The Generalist - Dune: The Data Must Flow

Hey friends,

It’s good to be back!

Today’s topic is one I’ve been passionate about for some time. Since discovering Dune last year, it’s become a core part of my research process for crypto and web3. Pick any of the deep dives I’ve written in that area and there’s a good chance I’ve relied on information from Dune.

It also happens to be on fire. It has grown key metrics by +600% a year. In February, a $69,420,000 Series B valued Dune at $1 billion.

Perhaps even more intriguingly, it reveals how the blockchain allows for different models to flourish. Though Dune bears a resemblance to Github and even Google, it is wholly distinct.

In today’s piece, we’ll unpack why that’s the case, how Dune almost failed, who benefits from its platform (🧙‍♂️🧙), and where it might be headed next. Follow the button below to jump right in.

This piece was written as part of The Generalist's partner program. I always note partnerships transparently, only share my genuine opinion, and commit to working with organizations I consider exceptional. Dune is one of them.

DUNE: THE DATA MUST FLOW

Actionable insights

If you only have a couple of minutes to spare, here's what investors, operators, and founders should know about Dune.

• Run lean, and persevere. If Dune’s burn rate had been higher, the company almost certainly would have failed in the dead of crypto winter. Instead, founders Fredrik Haga and Mats Olsen spent conservatively, giving them the chance to flourish in better conditions.
• Lean into what’s unique. Dune 1.0 offered paid dashboards of crypto data. Investors pushed back on that premise, given the availability of blockchain information at no cost. Rather than fighting, Haga and Olsen recognized the wisdom in this feedback. Dune 2.0 leaned into this characteristic.
• Wizards make magic (and money). At the center of Dune’s “figure-eight flywheel” are the platform’s creators, better known as “wizards.” These data analysts create the dashboards that consumers view. In the process, they construct a resume of their skills, get paid via bounties, and discover professional opportunities.
• Tokenize with caution. At first blush, Dune seems perfectly suited to a token. It has a thriving community doing meaningful work to benefit the ecosystem. Though they’re not opposed to the possibility of a native currency, Haga and Olsen are wary of doing so too soon.
• Omnichain is the future. Or, perhaps, the present. The emergence of Solana has spawned a wave of chain-specific projects. Dune will need to support consumer desire to understand the data behind these initiatives better. The company’s upcoming “Dune Engine v2,” internally dubbed “Arrakis,” seeks to do just that.

***

In 2019, Dune was dead.

At least, it was as close as a startup can get without officially closing its doors. Founders Fredrik Haga and Mats Olsen had spent the better part of a year trying to raise money for their blockchain data analytics platform without investors taking them seriously. More than a hundred conversations had led unrelentingly, unmercifully to the same response: no.

No, we will not give you money.

No, we do not believe crypto is the future.

No, we do not think there is a large market for crypto analytics tools.

No, we do not think you will succeed.

The playwright George Bernard Shaw famously remarked that since the reasonable person adapts to the world’s demands, “progress depends on the unreasonable man.” The comment has become a tagline for entrepreneurs – but what does it mean to be unreasonable? What does that look like?

It must have run through Haga and Olsen’s minds that persisting made little sense. Neither of them had taken a salary for more than seven months. And, the market had not only spoken, it had repeated itself many times over.
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​In the face of failure, Dune’s founders did the unreasonable thing: they persevered. What were ten dozen rejections when it would only take a single supporter to change their fortune? Thankfully, for both the company and the broader crypto ecosystem, Haga and Olsen found their believers.

Two and half years after its near-death and Dune is not only surviving but flourishing. The data analytics platform has established itself as the standard for blockchain data by embracing an innovative user-generated model that empowers the world’s data analysts – “wizards” in Dune’s parlance – to showcase their skills and make a living. It is a powerful, accessible utility for consumers blessed with the network effects of a potentially generational business. Now awake to the opportunity, investors have poured in $80 million, with Dune’s most recent round setting a valuation of $1 billion.

From near-collapse, Haga and Olsen have minted a unicorn that highlights the unique strengths of crypto data. It is a hero’s journey that even Frank Herbert, author of the sci-fi fantasy with which Dune shares a name, would have found especially tidy. Indeed, Dune’s founders seem to take pleasure in riffing on the beloved saga, borrowing vocabulary and metaphor to describe the strange blockchain wilderness of which they help make sense. In today’s piece, we’ll unpack Dune’s iteration of the monomyth, discussing:

• Certain failure. Dune courted collapse several times throughout its history, struggling to raise money, pivoting, and risking its customers. Its existence is a testament to the endurance of its founders and the value of an iterative approach.
• Crypto data. Financial data is typically reported quarterly. The blockchain changes this configuration, making mass amounts of information available instantaneously. Dune is built for this radical new reality.
• Multi-sided platforms. Dune’s genius is how it orchestrates mutually-beneficial relationships between three stakeholders. It resembles Github, with an extra-dimensional twist.
• Business model. How do you make money from free data? Dune seems to have found a way to create a consumer platform with the monetization motion that resembles large enterprises.
• Vibrant culture. Near-death experiences are supposed to give survivors a new lease on life. Dune seems to be proof that the same goes for companies. Few startups seem so resolute in soaking up the joy of work.
• Risks. Even the most invulnerable seeming of crypto companies can find their footing destabilized. Though Dune seems to be making sound strategic decisions, there is always the potential for disruption.
• Future. Dune’s core platform is undergoing a significant renovation. “Dune Engine v2” will allow for cross-blockchain querying at scale. A new API may also help unlock another step-change in functionality and growth.

Let’s get to it.

See you soon,

Mario