Journey of Avalanche from the inside
Founder spotlight -in this case super early president-(original published on April 28 2023)
At the end of 2022, I met up with visionary president of Ava Labs, John Wu.
With over $1.63B in TVL, Avalanche is one of the top contenders to become the platform of choice for Web3 developers, looking for scalability and EVM compatibility. Ava Labs is the company behind the development of the Avalanche blockchain, as well as a backer of many projects in the avalanche ecosystem. Ava Labs last raised in 2022 at a $5B valuation.
As a serial entrepreneur and a successful operator, John shared invaluable insights that apply to Web3 founders at large. I joked, Web3 founders have to be CEOs, politicians, anthropologists, ethnographers, game theorists, and product experts - all at once. John certainly ticks all of those boxes. Let’s learn about John’s entrepreneurial journey that led him to Ava Labs
What Are Ava Labs and Avalanche?
Ava Labs is the company behind Avalanche, which is positioning itself as the fastest smart contracts platform in the blockchain industry. It promises to be blazingly fast, low-cost, and eco-friendly and is a solution to the problems he saw back in 2018 (more on that later).
John's Origin Story
Prepared mind
John is a serial founder who has been involved in launching three diverse companies.
John’s first venture was an investment management firm (Sureview Capital) that focused on tech investments. Next, he started a Web2 firm enabling compliant token trading of private shares (SharesPost Digital Assets Group). As a tech investor and Web2 entrepreneur, John made it his mission to provide more access to hard-to-find, private, illiquid securities to private individuals. This history made John extremely familiar with the challenges in the existing or “TradFi” systems.
Then, John learned more about a project by Emin Gun Sirer. John and Emin were both advisors to the Cornell Blockchain Club (John's alma mater), so he took interest in the new consensus protocol that Emin was creating.
He realized that while Emin saw the problem from a technology perspective, he saw it from a commercial perspective due to his prior ventures. Together, he knew they could solve the scale, speed, and cost problems he experienced in his past venture. Though he's not a founder of Ava Labs, he was there from the very beginning and is now President.
What started as ten people in a shared office space has since grown to a team of 200 people and one of the top blockchains. Today, Avalanche has >$300M daily volume, a fully-diluted market cap >$12B, >$1.6B TVL, and >1.5M daily transactions over the past year.
John’s Web3 "Aha Moment"
Like many, his journey into Web3 had a few distinct iterations. Even as a successful, semi-retired tech investor, he didn't immediately see the utility of Bitcoin at inception. After studying the space more closely, he saw that the incremental demand dramatically overshadowed the incremental supply. He knew he had to go long and build on the core technology - blockchain. His first role in the space was as CEO of SharesPost Digital Assets Group, a marketplace that enabled compliant token trading of private shares and funds. Before we had the term “web3” John was trying to enable other-ledger assets to be on chain.
When he first witnessed the ICO boom in 2017, as a financial services veteran, he was amazed at how quickly companies could raise money, gain resources, and get input from the community. He was used to IPOs where founders routinely gave away 5%-6% to investment banks - this is after months and months of road shows. The process was painfully inefficient and costly.
The ICO construct had the potential to be a more efficient IPO mechanism. He realized that if he could create a way to make this process regulatory compliant, he could create more access to private shares and private funds through a security token offering.
What Existential Challenges Did You Face Along the Way?
Building the Community
The main challenge for Ava Labs was finding product-market fit. John had the benefit of being the founder of a tech focused investment firm. He had tried to tokenize private securities on the blockchain and understood the value proposition of Avalanche, but this was not immediately obvious to everyone. John and the Ava Labs team had to make inroads with Web3 founders, developers, and users to gain early traction on the network.
Now, as president of Ava Labs, he's not just a leader of the core team. He has to be in touch with the overall community. That translates to not only setting a purpose with the core team, but to setting a purpose and engagement with the wider community. To embrace Web3, founders have to become leaders for the entire community. That is a key lesson.
Scalability and Infrastructure Challenges
John and the team also realized that in crypto specifically, there's a lot of belief in potential upside over the horizon. One limiting factor was that the technology wasn't capable of handling the sheer scale of transactions.
He recounts running calculations with his engineers and concluding that if they were to perform an IPO-level volume and speed of transactions, it would have been as cost-prohibitive as doing a traditional roadshow and paying away 6% of a company’s value to an investment bank. This led to the team’s relentless focus on scalability and data availability while maintaining EVM compatibility to be able to leverage existing Web3 ecosystem talent.
Navigating Regulatory Scrutiny/Satisfying the Regulators
In late 2017 when this all started, the regulatory environment was murky - to say the least. Another challenge was to launch the marketplace and take the concept to market while remaining compliant. Ava Labs team had to work with the SEC, FINRA, and multiple law firms to finally create something that satisfied regulators.
These existential challenges shaped the direction of Avalanche and informed the core value it offers to users - throughput, fast finality, and immutability of a distributed network.
Closing Thoughts:
We are all building towards a future where identities, assets, and workflows will be on-chain. As interoperability is enhanced, developers will be empowered to make the choice on what protocol to build on, driven more by technical chops than perceived network effects.
With the scalability, throughput, and flexibility offered by Avalanche’s subnets, I anticipate we will see greater growth than most other EVM compatible smart contract networks. The team at Ava Labs has shown a thoughtful, community-driven, and technically sophisticated approach to developing Avalanche.
We are excited by all that John and team have done, and we are looking forward to what the future holds for Avalanche.