In today’s Steward’s call, I raised the question of whether Gitcoin might be “over our skis”.
In this post, I’d like to explain my question and offer some evidence in support of the hypothesis that we are actually “over our skis.”
The metaphor to be over one’s skis refers to emphasizing a course of action to such an extent that it constrains freedom of maneuver - implicitly in conditions in which one might want to be able to change direction. When you lean far forward when skiing downhill, you pretty much can only go in one direction. The more “over your skis” you are, the faster you go.
Why not lean forward?
My impression as a part-time contributor and committed fan and steward for Gitcoin is that we have a lot of momentum that we have generated by largely achieving our founder’s initial vision. Gitcoin has helped to fund nearly $70 million of public goods! And in so doing it has cemented relationships across the crypto ecosystem. After all projects like ENS started in part as Gitcoin grantees!
Maybe even more importantly - this success has helped Gitcoin to gather a team with deep experience and a breathtaking breadth of capabilities, from protocol developers to community builders, data scientists, meme lords, customer support professionals, and partnership leads able to find and close strategic commitments, and many more. The talents and diversity of the team inspire me.
So it is understandable that this team and DAO are confident that we can transition from being a destination site for the funding of public goods into a provider of protocols and other software and the necessary data science and communities to enable communities to fund their own shared needs. I share that confidence.
But - there be risks here
Enough preamble - what’s the issue? Why shouldn’t we lean forward?
A few risks come to mind:
- We have not proven product market fit for the protocols:
On the one hand, Gitcoin passport adoption appears strong and we have had extensive conversations with development partners and others. These data points suggest that our approach to protocol development is at least approximately correct.
On the other hand, we have not truly proven product market fit until we see broader inbound adoption and until partners start to succeed. Note that we have our first partner rollout starting shortly - when Fantom uses a part of the Gitcoin protocol starting in mid-November, so at least for the initial components that are ready for them to use, we will learn more very shortly.
- We have not proven our ability to deliver on time, on quality, the protocol software:
Even if we have absolutely correctly scoped the ongoing development work and so we have figured out product-market fit - we cannot be sure that the protocols will be delivered on time, on quality quite yet. In particular, when we examine the development streams of the Gitcoin Product Collective we see signs that both increase confidence and signs that temper optimism. The team is building largely in public and following practices that from the outside seem to make a lot of sense. Also, the design work and user interviews that have been conducted are amongst the most thorough I have seen in my career. On the other hand, I have not seen a burn-down chart and when probed a little bit on their ability to do estimation, the teams have very openly indicated that they are not yet at a point where they are comfortable using points per sprint to estimate team capacity, obviously an important part of estimating timelines. The process is not yet mature.
- We are not ‘DevReling’ successfully quite yet:
There is a lot of conversation about DevRel within Gitcoin. I view this as extremely healthy. Many if not all workstreams are doing something to prepare for a future in which developers and other technical decision-makers will be more crucial for our success than they have been in the past.
That said, again, we have yet to prove we know where to find our new personas. I would like here in particular to highlight the planned work of MMM at testing out persona funnels in season 16, Grant Ops planning to work with GPC to hire DevRel help, and the plan by DAO Ops to grow a technical support capability. Plus, FDD is leaping towards decentralizing aspects of itself via an OpenData community. All great plans. And yet - finding the right mix and starting to tune and further align these efforts for scale takes time and we are just getting going in building our DevRel motion.
- Macro uncertainty:
Last but not least, the macro environment is not great. The regulatory environment in the United States seems to be broadly negative for web3 innovation. Could this uncertainty impact a further downturn in the value of GTC? While we have diversified our treasury somewhat, currently we do not have a revenue stream to help solidify our runway which stands at approximately 2.5 years. For every 50% downturn in GTC our runway drops by approximately 37.5% - or 11.25 months - if, as I understand it, our treasury is approximately 25% in stablecoins now.
Regain balance, avoid a fall
If we are over our skis a bit, it may be prudent to reduce speed and derisk the business while minimizing the ongoing reduction of our runway. During S16 more conclusive signs of product market fit, our ability to deliver software on time and on quality, DevRel success, and even revenues will hopefully emerge, in which case we will have further derisked our transition to a protocol future. In that case, we can get back on our skis and accelerate. The opportunity and our mission will be there for us.
I would suggest that we hold ask workstream leads to hold budgets flat during S16. By S17 we will have addressed some of the risks that only time and effort can address and will be in a better position to make informed resource allocation decisions.