I'd spend hours composing articles only to find out they were useless. Twitter solved the problem.

Twitter is wrinkled, say critics.

Nope. Writing is different. It won't make sense until you write there.

Twitter is resurgent. People are reading again. 15-second TikToks overloaded our senses.

After nuking my 20,000-follower Twitter account and starting again, I wrote every day for 210 days.

I'll explain.

I came across the strange world of microblogging.

Traditional web writing is filler-heavy.

On Twitter, you must be brief. I played Wordle.

Twitter Threads are the most popular writing format. Like a blog post. It reminds me of the famous broetry posts on LinkedIn a few years ago.

Threads combine tweets into an article.

• Sharp, concise sentences

• No regard for grammar

• As important as the information is how the text looks.

Twitter Threads are like Michael Angelo's David monument. He chipped away at an enormous piece of marble until a man with a big willy appeared.

That's Twitter Threads.

I tried to remove unnecessary layers from several of my Wordpress blog posts. Then I realized something.

Tweeting from scratch is easier and more entertaining. It's quicker and makes you think more concisely.

Superpower: saying much with little words. My long-form writing has improved. My article sentences resemble tweets.

You never know what will happen.

Twitter's subcultures are odd. Best-performing tweets are strange.

Unusual trend: working alone and without telling anyone. It's a rebellion against Instagram influencers who share their every moment.

Early on, random thoughts worked:

My friend’s wife is Ukrainian. Her family are trapped in the warzone. He is devastated. And here I was complaining about my broken garage door. War puts everything in perspective. Today is a day to be grateful for peace.

Documenting what's happening triggers writing. It's not about viral tweets. Helping others matters.

There are numerous anonymous users.

Twitter uses pseudonyms.

You don't matter. On sites like LinkedIn, you must use your real name. Welcome to the Cyberpunk metaverse of Twitter :)

One daily piece of writing is a powerful habit.

Habits build creator careers. Read that again.

Twitter is an easy habit to pick up. If you can't tweet in one sentence, something's wrong. Easy-peasy-japanese.

Not what I tweeted, but my constancy, made the difference.

Daily writing is challenging, especially if your supervisor is on your back. Twitter encourages writing.

Tweets evolved as the foundation of all other material.

During my experiment, I enjoyed Twitter's speed.

Tweets get immediate responses, comments, and feedback. My popular tweets become newspaper headlines. I've also written essays from tweet discussions.

Sometimes the tweet and article were clear. Twitter sometimes helped me overcome writer's block.

I used to spend hours composing big things that had little real-world use.

Twitter helped me. No guessing. Data guides my coverage and validates concepts.

Test ideas on Twitter.

It took some time for my email list to grow.

Subscribers are a writer's lifeblood.

Without them, you're broke and homeless when Mark Zuckerberg tweaks the algorithms for ad dollars. Twitter has three ways to obtain email subscribers:

1. Add a link to your bio.

Twitter allows bio links (LinkedIn now does too). My eBook's landing page is linked. I collect emails there.

2. Start an online newsletter.

Twitter bought newsletter app Revue. They promote what they own.

I just established up a Revue email newsletter. I imported them weekly into my ConvertKit email list.

3. Create Twitter threads and include a link to your email list in the final tweet.

Write Twitter Threads and link the last tweet to your email list (example below).

Initial email subscribers were modest.

Numbers are growing. Twitter provides 25% of my new email subscribers. Some days, 50 people join.

Without them, my writing career is over. I'd be back at a 9-5 job begging for time off to spend with my newborn daughter. Nope.

Collect email addresses or die trying.

As insurance against unsubscribes and Zucks, use a second email list or Discord community.

What I still need to do

Twitter's fun. I'm wiser. I need to enable auto-replies and auto-DMs (direct messages).

This adds another way to attract subscribers. I schedule tweets with Tweet Hunter.

It’s best to go slow. People assume you're an internet marketer if you spam them with click requests.

A human internet marketer is preferable to a robot. My opinion.

210 days on Twitter taught me that. I plan to use the platform until I'm a grandfather unless Elon ruins it.

This resulted to obimy's new audience.

Hi! obimy's official account. Here, we'll teach app developers and marketers. In 2022, our downloads increased dramatically, so we'll share what we learned.

obimy is what we call a ‘senseger’. It's a new method to communicate digitally. Instead of text, obimy users connect through senses and moods. Feeling playful? Flirt with your partner, pat a pal, or dump water on a classmate. Each feeling is an interactive animation with vibration. It's a wordless app. App Store and Google Play have obimy.

We had 20,000 users in 2022. Two to five thousand of them opened the app monthly. Our DAU metric was 500.

We have 6 million users after 6 months. 500,000 individuals use obimy daily. obimy was the top lifestyle app this week in the U.S.

And TikTok helped.

TikTok fuels obimys' growth. It's why our app exploded. How and what did we learn? Our Head of Marketing, Anastasia Avramenko, knows.

our actions prior to TikTok

We wanted to achieve product-market fit through organic expansion. Quora, Reddit, Facebook Groups, Facebook Ads, Google Ads, Apple Search Ads, and social media activity were tested. Nothing worked. Our CPI was sometimes $4, so unit economics didn't work.

We studied our markets and made audience hypotheses. We promoted our goods and studied our audience through social media quizzes. Our target demographic was Americans in long-distance relationships. I designed quizzes like Test the Strength of Your Relationship to better understand the user base. After each quiz, we encouraged users to download the app to enhance their connection and bridge the distance.

We got 1,000 responses for $50. This helped us comprehend the audience's grief and coping strategies (aka our rivals). I based action items on answers given. If you can't embrace a loved one, use obimy.

We also tried Facebook and Google ads. From the start, we knew it wouldn't work.

We were desperate to discover a free way to get more users.

Our journey to TikTok

TikTok is a great venue for emerging creators. It also helped reach people. Before obimy, my TikTok videos garnered 12 million views without sponsored promotion.

We had to act. TikTok was required.

I wasn't a TikTok user before obimy. Initially, I uploaded promotional content. Call-to-actions appear strange next to dancing challenges and my money don't jiggle jiggle. I learned TikTok. Watch TikTok for an hour was on my to-do list. What a dream job!

Our most popular movies presented the app alongside text outlining what it does. We started promoting them in Europe and the U.S. and got a 16% CTR and $1 CPI, an improvement over our previous efforts.

Somehow, we were expanding. So we came up with new hypotheses, calls to action, and content.

Four months passed, yet we saw no organic growth.

Russia attacked Ukraine.

Our app aimed to be helpful. For now, we're focusing on our Ukrainian audience. I posted sloppy TikToks illustrating how obimy can help during shelling or air raids.

In two hours, Kostia sent me our visitor count. Our servers crashed.

Initially, we had several thousand daily users. Over 200,000 users joined obimy in a week. They posted obimy videos on TikTok, drawing additional users. We've also resumed U.S. video promotion.

We gained 2,000,000 new members with less than $100 in ads, primarily in the U.S. and U.K.

TikTok helped.

The figures

We were confident we'd chosen the ideal tool for organic growth.

• Over 45 million people have viewed our own videos plus a ton of user-generated content with the hashtag #obimy.

• About 375 thousand people have liked all of our individual videos.

• The number of downloads and the virality of videos are directly correlated.

Where are we now?

TikTok fuels our organic growth. We post 56 videos every week and pay to promote viral content.

We use UGC and influencers. We worked with Universal Music Italy on Eurovision. They offered to promote us through their million-follower TikTok influencers. We thought their followers would improve our audience, but it didn't matter. Integration didn't help us. Users that share obimy videos with their followers can reach several million views, which affects our download rate.

After the dust settled, we determined our key audience was 13-18-year-olds. They want to express themselves, but it's sometimes difficult. We're searching for methods to better engage with our users. We opened a Discord server to discuss anime and video games and gather app and content feedback.

TikTok helps us test product updates and hypotheses. Example: I once thought we might raise MAU by prompting users to add strangers as friends. Instead of asking our team to construct it, I made a TikTok urging users to share invite URLs. Users share links under every video we upload, embracing people worldwide.

Key lessons

Don't direct-sell. TikTok isn't for Instagram, Facebook, or YouTube promo videos. Conventional advertisements don't fit. Most users will swipe up and watch humorous doggos.

More product videos are better. Finally. So what?

Encourage interaction. Tagging friends in comments or making videos with the app promotes it more than any marketing spend.

Be odd and risqué. A user mistakenly sent a French kiss to their mom in one of our most popular videos.

TikTok helps test hypotheses and build your user base. It also helps develop apps. In our upcoming blog, we'll guide you through obimy's design revisions based on TikTok. Follow us on Twitter, Instagram, and TikTok.

New social media producers' biggest error

The Treadmill of Social Media Content

New creators focus on the wrong platforms.

They post to Instagram, Twitter, TikTok, etc.

They create daily material, but it's never enough for social media algorithms.

Creators recognize they're on a content creation treadmill.

They have to keep publishing content daily just to stay on the algorithm’s good side and avoid losing the audience they’ve built on the platform.

This is exhausting and unsustainable, causing creator burnout.

They focus on short-lived platforms, which is an issue.

Comparing low- and high-return social media platforms

Social media networks are great for reaching new audiences.

Their algorithm is meant to viralize material.

Social media can use you for their aims if you're not careful.

To master social media, focus on the right platforms.

To do this, we must differentiate low-ROI and high-ROI platforms:

Low ROI platforms are ones where content has a short lifespan. High ROI platforms are ones where content has a longer lifespan.

A tweet may be shown for 12 days. If you write an article or blog post, it could get visitors for 23 years.

ROI is drastically different.

New creators have limited time and high learning curves.

Nothing is possible.

First create content for high-return platforms.

ROI for social media platforms

Here are high-return platforms:

1. Your Blog - A single blog article can rank and attract a ton of targeted traffic for a very long time thanks to the power of SEO.

2. YouTube - YouTube has a reputation for showing search results or sidebar recommendations for videos uploaded 23 years ago. A superb video you make may receive views for a number of years.

3. Medium - A platform dedicated to excellent writing is called Medium. When you write an article about a subject that never goes out of style, you're building a digital asset that can drive visitors indefinitely.

These high ROI platforms let you generate content once and get visitors for years.

This contrasts with low ROI platforms:

1. Twitter

2. Instagram

3. TikTok

4. LinkedIn

5. Facebook

The posts you publish on these networks have a 23-day lifetime. Instagram Reels and TikToks are exceptions since viral content can last months.

If you want to make content creation sustainable and enjoyable, you must focus the majority of your efforts on creating high ROI content first. You can then use the magic of repurposing content to publish content to the lower ROI platforms to increase your reach and exposure.

How To Use Your Content Again

So, you’ve decided to focus on the high ROI platforms.

Great!

You've published an article or a YouTube video.

You worked hard on it.

Now you have fresh stuff.

What now?

If you are not repurposing each piece of content for multiple platforms, you are throwing away your time and efforts.

You've created fantastic material, so why not distribute it across platforms?

Repurposing Content Step-by-Step

For me, it's writing a blog article, but you might start with a video or podcast.

The premise is the same regardless of the medium.

Start by creating content for a high ROI platform (YouTube, Blog Post, Medium). Then, repurpose, edit, and repost it to the lower ROI platforms.

Here's how to repurpose pillar material for other platforms:

1. Post the article on your blog.

2. Put your piece on Medium (use the canonical link to point to your blog as the source for SEO)

3. Create a video and upload it to YouTube using the talking points from the article.

4. Rewrite the piece a little, then post it to LinkedIn.

5. Change the article's format to a Thread and share it on Twitter.

6. Find a few quick quotes throughout the article, then use them in tweets or Instagram quote posts.

7. Create a carousel for Instagram and LinkedIn using screenshots from the Twitter Thread.

8. Go through your film and select a few valuable 30-second segments. Share them on LinkedIn, Facebook, Twitter, TikTok, YouTube Shorts, and Instagram Reels.

9. Your video's audio can be taken out and uploaded as a podcast episode.

If you (or your team) achieve all this, you'll have 20-30 pieces of social media content.

If you're just starting, I wouldn't advocate doing all of this at once.

Instead, focus on a few platforms with this method.

You can outsource this as your company expands. (If you'd want to learn more about content repurposing, contact me.)

You may focus on relevant work while someone else grows your social media on autopilot.

You develop high-ROI pillar content, and it's automatically chopped up and posted on social media.

This lets you use social media algorithms without getting sucked in.

Thanks for reading!

He kept it under wraps for years until he legally couldn’t.

His shirt is incomplete. I can’t stop thinking about this…

Actually, ignore the article. Look at it. JUST LOOK at it… It’s quite disturbing, isn’t it?

Ughh…

Me: “Hey, what up?” Friend: “All good, watching lord of the rings on amazon prime video.” Me: “Oh, do you know how Amazon grew and became famous?” Friend: “Geek alert…Can I just watch in peace?” Me: “But… Bezos?” Friend: “Let it go, just let it go…”

I can question you, the reader, and start answering instantly without his consent. This far.

Reader, how did Amazon succeed? You'll say, Of course, it was an internet bookstore, then it sold everything.

Mistaken. They moved from zero to one because of this. How did they get from one to thousand? AWS-some. Understand? It's geeky and lame. If not, I'll explain my geekiness.

Over an extended period of time, Amazon was not profitable.

Business basics. You want customers if you own a bakery, right?

Well, 100 clients per day order $5 cheesecakes (because cheesecakes are awesome.)

$5 x 100 consumers x 30 days Equals $15,000 monthly revenue. You proudly work here.

Now you have to pay the barista (unless ChatGPT is doing it haha? Nope..)

• The barista is requesting $5000 a month.

• Each cheesecake costs the cheesecake maker $2.5 ($2.5 × 100 x 30 = $7500).

• The monthly cost of running your bakery, including power, is about $5000.

Assume no extra charges. Your operating costs are $17,500.

Just $15,000? You have income but no profit. You might make money selling coffee with your cheesecake next month.

Is losing money bad? You're broke. Losing money. It's bad for financial statements.

It's almost a business ultimatum. Most startups fail. Amazon took nine years.

I'm reading Amazon Unbound: Jeff Bezos and the Creation of a Global Empire to comprehend how a company has a $1 trillion market cap.

Many things made Amazon big. The book claims that Bezos and Amazon kept a specific product secret for a long period.

Clouds above the bald head.

In 2006, Bezos started a cloud computing initiative. They believed many firms like Snapchat would pay for reliable servers.

In 2006, cloud computing was not what it is today. I'll simplify. 2006 had no iPhone.

Bezos invested in Amazon Web Services (AWS) without disclosing its revenue. That's permitted till a certain degree.

Google and Microsoft would realize Amazon is heavily investing in this market and worry.

Bezos anticipated high demand for this product. Microsoft built its cloud in 2010, and Google in 2008.

If you managed Google or Microsoft, you wouldn't know how much Amazon makes from their cloud computing service. It's enough. Yet, Amazon is an internet store, so they'll focus on that.

All but Bezos were wrong.

Time to come clean now.

They revealed AWS revenue in 2015. Two things were apparent:

1. Bezos made the proper decision to bet on the cloud and keep it a secret.

2. In this race, Amazon is in the lead.

They continued. Let me list some AWS users today.

• Netflix

• Airbnb

• Twitch

More. Amazon was unprofitable for nine years, remember? This article's main graph.

AWS accounted for 74% of Amazon's profit in 2021. This 74% might not exist if they hadn't invested in AWS.

Bring this with you home.

Amazon predated AWS. Yet, it helped the giant reach $1 trillion. Bezos' secrecy? Perhaps, until a time machine is invented (they might host the time machine software on AWS, though.)

Without AWS, Amazon would have been profitable but unimpressive. They may have invested in anything else that would have returned more (like crypto? No? Ok.)

Bezos has business flaws. His success. His failures include:

• introducing the Fire Phone and suffering a $170 million loss.

• Amazon's failure in China In 2011, Amazon had a about 15% market share in China. 2019 saw a decrease of about 1%.

• not offering a higher price to persuade the creator of Netflix to sell the company to him. He offered a rather reasonable $15 million in his proposal. But what if he had offered $30 million instead (Amazon had over $100 million in revenue at the time)? He might have owned Netflix, which has a $156 billion market valuation (and saved billions rather than invest in Amazon Prime Video).

Some he could control. Some were uncontrollable. Nonetheless, every action he made in the foregoing circumstances led him to invest in AWS.

Most crypto is probably too.

The goals of Web 3 and the metaverse are admirable and attractive. Who doesn't want an internet owned by users? Who wouldn't want a digital realm where anything is possible? A better way to collaborate and visit pals.

Companies pursue profits endlessly. Infinite growth and revenue are expected, and if a corporation needs to sacrifice profits to safeguard users, the CEO, board of directors, and any executives will lose to the system of incentives that (1) retains workers with shares and (2) makes a company answerable to all of its shareholders. Only the government can guarantee user protections, but we know how successful that is. This is nothing new, just a problem with modern capitalism and tech platforms that a user-owned internet might remedy. Moxie, the founder of Signal, has a good articulation of some of these current Web 2 tech platform problems (but I forget the timestamp); thoughts on JRE aside, this episode is worth listening to (it’s about a bunch of other stuff too).

Moxie Marlinspike, founder of Signal, on the Joe Rogan Experience podcast.

Source: https://open.spotify.com/episode/2uVHiMqqJxy8iR2YB63aeP?si=4962b5ecb1854288

Web 3 champions are premature. There was so much spectacular growth during Web 2 that the next wave of founders want to make an even bigger impact, while investors old and new want a chance to get a piece of the moonshot action. Worse, crypto enthusiasts believe — and financially need — the fact of its success to be true, whether or not it is.

I’m doubtful that it will play out like current proponents say. Crypto has been the white-hot focus of SV’s best and brightest for a long time yet still struggles to come up any mainstream use case other than ‘buy, HODL, and believe’: a store of value for your financial goals and wishes. Some kind of the metaverse is likely, but will it be decentralized, mostly in VR, or will Meta (previously FB) play a big role? Unlikely.

METAVERSE

The metaverse exists already. Our digital lives span apps, platforms, and games. I can design a 3D house, invite people, use Discord, and hang around in an artificial environment. Millions of gamers do this in Rust, Minecraft, Valheim, and Animal Crossing, among other games. Discord's voice chat and Slack-like servers/channels are the present social anchor, but the interface, integrations, and data portability will improve. Soon you can stream YouTube videos on digital house walls. You can doodle, create art, play Jackbox, and walk through a door to play Apex Legends, Fortnite, etc. Not just gaming. Digital whiteboards and screen sharing enable real-time collaboration. They’ll review code and operate enterprises. Music is played and made. In digital living rooms, they'll watch movies, sports, comedy, and Twitch. They'll tweet, laugh, learn, and shittalk.

The metaverse is the evolution of our digital life at home, the third place. The closest analog would be Discord and the integration of Facebook, Slack, YouTube, etc. into a single, 3D, customizable hangout space.

I'm not certain this experience can be hugely decentralized and smoothly choreographed, managed, and run, or that VR — a luxury, cumbersome, and questionably relevant technology — must be part of it. Eventually, VR will be pragmatic, achievable, and superior to real life in many ways. A total sensory experience like the Matrix or Sword Art Online, where we're physically hooked into the Internet yet in our imaginations we're jumping, flying, and achieving athletic feats we never could in reality; exploring realms far grander than our own (as grand as it is). That VR is different from today's.

https://podcasts.google.com/feed/aHR0cHM6Ly9leHBvbmVudC5mbS9mZWVkLw/episode/aHR0cHM6Ly9leHBvbmVudC5mbS8_cD00MzM?hl=en&ved=2ahUKEwjH5u6r4rv2AhUjc98KHeybAP8QjrkEegQIChAF&ep=6

Ben Thompson released an episode of Exponent after Facebook changed its name to Meta. Ben was suspicious about many metaverse champion claims, but he made a good analogy between Oculus and the PC. The PC was initially far too pricey for the ordinary family to afford. It began as a business tool. It got so powerful and pervasive that it affected our personal life. Price continues to plummet and so much consumer software was produced that it's impossible to envision life without a home computer (or in our pockets). If Facebook shows product market fit with VR in business, through use cases like remote work and collaboration, maybe VR will become practical in our personal lives at home.

Before PCs, we relied on Blockbuster, the Yellow Pages, cabs to get to the airport, handwritten taxes, landline phones to schedule social events, and other archaic methods. It is impossible for me to conceive what VR, in the form of headsets and hand controllers, stands to give both professional and especially personal digital experiences that is an order of magnitude better than what we have today. Is looking around better than using a mouse to examine a 3D landscape? Do the hand controls make x10 or x100 work or gaming more fun or efficient? Will VR replace scalable Web 2 methods and applications like Web 1 and Web 2 did for analog? I don't know.

My guess is that the metaverse will arrive slowly, initially on displays we presently use, with more app interoperability. I doubt that it will be controlled by the people or by Facebook, a corporation that struggles to properly innovate internally, as practically every large digital company does. Large tech organizations are lousy at hiring product-savvy employees, and if they do, they rarely let them explore new things.

These companies act like business schools when they seek founders' results, with bureaucracy and dependency. Which company launched the last popular consumer software product that wasn't a clone or acquisition? Recent examples are scarce.

Web 3

Investors and entrepreneurs of Web 3 firms are declaring victory: 'Web 3 is here!' Web 3 is the future! Many profitable Web 2 enterprises existed when Web 2 was defined. The word was created to explain user behavior shifts, not a personal pipe dream.

Origins of Web 2: http://www.oreilly.com/pub/a/web2/archive/what-is-web-20.html

One of these Web 3 startups may provide the connecting tissue to link all these experiences or become one of the major new digital locations. Even so, successful players will likely use centralized power arrangements, as Web 2 businesses do now. Some Web 2 startups integrated our digital lives. Rockmelt (2010–2013) was a customizable browser with bespoke connectors to every program a user wanted; imagine seeing Facebook, Twitter, Discord, Netflix, YouTube, etc. all in one location. Failure. Who knows what Opera's doing?

Silicon Valley and tech Twitter in general have a history of jumping on dumb bandwagons that go nowhere. Dot-com crash in 2000? The huge deployment of capital into bad ideas and businesses is well-documented. And live video. It was the future until it became a niche sector for gamers. Live audio will play out a similar reality as CEOs with little comprehension of audio and no awareness of lasting new user behavior deceive each other into making more and bigger investments on fool's gold. Twitter trying to buy Clubhouse for $4B, Spotify buying Greenroom, Facebook exploring live audio and 'Tiktok for audio,' and now Amazon developing a live audio platform. This live audio frenzy won't be worth their time or energy. Blind guides blind. Instead of learning from prior failures like Twitter buying Periscope for $100M pre-launch and pre-product market fit, they're betting on unproven and uncompelling experiences.

NFTs

NFTs are also nonsense. Take Loot, a time-limited bag drop of "things" (text on the blockchain) for a game that didn't exist, bought by rich techies too busy to play video games and foolish enough to think they're getting in early on something with a big reward. What gaming studio is incentivized to use these items? Who's encouraged to join? No one cares besides Loot owners who don't have NFTs. Skill, merit, and effort should be rewarded with rare things for gamers. Even if a small minority of gamers can make a living playing, the average game's major appeal has never been to make actual money - that's a profession.

No game stays popular forever, so how is this objective sustainable? Once popularity and usage drop, exclusive crypto or NFTs will fall. And if NFTs are designed to have cross-game appeal, incentives apart, 30 years from now any new game will need millions of pre-existing objects to build around before they start. It doesn’t work.

Many games already feature item economies based on real in-game scarcity, generally for cosmetic things to avoid pay-to-win, which undermines scaled gaming incentives for huge player bases. Counter-Strike, Rust, etc. may be bought and sold on Steam with real money. Since the 1990s, unofficial cross-game marketplaces have sold in-game objects and currencies. NFTs aren't needed. Making a popular, enjoyable, durable game is already difficult.

With NFTs, certain JPEGs on the internet went from useless to selling for $69 million. Why? Crypto, Web 3, early Internet collectibles. NFTs are digital Beanie Babies (unlike NFTs, Beanie Babies were a popular children's toy; their destinies are the same). NFTs are worthless and scarce. They appeal to crypto enthusiasts seeking for a practical use case to support their theory and boost their own fortune. They also attract to SV insiders desperate not to miss the next big thing, not knowing what it will be. NFTs aren't about paying artists and creators who don't get credit for their work.

South Park's Underpants Gnomes

NFTs are a benign, foolish plan to earn money on par with South Park's underpants gnomes. At worst, they're the world of hucksterism and poor performers. Or those with money and enormous followings who, like everyone, don't completely grasp cryptocurrencies but are motivated by greed and status and believe Gary Vee's claim that CryptoPunks are the next Facebook. Gary's watertight logic: if NFT prices dip, they're on the same path as the most successful corporation in human history; buy the dip! NFTs aren't businesses or museum-worthy art. They're bs.

Gary Vee compares NFTs to Amazon.com. vm.tiktok.com/TTPdA9TyH2

We grew up collecting: Magic: The Gathering (MTG) cards printed in the 90s are now worth over $30,000. Imagine buying a digital Magic card with no underlying foundation. No one plays the game because it doesn't exist. An NFT is a contextless image someone conned you into buying a certificate for, but anyone may copy, paste, and use. Replace MTG with Pokemon for younger readers.

When Gary Vee strongarms 30 tech billionaires and YouTube influencers into buying CryptoPunks, they'll talk about it on Twitch, YouTube, podcasts, Twitter, etc. That will convince average folks that the product has value. These guys are smart and/or rich, so I'll get in early like them. Cryptography is similar. No solid, scaled, mainstream use case exists, and no one knows where it's headed, but since the global crypto financial bubble hasn't burst and many people have made insane fortunes, regular people are putting real money into something that is highly speculative and could be nothing because they want a piece of the action. Who doesn’t want free money? Rich techies and influencers won't be affected; normal folks will.

Imagine removing every $1 invested in Bitcoin instantly. What would happen? How far would Bitcoin fall? Over 90%, maybe even 95%, and Bitcoin would be dead. Bitcoin as an investment is the only scalable widespread use case: it's confidence that a better use case will arise and that being early pays handsomely. It's like pouring a trillion dollars into a company with no business strategy or users and a CEO who makes vague future references.

New tech and efforts may provoke a 'get off my lawn' mentality as you approach 40, but I've always prided myself on having a decent bullshit detector, and it's flying off the handle at this foolishness. If we can accomplish a functional, responsible, equitable, and ethical user-owned internet, I'm for it.

Postscript:

I wanted to summarize my opinions because I've been angry about this for a while but just sporadically tweeted about it. A friend handed me a Dan Olson YouTube video just before publication. He's more knowledgeable, articulate, and convincing about crypto. It's worth seeing:

This post is a summary. See the original one here.

A top-down company plan facilitates decision-making and impresses investors.

A startup business plan starts with the product, the target customers, how to reach them, and how to grow the business.

Bottom-up is terrific unless venture investors fund it.

If it can prove how it can exceed $100M in sales, investors will invest. If not, the business may be wonderful, but it's not venture capital-investable.

As a rule, venture investors only fund firms that expect to reach $100M within 5 years.

Investors get nothing until an acquisition or IPO. To make up for 90% of failed investments and still generate 20% annual returns, portfolio successes must exit with a 25x return. A $20M-valued company must be acquired for $500M or more.

This requires $100M in sales (or being on a nearly vertical trajectory to get there). The company has 5 years to attain that milestone and create the requisite ROI.

This motivates venture investors (venture funds and angel investors) to hunt for $100M firms within 5 years. When you pitch investors, you outline how you'll achieve that aim.

I'm wary of pitches after seeing a million hockey sticks predicting $5M to $100M in year 5 that never materialized. Doubtful.

Startups fail because they don't have enough clients, not because they don't produce a great product. That jump from $5M to $100M never happens. The company reaches $5M or $10M, growing at 10% or 20% per year.  That's great, but not enough for a $500 million deal.

Once it becomes clear the company won’t reach orbit, investors write it off as a loss. When a corporation runs out of money, it's shut down or sold in a fire sale. The company can survive if expenses are trimmed to match revenues, but investors lose everything.

When I hear a pitch, I'm not looking for bright income projections but a viable plan to achieve them. Answer these questions in your pitch.

• Is the market size sufficient to generate $100 million in revenue?

• Will the initial beachhead market serve as a springboard to the larger market or as quicksand that hinders progress?

• What marketing plan will bring in $100 million in revenue? Is the market diffuse and will cost millions of dollars in advertising, or is it one, focused market that can be tackled with a team of salespeople?

• Will the business be able to bridge the gap from a small but fervent set of early adopters to a larger user base and avoid lock-in with their current solution?

• Will the team be able to manage a $100 million company with hundreds of people, or will hypergrowth force the organization to collapse into chaos?

• Once the company starts stealing market share from the industry giants, how will it deter copycats?

The requirement to reach $100M may be onerous, but it provides a context for difficult decisions: What should the product be? Where should we concentrate? who should we hire? Every strategic choice must consider how to reach $100M in 5 years.

Focusing on $100M streamlines investor pitches. Instead of explaining everything, focus on how you'll attain $100M.

As an investor, I know I'll lose my money if the startup doesn't reach this milestone, so the revenue prediction is the first thing I look at in a pitch deck.

Reaching the $100M goal needs to be the first thing the entrepreneur thinks about when putting together the business plan, the central story of the pitch, and the criteria for every important decision the company makes.