1/ Protocols, funds, and large #crypto companies are either thinking about or are in the process of launching their own incubators and startup accelerators. Some will be protocol specific; others will be agnostic. Here's the case for why and when this will/won't make sense.
2/ First off, while this is a new trend, history rhymes, and we may have seen this movie (or at least a similar one) before: the rise, fall, and refactoring of corporate innovation labs and corporate accelerator programs over the last 10 years.
3/ While #crypto is certainly different and its properties as a open platform will enable new types of opportunities, specifically around collaboration, interoperability, and cross-chain asset exchange, there are still many learnings we can draw from corporate labs/accelerators.
4/ For context, I've been in the corporate venturing space for 10 years, and I specifically focused on and managed companies' innovation labs, startup accelerators, and incubation programs, most recently at @CitiVentures @Citi from 2014-2017 (where I was also the crypto lead)
5/ The primary purpose of labs, accelerators, and incubators is to drive growth, value, and adoption of the underlying platform, whether it is a banking platform, service, or product. In the case of crypto, a protocol or network token.
6/ If organized correctly, they achieve this in 3 primary ways: (1) building community and ecosystems around the lab/accelerator, (2) rapidly testing, validating, and launching new solutions into market, and (3) providing more agile infrastructure, capabilities, and resources.
7/ Over the last 20 years, however, most corporates designed their labs and accelerators incorrectly by focusing more on "innovation theater" (press releases vs. real impact) and putting their interests ahead of entrepreneurs, or even worse, end users and customers.
8/ What this led to, particularly over the last 10 years, is low a ROI and impact of corporate labs and accelerators. And worse, it has led to a general distrust and lack of confidence among the best entrepreneurs and startups in corporate's labs/accelerators.
9/ For #crypto funds, protocols, or companies thinking about or setting up labs or accelerators, distrust in your intent/agenda and lack of confidence in your ability to execute should be avoided at all cost, even profits, because this is a death stroke that can't easily be fixed
10/ The number of corporate venturing arms quadrupled over the last 7 years, and what we now have is a situation where every company has a lab and accelerator, all of them are trying to create walled gardens, and few of them are working. Is this where we are headed with crypto?
11/ Or can crypto learn from the mistakes made over decades and billions of dollars of sunk costs? Can crypto skip the bad chapters and jump straight to the way labs/incubators should have been designed without having to consolidate, write-off, and refactor? Here are some ideas:
12/ Well, it turns out that over the last 5 years, companies are starting to acknowledge that the way they setup labs and incubators was wrong, and after a number of experiments, some new models are starting to show evidence of a better way to design labs and accelerators
13/ First, more forward thinking companies are not thinking about them as "labs" that service all of its businesses, but instead as companies in of themselves that focus on totally net new businesses altogether, adjacent or completely unrelated to the core platform.
14/ That means many of these new labs aren't 5-10 person prototyping factories, but instead 30-50 person product development and management divisions that have every function in-house needed to take a product to market: engineering, product, design, business, legal, finance, etc.
15/ Crypto company labs, therefore, may be best designed as legit 20-30 person companies (or project teams) within the company/project, that have the mandate to launch net new businesses end-to-end that may have nothing to do with the core platform. Most are not thinking this way
16/ Second, companies are starting to realize that single platform labs and accelerators severely limit the breadth and quality of ideas, opportunities & partnerships that can be pursued as well as the talent & startups that they attract. They were doomed from the start.
17/ That's why we are now seeing a corresponding rise in three separate but related models: (1) multi-company/platform consortiums, (2) platform agnostic corporate accelerators/incubators, and (3) corporate spin-outs of their labs as new businesses.
18/ It is possible that crypto will end up in the same place, hopefully without having to go through the process of overbuilding, consolidating, then refactoring. At the moment though, it seems like the industry is setting itself up to make the same mistakes.
19/ Multi-company/platform consortiums in the traditional world look like @AlchemistAcc or even @ideocolab. In the crypto space, it may look like multiple L1 and L2 protocols with distinctly different capabilities and purposes teaming together to form common developer platforms.
20/ Some of these would even create common developer interfaces and experiences, common resources and cross-chain assets and services, and even accelerator programs for the combined ecosystem of protocols. It's likely there are teams already trying to do this.
21/ Platform agnostic corporate accelerators/incubators in the traditional world look like @mach_49 @pivotallabs and @FinTechSandbox. In the crypto space, these might look like new accelerators and incubators that focus only on L2 protocols and dapps built on any/all L1 platforms
22/ What I believe will be interesting is that it will be these firms that will likely build some of the most important cross-chain, cross-platform tools like discovery, prioritization, selection, routing, and work scheduling. These will be more valuable as L1 commoditizes.
23/ There are teams starting to do this, though it may be a while until they start working across chains as they are typically [blockchain name]-shops that are heavily invested and incented economically via that blockchain's token or community program. That won't last forever.
24/ Spin-outs of company labs and accelerators in the traditional world look like @NianticLabs (maker of @PokemonGoApp). In the crypto space, that would likely take the form of a lab, accelerator, or incubator that works across chains but leverages the resources of its ex-parent.
25/ The interesting thing with all of this is that (as we're seeing today) many labs will go away and new ones will be created. All these forms will co-exist at different levels, but the most successful labs/incubators/accelerators will start to build specializations and focus.
26/ In other words, they should become "known" for something higher order. That can be access to talent (@mach_49), capital (@ycombinator), a geography (@Level39CW), distribution (@CitiVentures), capabilities (@pivotallabs), networks (@ideocolab), users/customers, etc.
27/ In the crypto space, that means focusing less on a particular tech and more on the "jobs to be done" and usage/adoption. As I've said before, users will decide what protocols will ultimately win via actual usage/adoption (not what tech is coolest)
28/ Finally, and most important, is related to intent (and follow through). Corporate labs, accelerators, and incubators have gotten themselves into trouble by putting their interests ahead of entrepreneurs they hope to work with, and worse, ahead of end users and customers.
29/ It's simple: no one will want to work with you, if you're only in it for you. Being the "best" may work for some time, but as we all know, someone will always come out or be better, so arrogance is very short sighted. Instead, focus on long term community over profits.
30/ What the best labs, incubators, accelerators are doing now is focusing not on their company or platform, but instead a higher order intention about the impact they want to create in the world for a population of people, users, or businesses.
31/ Anchoring on human or user-centered problems, opportunities, and challenges is better than anchoring on a specific platform or tech. Emerging crypto labs, incubators, and accelerators should learn from this.
32/ And of course, they need their behaviors and actions to match their intent. Good intent with no follow through or incongruent behaviors is perhaps worse than having selfish intentions and congruent behavior because at least people can appropriately categorize you.
33/ My hope is that #crypto labs, incubators, and accelerators will learn from decades of experimentation and failures in the corporate space. We don’t want to recreate the old world—we can create a better one.
34/ There are promising teams at @coinbase @ConsenSys @ideocolab @BinanceLabs @NEO_Blockchain and so many others working on this. Would love to hear how people are approaching it, and how myself and others can be of service. {end}
