Article source: ChainCatcher
Interview: Mensh, ChainCatcher
Guest: Will, Core Contributor of Alliance DAO
Alliance DAO was established in 2020 and is a leading Web3 accelerator and founder community, helping the top 1% of Web3 founders launch and grow their companies through a 10-week program led by renowned Web3 experts. The community of Alliance DAO includes founders, lawyers, auditors, liquidity providers, market makers, and more.
As of now, Alliance DAO has held 14 sessions of its startup accelerator, with a total market value of the incubated companies reaching $11 billion. In this cycle, incubated projects such as Pump.Fun, Moonshot, and Glow have all performed very well.
In this conversation, we invited Will Robinson, the zero employee of Alliance DAO, to share his personal experiences in the Web3 field, insights on how to filter projects and founders.
Personal Experience
ChainCatcher: Let's start with your personal experience in the crypto field.
Will Robinson: The beginning of my career was as an academic researcher. I studied for eight years in graduate school, researching video games, tabletop games, and sports, focusing on the history and culture of games. I worked in the English department, sociology department, and communication department, studying mechanism design and how games help game designers create more artistic games. The emphasis was on independent games, especially those that were impactful and not just for entertainment. For example, I designed a game about when it is the 'best time' to commit suicide during high school. I researched the mechanism design and incentive structures for those who had early suicidal thoughts. These were the themes I explored, and they were also very challenging design content.
Later, I left game research and academia because my cousin Dan (whom I consider one of the smartest people in the crypto field and the head of research at Paradigm) introduced me to Bitcoin. He told me how research in mechanism design could help people in the blockchain space. It was early 2017, and I was about to finish my PhD, so I decided to switch careers. I started attending meetups in Montreal, looking for opportunities among a group of crypto enthusiasts.
After four or five meetups, I found a job helping people promote their audit business. The pay was very low, and I had no work experience, but my academic background made me good at storytelling and marketing. They wanted me to help them promote their product. We assist anyone who needs to prove to regulators that they indeed hold cryptocurrencies on their books. For instance, if you are the Ethereum Foundation, you need to report your finances in a specific way according to Swiss regulations in the early years and then require stricter reporting structures a few years later. We have collaborated with Swiss entities like the EOS Foundation and the Lisk Foundation. Additionally, if you are a Cayman Islands fund holding cryptocurrencies on your balance sheet, you must report to the local regulatory body, CIMA (Cayman Islands Monetary Authority), to ensure fiduciary responsibility.
We audit Cayman funds, foundations, and exchanges around the world. Exchanges usually have regulators, and we ensure that they hold cryptocurrencies safely, correctly, and intelligently, train employees, conduct penetration tests, and risk assessments. I have been doing this for nearly four years and have gradually become an expert in the field. Starting as a marketer, I transitioned into an auditor or audit expert while continually learning more about cryptocurrencies and adapting to the tech field. Then I applied to join Alliance as their first employee, responsible for building the accelerator program.
By now, I have been working here for almost four years. I have tried almost every role, including fundraising, mentoring, marketing, and research in many areas. I constantly switch roles to find the direction I like. When working in a startup, you can decide what the next most important thing is and then hand off the tasks at hand to those who are better at them. I enjoy communicating with people, so I spend a lot of time mentoring.
ChainCatcher: Which role do you enjoy the most in a startup?
Will Robinson: I enjoy helping teams prepare for Demo Day. We have about 20 teams in each batch, and about 10 to 15 teams will be ready to present to venture capitalists at the end of the batch. I spend a lot of time communicating with each team, teaching them how to tell the story of their startup, how to tell their story quickly and engagingly, making people want to invest.
By collaborating with 100 to 150 startups, not only does this give the teams a good story to attract investors, but it also deepens their understanding of why their company matters and what makes it unique. We put a lot of effort into preparing for Demo Day. Up until the last batch, this was one of the reasons founders liked Alliance the most, which makes me very proud.
ChainCatcher: How has your academic experience influenced your subsequent work?
Will Robinson: During my PhD, I did not learn much that could be directly applied to the Web2 game field. Because Web3 games are completely different from Web2 games, at least in the foreseeable future.
However, I learned how to give presentations, how to collaborate with others, and most importantly, I learned how to face a very difficult problem alone and spend a long time completing it under extreme psychological strain (like dealing with a complex problem in solitude). Therefore, the most important thing that doctoral studies taught me was how to deal with ambiguity. Facing questions that have no ready answers, with no formulas to refer to, everything needs to be created anew by you.
ChainCatcher: There are many trivial tasks to handle when helping startups; how do you manage your time?
Will Robinson: I spend a lot of my time connecting teams with venture capitalists, from preparing for conversations to formal introductions. I maintain a very long list of venture capitalists to ensure I can introduce teams to 50 to 100 potential investors. This is very time-consuming.
Additionally, I spend a lot of time reviewing potential applicants or future alumni as they apply to our program. We receive nearly 2000 applications in each batch. These applications take time to read, and it takes time to interview applicants, sometimes even requiring a second interview.
Another major task is fundraising for our third fund. Alliance has already established two funds and is currently raising the third.
The decision-making process of Alliance DAO
ChainCatcher: How do you efficiently filter projects? What does the decision-making process look like?
Will Robinson: Each application will be evaluated from two perspectives: whether the team is excellent and whether the idea is outstanding. And I think the excellence of the team is more important than the quality of the idea, possibly two to three times more important. The idea is more about proving that the team can come up with a good idea rather than the importance of the idea itself.
Alliance is not fixated on specific areas; we are more focused on great founders. Because we get involved very early, it is almost certain that they will pivot at some stage. We will help them adjust, work with them, and even support their pivot.
For example, the Pump.Fun team was called Caviar when they joined, and later built a 3:3 application based on Friend.tech. If we had rejected them because we did not like Caviar, it would have been one of the biggest mistakes of our lives. But we did not do that because we knew this team was outstanding.
What constitutes an excellent team? I believe this is the core of early-stage venture capital, and it requires firsthand observation. Excellence does not necessarily mean having attended prestigious schools, having worked at large companies, or having previously founded a startup that successfully exited. As Alliance founder Qiao said, to be a great founder, you need to be 'traumatized and a bit introverted.' Only a truly 'broken' mind can succeed in this.
Most founders do not even know why they are motivated to start their companies. Therefore, an important part of my interview process is to guide them in self-reflection. I try to get them to tell me why they want to do this. They typically start with, 'It's to solve this problem.' Then I ask, 'But why do you want to solve this problem?' They might say, 'Because it's an important issue.' I continue probing, 'Why do you personally want to solve this problem?' They might say, 'Because I had this problem before.' Then I ask, 'Why don't you let someone else solve this problem? Why does it have to be you?' I keep digging until I find something, like what happened to them when they were six years old that makes them feel compelled to solve this problem. This kind of deep exploration is crucial.
ChainCatcher: How many rounds does a team need to go through to enter Alliance?
Will Robinson: Two rounds. Typically, the first round is 15 to 20 minutes, and the second round is 30 to 45 minutes. Y Combinator only uses 10 minutes for each interview. With more practice, you will find that you can quickly judge whether someone is excellent. We call it 'heat.' We ask each other, 'Can you feel the heat in the interview?' Some people have heat, and some do not, and the manifestations of heat also vary. Because we are also building a community, Alliance is also a DAO, and this community cannot have bad apples. Since we are still small, a single bad apple can spoil the whole pot.
ChainCatcher: What proportion of projects stand out and give you a sense of 'heat'?
Will Robinson: We interview 20% of applicants, then interview 20% of those, and finally admit 20% of that group.
ChainCatcher: Have there been cases where outstanding founders were missed?
Will Robinson: I can give two examples. The last batch had a company called Force Prime. The team consisted of three older gentlemen from Eastern Europe who had a lot of experience in the Web2 gaming space but very little understanding of Web3 gaming. They applied, and we rejected them. They applied again, and after the interview, we rejected them again, explaining the reasons. They applied for a fifth time, and I finally let them in.
Part of the reason is that I realized my bias affected my judgment; they were actually very good developers, smart and eager to learn. I am also glad to let them struggle outside for a while longer because their initial ideas were indeed terrible. They did not understand Web3 well enough but later became increasingly sophisticated and familiar with how Web3 operates. I really enjoyed working with them; the founders were outstanding.
Of course, there are also cases where we refused to apply again. One case stands out, which is Monad. At that time, we were uncertain about whether they could build a community, and their valuation was relatively high. In the early days of Alliance, we did not have strict limits on valuations for projects entering, and we accepted teams with different valuations, sometimes even very high valuations. But at that time, we lacked 'purchasing power,' and we had no reputation; people did not think it was worth giving us 7% of their company. Now, we no longer face this problem; enough people believe we do very well, making it worth such equity dilution.
The business model of accelerators
ChainCatcher: Many VCs also want to incubate themselves; what do you think your competitive advantage is compared to VCs doing their own incubation?
Will Robinson: I think VCs can do very well with their 'Entrepreneur in Residence' (EIR) programs. For example, Paradigm is a great example. They take in a founder, work with them, help them come up with an idea and start a company. But they can only support a few people at a time.
I believe operating a full accelerator is beyond the scope of most VCs and is not financially viable. The annual operating cost of an accelerator is about $5 million, while management fees are far from covering those costs. This is not a good business. You need to leverage your accelerated teams in a broader vision or other ways. For us, this is about building a DAO and focusing on creating something very unique.
When VCs have other priorities, such as managing large amounts of capital, they cannot focus all their attention on these teams. The purpose of running an accelerator is to invest more money in Series A or B rounds. But when the focus is like this, it significantly impacts the teams joining the accelerator. If these teams do not receive follow-up investments or do not secure Series A funding from these VCs, it essentially equals 'death.' Other VCs will question, 'Why didn't your accelerator company receive follow-up investments? Don't they have follow-up funds?' This could be for completely reasonable reasons, such as excessive industry exposure or loss of confidence in a particular area, unrelated to the team. But such impressions are often dangerous. I believe most VCs have no reason to operate accelerators.
Moreover, running an accelerator requires immense attention, such as needing 15 full-time employees, which most VCs do not have the energy for. Reviewing 2000 applications requires a lot of work, so my advice is that the best VCs should focus on some founders emerging in the network and support them as available resources rather than trying to run an accelerator.
ChainCatcher: Besides online applications, do you have other sources for finding projects?
Will Robinson: All applicants must apply through our website, which is our way of maintaining order. However, the way they hear about Alliance or the website may vary. More than half of the teams are referred by previous founders or alumni, who tell applicants, 'Trust me, it’s worth your time to engage with Alliance.' Because most founders should be wary of accelerator programs, as many are not worth the time. And the best founders in the world know this. So to earn their trust, they need to hear recommendations from their peers. They need their colleagues to tell them, 'These people are reliable.' For this reason, we spent a long time building a large community of founders to spread the word that we are different.
ChainCatcher: Why are founders afraid to join accelerators?
Will Robinson: Great founders often do not go through accelerators because they already know how to build a company. The projects they are building may be overvalued, or they may choose to go to Y Combinator. Top founders know that most accelerators cannot provide the value required compared to the equity dilution they would incur. Therefore, it took a long time for Alliance to get great founders to accept the terms we required for applications. Building this trust requires word of mouth from multiple sources. As a great founder, you need to hear from two or three people that Alliance will do everything possible to help you succeed.
Some excellent founders are in the early stages of their careers, and accelerators can truly help them learn. But now Alliance is a well-known brand with a large community, and great founders are willing to give up dilution to sell their products to hundreds of alumni. Many of our teams' first customers are alumni of Alliance. This way, you can quickly launch a business and get feedback.
Secondly, the legitimacy and signal brought by Alliance are now very meaningful. You can gain a lot of marketing and exposure because you will be included in a series of recent success stories. I believe this year we have Moonshot and Pump.Fun, along with many other consumer projects that are emerging. So if you are building a consumer application, Alliance will make your product more visible to more customers, and people will be willing to do so. If you are building SaaS or some kind of infrastructure, then you will want to join Alliance to sell your product to its founder community. These are two different reasons why you might want to join.
Accelerators can be divided into two types: very boring, assembly line-style guidance, such as how to register a company, implement HR practices, establish recruitment processes, design websites and marketing, and even more specialized cryptocurrency guidance, such as how to issue tokens.
But Alliance does not do those things. We do not tell you how to register a company or how to issue tokens. We tell you how to create products that people want to use. Finding product-market fit is very difficult. A typical accelerator's junior mentor cannot help you achieve that. But Alliance's mentors have worked in the crypto field for 8 to 15 years. These are the people who can truly help you find the right product for your target users.
ChainCatcher: You mentioned that investing in follow-up rounds could be harmful to projects. Do you sometimes invest in follow-up rounds?
Will Robinson: We never invest in follow-up rounds of the teams we accelerate. This way, the venture capitalists cannot discern which teams we favor. However, we do invest in follow-up rounds of teams we did not accelerate. For example, Arbitrum gave us an investment opportunity. We invested in Axie Infinity. We have many great strategic investments, but these are not part of the accelerator's business scope.
Judgment on founders and teams
ChainCatcher: How do you balance between a founder's ability to pivot and their resilience?
Will Robinson: When we interview founders, we check several aspects. First, whether there is a strong collaborative relationship between the founders. If not, it means that they may fail during the pivot process. So we place a great emphasis on finding people who have been working together for some time.
Another point we focus on is whether they have an obsession with succeeding at all costs. This is also very useful. We really do not like teams that are too large. This is a big issue for teams from Asia or Eastern Europe, where labor costs are lower, and people tend to hire quickly. However, large teams find it hard to pivot. So we strongly prefer small teams.
Typically, the first thing we do when joining Alliance is teach them how to downsize. If you haven't found product-market fit, you don't need that many employees. You need to focus on finding the right problems and the right solutions. Some companies need a lot of employees to achieve this, but it's very rare. And this is not the type of company we excel at helping.
Y Combinator and OpenAI are a great example. OpenAI broke all the rules of Y Combinator. It does not resemble a typical YC company. It has too many employees and no clear product-market fit in ten years. But it is one of the most valuable assets they accelerated. So there will be exceptions, and we will accept them. But generally, if we want them to be able to pivot, we need them to have strong motivation, solid collaboration, and fewer employees.
(Stardew Valley) made over $100 million with just one developer. I'm not here to create the next (Rockstar) valued at $2 billion like (GTA7). I believe if we're going to develop games in the crypto space, it's best to focus on small teams.
Usually, the teams that come to us tend to be the largest because they come from the Web 2 field, such as the traditional gaming industry, where a large team is needed, and everyone is like a cog in a machine, quickly developing many different games. However, the usual result is that they eventually slow down all processes due to entering the crypto field, slowly developing only one game, and overemphasizing quality while neglecting quantity. If I were to talk to a game team, I would want to hear that they released 20 games in a year, continually trying, even if the games might be rough, as they seek market-product fit.
We are currently receiving many applications related to AI. Many applicants with tokenized AI-related projects have proposed ideas around this theme, which excites me. I have always wanted to provide financial services to those who cannot access banking services, but I never thought 'those who cannot access banking services' would be AI. I initially thought it was the people in the Global South who could not access banking services, but now I find that AI also faces challenges in managing funds, and I am very hopeful to see crypto technology solve this issue for AI. For our alliance, the core interest is great founders; whatever they want to build, we are happy to build alongside them.
ChainCatcher: What do you think is the most interesting project at the moment?
Will Robinson: Pump.Fun, because it changed the way many people behave and shifted their thinking about meme coins. Another amazing project is Glow, as it incentivizes solar farms' production in a very interesting way and performs exceptionally well. However, there are infinitely many interesting projects, and I also enjoy being surprised.
We did not know in the first two months that Pump.Fun would be a great success. Initially, no one used it, and we had to beg people to try it. It was one of those projects that started very slowly but suddenly exploded. Many thought it would quickly fade away, but that was not the case. It is still unclear where Pump.Fun will end, and I like to think about what its ultimate game mode will be. Now we see other projects starting to use it as a platform to release content, which brings various issues, such as how to deal with potential criminal behavior or whether to address them. And there are many interesting puzzles surrounding this team that occupy most of my thinking space.
When they joined us, they were developing an NFT trading platform called Caviar, which used some unique financial vernacular to showcase its uniqueness. Despite having a user base, it was still insufficient, so they tried some new things, but the team also split. One co-founder, Mohammed Bayoumi, left to found Exo, a well-performing AI company.
The other two found new co-founders and started developing in other areas. At that time, they did not know what to develop, and we brainstormed with them. Imran is one of the co-founders of Alliance and is the mentor who worked most closely with the Pump team. He researched Friend.tech with Chow and thought there might be something interesting to explore or develop. So they began investigating the bond curves and speculation in the social media environment.
Despite the lack of appeal of Friend.tech and insufficient interest in their project, they learned how to launch tokens at a very low cost (only 2 cents). This ultimately became a clear milestone for community members, helping to drive the project forward.
I believe a key lesson in entrepreneurship is that you need to create your own lucky conditions. You need to work in the right direction, solving people's problems, but also hope that certain unexpected things will ultimately play a significant role. They gained many lessons through deep learning of users and consumers, continuously focusing on the consumer crypto space while constantly pivoting, which allowed them to gain domain expertise and ultimately discover some truly useful things.