I’m sure you’ve all heard the news that the future is here. It’s distributed, it’s crypto, it’s NFTs, it’s web3, and it’s all leveraging blockchain technology. The world’s most ambitious technologists are building infrastructure to transform art, music, money, identity, regulation, government, passwords, and documents. Really any exchange of information. 

I’m here for this future. I believe the next phase of adoption is about education, accessibility, and regulation. 

My first experience buying Bitcoin (according to Coinbase) was in 2017. It felt similar to the volatile and opaque world of stock investing. As an early Fitbit employee, I had experienced the stock price post-IPO go from $16 to $60 to $7 before I could sell any of it - meaningfully changing my compensation package in ETRADE. With Coinbase on the other hand, I could see my investments moving daily and I could cash out at any time without blackout periods. I like taking bets, and experimenting with this new world was fun and exciting.

I read a few books like Bank 4.0 last summer, thinking I would build a neo-bank designed for women. While I worked through a variety of potential ideas, my prototypes always centered around the idea of a personal identity controlled by the individual. It felt like a future blocked by national borders, bureaucracy, and an archaic financial system.

This past December, I was walking on the 606 in Chicago when I overheard two women in their 60’s explaining Bitcoin to each other. I opened my Coinbase wallet to a surprise $500 in BTC I had forgotten about. As a student, this was a welcome present from the past. After a few inspiring conversations with web3 friends (thanks Jae, Lauren, Syd), I decided to spend my spoils investing in a DAO and buying an NFT on OpenSea. Why a DAO and an NFT you might ask? Because they were the only places I could readily spend crypto without cashing out to fiat.

The easy part - I found an NFT and a DAO I liked. The hard part - spending many hours watching bro-tastic TikTok videos on how to transfer funds the right way and optimize gas fees. The process for this particular DAO was to buy an Avalanche token, make a MetaMask account, add the extension to chrome, add the Avalanche network, transfer it back to Coinbase, pay the gas fees to transfer back to Metamask ($5 - 10), then create an account with the DAO, figure out staking and “buy time” for the DAO, then buy in. 

Once I emerged from the rabbit hole, I decided to just keep my money in Coinbase.

Thinking back on each product I’ve worked on over the past decade - the biggest problem is almost always around the onboarding funnel and retention. Once you acquire new users, how do you keep them retained? The potential for innovation and a democratized economic order is exciting in web3. But it seemed that the basic best practices around user experience and adoption have been forgotten.

Since August 2021, I’ve been spending my free time validating ideas. I created three marketing websites around patterns that consistently came up in conversations with friends at that time. (1) Buying engagement rings, (2) Rental payments, and (3) Crypto payments.

Each of these segments started with a consumer problem that could be solved with software, and also had an underlying business model in technology infrastructure and B2B2C.

Please note these are rough value-prop websites to test a market. These are not product launches or even close to what we’ll end up building. Think of them similarly to Amazon’s famous exercise of writing a press release before starting a new initiative.

We scheduled user interviews around each idea. The qualitative data showed clear trends almost immediately. We started canceling meetings because the feedback was so consistent after about 15 calls. 

Here’s a quick overview of learnings:

Discover your unique wedding ring, split the costs + get insurance, enhance or trade any time.

People liked talking about this idea, especially those with private equity or affluent backgrounds. De Beers and Tiffany & Co put out ad campaigns starting in the late 1940s that created a mainstream perception that diamonds are the meaning of love (“A diamond is forever”). Our initial hypothesis was that people wanted a more modern approach to marriage including equity splits, insurance, and even easy storage of marriage certificates and prenups. We were generally proven wrong - people like the traditions around marriage. We found that women wanted their partners to spend a lot of money on a big diamond, and their partners were willing to do it. Wealthy people have family jewelers and pay in cash, and price-sensitive people are looking for a deal.

This idea evolved into more of a pure e-commerce play (like Warby Parker), and less of a long-term relationship with the consumer (like Lemonade on the blockchain). We quickly decided this wasn’t the right business for us.

Velvet helps you decide on a home you love, gives you rewards and credit for paying your biggest expense (rent), and builds your trusted financial identity for life.

People understood the need for this consumer rental payments layer, but it began to feel like a vitamin instead of a painkiller. They agreed that rent payments were outdated and difficult, but they were generally okay with it (“a necessary evil”). They write checks, send broken-up payments through Venmo, or begrudgingly use building management software designed for the 90s (hey, Elevated Living). Paying rent becomes part of their monthly financial routine, even if it’s relatively manual. 

When we talked to people in competitive markets like New York City and San Francisco, it was more of a pain killer. We still think this product should exist (payment splits, flexible deadlines, rewards, credit building, service bundling), but likely as one part of a larger platform or in targeted geographies where it’s most needed.

Pay people, stores, and for anything online using our app & card. Spend and manage your money using any currency - from Dollar to BTC to Yen to ETH.

This proposal felt polarizing and controversial to a mainstream audience (note, posted in early 2022). The first website was written to target a less sophisticated audience than the average crypto product. Everyone had an opinion about why this wouldn’t work or why they loved it. The most common objections were ‘the US government will never let this happen”, “it’s too volatile, I don’t trust it”, or simply “I don’t understand”. People wanted to talk about it for most of the call and were curious even in their hesitancy.

Most people thought of crypto as an investment, rather than as a tool or a new technology. The lack of accessible applications makes it hard for the average consumer to start experimenting in the ecosystem.

This is the space where we’ll be focusing our attention moving forward. It will evolve into something very different moving forward.

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Update: Check out the Velvet website for where we’re at today.