Gm POD readers!
We’re back with another post from our executive insights blog, Bears Are for Building. If you’ve ever wanted to sit and chat with the C Suite about building in Web3, subscribe for free.
—
In other (big) news, the new Flipside App is launching next week! Be on the lookout for the announcement here and on Twitter.
To try it in pre-release, head to next.flipsidecrypto.xyz.
Now, let’s get to crypto’s failure(s):
(For “legal reasons”, the above meme does not necessarily reflect the opinions of the author or Flipside.)
“Tell me about a time when you failed.”
A favorite prompt among job interviewers. After all, it’s universal — everyone fails, so everyone should have an answer.
For me, this question is critical for every hire. Tell me when you failed. But the question I’m really looking for you to answer is:
What did you learn?
Because failure, like inflation, is transitory (don’t @ me, yeah I’m in Camp Transitory, generally speaking). A passing state. Well, it is as long as we try again, reflecting on how we can do better, at least. Fix what we screwed up, learn and move on.
It isn’t just people, either. Projects, companies, industries, even nations fail during their evolution. Even the internet failed at important points in its history.
The first thing I used the internet for — okay, my friend used the internet and I was sitting next to him — was looking up the script of Monty Python and the Search for the Holy Grail.
We found it, but around that same time he also almost ended up getting catfished in a chat room he showed me with someone called "Maid Marian", who was asking for his address. (This was 1992. We were 14.)
So was the internet designed for looking up movie scripts from the 70s? No, but it worked, I guess. That’s one thing it didn't fail at, at least. But the internet burned a lot of capital figuring out what it wanted to be when it grew up. Remember that Dotcom bubble burst in the early 00s? Yeah, I watched it from my financial economics classes and laughed at the silly irrationality that our models would have steered us away from. It kept learning and failing until we have what we have today — a massive store of knowledge, social connector, and infrastructural layer incomprehensible to anyone in history before the past maybe 60 years.
So when someone says “crypto failed”, thinking it’s over, I just shake my head and imagine how a job interview might go:
*Shakes Crypto’s hand, beckons for it to sit.*
“Nice to meet you, Crypto. I see here you’d like to interview for the role of, let’s see here… changing the world?”
“Among other things, yes.”
“Great. Then, let’s get right to your history. Tell me about a time when you failed.”
So many possible answers. What industry-shattering event came to mind? I tend to think about crypto in the context of the following categories, so let’s just take a look through each:
Stablecoins (particularly, algos)?
Probably not a great idea from the jump, if we’re honest (see: “death spiral”). Markets learned this lesson a long time ago — always have release valves. This wasn’t really a crypto-specific problem, even if this particular design was borne in crypto. (Though, maybe we could’ve taken a hint from TradFi and avoided this? Who knows.) More normal stables such as USDC, or decentralized versions like DAI? Now we’re getting somewhere.
I swear if I read about another algo stable that’s “different this time”, I might just quit. Or at least actually start rage-Tweeting into the void.
CeFi?
Yeah, we’ve been working on these lessons since the development of modern economic paradigms in the Enlightenment and before. Don't grift. Don't steal customer funds. Don't over-lever. Crypto itself didn't fail here, the market-manipulators around it failed to suss out the problems (like the VCs who threw money at SBF without really digging in — hello?)
I read about when Alex Pack at Hack.VC passed on investing in the early days of Alameda / FTX. They were asking the right questions, and the Alameda / FTX books were opaque enough that they moved on — and SBF gave him shit on Twitter for doing so. Who's laughing now? Then there’s Genesis, 3AC, GBTC Trade? Same. It’s all leverage, all typical Wall St tradfi stuff. I was front and center for the GFC, remember? Seen this before.
NFTs?
Many eras in history books are benchmarked by assets that get bid into the stratosphere, then crash. Some are still around, figuring out new ways to evolve and make a difference (and it’s not tulips, though they are still around, and your spouse might appreciate some).
What did we learn from NFTs? Beauty is in the eye of the holder, and we like the jpegs. What’s profit?
Bridge and other hacks?
So you're telling me crypto is the only industry that gets hacked for economic value? Where do you get your news from, good ser? Not a crypto-specific failure, but a good sign to up our security and take ourselves seriously.
Defi?
DeFi protocols haven’t broken, at least not yet. Hey, we might have something here…
Whatever example crypto responds with in our interview, my response is the same.
"You've failed, sure, but look — you've learned from those failures. Are you still ready to build and move on? Looking at the data, your on-chain activity tells me that's the case.”
I don't want to be a part of an industry that's never failed. That's not an industry that really knows what it can and can't do.
There’s a lot that crypto can’t do. But what it can, it does unlike anything else.
—
Did this post feel like a pleasant, stimulating conversation with a friend over foil-wrapped sandwiches at lunch? Subscribe to Bears Are for Building for more!