Multicoin Capital's achievements have attracted attention from both inside and outside the market, and The Generalist has written three articles about Muliticoin for this purpose, please check the reference end of the artical, However, I have some doubts about the mainstream articles ，If Multicoin has three secret weapons, and I think that these articles only introduce one of them at most. But I'm more interested in knowing what the other two secrets are. That's why I wrote this article and explore this question with interested people ，because I'd like to know it too, so the following article contains a lot of doubts, as well as what I think are the secret weapons 。
As advocates and participants in the crypto market, we all believe crypto can revolutionize the world. Samani has presented a session on the importance of "composability" to the web3 world. Simply it is a product or network open enough to be used as a module for other products, adding value to other products, and combining products is like building Lego.
To get this magic key unlock Multicoin's secret. I have collected a lot of information ，The Generalist‘s artical is in my reference and including reading articles on their website, the history of other projects with their investing list, and their podcast which I have listened to almost every episode. I'm glad they like to write articles, it brings a lot of useful thinking to others. I have tried to summarize my thinking into three areas, and I think three factors drives their success.
Thematic investment oriented thinking framework
It's a well known secret that a thematic investment oriented thinking framework is throughout multicoin capital's investment history, as show on their website , they focus on topics such as Open Finance, Web3, Composability, Proof of physical work, Data Dao and so on.The Generalist profile shows that the team invests strictly by theme and then identifies projects that fit the theme. The reports also highlight three investment elements - team, product and market , multicoin capital is more market oriented and spends a lot of time polishing their thinking framework. They spend very little time focusing on product and team, these giving investors the impression that this is the secret of multicoin capital's success. I think this is seriously misleading and they are not reporting the truth. When we give a conclusion, it should definitely contain several constraints.
- while web2 investors are all in-rolling in the same field, but web3 investors at this time are getting huge returns in a short period of time. for web2 investors, multicoin capital is using a thematic investment strategy to get excess returns, which seems to web2 investors as if they have found the key. Is it true?
- Multicoin capital focuses on investment themes that are not new to OG in the crypto space, almost everyone is focusing on these areas, of course we can say they are more deeply researched in this area, but I also believe that other good investors also have a deep understanding of these themes, so why others don't own such supper record? Is there something else we are missing?
- As we all know, one of the themes multicoin capital was obsessed which is scalability, and their investment record shows that they invested in many Layer 1 projects, such as Solana, Near, Algorand, EOS, and as you can see from the table below, these Layer 1 projects brought them great returns, especially Solana. There is a very important question, why Solana performs better than other Layer 1 projects , an excellent low-price may be one of the factors, maybe the price of Algorand they got is much more expensive compared to Solana. The result is that the return on investment is not as good as Solana. When you look at the market performance of these Layer1, Solana's growth is better than the other projects by several orders of magnitude. Also, we know that Multicoin capital bought many Solana investors' shares against the trend when the market was down and no one was paying attention to Solana. So the question is .....
- What made them choose to buy a lot of Solana token instead of other projects? The investment themes of these projects are the same, and it is also difficult to distinguish the underlying technical advantages and disadvantages, when the technology of EOS is also very scalable, so why they later withdrew? I think the reason they chose to strongly support -- Solana and exit EOS is probably based on the same consideration ---- TEAM, which also leads me to the next "secret" I want to propose.
The ability to tap into genius
Their ability to tap into genius teams is probably unique, something they may have overlooked. Samani once said in an article that he spent an average of about 200 days a year on the road, attending hackathon and meeting difference kinds of project teams. This ability may answer the question above, why they chose to buck the trend of acquiring Solana's token and quit EOS, I guess a possible reason is that Solana team's unique ability deeply attracted them. I think Multicoin has a special ability to find the best team in the crowd, and this special perception can also support them to trust Solana and buy Solana from other investors at the critical moment, and also let them knew that the core team of EOS lacks the ability to move forward, leading to the exit of EOS. we know a product is successful not because it has a unique technology, but because it has a unique team and community. I wonder what Multicoin capital thinks about this?
Other secrets
Just as I think the generalist article doesn't fully reveal the key to Multicoin Capital's success, there must be something wrong with my summary as well. What else is unique about them that we can learn from?
- They are powerful learning monsters, which can be perceived from their output and statements.
- the ability of Multicoin capital to feed into the project. In some projects, Multicoin is as team player, actively participating in the construction of the project, which like Paradigm capital. The difference is the point of support they give to the project during the construction process.
- To conclude this article, I would like to leave readers with an interesting question: If Multicoin capital put all the support on Algorand/Near, and if we consider SBF, FTX, AR as a resource, and if all these resources cooperate with Algorand, what would be the current public chain landscape? Could Solana have achieved this on their own ? I don't mean to belittle the project or elevate the resource by asking this question, but just to bring up a perspective and let's expand the interesting topic of composability from a deeper level.
Criticisms and corrections from all are welcome! @ImBlockBB
Update again 22/4/7: Got the answer why they allin solana not EOS and others in bear market.the answer is Solana team work much much much harder than other teams. Quit EOS as this team was not doing anything anymore.
Update again 22/4/24: Today I read an IOSG Venture‘s article discussing PMF, which talks about Mark Anderson's The only thing that matters, so I wanted to limit the discussion to the first time I wrote this article, and discuss the importance of teams in the context of a defined market. To borrow a quote from Tim Shephard: "A great team is a team that will always beat a mediocre team, given the same market and product. So the issue I discussed above should be a subset of the article "The only thing that matters". In a way, multicoin's "theme" is the "market" mentioned by Mark Anderson, and both follow the future needs of people and the pain points to be solved. Finally, I'd like to borrow Andy Rachleff's words to explain the relationship between the market and the team.Andy puts it this way:
- When a great team meets a lousy market, market wins.
- When a lousy team meets a great market, market wins.
- When a great team meets a great market, something special happens.
[1] [Multicoin Capital: The Outsiders]
https://www.readthegeneralist.com/briefing/multicoin-capital-1
[2] [Multicoin Capital: How to be a Contrarian]
https://www.readthegeneralist.com/briefing/multicoin-capital-2
[3] [Multicoin Capital: In Search of Outliers]
https://www.readthegeneralist.com/briefing/multicoin-capital-3
[4] [Read their articles]
[5] [Mable Jiang's podcast]
https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zaW1wbGVjYXN0LmNvbS9ZYVlCOXRqSQ?ep=14