With the launch of a zillion NFT projects and other crypto experiments (DeFi apps, DAOs, etc.), the blockchain space is as wild as one of those giant inflatables at the car dealership. But there’s a company giving it a backbone: Alchemy. Founded in August 2020, the startup hit a $10+ billion valuation this February and has been heralded by some investors as the “Amazon Web Services of crypto.”
Morning Brew chatted with Alchemy’s co-founders, Nikil Viswanathan and Joe Lau, to learn about the hot term of the moment, “Web3,” and what the company, well, does exactly.
So, what does Alchemy do, for the uninitiated?
Nikil: When you think about the big shifts in technology in the last 100 years, there’s three: personal computers, the internet, and now there’s blockchain or web3. They each had this developer platform that enabled people to build apps. For the computer, that’s your operating system, so Windows or iOS, which lets you build apps on top of it, like Excel or Chrome. The way it does that is by abstracting the underlying technology and making it really easy for people to build.
Alchemy is that developer platform layer for Web3, for blockchain. So we make it easy for people to build applications [like NFTs].
You mentioned the term “Web3.” Can you explain what that means?
Nikil: Computers came along with the idea that machines could follow human instructions. And then the internet gave it this new capability: Two machines could now exchange information between each other, they could talk to each other.
Web3 is giving a new building block: Now, machines can transact—meaning they can have commerce, they can send money to and from each other. And I know there’s some confusion here because we have PayPal and Venmo, but, without going into technical details, that’s not really being able to transact. That’s just an application built on there. Now, you can take money and put it into code, which was never possible before.
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With all this breakneck growth, do you think blockchain will experience a shakeout similar to what happened following the dot-com boom?
Nikil: There were a lot of companies that ended up dying in 1999. But it didn’t mean the internet was dead, right? Certain ideas might not have worked out or they might have been too early. And when you look at crypto, there are a lot of people playing with experiments, and “experiment” doesn’t mean it’s going to work. But what it means is there’s a lot of new ideas, new ingenuity, and new products coming into the space. And fundamentally, the reason that Web3 and blockchain is interesting and useful is not because of the technology—it’s because it enables new types of products that were never possible before. Like when you think about NFTs…actually funny story: Now, we do $100+ billion in transactions annually. But our very first user was this guy who built a side project that we thought no one was ever going to use. He built CryptoPunks.
Do you have any advice for co-founder duos like yourselves?
Joe: One lesson is just to work with friends and pick them carefully.
Nikil: This is how we think about hiring and also how we tell people to think about product–market fit, which is the hardest thing to get [right] in an early stage startup. If you’re asking, “Is this the right co-founder fit or do we have product–market fit?”—the answer is no. If you have to ask that question, then you’re not there.
