The Importance of Product Focus in Crypto

In the rapidly evolving world of cryptocurrency and blockchain technology, there's often a heavy focus on infrastructure and technical aspects. However, Jeff Morris Jr., managing partner at the venture fund Chapter One and former VP of product and revenue at Tinder, believes that the crypto industry needs to pay more attention to product development. During his appearance on the Lightspeed podcast, Morris shared valuable insights on building crypto products that users love, drawing from his extensive experience in both traditional tech and the Web3 space.

Morris's background is particularly relevant to the crypto industry's current challenges. At Tinder, he led the company's revenue team, helping grow annual recurring revenue from $20 million to an impressive $1.2 billion. This experience in building successful consumer products and monetization strategies could prove invaluable for crypto projects looking to achieve mainstream adoption.

Venture Narrative Whiplash

One of the key concepts Morris introduced during the podcast was "venture narrative whiplash." This phenomenon, which he believes has shaped the tech industry more than anything else in the last decade, refers to the rapid shifts in popular narratives within the venture capital and startup ecosystem.

Morris explained: "The entire industry lives on Twitter, crypto and venture capital. And so in an era of trying to build audiences, the best way to do so is through mostly like negativity and because that gets most engagement."

This constant shift in narratives can have profound implications for what gets built and funded in the crypto space. Morris noted that just 18 months ago, the entire industry was excited about blockchain technology and digital assets. Now, outside of crypto-specific events, there's often a need to defend one's interest in the space.

The impact of this "venture narrative whiplash" is particularly pronounced for crypto founders seeking funding. Morris stated: "The impact of all this, this venture narrative whiplash is it's nearly impossible to raise a series A right now if you're doing anything crypto related."

Protocols as Open-Source Software

When discussing the unique aspects of crypto products, Morris drew an interesting parallel between blockchain protocols and open-source software in the Web2 world. He explained that protocols allow for multiple iterations of end-user experiences based on different subsets of audiences with varying tastes.

Using Farcaster as an example, Morris highlighted how this approach could lead to better products for users: "You could have a Farcaster India that function and looked a lot different than Farcaster US for crypto native audiences. You can really build I think better products for users if you take the product, the protocol approach."

However, Morris also acknowledged the challenges in getting people to care about new social apps, especially decentralized versions of familiar Web2 platforms, during a bear market.

The Power of Subscription Business Models

Drawing from his experience at Tinder, Morris emphasized the potential of subscription-based models in the crypto space. He explained that subscriptions create a binding relationship between the product and the end-user, forcing continuous innovation and value addition.

"If your product gets worse, you don't innovate, you'll see churn," Morris noted. "And so there's this binding relationship between you and the end user that you have to continuously add value. I think that's a really great relationship to have with an audience."

While traditional subscription models may not directly apply to many crypto projects, Morris suggested that token holders could be viewed as a form of subscribers. However, he also pointed out that Web3 communities tend to be more demanding than traditional Web2 users, creating additional pressure for project teams.

Using Tokens to Incentivize Users

Morris sees great potential in using tokens as a powerful go-to-market strategy for crypto projects. He compared this approach to traditional referral programs like Uber's "gift 5 get 5" model, but noted that tokens offer far more exciting possibilities for user acquisition and engagement.

"Tokens make that feel like antiquated almost like it's like a color TV compared to a black and white TV," Morris explained. However, he also cautioned that the sustainability of token-based bootstrapping mechanisms remains a challenge for many projects.

Finding Crypto Market Fit

Instead of focusing solely on traditional product-market fit, Morris introduced the concept of "crypto market fit." This approach takes into account the unique characteristics of the crypto ecosystem, including the potential for smaller but highly engaged user bases.

To illustrate this point, Morris compared the trading volumes of Uniswap and Coinbase: "Uniswap trading volume, which this was in Q2 22. And the monthly trading volume was over $170 billion with 400,000 monthly traders. And so you can see, then I compared that to Coinbase, which had a little over $200 billion of volume with nine million monthly traders."

This comparison highlights that crypto projects can achieve significant traction and value creation with a relatively small but active user base compared to traditional tech companies.

Making Crypto More Accessible

Morris emphasized the importance of making crypto products more accessible to mainstream users. He praised the recent launch of Helium on Solana as an example of effective messaging that focuses on user benefits rather than technical jargon.

"The headline was $5 unlimited phone plans, right? There was no mention of anything crypto related or deep in like all these words we use. It's just $5 for a phone plan," Morris explained. This approach, he believes, could be a "backdoor" to mainstream adoption without forcing people to engage directly with complex crypto concepts.

Balancing Decentralization and User Experience

One of the key challenges in building crypto products is striking the right balance between decentralization and user experience. Morris acknowledged that more decentralized projects often face greater difficulties in controlling user acquisition and retention.

However, he also sees this as an opportunity for innovation: "I think this is all part of like the larger question around like, is it possible to build a huge sustainable business while being more decentralized as a go to market."

Underrated Verticals in Crypto

When asked about underrated verticals in the crypto space, Morris expressed continued interest in NFTs as a primitive for community formation and alignment. He mentioned projects like Archive, which allows users to co-own a museum and choose what art to purchase, as interesting experiments in this area.

Morris also highlighted his fund's investments in DePIN (Decentralized Physical Infrastructure Networks) and RWA (Real World Assets) projects, seeing potential in bridging the gap between digital assets and physical world applications.

Lessons from NBA TopShot

Reflecting on the success of NBA TopShot, Morris emphasized the power of leveraging existing intellectual property to drive adoption. He explained: "I think probably what they did right was recognize that intellectual property is a great shortcut to adoption with any products."

This approach of tapping into established fan bases and interests could be a valuable strategy for future crypto projects looking to achieve mainstream adoption.

The Challenges of Building Consumer Products

Morris shared insights on the difficulties of creating successful consumer products, drawing from his experiences at Tinder and observations of other successful companies. He emphasized the importance of experimentation and maintaining a "low ego, high builder energy" approach.

"The best people I've invested in just take a very low ego, but high builder energy, but low ego is what we look for," Morris explained. He cited the example of Captions, a company that emerged from over 100 consumer experiences built at Snap, highlighting the importance of persistence and iteration in product development.

Platform Shifts and Opportunities

Despite the current challenges in the crypto market, Morris sees the present moment as an exciting time for builders due to multiple ongoing platform shifts. He mentioned AR/VR, AI, and defense tech as areas with significant potential alongside crypto.

Morris encouraged crypto founders to consider experimenting with ideas that combine their crypto expertise with other emerging technologies: "I think right now in a bear market, like the stakes are pretty low in a good way, where you can go like try some crazy ideas and see what you create and I would encourage people to take a very broad view of what that might be."

The Importance of Distribution in Crypto

Morris emphasized the crucial role of distribution in the success of crypto products. Drawing from his experiences in Web2, he noted that distribution often proves more important than product quality in determining success.

"I've learned in my career that distribution, I've been like very stubborn to reach this conclusion, but distribution is more important than product in most cases," Morris stated. He pointed out that while established Web2 companies often have significant distribution advantages, the crypto space is still relatively open in this regard, with perhaps only Coinbase and MetaMask having notable advantages.

Writing Tips for Crypto Founders

For crypto founders looking to improve their writing and communication skills, Morris shared valuable advice drawn from his background in screenwriting. He emphasized the importance of grabbing attention quickly and writing in a conversational tone:

"I kind of view writing as being like coming up with a hook and then really like grabbing people's attention within the first paragraph or two and trying to convince them that spend more time with whatever you're trying to communicate."

Building Products People Actually Want

In closing, Morris stressed the importance of focusing on fundamental human needs and desires when building crypto products. He encouraged developers to think about why successful Web2 products worked on a visceral level, rather than just focusing on technological aspects.

"So if it's pretty vain, but you know, like this is a world we live in. And so I would try for crypto products to really think about like what are web2 products that have worked and what like why did they actually work? Not because they were built on some technology stock," Morris explained.

By focusing on creating "magic moments" that provide real value and improve users' lives, crypto products have the potential to achieve mainstream adoption and drive the industry forward.

The Future of Crypto Product Development

As the crypto industry continues to mature, the insights shared by Jeff Morris Jr. offer valuable guidance for founders and developers looking to create successful products in this space. By combining the unique possibilities of blockchain technology with proven product development strategies from the Web2 world, crypto projects can overcome current challenges and build solutions that truly resonate with users.

The emphasis on user experience, distribution strategies, and addressing fundamental human needs provides a roadmap for creating crypto products that can achieve mainstream adoption. As the industry navigates the current bear market, those who focus on building solid products with clear value propositions will be well-positioned to capitalize on the next wave of crypto adoption.

Morris's optimistic outlook on the potential for innovation in the crypto space, combined with his practical advice on product development, serves as an inspiration for builders in the ecosystem. By embracing experimentation, focusing on user needs, and leveraging the unique aspects of blockchain technology, crypto products have the potential to revolutionize various industries and create truly transformative user experiences.

As the crypto industry continues to evolve, the lessons shared by experienced product builders like Jeff Morris Jr. will be invaluable in shaping the next generation of successful blockchain-based applications and services.

Facts + Figures

• Jeff Morris Jr. led Tinder's revenue team, growing annual recurring revenue from $20 million to $1.2 billion.
• Morris introduced the concept of "venture narrative whiplash" to describe rapid shifts in popular narratives within the venture capital and startup ecosystem.
• Uniswap had a monthly trading volume of over $170 billion with 400,000 monthly traders in Q2 2022.
• Coinbase had a monthly trading volume of over $200 billion with 9 million monthly traders in the same period.
• Morris's fund, Chapter One, invests in pre-seed and seed-stage projects, focusing on pre-launch products.
• The Helium project on Solana marketed itself with "$5 unlimited phone plans" to appeal to mainstream users.
• NBA TopShot leveraged existing intellectual property to drive adoption in the NFT space.
• Morris mentioned that 50% of people in Brazil own digital assets, mostly Bitcoin.
• MetaMask has approximately 26 million active wallets, giving it a potential distribution advantage in the crypto space.
• Morris's team at Snap built over 100 consumer experiences before finding success with Captions.

Questions Answered

What is "venture narrative whiplash"?

Venture narrative whiplash is a phenomenon where popular narratives in the venture capital and startup ecosystem shift rapidly, often driven by social media engagement. This constant change in narratives can significantly impact what gets built and funded in the tech industry, including the crypto space. It can make it difficult for founders to secure funding if their projects don't align with the current popular narrative.

How does Jeff Morris Jr. view the potential of subscription models in crypto?

Morris sees great potential in subscription-based models for crypto projects. He believes that subscriptions create a binding relationship between the product and the end-user, forcing continuous innovation and value addition. While traditional subscription models may not directly apply to many crypto projects, Morris suggests that token holders could be viewed as a form of subscribers, although he notes that Web3 communities tend to be more demanding than traditional Web2 users.

What is "crypto market fit" and how does it differ from traditional product-market fit?

Crypto market fit is a concept introduced by Morris that takes into account the unique characteristics of the crypto ecosystem. Unlike traditional product-market fit, which often focuses on large user bases, crypto market fit recognizes that crypto projects can achieve significant traction and value creation with a relatively small but highly engaged user base. This approach acknowledges the potential for high monetization in crypto despite smaller user numbers compared to traditional tech companies.

How can crypto projects make their products more accessible to mainstream users?

Morris emphasizes the importance of focusing on user benefits rather than technical jargon when marketing crypto products. He cites the example of Helium on Solana, which marketed itself with "$5 unlimited phone plans" to appeal to mainstream users. This approach focuses on the tangible benefits of the product rather than its underlying technology, potentially serving as a "backdoor" to mainstream adoption without forcing people to engage directly with complex crypto concepts.

What advice does Jeff Morris Jr. give for building successful consumer products in crypto?

Morris advises crypto founders to maintain a "low ego, high builder energy" approach and emphasizes the importance of experimentation and iteration. He encourages developers to focus on fundamental human needs and desires when building crypto products, rather than just technological aspects. Morris also stresses the importance of creating "magic moments" that provide real value and improve users' lives, similar to successful Web2 products like Uber and Tinder.

How important is distribution in the success of crypto products?

Morris emphasizes that distribution is often more important than product quality in determining success. He notes that while established Web2 companies often have significant distribution advantages, the crypto space is still relatively open in this regard. Morris suggests that perhaps only Coinbase and MetaMask have notable distribution advantages in the crypto space currently, highlighting the opportunity for new projects to establish strong distribution channels.

What are some underrated verticals in the crypto space according to Jeff Morris Jr.?

Morris expresses continued interest in NFTs as a primitive for community formation and alignment. He also highlights DePIN (Decentralized Physical Infrastructure Networks) and RWA (Real World Assets) projects as interesting areas with potential. Morris sees value in projects that bridge the gap between digital assets and physical world applications.

How can crypto founders improve their writing and communication skills?

Drawing from his background in screenwriting, Morris advises crypto founders to focus on grabbing attention quickly and writing in a conversational tone. He emphasizes the importance of creating a hook and convincing readers to spend more time with the content within the first paragraph or two. Morris suggests writing as if speaking to a best friend or writing in a journal to achieve a more natural and engaging style.