thought it was this, the hookup app that wasn’t ever going to be able to build a big business and monetize. And I think a lot of people in crypto specifically don’t take products as seriously as they should.

(09:36):

And an example I saw firsthand was I invested in Dapper Labs after they released CryptoKitties. And again, people thought CryptoKitties was a joke and granted it was [inaudible 00:09:52] kind of funny. They were digital cats, scarce digital cats that people were collecting and buying. But I think it was really easy to overlook the deeper vision of what they’d eventually build. And yeah, I think Chris Dixon has that great quote, every meaningful product or technology shift looks like a toy at first. It’s not the exact quote, so I probably butchered it.

(10:16):

But I think for crypto specifically, a lot of people look at crypto and think it’s still a toy or it’s not very usable or there’s some mainstream always has pushbacks on why crypto won’t work. And I’ve just found that to be consistent throughout my crypto experience and certainly at Tinder, felt that way too. A lot of people just thought what we were doing was not very serious.

Nick (10:41):

Well, going back to this idea of product market fit, I’m really intrigued by what you shared there. So, as a way to give advice, I mean, you had this incredible experience at Tinder, something unique. Not everybody on the planet will have the opportunity to experience something like that. In terms of the growth and the impact that you had, what’s the one or two lessons about product market fit that you could share with listeners?

Jeff Morris (11:03):

Yeah, I think it’s largely around experimentation velocity and how quickly you can iterate against whatever your vision is and not being too precious about how you get there. In the case of Tinder, it actually started within an incubator and they started, it was a business networking app where the cards, the Tinder cards were people you could connect with in a professional context. And they were able to pivot to the dating use case and had the same UX and UI, but just adjusted the use case and it exploded true virality.

(11:41):

And so, I think you just need to be really thoughtful on around how quickly you get to market and how fast you can experiment it. I think within crypto especially, we’ve seen so many projects take years and years to hit main net. And granted a lot of the technology is highly complex foundational work that people are needing to build, so it’s not as easy as spinning up a mobile app.

(12:05):

But I would encourage as much as you can just to get to market quickly and see if there’s, I always call it a pulse. Every product has a pulse. And you want to see when you ship something if your product has any pulse, because sometimes products are dead upon arrival. You ship them and literally nobody cares. And so, it’s probably my best advice.

Nick (12:29):

And so, in your role at Tinder, just one last question about your time at Tinder, but in your role there, you were VP of product revenue and a lot of technology firms struggle with monetizing their services and the things that they’re doing. What lessons did you learn about revenue and monetizing technology there that you look now as you work with crypto firms?

Jeff Morris (12:51):

Yeah, I think it’s funny, crypto, well, I would say two things. One, crypto is highly, highly transactional in many use cases. So, obviously trading is a big use case. NFTs have built in monetization, and so crypto is blessed that a lot of it is just making finance more accessible and also social and creating new primitives to express ownership. These are all things that have real revenue models.

(13:19):

And so, I think for crypto founders, a lot of them don’t want to talk about monetization. They want to talk more about community as their main focus. And I think you can do both. A lot of people in web2 were always build a network and then you figure out monetization later. But I think it’s okay to think about monetization really early in your journey. And I don’t view it as being something like a goal you need to get to is to build a big enough network to have that conversation.

(13:54):

But I would say in the case of exchanges and marketplace, it’s like it’s actually pretty amazing that OpenSea’s built such a massive business with such a small base of users. And so, if you think about web2, if you had a marketplace with 500,000 monthly actives in web2, that would probably not be considered to be a category winner and definitely wouldn’t be generating billions of dollars in GMV per month, gross marketplace volume. And it’s just staggering how much revenue you can generate in crypto with a relatively small base of users.

(14:33):

And so, I think one of the struggles of investors who are new to crypto is just recalibrating their expectations for how large these networks need to be because you don’t need to reach Facebook scale or eBay scale or whatever it is to build large businesses, which is pretty cool. I actually think it’s really neat for builders and takes a lot of the pressure off some of the web2 product decision making that led, I think to less where we are honestly.

(15:04):

Because I think the goal of growth at all costs and trying to onboard a billion users to a single platform ended up working against web2 to the point where web3 was born to address some of those faults.

Nick (15:19):

Well, I want to talk a lot more about your thoughts and opinions on web3 and some of the crypto projects that you have affiliation with. Before I do, I want to talk about Chapter One and how that stage of your career came along. So, it seems to me while you were working at Tinder and having all the great experiences you’ve described here, you started what appears to be an entrepreneurial hustle, a side hustle in Chapter One. Have I got that right?

Jeff Morris (15:42):

That’s right, yeah. So, I was investing just as an angel and I have been investing for about 10 years, but the origins of Chapter One was I was a scout for a venture fund called Index Ventures. And they gave me a pool of capital to invest in crypto largely. And I thought it’d be fun to just develop a brand around what I was doing as an angel. And now that I had a fund, I was really interested in actually branding the work. And through that fund, which I called Page Zero for zero-knowledge proofs, I ended up building a big enough track record where I was able to raise a real venture fund, which to me didn’t even seem possible.

(16:25):

But there’s a lot of ways you can start a venture fund now, which are pretty interesting, maybe a longer conversation, but the various entry to launch a fund, a lot of the complexity’s been removed by platforms like AngelList, and so you can start a venture fund and initially Chapter One just myself, and now we’re in fund two and I’m lucky that we’ve grown to a larger team of people who are really phenomenal in different domains.

Nick (16:52):

And for listeners that aren’t familiar with Chapter One, how would you describe what Chapter One is and what it does?

Jeff Morris (16:57):

Yeah, I think our mission is to make crypto and web3 more reusable and more accessible, taking the lens of product design and data sense as being areas we believe we’re particularly strong in. And we want to help founders remove a lot of the complexity of crypto and web3. And that can be the complexity of the actual product or things like making better on-ramps using education or removing the topic of crypto altogether.

(17:28):

And a good example we missed a long time ago in Lolli. And it’s a Chrome extension where when you’re shopping on websites, you can earn crypto and it sounds pretty simple. But by installing a Chrome extension, you’re actually creating your first crypto wallet and you’re not having to think about what does it mean to set up MetaMask for the first time. It’s just all built into the experience.

(17:53):

Yeah, and then I guess more missions focus too, where we really believe in this idea of people being able to own their time and their work and their contributions to the internet. And so, someone that’s been described as the ownership economy, but we’re just really excited about this new internet where incentives are finally aligned to place users in as a first class citizen within the internet.

Nick (18:20):

What did you learn as somebody with a very busy day job working at Tinder and then having this side hustle that eventually became Chapter One and all the success you’re having there?

Jeff Morris (18:31):

I learned a couple things. And at the same time, I was also getting my MBA at UCLA while I was doing Tinder and Chapter One. And so, I basically learned if you really organize your time and your schedule and you start to prioritize a couple things above everything else, you can accomplish a whole lot more than you thought was possible.

(18:52):

When I was only working at Tinder, I was busy. But when I added those other things, I just needed to really prioritize my time. And some of that was saying no to all of the … There’s a lot of distracting things in our lives, a lot of people asking for your time and whether it’s socially or professionally, and so you have to reprioritize your relationships to support doing multiple things. And then also, I think more broadly, I think the idea, and this is a web3 idea of having multiple jobs can actually be really helpful to whatever you’re doing.

[NEW_PARAGRAPH]So, my investing really helped my product work at Tinder because I had such great visibility into everything that was going on in the ecosystem and also things that were going to be built in the near future that I felt like I just had a more well-rounded perspective as when you’re just working on one thing all day, you have tunnel vision and you often lose sight of the rest of the world.

(19:50):

And so, within crypto, you see there’s people who work for multiple jobs. They basically wake up in the morning and they have three or four different jobs. I think fundamentally, that probably helps them a lot in terms of their perspectives and ability to think more holistically.

Nick (20:07):

In preparation for this interview, I took a look at some of the information online about Chapter One, and I noticed that a lot of your partners, some of, I presume the LPs that you work with are very notable names in the technology space. We’re seeing names like Marc Andreessen and Chris Dixon. For people that don’t know, these are very highly recognized names in traditional, conventional technology in addition to in the web3 crypto space.

(20:30):

As somebody with connections to not specifically those two individuals, but that circle of people and investors, I’d be curious to know what you’re hearing from some of those folks that invested and built web2 and are now looking at web3 and maybe more specifically, do you think they see this thing as an inevitability? Are they seeing this as an experiment, a potential passing fad? What are you seeing there?

Jeff Morris (20:57):

Yeah, it’s a great question and have been lucky to work with a lot of folks you mentioned. I think the one thing that I really remember from Marc Andreessen and he didn’t tell me this specifically, but he said that the original sin of the internet was not having a wallet or credit card built into the browser because it’s created an internet. That’s how they fragmented and would it be way easier for us all if you had a wallet connected to the browser.

(21:30):

And so, to me, that’s crypto. It’s this idea that you have MetaMask or a wallet in your browser and you can really easily buy and sell things, digital assets that you think can either appreciate and value or that speak to you directly as a human in terms of what you believe in. And so, I think from that perspective and just looking at the actions of Andreessen, it does feel inevitable that this is happening.

(21:58):

When you go to a crypto conference, I was at ETHDenver. We went to Lisbon twice last year. We were at MAINNET. We were at Bitcoin Week in Miami. We’ve been all over the world and you see the energy of 22-year-olds and not only 22-year-olds, but this group, especially this group that’s just graduating from CS. I read that 70% of Stanford CS majors plan to go into crypto after they graduate from this class. And so, if you just think of let’s just remove all the debates around the purpose of crypto and the usability currently, and 70% of the CS department from one of the world’s top programs wants to build in this area.

(22:42):

And if you just simply follow the best technical talent where they’re going, this is where they’re going. And so, I think it’s inevitable, and I don’t know the exact order of operations. I don’t know how many air markets and bull markets we’ll have before we get there, but it just to me is so clear that this will be a layer of the internet that will probably be the most important part of where people build and where I invest over the next at least 10 or 20 years.

Nick (23:13):

Then as somebody who has a background in crafting stories and branding and positioning, what do you make of some of the public discussion around web3? How do you make sense of web3 and what’s going on in terms of defining it and understanding it?

Jeff Morris (23:28):

I think it’s actually, so web3 as a brand, I think it’s a blessing and a curse. And crypto to me had a lot of baggage. It was a lot of the early crypto use cases with Silk Road and everything else, I think created this idea that crypto was, there was something that felt like it was for bad illicit internet transactions. And we all knew that wasn’t the case.

(23:54):

And so, web3 came around and was much more positive. It felt more like an evolution of web2. And I think it was just really easy for people to understand this is the next version of the internet where I think it’s gone wrong and where it’s created a lot of debates and tension is web3 claiming to be a replacement of web2 and disregarding all of the work that was done to get us here.

(24:21):

And I think a lot of web2 companies have taken that personally and also felt threatened by that fact where especially if web2 companies for talent retention. I think when web3 came along, it almost made web2 feel like when web3 came along as a phrase, it made web2 feel like it was something of the past and antiquated.

(24:41):

And so, I think web2 took that personally. And to me, web3 is very much, it’s a new layer. It’s a new set of capabilities that you can build with as a founder or product person. It shouldn’t be thought of as being the end of web2 or the death of web2 because I think that’s where we start to have a lot of heated discussions and it’s not super useful.

(25:06):

But the funny thing about web3 is if you talk to, you could stop the smartest people at a crypto conference and ask them what their definition of web3 is, and every single person will have a different definition. And so, there isn’t one definition. It’s a lot of, it’s just like a belief that we need to build a better, more equitable internet for it to fully realize its potential, especially for creators and artists and builders. I think those are the people who got the short end of the stick in previous versions of the internet. And so, yeah, hopefully that answers some of the questions.

(27:07):

No, it does, and I want to reset the question and give you a lot more terrain here. Let’s assume that we go to bed tonight and the canvas is wiped clean and when we wake up in the morning, you, on behalf of everybody working in crypto and web3, get a define and position it. I know you’ve alluded to some of these things in some of the answers you’ve already given, but how would you then position and define web3 with a blank canvas?

Jeff Morris (27:41):

To me, web3 and there’s been a lot of … Like Chris Dixon actually has a really good framework, which is web1 is read, web2 is read, write, and web3 is read, write, own. And to me that word “own” and the ability for users and creators to actually own their contributions to the protocols and platforms that they use every day is probably the most powerful part of web3.

[NEW_PARAGRAPH]So, it’s almost a business model shift as much as it is a tech technology shift, which is pretty interesting. I think to me, web3 will just enable better communities and networks to form around this idea that the end user actually gets to own a piece of whatever platform or community they’re contributing to. And there’s different ways to define that ownership and to determine those rewards.

(28:33):

But at the end of the day, this idea of us contributing our data and our efforts to platforms and not getting anything in return appears to be over and what’s being built instead is an internet where you do get value from contributing to platforms and value is direct monetary value in the form of owning those networks.

Nick (28:57):

You’ve mentioned artists and creators several times in the discussion so far. How does web3 change the way they do work and maybe even that business model? And I know you’ve already referenced there’s a sense of ownership or even literal ownership. But beyond that element, what does it change for artists and creators?

Jeff Morris (29:16):

I think that there are a few parts of web3 that’s already shown to be more impactful than web2. But I think about obviously the most, probably the hottest venture category a year and a half or two years ago was the creator economy. And when you look at the platforms that were being built and they’re still being built, a lot of them are, Kevin made creators, I guess more their own businesses. They’ve really created the sense that the creator is a business and helping creators capture more value.

(29:53):

But if you look at things like Spotify and you see what the actual artist payouts are and how little of the creator groups actually make, it’s stunning. It’s like the top 10% of musicians on Spotify do make enough to have some livable income, but most people are making nothing. And you look at things like music NFTs that are popping up and the ability to monetize your audience directly through a new primitive that has the idea of community and membership and also scarcity.

(30:31):

It’s really powerful to see that even artists like I was at an art event a couple weeks ago and listening to the stories of artists who’ve created their own N F T collections and how much money they’ve been able to generate for themselves relative to their prior careers as graphic designers or digital artists, it really is a big shift. And it’s not all about making money too. It’s also about the ability to create better communities and a better membership model for your audience I think is really powerful too.

Nick (31:04):

So, again, hearkening back to your ability to craft narratives and write scripts, if web3 is a story, where are we in the evolution of that story?

Jeff Morris (31:14):

I think we’re literally just at the beginning where we’ll look back on the PFP NFT craze and we’ll look back on defi 1.0 and we’ll look at all these things as really being experiments on what’s possible. And if you look at how long it took to build the internet, whether it was web1 or web2, these were 10 to 20 years of real innovation and that innovation actually happened when it was a lot harder to build products because you didn’t have as much off-the-shelf tooling as we do now or open source tooling. And so, I think it’ll just be an incredible moment for experimentation. And so, I would say we’re really early.

(31:57):

What what’s probably going to happen is we’re going to have a lot of many different cycles where even right now, it feels like there’s like there’s a bearish mood to crypto today in March 2022, and not so much on the builder side, but just the narrative feels like we peaked in, call it Q4 or maybe January coming back from Christmas.

(32:22):

And so, we’ll have a lot of these cycles where people end the space and leave the space. And I think that will more be like, it’ll just be interesting to see how long those periods take because in 2018 and ’19 it, that was a tough stretch and it was hard to stick around for a lot of people. Even myself raising my first fund, nobody wanted to hear the word “crypto”. And so, hopefully times have changed.

Nick (32:50):

I can’t imagine what it must be like to, number one, start a fund, get people to understand your vision, your story, and then trust you with their capital to go out and invest and then to compete and invest in a market like crypto, which as you said there has had a lot of up and downs in its past. How do you weather that both from a business perspective but also personally? I got to imagine that’s fairly stressful.

Jeff Morris (33:15):

It is stressful, and I think at least for my first fund, we were doing a lot of crypto, but it wasn’t only crypto, and so there was some balance there. Now, we’re only crypto as a fund. And so, I’ve been through enough cycles personally where I just trust that if you take the lens of an early stage investor, which is a 10 to 12 year view of your investments, I just have to believe that a lot of the things we invest in will over time succeed in work.

(33:48):

And also there’s a lot more capital in the system now where when I invested in DAO from The Graph and other things, there weren’t a ton of crypto funds to support companies through those bear markets. And so, you saw a lot of flat rounds or bridge rounds where companies were just raising money to survive.

(34:07):

And I kind of think now’s enough money in the ecosystem that companies will be able to fundraise through those down markets much easier than they did in previous cycles. It might still be hard if you don’t find product market fit out of the gates. But as you know, there’s just so much money in crypto right now that it’s really an amazing time to be a founder and very founder friendly.

Nick (34:28):

So, you mentioned the amount of investment in the space. You referenced earlier the talent that’s moving into this space. The question then is what are some of the challenges you see ahead for web3? What must be overcome for web3 to realize its full potential?

Jeff Morris (34:46):

It’s amazing. We have this incredible NFT bull market that largely took crypto mainstream. And if you just watched the Super Bowl, you would know that crypto is mainstream in terms of just knowing the basics of what’s happening. I think now you can ask your friends, you can say the word “crypto”, and they at least have some understanding of what that word means.

(35:10):

Largely, I think at least in groups that I’ve … Like my friend group and also the larger non-early adopter ecosystem, I still think crypto is pretty confusing from just an on-ramp perspective. And a lot of people don’t feel like they know how to participate. And so, a huge part of crypto, which I’ve seen in terms of success stories are it really does require mentorship and onboarding through one of your friends or somebody really helping you get started.

(35:43):

And I’m not sure how that scales or what the breakthrough moment is where crypto suddenly feels like everybody in the world should own digital assets because if you’re building a balanced portfolio, you’d be crazy not to own crypto knowing how asymmetrical the outcomes can be, but there’s still just such a huge education gap.

(36:04):

And then the actual things that have worked in crypto are even harder to grok. Like defi for most, it’s almost like a foreign language of financial concepts that just do not make sense beyond just basic yield. It’s very hard to grok. And then NFTs themselves, I think beyond the PFP rarity use case, I think there’s still a lot of people who don’t fully grok that NFTs actually represent membership and belonging to communities. I think what people think of NFTs more broadly, it’s still the crypto punk use case, which is cool, but we know there’s a lot more utility that can be built with NFTs.

(36:52):

So, yeah, I think it’ll take a long, long time to play out. I’m curious if things like gaming can help accelerate crypto. So, suddenly again, you’re not having to set up a MetaMask wallet or make the decision to go on open scene and purchase your first NFT. It’s just baked into the utility of what you currently do and love to do.

(37:16):

And so, I’m always just curious what will that tipping point be where suddenly we go from three million people on NFTs or whatever it is. I think it’s a little bit larger than that, maybe it’s closer to 10 now, to just everybody owns it because it’s just a part of either games or something. It could be it’s integrated into web2 social networks better, but there has to be some tipping point.

Nick (37:43):

When we were talking about artists and creators, you talked about the innovations that web3 provides in terms of changing the business model. I’m curious if you have an opinion on how web3 and crypto may have impacted the business models of venture capitalist firms or angel investment firms?

Jeff Morris (38:00):

For sure. I think this is a story in progress. But the general idea is because especially tokenized crypto assets are liquid and publicly available that now everybody within two to three years of a company going public even sooner than that in Japan, the token launch, everybody can be an early stage investor now, which is pretty wild. And so, teams, especially teams that are building more decentralized products have actual incentive in terms of building more network value to offer less of ownership, less ownership to VCs. And so, you have diversification rounds where VCs do have a small percentage of the total ownership.

(38:43):

But I guess how that plays out is I see a role where a much larger audience can actually participate in the financial upside of early stage startups, which I think is amazing for anyone who has the opportunity or desire to become an investor. Where that might leave venture is you’ll probably have funds that get less ownership in individual companies. You’ll have way more venture funds competing for fewer spots on a cap table, whether it’s an equity round or a token free sale. And so, you have seen the unbundling of VC in many ways already, and I think that will continue.

(39:25):

And it really puts more of the onus on each venture capital firm to differentiate their product and build services or an investment team that can actually tangibly help founders. And we’ve seen that a lot in crypto with defi focused funds who help with liquidity or market making. We’ve seen that a lot with teams that have any regulatory concerns. There’s a lot of funds that focus on very specifically with regulatory as a service. And so, yeah, you’ve seen the unbundling of VC already in some ways and I’d expect that to continue.

Nick (40:02):

How would you describe the market right now in terms of competition between VCs trying to get investment in some of these crypto projects? Is it pretty competitive or is there a lot of opportunity still?

Jeff Morris (40:14):

So much opportunity because there’s just so much company creation. I’d say the competition comes largely from the fact that one piece of it is there’s just so many more funds, and so there’s in any given deal more competition. The second part of it is I think there’s almost no secrets in venturing anymore. It used to be more of a private social club. But now everything, especially in crypto, most projects announce themselves on Twitter or they deploy there for a smart contract, like they’re on chain. And so, there’s just more visibility into what people are building.

(40:53):

So, when you have this combination of more funds, less information advantages, you just have an environment where there’s just hypercompetitive rounds. And so, I don’t expect that to change anytime soon. And again, there will be this moment in time where a lot of venture funds I think won’t make it. Like the WAGMI ethos I think is awesome, especially for builders, but I don’t know if all venture firms are going to WAGMI, and so that will be interesting to see.

Nick (41:25):

Jeff, how would you answer this question that you see show up on social media occasionally, and it has to do with the ethos you just mentioned there, but the ethos of web3, which is that it’s all decentralized and there’s low barriers to participation? And the argument sometimes goes, well, if you look behind a lot of these decentralized entities, you’ve got a bunch of VCs and invested in them. And so, in fact, web3 is just another step in the web2 process of more VCs owning more of technology. How would you answer that challenge or I guess that criticism?

Jeff Morris (41:59):

I think it’s valid in some cases. I think where things get most spirited and heated are for liquid projects that have publicly available tokens where venture funds are able to negotiate discounted … They’re able to invest at some discount to the publicly available price. That to me, candidly, I don’t know how I feel about that. I think it can be attempt to conflict of interest and often not totally fair to the community who spent so much energy helping build those networks.

(42:35):

In terms of early stage pre-product market fit or pre-product companies, which is largely where I invest, I don’t see that many rounds happening where a single fund owns a size amount of that network. Largely, it’s now a lot of more community rounds or you have a fund that maybe owns 10 to 15% of the company at the upper end. And so I get it. I think there’s always a tension between VCs and builders and also the larger community.

(43:08):

A lot of that comes, I think, out of VCs in the past and still happens not providing actual value and overpromising and underdelivering. I think the world’s much more online now and much smaller and reputations are, I think, easier to glean from doing very basic diligence on each venture fund.

(43:32):

And so, I would encourage builders and community members to be really thoughtful about how they figure out which venture funds can actually help move projects forward. Yeah, I guess I think venture can be positive if you find the right partners, but obviously understand the fact that at times, that hasn’t been a promise that a lot of ECS have delivered on.

Nick (43:59):

So, you’ve referenced this a couple times, Jeff, and it’s part of the reason you and I are speaking today. Chapter One was an investor in The Graph. I want to now shift our conversation to The Graph and your experience working in this community, both from an investor perspective and as a member of the ecosystem. Can you share with us when the first time was you became aware of The Graph and what some of those original impressions were?

Jeff Morris (44:21):

Yeah, talked to Yaniv Tal when he started building the project I think in late 2017, and really, he pitched The Graph as being, it was a huge vision, but it was Google for crypto, like this idea of building accurately indexing all launch chain information in a really ways that hadn’t previously been done. And so, that was just, he came in with a really big pitch. When you hear Google for X, that’s a pretty big vision.

(44:49):

And I guess more recently I’ve had to figure out where to delegate my tokens to and have been going through that process, I guess, through interviewing different folks who I thought could be good stewards of my tokens.

Nick (45:03):

What was it then about the pitch from Yaniv and this idea of The Graph in the context of web3 that sallied your energy and motivation to get involved?

Jeff Morris (45:16):

I think it was this idea that because all data is on chain and you have this environment where you could actually create really elegant of information if you incentivize the community correctly. It just seemed like a very necessary piece of infrastructure that if I was building a product I would want to use, and even more recently, we’ve thought about different products we can build at Chapter One. And it’s not easy to query on chain data in a more generalized format.

(45:49):

So, to me felt like something I would actually use as a builder, which I thought was really telling. And also, even the team, as I mentioned, they have a very decentralized ethos that I thought really to me felt authentic and they just felt like the right team to build this.

Nick (46:08):

With your hands in so many different projects in the crypto space, are you hearing The Graph come up in other circles where you’re thinking, “Oh wow, there’s adoption here. People are knowing and using The Graph?”

Jeff Morris (46:21):

I think so more recently, talking with builders and when you ask them how they plan to go to market, what data sources they’ll be using, it always comes up. The idea of utilizing subgraphs comes up in so many conversations and it just has felt like it’s just become de facto piece of the web3 builder stack that they always consider using The Graph for some use case. And so, I would say, I’d say probably in the past year or two, I’ve noticed it more and more. And I think part of that is the team at The Graph has done an amazing job working with the community and really, I feel like they’ve really created this market through a lot of hard work.

Nick (47:06):

Are there any milestones that you’re watching for as you watch the ecosystem at The Graph continue to grow and expand?

Jeff Morris (47:13):

There’s no specific milestones. I think I’m more interested in specific use cases. The use case I’m most excited about tends to be around structuring. I’m really interested in seeing how web3 social graphs will be built. I’m really interested in web3, I guess like the consumerization of crypto. So, yeah, I more had my insights on how they help us build better social networks and what we can query to create those networks from scratch.

Nick (47:47):

Jeff, you’ve been very generous with your time and going through a lot of questions about your background and how you became aware of The Graph and eventually investor, and not only an investor, but a participant in The Graph ecosystem as a Delegator. I noticed also you’re involved with a project called Spline. I believe you’re on the board of directors there. What can you tell us about what you’re doing there?

Jeff Morris (48:06):

Yeah, so I’ve long thought that the web, especially as mobile came out, the web started to feel really stale and boring because it’s largely 2D. And so, the Spline is building really, if you ever use Figma and which is 2D design, they’re basically building Figma for 3D is the easy pitch. And I want to see the web become more three-dimensional. And luckily, there’s a lot of tailwinds pointed in this direction.

(48:33):

When I invested in Spline two and a half years ago, nobody was talking about the metaverse. That was a part of the everyday lexicon. But I think there’s this idea that the web can be much more immersive. And as we spend more time online in areas and call it the metaverse, I don’t actually love that phrase, but it will become more three-dimensional.

(48:54):

And one cool project that actually reminds me of Spline is NFT Worlds, which maybe you’ve seen, but you basically can buy a plot of land and they built it on top of Minecraft, but you can create your own NFT world. You can really build it, which is entirely done in 3D. But yeah, I really want the web to be more 3D and Spline is helping make that happen. And I’m on the board, but really and truly, I’m just a fanboy of the project and loving what they’re doing.

Nick (49:26):

Sounds like an incredibly cool project. As someone who uses Figma, I love the idea of being able to do something at 3D there. Are there other projects you’re keeping an eye on or tracking as well?

Jeff Morris (49:35):

Yeah, I think there’s a few areas that I’m really interested in, but one is just the future of wallets. I think the wallet as your operating system for crypto feels like we’re still in the early days of what that will functionally look like and do. And so, I think this idea of a MetaMask type extension where you just have your assets and your activity in view will feel really basic in the near future. And there’s just a ton of really interesting activity going on there.

(50:06):

And I’d mentioned earlier I’m really interested in crypto meets social and specifically I think we’re in this moment in time where finance is now so social. Finance to me was always the last frontier for what could be made social.

(50:21):

And so, this idea of being able to really easily spin up a Dow and invest with your friends or being able to track what your friends are doing on chain and ate into what they’re investing in or minting, it’s just such a cool time where I don’t think we’ve even fully … We’re in the first inning for what can be social in terms of crypto, and much of it happens in Telegrams or Discords, but I think we’ll build actual product around those use cases pretty soon.

Nick (50:52):

Well, I really appreciate your time. I want to end this discussion with two final questions. The first one is, as somebody who makes a career out of finding projects to invest in both personally and from a business perspective, how do you navigate the industry that never sleeps 24/7, 365, always new information? For listeners that want to learn how to do that, how do you do it?

Jeff Morris (51:18):

Yeah, I think you can’t be an expert on everything and you also do need to sleep. And so, I think it’s about picking the themes that really interest you. And so, right now, as an example, I’m spending a ton of time within the Starknet Ecosystem and trying to figure out, I guess, where the best builders are hanging out and what they’re doing. And that’s probably something I decided to spend time in two or three months ago.

(51:43):

But I find a lot of happiness in crypto when I pick one or two things and just try to go really deep on those areas and then you can move on or you can keep them in your list of things that you want to do. But I feel less happy in crypto when my knowledge is really surface level and shallow. And so, it’s really easy to want to get pulled into the next Twitter headline or the next greatest thing.

(52:14):

But I would just say pick a couple things that you really aren’t interested in. It could be like you could spend a year on getting caught up to speed on defi. It literally could take you a whole year. And so, I’m starting to see a lot of venture funds starting to verticalize their crypto teams, which is interesting because when you were at a crypto fund in 2017, you could actually cover, feel like you could cover everything now.

(52:40):

Even professional investors are saying, “I have to wake up and focus on one small piece of the ecosystem or else I just won’t know what’s going on.” So, yeah, I guess my biggest advice would be don’t feel like you need to keep up with every news story. Pick a couple things. It’s really easy to become top 1% in really small areas of crypto. You could be the world’s top 1% expert on The Graph outside of the core team. I think that’s a cooler approach to navigating these markets and this industry.

Nick (53:14):

And the last question I have for you is this. As somebody who has an MBA from a top university in the United States, somebody who worked at a vice president level role at Tinder, was a one-time script writer and now an entrepreneur launching Chapter One, if you throw all those experiences into one bucket, what is it that you’ve learned about the world, about business that you think most people may not understand or know themselves?

Jeff Morris (53:43):

Yeah, I think it’s that you can become an investor or an expert in crypto if you just apply yourself. You actually don’t need an MBA or any credentials to become an expert in this space. I just got off the call with somebody who, I think they’re 20, 22 or 23, and she’s completely kicking butt after being in the space for three years, and she survived one really serious winter, but kept her focus.

(54:19):

And so, within crypto specifically, maybe it’s more broad, but it’s probably about just sticking with something for a long period of time, even when things aren’t going well. And so, within crypto, I’ve heard this a lot and it’s true, if you just stick with it and you stay in the space through every cycle, the people I’ve seen who’ve done that have been rewarded financially and personally.

(54:46):

And so, yeah, I don’t know if there’s a grand lesson there other than you actually don’t need all those credentials. It’s just pursue what actually makes you happy when you wake up in the morning and do that with a high level of intensity and focus and stick with it through bear markets and rough moments and you’ll become an expert and you’ll also just find yourself in a really good place when all said and done.

Nick (55:14):

Jeff Morris, I want to thank you so much for taking the time to come on the GRTiQ Podcast. You’ve been very generous and for letting listeners learn more about you, Chapter One and the great work you’re doing there. If listeners want to follow you and stay in touch with some of the things you’re working on, what’s the best way to do it?

Jeff Morris (55:29):

Yes, @jmj on Twitter and yeah, I’d love to meet you all. I think I’ll be at The Graphs conference in San Francisco in June if anyone’s there. And otherwise, look forward to seeing you all on online.