Alliance DAO Zero Employee: Why is the first thing we teach founders to lay off employees? | Conversation with RootData Listed Projects

Interview: Mensh, ChainCatcher

Guest: Will, Core Contributor of Alliance DAO

During the "DeInsight 2024" annual summit co-hosted by the Web3 asset data platform RootData and ChainCatcher in Bangkok during Devcon, the "RootData: 2024 Web3 Industry Development Research Report and Annual List" was officially released. ( Click the link to view the full report and list ).

The report provides a detailed analysis and interpretation of the development characteristics of the Web3 venture capital market in 2024 and prominently releases the RootData List 2024. This list is the second annual selection launched by RootData following its first release in 2023, and its results are gaining attention from more entrepreneurs, investors, LPs, and general crypto enthusiasts.

The RootData List 2024 includes five categories: Top 50 Projects (completed TGE), Top 50 Projects (not yet conducted TGE), Crypto VC Top 50 Investment Institutions, Top 10 Angel Investors, and Top 20 Best CEOs.

ChainCatcher will publish a series of articles, engaging with the projects and institutions listed on the RootData List 2024, seeking builders who navigate through bull and bear markets and tracking the latest trends in Web3.

Today's featured project, Alliance DAO, has been selected for the RootData List 2024 Annual List "Top 50 Investment Institutions."

Founded in 2020, Alliance DAO is a leading Web3 accelerator and founder community that helps the top 1% of Web3 founders establish and grow their companies through a 10-week program led by renowned Web3 experts. The Alliance DAO community includes founders, lawyers, auditors, liquidity providers, market makers, and more.

As of now, Alliance DAO has held 14 sessions of its startup accelerator, with a total market capitalization of the incubated companies reaching $11 billion. In this cycle, incubated projects such as Pump.fun, Moonshot, and Glow have all performed exceptionally well.

In this dialogue, we invited Will Robinson, the zero-th employee of Alliance DAO, to share his personal experiences in the Web3 field, insights on project and founder selection.

Personal Experience

ChainCatcher: Let's start with your personal experiences in the crypto field.

Will Robinson: My career began as an academic researcher. I spent eight years in graduate school studying video games, tabletop games, and sports, focusing on the history and culture of games. I worked in the English, sociology, and communication departments, researching mechanism design and how games help game designers create more artistic games. The focus was on indie games, especially those that are impactful and not just for entertainment. For example, I designed a game about when the "best time" to commit suicide is during high school, studying the mechanism design and incentive structures for those who had early suicidal thoughts. These were the themes I explored, and they were very challenging in terms of design.

Later, I left game research and academia because my cousin Dan (whom I consider one of the smartest people in the crypto space and the head of research at Paradigm) introduced me to Bitcoin. He told me how my research in mechanism design could help people in the blockchain space. It was early 2017, and I was about to finish my PhD, so I decided to switch careers. I started attending meetups in Montreal, looking for opportunities among a group of passionate crypto enthusiasts.

After four or five meetups, I found a job helping people promote auditing services. The pay was very low, and I had no work experience, but my academic background made me good at storytelling and marketing. They wanted me to help them promote their products. We assisted anyone who needed to prove to regulators that they indeed held cryptocurrencies on their balance sheets. For example, if you were the Ethereum Foundation, you needed to report your financials in a specific way according to Swiss regulations in the first few years, and then a stricter reporting structure a few years later. We worked with Swiss entities like the EOS Foundation and Lisk Foundation. Additionally, if you were a fund in the Cayman Islands holding cryptocurrencies on your balance sheet, you needed to report to the local regulator, CIMA (Cayman Islands Monetary Authority), to ensure fiduciary responsibility.

We audited Cayman funds, foundations, and exchanges around the world. Exchanges typically have regulators, and we ensured they held cryptocurrencies safely, correctly, and intelligently, training staff, conducting penetration tests, and risk assessments. I worked there for nearly four years, gradually becoming an expert in the field. I transitioned from a marketer to an auditor or audit specialist while continuously learning more about cryptocurrencies and adapting to the tech space. Then I applied to join Alliance, becoming their first employee responsible for building the accelerator program.

Now, I have been here for nearly four years. I have tried almost every role, including fundraising, mentoring, marketing, and research. I constantly switch roles to find what I enjoy. In a startup, you can decide what the most important thing is next and delegate tasks to those who are better suited for them. I enjoy communicating with people, so I spend a lot of time mentoring.

ChainCatcher: Which role do you enjoy the most in a startup?

Will Robinson: I love helping teams prepare for Demo Day. We have about 20 teams in each batch, and around 10 to 15 teams will be ready to present to venture capitalists at the end of the batch. I spend a lot of time talking with each team, teaching them how to tell their startup story, how to present it quickly and engagingly, making people want to invest.

By working with 100 to 150 startups, not only do the teams end up with a compelling story to attract investors, but they also gain a deeper understanding of themselves, realizing why their company matters and what makes it unique. We put a lot of effort into preparing for Demo Day. As of the last batch, this is one of the founders' favorite parts of Alliance, which makes me very proud.

ChainCatcher: How did your academic experience influence your subsequent work?

Will Robinson: During my PhD, I didn't learn much that could be directly applied to the Web2 gaming field. Because Web3 games are completely different from Web2 games, at least for the foreseeable future.

However, I learned how to present, how to collaborate with others, and most importantly, I learned how to tackle very difficult problems on my own and spend a long time solving them under extreme psychological pressure (like dealing with a complex problem in isolation). Therefore, the most important lesson from my doctoral studies was teaching me how to handle ambiguity. When faced with questions that have no ready answers, no formulas to refer to, everything needs to be created anew by you.

ChainCatcher: There are many mundane tasks to handle when helping startups; how do you manage your time?

Will Robinson: A lot of my time is spent connecting teams with venture capitalists, from preparing for conversations to making formal introductions. I maintain a very long list of venture capitalists to ensure I can introduce 50 to 100 potential investors to the teams. This is very time-consuming.

Additionally, I spend a lot of time reviewing potential applicants or future alumni because they apply to our programs. We receive nearly 2000 applications for each batch. These applications require time to read, and I also need to spend time interviewing applicants, sometimes even conducting second interviews.

Another major task is fundraising for our third fund. Alliance already has two funds and is currently raising a third fund.

Decision-Making Process at Alliance DAO

ChainCatcher: How do you efficiently screen projects? What does the decision-making process look like?

Will Robinson: Each application is evaluated from two aspects: Is the team excellent? Is the idea outstanding? And I believe that an excellent team is more important than a great idea, possibly two to three times more important. The idea is more to prove that the team can come up with a good idea rather than the importance of the idea itself.

Alliance is not fixated on specific fields; we focus more on excellent founders. Because we get involved very early, we can almost be certain that they will pivot at some point. We help them adjust, collaborate with them, and even support their pivots.

For example, the Pump.Fun team was called Caviar when they joined, and later they built a 3:3 application based on Friend.tech. If we had rejected them because we didn't like Caviar, it would have been one of the biggest mistakes of our lives. But we didn't do that because we knew this team was exceptional.

What constitutes an excellent team? I believe this is the core of early-stage venture capital, and it requires firsthand observation. Excellence does not necessarily mean having attended prestigious schools, having worked at large companies, or having previously founded successful startups. **As Alliance's founder Qiao said, to be an excellent founder, you need to be "traumatized and a bit introverted." Only a truly "broken" mind can succeed in this space. We are looking for extreme **drive.

Most founders don't even know why they are motivated to create their companies. Therefore, an important part of my interviews is guiding them through self-reflection. I try to get them to tell me why they want to do this. They usually start with, "It's to solve this problem." Then I ask, "But why do you want to solve this problem?" They might say, "Because it's an important issue." I continue probing, "Why do you personally want to solve this problem?" They might say, "Because I had this problem before." Then I ask, "Why don't you let someone else solve this problem? Why does it have to be you?" And I keep digging until I find something, like what happened to them when they were six that makes them feel compelled to solve this problem. This deep exploration is crucial.

ChainCatcher: How many rounds does a team need to go through to enter Alliance?

Will Robinson: Two rounds. Usually, the first round is 15 to 20 minutes, and the second round is 30 to 45 minutes. Unlike Y Combinator, which only uses 10 minutes for interviews. As you gain more experience, you find that you can quickly judge whether someone is excellent. We call it "heat." We ask each other, "Can you feel the heat in the interview?" Some people have heat, and some do not, and the manifestation of heat varies. Since we are also building a community, Alliance is also a DAO, and this community cannot have bad apples. Because we are still small, one bad apple can spoil the whole batch.

ChainCatcher: What percentage of projects stand out to give you a sense of "heat"?

Will Robinson: We interview 20% of applicants, then interview 20% of those, and finally accept 20% of that group.

ChainCatcher: Have there been cases where you missed out on excellent founders?

Will Robinson: I can give two examples. In the last batch, there was a company called Force Prime. The team consisted of three older gentlemen from Eastern Europe who had a lot of experience in Web2 gaming but very little understanding of Web3 gaming. They applied, and we rejected them. They applied again, and after interviewing them, we still rejected them, explaining the reasons. They applied for the fifth time, and I finally let them in.

Part of the reason was that I realized my biases were affecting my judgment; they were actually very talented developers, smart and eager to learn. I was also glad to let them struggle outside for a while because their initial idea was indeed poor. They lacked understanding of Web3, but later became more seasoned and familiar with how Web3 operates. I enjoyed working with them, and the founders were exceptional.

Of course, there are also cases where we rejected them, and they did not apply again. One particularly notable case is Monad. At that time, we were uncertain about their ability to build a community, and their valuation was relatively high. In the early days of Alliance, we did not have strict limits on the valuations of projects we accepted, allowing teams with varying valuations, sometimes even very high valuations. But at that time, we lacked "purchasing power," and we had no reputation; people did not think it was worth giving us 7% of their company. Now, we no longer face this issue; enough people believe we do a great job and that such equity dilution is worthwhile.

Business Model of the Accelerator

ChainCatcher: Many VCs also want to incubate themselves. What do you think your competitive advantage is compared to VCs that incubate themselves?

Will Robinson: I think VCs can do well with "Entrepreneur-in-Residence" (EIR) programs. For example, Paradigm is a great example. They take in a founder, work with them, help them come up with an idea, and start a company. But they can only support a few people at a time.

I believe running a full accelerator is beyond the scope of most VCs and is not financially viable. The operating cost of an accelerator is about $5 million a year, while the management fees are far from covering these costs. It's not a good business. You need to leverage your accelerated teams in a broader vision or other ways. For us, this means building a DAO focused on creating something very unique.

When VCs have other priorities, like managing large amounts of capital, they cannot focus all their attention on these teams. Their goal in running an accelerator is to invest more capital in Series A or B rounds. But when the focus is like this, it greatly impacts the teams that join the accelerator. If these teams do not receive follow-up investments or do not get Series A funding from these VCs, it essentially means they are "dead." Other VCs will question, "Why didn't your accelerator company receive follow-up investments? Don't they have follow-up funds?" This could be due to completely reasonable reasons, such as excessive industry exposure or a loss of confidence in a particular area, unrelated to the team. But such impressions are usually dangerous. I believe most VCs have no reason to operate an accelerator.

Moreover, running an accelerator requires tremendous attention; for example, it needs 15 full-time employees, which most VCs do not have the energy for. Reviewing 2000 applications requires a lot of work, so my advice is that the best VCs should focus on some founders emerging in their networks and support them as available resources rather than trying to run an accelerator.

ChainCatcher: Besides online applications, do you have other sources for finding projects?

Will Robinson: All applicants must apply through our website; this is how we maintain order. But how they hear about Alliance or the website varies. More than half of the teams come through referrals from previous founders or alumni, who tell applicants, "Trust me, Alliance is worth your time." Because most founders should be wary of accelerator programs, many accelerators are not worth the time. And the best founders in the world know this. So to gain their trust, they need to hear recommendations from their peers. They need their peers to tell them, "These people are reliable." That's why we have spent a long time building a large community of founders to spread the word that we are different.

ChainCatcher: Why are founders afraid to join accelerators?

Will Robinson: Excellent founders typically do not go through accelerators because they already know how to build a company. The projects they are building may be overvalued, or they may choose to go to Y Combinator. Top founders know that most accelerators cannot provide the value needed compared to the dilution of equity they would give up. Therefore, it took Alliance a long time to get excellent founders to accept the conditions we required for application. Building this trust requires word-of-mouth from multiple sources. As an excellent founder, you need to hear from two or three people that Alliance will do everything possible to help you succeed.

Some excellent founders are at early stages of their careers, and accelerators can genuinely help them learn. But now Alliance is a well-known brand and has a large community, and excellent founders are willing to give up dilution to sell their products to hundreds of alumni. Many of our teams' first customers are alumni of Alliance. This way, you can quickly launch your business and get feedback.

Secondly, the legitimacy and signal that Alliance brings are now very meaningful. You can gain a lot of marketing and exposure because you will be listed among a series of recent success stories. I think this year we have Moonshot and Pump.Fun, along with many other emerging consumer projects. So if you are building a consumer application, Alliance will get more customers to see your product, and people are willing to do that. If you are building SaaS or some kind of infrastructure, you would want to join Alliance to sell your product to its founder community. These are two different reasons you might want to join.

Accelerators can be divided into two types: one is very boring, assembly-line guidance, like how to register a company, implement HR practices, establish hiring processes, design websites, and marketing, or even more specialized crypto guidance, like how to launch a token.

But Alliance does not do these things. We won't tell you how to register a company or how to launch a token. We will tell you how to create products that people want to use. Finding product-market fit is very difficult. A typical accelerator's junior mentor cannot help you achieve this. But Alliance's mentors have been working in the crypto space for 8 to 15 years. These people are the ones who can truly help you find the right product for your target users.

ChainCatcher: You mentioned that investing in follow-up rounds can be harmful to projects. Do you sometimes invest in follow-up rounds?

Will Robinson: We never invest in follow-up rounds for teams we accelerate. This way, venture capitalists cannot discern whether we have preferences. However, we do invest in follow-up rounds for teams we did not accelerate. For example, Arbitrum gave us an investment opportunity. We invested in Axie Infinity. We have many great strategic investments, but these do not fall within the scope of the accelerator's business.

Judging Founders and Teams

ChainCatcher: How do you view the balance between a founder's ability to pivot and their resilience?

Will Robinson: When we interview founders, we check several aspects. First, whether there is a strong collaborative relationship among the founders. If not, it means they may fail during the pivot process. So we pay great attention to finding people who have worked together for a while.

Another point we focus on is whether they have an obsession with succeeding at all costs. This is also very useful. We really do not like teams that are too large. This is a big issue for teams from Asia or Eastern Europe, where labor costs are lower, and people tend to hire quickly. However, large teams find it difficult to pivot. So we strongly prefer small teams.

Typically, the first thing we do when a team joins Alliance is teach them how to downsize. If you haven't found product-market fit, you don't need that many employees. You need to focus on finding the right problems and the right solutions. Some companies need many employees to achieve this, but that is very rare. And that is not the type of company we excel at helping.

Y Combinator and OpenAI are a great example. OpenAI broke all the rules of Y Combinator. It does not resemble a typical YC company. It has too many employees and has not had a clear product-market fit in 10 years. But it is one of the most valuable assets they have accelerated. So there are exceptions, and we will accept them. But generally speaking, if we want them to pivot, we need them to have strong motivation, solid collaborative relationships, and fewer employees.

Stardew Valley made over $100 million with just one developer. I am not here to create the next $2 billion Rockstar like GTA7. I think if we are going to develop games in the crypto space, it is better to focus on small teams.

Typically, the teams that come to us tend to be the largest because they come from Web2 fields, like the traditional gaming industry, where a large team is needed, and everyone is like a cog in a machine, quickly developing many different games. However, the usual result is that they end up slowing down all processes due to entering the crypto space, slowly developing a single game, and overemphasizing quality at the expense of quantity. If I want to communicate with a game team, I want to hear that they released 20 games in a year, that they are constantly experimenting, even if the games might be rough, they are looking for market-product fit.

We are now receiving many applications for AI-related projects. Many applicants proposing tokenized AI projects are centered around this theme, and I find it exciting. I have always wanted to provide financial services for those who cannot access banking, but I never expected that "those who cannot access banking" would be AI. I initially thought it was people in the Global South who couldn't access banking, but now I find that AI also faces difficulties in managing funds, and I am very eager to see how crypto technology can solve this issue for AI. For us at Alliance, the core interest is great founders, and we are happy to build with them, no matter what they want to create.

ChainCatcher: What do you think is the most interesting project currently?

Will Robinson: It is Pump.Fun because it has changed the way many people behave and has provided a different perspective on meme coins. Another amazing project is Glow, as it incentivizes solar farm production in a very interesting way and performs exceptionally well. However, there are countless interesting projects, and I also enjoy being surprised.

In the first two months, we did not know that Pump.Fun would be a huge success. Initially, no one was using it, and we had to beg people to try it out. It was one of those projects that started very slowly but then suddenly exploded. Many people thought it would quickly fade away, but that was not the case. It is still unclear where Pump.Fun will end, and I enjoy thinking about what its ultimate game mode will be. Now we see other projects starting to use it as a platform to release content, which also brings various issues, such as how to handle potential criminal behavior or whether to handle it. And there are many interesting puzzles to solve around this team, which occupies most of my thinking space.

When they joined us, they were developing an NFT trading platform called Caviar, which used some unique financial primitives to showcase its uniqueness. Although they had some user base, it was not enough, so they tried some new things, but the team also split. One co-founder, Mohammed Bayoumi, left to start Exo, a high-performing AI company.

The other two found new co-founders and began developing in other areas. At that time, they did not know what to develop, and we brainstormed with them. Imran, one of Alliance's co-founders and the mentor who worked most closely with the Pump team, researched Friend.tech with Chow and thought there might be some interesting things worth exploring or developing. So they began to study bond curves and speculation in social media environments.

Although Friend.tech's appeal was insufficient, their project interest was also lacking, but they learned how to launch tokens at an extremely low cost (only 2 cents). This ultimately became a clear milestone for community members, helping to push the project forward.

I think a key lesson in entrepreneurship is that you need to create lucky conditions for yourself. You need to work in the right direction, solving people's problems, but at the same time, you hope that some unexpected things will ultimately play a significant role. They gained many lessons through deep learning about users and consumers, continuously focusing on the consumer crypto space while pivoting, which allowed them to gain domain expertise and ultimately discover something truly useful.