The next step for consumer apps. And for me.

Bringing the Ownership Economy to today’s apps

Power users — not companies — drive most of consumer internet. They are social media’s content creators and curators, Uber’s drivers and car suppliers, Airbnb’s hosts and real estate investors, etc. Users consuming these products pay for these networks to exist. Heck, individuals volunteering their time — not companies — write most of the open source code on which these networks rely. So, why don’t users own any piece of these networks?

Take Snapchat, for example. Millions of content creators who turned the app into the behemoth it became didn’t get any direct proceeds from the network’s $25 billion IPO. This misalignment is not only unjust, but also makes the network vulnerable: Snapchat gave shares / stock options to retain and engage thousands of investors and employees, but not to its content creators. Its power users had no skin in the game, and many of them switched to Instagram when it launched Stories. Similarly, Adi Sideman and I learned firsthand through our experience running YouNow — a 50 million user mobile video app — that networks rise and fall with their power users. It became clear that the economics of user networks are broken, and that they ought to change. The consumer networks of the future will be user-owned.

Uber IPO, 2019. While all of Uber’s employees and investors had equity, none of its drivers did. Some went out partying, drivers went out to protest in cities around the world.

Three and a half years ago, we started Props to bring user ownership to today’s popular apps. Bitcoin and Ethereum were the first to prove the power and feasibility of the Ownership Economy in digital networks (hat tip to our early supporter Jesse Walden for coining the term). Crypto token models show that the code tissue that connects two sides of a marketplace (for computing power, financial assets — anything really) can become a fully open-sourced public good governed by the network itself. Token models enable those who contribute time, energy, capital or code to share in the wealth that a network generates, and govern it together (the key tenets of ownership), and we’re seeing more crypto-native networks successfully going down that route. Our approach at Props has been to leverage blockchain tech under the hood to make it easy for standard, popular consumer apps to get into the ownership economy. Not rebuild consumer networks from scratch, but enable people to share in the financial success of apps they regularly use.

The breakthrough of early crypto networks is a new model for market-driven networks, where users build, operate and own a piece of the products and services that they use everyday. (Source: Variant)

Fast forward to today, multiple apps leverage Props to run their “user ownership loyalty program” using a simple API integration, and see material growth in user engagement and loyalty. With ~6 million Props users across multiple apps, we’re now one of the most highly used crypto tokens out there. Reddit’s recent launch of its own app token serves as strong validation that even large incumbents recognize the need for deeper alignment with their users. For Reddit, one of the world’s top 10 networks in popularity, this was the culmination of a multi-year strategic initiative. Props enables any app to launch their own app tokens within a couple of weeks, and tap into the power of user ownership without going “all in”, or knowing anything about the blockchain tech under the hood.

My Journey from entrepreneur to investor

Developing this vision and bringing it to life together with Adi, Peter Watts and the rest of the amazing Props team over the past few years has been the most exciting adventure of my career. I can’t thank my teammates enough. We’re in the pole position for serving many more apps and hundreds of millions of users. With Props growing stronger than ever before, and my family and I moving to Israel, this is the right time for me to follow my heart and take the next step in my journey. I’ll be transitioning from leading the team and an operational role, to a board role on the Props team. I will continue to help Props bring the project’s vision to life, and grow from 6 to 60 million users and beyond in my capacity as a board member.

I’ve been building startups for most of the past 12 years. The common thread in the three main ventures I was part of was the passion for creating something new and valuable in the world. I love diving into a new domain, thinking through the different facets and the deeper layers of a problem and the process of making something new using tech, because it can quickly become impactful for millions. In recent years I had the privilege of closely supporting other founders on their path, and I found great joy in that. I will now get to do a lot more of that — as a VC.

I’m moving from building to partnering with other builders because I am too excited about various tech vectors, too impatient to park my unsatisfied curiosity, and too eager to work with multiple founders to have the laser-focus that leading one venture requires.

“Here’s to the crazy ones. The misfits. The trouble makers. The round heads in the square holes” — this timeless ad is the inspiration to Square Peg’s name.

I am joining Square Peg to help grow the Tel Aviv office. I chose to join the Square Peg crew because of the people. They are a strong mix of builders and allocators, who are brilliant and authentic, with great vibes. They are very founder centric, and feel like true partners to the founders they invest in. We have a fantastic portfolio (Canva, Fiverr, Stripe and many others) and ability to invest across stages (manage funds of over $1billion). The firm is growing, and we have a unique opportunity to double down on the thriving Israeli tech hub, where we’ve been investing ~40% of our funds. So I still got some building to do, even if my main job going forward will be to help others build their own dream company. If you are building something special — hit me up on Twitter or LinkedIn, I’d love to talk!

VC @SquarePeg, Co-founder @PropsProject . Ex: @YouNow , @Venrock , @Wharton , @Tvinci (acq. by @Kaltura ), @BCG . Hooked on electronic music, poi & tahini

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