How Developer Tooling Shapes Landscape | KBW2023

all right hello guys uh this is Timmy from hashed uh thanks for the introduction I'm part of the investment team and I'm really proud uh today to have these two uh as our portfolio companies and Paul and she uh do you mind uh giving us a brief intro and backgrounds of you guys too starting with Paul sure uh my name is Paul Kim I am the founder and CEO of notify uh before this I was in web 2 uh building a lot of things in AWS but also uh served as product uh director of product at Circle uh for a little bit hey this is CH I'm the co-founder and CEO of a z block and before that I used to Le product management at data breaks uh web to data infa company and before that I did my PhD in stat from UC Berkley we focused on the machiner and CA INF side so um nice to meeting you guys all right thanks so today's session is about um developer tooling session right so could you guys uh briefly explain what you guys actually uh building in this uh space uh especially with your products starting with she yeah so Z block is building a fully managed full stack uh data infa platform for web three use cases basically it covers uh the you know uh data scenarios from indexing analytics to real-time capability and the reason we build this is we really want to serve in the end as a single backend for web 3 developers to build applications on top of blockchain Technology uh so for notify uh we believe in providing infrastructure for communication rails uh so we provide a lot of notification Services uh monitoring events and uh smart contract interactions with wallets so that at the end of the day you can get a text message or email sent to you about something that's happening with your position or information that you want to learn from your project um so we're trying to Federate between web two and web 3 and we think that communication is something that's very very vital yeah I think uh personally it's not really targeting the the retail users itself so it's actually a kind of a nich Market in this web space targeting the developers right so I think there will be many challenges um while building your product so what kind of uh main challenges uh you guys face uh during your work starting with Paul uh I think one of the biggest things that we've had was overcoming a lot of the education process of some of the Primitives that don't really exist in web 3 um so you know back in the defi summer days uh Discord and pretty much like Twitter was the only form of communication uh and a lot of people didn't really know how to build the tools to provide even an email alert or a text alert to your community so uh a lot of that was uh educational processes of like people understanding how we provide these services to them but also why it's so important for customers uh to have communication experiences with your project um so that was a lot of the uh I guess like the the heavy like homework that we actually put into uh but other than that I think uh understanding like some of the basic Technologies in web 2 uh was actually very transferable uh so we call ourselves like the twilio or the SNS of web 3 and I think a lot of developers or a lot of of the builders in web 3 understood that experience yeah so I definitely want to Second the uh first the challenge um the educational barrier that Paul just mentioned so like probably a lot of people come from web to space all have been well trended or well educated about the importance of data and utilizing data to do data driven decisions so everybody know that how Google meta and all those like very web to successful uh tech companies make money however in this space uh we consider that a lot of uh basic understanding about data and also like the data infrastructure tool layers in the space is uh not well educated so you have to spend time to even explain the difference between analytics and the indexin to even developers in the space uh that's one thing and another thing is uh especially give our teams background we come from like Enterprise focused uh you know like industry in that case we initially really want to utilize the strategy of goto Market strategy in web to that we call land and expand in the space however uh one challenge we see is the lifespan of uh a lot of web 3 projects especially native Protocols are very short uh it's usually less than 18 months most of the time 12 months and uh the strategy you use in web 2 for Lending them first and then make them more like a loyal and uh you know like a reliable customer remue stream and everything is very challenging in the space so as she mentioned about the go to market strategy I think uh you guys have different um strategies uh targeting your own users right so um are there any like uh um uh funny examples or anecdotes that you had while you were uh coming up with your own strategies or any some kind of like accomplishments uh with your uh own product starting with Paul well I think as Chi was mentioning uh you know the space is so new uh and a lot of Builders here are very excited uh and sometimes they don't have a lot of traditional background in some of the web two size of things they just really happy to build thing so uh when we went to Market first uh we started originally on salana we're across 18 blockchains now um there was a lot of like a close-nit community so people uh know each other people are very friendly with each other and a lot of the times you're interacting with uh a lot of uh what we call dgen folks uh especially in like defi protocols uh so I think learning to speak their language understanding how to go to market with them uh explaining to them why infrastructure is so important uh a lot of that was kind of uh just a discovery process um but you know as we kind of went to Market we found a lot more like different strategies across different blockchains salana has a different vibe uh polygon has a different vibe uh especially Avalanche as well so uh we tried to cater to um at least bringing web 2 forward uh with a lot of the user experience optimizations and a lot of people appreciated that so uh even though sometimes we were kind of uh I guess a little bit more on the Boomer side I think explaining technology uh they appreciated that we were fighting for the customer experience yeah um so from our experience uh we basically categorize uh people in web 3 space into four categories one is that they're one two ecosystem people uh ler one l two and the second is the developer who are building on top of them the third is retail user the fourth is Enterprise that they're trying to lay one or two are trying to attract to their ecosystem to launch something like you know their nft or even like tokenization of stuff so um we found it initially we're really trying to go after uh developers like protocols building on top of layer one layer two uh in the beginning last year uh it was not very successful again because of the two challenges uh we earlier discussed the educational barrier and also like the like lifespan and unstability from their side about like their revenue and also like their you know Runway of the capital and everything so then uh we start realizing actually um before the very bottom of the bare Market ler one ler two they still have at the time the um you know eager to grow their Community which means they want to have more applications built on top of them they one and more developer uh Enterprise potentially you know do something with their ecosystem so that's is where we found some success uh successful you know partnership and uh Enterprise uh deals we made with layer one layer two then we realized for layer one layer to especially in the after the market is you know really getting worse and worse they also kind of lose the appetize of uh you know trying to push the growth of the ecosystem in this moment because they just want to survive they want want to make sure they save the cost preserve their energy and uh capital for the next thing so in that case we realize uh the people who want to who have still more appetiz to pay stuff uh is actually Enterprise customers then it goes to like uh you know similar findings and observations with uh Paul for notify then we we start really being focusing a lot on like trying to serve Enterprise customers including people from web to uh transitional background who want get into web 3 or like some of the very big web 3 customers but the approach of doing business with them is more like a traditional Web Two uh approach yeah thanks and uh I just got curious and I think it was interesting point that they each blockchain has different Vibes so I think uh you both see a lot of quantitative data in in this space and how do you actually uh see those differences and how do they differ from each other well I think some of them are uh you know it's like some of all the people that work there as well right so uh a great example is like the move ecosystem uh a lot of folks come from Facebook um so they approach it a little bit more web to style uh versus say like salana it's a little bit more dgen um I think and ethereum is also a very very different vibe as well of course like BTC and lightning um but I think you have to cater your strategy according to those personas because uh gra like naturally people are gravitated towards those personas in the first place right uh and they want to build in the community and I think a lot of people who build uh projects on those ecosystems are attracted by those same personas Sor I want to make sure I understand the question so you are saying like uh could you yeah so so Paul mentioned that they they each blockchain has different Vibes and I just want I I was just curious on how uh on a quantitative data uh analysis base so like how they differ from from blockchain to blockchain oh got it um yeah actually from data infa perspective it's very interesting to see uh some of the blockchain like Solana they're highr blockchain which means they generate a lot of data every day uh even though most of them are like systematic data that's are useless uh but but it's indeed it generates they generate over like 150 to 200 gigaby data per day so that's is way more than majority of the other uh uh blockchains generator so from again from infa perspective the demand of uh you like the demands of using the each blockchain data can be different because of the data size and data volume that's being generated and another difference we see in across blockchain is some of the blockchain uh Focus really on the defi adoption but some of the newer blockchain especially recently we see they are focusing a lot on the gaming space adoption so that's why uh obviously for KBW you see a lot of uh those new blockchains have been you know very eager to I I I see like trying to like get into the Korean market uh definitely like for those type of uh blockchain uh strategies uh for us then we have to tell tours helping them to grab the most important customers and profile for them so that's uh interesting interesting and um in terms of like a user experience so uh well this is extremely my personal experience but like using Dune analytics or nansen uh it wasn't really comfortable like uh like searching all those data and they need to come up with their own dashboards and some of them are locked so those kind of things so in terms of user experience how how are you guys actually approaching to the users and like uh as smooth as possible yeah okay so um first of all this is where the educational barriers start happening because a lot of times then we start need to expand oh do and nson they're actually more for data analytics for you to do you know for example like historical data inside extraction or visualization dashboard type of thing however when it come to developer side because this panel is about developer tooling a lot of times what they care about is really like serving the data to their customers via application front end and in that case they really care more about you know like the data freshness and the uh uh concurrency of the API so they can handle like millions of millions request at the same time so for those type of uh uh user experience uh we provided them we usually you know really trying to close the gap that developers usally cannot didn't experience in the space uh when there's only like analytics type of solutions but even for analytics Solutions in in this in this space uh there's a lot of uh uh additional Improvement we think it can be done for example one thing is uh how you can how you can trust the data quality and integrity uh from those platforms uh especially uh some of the platforms is Community Driven so in web 2 one of the very very critical topics when it come to data is like data quality uh especially when the data growing a lot so um that's one thing I think you know in the future there are definitely a lot of uh interesting Solutions can uh can be can be implemented uh so for us I think from a user experience and how we're advocating things um you know when we started the company and we had this thesis that uh every defi user would want a uh trade confirmation sent to them uh just like a web 2 experience would be uh and they would want to get it through an email or text message and I remember having these conversations with some of the investors but also some of the foundations uh and they thought that you know the idea of decentralization and anonymity would Trump basically these like you know foundations that we take for granted uh so we had this like you know I guess bet uh when we launched our product and uh we found that 90% of the users that use our service uh wanted a text confirmation of their trade right uh and I think a lot of this like kind of shocked put folks because they thought that you know because it's like onchain because you know Twitter and Discord are there uh people are so used to this uh you know you know defi 2.0 experience that they didn't want and forsake web 2 and I think where we try to propose folks is that instead of sending users to another third party app or going outside the experience um one of the biggest values that we learn in web to is that um you as a project or a protocol your biggest value is really the user Journey that you're giving to your consumers um and we tried to enforce that and and provide these tools to kind of enhance that experience um so when we did our experiments and when we went mainnet um you know a lot of protocols uh suddenly become you know more interested in what the user journey and consumer experience is uh so we were challenging a lot of those paradigms uh when we first started and I think now uh if you go to salana like Sal's a great example uh we launched in salana in May uh at the time nobody had had communication notifications and now 90 95% of all the projects do uh so in a period of a year year and a half uh you could see a lot of momentum shift and people realize that hey this is what I used to have in uh erade or Robin Hood why can't I have it in def5 yeah thanks for sharing uh your experiences and I think uh both of uh CH both of Zeda block and uh for Paul notify you guys are both uh building zero to one uh the new infrastructure and the new product uh in this space so I think uh most uh many of the critical uh voc's voice of customers would have been really helpful while building your product so what kind of uh examples were there while uh you were building up your own business you mean challenges well challenges uh some interesting stories or like uh things that have been really helpful while you're building your own uh product oh got it like what we learned from customer side yeah so one one thing yeah I'll go first um one thing I think we definitely learned uh from web three developers is initially so there initially when people are thinking building applications on top of blockchain they treat blockchain as a like all in one solutions to them what does that mean is they think blockchain can do everything except front end so they use blockchain for transaction you know uh verification they use blockchain for backand they use blockchain for infra like they want to use so basically a lot of uh like early stage application even like right now a lot of applications you see why like Paul mentioned the user experience is so limited or you know not that good compared to web 2 is actually they interact their front end directly with blockchain and in that case uh because especially a lot of developers in the space are also very young uh uh you know developers who believe in the uh the philosophy of uh blockchain decentralization everything so their approach of doing this uh well in in in a good way is simplify a lot of things but in bad way it's limited limitate limits their capability of uh building Advanced features and advanced user experience so in that case we learn how we should build a solution that's on the one side provide the advanced capability like what people can use in web to like some of the foundation of web to like a very solid robust backhand to developer but meanwhile simplify further simplify the development experience for the developers in the space because those people usually compared to what to are less interested to maintaining those stuff than uh than traditional way yeah yeah I guess we had a similar story to uh like our our kind of like oit moment was uh we built our product and we were like Hey we're going to create these apis that uh de the developers and Builders can call uh so they can like send these messages uh when we talked to our first dii protocol uh we explained to them how our product works or how SDK works and the first question was like how do we how do we fire your apis right um and we're like well don't you have a Cron job or don't you have like a service that runs to monitor this and they're like no we don't have it we we have a smart contract and we have a website uh so what we ended up doing was we had to build all the monitoring elements and the Eventing service and provide that as an end to-end solution for these customers just so can fire our apis uh so that was like our kind of like oh this is kind of weird this is not like a web 2 thing because uh in web 2 you you always know when to send a message or to send an alert because you're tracking everything and you have these services that are running like infra devops to make sure it works in web 3 they they were pretty much like we have a smart contract people people engage with like you know permissionless and we don't know what's happening and the beauty of it was like they don't they don't want to focus on what's happening on the blockchain right they just want to provide the smart contract as the service and everything else from user experience is like well it's on the customer um I think that's being challenged right now uh in infrastructure and that's why a lot of folks are investing into you know thinking about how we're going to unlock the next you know million users and that answer has to be from a better user experience in Journey actually can I add one more for sure for sure yeah actually this uh this is a really good point um that to some extent that's why we see a lot of opportunities in this web three space because as a infr play as an infr player or like middleware player you just need to build one one solution and can be used by many people in the space however in when it goes back to web 2 for example if you are building a data infra platform uh in Uber and in mattera and in Google it can be very different you actually have to like customize that a lot for each of the business use cases but in web 3 because everything happened on CH I mean it's you know the the the the core stuff happened on CH the transaction so there's a lot of things that you don't need to repeat your work like engineering and development work again and one universal Solutions can be utilized by a lot of people across blockchain solu across even blockchain ecosystems U so that's is another you know very interesting and exciting uh findings for us when building web three space yeah thanks for uh sharing your one more thing I think one one more thing is like I think educating folks on there's a cost Associated uh or you know it it it costs money to run some of this infrastructure uh and getting projects to understand there's a payment aspect to it uh is something that was also kind of interesting uh you know not everyone knows like you know everything everyone everyone expects it to be free and I think blockchain or web 3 has built this kind of like like uh you know identity that everything is open source everything is provided um but you know when you're running infra and middleware uh a lot of the stuff does have a cost and I think that was one of the cool things that we discovered is that we just simply now say this is what the price is and they can integrate uh versus integrate first and then it's like okay let's talk about what the cost is going to be exactly right thanks for sharing your findings and I think one of the biggest difference between web 2 and web 3 is that data is transparent in this bace right so um how do you guys think that this kind of feature actually innovates uh this space and how are you how are you guys actually uh building your product um um oriented in this kind of feature yeah so I'll go first again uh um I I think one again very interesting uh uh first I I think the data transparency obviously give back a lot of like uh data ownership to the real creators and use uh owners of the data and in that sense for example things that uh happened when your accounts Twitter account or LinkedIn account got banned due to some stupid algorithm they did internally and you cannot like validate why it's happened won't happen in web 3 so the data transparency I just want to add like a little bit Sidetrack that I think this actually gives a lot of like power and ownership back to the real owners of the users but then goes back to uh uh go go go goes back to uh we think the data transparency how that will affect our business uh we think one interesting thing is compared to web two most of the data infra Solutions in web two require user to bring their own data into that uh solution like if you're building on top of a snowflake or big querry you have to generate a lot of off your like private offchain data but in this space it's the opposite people come into your platform already have all their needed data on the platform they just need to find them and utilize that so in that case I think building a Marketplace and economy around that from the beginning is a very interesting thing uh that a new type of business model you can do in the space compar to web to usually it only happens when you have like a like very big Network effect to help you generate that for example think about when aw start their Marketplace when snowflake started their Marketplace it's very late stage of their company but in web three it's uh we consider it's very different uh one of the requests that we're getting these days uh because you know we we provide the tools to have projects message their users um and because of data transparency I think where we're getting a lot of ask from is these creative projects uh who are asking hey how do I Target my customer like my competitors customers um because they they know like the wallet IDs they know what they work on and what they trade on but they also know when they interact with different contracts owned by different projects uh so one of the common requests we're getting is a little bit more on the customer relationship management uh they're doing insights analytics to do better CRM to better Target uh their user base and also their competitors uh to see how they can motivate them to come over to their project instead so I think we haven't seen that really too much right now in web 3 but I think the next cycle this is going to be basically uh the Forefront of customer acquisition is sniping users and bringing them to your platform uh and of course you know communication messaging is like a critical part of it but I think the you know Data Insights and transparency leads to basically better ads in a sense uh to the user base yeah I think it was really helpful to uh to see how you guys actually shape up uh this developer tooling landscape as a whole and I think considering the time constraint I think this will be my last questions and wrapping up this session um so I think there are many web2 companies trying to hop into web 3 space and especially for the developer uh tooling system uh there will be a lot of competition uh further on so what kind of advice or what kind of like uh strategies you guys have uh while building up their own product uh is this mostly for like uh trying to be more like competitive or Mo building a mo yeah for both I I mean I I think this is the advice I give to every single Builder uh in the space is I think worry more about like iterative approaches getting things out testing it with your customer base user base uh it's not a very big uh ecosystem in a sense you can get uh into contact with all the builders that are out there your customer base and get direct feedback I think that's one of the things that most of the bigger players probably don't have a great tool to do um they don't understand how to go to market and talk to these projects directly um so they're going to take a very corporate approach of I'm going to create a 5-year road map right and try to build something and ship something in like a year uh in web 3 the luxury that we have is that we can go you know pick up our telegram message the founder of some other protocol and get real-time feedback and get something out on the market in a couple weeks uh this is something that you know is mindblowing for web 2 users or web two Builders because everything happens in quarters and crypto you know a quarter is a cycle almost right so so I think things go just really really quickly yeah I actually agree with this uh iterative approach and also I think one important thing for like smaller developer or companies compared to uh transitional companies is really be consist not being consistent but really trying to build something that's bring the real value to the space and uh uh you know don't yeah given what you want to do but if you are thinking that you want to build a long-term successful company I think bring the real product and real value to the space is going to help you a lot because the initial kind of uh observations we have in the space when we just started building web 3 is so many projects uh spend so many time and their energy trying to do so much marketing stuff and uh you know but instead of focusing on shipping out some real product and everything uh it's my Works in The Bard Market but in the bare Market uh it's really people are only willing to work with a uh team and the products that have something helpful to them uh instead of just some hype um so I think you know focusing on bringing the real value to the community is something definitely very important uh and another thing I think it's uh I I definitely want to uh Echo with uh what Paul mentioned is uh the ecosystem play in web 3 is very interesting compared to web 2 so you can actually in even in a very small stage get a lot of help from the bigger place in the space compared to uh web 2 this is probably one of the reasons why this space is very attractive because of the openness uh and you know like wanting to to to to collaborate to you I think that was awesome advice and if I become a a builder in sometime yeah I have that in mind all right I think uh we can wrap it up here and thanks for your time today uh enjoy your night [Applause] thanks [Music] oh