Why gCC invested in Bling

Company Update

Bling has over 5 Million users, over 1M monthly active users and almost 200k daily active users. It is robustly profitable and recently raised a strategic investment round from Coinbase Ventures.

Coinbase is a partner of Bling Financial.

First-time Founder CEOs

Investing in first-time founder CEOs in a pre-seed round is exceedingly challenging and rewarding, especially as an institutional investor. It is the most exhilarating thing you can do as a VC and it takes the most courage of conviction. It can also be the most asymmetric bet you can make in your career as a VC.

In our VC practice, the relational takes priority over the transactional. That is why such investments can pay off hugely. Because if you bet hugely into someone who is early in their career, they won’t ever forget you, or at least one hopes not.

It’s very wrong to say we invested in Bling, we most certainly invested in Amy Wan. Because at the time we invested, it was not called Bling. In fact, it was called Sagewise.

Furthermore, Sagewise was not providing 5 million users bitcoin rewards for playing mobile games. It was providing a legal dispute resolution framework for smart contracts.

Underrepresented Founder CEOs

Consistent with our statement on equality, we feel that we must all strive to create a more just, equitable and fair world. But of course the core charter of gumi Cryptos Capital is purely financial and we maintain our fiduciary responsibility to the partnership. The way these agendas harmonize is by finding high performing world-class entrepreneurs from underrepresented groups and backing them until they win.

One thing to recognize is that if someone comes from an underrepresented group, they have a unique set of challenges that they may have had to overcome to get to the same starting line as others. These experiences can make a person stronger and more capable and more persistent. It may also help an entrepreneur think differently and come up with unexpected solutions. We saw all of these things in this case.

How we met Amy

We met Amy through many mutual friends in the Los Angeles blockchain community, which I had nicknamed the “Brock” Chain thanks to the central role that Brock Pierce had played in nucleating and connecting everyone in that environment (before he moved to Puerto Rico). Amy was speaking the conference circuit and was outshining all of her fellow panelists with very sharp and incisive analyses of legal and regulatory issues around blockchain assets. Amy has an extensive background in legal and regulatory matters and had spend 3 years in public service with the U.S. government.

Despite her considerable achievements Amy has a very open and humble and curious approach. This means that she is able to take input from everyone but also is able to be “ruthless” when necessary.

From her interview on the “MikoBits” show:

First of all, I think you have to be very ruthless, and, and you can’t get too emotionally attached to anything, right? We have not had to let people go due to COVID-19.

We were super excited about a hire recently, and they were supposed to be going to a unicorn, but had their offer rescinded due to COVID-19.

We had to actually let them go after three days, even though we were so super excited. We were so stoked about this candidate, we didn’t even go through the normal hiring process. So what we learned about that was to always go through the normal hiring process. I think they had gotten through because we were really looking for someone with certain technical skills, and this person demonstrated those and we were willing to sacrifice a little bit on cultural fit. And I think after three days, we realized that the cultural fit issue was going to become a big issue.

Amy Wan talking about what it takes to succeed during COVID on the Mikobits Show.

After some discussions with Amy about her company, then called Sagewise we joined their first round on the thesis that we had found a CEO who could uniquely understand, execute and operate in the legal and regulatory waters of crypto.

Navigating the “Idea Maze”

One of the things we spend a lot of time reasoning about is the navigation of the “Idea Maze” of a market segment.

This diagram, from Balaji Srinivasan’s Stanford course on Startup Engineering shows the idea maze:

And perhaps the most famous example is how Netflix went from shipping DVDs in red envelopes to being the dominant streaming video provider on the Internet.

A Unique Solution

Not all solutions to the idea maze are predictable.

Hamster finds a unique way to navigate the maze

This is a stunning explanation of how Amy found product market fit and a huge pivot. The company now has 5 million users and is profitable and growing quickly.

The video below is from the MikoBits show and jumps to the section where she talks about finding product/market fit.

How did Amy Wan engineer product market fit

The Future of Incentivized Gaming

Bitcoin as an incentive to gamers is a phenomenal concept and crazily simple. One of the incredibly deep insights Amy found during her journey was how much curiosity there was about Bitcoin. Bling’s apps like “Bitcoin Blast” come up as some of the top hits when searching for the word “Bitcoin” in the app store. Another key factor is understanding how difficult and scary Bitcoin can be to beginners. And of course the word “Bitcoin” is in the public domain and not an owned trademark. Another tremendous insight is the use of popular game formats like connect 3 and solitaire–games that users are known to enjoy already. So no innovation needed there.

All of these factors help expose what we at gumi Cryptos Capital call a “terrain feature” which is an impedance mismatch or arbitrage opportunity for a correctly structured product. The metaphor is that a waterfall is a terrain feature that can host a hydroelectric dam that can convert a gravitic drop into a voltage drop. The mismatch here is how people are curious about and drawn to Bitcoin but are also intimidated by most entryways into the space.

The central idea and motto of Bling Financial is: Let’s make money fun. There is a tremendous generational potential in this brand promise and of course the central disruptive motif for blockchain is ownership of assets like Bitcoin. Amy is leading a super productive and dynamic team into a very large and fast growing opportunity. We can’t wait to see what they come up with next!

Information is provided for general educational purposes only. This presentation is not an offer to sell securities or a solicitation of offers to buy securities. Nothing contained herein constitutes investment or other advice nor is it to be relied on in making an investment decision. For more important information, please see disclaimer

Author: miko