GM web3 fam!
It’s not every day that someone launches, scales, and exits a startup in a single year. But that’s exactly what this week’s guest did.
And in true DOer fashion, he did it at 20 years old AND while still at university. 🤯
So if you’ve been thinking about launching your own web3 startup, but haven’t pulled the trigger, this DOer Spotlight is for you!
In this episode, we chat with Matt Espinoza about his startup journey with Agora Labs.
We cover:
🪙 How his first foray into web3 was launching his own token $MATT and raising $20k from family and friends🚀 His experience in co-founding and exiting his first startup—Agora Labs—in a single year🌍 Matt’s take on the future of social tokens. Hint: Everyone will have one!
If you'd prefer to listen to Matt's journey, head over to our podcast.
Let’s dive in 🏊
If you want to get a head start on the social aspect of web3, make sure to check out Lens Protocol 🚀
Matt's First Web3 Steps: Launching $MATT Token
Matt’s initial web3 experience is a unique one. It was through social tokens with a platform called BitClout (now DeSo), rather than investing in Bitcoin or Ethereum.
But once he saw the opportunities of social tokens (DeSo’s product) he was hooked. He saw social tokens as a way to have people fund his ambitions, keep him accountable, and create closer connections with his community.
Shortly after his discovery, Matt launched his own social token through DeSo, aptly named $MATT.
He raised around $20k from friends and family, essentially turning himself into a company (without the profit-sharing aspect). Luckily Matt didn’t have much trouble raising these funds since his friends and family knew he was destined for big things. They saw it as becoming angel investors in Matt’s potential.
But, the money itself wasn’t the biggest benefit of launching a social token.
Matt shared that launching a token shifted his mindset and made him more serious about generating revenue and building a successful life. It gave him extra accountability as he had to share his progress with token holders every six weeks—a commitment he made of his own accord.
But why would anyone invest in a social token? What do they get out of it?
Social tokens are an interesting intersection between supporting and investing in someone.
Think of it as a Patreon membership which is essentially a way that:
- Creators can gate premium content with a payment they deem fair.
- Communities can support creators outside of typical content channels.
- Supporters can receive exclusive access to a creator—for example, through one-on-one or group calls.
Social tokens function in a similar way except that:
- People only have to invest one time (unless they want to own a greater share of tokens).
- And social tokens can increase in value based on market demand giving investors returns outside of the perks they get for holding a token.
So instead of apeing into the hot new protocol of the month as most of us do, Matt turned himself into a walking, talking web3 startup.
Before we continue...
🪙 Would you launch your own social token in web3?
Let us know by replying yes or no to this email!
👉 Bonus points for telling us what you would name it!
🟣 SOCIALS
Tweet of the Week
Building, Scaling, and Exiting Agora Labs in 1 Year
While Matt had some web3 success by launching his social token, he noticed some glaring issues with early social tokens on DeSo.
In particular, he saw that there wasn’t any utility or perks for investors besides wild speculation. And that’s how Agora Labs (previously BitPerks) came to be.
The Beginning of Agora Labs
One of the most interesting parts of Matt’s journey is the inception of Agora Labs. He co-founded the web3 startup with his best friend from high school and, get this, another person who he only met online!
The team even spent seven months building online through Discord community calls before they all met in person. Wild 🤯
But hey, that’s the power of our digital world. If you have some like-minded people in your circle, you can build a successful web3 startup no matter where you are in the world.
Before building anything, though, the Agora team launched a pre-validation MVP (minimum viable product) and landing page in just six days to see whether it was worth their time.
They ended up getting 1,000+ signups (which was a large share of the DeSo ecosystem at the time) and decided to bring their idea to life by launching the first iteration of Agora Labs, BitPerks.
It wasn’t all smooth sailing, though. The founding team was still at school during the early stages of Agora which meant they could only work on the startup at night.
Luckily, the team didn’t have high expectations at the time and didn’t have the pressure of being VC funded. So the team used this time to continuously iterate their product without fear of failure.
The initial idea behind BitPerks was to add utility beyond speculation to DeSo social tokens. But the team soon rebranded to Agora Labs because the name wasn’t tied to perks and rewards—they also thought BitPerks sounded scammy.
BitConnect anyone?
Thankfully, Matt and his co-founders weren’t out to build a Ponzi scheme.
They saw that DeSo was great at making, building, and scaling tokens, but weren’t great at adding attractive features to create utility for community members.
So the Agora team built a platform that allowed creators to:
- Connect their DeSo tokens to Agora as easily as signing into Google. Shoutout for improving web3 UX!
- Choose the rewards and perks to offer supporters.
- Token-gate investor access.
These features unlocked unimaginable use cases on the platform—for example:
- One user on the platform created a social governance token that allocated voting power based on the number of tokens held. But here’s the kicker, he held governance votes where people could decide where and what he tattooed on himself!
- Another user decided to live-stream their life for three or four days while allowing token holders to vote on their daily activities.
- Some people even have income share agreements with token holders so investors can really share in the upside of their life!
How crazy is that? If Matt added income sharing, we’d definitely invest in him 📈
🟣 SOCIALS
Meme of the Week
Scaling Agora Labs
After Agora Labs started gaining traction, Matt knew that it was time to scale so the team went about it in two ways: launching the BitPerks token and applying to startup accelerators.
Launching a native token ignited some monetary value and incentivized hiring engineers to help scale the company. But the real magic happened when Matt was accepted into three accelerator programs.
In particular, Matt cites the Z Fellows accelerator program as being the one that propelled Agora Labs to success.
The program is one of the most prestigious accelerators in the world with most attendees coming from top American universities, such as Harvard and Stanford. On top of this, Matt was able to connect with Thiel Fellows (a program with a 0.1% acceptance rate) and top tech founders from companies like Netflix and Tinder.
Through these accelerators, Matt went from knowing how to build a product to knowing how to build a company. From there, the team was able to truly understand business strategy and use it to ultimately scale Agora’s user base.
Selling Agora Labs
Shortly after growing Agora Labs, Matt and the team faced a fork in the road: Do they raise VC funds and continue scaling Agora? Or do they get out while they’re ahead?
Matt was confident that they could raise money. In fact, Agora Labs ended up with a term sheet from a respected VC committing $350k to the startup. At this point, Matt knew that, if they accepted the money, everyone would have to drop out of school and commit to Agora.
Around this same time, the markets were looking shaky, and after the crypto markets crashed in April, the team began to rethink their options.
If they took the $350k pre-seed investment but didn’t grow fast enough to raise money again, it’d be difficult to sell the company. On top of this, they’d have to give the VCs their slice of the profits and crypto was in a bear market.
Rather than take the gamble, they decided that selling was the right thing to do. The team could add a successful exit to their resume and make some profits along the way.
The problem was, Matt and the team had no idea how to sell their startup.
So Matt called a few of his entrepreneur connections to learn about their previous exits. On top of this, he spent about four weeks absorbing as much information as he could about acquisitions and a further four weeks actually selling the company.
On his knowledge hunt, Matt used the resources (blogs, pdfs, etc.) on MicroAcquire, which is an acquisition marketplace. While the team could have sold Agora Labs through the platform they decided against it since web3 startup options were limited.
During the second month, Matt contacted companies that he thought would be potential buyers. He focused his attention on businesses that they previously worked with who were either adjacent or direct competitors as it’d make sense for them to own Agora Labs.
And after a few weeks, the offers started rolling in (but not without some solid outreach from the team).
Out of all the companies the team wanted to sell Agora to, Talent Protocol was at the top of their list because:
- Talent had solid name recognition thanks to their program which funds web3 builders to help them attend crypto conferences.
- They were also building a social token model, meaning they could improve on Agora after the sale.
- The CEO had a great reputation and the team resonated with him.
So to give them some leverage, they waited until they had a few offers before contacting Talent Protocol.
Luckily, Matt knew the CMO of Talent Protocol through a Twitter space they were on together. The CMO put Matt in touch with Talent’s CEO and the call went smoothly.
So smoothly, in fact, that it only took around six to seven weeks to finalize the acquisition which is extremely fast.
While the Agora Labs journey sounds like something out of a fairy tale, it’s a testament to Matt and the team’s hard work, dedication, and trust in each other.
👉 If you want to hear the advice Matt would give to his younger self after reflecting on his journey, make sure to tune into the podcast.
🟣 POP QUIZ
What Was the Name of Matt's Favorite Accelerator Program?
A. Y CombinatorB. Z FellowsC. Alchemist Accelerator
Find the correct answer at the bottom of this article. 👀
What’s Next For Social Tokens?
Since Matt’s entire web3 experience revolves around social tokens, we wanted to get his take on the future of social tokens.
Here’s what he had to say:
In five to ten years, Matt thinks everyone on social media will have their own social tokens since they all have an online identity—for example, high school students who use Snapchat and Instagram.
While NFTs could fill the role of social tokens, they aren’t super scalable or easily traded—negatives from an investment perspective. Matt believes that NFTs are better for one-to-one transactions, such as token-gated access.
But it’s not just about investment and speculation. At Talent Protocol (where Matt now works) they’re helping people build a web3 presence through their profile-based tokens which allow people to showcase their work experience and education.
They’re also building on-chain verification for these profiles where companies can issue an NFT or token to confirm employment history.
Between Talent Protocol using profile-based tokens to showcase professional information and using true social tokens, like Matt, for accountability, it’ll be interesting to see where we go from here.
Will everyone have a social token or will it be the domain of influencers and celebrities?
Only time will tell.
Thanks for reading, frens ✌️
🟣 SPEED ROUND
A Little About Matt
For context, this is a speed round that we do with each of our podcast guests. Click here to watch the speed round. 🚀
Here are some of the questions and answers featured. 👇
What's an NFT you'll never sell?
- A Dolce & Gabanna NFTs since Matt would rather burn them to get real clothes.
Who's your favorite person to follow on Twitter?
- Andrew Gazdecki, the CEO of MicroAcquire.
What's something you've purchased recently for under $100 that brings you joy?
- A Captain America Funko Pop
Connect with Matt:Twitter
🟣 FOR THE DOERS
READ
Part 2 of our NFT Business Models series: Alternative Revenue Sources For Creators.
FOLLOW
Web3 Academy on TikTok. We're guiding entrepreneurs into web3 but reaching them requires your help! 🤝
LEARN
Take our FREE Web3 Rabbit Hole Course to get up-to-speed on the foundational components of Web3 so you can confidently build, work, or use the fastest growing technology in history
🟣 POP QUIZ ANSWER
The correct answer is B. Z Fellows ✅
