3 Lessons from the Coming Blockchain Developer War

There is a classic video of Steve Ballmer at a Microsoft company meeting going absolutely crazy, covered in sweat, screaming “Developers! Developers! Developers!”

Many will say that Ballmer did not do much right while he was CEO, but he did understand one thing.

A platform is really only a platform if other people leverage it.

As the blockchain revolution kicks into high gear, a new war for developers is under way among the builders of decentralized technologies, seeking to inspire decentralized application creation on top of their base protocols

In its August update, Tezos’ first item is about a commitment to the creation of a $50 million venture capital fund of its own.

The purpose?

They want to jump start projects that will build on top of Tezos, thereby solidifying the value proposition of the underlying platform. By allocating 20% of their $232 million war chest to incentivize building on their technology, they are literally putting their money where their mouth is.

They are also signaling just how important the ecosystem is by leading the newsletter off with this commitment. That is not something a traditional software product company would do.

Blockstack has the same objective, though a different strategy.

They recently announced a developer/ecosystem-focused fund backed by Version One, Lux Capital, OpenOcean, Rising Tide, and Compound. Its specific purpose is to invest in early stage projects for developers that want to build decentralized apps on the Blockstack platform. This approach differs from Tezos because Blockstack (which has not issued its own token yet) is only making introductions to its partner VCs. But it is notable that a dedicated pool of money is set aside a part of the eco-system (in this case, investors) to expand Blockstack developer mindshare.

In preparation for their eventual token launch, it is not lost on Blockstack that having a strong developer pool is a differentiator. In fact, co-founder Muneeb Ali outlined the 5 traits he considers critical for assessing the potential of a token. I’m willing to bet that they will come to market when they have all five of them nailed down.

Regardless of the approach, in the previous centralized paradigm, it would be unheard of for a seed-stage or Series A company to devote this kind of money or percentage attracting developer talent.

But the blockchain/decentralized world is different.

The value creation opportunities sit at the protocol layer. That value can only be extracted and realized as developers begin to put real use cases into the wild that leverage the underlying data and require the underlying token.

There are a number of lessons to glean from this trend, which you should fully expect to continue and intensify as the decentralized world begins to take shape.

• It is not just the strength of the underlying technology, it is the strength of the community and the entire eco-system that will be key performance indicators to track.
• If people cannot build on top of a technology, the upside potential may not be so large. This is not the app era, it is the protocol era.
• Successful marketing of decentralized technologies will hinge on the ability to attract and retain the mindshare of talented developers.

Recently, I led a trip of 35 crypto-enthusiasts from 15 countries to Zug, Switzerland (a.k.a. ‘Crypto Valley’) to explore the decentralized future. The conversation was wide-ranging and insightful, but the comment of one long-time participant in the Ethereum community really stood out for me.

“When you look at all these tokens being launched on a daily basis, how do you decide which ones have long-term potential?”

“I just look to see if anyone is building on top of them. I know people building Augur apps and on top of Melonport. But there are protocols where I don’t see anyone building on top of them. Those are the ones to stay away from.”