Crypto Startup School: How to build companies by building communities

Zoran Basich
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Editor's note: Andreessen Horowitz’s Crypto Startup School brought together 45 participants from around the U.S. and overseas in a seven-week course to learn how to build crypto companies. Andreessen Horowitz is partnering with TechCrunch to release the online version of the course over the next few weeks. 

In week four of a16z’s Crypto Startup School, the spotlight shifts to building companies by growing communities of users, developers and employees in a decentralized context.

In a virtual fireside chat, 16z General Partner Chris Dixon and GitHub and Chatterbug Co-founder Tom Preston-Werner discuss “Building Companies and Developer Communities.”

Preston-Werner explains how the open-source ethos is a great way to build social virality among developers, and how the clean, developer-focused interface of GitHub led to its wide adoption and caused developers to demand it within their own organizations.

He also offers marketing lessons from the early days of GitHub, when the company used informal methods of building community in a bid to create “superfans.”

He urges founders to view a company’s brand as an expression of its core beliefs, with a focus on how it helps its users succeed. The reason people would put a sticker on their laptop or wear a company tee-shirt is because of “what they believe they are communicating to others with that sticker or shirt … it’s a shortcut for communicating values.”

In the second video, Jesse Walden, a former a16z investment partner and Mediachain co-founder, and Robert Leshner, founder and CEO of Compound, do a “Deep Dive on Decentralization.”

Walden starts with a playbook for progressive decentralization — the process by which crypto project creators build a useful product, create a community around that product, and then gradually hand over control of the maturing network to the community. This process is in keeping with the cooperative model of crypto networks, which drives rapid, compounding innovation through better alignment of incentives and open participation.

Leshner follows with a case study of his experiences at Compound, an automated money market for crypto assets in which lenders and borrowers can come together to transact without the involvement of third parties. Compound, one of the first crypto projects to move through the full progressive decentralization model, built a thriving community of third-party application developers, who have set up shop on top of Compound’s smart-contract protocol.

The Compound team has gradually brought this community further into the protocol’s inner workings; in the final stages before handoff to the community, the founding team made changes transparently, with greater reliance on the community’s input, and created a sandbox for experimentation to test governance mechanisms. Decentralizing “allows the protocol to live forever,” Leshner says, which fosters innovation because developers can trust the protocol with their businesses and livelihood.

In the final video of week four, Tina Ferguson of a16z’s Tech Talent and People Practices team offers guidance on “Managing a Distributed Workforce.” Because of the decentralized mindset and evolving business models at the heart of crypto, founders and managers face unique challenges. In such a fast-moving space, for example, it’s important to hire someone who has the right skills now and will also adapt to what’s required in 12-18 months.

Compensation, which could include the allocation of tokens rather than more-traditional shares, also requires close attention. When hiring in other countries, teams must consider employment laws, as well as whether to use Professional Employer Organizations (PEOs) to move quickly via local contacts on important hires. Finally, real-time feedback is especially crucial in a distributed workforce, as is clear and timely dissemination of information.