Shahin Farshchi (Lux Capital) discusses early-stage blockchain investing: Lux recently invested in Blockstack (decentralized web) and is evaluating other applications such as security and IoT. He emphasizes founder quality (market understanding, product execution, team-building) as a key investment criterion in an immature market with many experimental uses of blockchain. He views blockchain/Bitcoin as being in the "first inning," potentially disruptive across legacy paradigms, and cautions against dismissing the technology due to early failures.
Chapters
So we look at blockchain for a variety of applications. We actually recently did an investment in Block Stack, which is using blockchain technology for decentralizing the web. Quite a few co investors, and I'll let you guys talk about that. But as far as other applications are concerned, we looked at security IOT and I think there's some really interesting ideas out there. We haven't quite come across as many founders that really come out of those industries. These are founders who are kind of on the bleeding edge as it relates to understanding blockchain and simplications and are trying to find applications. And you see that across kind of science and technology broadly, where people have shiny objects and are trying to find applications for them. And right now blockchain is kind of that shiny object and people are kind of experimenting with different kind of applications. And so again, for us, when you're investing in lieu of any kind of real MCQs, then you really have to feel comfortable with the kind of founder's grasp of the market and the product and ability to really execute on those and build a team around them. So we're still looking. And blockstack would be one of the first kind of leveraging digital ledger technology. I wouldn't say that I'm why I'm optimistic. I think this is an amazing comments that were made earlier. We're in the first inning and I think there are many kind of old, kind of, I would say, paradigms that could be disrupted with this. It's a matter of kind of what and when. And so I wouldn't dismiss Bitcoin or blockchain because of a few bad investments or companies that kind of go sideways. There are many companies that went sideways in the early days of the Internet.
