Lessons from building a $1 billion market cap blockchain

Summary

The video transcript features an in-depth conversation with Jos, the co-founder of Axie Infinity and Ronin, discussing the challenges and strategies of building a successful Web 3 gaming ecosystem. Key points include the importance of innovation in a rapidly evolving industry, the significance of community as a primary distribution channel, and the concept of 'play-to-earn' as a driver for user engagement and adoption. Jos emphasizes the necessity of having a strong co-founder dynamic, akin to a marriage, to sustain the business through tough times. He also touches on the evolution of NFTs and the potential for new business models within the gaming industry, suggesting that the future of play-to-earn lies in balancing economic sustainability with engaging game mechanics.

Takeaways

• 🚀 **Innovation and Resilience**: Axie Infinity and Ronin were forged by challenges, with the team becoming stronger after each adversity, akin to a Super Saiyan.
• 🎯 **Lack of Playbook**: There is no established playbook for building in the web3 gaming industry, necessitating innovation and first-principles thinking.
• 🌱 **Niche Dominance**: Starting small and niched, like dominating web3 gaming, can lead to expansion and broader impact, mirroring the growth strategies of major companies like Amazon and Google.
• 💡 **Cross-Disciplinary Inspiration**: The best ideas often come from combining concepts from different fields, such as biology, astronomy, and physics.
• 🔄 **Adaptability**: The ability to adapt and evolve is crucial, as seen in the transition from a single game to a dominant gaming chain and beyond.
• 🤝 **Community as Partners**: Engaging the community is vital, with members acting as partners in the co-creation process, significantly contributing to product direction and onboarding.
• 📈 **Sustainable Growth**: AXS has become a sustainable product within the crypto space, generating consistent revenue and user engagement.
• 🌟 **Dynamic NFTs**: Introducing dynamic NFTs that evolve with use is an innovative concept that could redefine digital collectibles.
• 📊 **Metrics and Models**: The business model for NFTs and digital collectibles is still emerging, with attention and community building being key in the early stages.
• 🧩 **Information Diet**: Staying competitive involves a curated information diet, learning from various sources, and adapting successful strategies from other industries or platforms.
• ⚖️ **Balanced Teams**: A successful founding team isn't made of well-rounded individuals but rather a balance of individuals with specific, strong skill sets.

Q & A

What is the biggest challenge faced by the co-founder of Axie Infinity and Ronin?

The biggest challenge has been that there is no playbook for what they're doing, as they are building in a very new industry within a subset of that industry, web3 gaming. It's not just an execution problem but also an innovation question, requiring thinking from first principles and a cross-disciplinary approach.

How does the concept of 'play to earn' in Axie Infinity relate to real-world business models?

The 'play to earn' concept was inspired by looking at real-world business models like Uber paying drivers when there were no riders. It's about creating new forms of value exchange that haven't been done before in the gaming and blockchain space.

What is the significance of community in the context of web3?

Community is King in web3 because it serves as the primary distribution channel. It's not just about having a good product; the community's involvement is crucial for spreading the product and making it successful.

What is the current state of Axie Infinity in terms of monthly active users and revenue?

Axie Infinity has around 180,000 monthly active users and generates approximately $200,000 a month in revenue.

How does the concept of Dynamic NFTs work in the context of Axie Infinity?

Dynamic NFTs in Axie Infinity are digital collectibles that increase in value, power, and aesthetics the more they are used. They have on-chain levels that can be upgraded using experience points, representing an innovative approach to NFTs.

What is the future vision for Ronin as a blockchain?

The plan for Ronin is to first dominate the gaming industry and then expand into other verticals like e-commerce and payments, aiming to fulfill the original dream of blockchain technology to democratize financial services.

What is the role of a growth team in the context of a startup?

A growth team differs from a marketing team as it has a more significant impact on the product and covers the entire user journey, not just the bottom or top of the funnel. It involves understanding agile development practices and product development to interface effectively with product managers.

What are some of the key skills a founder should possess?

A founder should have a strong understanding of engineering, business and negotiation, aesthetic sense, and community engagement. It's not about being a jack of all trades but having a balanced team with individuals who are highly skilled in specific areas.

How does the concept of 'distribution is King' apply to web3 products?

In web3, community is the primary and most effective distribution channel. It is crucial for user adoption and can amplify all other strategies. A good product with poor marketing can outperform a poor product with good marketing due to the power of community-driven distribution.

What is the importance of an 'information diet' for founders?

An information diet refers to the sources of information and ideas a founder consumes. It's important for staying up-to-date with trends, getting inspired, and innovating by combining new ideas from various fields.

What advice does Jos provide for aspiring founders?

Jos advises aspiring founders to find co-founders they can trust and work well with, as they will become like family. He emphasizes the importance of having the right team dynamics and chemistry, which contributes significantly to the success of the venture.