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The Web 3 Revolution: Scarborough Edition.

The Web 3 Revolution: Scarborough Edition.
By Keith Teare • Issue #278 • View online
It is widely accepted in Silicon Valley that the world is on the cusp of a significant technology led transformation. Web 3 is the new term. This week venture heavyweights Andreessen Horowitz and Index Ventures go on the record about the shift. And we deep dive into Crypto

Content
Editorial
Why The Scarborough Edition? Scarborough is where I was born and raised until I attended University at the age of 19. It is a coastal town of 60,000 or so on the East coast of Yorkshire. It’s home.
I decided it was time to revisit and see friends and family, and after a couple of days of travel here I am.
My entire context has shifted from this:
Stanford University in Palo Alto
Stanford University in Palo Alto
To this:
Scarborough (Old Town)
Scarborough (Old Town)
Sorry for the segue but the rapid evolution of what is increasingly being described as Web 3 is an equally dramatic content shift.
Web 3 is a label describing a number of profound technology platform shifts. The shift from centralized portals with operating companies to decentralized platforms with tokens, and often no company. The shift from mere data to AI and automation on these platforms. The opening up of the “creator economy” to millions of creators.
Web 3 is complemented by Venture Capital changes that we have documented here. However, this week a slew of statements by VCs purporting to be “manifestos” (Index Ventures) or “agenda for the future internet” (Andreessen) seek to frame these changes in a broader context.
An interview with Azeem Azhar focuses on how unprepared Web 2 is for the new products of innovation. And MG Seigler of TechCrunch fame suggests that Facebook itself is dead, at least “living dead” and needs to morph or die for real. He agrees with my editorial last week that:
The problem with Facebook isn’t actually Facebook. It’s us. It’s human beings. The problem is that Facebook created the greatest tool ever to connect those human beings. And it has led to a world in which the local lunatic is now the global lunatic.
But my favorite section this week is the venture transformation section, and specifically three articles within it. John Luttig writes about the emergence of passive investing through index funds as a new alternative to picking single startups and suggests private companies will become the subject of indexing. I like it because that is essential to what I am doing at SignalRank Corp.
Further evidence of institutional capital embracing indexing comes with the story about Blackrock investing in Inovia’s follow-on fund. $340m focused solely on follow-on rounds in 8-9 existing portfolio companies. Blackrock bought into a collection.
Finally, the story about venture capital firms morphing into investment banking-like organizations, focused on Andreessen Horowitz indicates that capital allocation is not a static model.
It is logical, then, that the most successful VC firms are slowly morphing into a new breed of investment banks — gatekeepers of the capital markets for tech startups and tech companies.
It is no coincidence, then, that indexing, a concept long confined to the stock market, is becoming more visible in venture capital (see John Luttig here, and Tomasz Tunguz here). Instead of chasing a few deals a year, just trust a large, established firm with your money and let it index it on the entire tech market! A traditional VC firm can’t do that, but an investment bank does.
The targets for indexing are spelled out in Wired Magazine’s article on the accelerating pace of unicorns being minted. All of this adds further clarification to the rise of large-scale investors like Tiger Global.
Finally, there is a lengthy section on Crypto. Scan the headlines to see the trends that make up a large part of Web 3.
See you back in Palo Alto next week. My context will return to normal. But tech will not. These changes are deep, fast, and profound.
Video
The Web 3 Revolution
The Web 3 Revolution
The Web 3 Revolution
The Death and Birth of Technological Revolutions

Stratechery by Ben Thompson
Venture Transformation
The index mindset - by John Luttig - luttig's learnings
BlackRock Eyes Canadian Tech by Backing Venture Firm Inovia's Fund - Bloomberg
The Creator Manifesto
An Agenda for the Future of the Internet
Earth’s Unicorn Population Is Exploding
US VCs are becoming modern-day investment banks. Can Europe compete?
Venture Capital Spurs Endowments’ Record Returns | Chief Investment Officer
Finnish venture capital investors increasingly making international investments, indicating internationalisation of the industry
France is Europe's latest seed-stage startup investment battlefield - Sifted
Big Tech, Regulation, the USA and China
Facebook is Too Big, Fail. Facebook is screwed. At this point, it… | by M.G. Siegler | Oct, 2021 | 500ish
“The internet wasn’t designed to breach national boundaries”
Microsoft Folds LinkedIn Social-Media Service in China - WSJ
Has the US already lost the tech competition with China?
Notable
How Slack and Discord became tools for worker revolt
More Clouds Form Over $55 Billion Nvidia-Arm Merger
Clubhouse CEO Says the Once-Hot Startup Grew ‘Way Too Fast’ | Time
Crypto is King
Tokens are a New Digital Primitive, Analogous to the Website
How Decentralized Identifiers And Bitcoin Fix The Web
6 policy proposals from Andreessen Horowitz for the future of crypto
The US Is Now the Biggest Bitcoin Mining Center after China’s Crackdown
Crypto will generate more wealth than the internet, says Morgan Creek Capital CEO
Coinbase unveils lobbying push for a brand new US regulator focused on digital assets
Opinion | Coinbase CEO: We Need a New Approach to Regulating Crypto
Digital Assets Could Pose a Threat to US Dollar Dominance in the Future: United States Federal Reserve
CEO of Largest Asset Manager on Earth Sees Big Opportunities in Crypto and Blockchain – But Remains Critical
Payment Giant Stripe To Start New Crypto Division
Bank of England leader calls crypto regulation a ‘matter of urgency’ for financial stability
Startup of the Week
Canva raises $200 million at a $40 billion valuation – TechCrunch
Sam DeBrule
Melanie Perkins co-founded Canva when she was 19 years old and still in college.

Last month, the company hit a $40 billion valuation.

This is a story of how two gutsy Australian entrepreneurs convinced Silicon Valley to fund their dream and change the world of design forever.👇 https://t.co/qVQOFywKZr
Tweet of the Week
Bloomberg Technology
"I want to challenge every aspect of this story:" tech investor David Sacks thinks Facebook isn't the bad guy. He tells @emilychangtv why https://t.co/NPiOBcjaGW https://t.co/YVyj0mzKnJ
Bill Gurley
For me, the last thing we want is to hold the platform accountable for determining what is "misinformation." Why? 1) "Truth" is very hard to discern, especially on the issues that are most discussed. This is WHY they are being discussed. No one cares if I post 2+5=6. (cont)
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Keith Teare, Palo Alto, California