Forbes Conversation with Morgan Beller: From Diem Co-Founder to NFX Partner

This article is sourced from Forbes Magazine, written by Michael Del Castillo and translated by Mike.

Long before Facebook planned to create a new global currency controlled by them (which alarmed regulators around the world), a young investor, Morgan Beller, was running around social networks like a headless chicken (in her own words) trying to figure out how to prevent this social media giant from being interfered with.

NFX General Partner Morgan Beller, who accumulated experience at venture capital firms Andreessen Horowitz and Medium before conceptualizing one of the most revolutionary projects in the crypto space—Facebook's Diem. Diem is a cryptocurrency backed by several traditional currencies and controlled by Facebook and a few other giant companies. Photo: Christopher MICHEL

This Cornell University graduate and member of Forbes' 30 Under 30 list had a series of insights about the future of cryptocurrency while working at venture capital giant Andreessen Horowitz and Medium, making her one of the most active investors in the field.

After collaborating with former PayPal president David Marcus, Beller used these experiences to conceptualize the Libra currency. This currency would be backed by numerous global assets stored in accounts co-owned with Facebook.

Until now, this social media giant has been notorious for controlling employee interactions with the media and has remained tight-lipped about how this happens. But in 2020, before Libra (now renamed Diem) was officially launched, she left Facebook to join venture capital firm NFX as a general partner, marking the first time she has shared this story. At least part of it.

In an exclusive interview with Forbes, she explained her reasons for leaving, what she is doing now, and why she believes her latest investments can not only change Facebook's future but even the entire tech landscape.

Here is the interview content

Forbes: What is the one thing you are most proud of during your time at Andreessen Horowitz?

Morgan Beller: No one has ever asked me that before. I’m proud of helping to restart their founder program. When I first joined, Ronny Conway was leading the firm's seed program, and he was great. But after he left to start his own company, for various reasons, that work was scaled back.

After about six months, they realized that having relationships with these seed founders was actually valuable. So there was this prompt: "We don’t necessarily have to focus entirely on startups, but how do we ensure that founders reach out to us first rather than others for their next round of investment?"

Forbes: How did this prepare you for your next steps?

Morgan Beller: It’s about the psychology of founders. If I could go back to school, I might study philosophy or psychology. Because at the end of the day, that’s what we’re doing now.

When we informally restarted this project, we didn’t necessarily have to write seed checks. Instead, we asked: What value can we provide to founders so that they reach out to us when raising more funds? We could offer a whole suite of services, but where do founders need help the most?

Actually, it’s a really interesting story. I don’t know if he wants me to say this, but I can. Through that, my friend Eric Thornburg, who doesn’t work at Andreessen, and I realized that founders are a bit lonely.

In Silicon Valley, when you go to cocktail parties, everyone asks how things are going, and you can only say, "Great, everything is wonderful." But that’s not the case. Because maybe your sales director quit, or you lost a client, or your partner is mad at you because you haven’t had dinner with them in two weeks.

So we started what we colloquially call the Founders Anonymous Organization. It’s basically a monthly drinking club where we invite founders to dinner, and the rule is you can’t talk about anything going well; you can only talk about things that aren’t going well.

So how did this prepare me for my next role? At Andreessen Horowitz and Medium, there were many highlights, but there were also many tough moments. I think those difficult moments allowed me to see this before entering the startup world.

Forbes: I’m sure you’ve told this story many times. But I still want to ask how the Libra project started?

Morgan Beller: I actually never really told this story. It all started when I joined Facebook in May 2017. I initially joined the corporate development team. Shortly after joining, I realized that no one was dedicated to blockchain, crypto, decentralization—whatever they call it today.

So I went to my boss, Amin Zoufonoun, who was in charge of the corporate development team. He said, "I think this is going to be a big deal. Will it happen in 1, 5, or 10 years? I’m not sure. Is it 1%, 5%, or 10% of the future? I’m not sure. Do we have the opportunity to play this game because we are a huge centralized entity? Probably not. But we will be scared, and we need a game plan."

When I was at Andreessen Horowitz, they had their crypto moment: when Balaji [Srinivasan] joined, Marc Andreessen wrote that column about Bitcoin in the Wall Street Journal, and when they invested in Coinbase. Undeniably, I was too dumb at the time to dedicate my life to it. But I was paying enough attention that when I entered Facebook and saw no one working full-time on it, that might be a mistake.

Then I went around consulting like crazy, hammering away like a headless chicken, or whatever visual you want. I was talking to anyone who replied to my emails, discussing which groups blockchain could actually help grow faster; whether it made sense to tag groups; whether it made sense to add cryptocurrency as a payment method for WhatsApp; getting into Bitcoin mining, etc.—did all this make sense? The continuation of all this was due to my reconnection with David [Marcus].

We teamed up to create Libra, and more interesting things were about to happen.

Forbes: What about your departure? We are very interested in your transition. You have already started doing the next thing. But what led to your departure, and how did it happen?

Morgan Beller: I didn’t want to leave at the time. I was really happy then; I loved David, I loved the team. I felt I needed to see this thing launched and didn’t want to leave.

Now, I’ve known the guys at NFX for a while. I met them while working with other seed investors at Andreessen Horowitz, which is how I initially met James [Currier] and Gigi [Levy-Weiss]. They were constantly reaching out, hoping to add someone to the team.

They kept calling, and I kept telling them, "Don’t waste your time." Gigi was very persistent during the quarantine. One day, he called and said, "Here’s the deal. We’re just going to give you an offer. Do with it what you want." That night, I had dinner with my husband. I thought, "This guy is crazy; they don’t really know me; this is a serious offer; I’m not leaving Libra; they’re wasting their time." It became a moment of reflection, and I realized I loved Libra (Diem), and I really didn’t want to leave.

But it was a very unique opportunity. Plus, it’s really cliché (I don’t want to be one of those cliché venture capitalists, but I’ve become one in the past three months), I think I really enjoy the stage of projects from zero to one. With Diem and Novi, we’ve already moved beyond that. But I’m still an advisor for both Diem and Novi projects, and we’re still friends.

Forbes: How do you feel seeing what they’ve gone through and their current achievements? Even though you’re still an advisor, what’s your perspective as an observer?

Morgan Beller: Part of the feeling is a bit of frustration and fear of missing out because you’re on the outside. There’s a part that really misses being in the room when it’s happening. Recently, I had a call with David, and I felt really nostalgic. They’re just good people, and you support them. It’s also interesting—being outside in a different way.

Libra was like a 24/7 job, just trying to keep the train running as on time as possible. It took all your time. I feel like a lot of aspects of crypto aren’t necessarily related to Libra, at least in v1. For example, decentralized finance (DeFi). Ironically, I didn’t have time to pay attention to a lot of what was happening in the crypto world because I was so focused on Libra.

Now I have time to look at what’s happening in the crypto world, which is very exciting, and I think over time, Libra will enter those worlds. That’s my hope.

Forbes: Recently, I interviewed Tyler and Cameron Winklevoss and asked them, "If you could go back in time and do it all over again, would you still want to run Facebook?" They said, "We are currently disrupting ourselves because social protocols will soon make things like Facebook a thing of the past."

You mentioned DeFi and the concept of social protocols. Although this concept is still somewhat distant, you have personal investments. Even if only emotionally, how do you view the future of social protocols and social networks? Get to the point.

Morgan Beller: I think the most important thing is the ownership economy. The second is pseudonymity/anonymity—what is your internet presence? When it comes to the ownership economy, if Facebook started today—in a crypto mindset, users are owners, and they would incentivize the platform to grow and take off and be rewarded for using the platform—all these incentives could be applied to potential users who aren’t really using it today. That’s the biggest pillar.

Forbes: The idea that these giants might one day self-disrupt is intriguing. Coinbase has purchased several decentralized exchanges, and Binance has launched a decentralized exchange. There seems to be a trend where large giants are somewhat predicting disruption and self-destruction, or at least taking the first steps in that direction. How do you see the intersection between big tech's future and these decentralized protocols that might make them unnecessary?

Morgan Beller: I think decentralized protocols are inevitable. Software is eating the world, and decentralized protocols are eating the world. So it’s happening. Big tech companies need to figure out their play.

So if Facebook’s play is Libra/Diem, maybe they can create some other plays… Everyone has to make some plays to stay relevant. At some point, you need to switch to mobile to stay relevant, or you need to go online to stay relevant. Similarly, you need a crypto play not just to stay relevant but to attract and retain users. I think that’s the model we should be pursuing.

Forbes: As an investor, how do you leverage this?

Morgan Beller: If you believe this is the direction the world is heading, you have to make a lot of assumptions. As my partner James says, we focus on something and have to believe that, unlike other venture capital areas, crypto is more like gambling, betting, betting… You have to believe that Ethereum will work, and scaling will work, and it will provide an entry point for consumers.

So for this application to work, you have to believe all the other things. I think you have to assume all the IF statements are correct.

When the internet started, you had Pets.com because people were familiar with pet stores, and you just put a pet store online. No one could think of Amazon, Uber, or Netflix because we didn’t have the corresponding mental models.

I think similarly, many of the DeFi protocols or crypto applications you see today are things we have mental models for. But those things that ultimately eat the world will be things we can’t even think of right now.

Forbes: Have you made any investments in the protocol space?

Morgan Beller: I’ve made two investments from NFX (and a few more that are yet to be announced). But among the two that have been announced, one is called Radicle.XYZ, which is like GitHub for Web 3.

Ironically, the crypto code for Web 3 and all these projects not only exists in centralized repositories but is owned by Microsoft. That’s the Kumbaya pitch. But at the same time, you can’t directly incentivize open-source developers to work on your project or contribute to your project, which seems crazy to me.

So on GitHub, with pull requests or unresolved issues, you want positive feedback, or people to care about your project and get involved. But right now, there’s no way to pay them directly, and no way to incentivize them to grow your project. So Radicle is addressing or solving all these opportunities, and more.

Then there’s a company called Ramp.network, which is the entry and exit for cryptocurrency. I think that’s really important. People have said many times before, "Maybe this time is different"—maybe not, but we are crossing the chasm of mainstream consciousness.

Forbes: Looking ahead, what do you think will be the biggest area of your investment in crypto?

Morgan Beller: Broadly speaking, it’s DeFi. The financial markets are huge, and if there’s any way to recreate any proportion of that, it’s a big deal.

Then it’s about getting people who aren’t using crypto products today to use them, regardless of whether they realize it’s crypto. I just think crypto will become a foundational infrastructure for choice. There will be markets, fintech companies, and media companies built on blockchain, and ultimately consumers may not even realize it.

So those are also the things I’m looking for, where the end consumer doesn’t necessarily need to know what the infrastructure is. But the user experience does need to be as good as centralized products because people like convenience.

Forbes: Thank you.

Source link: www.forbes.com