Zima Red ep 115: Greg Isenberg - Late Checkout: The Berkshire Hathaway Of Community-Based Products
Primer: Greg Isenberg is a successful serial entrepreneur. He has started at least 3 companies that were subsequently acquired. Now, he is building Late Checkout, the Berkshire Hathaway of community-based products in Web3. In this episode of the Zima Red podcast, he shares what he means by community and how he situates his businesses around them.
Background
Has started at least 3 companies that were subsequently acquired
His success can be attributed to building community-based products
In 2008, when the financial crisis happened, he built a community called Wall Street Survivor
Has been building since he was a teenager:
Has light design and engineering skills
Has heavy community and branding skills
What Does He Mean By Community? Is Community Another Word For Marketing?
Community is about throwing parties on the internet
Thinks that he is good at designing community experiences:
Step 1 involves community design
Step 2 involves stimulation of the community/community management
Step 3 involves product building
How Does He Start Designing A Community?
First, he has to define the mission of the community
There needs to be a strong mission and milestones
E.g. a weight loss community for a specific group of people
Once you have identified your mission and the people who are really connected to that mission, then you can be very nuanced in designing your community
Other Companies He Has Started
Islands
His last company was called Islands
His core thesis was that group chat will be the next social network
They built a Discord-like product for college students
Islands was acquired by WeWork
5by
The core concept was like a TikTok feed but for YouTube and other platforms
5by was acquired by StumbleUpon, one of the largest social apps at that time
What Was The Process Of Selling A Company?
It’s one of the worst feelings
His advice to new founders is to build relationships with the 7 companies that are likely to acquire your company
There’s probably 3 people at each of those companies who would acquire your business
This results in 21 individuals you need to know
When you sell your business, you are not a stranger walking into someone else’s doors
“It's like the most painful three months of your life. And the example of Islands like I was basically personally almost out of money. The business was out of money, and you're sitting there waiting until this deal closes.”
- Greg Isenberg
How Did He Get Into Crypto?
Islands was almost a part of the 2017 ICO craze
They wanted to create something called student coin, but they did not go through with it
Web3 and crypto was the next logical step for the Web2 communities he was a part of
Didn’t get into the space until March 2020, when the NFT space was starting to get more mature
What Is It About NFTs That Is So Appealing To The Masses?
People connect with IP, brands, and characters deeply
People love collecting
NFTs will be a way to onboard the masses into crypto
Why Are Metaverse Native IPs Taking Off In A Much Larger Way Compared To Traditional IPs?
Metaverse native IPs like CryptoPunks and Bored Apes are very nuanced for the crypto community
In contrast, legacy brands are focused on the mainstream, which hasn’t caught on yet
Will The NFT World Expand To The Masses Or Continue Being A Niche Community In The Next Few Years?
Thinks that we are one step above the Homebrew Computer Club stage
💡 The Homebrew Computer Club was an early computer hobbyist group in Menlo Park, California, which met from March 1975 to December 1986. Several high-profile hackers and computer entrepreneurs emerged from its ranks, including Steve Jobs and Steve Wozniak, the founders of Apple Computer.
Believes that we are 2-3 years away till NFT becomes mainstream
Late Checkout
A culmination of everything he’s worked on
Thesis is that community-based products will outperform non-community-based products
They hold 3 businesses:
A product design agency that brings Web2 brands to Web3
Studio that incubates their own community-based projects
A venture fund that invests in community-based products
Product Design Agency
Starts every engagement with a community design sprint to understand who they are, their likes and dislikes
Will propose 2-3 different NFT concepts
One of the concepts will be picked, get prototyped, and buy-in from the community
Studio
Self-fund their own community-based projects
Will use the same community design sprint methodology and apply it to the projects
Venture Fund
Some of their investments:
Metalink — Web3 version of Discord
Wonderverse — DAO tooling
Metafy — video game coaching
Rainbow — wallet
Recently started the acquisition side to acquire community-based product businesses
Example Of A Company That They Would Like To Acquire And Bring Into Web3
Wanted to acquire Carrd but it did not work out
Carrd is a one-page landing page builder
They invested in Carrd. If they had acquired Carrd, they would put a Web3 spin to it
What Will Happen To The Founders After He Acquires Their Companies?
They are completely agnostic as to whether they stay or leave
How Are They Going To Scale Late Checkout?
“To me, what Late Checkout is, is the Berkshire Hathaway of community-based products.”
- Greg Isenberg
Convinced that they will own equity in community-based products if they do good work over the long-term
Thinks that the agency and studio side are scalable
What Are Some Insights That They Have Discovered While Operating Late Checkout?
Having a great process really accelerates work done
Differences Between Web2 And Web3 Communities
If you are part of a Web3 community, you share in the upside of that community
What Interesting Business Models Has He Seen In Web3?
Finds the Creative Commons (CC0) and public domain as an interesting business model
What Excites Him The Most About NFTs?
Intersection of NFTs and gaming
Proof of competency — accomplishing tasks, proving your level of competency, and having doors opened to you
What Is The Metaverse?
“The internet is now graduating from a set of protocols to a real place.”
- Greg Isenberg
Grand 5-10 Year Vision
Just continue working with a great team
Single Favourite NFT
His CrypToadz with Noun glasses
Most Controversial Thought On NFTs
NFTs have ways to go before becoming mainstream
If He Could Improve One Thing In The Space
Easier on-ramps to crypto
NFT Ecosystem In 3 Years
A lot of creators, artists, and institutions will have adopted NFTs
Will have a playbook for how to launch a great NFT project
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