Riding Unicorns: Venture Capital | Entrepreneurship | Technology
00:10:28 · Shah Ramezani
[00:10:28] S1: So stablecoins are basically a dollar issued on the blockchain. I mean, any currency. Right? You have issued on the blockchain, which moves through the, like, permissionless blockchain that is like 20 fourseven speed settlement. Like, you know, you have all these benefits where it just like it permeates more better with the entire need of the today's economy, which is like 20 fourseven instant. You know, WhatsApp is instance of why is money an instance. Think stablecoin fits that profile really well. Whereas before money would move through banking systems and maybe alternative payment networks like SEPA. So you had like these different systems and stablecoin is a bit of a better standard that just like makes any effects move pretty much like frictionless across the globe. I mean, see also with like the entire agent needs. I mean, tomorrow you will have agents negotiating each other. They're not going to be able to manage a JPMorgan account from a regulatory perspective, compliance perspective. Going be a lot of... Stablecoins are much more native to what we need today to be able to fulfill the money part and the transaction part. And that's kind of like the kind of the evolution of money. And that's why it kind of took off so much. You know, I think we are at 330,000,000,000 market cap for stablecoins now, which is still small to where it's going to go. Think the prediction from Scott Bessent and a lot of the key figures in the Trump administration is that it's going to be by 2,030 to 4,000,000,000,000. That's basically a bigger buyer of U. S. Debt than top 10 countries in the world. So it's pretty like a fast growing industry. And I think with AI, it will even accelerate further.
00:11:49 · Hector Mason
[00:11:49] S2: And who who are like your customers? There's something quite interesting with the space like Stablecoins where there's some question around timing, you know, when you got started. As you said, the use cases weren't obvious. You thought there was something under the hood that was gonna be great. But as a VC back in those companies, you're kinda thinking, okay. Well, we wanna get in there early, but not so early that the company runs out of runway. But if we go too late, then someone else is gonna be already doing it. And you have your own version of that as the company founder. So how were you convincing people to join you? How were you convincing customers to pay? So for
00:12:20 · Shah Ramezani
[00:12:20] S1: me, maybe as a founder, I think it's very important that you often start a company not really for the first idea that you're pitching to investors. I think that's, like, the best idea. You just get everyone together like a team. We we pivoted many times. It's just, like, get everyone excited about something. But really what this is is the most important asset here as a new upstart is that you are with a ready team who is like knows all the tooling, all the technology, who's constantly tooling around, playing around. Plus, you are in the market listening where the market is moving more than anyone else. Okay? So you're like there. And then once you spot something like a torpedo, you can just move much faster than anyone else because the team is basically not doing anything. They're just waiting. They're just, playing around, like... Because normally, if it's another company, let's say, like, it's a big payment company, all their engineers are allocated to existing customer base. Like, okay, you have to pull out 10. Like, no. Thanks. You know? There's, a team of, say, let's say, people, like, constantly searching with the conviction that there is something there. And then I called them almost like the tiger in the wilderness waiting for the next bait. Think the best time to build companies is when market crashes happen because it's very hard to build around right now because everything seems like a good idea. Everything sells because a lot of customers are buying because of the hype. But then the market crashes. Everyone's like, oh, yeah. So I don't need this actually because company A says the same thing. We don't need this. So what so happened in crypto crypto crashed, you were like one year in, two year like FTX. Everything went to which like zero. People were like, it's over. Regulatory is gonna kill it. All that stuff. One thing you could have spot is that Tether and Circle were growing. And then you were like, why are they growing? Crypto is dead. So then you were calling around like, oh, actually, people are using them for payments. And, actually, they don't even care about the stablecoin. They really don't care. And then what happened as well is you noticed that Tether was starting to make crazy amount of money. It was like hundreds of millions per week. It's crazy.
00:13:56 · Shah Ramezani
I was at some point looking at my phone and there was an announcement of, oh, Vantor just hit 100,000,000 ARR. Amazing. Like, or some company, don't even remember. But 100,000,000 ARR was being celebrated. And I was, wow, this is such an arbitrage. I think the industry will realize soon that this is an amazing business model. Regulator, governments, everyone will move around this because we had also the issue with regulatory support. We didn't have that for stablecoins. But my conviction was it will happen very fast because The US will realize stablecoin is the best thing that happens to them because it buys US debt and avoids inflation or at least dampens it. So that was my bet. I was like, this is going happen. I don't know the timing. And that actually happened faster than I did. Whether it happens faster or not doesn't really help us. It's like it neutralizes us because in a way, if it happens faster, you have more people moving into the industry faster. You basically are competing more. Whereas if it if it happens a bit slower, you might be able to grow so fast. So I think we got it right in some way. I don't know. I think it happened faster than thought. I think the speed came a lot with the Trump administration, Stripe, and there was a couple of moves that really ignited the fire. So that's, think, that's kind of how you think about it.
00:14:54 · James Pringle
[00:14:54] S0: Yeah. It's fascinating because I think there's that table of the company that was founded in the year and the sector that was most hyped, and it's never the big deck of corn built in that year is never the industry that everyone was most hyped about in that year.
00:15:09 · Shah Ramezani
[00:15:09] S1: No. You can't because you're always... Yeah. Exactly. I mean, most founders, make a mistake. They run off the hype, but you're just too late. You're never gonna get the traction. It's like almost like you're five steps behind. You have to be one steps ahead. For example, at the time, remember one very good investor, don't wanna see his name, gave me this advice. He said, listen. Don't play yesterday's game. And that was four, five years ago. He was like, everyone is doing SaaS, but the people who actually made a killing in SaaS did it at a time when people thought you are crazy to do build something on the cloud. Cloud is not safe. But they made the bet and they were early and there was only a few companies doing that. But now everyone who's doing it is kind of like late and they have to carve a niche of a niche to get a product. And now obviously, they are all like, you have to play tomorrow's game. In order to do that, you have to really think what's gonna be the next order effect or the next second or third order effect. That's And why when we spot a stablecoin, we said we're not gonna be an issuer because that's first order effect thinking already. What's second order effect thinking is that all these stablecoins in payment processors and convert them in all local payment, and that's... No one is gonna think about that. And plus, it's super hard. So most 80% of funds don't wanna do hard things because it's too complicated. They wanna do fast software, but there's no moat. So you have to really think four steps ahead and then place yourself. And then when the market moves you right away. But that's the only way as a small company, a first time founder actually. Because if you wanna be a first time founder but then also get the wave at the time, it's hard. Everyone is competing for the same thing. It's like never gonna happen.