Welcome to Eth Dog. To Eth Dog. To Eth Dog. Emily, and now we will have a switch to data and AI. Please welcome to the stage Emily from MoonPay.
Yeah. Oh. Okay, that's good. Just use this. Yep, nice.
Okay. Great. All right. Check, check. Thanks.
Well, the crowd's sitting out really encouraging here. All right, in any case, hi everybody. Welcome to my talk. I'm talking about opportunity sizing today. So, one of the benefits of blockchain technology is that we are essentially transforming how we think about data, right?
Everything's just on chain. We're thinking about privacy protocols. That's a theme of this weekend in fact, right? And it's no longer being held by, well, this is the dream. It's still being held by only a handful of companies today, but the dream of course is to not have that.
And that also means then that we have a lot of opportunities for us. So, what we're trying to do here is actually who who runs their own company or who is part of a startup? Great. Okay. And others are guess part of a company or you just Okay, cool.
Makes sense. Just checking. Yeah, so as everyone understands, you know, when you're trying to get people on to the protocols, on to the networks, on to using crypto in general, whether that's, you know, through through privacy protocols or for whatever use case that there is, we are trying to get to critical mass. And that is so difficult, right? I think everyone here has faced those problems and it's very common.
I think we just had a talk in which, you you 0.5% of the American population, never mind the whole world, which is probably a lot smaller, are on crypto, and that means that we have 95. 99.5, rather, percent of the population to go. So, we can wax poetic all day about the theoretical and ideal states of the technology, but it is developing at a breakneck speed.
And how do we ensure that we're working on the most impactful opportunities to solve real-world problems? So, the framework I'm going to present today, full disclosure, is pretty simple, but that's also its beauty. And the way I really want everyone to start thinking about it is, you know, how can you start to deploy this within your own company, within your own initiatives, within your own project, etc. I think one of the things that we have a problem with, in some sense, within crypto is that, you know, the technology, like I said, is moving so fast. AI is also coming in, which is also equally moving just as fast.
And so, how do we make decisions equally quickly to make sure that we're solving the real-world problems that are presented before us, and not just chasing shiny new things? I'm looking at you, like, PFP NFTs. So, I present to you this framework here. All examples here refer to net revenue. Oops, sorry.
What? Okay, it's going backwards. Anyway, um uh but you can modularize this to whatever your net north star is. So, some of you, actually, could I have a little more interaction here? So, who What is the north star for your company, for those of you who are working in companies or otherwise?
People that consume the data via the API. Okay. Yeah. Number of people, basically. The number of users, essentially.
What's it coming down to? Yeah, so this applies to everything, right? It can apply to net revenue, it can apply to users, it can apply to safety and security metrics of a whole number of kinds. So, feel free to replace with whatever your North Star is with revenue that where I've said revenue here. So, in any case here, we want to estimate the impact of doing something.
And this is again very important to make sure that we're not sort of yeah, going on these tangents and kind of chasing these shiny pies in the skies. Let's see. Why opportunity sizing? So, again, this is a framework that allows us to really understand are we doing this because we have a feeling about it? I want to actually get a show of hands.
Who is a coder here? I presume a lot of people. Okay. Yeah, exactly. I was about to say who vibe codes actually.
That's That's a whole thing, right? But yeah, I think I mean a lot of things that we do are based on vibes. And that's also the spirit and that's also fun, right? We We're like, "Hey, that's so cool. Let me go ahead and do that."
But here I'm trying to present to you a way to frame the work that you're doing so that you're not just sort of vibe coding and then it goes into the ether, which we've all experienced before and that in this case on Ethereum. Pun intended. Um and we're not just sort of like letting it go, you know, and and have seeing that it doesn't do anything. So, again, we want to also miss out We don't want to allocate misallocate resources. So, again, how many people are in companies that are less than 50 people?
Okay, quite a few. Yeah, 100 people? Okay, so quite small. And so, with less than 50 people, you all you need to mobilize around things with focus, right? You can't just have 50 people running off and doing 50 things at the same time.
So, again, this framework is to help everyone understand even individuals on teams or individuals within organizations and companies, whether you're an entrepreneur or whether you're a project manager, etc. You you to make sure that yeah, you are kind of going all in the same direction towards that North Star that we were just talking about. So, this is probably very similar I I I think So, reading these here, let me just say like improve feature X because an investor wanted that. Who is familiar with this? Cool.
Yeah, great, great. Yeah, a lot of this is very familiar, I'm sure, to everybody, right? I mean, fix bug Y, it's been a while. Tech debt, we all are super familiar with that and a lot of times we sweep it under the rug. We're like, "Okay, we don't have time now, etc."
But, of course, you know, this is this is another way again to think about how you can frame that so that you can understand is something we need really need to address today or indeed can we just kick the can down the road? That's totally fine, by the way. You know, sometimes we just have to have a healthy amount of tech debt and that's totally okay. So, this is basically what this framework will end up with you doing is creating a list of all the initiatives you want to do and stack ranking them by again your North Star. In this case, I've used revenue and you're easily able to see, "Okay.
So, in my example here, expand feature Z to Mars." Martians are high-value customers with $50,000 in net revenue per year. Expanding feature Z would mean we get 100 incremental Martian customers per year, which means 5 million in net revenue incrementally. That goes to the top of the list. Fix bug Y, which we were just talking about, right?
Um bug Y is broken. Okay. What we're doing here is that we're losing actually $3 million in net revenue because we have this bug. So, what we're doing is Okay, we're probably not going to fix all of the bug, but fair enough. What it ends up doing is we have an estimated incremental $2.
7 million per year. That goes on number two, and etc. etc. So, now you have a very clear way of understanding what are the things we need to focus on today, what do we need to backlog, and also what you can do with this list is go through systematically. You can say, "Hey guys, especially for all of you in smaller companies, say this week or this sprint, whatever you want to call it, we are doing number one.
We're going to do number one because it's going to get us $5 million in revenue." If we knock off number one or if we work in parallel potentially, depending on how big your company is and how many resources at your disposal, then you can move on to number two, and so and so forth. Eventually, the ideal state is of course that you get to a place in which, you know, all the things are are kind of knocked off and you can have some room and time and space in order to or resources, that's also another option, in order to hit some of the ones at the bottom of the list. But, that's basically what we're trying to get at. So, how do we do this?
I already think I've covered when, which is whenever you feel like it. I know, but it's really kind of in the strategy and planning cycle, and it is something that I think that a lot of developers, including myself, are very prone to not doing, right? We're sort of like, "Oh my gosh, this is a problem today, right now. I don't have time to think about this in the way that I need to, so I'm just going to go ahead and do it." Fast forward, sunk cost fallacy, you go down a rabbit hole, you know, one sprint, two sprints, even more than that sometimes.
And then all of a sudden, you're like, "Oh, what did this get me? I'm not actually sure." And especially, like I said, in in crypto and in AI spaces where the technology and the industry are moving so quickly, that's a lot of lost time. That is a lot of lost revenue or a lot of lost users, whatever, again, the North Star metric that you want to attach yourselves to. So, there are three opportunity sizing methods that I recommend.
And they're all listed here. So, they're very basic and very simple. They don't even require like sim- like they don't even require you know, calculus or anything specific sophisticated that kind. It really is about making simple arithmetic to understand is this something that is worth doing or is this something that someone that we again can sort of put on the backlog and make sure that we do address at some point, but not necessarily right now or today. Uh there's different types of rigor that one can have.
A lot of this is also beneficial within crypto because we do have a lot of on-chain data at our disposal, right? So, especially the top-down sizing, which I think is a lot of in the cases of what we're dealing with in the crypto space. We're going into these areas in which we've never been before, that no one has been before. How do we understand, you know, how big the opportunity is? And right now what you can do is look on on-chain data.
Even on the more like private protocols, etc., there's a lot of metadata that you can also still use to right-size like, okay, how many transactions, even if you don't know the details of the transactions on the chain or on the protocol, have been happening in the past year, let's say. Is it worth it for me to kind of go into the space or is it not and so forth? So, I'm not going to go too much into detail cuz I have an eye on the time, literally. Um I want to make sure, you know, that that everyone kind of gets it very generally.
So, directional t-shirt sizing is really about um well, as it implies, directional t-shirt sizing. It's very much about very rough estimates in both directions. You have both internal data as well as external data at your disposal and you can make a really sort of general idea of where you want to go and how this is going to affect your North Star metric. Bottom-up sizing is primarily used by internal data. So, this is indeed something around, for example, improving your conversion rates or um improving your ROI on your marketing spend as an example, very basic ones.
Um and this is very doable by using mostly internal data. You might need to pull from a couple of external sources as we have in this example. Uh but mostly you can do this in-house and it doesn't require uh as much lift as some of the other methods. And then like I said, top-down sizing is very much about uh using as much external data as possible, making some assumptions here and there. Assumptions are going to be part and parcel of it.
The fact of it is that opportunity sizing is as much of an art as much of it as much as it is uh tech or like as much as it is a science. So, in this case, you want to make sure that you are uh understanding, you know, what the spaces that you're going into and of course it allows you to really sort of uh do a lot of research in that area and make sure that, you know, you are solving the problems that are uh presented to you and that you're again not chasing a pie in the sky. So, there are some limitations. Like I said, um it is not perfect, but that's totally fine, right? I mean, how many people on a daily basis make a lot of macro micro decisions?
I think everybody probably does. And so, it is really just for you to help yourself as well as your company and whoever you're working with to understand this is the direction we want to go in. This is why we're doing this because a why is extremely important, right? We don't know the why, we're never going to get to success because everyone's sort of going towards a different definition of what that is and that is not usually the most productive nor the most performative. Um and so, that is something to definitely keep in mind.
And yeah, so essentially, that's basically where it is. If you want to implement this framework, super easy, especially for those of you in small companies or sing a solo entrepreneurs with very, very small teams. You can do this tomorrow or with your next idea immediately. And again, you know, even if it's not perfect, even if at the end you say, "You know what? We did this and it didn't get us to exactly what we had estimated."
At the absolute least, you do know that you oriented your resources and your thinking and strategy around the value of what that could have been. And that's pretty much it.
Automatic transcript — names and jargon may be misspelled.