Web3 entrepreneur, investor, CBDC inventor and founder of Panther, Bitt, BaseTwo, Fluent and Elemental. Collaborated with UN, MIT and IMF.
Over the past decades, we witnessed the evolution of online data as an industry. As technology moves to enable user-owned digital public goods (a la Bitcoin), safeguarding and giving users power over their data has become vital.
Running a privacy startup has given me a close look at this evolution and the unique role privacy plays in society. It has allowed me to understand what a resilient startup requires in order to align with real needs and withstand industry demands.
Here are some lessons I’ve learned over the past few years to make private DeFi a reality.
Your message needs rock-solid foundations.
Every good entrepreneur knows that to survive, you need to adapt. And yet, persistence is key. But how can you stay persistent despite constant calls to pivot?
In Web3, this dilemma is exacerbated. A once clear and convincing message can quickly become redundant at best or an existential threat at worst. This is the natural result of shifting regulations and uncertain market dynamics. Rapid tech breakthroughs render previous approaches obsolete while emerging narratives and social phenomena reshape public perceptions of Web3 startups.
After realizing how fast tides change, it became clear we had to craft a message that served as a framework for our values and direction.
Governments are actively addressing privacy, trying to decide on frameworks that protect users without enabling others to break the law. As such, our messaging needed to be compelling, flexible, and adaptable, while benefiting from every subsequent change.
We asked ourselves:
• What problems are we here to solve?
• Who else is trying to solve the same problems? How are we different? What are they communicating better than us? Can we learn from this?
• Can our current messaging bring harm to us? How and why?
• What’s the foundation of our philosophy? What is opinion, and what’s grounded in reason and logic?
• Where are pivots acceptable? What trade-offs are we willing to make, and how do we become stronger if we pivot? What do we lose?
The resulting message goes beyond descriptions and branding—it extends to every aspect of communications, go-to market, culture, and technology design.
Adapting is a strategy.
Navigating uncertain waters requires agility. Listening to the pulse of conversation happening within the industry, understanding regulatory values and deciphering which direction the industry is moving is instrumental in staying relevant in the product space.
And yet, it’s easy to get lost in the noise.
To prevent this, you need to develop processes where you weigh diverse sources of information. This is part formal learning, part training, part intuition. Seek information from industry peers, academic and legal publications, and keep an ear to the ground—conferences and other opportunities for one-on-one chats with builders within the industry are priceless. Make sure not to filter out different backgrounds and perspectives. The more comprehensive your top of the funnel is, the better chance you have to develop your filters.
Be open to candid feedback, both internally and externally. Honest communication that goes both ways creates an environment where the truth can more easily be arrived at. A team full of followers reduces collective intelligence and hampers chances of success.
Bet on the flexible.
A key component of our thesis is that zero-knowledge technology will become pervasive in many industries. This is because it allows users to protect their privacy while aligning with regulatory expectations and enterprise demands, all without sharing valuable data.
Incorporating resiliency and flexibility as pillars means that, before looking at use cases, we look at the technology’s core properties: scalability, privacy, decentralization and antifragility.
Zero-knowledge technology is already flexible in many use cases. It can:
• Reduce cybersecurity costs.
• Scale decentralized technologies.
• Decentralize identity services.
• Enhance user privacy and security for institutions.
• Enable regulatory compliance.
• Interact with AI and be composable.
Every use case you tackle can be counted as a bet. However, you can always bet on what can be repurposed, as a principle.
Earning trust is a journey.
Web3 privacy startups are at the top of the tech scrutiny list. A sad reality is that there is still widespread distrust of anything crypto-related. Even within Web3, there’s a wariness. Past scandals have made people cautious, questioning who is genuine, who is a fraud, and the grays in between.
Bottom line: Trust is earned, not given. And in the world of Web3 privacy, you have to work hard to earn it.
That’s why transparency, accountability, and consistent value delivery are paramount. In an industry where skepticism is the rule, transparency must be built into every process.
To build trust, your approach should encompass regular security audits, Q&A sessions with the community, clear disclosures about practices and data usage, open-source or source-available code for user inspection, and actively learning from any missteps.
Furthermore, transparency either builds upon itself or wears out. Every action moves you somewhere on the scale, and inaction sets you back.
Operate from first principles.
Many times, you have to embrace the uncertainty. At those times, it’s worth focusing on what you can control, and making sure to go above and beyond industry standards.
Find your “above and beyond,” and remember that pioneering is difficult for a reason. In our case, this has meant undergoing decentralization challenges, putting incredible care into the legal structures that separate builders from operators (again, for decentralization reasons), and carefully aligning incentives to goals. It’s always a balancing act.
While we don’t have all the answers, we strive for a balance based on legal principles and functional products, and you can create your version of this, too. If you’ve set that your role is to lead innovation and explore ways to enhance systems using new technology, you should be in the business of shaping and transforming ideas—always.
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