Building early ventures in Web3

Diana Biggs started hacking at the age of 11. She was a natural. At the age of 15, on a lark, she hacked into the website of Tom Green. The comedian was amused and made her a regular guest on his weekly radio show – she appeared as “Hacker Girl.”

Several years later, Biggs earned an MBA, worked for a management consulting firm, focused on finance, spent time in sub-Saharan African banking and eventually helped launch an e-commerce company that operated between Kenya and New York. But transferring funds to Africa was a headache – cumbersome and full of fees. Was there a better way? Her younger brother, a programmer, told her, “Oh, check out bitcoin.”

Suddenly, Biggs discovered a field that combined her teenage obsessions (computers and hacking) with her adult profession (banking and fintech), and she has been a fixture in the crypto space ever since. Biggs served as HSBC’s private banking global head of innovation, she was CEO of Valor and now she is a partner at 1kx, an early-stage venture capital fund.

“It’s really tough being an entrepreneur,” Biggs says in a recent interview at a Denver coffee shop. Biggs knows. She has been on both sides of the table – in lousy startups and in investment firms with deep pockets. So she shares some hard-earned advice on what founders can do to get noticed by VCs, what it’s like to work at a fund (Spoiler alert: It’s not a cushy gig) and why her prediction about the space is “enormous growth.”

The interview has been condensed and lightly edited for clarity.

You joined 1kx in October 2022, in the midst of the crypto winter. How has the bear market affected your work?

In some ways it hasn’t. One of the reasons I was happy to join 1kx is because they are very crypto-native, working with builders across crypto and Web3. So I get closer to the technology.

And as you get closer to technology, are you less fascinated by the macro environment?

Yes, I would say that. Especially for previous projects. When you are a larger company and you have customers across many different sectors, the overall economy will affect you more broadly.

What excites you most in the space right now? What are the use cases most of us overlook, that no one talks about?

Well, I don’t really know what people are talking about, but a new area we’re really interested in is on-chain gaming. It can unlock a lot of interesting opportunities on both the demand side and the supply side, with people making games. It can inspire games you haven’t even thought of.

There are many interesting new projects coming out around co-creation. A collaborative creative economy type of thing.

Song Camp, which is one of our portfolio companies. People come together not just to make music, but to create your own record label.

OK, I’ll ask the age old question “What problem does it solve?”

The way the music industry tends to work now, if you’re a solo artist and you’re working with your producer and mixer, there are so many stories of musicians being screwed over by their label or label. So to be able to make everything from scratch [via smart contracts] I think it’s great.

Let’s swing to your actual job at 1kx. How is the job? What are your goals?

The real focus of my role is helping our portfolio companies, mostly with institutional connectivity. Helping them reach wider audiences and bridge traditional companies of all types. And understand, what are the needs of these types of companies? Can they build or partner with our portfolio, and then help the portfolio through different types of growth?

Interesting. Going back a bit, people might think that once they have a brilliant idea for a Web3 startup, all it takes is some quick coding and they’re good to go.

But it’s a lot more complicated than that, right? And that requires the right connections and communication and marketing.

Yes. Some people may only need conversations to understand an institutional market. Others may need other types of support. There is one portfolio company I work with that is a very technical proposition, so I help them develop their messaging and work through it in a hands-on way.

What are the most common things you help the portfolio companies with?

I will say a lot about messages, develop proposals, make introductions and help design certain strategies.

What is the average age of the people you work with? Are they all 22 year olds?

Not all, but most are probably in their mid to late 20s.

How are your classes?

The team works extremely hard. And I’m kind of always on, just like the square. But they love it. This is a group of incredibly passionate individuals. They have to be for the amount of work we do.

But what kind of hours do you really work if you don’t mind sharing?

Yes. I am not a healthy example. [Laughs.] And having been in space for the past nine years, much of my social network is also crypto. Then it all merges into one. [Editor’s note: This answer is strikingly similar to what fund-manager Magdalena Kala shared in a recent interview.]

And when you work with early-stage companies and as a VC, you have to test, try, experiment and read up on all the latest. And it’s a very technical space too, so there’s always so much more to learn.

To that point, how do you stay updated? What are your productivity hacks for media consumption? What tools do you use?

Yes, I have no hack. But definitely Twitter, and also Telegram groups of trusted people I’ve known for a long time. Discord is a necessary evil; not my favorite thing, but it can be very helpful to be connected to certain communities. Conferences are also very useful for actually meeting people and seeing where there is energy and movement and things like that. As much as crypto can be a never ending conference circle, it is a very important aspect.

What are your specific goals when attending conferences? Trying to discover new projects? Get new connections?

For me, it’s more about meeting people. In Denver, it was great to meet our existing portfolio, the people I actually work with. To actually meet them in real life.

What advice would you give to founders or to people who are creating in the space right now, who might one day want to be one of your portfolio companies and work with you?

For people who want to get the attention of a VC or an investor, I think you really need to be part of the community. It will depend on what you do, so this is not advice for everyone. But to be deeply involved in what you build and to actually participate. For crypto specifically, I would say you should participate in that community or network.

Say I was interested in doing a ZK [zero-knowledge proofs] startup. There are ZK-specific hackathons happening all the time. We’re actually sponsoring one right now. Go to these hackathons, build and do everything you can to prove and test your idea and be prepared for the talks. I think there are a surprising number of people who think, “Oh, I have this idea. Do you want to chat?” You really must have done your homework.

And there’s a lot to be said for showing enthusiasm.

Just from what I’ve seen in my experience, when you see some entrepreneurs become very successful and build different companies, when people are really, really passionate about what they’re doing and really committed to that idea, it can come across.

What would you say separates the projects and entrepreneurs that flourish from those that, for whatever reason, don’t quite make it? What traits or characteristics would you mention?

I would say the willingness and ability to take feedback, for personal growth.

That’s very selfish of you to say, because as a counselor you’re the one giving the feedback, right?

This is also from my experience of having been in the management team of a number of different startups.

When you build a startup, it takes your whole life of experience. You have to really believe in your idea when everyone else is telling you, no, that’s crazy, and that it can never happen. That’s how the best ideas start. So, on the one hand, you have to stick with your idea and really believe it.

And then on the other side, you have to be able to understand when something isn’t working and then be able to pivot and grow. I think it’s very hard to think of a company that didn’t have some kind of pivot, or a need to change course.

To your point, it’s been a while since Apple has focused on desktop Macintosh computers.

Yes. So that ability to develop and take feedback. And also making the tough calls and then sticking with it. I mean, in crypto you can easily find out who’s having nice weather, right? Everything happens at 100 times the speed of normal life. So you see, who’s going to put up with it? Not everyone can. Being an entrepreneur is really tough.

Any predictions for the space over the next few years?

I think we’re going to continue to see tremendous growth. It is obviously difficult when it comes to waiting for regulatory clarity. And there is so much more scrutiny now because of recent events. But what feels different [from previous cycles] is that institutions do not leave as they were before. In every other bear market, we saw people saying “OK, it’s over” and shutting things down. And there are some companies that had a blockchain team and they didn’t continue. But you don’t see that in the big banks, you don’t see that in the media and entertainment. This will not go away.