Good morning,
It took a lot for me to overcome my nerves and ask people (you wonderful folks) to support my writing. We’re not used to this model. We mostly consume content served by aggregators with a big brand and huge reach like publishing companies or social networks.
So we expect content to be free. Creators contort their efforts to please the algorithms that get them views and clicks. Consumers consume what they’re served. And behind the scenes, everybody on the platform is monetized in oftentimes questionable ways.
But that’s starting to change. Creators are directly connecting with their audiences–tools like Stripe, Memberful, Patreon, and Substack make it easy to set up. And as a result, we’re seeing a gradual cultural shift towards preferring to directly support the creators we like.
While aggregators offered previously unseen reach to potentially millions and millions of people, creators had to give up control and participate in indirect monetization schemes (like ads, selling of user data). Directly connecting to audiences gives creators more independence and a closer relationship with those that value their work (and a better business model, in most cases). I’ll write a whole post about this some day. It’s a wonderful thing.
This is an example of product-channel fit (finding the right distribution channel for your product), and it’s the topic of this week’s update. Dapps need ways to reach users, but there isn’t a good channel for distribution yet.
Airware, a company that raised $118 from top-tier VCs to build an operating system for drones, suddenly shut its doors to the surprise of the startup community. Why? A bad bet on distribution.
An ex-employee explained:
Airware was […] so far ahead that the drone hardware on the market wasn’t sophisticated enough to […] test out their software/train their algorithms. So they spent shitloads of money designing bespoke hardware, including two drones in-house […] Both projects were scuttled as hardware from [OEMs] caught up to needs, after sinking tons of engineering time and manufacturing into them.”
In a tale as old as time, a startup with the ingredients for success failed because they were too early to the market.
Tren Griffin observed a parallel between the fundamental challenge for Airware and distribution of software during the DotCom era.
Become a member to get posts like this
Support the site and get members-only benefits
or subscribe monthly for $12 a month
Members receive a members-only analysis each week that is timely and substantial. I've been asked to be more opinionated and responsive to current events, so I'll try to do that in this more private forum. If you want my critical take on what matters in the industry, you might enjoy these analyses.
You can see a sample of a members-only analysis here. And a list of all of them here. Don't take it from me, check out these tweets from members:
- "@tonysheng's writing is the best out there and this is worth every penny" --Myles Snider, CEO of Aurora EOS
- "Highly recommend signing up for a membership if you're full-time in crypto or passionate about the space" --Spencer Noon, Managing Partner at DTC Capital
- "All signal, no noise" --Zach Segal, Product at Coinbase
Over time, I'd love to develop more benefits like transcripts of podcasts (maybe host my own), a members-only discussion forum, AMAs with industry leaders, and more.
Thank you. I hope you'll stick around.
–Tony
If you aren’t already familiar with my work, I write long-form analyses on building and investing in crypto, and the impact of crypto on society.
My readers include investors at Union Square Ventures, a16z, Village Global, Multicoin Capital, Scalar Capital, and Polychain and builders of Bitcoin, Ethereum, Zcash, EOS, Tezos, 0x, and Coinbase.
Some awfully nice things people have said:
Tony’s blog is one of the best hidden gems in crypto. The content is regularly some of the most insightful out there. I read every post with a fine toothed comb.
–Kyle Samani, Cofounder and Managing Partner, Multicoin Capital
Tony is one of the most insightful and independent writers in the space. His newsletter consistently provides original perspectives on crypto/blockchain fundamentals that inspire you to think more critically.
–Soona Amhaz, Cofounder and CEO, Token Daily
If you read one person’s writing in the space, make it Tony’s. Tony breaks down complicated crypto concepts and economic theories in ways that educate both the beginner and expert alike.
–Erik Torenberg, Cofounder and Partner, Village Global
Not a member? You're missing out.
Join thousands of crypto insiders who make reading my analyses a part of their weekly routine.
or subscribe monthly for $12 a month