Building a Web3 Accelerator (Coinvise Creator Stories Ft. Jess Sloss)
On the future of Seed Club, Social Tokens & NFTs, and the learnings from building in Web3.
This article is a transcript of a live interview conducted by Cody McCauley. To attend our next Creator Stories episode, follow us on Twitter. Also, make sure to follow Jess Sloss. We hope you’ll enjoy the conversation as much as we did! 😉
Cody: Jess, thank you again for coming through. I appreciate you taking some time to chat today. For anyone who's tuning in and who's not familiar with Jess's background, Jess is the lead instigator at Seed Club and has emerged as one of the more thoughtful leaders in the DAO and tokenized communities universe.
I'd like to kick things off and take a moment to reflect on the past year or so for you and Seed Club. How would you characterize what happened for Seed Club and yourself in 2021?
Jess: Hey Cody, thanks for having me. It's funny because I was talking to one of our contributors yesterday, and I realized that I hadn't had the space or gap to really reflect on the insanity that I think so many of us have gone through in the last little while aha.
But, you know, we started Seed Club in August 2020 when the crypto world was very different. It was still the bear market, and we were just seeing the early signs of the new potential waves that were coming, and it was just an incredible time to do things.
And that's a good note for folks thinking about building now or in the next few months. When launching at a time when there isn't much hype, people look at you weirdly because you're doing this weird thing that they don't quite understand. But for us, there were 11 people out there who really were intrigued by this idea, and those 11 people not only formed the basis of Seed Club, but also went off and did incredible things, leading some of the most promising projects in the space.
So I'd characterize last year as chaotic and wild but also extremely fun, and it's a privilege to be a part of the entire new space.
Cody: Nice. From that origin story back in August 2020, when you first started the Seed Club's group chat, how has the journey to date compared to any expectations or aspirations you set out when you first formed that group?
Jess: Great question. First of all, I could never have predicted what happened in any sense of the way. It's a very interesting and amazing experience to have an idea that comes out and that you're able to start investing yourself into, and then see other people come around and invest their heartbeats into the same thing as well.
Every little piece of this has been a pleasant surprise and an unexpected one.
But I think, because we're in Web3, we knew the community was essential. Going through cycles in crypto, some members are less standing when the easy money has gone, and the hype has gone. So we knew from the beginning that, to succeed, we needed to build a deep community with people who are missionaries and believe in a big vision.
We also knew that tokens were an amazing technology that could help us unlock the community's values, and I've already had an experience running workshops and masterminds and facilitating, so I had a strong conviction that if we brought smart people together and leveraged new crypto tools, we could create a lot of value.
The unexpected wild thing is how value started to compound within Seed Club. From a network sense, we've worked with 53 projects so far, and those projects have wonderful teams behind them. The Seed Club network is just growing at an incredible rate. So I just imagine, what does five years of compounding the value of the human beings, the network, and the insights we're able to bring together in Seed Club? It gets really exciting.
Our vision, interest, and belief here are that the network is the way that economic activity is going to be coordinated moving forward. So our job at Seed Club is to stand up a network accelerator. And when you start to think through like, "what does an accelerator look like as a network?", you get into a whole lot of interesting ideas, opportunities, thoughts, etc.
Cody: The vision of a network accelerator is really fascinating and something that I definitely want to dive into a bit deeper. But before we double-click on that, it would be helpful if we could have a high-level overview that everything Seed club is today. Getting clarifications between the Studio, the Accelerator, the DAO more broadly, and the introduction of the $CLUB token. How do all these different pieces of the puzzle fit together?
Jess: Our job is to bring in the most amazing projects and people into Seed Club to help launch world-changing communities. We're in a world where community-governed organizations will become the most powerful in the world. The core idea here is that in Web2, so much of the value that Humans create on these networks is captured by Web2 platforms and not the people. I think the promise of Web3 is to reverse that.
That's why we started off running an accelerator program, which is still our core offering. It's essentially six weeks of coming together with our network of collaborators and past projects to help explore the potential that each of these new projects coming to Seed Club has. We're able to do it from a much earlier standpoint than most accelerators because there are many new exciting tools that teams have to use and need help with.
As we were able to bring such a great group of early teams together, we were being approached by a number of folks building tools and technologies. As we want to play an active role in stewarding the Web3 ecosystem, we created Seed Club ventures, which is a separate entity (but related) that allows us to back exciting communities, DAO tooling platforms, and community tooling, etc.
We also started getting approached by interesting projects that were a little bit too advanced, already had venture funding, or just didn't quite fit our program for timing reasons. And so we created Seed Club Studio, which is our way to work with those projects in a bit more direct way.
You also mentioned the Seed Club press. This is the beginning of our media arm, and it's really there to ensure that our teams get the exposure that we think they deserve.
Finally, the Seed Club community is the backbone of the Seed Club ecosystem. At the beginning of this year, we dropped the $CLUB token, which is our governance token, which ultimately allows our community to have an active role in choosing which projects we work with and the future of Seed Club.
Those are the main pieces under the hood.
Since we are co-owners of these projects, we're really focused on what we're calling "Cultivation" right now, which is basically all the things we can do and create to support these teams across their life cycle. It can be providing ongoing legal support, fundraising support, etc..
Cody: The suite of services and support that Seed Club offers is unparalleled. And you guys certainly set the precedent of what best practices look like across the ecosystem.
Jess: Ahah, I would rather say "ever-evolving best practices." Those of us that are deep in the ecosystem recognize we still have far to go. This is another core insight that we had early on at Seed Club.
We wanted more communities, more DAOs, and more people out there doing things so that we can actually advance these complex, challenging topics of token economics, legal structures, how do you reward ownership without ruining the community, etc. There's been a ton of learnings from that, and I still think we have a long way to go, but I'm incredibly excited by the teams that are building right now.
Cody: You're right. That's actually an essential point to highlight. I'd like now to dive a bit deeper into the accelerator. After you've hosted four cohorts, I'm curious, what have been the biggest changes with each cohort? Are there any key learnings from the earlier cohorts that have been applied to the most recent ones?
Jess: When we started off, we battled to get eight phenomenal people for the first cohort. The biggest shift, I think, has been just the increase in awareness and talent in the space. We had around 300 applications for our fourth cohort and worked with 20 projects. So the biggest difference is this huge growth in talent and interest, which is really exciting.
Also, early on, we were looking at creators and social tokens in a much broader way. We were thinking about social tokens as personal tokens, brand tokens, etc. After that first batch, we really recognized that communities were where the most value would be created.
Finally, the biggest shift we've seen in the last two cohorts was the shift away from fungible tokens, as sort of the original community token, to NFTs. We had maybe 90% doing fungible tokens in the second and third cohort and 10% doing NFTs, and that's flipped on its head in the fourth cohort.
Cody: That's also something that we see at Coinvise, and that's why we're introducing "NFT memberships" next month. We understand the ease of getting started through NFTs and introducing a token later on in the life cycle.
You guys have the next cohort kicking off this fall. I'm curious if there are any changes planned for this upcoming cohort?
Jess: We're in a privileged position where we can take a very broad view of what an exciting project is to Seed Club. One of the benefits of us having our communities very deeply involved in recruiting and ultimately choosing is that we get a bunch of opinions on it. Indeed, one of the biggest risks in Web3 is focusing on something too early or that may not have longevity. We've taken a very broad approach, and that will probably continue forever. So no changes on this side.
What is changing, however, is that there's been a big increase in the knowledge and awareness of Web3 generally with creators, and so, where in previous cohorts we'd spent more time on some of the foundational things, we're able to move up the stack quite a bit and start in a more advanced space with most teams. A lot less theoretical, a lot more hands-on and practical.
We also have a much larger community of folks who've come through and a bigger alumni network, so we're now able to leverage this network, and it changes the game quite quickly. When you're launching a project on your own, your social network is your first user group. If you're launching a project with Seed Club, your initial community is composed of leaders of some of the most exciting community token projects in the space.
Finally, information asymmetry is one of the things we learned through the last batch and that is a big challenge in organizations like Seed Club. When you look at our application process, we ask our community to help vote on the top 10 projects to come into Seed Club. But as an outside observer, it's really tough to get the full feel and understanding of these projects. So the challenge we have now is to help our community actually make a good decision. We're revamping how we take applications and how our community reviews things and ultimately chooses them. We're building some tools that will make our operations better and enable our community to be a lot more involved and effective in choosing projects.
We get to go see and be a part of these experiments, be active participants in them, and bring those insights back to our next batch. It's an ever-evolving set of insights that we get and that can be applied to future projects. Then those projects also become a part of creating those insights. We're ultimately trying to create a flywheel of great people and great projects.
Cody: Yeah, it's really fascinating to see how these network effects will play out over time.
Jess: Absolutely. It's interesting because when you think about the dynamics within Y Combinators, one of the big benefits is getting your first customers and getting deep connections with founders and VCs.
In Web3, it isn't just these professional investors who participate in the earliest stages of these projects.
For us as an organization, it's essential to think about how we can create the most value for our projects and create a community of supporters for these early projects. I think we'll see the earliest money into the most exciting community projects through NFT drops and focus on getting the right people in the community. There are some interesting things we can do to be very proactive in helping to build that community of backers who are excited to be able to participate or get exposure to these communities early on.
Cody: Yeah, I'm excited to see how that will unfold. Shifting gears a bit, I would love to dive deeper into the $CLUB token and get an overview of the token and how that has tied into the DAO to date. What your key takeaways have been since the token launched?
Jess: There was an intentional strategy to really *not want* token-gate the community with a fungible or liquid token too early, but there's also this tension of wanting to ensure that the $CLUB token powers the things that we're building at Seed Club, and ownership or governance is well spread across the community.
So we intentionally quietly launched $CLUB to a group of active contributors, and we only made a small drop at the beginning of this year.
I really haven't put a lot of effort, thoughts, or attention into standing up a market around it or trying to add liquidity. It's still very early in Seed Club's evolution, and focusing on that side of things too early is probably one of the biggest errors many projects make.
As of now, the $CLUB token is in the hands of ~ 600 holders who help govern the network, and there's a desire for us to continue to lean into the utility and the opportunities that this token has, but we're also not in a rush for hype and intensity around it in anyways.
Cody: That's the right way to do it. Given your learnings from the token being out in the wild, I'm curious if that has changed how you think about the role of tokens within tokenized communities more broadly.
Jess: Yes. And I think that's an ever-evolving thesis that we have - we're always changing things based on our experience and others'.
The model of ERC-20 airdrop to early people, which was really the popular model, is becoming less attractive for early communities. Founders are starting to realize it might not be the best path moving forward. But we still need to figure out what a new model ultimately looks like.
There are also some real challenges that come up with having a token out in the world. If you've been in the Seed Club discord and last a little while, you've noticed we'd been under a fairly intense scammers attack. When you have a token, you really need to level up everything across the border, from the security to how you communicate, making sure you're making information available to token holders and not just a subset of them.
That was another reason we really wanted to put the $CLUB token out there, to have those learnings that we can also share back with our community. It would seem somewhat hypocritical for us to be out there saying we should be community governed and that tokens are core to that, and not having a token.
Cody: Yeah, that certainly makes sense. I'm curious, on the Seed Club front, how do you guys think about NFTs going forward?
Jess: We're seeing several teams with social tokens or community tokens exploring how to transition over to NFTs.
So we're pretty deep in a couple of projects right now that are doing that, and we're watching that closely and seeing the ultimate results.
More generally, there are no immediate plans to make any changes to our token model whatsoever, but I think anytime you start to see fairly meaningful trends and different dynamics that seem to be positive, it'd be silly not to explore that deeply.
Cody: That makes sense. Extrapolating out a bit to the specific moment when the waters have become a bit tougher, to say the least, within both the Web3 ecosystem and macro sentiment across the economy more broadly, how have your sentiments changed at all?
Jess: My conviction sentiment about the future of tokenized communities hasn't changed one bit, and I think it's only getting stronger.
One of our core values at Seed Club is building for the long term. We really have a long-term view on what we're building at Seed Club and make most of our decisions based on that belief, starting from how we choose projects and not just work with everybody. We have been through the Bull and Bear cycles before, and we know it was inevitable. We saw it coming. This was one of the big reasons why we were focusing on community tokens and building a community that is there for intrinsic value.
The price isn't the big determiner of whether a community is valuable.
Now, obviously, macro and crypto trends impact everybody in the space. With fear, there's less capital moving around, but we'll see the ultimate impact on the projects in the next months.
We launched in the middle of a bear market, which was one of the best things that happened to us. Opportunities are going to show up again. But yeah, we need to be realistic about many things, and valuations will come down.
Now the biggest impact on me emotionally is the fact that when I go drive my car into town, the gas is 2.28/L, which is absurd aha.
Cody: In terms of the dialogue or the messaging you're having with both the contributors at Seed Club and the communities you're working with, has that changed in any capacity? Are they looking for more support from Seed Club?
Jess: Anybody with responsibility for a community or for others needs to be thoughtful of the economic landscape so they can be confident that there'll be able to survive and be around.
We want to be a lot more conservative and see Seed Club teams taking similar actions. We want to make sure that we're preserving a runway and we're going to be able to survive. I don't try to time the market whatsoever, but you know, maintaining optionality is key. This is a great reminder to double down and focus on your core values and build a strong community.
If they're able to do that, I think there's no doubt that these projects will be successful in their short-term goals as well.
Cody: To wrap things up, curious about what you're most looking forward to for the rest of 2022?
Jess: It's been really wonderful, as the world's opened up, for us to lean into some IRL events, and it's incredible to bring groups of our projects together in small intimate spaces around some of the conferences in the last little while.
We start to see the connections and just the serendipity that comes from that, and so we're excited to continue to do that for the next few months.
There's also a lot that goes on within the operations of organizations at Seed Club, and I think we've had the incredible privilege of bringing just an outstanding group of stewards and contributors and community members together. Our focus is really just doubling down on supporting them and building the things that will allow us to add value to them immediately and create the structures for those future groups that come in.
So there's absolutely no shortage of things that we need to do and are excited to do.
We're heads down building the infrastructure and the social infrastructure around it to really create that value.
I thought that bear markets were supposed to make us have less work. My calendars indicate the exact opposite.
Cody: Ahah! Awesome, we're very excited to continue seeing Seed Club's evolution and everything that you're doing. Thanks for all of your insights. It was such an enlightening conversation.
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