A New Toolkit: Our Thoughts on Web3 and the Future of Work
Moment Ventures & Web3
Our Crash Course
In December 2019 (shortly before the world was about to change forever), one of our portfolio companies, Alto, launched their CryptoIRA. For the first time, anyone could directly use their retirement holdings to invest in cryptocurrencies via integration with Coinbase. When we shared the news with friends, some scoffed that it was a crazy idea to let people invest their retirement dollars in such assets. Vision and conviction from Alto’s fearless leader, Eric Satz, proved prescient. Their user base skyrocketed and adoption of the CryptoIRA offering went through the roof (or is off the chain better here?). It opened our eyes to an opportunity set that we had only personally dabbled with to-date.
People want to be in control of their assets (self custody) with the ability to move and exchange those assets quickly at any time (instant liquidity) from anywhere (global by design). As the world began to look at how an ecosystem built on blockchains and transacted by cryptocurrencies was possible, Web3 began to evolve.
Web3 isn’t new, but it’s excellent re-branding
First, what is Web3? Second, what is a Future of Work venture firm doing in this space? Let’s answer these questions in order and then clarify where we’re headed next.
To define Web3, beyond as its name suggests (the third-wave of the internet era), I like to use this oversimplified but helpful analogy:
- Web 1.0: Read (surfing the web)
- Web 2.0: Read, Write (surfing the web + uploading content)
- Web 3.0: Read, Write, Own (surfing the web + uploading content + owning digital content or fractions of it in perpetuity)
In the Web2 world, the valuable data created by users (whether uploaded content or their recorded interactions online) is owned and monetized by the companies and services on the web. Trillion-dollar businesses were created as a result of this wave. A growing cohort of entrepreneurs questioned the near-infinite and heavily concentrated profits generated from such business models and looked to new technologies for another way. Now, Web3 companies are flipping the incentive and monetization structures upside down by giving users the upside and the monetary value from being participants in the ecosystem. Play-to-earn, watch-to-earn, and staking are new mechanisms being explored to reinvent customer engagement.
Moment Ventures is focused on investing in the Future of Work, whether that be how industries are transforming with new technologies and business models or how workers are empowered in new ways. We think Web3 fits seamlessly into our strategy based on our recent exploration of the space. We have learned alongside our founders as they build out exciting businesses that blend both Web2 and Web3.
Moment Web2 meets Moment Web3
One of our recent Moment investments, Laylo, began by building the messaging and CRM platform for creators, designed for drop notifications and community building. Is a new album coming out? Let your biggest supporters know immediately via Laylo. New limited release merchandise dropping on Friday at 10 am? Sign up on Laylo and be the first to grab that new sweatshirt.
One of Laylo’s earliest (and valuable) use cases was non-fungible token (NFT) drops. Popular collections sell out within seconds of their release and super fans want to know immediately so that they can be one of those lucky few. Building off that success, Laylo recently partnered with Polygon Studios to expand their offerings to Web3 creators more natively. Laylo leverages Polygon’s technology to add Web3 capabilities directly on top of communication tools including SMS, Email, Instagram DM, Facebook Messenger, and Discord. They now give Web3 projects a full suite of audience engagement tools including whitelists, token gated messaging, and segmented messaging. For the first time, creators can target and engage with fans who own specific digital assets. Laylo is building the next-generation messaging infrastructure for Web2 and Web3.
Web3 Opportunities and What’s Next
Beyond creators, Web3 is quickly changing the fintech industry with Defi (decentralized finance). Instantly verifiable digital payments, systematized algorithmic collateral for loans, new yield-generating instruments, and many other use cases are now possible without centralized (or human) intermediaries. We are very eager to see how this transforms how workers collaborate and get compensated.
What if Web3 doesn’t stop there? What if Web3 becomes core to the workings of every industry? The same way Machine Learning used to be a new frontier and now is built into the tech stack of every premier software company, Web3 might be that next big thing. We are excited to see Web3 infrastructure and applications in healthcare, logistics, food, education, energy, entertainment, and many other areas.
What if all participants in a market could benefit from a service or offering? Could that permanently alter how we define work? If we squint, we see a future in which all skilled workers can support their livelihoods in meaningful, even mightily prosperous, new ways. If you are a painter, an indie musician, a dancer, a teacher, a 3D game designer, an author, an academic scientist, or [insert your profession here], we are excited for what Web3 will bring to your craft.
If used correctly, Web3 has the potential to:
- improve and align incentives
- increase customer lifetime value (LTV)
- decrease churn
- provide distributed, trusted, and decentralized ledgers of record
- more profit sharing to core constituents due to fewer middlemen
- minimize operating fees and overhead
- accelerate the time to market for new product offerings
The pace at which intelligent, hungry entrepreneurs with deep industry experience are moving to this space is undeniable. We are obviously not the first to talk about Web3. We have plenty more to learn, but who doesn’t in this rapidly changing landscape? We see a not-so-distant future in which this new toolkit is essentional to the evolution of industries we’ve been backing for the larger part of a decade now. We’re at the beginning of the beginning.
If you, or someone you know, is building something that is leveraging Web3 to transform an industry or a historically broken part of work, please reach out as we’d love to hear more.
Matt Divack is an investor at Moment Ventures, an early-stage venture capital fund focused on the Future of Work. You can reach/follow him on LinkedIn, Twitter, and Medium.
