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Markets Outlook
Taking a Page From 'Elon's Book': Mo Shaikh on His New $50M Fund | Markets Outlook
00:16:24
Diving deep in the state of the markets with Aptos Labs co-founder Mo Shaikh.
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- [00:00]
A
We come in and work with founders in a way that we will not leave the end of the day until we've solved the hardest problem for them. And this is something that we've taken out of Elon's book where, you know, how he manages multiple companies. He's able to spend a full day with them and make sure that they solve that hardest problem. We're doing the same thing for a lot of our portfolio companies.
- [00:26]
B
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- [01:30]
A
Hey John, nice to meet you.
- [01:33]
B
Yeah, wonderful to have you here on the show. I like to start this show with a broad question. I ask everyone this. What have you been watching this week? I mean, when you're looking at what's going on in the industry, what are you paying close attention to? What might be keeping you up at night?
- [01:50]
A
Yeah, well, there's two things that I'm paying attention to very closely. One is everything that's sort of happening in D.C. and, and regulation around crypto. And we just saw a CFTC appointment go forward with selling and we're obviously very excited about that as an industry and we'll continue to monitor everything happening there. Last week we obviously had the Federal Reserve host a meeting on payments as well. So exciting momentum there. The second thing that I'm watching is what's happening in a sort of global capital markets. And the reason I'm paying attention to that is because what happens in the world of finance ends up having a massive sort of trickle effect or domino effect into the world of crypto that not only from a price perspective, but also more from a sentiment perspective. And so those two, that catalyst has been incredibly positive as well. Everything that BIS is doing or IMF is doing has been pointing in a very positive direction for crypto. And I think those are two great macro signals that we should all continue to pay attention to.
- [02:45]
B
I want to talk about those macro signals for just a second because I think sometimes folks who are building in the industry, who are talking to their peers sometimes get stuck in just what's happening here. And we don't look outside and pay enough attention to how what's happening in global capital markets or from a macro factor is going to affect the industry. Talk to me a little bit more about how you're watching macro events and how that's informing how you move forward with your venture firm.
- [03:15]
A
Sure. I mean for Maximum Frequency Ventures, we think about what products will be built that sustain multiple crypto cycles. So of course we pay attention to what's happening in the macro, but we also pay attention to that from a perspective of how can our portfolio companies benefit from that immensely. Whether we're investing in a stablecoin company that's issuing out of Abu Dhabi and other other US market. US markets as well. Those projects are really well positioned. And they're well positioned because the macro factor of money or dollars dollar demand has increased significantly. And obviously crypto and blockchain technology allows for the permeation of that dollar to move in a far more efficient way. Other things that we pay attention to is how are consumers behaving. So for example, in the world of AI where anyone can be a creator today and be far more efficient at it than they once were before struggling with all the different tools, content is easily created and it's created using existing IP mashed up with new ip. What happens to folks when they're thinking about IP management and how they get paid. And so these large trends around AI having massive consumer behavior changes. And you know, when we think about it from Maximum Frequency Ventures perspective, our portfolio companies have an, have an amazing opportunity to take advantage of that.
- [04:35]
B
Maximum Frequency Ventures launched recently with $50 million to invest. I think you started talking a little bit about it, but tell me a little bit about your investment thesis.
- [04:46]
A
Yeah, so MFV is set up as a $50 million fund. It's our first fund where we're focusing on pre Seed seed and going up to Series A. Our, our sort of philosophy is, you know, founders need an incredible partner alongside them to build companies they're traversing on an incredibly arduous journey. And so where we come in as sort of partners or act almost as co founders to help them get through that journey. We're industry agnostic when it comes to finance ip, as I mentioned, or many other industries. But we are squarely focused on how crypto is disrupting these industries. So we focus on, you know, folks building in crypt, of course, and look at token deals.
- [05:27]
B
I know the announcement said this is something you wished had existed when you were building aptos previously. Talk to me a little bit about that. What gap are you filling here?
- [05:38]
A
This is a great point. There's two gaps that we're filling for one is being an operator. Being a builder again is incredibly difficult. And so from our perspective, what I wish I had was that level of support where someone had built a crypto company before or an L1 before, those founders don't exist as investors. And so we're obviously very excited to step into that role and close that gap. And that gives a lot of the portfolio companies and the founders that are looking for help, the right kind of help that they need to build companies and whether that be designing tokenomics to, you know, how they should be thinking about their go to market and their, you know, and product market fit. The second thing that we provide is, you know, a hand this through sort of a hands on approach. So, you know, we come in and work with founders in a way that, you know, we will not leave the end of the day until we've solved the hardest problem for them. And this is something that we've taken out of, you know, Elon's book where, you know, how he manages multiple companies. He's able to spend a full day with them and make sure that they solve that hardest problem. We're doing the same thing for a lot of our portfolio companies.
- [07:10]
B
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- [08:14]
A
That's a very hard question to answer, Jen, and it's a great one. Mfv, we look for people, we look for that founder that has something, it's easy to say. Jen, let's say for example, has incredible depth in the problem space. So she knows the industry really well. She may have ideas on how to solve this problem space as well. And so that's a great starting point. But what we also look for is, you know, do you have sort of what it, the IT factor, the MF factor essentially. And that is something hard to sort of pin down. It takes multiple meetings. It takes sort of understanding a person of who they really are, what makes them tick, why they're so passionate and how they'll be able to sort of sustain through all these, you know, trials that they'll have to have to traverse through. Again, as a founder, the good thing is when we find an individual like that, we come in and provide unmatched support. And so, you know, when you see, when you see something special in, let's say, Jen, in this scenario, we're able to really augment around her everything else that she might need to really get a product off the ground and build a company. So, you know, it's hard to pin it down, but it's really getting to know that individual incredibly well.
- [09:33]
B
You know, you were a founder, you were a builder previously. What was the biggest obstacle you came up against?
- [09:40]
A
I mean, building in crypto is hard. It's an industry that moves at an incredibly rapid pace. And as a founder you're trying to keep up with that pace. At the same time, to your earlier point, you want to make sure that you're building long, sustainable product that stands multiple cycles. And so how do you balance both sort of short term windows and long term product market fit? That's hard to do in crypto. In fact, crypto is probably one of the most difficult industries to build products given these two different cadences that founders have to run at. On top of that, if you happen to have a token. Well, at this point that's akin to running a public company. You have to manage the market's perception and understanding of what they actually get as being token holders. And so being a crypto founder is managing multiple different paces and cadences at the same time, entering to the universe of being a public company founder at the same time. And these are not easy things to solve for. The good thing is we've gone through it. We know what works and we also know what doesn't work. And so bringing our stories of these moments of resiliency and how to sort of be savvy, manage these tempos is something that we're incredibly excited to bring to our founders.
- [10:55]
B
You have a significant focus on Asia. Talk to me about why focus on the Asian market first.
- [11:02]
A
That's right. So, Jim, we have three, two of our four partners. So 50% of our team in Asia, one of them is based between Seoul and Hong Kong, the other is based in Singapore, are out of our portfolio companies. 50% of them sit in Asia. The other 50% are right here in the U.S. and so, you know, we take this diversified approach in a world where we believe that founders can come from anywhere they have access to resources unlike never before. And so when we look for these, when we're looking for sort of that it factor in a founder, we also are making sure that we're expanding our presence in Asian markets. And of course, obviously, when you look at crypto activity, it's massive in Asia. In fact, Asian crypto markets market activity dwarfs that of the US and while the US is providing clarity and getting up and running, Asia markets have been running for the last 10 years and running very aggressively. And so we want to make sure that we're looping those founders in and capturing that activity for our founders here in the US and vice versa, sharing what's happening here in the US with our founders in the East.
- [12:04]
B
We touched on this a little bit when we were talking about your investment thesis, but I want to dig a little bit deeper into it. What kind of projects are you looking for? So many folks who come on this show talk about infrastructure really being what's going to push us into the next wave of crypto adoption. Is that where you're focused? Is it more on the picks and shovels? The folks who are building the infrastructure to support the use cases we've seen take off, like stablecoins, et cetera.
- [12:34]
A
That's an excellent point, Jen. And when I think about infrastructure and having built infrastructure, I think infrastructure is in a pretty good place. And so similar to different technology cycles where infrastructure was one of the first things that had to really stabilize and mature, we see that similarity here in Crypto, you have multiple protocols, protocols like Solana Sui and others doing a great job of really navigating what, you know, sound infrastructure should look like at scale. Similarly, we're now moving towards seeing products being built on top of these networks. And the products themselves have massive value. They solve users pain points. And so, you know, similar to the days, the early days of the Internet where, you know, you started to see the Internet stabilize, it came down to what products people would use on top of the Internet. And so that's where we're focused. We're focused on, you know, anything that touches things like money. The financialization of the world as we continue to see, permeate through, you know, prediction markets and capital markets moving on chain all the way to, you know, what are the other sort of behaviors that we're going to start to see as consumers start to use more and more crypto native products?
- [13:40]
B
Is there one narrative you're particularly excited about? I know you just mentioned prediction markets there, you talked a little bit about AI at the beginning of our conversation, but is there one that you're just, you know, I don't want to say all in it, all in on, because I know you got to diversify, but what are you excited about?
- [13:59]
A
I think this is also. You ask great questions, a hard one to answer when you think about a core theme and again, where sort of crypto is a real problem solver. It's around how economies move value. And historically there were many barriers and some of them were technological and some of them obviously were dependent on the rules of different jurisdictions. Today we're seeing a convergence in those rules and at the same time we're seeing obviously technology being incredibly powerful in terms of bridging those gaps. So now what happens? Now I think we can sit in an environment where you have massive amounts of data and the opportunity to sort of digest that data and make a call on that. And what we've seen historically throughout humanity is people have very strong beliefs. Behind those beliefs, some may be able to place a economical outcome. If you think that the price of corn will go down because of an abundance of corn seeds, well, maybe you might buy less corn today and wait to buy it in the future. However, if you think that there'll be a rainstorm and corn crops will get wiped out, then you probably want to buy your corn today and protect from future price volatility. We see that in futures markets. Similarly, we've seen the evolution of gambling or being able to place bets on outcomes on sports. Typically that was only available in casinos today you can log on to stake or many other gambling platforms and place a bet right there at the tip of your fingers and it's created some issues for the NBA actually so it'll be interesting to see how the league handles that. Other things are more micro beliefs and someone like Kalshi and Polymarket are doing a great job of providing a belief market and a belief market essentially the market that we all live in as a human society. And so I think this financialization and belief markets are very interesting and what we're going to start moving towards is a more efficient belief economy and so I'm excited about that as a theme permeating throughout crypto but also permeating throughout human society which I think will be very fascinating to endeavor on.
- [16:10]
B
Mo, thanks so much for joining us today. It's been such a pleasure and congratulations on the launch. Maybe we'll see you at Consensus.
- [16:17]
A
It'd be a pleasure. Great. Great to hang out. Jen, thank you so much for having me.
- [16:20]
B
Thanks. Moving.