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Whenever I witness an emerging trend or viral phenomenon…I go back to this one question: Who made the most money during the gold rush? I was first introduced to this question via ’s blog: Chris Dixon There is a saying in the startup world that “you can mine for gold or you can sell pickaxes.” This is of course an allusion to the California Gold Rush where some of the most successful business people such as and didn’t mine for gold themselves but instead sold supplies to miners — wheelbarrows, tents, jeans, pickaxes etc. Mining for gold was the more glamorous path but actually turned out, in aggregate, to be a worse return on capital and labor than selling supplies. — Levi Strauss Samuel Brannan Chris Dixon It turns out, we can apply this same framework for thinking about how to build companies. When a major new technology trend emerges — say, the rise of online video or social media — entrepreneurs can try to capitalize on the trend by creating a consumer product (mining for gold), or by creating tools to enable consumer products (selling pickaxes). There are many exciting technology opportunities emerging today: some are horizontal like mobile, location, and local; others are vertical like fashion, art, real estate, education, finance and energy. If you are an entrepreneur thinking about starting a company around these trends, consider selling pickaxes. — Chris Dixon While Dixon’s article was originally published back in 2011, I believe that there is still, of course, a massive opportunity to build digital pickaxes that complement today’s evolving trends. For instance, interest in blockchain (and cryptocurrencies broadly) has exploded over the past few months. via Google Trends Whether or not you personally believe in the short/long term implications of crypto, there is clearly an opportunity to capitalize off of this mad rush. In unpacking this further… I think about what “digital pickaxes” my friends and I can build to provide for this budding ecosystem. As a test, we launched — a coin tracker that lives in your browser. And we now have over 750 users! CryptoTab This is just one, super tiny example of how you can build out little pickaxes that provide value for this community. THERE ARE SO MANY MORE OPPORTUNITIES. Immediately, some ideas that come to mind are: Systems that help “gold miners” AKA crypto investors Systems that help the next generation of “blockchain entrepreneurs” Systems that enable a decentralized future Imagine Bitcoin and decentralized systems are the metaphorical gold…what can we build? What is the Levis of this rush? While we are still in the very early days of this developing space, there are a number of entrepreneurs and companies who are already producing and selling their “digital pickaxes” at scale. For instance, look at popular blogs/forums like , , or . Coindesk 99bitcoins The Bitcoin Pub They are providing a consistent stream of helpful resources and tutorials for the rush of newbie investors looking to invest in crypto. There are also opportunities to build automation tools to help crypto-investors allocate their capital and reduce friction: Coin exchanges/exchanges Investing tools Crypto-tax guides And finally, there are a number of other blockchain projects developing different elements of this “decentralized future”: : A decentralized Reddit of Sorts Steem : A decentralized file storage system IPFS : A prediction market Augur They are focused on building out critical components of a future-state blockchain world. Look at platforms like , that are bringing us closer to a “tokenized future.” They are borrowing from Elon Musk’s frame of thinking and “accelerating an inevitable shift,” bridging the gap between blockchains and real world assets. Partnering with a number of leading institutions like , they are rolling out the first “legally enforceable protocol for blockchain-based ownership and control of real world assets.” You will be able to securitize a number of different tangible assets, encompassing everything from timeshares to small businesses to rental properties. This shift to tokenized assets will enable a new age of liquid markets. TrustToken Stanford and StartX These projects are raising money by creating and then selling their own tokens through crowdfunding on a blockchain. At first glance this just looks like a new way to raise money, much like how a normal company issues and sells stock to raise capital. At second glance it goes far beyond that. — Fred Ehrsam There are a few key components to these tokens: - They are the currency that is used in the app itself. - Contributors to the app are directly paid for their contributions in tokens. This can be extremely granular. - The tokens are easily converted to any local currency since they are on the blockchain. As the space grows to become more developed and mainstream, it will be interesting to see which projects are here to stay. Meanwhile, I’ll be selling: What digital pickaxes are you thinking about?

Building Digital Pickaxes for the Blockchain Community

Altcoins or alternative coins usually refer to all cryptocurrencies except bitcoin. Sometimes some people single out ether as well because the current between BTC and ETH is noticeably higher than with other altcoins. But despite its high capitalization, ETH is still considered an altcoin. We can call it the "main alt," setting the tone for all other alternatives to bitcoin coins. correlation That said, ETH, like other altcoins, depends on "bitcoin dominance" - that's the ratio of BTC's market capitalization to all other coins. Some altcoins use different consensus mechanisms to verify transactions and open new blocks or try to disassociate from bitcoin and ether, providing new or additional features or targets. Bitcoin for almost half of the total cryptocurrency market capitalization, while Ethereum accounts for almost a quarter. Altcoins as a whole account for about 40% of the market. accounts The first altcoin was LightCoin, an offshoot of the Bitcoin blockchain in 2011. Lightcoin uses a Proof-of-Work (PoW) mechanism called Scrypt, which is less energy intensive and faster than Bitcoin. Altcoins are very speculative, so before you invest - familiarize yourself with the types of scams so you don't lose your funds. Types of frauds related to altcoins 1. One of the first and most popular types of fraud associated with altcoins is Initial coin offering (ICO). An ICO works on the following principle: a start-up company seeks capital to expand its business, but investors get a stake in the venture. And instead of their capital, they get cryptocurrencies. At first glance, an ICO is just another way for a startup to accumulate capital, but this offering is not resistant to manipulation. A company or individual can say that they have a unique opportunity to invest in a new form of cryptocurrency with a guaranteed huge return. And then get you to transfer a bunch of new coins into a digital wallet that will "miraculously" be compromised. 2. Another method of fraud is the "pump and dump" method. Here's how it can work: an altcoin owner spins up a crypto-asset, and when the price peaks, the scammer sells everything, after which the price of the asset collapses dramatically and investors lose their money. Pump and dump schemes are usually accompanied by false promises in certain categories: guaranteed exorbitant profits and inexhaustible support from celebrities and influencers. 3. As we saw in the Squid Game scam, skilled programmers now can create new games and entire imaginary worlds. A simple way to scam newcomers to crypto investing is to get them to buy a newly minted coin or token to play the game. If enough people raise the price through supply and demand, it gives the primitive scammers a chance to sell all their assets and disappear. This scheme is known as "pulling the rug." 4. Scammers can also abuse DeFi protocols. This is a lucrative target for cybercriminals. While law enforcement is just getting deeper into the crypto world, attackers are evolving and developing new tactics to steal funds. 5. A large proportion of people consider alternative coins to be another "Ponzi scheme," that is, a scam in which the money of one group of people is secretly used to pay promised proceeds to another group of people. Unfortunately, such cases do , but they can be avoided. happen How to Avoid Altcoin Scams? Cryptocurrencies can indeed generate significant returns compared to traditional asset classes, but one can fall victim to fraud through recklessness. There are certain "red flags" in the crypto space that are signs of a possible scam, let's break them down in more detail. ●  The promise of huge passive income. Thanks to innovations such as the DeFi architecture, crypto businesses can not only replicate passive income platforms but also offer much higher than usual returns. So if there's an offer of too good terms and daily income - ask where the money is coming from. If you don't like the answer or don't get it at all, don't get involved with such currencies and platforms under any circumstances. ●  Lack of Risk. Even the most well-known virtual currencies carry incredible risk. Any organization that says otherwise is either incompetent or planning a scam. Fundamental analysis of altcoins involves reviewing and evaluating all available information about these currencies. This includes looking at the use cases of the cryptocurrency and its network, as well as the teams behind the project. This helps to fully understand and evaluate the best altcoins to buy. When analyzing alternative coins, one must determine whether the asset in question is overvalued or undervalued. Overvalued assets should be avoided, while undervalued assets are more suitable. This is because overvalued assets are likely to be underperforming and will return to their real value. On the other hand, undervalued assets have more growth potential and are consistently profitable. A thorough review of the technical documentation of the token will provide a lot of relevant information. The white paper should give you a good idea of how altcoin will provide value to its users. Looking at supply and demand is one of the best ways to evaluate your next cryptocurrency investment. Simply put, altcoin should have incentives that will increase demand so that supply is constantly decreasing or stable. When demand exceeds supply, prices rise, thereby fueling even greater demand. Online altcoin exchanges should also be carefully researched. Research the target platform inside and out. Review social media posts to get feedback from other users. Use only reliable legitimate platforms to reduce the risk of losing money. It is very important to evaluate the team behind the project. You can find information about the team in the white paper, but try to do independent research on them as well. Look at the team's page on the official website, as well as their LinkedIn profiles. The goal is to see if the organization is experienced, with experts who know what they do. Signs of reliability in altcoins ●  Broad community and adoption of new programs and protocols even during a bearish trend. ●  A positive growth trend since its launch. Stability in the list of crypto-assets is a great indication of investor confidence in the coin. ●  The rapid pace of renewal after a market downturn. In general, investing in altcoins is similar in principle to investing in venture capital. The algorithm of project consideration is the same: it is important to understand who the founders are, what other investors there are, and what idea the token carries. If the project has its own Road Map (with clear and precise goals), this will also be an important bonus. Separately, you can check the coin on Coinmarketcap. Especially whether the number of coins is limited or not. If the project plans to issue a lot of tokens (more than 1 billion), it indicates a bad investment because of too many. So, altcoins are not a bad kind of investment, but they are very risk-sensitive, collapsing some investors' portfolios to zero. Be cautious with alternative coins, carefully analyze all information, and use only proven reliable platforms.

The Magic of Altcoins: How do I Know if a Coin is Worthy of Attention?

Niko Bonatsos is one of the most successful venture capitalists in Silicon Valley. A cursory glance of his LinkedIn profile suggests he’s maybe not what you would expect from a typical investor. Why? He loves working with first time founders, as opposed to those with an extensive track record, and frankly he doesn’t care whether you went to a school like Stanford or not. It is fair to say that he has a gift for identifying the next big thing. His contrarian investment philosophy and love for investing in “annoying and controversial” apps led him to YikYak’s Brooks Buffington and Snapchat’s Evan Spiegel, at a time when others might have dismissed their respective apps as fads. It is hard to argue with his approach. In chatting with Niko, you get the feeling that he also cares about the founders he works with. It is not just about making money. He has been in their shoes. He empathizes with their struggles. Niko was kind enough to chat with us, at CampusKudos, about his own startup failure, what made him invest in YikYak and much more. You can listen to the whole convo . here Below are some highlights of our conversation, edited and paraphrased for brevity and clarity. Can you tell us about your first startup myLinkPower? Why didn’t it work out? What would you have done differently with your first startup? At the time, we thought we were taking on a once-in-a-lifetime opportunity to be one of the first teams to build on top of the LinkedIn platform when LinkedIn released its API back in late 2009. Our goal was to build a network for the power users on LinkedIn — to help them connect more easily. It did not work out. It was a huge failure. The reason why it didn’t work out was twofold. Building on top of someone else’s platform was a huge mistake. The platform risk was devastating. The rules to use LinkedIn’s data were very rigid. Today, LinkedIn has almost entirely shut off access to its data for other developers. We had a culture problem. We hired two types of people — people who worked their butts off and others who worked forty hour weeks. In the early stages, you cannot have the latter. The 9-to-5ers need to be managed, and the people who work all day do not have time to manage them. This can be demoralizing. You mention you love working with first-time founders. I’m used to hearing that VCs prefer working with founders with a track record. Can you tell us why? I love working with first time founders for a number of reasons. They don’t have any legacy or baggage. This is especially important in the consumer space since it is hard to predict what the next big thing will be. Prior experiences and bad habits can dramatically slow you down. Often times, you might lack the creativity, imagination and free spirit to imagine the “new new.” You must experiment like crazy until you stumble upon it. I love working with first time founders who are learning animals and will become domain experts in just a few years. They are passionate about succeeding in their own way and solving a specific problem. I enjoy this and try my best to work with these types of young founders. I read that you love investing in early products that upon launch are perceived as stupid, funny, controversial and maybe even annoying. Those are not words one would expect to read. Could you elaborate on what you mean? In the consumer products space, it is really hard to create awareness for a new product. If you have to create awareness on your own, it can be very expensive. If you are a first time founder, you might lack resources and people who will pay attention to you. As a result, it can be really helpful if you have a product that others perceive as controversial. If it is controversial, they will start talking about it. If they start talking about it to their friends, the press will hear about it. If the press hears about it, they will write a story. If it is really controversial, there will be more headlines. More headlines leads to more users. With more users, the product will become less controversial as more mainstream use-cases emerge. With all this, a company has a good shot to raise capital and have access to resources to drive even further adoption. That’s a great segue to your personal investment into YikYak. How’d you connect with Brooks Buffington at YikYak? I met the YikYak team in their very early days, when there were only tens of thousands of users. I discovered the app just by searching through the app store. I came across YikYak and decided to cold email Brooks, one of their founders. Niko’s first email to Brooks at YikYak When we started talking, what really impressed me was that Brooks was cracking jokes the first time we ever chatted. He was not stressed out or nervous at all. He was very authentic, and he shared insights and metrics that were very impressive. So, I flew Brooks and Tyler out to California to meet with me. When we met, the app had traction at a few high schools and a handful of college campuses. There were three things that really struck me. I loved a couple of Tyler’s insights. Tyler asserted that, in the history of social media, the same people create the majority of content, which gets all the “likes.” Everyone wants to be like those individuals, and, if you are not one of them, you feel embarrassed to share and create content. With YikYak, everyone is treated as an equal from day one. This is true since every user is anonymous. The intensity of engagement from college kids was super impressive. College students were spending numerous hours each week with the product. Students were literally requesting for size of the feed to increase, so they wouldn’t have to stay up late at night scrolling as much to catch up with each post. Brooks and Tyler were genuine and good guys. They were very serious about stopping incidents of bad behavior. Despite the fact that high school students account for 80–90% of YikYak’s growth, Brooks and Tyler decided to essentially ban all their high school users. College students were apparently more mature about how to use the product. This was a very bold move. Today, YikYak is a household name among college students in America. It is how college students find out what is happening around them on campus. It is a go-to information source. How do you determine which apps are BS or the next big consumer product like Snapchat? What did the General Catalyst team see in Snapchat when others might have thought it was a fad? It is a combination of a few factors. First, if the product has launched, we will look deeply into the metrics. Is there something that is ten times better than anything we’ve seen in the market before? We will also spend a lot more time with that particular product and company. Second, we assess if the product is differentiated. We view this not from the lens of a VC, since we tend to be early adopters who see hundred of products each week, but rather from the perspective of a typical consumer. The best way to tell, if something is differentiated, is by word-of-mouth. What words do people use to describe the company or product? Do they get excited? Emotionally engaged? These are signals that there is product differentiation. Third, we look for special founders. While Evan from Snapchat could not foresee the Selfie revolution, he laid out an impressive vision of building the fastest camera app out there. He wanted to build a more humanized communication platform. With a snap, you could communicate your location and your feelings, all at once. In addition, after ten seconds, it disappeared just like how we typically communicate. This was unlike everything else in social media, where things left a trail and continued to exist. You mention on your LinkedIn, “Talent is universal, but opportunity is not.” How do we make opportunity universal? In the Internet era, access to knowledge is easier than it has ever been. Anyone with an internet connection can have access to all of humanity’s knowledge. For me, I’m constantly looking to find the next big thing, and I believe it probably will not come out of Silicon Valley. As a result, I’m always looking through the app store and reading a lot of different articles. I personally have around ten Skype convos each week with people from around the world. If you are somebody who is really excited about working on something and you do a little bit of content creation or have an online presence, opportunities will come your way. Check out to meet amazing professionals and check out other podcasts with and many more. CampusKudos.com Hiten Shah Kindly recommend or share this article if it was interesting :)

YikYak’s Investor Niko Bonatsos Loves Your Annoying App and Lack of Experience

THE CAPITAL

The digital transformation of the capital markets industry has been a hot topic for the past few years. It has been a significant shift in the way that people invest and transact. The adaption of digital assets, along with blockchain infrastructures, has placed tremendous pressure on stock exchanges, marketplaces, and trading vehicles. The legacy solutions, which are currently the widely used infrastructures of financial institutions, are not as transparent and fast-paced as their new tech counterparts. Blockchain and Web 3.0 have been gaining traction attributed to the decentralization aspects as well as the ability to move finance fast without unnecessary regulations. How Tech Companies and Startups are Disrupting the Current Capital Markets FrameWork Tech companies are disrupting the current capital markets framework by decentralizing it. Crypto and blockchain-based technologies have been making waves in the industry with their decentralized and transparent nature. Tech companies like and are moving the capital market industry into a fast-paced, highly efficient environment. Exberry provides a cloud-native SaaS solution for exchanges and marketplaces, enabling anyone to open up a marketplace through their platform. If you think about it, traditional players should be worried about the quick integration and adoption of platforms like that. Exberry Etoro The Gen Z generation is already investing heavily into cryptocurrencies, with of millennials believing they can become millionaires by investing in cryptocurrencies, according to a survey by the research company . This is a strong indication that these generations are highly supportive of the blockchain framework and the ability to move into a more decentralized environment. 59% of Gen Z and 46% Engine Insights How Will Traditional Capital Market Players Adjust? At first, it seemed as though capital market veterans are seeing blockchain more like a trend than an actual threat. But now it is very clear to see where the wind is blowing. Yes, legacy infrastructures are convenient both in terms of prices and way of doing things, but we are seeing a streamlining of blockchain-based startups that are providing affordable and highly effective integrations in order to remove legacy barriers and provide better time to market for financial institutions, as well as a much better native experience for traders. When zooming out for an overview glance at the options laid out for veteran capital markets institutions, we are seeing several choices: Traditional capital market players will need to acquire and install blockchain infrastructures that will replace legacy ones. To do so, they will need to fish early-stage startups that are yet to be run away with clients and partners of their own. Keep trusting legacy solutions while tech companies evolve into full-on marketplace solutions, and by this, kicking traditional players out of the door. Finding a way to strategically partner with already running tech companies and startups that have SaaS-like marketplace solutions based on blockchain. These startups are usually too big to be bought but are in a great position for win-win partnerships. Overcoming Barriers, Winning Decentralization One of the main problems with traditional financial institutions is the lack of transparency across markets and asset classes. This makes it hard for new entrants to enter this space because they have no way of knowing what assets are available for purchase or trade on a given market or exchange. Another obstacle that these players face is the lack of standardization across markets and asset classes. This means that they cannot move assets from one market to another without incurring transaction fees and delays in settlement times, which limit the ability to efficiently execute trades. The third challenge is the lack of liquidity in these markets and asset classes, which creates high barriers to entry because any new entrants have to wait for market makers such as banks or institutions with a lot of money and liquidity. Another issue is the lack of technical infrastructure, which includes APIs, exchanges, and data feeds. This makes it difficult for new entrants in emerging markets because they have no way of connecting to global marketplaces and trading platforms without a lot of upfront cost or time investment. What emerging fintech startups in this space promise are the ability to bridge these gaps and do it consistently and with scale. What is really exciting about this is that the decentralization aspect will not only come from the blockchain infrastructures; it will also come from the ability of traders to decide what they perceive as a legit token or coin. That is why when companies like Exberry announce that their Saas platform is asset agnostic, it means more to decentralization than any specific coin or currency. It means everyone can open up a marketplace that makes sense to them, with rules and regulations that are not forced but rather chosen.

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