From Programmable Money to unstoppable flywheels
Founder Spotlight - Joe Lubin (originally published on my newsletter May 30 2023)
What fascinated me about the crypto space for many years is that, beyond the hype and speculation, there has been a core group of builders who persevere through multiple cycles.
These founders join the space not because they see this as an opportunity to make a “quick buck,” but rather as an opportunity to change the world for the better.
They persevere because they have a deep philosophical alignment with what crypto has to offer - be that frictionless value transfer, auditability or open-source coordination of novel service delivery.
Joe Lubin, co-founder of Ethereum and CEO of ConsenSys, is one of such founders.
What kept Joe going has been trustless accountability via unstoppable code.
Founders like him, who build to last, stay in this space no matter how “unpopular” or “uncool” the space becomes during the bear markets.
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Last November, we were fortunate to host Joe during the opening of our BCVC Web3 Summit.
A lot has transpired since our interview - FTX was blowing up literally the day this interview was taking place. Subsequent months of FUD followed that were only exacerbated by regulatory enforcement despite ambiguity.
To get a sense of the “alleged clarity” (despite no real answers), watch the next three minutes of this video.
As the worst is likely behind us, we thought to revisit this conversation in the spirit of reminding you, the founders, that in the darkest moments, you can follow the footsteps of those who have come before.
What was the inflection point for Joe to co-found Ethereum?
Joe’s journey to Ethereum began with an interest in broader economic history.
Like many immigrants, Joe has a keen focus on the stability of economic systems. Specifically, around 2008, he began to have concerns around debt supercycles, i.e. periods of prolonged, outsized debt growth relative to GDP brought on by countercyclical fiscal and monetary policy administered by central banks.
These supercycles have destabilized nations and monetary systems. This started his initial interest in blockchain, but it took meeting his co-founder, Vitalik, to gain conviction that the ecosystem was mature enough to create alternatives to “traditional” financial systems.
What was Joe’s motivation for starting ConsenSys?
Initially, the goal was to create applications that could help jumpstart the “developers → applications → users → more developers” flywheel.
What the team ended up finding was that key infrastructure for the space was clearly missing. That led to the creation of projects like MetaMask, Infura, Truffle, the recently developed Linea and others. With these projects, it was important to focus on security BEFORE optimizing for decentralization.
This is critical. Security must come first.
What were the challenges that Joe and the Ethereum founding team faced?
As strange as it seems today, the team struggled to raise money while building the technology from scratch in the early days. They had to overcome a lot of rejection. Joe reiterated that being a founder in the blockchain space requires a lot of perseverance and resilience, as the industry is still in its infancy and there are many unknowns.
How did Joe think about the decentralization of Consensys?
The organizational structure of ConsenSys likely deserves a separate post of its own. It has gone through many iterations over the years and could be a subject of a Harvard Business School case study one day.
While not entirely decentralized at the outset, the team operates in an extremely flat and non-hierarchical way, with a number of internal founders and entrepreneurs serving as department (aka “spoke”) heads.
Decision making is supported where it is most relevant. Objectivity is key to teams staying aligned and productive now that the team has grown to over 780 people.
With that said, At ConsenSys the teams are getting progressively decentralized, along with their core products like Infura and the broader Ethereum ecosystem.
What does Web3 need for mass adoption?
Always ahead of the curve, Joe, Gavin Wood, and others on their founding team started using the term Web3 early on. Specifically, the term they used referred to the semantic web. Since then, the space has changed dramatically in scale, complexity, and awareness.
It is no surprise to anyone that regulatory uncertainty and the lack of standardization in the industry holds us back. As a founder, it can be challenging to understand the legal and regulatory landscape, and to ensure that your project is compliant with various regulations.
Joe acknowledged that while there has been significant progress in terms of adoption and awareness, there are still many challenges that prevent mainstream adoption; scalability, interoperability, and usability.
There is still a long way to go in terms of making blockchain technology accessible to the masses. He encouraged all founders to focus on creating solutions that are easy to use and understand in order to drive mainstream adoption.
The growing interest from institutions and governments is a promising sign for the future of the industry.
What role does decentralization play in creating more equitable systems?
It is no surprise that Joe views decentralization as a powerful tool for creating more transparent and accountable systems, which is what attracted him to the space initially.
With that said, he believes that it is also important to “right size' intermediation.
In existing economic models, intermediaries (e.g record labels, investment banks, etc) are able to extract an outsized share of value from other stakeholders. Decentralized systems allow for more transparent, fair, and competitive dynamics.
However, creating and launching decentralized systems can present a whole new set of challenges around speed and scalability. It’s a balancing act to handle with care - managing decentralization with the practical realities of building and scaling a solution the market needs.
We closed with the ever-bullish sentiment that perseverance and resilience in the face of the many challenges facing founders is the key to success in the blockchain industry. Even in dark moments and bear markets, it is important to remember that there is still enormous potential for blockchain technology to transform the internet and the world.
Closing thoughts
I still remember those early days of crypto when Vitalik was contributing to Mastercoin, the first attempt at a scalable “smart contract” platform. I remember when he pitched our then 300 member angel network and how most were skeptical at that time.
I was a skeptic myself. It took me the whole year to buy into the vision Vitalik and Joe had shared in 2014. I didn’t buy my first ETH until 2015. But as the saying goes - better late, than never.
We have come a long way since those early days of crypto experimentation. I saw first hand the difference between being early and being right. Many projects have come and gone, but a few ones - like Ethereum and ConsenSys - found product-market-fit, by prioritizing security and adoption first.
Thanks to builders like Joe, I know that crypto is here to stay.
The full length video and other founder interviews can be found at my youtube channel https://youtube.com/@cryptonaut