Welcome to the Outlier Ventures weekly newsletter. It was great to meet you as part of my 10 days moving around Asia. Thanks for the warm welcome and hospitality. It was an incredible trip both deepening existing relationships and making new friends.
It was a first step in growing our presence in region, and that of our portfolio, which you probably know by now we think of as a Stack. One we not just invest in and advise but also directly integrate and make interoperable. This newsletter summarises that Stack's evolution and progress. Which now stands at over 20 protocols, 50 million lines of open source code and hundreds of enterprise and governmental partnerships.
By following it each week you can get to know us and them better as we begin to build our team in region, starting with Joel John now in Singapore and soon, mainland China. So we can begin to partner and collaborate with you to create a bridge between Europe and Asia for our mutual benefit.
m: +44 (0)447590 488502
Why are some societies more entrepreneurial than others? I have been thinking about this question this week related to the growth of crypto ecosystems after reading a paper by Valentina Assenova. She collected evidence from 192 countries from 2001-2018 and found contrary to prevailing theories, there is limited empirical support for economic determinants of entrepreneurship like R&D spending, human capital e.g. STEM education, financial capital e.g. early-stage funding, and government support and policies. She found social determinants of entrepreneurship were the strongest predictors of cross-national variation in entrepreneurial activity. More specifically, she finds that more gender-egalitarian societies and societies that value and reward performance and endorse status privileges had on average higher rates of organizational founding. To be clear, more gender-egalitarian societies – those that actively minimized gender-based inequality – had higher rates of organizational formation and density. This is a remarkable and wonderful finding. Further study is needed to support these conclusions and tease out some potential explanations and root mechanisms. But I would be excited if gender equality policies became linked directly to an economic growth and innovation agenda.
This paper made me think of current challenges in adoption of crypto-networks. The vast majority of crypto-networks are still not technically ready to be used at scale (until 2.0 that is). Ignoring the technical challenges for one moment, maybe a useful framing is to think about adoption as encouraging entrepreneurship on the network. Entrepreneurship is positively correlated with innovation and as crypto-networks can be thought of as economies, maybe we should be thinking about how to encourage entrepreneurship rather than thinking in the more narrow lens of customer acquisition. Growing the developer community or selling into enterprise might be thinking too much like a product. Like governance, the vast majority of applications and middleware projects don’t need to think at this higher level traditionally reserved for national level discussions. It could, however, be a valuable line of exploration for base-layer protocols. So rather than ask the question: how can we get app developers to use our software? We should instead think like a government and ask: how can we increase innovation output and economic growth? What can we do to encourage entrepreneurship? (In fact, as Joel points out, the problems of Facebook and Google are already the problems of nations not businesses e.g. freedom of speech, censorship, fake news healthcare (addiction).
This requires more research than I can afford for a newsletter op-ed. If it is true that social determinants of entrepreneurship, specifically normative legitimacy and social norms, are more important than economic ones, then what could crypto-networks be doing than they aren’t today? Or as an investor, what are the conditions that are more likely to lead to greater entrepreneurship/adoption on the network? Are these conditions already apparent and how can we measure them? Obviously, this throws up more questions than answers, but it does reinforce one thing for me. Crypto-economics and token engineering are too narrow in their scope of research. Just as “governance” is just how decisions are made balancing self-interest versus group-interest and is the domain of philosophy and politics. Sociology and cultural studies are also important domains in then growth of economies and by extension crypto-networks. If you are a base-layer protocol, I suggest you start contacting some sociology departments.
Watching: Dark Season 2 (for the second time, or was it the first time?)
Listening: Familiar - Agnes Obel (From the Dark OST)
From The Stack
- Curious to know how Outlier Ventures is enabling value transfer across protocols? Jamie gives the full breakdown on how we are working towards a shared web 3 stack - Link
- Certik completed their audit of Fetch's staking smart contracts yesterday. - Link
- Agoric will be opening up their framework to developers in an invite only testnet. Developers will be building on the testnet at Diffusion being organised by Outlier Ventures in October - Link
- Aragon is looking to hire a head of support for assisting individuals looking to build a new organisation. The role will be remote - Link
- Wish to know what a marketplace for conversational bots would look like? Seed has released a sneep peak at theirs. Read to know more.- Link
- Chainlink now plugs in directly to Binance Data feeds. This could pave the way for a suite of new DeFi products. Check the whole list of services supported by them in their updated documentation- Link