In part 2 of our VB Map Podcast with Apoorva Ruparel,, we dig into how philosophical questions and human history can inform the creation of startups in the Web2-Web3 world:
- The role of standardization in scaling anything (religion, F&B, startups!) and the conditions needed for scaling
- Categorizing human needs helps product strategists synthesize patterns and good practices in addressing problem statements
- How the values system for the internet is broken and the opportunity for Web3 companies
- What does a venture look like that builds for a world that transitions from Web2 to Web3?
- What verticals and problems are Web3 adoption ready?
- The risks and dangers of having average consumers start with angel investment
Check out Part 1 here.
Listen to the Episode
EPISODE TRANSCRIPT
Apoorva Ruparel: I started focusing more on specific business models, particularly marketplaces as they are the largest value creators now. The idea is to build more success factors. So, how do you build a business model to blitzscale? It can give a 5-7% growth or a 40% growth. There’s a lot of uncertainty. I dug into human history to understand how scalability works, and I think the 1st industry was religion: it brought people together, created hope and discipline. For example, Hinduism isn’t scalable because it isn’t standardized – it has a million gods, over 30 languages. Christianity and Islam each have one book, one god, so they are easily scalable across the globe. A Michelin restaurant in Brussels has a constantly changing menu and offers unique experience, but it can’t be standardized. McDonalds, on the other hand, is extremely standardized, so it is globally scalable. So, the model is that first, you build an efficient business, then you standardize it, and then you scale it.
Andries De Vos: How do you create something original despite the drive for standardization and keep the authenticity, innovate by design?
Apoorva Ruparel: Let’s dig deeper to understand that and dive into problem solution statement. Who is buying a product or a service? It’s the human being. Fundamentally, we all have 3 key motivations: value creation, elevation of status, and span of control. Problem solution statements don’t come only from industry trends, I think they are needs of humans coming from deep thought.
From these needs come authentic ideas, which then can be built into businesses. We should also look at specifics of human behavior, so let’s compare developed and developing markets. Value services are used in the former. Any service that saves time isn’t used in the emerging markets. Why? Because people in developed countries are paid by the hour, while people with monthly salaries don’t know the value of time. At the business level, you consider what emerging markets will buy: will it be saving time & productivity or elevation of status?
Andries De Vos: What types of products do you want to pursue given your impact objectives and the Web2 to Web3 transition?
Apoorva Ruparel: The evolution of the Internet is still very foggy for most people. A lot of them struggled before catching up to Web2, so they are happy with what they see now. The new technologies are still difficult to understand. In the beginning, many telecom companies were struggling to build broadband, and now it’s widespread. It’s going to be the same with Web3 – expensive in the beginning, so the elite will be in it first. The difference between Web2 and Web3 is that there was no Web0 that was efficient. Web2 is efficient, so it isn’t the Internet that’s broken, it’s the value system – 5 companies control everything.
How can we change that? Let’s imagine a music startup, which founders started with a bunch of friends. They enabled the creation of an original piece, which is protected from stealing. They count how many people access the piece and give loyalty points to active users. Then, they move the startup to Web3, and eventually, the original piece becomes an NFT. My view of creating organizations is let’s use the most efficient Web2 and value system of Web3, then build the transition.
Andries De Vos: What is the framework you utilize to say that these verticals of Web2 to Web3 transition are ready for venture building?
Apoorva Ruparel: The way we think about our venture building is that the APIs are fundamentally modular, which means that the APIs we created for our first ventures can be used by the next ones.
Coming back to the role of human behavior in this, we ask ourselves several questions. Why are people unable to buy a house? How are people moving nowadays? Where is the concentration of power and data that we can unlock and democratize? How do we create financial inclusion? How can we create an inclusive investment in an alternative asset class for the 3rd bucket of the worldwide population and provide significant returns? And how can we unlock this with Web3?
The value system of Web3 is about ownership, so let’s bring it into the venture, e.g., a map service. We want to make getting from point A to point B more efficient. One way to do it is to distribute the entire map into 1cm squares and make possible ownership of that 1cm. We can do that indoors and outdoors. We can also provide programmable cells to the client so that the client and not the mapping company own the data and can trade it. With this map service, we ensure up to 92% of accuracy in geocoding and save the client $40,000/month on driver time lost –this is value.
Andries De Vos: What question, which I haven’t asked, do you think is important to ask at some point?
Apoorva Ruparel: I have a concern about fast-tracking a lot of emerging market individuals, the growing middle class into venture investing. While there is a great upside, they are not conscious that only 1% of the ventures they invest all their savings in creating the highest returns. There is a huge amount of risk. The more this grows, the more and more people are going to send their hard-earned savings down the drain. This is something no one discusses across the globe, and something needs to be done about it.