How does the bull bear cycle and encryption evolve in the future? Look at Sequoia Capital

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Sequoia Capital was founded in 1972 year , Just this year 50 year , In the field of global venture capital , Sequoia Capital is the undisputed leader .

Since its establishment , Sequoia Capital successfully invested in Apple 、 Cisco 、 Oracle 、 Giant companies such as Google , Witnessed the shining moments of legendary enterprises one after another .

This article is from UnChained Talk about the two partners of Sequoia Capital Shaun Maguire and Michelle Bailhe, The former has opened five companies and succeeded in three , The latter started from McKinsey , Later, he served as the team leader of the Silicon Valley Creative Laboratory .

The vernacular blockchain has collated, translated and excerpted the interview content , See the link at the end of the text for the full version of the video .

Interview highlights ：
• What are Sequoia's long-term views and arguments on the encryption industry
• Due to blockchain Technology , Our life will be in 20 How different it becomes after years
• How does Sequoia decide whether to invest in the entity behind the project or token
• Is it against the spirit of decentralization to involve venture capitalists
• Michelle How to view the macroeconomic environment that affects encrypted assets , And whether this cycle is different from the previous cycle
• What encryption projects should focus on and the business model they should pursue
• Even if there is no clear stipulation , How encryption founders should always do the right thing
• The future of the metauniverse and how to define
• Encryption industry mental model and the stage of realizing global landing

 01 
What are Sequoia's long-term views and arguments on the encryption industry

  host ： It is said that Sequoia has launched a 5/6 A billion dollar encryption Fund , According to the news, the fund is for the future of encrypted assets 20 We're going to lay it out in 2010 , So what exactly ？

 Michelle： The encryption industry is quite mature in technology and Application . Interestingly , The question we have been asked recently is whether our beliefs have changed , The answer, of course, is No . namely , Encrypted assets have created a new asset category and computing platform , And there will be business units that provide services for these assets at the same time . You know that many financial businesses are developed on decentralized platforms in a combination of centralization and decentralization Dapp, So we continue to invest in these projects , Including the core layer Layer2 Infrastructure and Applications , And expect in the future 20 See more good developments during the year .

 02 
20 What has become of blockchain based life in

  host ： You think our future 20 What will life be like in ？

 Shaun： First of all, I think it's hard to say . You know how to predict the next 20 perhaps 30 What encryption assets will be used in , Similar to in 70 Age prediction 90 How to use the Internet .

I personally think the future 20 All money will be digital in , For example, the dollar may become a digital tool of the government , The adoption rate of decentralized currency will increase significantly , Especially in the developing regions of the world .

Uniswap The current situation of is a good case , That is, you can use some very simple code , Let some businesses with very high transaction volume run forever , No one needs to maintain it , Just release the code , It's right there . I think there are many such examples that can give me a glimpse of the future , But you know , It's sad to make specific predictions .

 Michelle： I totally agree Shaun, I imagine something like the Internet , It is basically an information revolution , So it's hard to predict . Just like we couldn't predict that the Internet would become what it is today , No one will predict Google / Mobile Internet is bound to happen today , But they were born .

Now we can book a taxi on our mobile phone , Book a hotel anywhere , Just like what we couldn't understand at that time . But a clear trend is that billions of people will have more information than they used to , And share information / The cost of transaction information will be greatly reduced , I think this is consistent in all businesses , Except it's hard to say exactly what form it will take . And you know today's Internet services are censoring 、 The regulation is different , I think , This does not mean that the old will disappear , But we will have more choices .

 03 
Sequoia to the project entity /Token Investment decisions

  host ： At present, many successful large venture capital companies are mostly from the old investment model , Now this kind of start-up company or VC Very much like a centralized company , In order to adapt to this new investment model of decentralized new world , There must be some reorganization 、 Large amount of investment Token etc. , Are they really decentralized ？

 Shaun： I agree with you , But the encryption industry has many differences , Although encryption and traditional business have many similarities , For example, you agree that you need to hire engineers and product personnel to help build the best public relations 、 product , You need to pay and manage them , There are many similarities between establishing encryption companies and establishing traditional software business companies .

But it's really not what people think , You know Sequoia already exists 50 year , The biggest victory of early investment is apple, Atari and other hardware companies , And then in 80 End of the decade 90 s , Sequoia Capital's most successful investment is the Internet infrastructure company , You know cisco As an example , I don't know oracle The core infrastructure of . Whether it is really decentralized is not in the surface mode, in fact .

  host ： Let's talk about your investment in encryption projects , There is a centralized entity behind many agreements , Therefore, you can choose the investment project Token Or the equity of the centralized entity that starts the decentralization project , for example , I know you invested filecoin, So I'm sure , You can choose to invest filecoin Token Or protocol Laboratory , How do you make a decision ？

 Michelle： Most of the time, the problem we need to solve is consistency with the founders , We will ask for matching Token, This is very important . Now there are examples of inconsistent incentives everywhere , It will lead to undesirable results , Of course, non encrypted assets are just a broader application of Technology , So we always try to promote the shareholders of equity , We have to discuss again Token Share 、 Proportion, etc .

Now? Token It is widely used in encrypted assets , In fact, there are many different things in my mind , Some things look more like commodity relationships , Used to stabilize or protect the network （ Such as bitcoin or Ethereum or anything else ） The native Token, Then you may have something related to the success of your application Token, Then what you have just looks like bonus points , Like it's basically aviation mileage , Like it has nothing to do with business , But it's just a trade discount or something you like, supermarket points or airline points .

You have other things , You have dog money , Or anything else you want , So what we're talking about is Token It really depends on the business and what they are building , If it is something like bonus points , You know we may not care , Because these are of no value to us, because we are not necessarily users who will trade on them , So we may only care about becoming equity shareholders in other cases , We may really care about applications or both , Then for the first floor , It's just the first level of power , This is where value accumulates , Therefore, its scope depends on the content being built and how you deal with the attitude of some members of the encryption community .

 04 
Is it against the spirit of decentralization to involve venture capitalists

  host ： I have to ask a follow-up question , Because obviously , You know Sequoia has investment startups , for example door dash or airbnb, You may have heard some encryption entrepreneurs say such words , Decentralization means that they will have the ability to motivate different workers Token, So when you consider what kind of products or services you can provide on the Internet , How do you make sure it makes more sense ？ Whether provided by a centralized entity or in a decentralized manner , Or when you plan to invest in encryption companies ？

 Shaun： This idea used to be 20 It has been very popular for years , So now it's a little uncertain , The main difference is whether to give ownership of the early network to users , To help motivate early program guidance . therefore , There will be some differences at the beginning , But the final state is not important , Like you know airbnb, Suppose you have a decentralized airbnb, And you gave up 50 % As Token To motivate early users and early hosts and everything you have after you reach a certain scale , But competition is also emerging in endlessly , People like to use the best products , And good products mean having the largest customer base 、 Have the most liquidity 、 Have better services , So I just want to say , The only difference is whether to give up ownership at an early stage to help stimulate use , But at the end of the day , You must have better products , Because if your product is not better than alternative products , People will leave and do the next thing . So I think this is actually a lot web3 What the company didn't pay attention to .

 Michelle： I agree with , This desire for unrestrained decentralization is becoming increasingly popular , I think when you really study it in depth , Running decentralized things is actually inefficient , It needs more computing resources and more coordination to ensure that it can be done well , So over time , Our expectations for its realization are actually very extravagant .

You want to use it to do the most important things , And this is like the pursuit of stateless freedom , You know , Value storage is as important as public information networks , You don't want a government or a company you know to be the only one who controls , So this is a bit like the common problem that mankind has been facing , People have been looking for the best way to organize the government or people , We can centralize democracy or make it more decentralized , But this requires a lot of cost and participation , So for the final desired result , In other things, it optimizes decentralization in order to facilitate access or speed , It adopts a centralized business model .

Take another example , Some people say , If you think about what Google is doing , Or if the problem you are solving is to change the existing advertising business model , Then you will know something web 3 Startups are a big threat to Google . It's a great way for billions of people to get free information and fund it through advertising , But it's hard to do this by charging these people , If what you want is not to get private information 、 Not selling advertisements , And you may need something with more security and control , Then you won't pay for billions of people accessing the same information they can't afford , But it may be a smaller group , You can access it , So in fact, it's just a different choice , So we think it allows centralization , Or this blunt decentralization tool is always at all costs . I'm happy to use centralized things , Because it may be cheaper , More convenient .

 05 
Michelle How to view the macroeconomic environment that affects encryption
And whether this cycle is different from the previous cycle

  host ： There are too many news recently , Let's start talking about the bear market in general ！ Bitcoin is in 2008 Launched in the last global financial crisis in . Crypto assets mainly exist in about of the United States 0% Interest rate environment , So what do you expect to happen next year ？ What stage do you predict we are in the encryption industry ？

 Michelle： I think it's just to prepare people for what they see , In the encryption industry , The cryptotree has grown higher . So it will vibrate more severely when it is hit , This does not mean that it will disappear , Or just like the amount of dollars , Maybe the quantity is more, but the value has decreased , Because they are larger . The changes and fluctuations in this period will feel greater than before , That's because we have more users 、 More dollars 、 More liquidity 、 More regulators are concerned , These are encrypted assets that have never been , So it really just tries to prepare people .

And encrypted assets always go through cycles , But this may have some unique elements , Make it feel different , And be prepared for it , I think it really depends on the business you run , As for how you should react , You know, some of them may have been active in a large number of retail transactions in the past few years , You know they may need a very low cost to plan a future environment , The difference is , Retail interest may decrease , But it can't be zero , But less than before , And you've seen , Since last year, the trading volume of many large listed companies engaged in brokerage transactions has decreased significantly , Obviously, last year was a record high , But that doesn't mean it will disappear , But you just need to plan for this difference , So this is what we have been trying to talk about with our founders , Is to realize , This is a different environment , If you continue to do what you are doing in the past two years , You may soon find yourself trapped in quicksand , So realize that the environment has changed , And make corresponding plans for some people you will know , Focus on some product areas or difficult transformation , It also depends on who you are and what you think , But the message we just want to convey is that this is a different plan , Plans that can be prioritized .

 06 
Even if there is no clear stipulation
How should crypto asset founders always do the right thing

  host ： Then I want to ask you the last point in your post is that you said to build a sustainable business Token, But it's not a business model , What kind of business model do you think will play a role in decentralization ？

 Michelle： You know, Token It's a really cool invention , For example, there are some very cool things in terms of regulatory dynamics , About finding this way to really get motivated , You know, reward users 、 There are many interesting things about rewarding early developers , And many people will use them again for real value , For example, Ethereum or bitcoin and many other similar things , It is indeed useful in stabilizing and protecting the network , There are other places where you know it works , But there are many other projects that have no real value .

In the encryption boom of the past few years, people are very excited , Maybe things are going well , Everything is trading , You may see a lot of growth , Then you think , Oh my god , We are doing something amazing , It's working .

But once the interest rate environment changes and starts to flow out of the market , When liquidity does not exist , You will see the value of the project disappear , This is the situation of many projects now .

Just like you can't see Token The rise can see whether there is such a business model , It's like there's no Token It's the same thing , If you just keep getting valuation growth from investors , But many other health indicators do not exist , This does not mean that the business model is true , Therefore, we should really understand what the actual business model is , What products or services do people actually pay you , How it works , Then what is the relationship between it and assets , This may be business related , It may not be relevant , This is an important question .

 07 
The future of the metauniverse and how to define

  host ： Do you have any expectations about what the metauniverse will become ？ Do you think VR、AR Must be part of it , Or do you think you don't need , Everyone is talking about the metauniverse , And I don't think there is a good definition , So I'd like to hear your thoughts .

 Shaun： Oh , Oh my god , You are posing a problem to me ！ I thought of the metauniverse , I agree that there is no good definition of metauniverse at present , Besides reading Neil Stevenson's book , And I like the metauniverse he describes 、 Obviously, it is the meta universe of our ideal life . Anyway, I think the metauniverse may have two different ways , One is just the next big stage transformation of the Internet , It's very hard. , I don't even know what it will be , But just like when the Internet evolves from today to the unknown future , I would call it the meta universe .

And I think a certain type of spatial component may be one of the important properties , It's like we invested in a company called gather The company , It can easily build maps , And you know you can link maps together like an office , So you can have a bunch of remote encryption companies . What you know , It's like they are teams headquartered around the world , But their offices can be like digital Tokyo , There you can walk from one encryption company to another's office , It may be like a shared game room , It feels like connecting people in different parts of the earth , But they can walk digitally from one space to another , And talk to people , So these organizations are not based on geography, but on ideas in cyberspace , This is just like the meta cosmic finance that I hope to be very strong in any field .

 08 
Encryption industry mental model and the stage of realizing global landing

  host ： We talked at the beginning , About the encryption industry 20 Years or 30 Vision for , but Michelle, Your blog lists the applications of blockchain Technology S curve , Can you give a brief overview ？

 Michelle： In the early stages of this curve, nothing seems to happen , As you know , Encryption is an island , It is very disconnected from other resources , The entry only for assets is still a cumbersome flow of information , You know it's hard to get data from other Internet on the chain into smart contracts , So although this island is necessary , But there are few things that can be done .

Overall speaking , As the island continues to grow in terms of users and funds , There will be more encrypted asset native applications built to serve the universe , Not anywhere else .

It is more likely that the world of existing enterprises begins to connect here , And begin to meet these needs , Then we must enter the second stage , Because the infrastructure has been greatly improved , You know, from the dial-up stage to the broadband stage and now 5G, We are right now , Those core infrastructure layers have been significantly improved , Orders of magnitude faster 、 Cheaper . And we began to establish more connectivity between on chain and off chain applications through the liquidity of assets and information , I think it is difficult for us to see the future development in the initial stage .

Because the core infrastructure must be solved first , It's like the foundation of a building , You really have to start at the bottom , Then we come into contact with Internet users , You can start getting really large applications . So what people often miss is , Through that growth curve , What do you think , wow , This company or product has grown dramatically , But I'm sure it has been eliminated now . When we have 40 Billion or more encrypted users , You may think it's far away , But when you start to see trillion dollar companies or two trillion dollar companies , Not so , Because they do serve the Internet scale population in a very important way , So we think we are still in the early stage of the first stage , Maybe I just hope to enter the second stage , But this is still the real early stage .

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Original video link ：https://www.youtube.com/watch?v=KXINL12PftA

END

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『 Statement ： This article is the author's independent opinion , It does not represent the position of vernacular blockchain , This content is only for the majority of encryption enthusiasts to learn and exchange science , It does not constitute an investment opinion or suggestion , Please look at it rationally , Set up the right idea , Improve risk awareness . The copyright and final interpretation right of the article belong to the vernacular blockchain .』

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