Storytelling and Memetics: The Future of Crypto's "Narratives"

Transcript

Hi everybody. Thanks for coming today. Thanks for listening my talk. Let me walk through this. Oh cool. These are not the emojis I pick. That's awesome. We can figure that out. So, hi. I'm Will Robinson. I've uh become the director of Alliance Foundation. We're a web 3 accelerator for early stage crypto startups. Uh we try to help founders help each other basically. And I'm not here to shill alliance beyond this. Um but a lot of what I've learned has come from teaching founders how to tell their stories. And so at some points I will seem like a walking billboard and I'm going to apologize for that. I'm also uh going to apologize because the vast

majority of this talk is going to be about startups and VCs and the stories they tell each other. And if you are neither of these things, then at best I can be a charismatic and entertaining individual at the front and sort of talk past you. Um, there we go. So, uh, before I get into this quote, I want to legitimize myself as a speaker on this topic of storytelling. I spent a decade studying video games and the stories video games told. And I did that with a particular interest into mechanism design. How do games tell stories with math? How do the rules of a game shape the narrative that emerges?

And I taught students how to do this for years. How to tell stories with math and how to read the math behind video games as stories. And a good example would be something like Monopoly. So, if you've ever played Monopoly, you might have had fun uh or or had some misery uh depending on your perspective. But it was originally designed by Lizzie Phillips to help explain to people that if you don't tax land at 100%. Everybody's going to go bankrupt except for one person who's going to hold all the wealth in the world. And it was meant to be this big like Cassandra moment. The sky is falling. And the Parker brothers like that's fun as I'm going to buy that off you for $1,000 and sell a million copies for the rest of time. uh and uh this kind of mechanism in monopoly is basically

around luck and money transfer and it just evolves this emergent property and I became fascinated by the dynamics of these kinds of stories in my doctorate and the year I graduated I jumped totally out of games into crypto because I had this opportunity to keep teaching mechanism designs but in a new context of Bitcoin and I taught Bitcoin to uh accountants and auditors around the world helping audit things like the Ethereum Foundation uh and then four years ago um had a new opportunity to tell stories and teach startup founders how to uh be like Steve Jobs and sell the world and their ideas.

Um so the importance of storytelling is that essentially the most powerful people have to be storytellers. And it's not a very intuitive thing. You think the most empowerful person that's like the president of the United States, he's not a storyteller. Well, well, actually he is obviously he he fabricates an entire reality for everybody to sort of get behind and to imagine that they're with him on this journey. And instead of reasoning from first principles, which is what very few people in the world do, we we reason by analogy. We say that this is like this other thing you've seen before. And that's a really important evolutionary trait that humans have that we learn through stories and

not through facts and principles and through reasoning because that's too slow. You couldn't get through a day in your life if you had to relearn from the basic fountaining ideas of the world you know how to brush your teeth. And so the the storyteller becomes really important except when you know things break down. So for instance, if it's 2020 and you see that there's some disease in China that's replicating at a rate that's like roughly two per one person that gets the disease and that disease kills roughly one in 20. Well, you should be scared shitless because this thing's going to spread across the entire world and kill everyone. And you could know this months in advance if you could reason from first principles, but you can't and everybody just tells you it's like SARS

and it'll be okay. And similarly with things like Bitcoin, if you could look at, you know, these three, you know, or four different computer science ideas, clues them together and realize, oh, we're going to replace all of finance. That's the emerging property of this system. Well, then you would sort of reallocate your funds and reimagine things. But the world I came from, very leftist anti-crypto world of the academy, the sense was this is bad for the environment. It's for mostly criminals to use and gross smelly libertarians are into it. So definitely don't read up on this Bitcoin thing. And well, you know, I had fun staying poor for a while and then I I stopped, did my own research, as they say, the dy, and

uh learned that, you know, you you can't only work through stories. And I started thinking about anti-mimetics, the opposite of stories. This is my favorite novel. It's actually a novella. There is no antiimetics division. It's about the scientists who study things that are impossible to remember. So what happens if you have this field of of research where every day you study something and by the end of the day you've forgotten everything you learned and the next morning you have to go from your notes and hope you can learn it even faster than you did the day before so that you get a little bit further

along in your scientific discoveries. And what happens if you start to realize that there are things that evolve that are killing us every day but they're just so forgettable we never learn to deal with them or think about it. It's a horror story. It's a terrifying book, but uh I highly recommend it and I highly recommend the idea of thinking in the terms of anti-mimetics. What are things that are impossible to spread from mind to mind? Monopoly is a great example. So Monopoly was a dominant board game even today, barely being replaced by Katan, a vastly better game that's already 30 years out of date and nowhere near as good as the current games that exists in board game land.

But here it's so hard to spread the knowledge of one new board game to another person because you have to download a whole bunch of rules. It takes time and groups that do form around board games have very little interest in spreading beyond their immediate vicinity because they already have a gaming group to play with. Right? So which kinds of ideas are anti-mimetic and hard to sell? Uh it becomes very important in crypto as well. Bitcoin is a truly anti-mimetic thing, right? It's so hard to get someone else to care about Bitcoin in the early days or Ethereum in the early days. And that's why the people who bought in early did so well because they were able to get past that. And then we ended up in a moment where now all we can think about in crypto are the meatic tokens, right?

Those tokens that are so easily spread from the fart coins um to uh you know things as legitimate as arbitum which you mentioned earlier for instance. Um, and so this talk, which you know, I'm gonna try and move as quickly as I can, uh, is about the storytelling. And, and this is how I I see myself as Bobby Fischer playing chess, uh, against, uh, my cohort. So, I'll train 30 startups at a time and how to tell stories. And each one is coming at me with their narratives. I'm like, "No, that's boring." Or, "No, that's out of date," or, "No, that's unclear." Or, "That's grammatically incorrect," or whatever it is. uh prepping teams to tell their stories uh in the shortest possible time. often they'll come at me with like a 20 minute spiel and we have to condense it to 90 seconds because it's

about how much you know mental bandwidth VCs tend to have um and we also really focus on our oneliners right every project has to have this very clear oneliner and it's a different oneliner for every audience right one for your employees one's for your users one's for your venture investors and you know you have to make that oneliner enticing because the idea is everybody including the VCs are going to need to reason from first principles at a certain point, but before they do, you have to entice them to to reason from first principles to begin with to get them past that initial anti-mimetic hump of learning about your startup. And so we go with enticing and then we go with memorable. You have to be able to remember your oneliner. And and lastly, your oneliner has to be

accurate, which is the least important of those three things. And that's what really frustrating for most founders is they start with accuracy. No, my oneliner needs to have 47 words so that I can get to exactly what we do. And by the time you finish the last one, they've forgotten the first and they can't remember or repeat it to their investment committee. And so there's no chance things are going to go forward. Um, so this is me. This is what I do. This is who I was. And this is basically the history of of how I see MX. I don't know what that circle is. It's a weird artifact. I'm sorry for that. But, uh, basically I'll tell you how I see the history of crypto's narratives. um from when I started uh working with founders four years ago. So it's 2021

and uh because of co which you mentioned earlier the governments have printed a lot of new money and a lot of new money has had to find a place to go and what it starts to do is buying companies because private companies and making companies go public and this makes venture capitalists look like geniuses because for the previous few years they'd been investing and now their portfolios are skyrocketing and so people see these venture capitalists with all this money that they're making and they say, "Oh, I just got this new free money from the government. I need to invest it somewhere." And you, Mr.

VC, look like a godamn genius. Here is my capital. And the problem is this happens to so many VCs at the exact same time that they start flooding the market with venture capital. And absolutely any idea under the sun in crypto starts getting investment. And not just some investment, prices are bit up to astronomical levels. companies that are pre-team, pre- idea are raising at 50 million, 100 million valuations. It's sort of an absurd era. Uh and this is a phenomenon that is macrodriven.

And as a result, the stories change, right? The stories and visions you need to sell to these people because they're coming in at a hundred million valuation day one is to sell them trillion dollar visions day one. And these it's sort of unhealthy for a company to be born trying to make a trillion dollars. Uh but that's what they tried to do. They sold things like games, but not just games. Games that would solve global poverty, right? That's what games were supposed to do in 2021. Everyone in the South would have a job playing games for wealthy um Westerners or uh well some Dows. We'd reimagine all of working.

That's the dancers up there. Uh everybody would rebuild companies from the ground up to work. exactly the way they wanted for the correct incentives they needed and we would just reimagine the entire corporate infrastructure of the world and these were the stories that could captivate because of the demands of capital at the time. It's for very like Marxist reading right where capital drives culture. Um and then obviously DeFi and finance uh which continues to this day is important story. Wow, I really don't know what that symbol is doing there either. Uh, okay. In uh, forgive the male symbol. I swear it wasn't there when I put it. Uh, in 2022, 2023, um, we see the collapse of FTX and the collapse of Terra. And so VC changes

quite a bit, the narrative shift where now we need to do a little bit more diligence than just two hours. Um, we move to like two days of diligence uh, on companies before writing checks. And we're seeing a lot of things like layer ones and layer twos. That's my layer cake here. uh Steppen becomes this breakout success for moving to earn and uh we have a lot of deepin too now the uh grandiose ideas are around reimagining hardware and physical infrastructure and then following year we're starting to see VCs run out of that money that they raised in 2021.

uh the ability to raise now takes two weeks instead of two days or two hours. And not only that, the returns are starting to look bad. So those investors that had put those checks in at $und00 million valuation are are unable to show markups in their funds and so they're being a little bit more reserved. But uh they see things like uh count abstraction, social fi, farcaster, friend techch and they start getting excited in the space. We have one company that was previous in NFTts. We pivot them to build into this like social space. It doesn't go very far.

Then we see memecoin show up and uh we tell them look go dig into the memecoin space because maybe that's where the VCs are excited. Maybe that's where you'll find users more importantly. and and so they do and they build this interesting product called pump.f fun and it does really well um capturing a lot of mind share. Uh and then the next narrative that shows up is Telegram. We've got all these users there. Let's go after them. And and so once again the narrative becomes much more user focused as opposed to grandiose vision focused. the narrative shifts uh because the VCs need a little bit more concrete uh I think investment possibilities. Uh and then to today we have um three I think dominant

trends for investment that people are excited about. Stable coins, payment rails, revenue like day one. The VCs are now so far away from their zero interest rate phenomena dollars that they have to be grounded in actual like business financials. rounds now take two months to diligence. It is a much more sober nature is healing moment. Uh and so if you are raising right now and you're sort of scared that your funds aren't coming in, well, don't worry. It's it's sort of normal for what's happening now. Uh and and LPs have now just like lost all the cash they also had. The limited partners for these VCs are now short on cash and the VCs have bad track records.

So, it's really tough for the fundraising space and the stories we tell are now much much more concrete with much better traction with more users with more real people building at every step of the way. Uh, and yet we still have some things even reject VCs. So, VC is so hard to raise. Some people say, "Well, VCs are immoral. Let's not even bother raising from them." And this is a big part of Hyperlquid's narrative. Uh, you know, if the VCs want us so bad, they can buy us on the liquid market. Um, and I don't think it's cope because they're doing very well and they're being successful. But I think there's also something to be said about this relationship between when it gets hard to raise from VCs, you're like, "Ah, sour grapes." Uh, and then AI, uh, AI just is a super dominant trend, right,

in this narrative. And in part, it's because these VCs are sitting on this cash and they can't put it into AI because their LPs said, "Hey, you have to only invest in crypto. You're a crypto expert. What are you doing? You can't touch AI." And the VC, but the opportunities, they're so big. And so we see a huge influx of capital into AI meets crypto. Anybody who can do any kind of intersection, no matter how absurd, um, gets at least a look at. And the vast majority of these projects obviously are vaporware. It's not their fault. It's just the nature of the game and where the capital is. and and some are actually quite reasonable and and we've even, you know, been supportive of a few.

So, this is this history kind of lined up. It's obviously inaccurate. I mean, there's way more narratives that happened during that time. I don't think it's a complete view um to say the least. And I don't think that you can, you know, say, hey, um games will never raise again and that narrative is dead. But if you do try to raise on that premise, you have to be aware that it's an uphill battle, right? That narrative has passed. And to bring it back means coming up with a reason for why it would have returned. And I think some things would be quite difficult to bring back like NFTTS for instance. Uh you know, you again you need to have a unique perspective as to why. And the reason is because VCs are basically trained on this curve, the sigmoid curve. their

entire existence is looking for something that's going to reach an inflection point. Something whose growth is going to grow. And the only way you're going to be able to do that for them is if you have a growing number of users paying a growing amount of money. And so these narratives that people tell, they're not necessarily built from whole cloth. It's not like I'm going to design my company and they will come. It's no, I'm going to see where users are and what users are doing and then I'm going to build for them and capture their mind share and attention and then they'll reiterate my story with me. And that's how um the game is played today. And so whenever we work with any company, you know, we'll say, hey, focus

on your users, go talk to them every day, find out what they need, build that for them. That's the only sort of sure path to success. And by sure path, I mean, you know, one in 10 chance. Um but that's the best you kind of get in this venture space. So yeah, here you got like you know seed series A series B series C um kind of investment opportunities for VCs and everybody's just looking for that inflection point and growth. Um there are lots more things to say. I hope this talk met some of your standards for what you're hoping to hear. Sort of an interestingly weird space that I find myself in. Um, thank you for your attention and I'll be happy to take any questions with the few minutes we have left. Thank you.

[Applause] I see some hands up here, but I don't know how to get Do you just say things loudly or does there a microphone? Okay, you say it loudly and I'll repeat it. Okay. No, no. I've got a microphone now. It's coming. I've got a microphone now. Um, okay. There we go. Really neat. Whoa. Really neat point regarding needing multiple stories. Nobody's ever said that I think I've ever heard. How many do you think you need? You sound like you're coming from there. Where are you? Okay, great. Hi. I mean, how many do you think they need and how differentiated should they be?

Oh, they're extremely different and they need two minimum. Um, but I think three ideally, right? So the venture capitalists, their interest is in hearing that there is a problem that is currently being solved badly and that you are going to solve it better with the best team in the world and that then they're going to make a boatload of money, right? And that's the sort of um narrative you need to tell. But your users don't really care about your future success or your equity growth, right? They care about you have a solution to a problem they currently have. We call it the hair on fire problem. The only kind of problem a startup can solve is a hair on fire problem. And if you haven't heard, it goes like this. You're in a room, your

hair is on fire, and there's a startup there. And you say, "Hey, please. My hair is on fire. Can you help me?" And they say, "I have a brick. It's all I can build with my startup is this brick. Would you like to bash your head in with this brick?" And I say, "Well, I don't want to burn my hands, so okay, I'll take this brick and I'll bash my head in, and here's a SAS payment." Uh, and so that's the different kind of story that needs to be told. Sure. Yeah. I I have to cut it. So, goodbye. I'll see you outside maybe. Thank you.

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