This is the article I published on the technology edition of The Paper.
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It’s a crazy idea to start a new record company with thousands of people involved; it’s also crazy to be the owner of a sports team. But Web 3.0 provides us with such possibilities, allowing these networks and communities to pool capital, resources, and allow these organizations to create new experiences for people.
In DAO, entrepreneurs face a community of thousands of people. These community members are professionals gathered from all over the world. They have different social resources and are able to support the entrepreneurial team in many aspects such as legal affairs, financing, public relations, and marketing.
Jess Sloss is the founder and chief strategy officer of Seed Club, a Web 3.0 innovation incubator. Seed Club focuses on helping creators create tokenized communities and achieve project growth and profitability through community development. Unlike traditional incubators, Seed Club relies on the unique digital sovereignty and network effects of blockchain to help Web 3.0 startups build communities and develop into influential Web 3.0 native projects.
Prior to joining Seed Club, Sloss was the co-founder of Blimp Homes, a real estate collaborative space, and led the community at Protos Asset Management, a crypto asset management service provider. He has extensive experience and talent in the blockchain field, having founded a cryptocurrency startup at the peak of the crypto bubble and launched the first batch of security tokens.
Taking Songcamp and Krause House, two projects incubated by Seed Club, as examples, Sloss explained new concepts such as Web 3.0 creator economy and social tokens to The Paper (www.thepaper.cn).
The following is the transcript of the conversation between Curiousjoe, a special contributor to The Paper, and Jesse Sloss.
“The Y Combinator of Web 3.0”
The Paper: Please introduce yourself first.
Jesse Sloss: I live near Vancouver, Canada, and have been fascinated by the digitization of our world since college. I grew up experiencing the first internet boom as a child and was raised in that environment. It is a deeply held belief in the way the internet and technology are radically transforming our economy.
I got involved in video content studios when YouTube first started, and then worked in the music industry for a long time, helping artists better use social media and new digital platforms.
So I witnessed the benefits of this new technology very early, and I also discovered its drawbacks very early. These large digital platforms, such as Twitter, YouTube, Facebook, Google, etc., did not keep their early promises. There were many developers who built on Twitter and suddenly found that their ideas were stolen. Many content producers spent a lot of time and accumulated a lot of subscribers, but suddenly found that they could no longer connect with their subscribers organically. Early users of these platforms, including me, later felt a deep sense of powerlessness when facing the platforms. Users had no voice in front of the platforms.
In 2016, I saw a YouTube video about self-driving cars and DAO (decentralized autonomous organization), and the concepts in it surprised me. After that, I learned about Ethereum and the first DAO organization, and bought my first Ethereum. The following year, a friend took me to learn more about tokens, and I quickly fell into the crypto rabbit hole (devoted myself to the crypto industry).
I have worked with artists and content creators, and also started a business in the technology industry. These experiences combined made me very excited about some new technologies developed in the blockchain industry, which allow communities, individuals and developers to share ownership of the platform while creating. I started to enter Web 3.0 full-time in 2017 and helped a Swiss hedge fund issue the first security token.
Since 2020, many tools have been developed in the Web 3.0 field, and anyone can use these tools to create, such as Uniswap, which can create markets for any token, and there are tools to empower tokens, such as early token gatekeepers (tokengating, a tool that automatically verifies token holders, generally used by some Web 3.0 communities, first distributes tokens to specific groups, and then only token holders who have been verified by the program can join). It feels like everything is just beginning, and everything is becoming more open and interesting.
At the time, some people were talking about social tokens and how creators could use them. I was very interested and gathered 11 people in a chat group, and that was the prototype of Seed Club. To date, our accelerator has accelerated 5 cohorts, each of which has been supported by top international investors, covering fields such as music, digital cities, and fan-run teams. The world is digitizing, and we are witnessing Web 3.0 as a potential solution.
The Paper: Can you introduce the growth of Seed Club with some numbers?
Jesse Sloss: Well, Seed Club now has more than 2,000 token-holding members. The community has more than 12,000 people, but our goal has never been to simply increase numbers, but to find smart and passionate doers and creators. Value is not created by large communities, but by small groups within the community.
Our first cohort had five teams, and the following four phases have collaborated on more than 100 projects, attracting many new contributors, blockchain capital, and some very powerful venture capital, raising $15 million for construction costs. In addition, Seed Club Ventures was established, which manages a $30 million venture capital fund in the form of a DAO. Seed Club focuses on helping early entrepreneurs, while Seed Club Ventures focuses on infrastructure and tools to provide protection for entrepreneurial teams.
In the ecosystem we created, Seed Club and the projects we support have a valuation of $1 billion. It feels like we have come a long way from a chat group of 11 people to where we are today. But looking forward, we have just started, and what we are doing is creating real value.
The Paper: What is the difference between Seed Club and traditional incubators?
Jesse Sloss: I think the difference is that we are a DAO. In the traditional accelerator model, entrepreneurs generally need to face one or several investors, or a large venture capital company, which may have 20 to 50 employees. In DAO, entrepreneurs face a community of thousands of people. These community members are professionals gathered from all over the world. They have different social resources and are able to support the entrepreneurial team in many aspects such as legal affairs, financing, public relations, and marketing.
Some people call us the Y Combinator of Web 3.0. I am very grateful for their evaluation of us. I think we still have a long way to go. What we need to solve most is how to design a network that can support entrepreneurs, rather than becoming a company. There are unique opportunities in this subtle transformation, which can help us do something for the world.
Creator Economy is also called “Passion Economy”
The Paper: Could you first tell us about a project that Seed Club has helped and give us a more intuitive feel?
Jesse Sloss: Okay, so let's talk about Songcamp, which is a music lab for Web 3.0.
In 2021, we held an online event called the Crypto Creator Summit, where we released a themed NFT (non-fungible token) in the form of an auction and sold NFTs to get sponsorship. Many people came to buy these NFTs, one of whom was Matthew Chaim. Afterwards, I called Matthew and I asked him, "What do you want to promote at this summit?" He replied, "I don't have an idea. I just thought it was cool, so I bought it."
Matthew is an artist, and I started listening to his music a long time ago, but I didn't know he was Matthew at the time. Later he mentioned a creative camp, which was a very creative place where many musicians got together and created a lot of music, but because of too many royalties and record company issues, the music written there could not be published. So he mentioned that it might be interesting to bring people together to create music and then release them as NFTs. I said, "Matthew, this is exactly the project we are interested in."
So he proposed this idea at that summit, established a project team, and dozens of people joined the project. They brought together musicians and visual artists to create music NFTs and auction them off, and all proceeds would be automatically distributed to the participants.
In the traditional music industry, the rules for revenue distribution are not transparent. After an artist releases music, it may take months or even years to see revenue, and artistic and economic returns are disconnected. So what Songcamp does is a transformative experience for musicians.
Their most recent creative camp is called "Camp Chaos", which brought together 77 artists to create and release 3 albums. The way they release NFTs is quite interesting. You can buy card packs, and after opening the card packs, you will get different NFTs corresponding to different music. The sales proceeds will be automatically distributed among the artists immediately.
Songcamp is preparing for their 4th event and is growing healthily. Their last camp sale almost reached 1000 Ethereum (current Ethereum price is about 1600-2000 USD), which is incredible.
Songcamp's practice is an exploration of Web 3.0 plus music. Through transparent and timely value distribution and creation, it proves what kind of empowerment Web 3.0 can provide to musicians and creators.
The Paper: I know that Seed Club covers a wide range of fields and has helped many creative projects, such as Krause House, a fan community that wants to buy an NBA team. But since we are talking about Songcamp, I think of a concept you have talked about a lot - Creator Economy. Can you tell me what Creator Economy is?
Jesse Sloss: I think the term “passion economy” is another way to describe the creator economy. It’s basically about helping people make money on the internet. The creator economy has exploded in recent years with the popularity of YouTube, podcasts, direct-to-consumer brands, and all kinds of digital business models. Individuals who build communities or attract attention online can now earn significant income from it. I think blockchain brings a unique value to the creator economy, which is that ownership is at the core of this space. Compared to how communities are built on YouTube or Substack (distribution platform), blockchain and Web 3.0 give users and investors more control over the platform.
The creator economy is the process of individuals creating value in the digital realm and capturing that value at a micro level. This can be working in a DAO and earning income, or building a personal brand or small business in a more traditional way and then earning income from it. In the creator economy of Web 3.0, work is not just about signing a contract and then getting a salary, but more importantly, having a certain equity in the project. For example, one of the projects we are involved in is called Forefront, which is committed to providing community members with ways to create value, including building websites, writing newsletters, and organizing community events, so that people can earn income through their contributions. Although these projects are still in their early stages, I think they have great potential and opportunities.
The Paper: Is there any difference between the Web 3.0 creator economy and the previous creator economy?
Jesse Sloss: The difference is that Web 3.0 can generate revenue on-chain. NFT is an amazing way to use blockchain technology to fix copyright. This copyright proof on the chain cannot be tampered with and is open and transparent across the entire network. In the traditional world, creators need to go through complicated procedures to apply for patents or copyrights, but in the world of Web 3.0, you only need to mint an NFT on the chain, which greatly reduces the cost and threshold. Moreover, through blockchain, creators can easily transfer this NFT and capture its value. What's more interesting is that this technology supports many people to create together and earn income together.
Take Songcamp as an example. They are like a record company in the Web 3.0 era, but they are not organized as a company. In Web 3.0, they are a small creative team formed by people working together, a community that makes music. Their achievements are auctioned through the Mirror platform, and the split of all rights and interests is very clear on the chain. Creative combinations and revenue sharing are instant and automatic on the chain.
Social Tokens and Community Curation Growth
The Paper: Seed Club describes itself as a “social-token incubator”, and the target of your assistance is often the “social-token community”. What is a social token?
Jesse Sloss: Social tokens are digital tokens that represent community value and engagement. They are often associated with specific communities, creators, or brands, giving token holders access to a range of privileges, such as access to exclusive content, participation in private events, or interaction with creators. For creators and brands, social tokens provide them with a new and interesting way to engage with fans and earn revenue.
We can divide social tokens into three categories: personal tokens, brand tokens, and community tokens. There is a lot of room for exploration in each segment, and our focus at Seed Club is on community tokens.
The "community" in the community token can be further divided into creator-centered communities and general communities. The value of creator-centered communities mainly comes from the active participation of creators, while general communities focus on the collaborative creation of the entire community.
There are huge business opportunities in all these categories, and many exciting innovative tools have emerged. As an emerging digital asset, social tokens will play an important role in the future of the Internet. First, social tokens will penetrate into various application scenarios of the creator economy, helping creators build closer connections, increase fan engagement, and diversify their income. Second, social tokens are expected to become an important means of value storage and delivery. With the development of digitalization and blockchain technology, more and more users are beginning to recognize the value of social tokens. In the future, we may see various types of tokens realize value transfer and circulation in different scenarios. In addition, social tokens will also promote the integration of the virtual world and the real world. With the rise of virtual worlds such as the metaverse, social tokens will become a bridge connecting the real world and the virtual world.
The Paper: You mentioned community tokens and the power of the community. Among the projects that Seed Club has helped, Community Curated Growth should be a relatively important link and an important feature of the Web 3.0 incubator. Can you explain this concept in detail?
Jesse Sloss: Community curated growth refers to a community that brings growth to a project or brand through joint efforts, collaboration and sharing. This growth method is different from traditional centralized marketing strategies. It relies on the participation and contribution of community members to achieve the development of projects or brands.
In the context of community curation growth, community members work together to share resources and knowledge and jointly develop strategies for projects or brands. This approach emphasizes the power of the community to achieve the goals of a project or brand through decentralized collaboration and innovation.
In practical applications, community curation growth can be achieved in many ways. For example, we can stimulate the participation and creativity of community members by organizing online events, discussions, and workshops. In addition, we can use social media platforms to establish communication channels and stay in close contact with community members. In fact, we have seen many successful cases at Seed Club. For example, in a project's community, community members provide valuable opinions for the development of the project by discussing together, sharing ideas, and making suggestions. The active participation and contribution of these community members not only increase the popularity of the project, but also bring new users and investors to the project.
I think there will be several trends in the future of community curation growth: First, community curation growth will be further integrated into the business model of all walks of life. With the improvement of community awareness and the popularization of decentralized concepts, more and more brands and projects will begin to pay attention to the potential of community curation growth. Whether it is technology, art or other fields, we will see more projects adopt this growth method to achieve sustainable and shared development. Secondly, community curation growth will prompt projects and brands to further pay attention to the construction and operation of the community. They will pay more attention to the needs and expectations of community members and provide them with more value and opportunities. This will help build a closer and more cohesive community, thereby bringing greater growth momentum to the project or brand. In addition, community curation growth will also push projects and brands to pay more attention to transparency and trust. In this growth model, community members need to clearly understand the goals and vision of the project in order to contribute to the development of the project together. Therefore, projects and brands need to show higher transparency in communication, information disclosure and decision-making to win the trust of community members.
The Paper: In the conversation just now, we mentioned an interesting project, Krause House. There are many NBA fans in China. They may find this project very interesting. Can you give us a detailed introduction to this project?
Jesse Sloss: Absolutely. Krause House is a very interesting project whose goal is to buy and operate NBA teams. They already have thousands of members who work together to explore how to get fans involved in the operation of these professional sports teams. If you follow American basketball, you will know that basketball teams are very expensive and out of reach for ordinary people. We may buy tickets to games, but we can't become owners of teams. The idea of Krause House is that if you can unite fans, then teams also want fans to be part of their organization because fans bring a strong community force.
In fact, Krause House has made remarkable progress. They successfully participated in the bidding for an NBA team, but unfortunately lost the bid at the last minute. Its two founders are both in Los Angeles. They had no sports connections before they founded Krause House, but they were able to meet with NBA owners, agents and retired athletes. I believe they will get equity in an NBA team in the next one or two years. Of course, they can do many other things.
The Krause House project got us thinking about what happens when fans become more than just consumers, but actually participate in the creation and operation of sports teams? I think this is one of the biggest trends I see in the work I do: we are saying goodbye to the line between creator and consumer, owner and consumer, and it's becoming increasingly blurred.
Imagine starting a new record company with thousands of people involved. It's a crazy idea. It's also crazy to be the owner of a sports team. But Web 3.0 provides us with such a possibility, allowing these networks and communities to pool capital and resources, allowing these organizations to create new experiences for people. I believe we will see similar developments in many other areas of the economy. In fact, this is exactly what Seed Club does.
(Author Curiousjoe is a cross-border researcher of international politics and cryptocurrency.)
