Building Businesses for the Future of the Decentralized Web
A conversation with Jamie Burke of Outlier Ventures and Colin Evran about business opportunities for the decentralized web, and the role the Filecoin Base Camp Accelerator plays.
Outlier Ventures CEO & Founder Jamie Burke and Protocol Labs Ecosystem Lead Colin Evran talking about the business opportunities of decentralized storage in the future of Web3 and the role that the recently-announced Filecoin Base Camp by Outlier Ventures plays.
Outlier Ventures and Protocol Labs are collaborating on a multi-year vision to grow the Web3 ecosystem through the lens of decentralized storage. The effort is starting with Filecoin Base Camp Accelerator, a three-month program by Outlier Ventures to nurture and grow early-stage projects from concept to business model. Learn about Filecoin Base Camp Accelerator and apply.
Data Businesses of the Web2 Past and the Web3 Future
“Filecoin is a movement to create a decentralized, efficient, and robust foundation for humanity’s information.” - Colin Evran
This vision presents a massive business opportunity. In the next four years, the amount of data produced globally will triple to about 175 zettabytes. Today’s data storage infrastructure is only capable of maintaining 5% of that anticipated data.
Today’s data storage industry is hampered by more than just storage capacity:
- Centralization: three companies control the vast majority of cloud storage.
- Data Control: users do not have control over the data they store today.
- Verifiability: fake news and data integrity are increasingly becoming problems, meaning people are less and less able to trust the information they see online.
Ecosystems like Filecoin, IPFS, and Ethereum have the right primitives to address all of these problems, but the game will be won or lost based on the applications and businesses that people build on these protocols. Programs like Outlier Ventures’ Filecoin Base Camp Accelerator are critical to mobilizing the capital that is out there to find, nurture, and launch these businesses.
The Data Economy
Today, the data network economy is not functioning in an optimal manner. There is too much value capture by too few companies that operate as unchallenged monopolies. There is also too much data going unused. Its potential is not being realized, which is a consequence of the world’s data economy not being open.
One way to think of Filecoin is as the Airbnb of cloud storage. Currently, new data centers and solutions that want to grow cannot compete with the companies that currently dominate cloud storage. As Airbnb allows individuals to compete with the Marriotts of the world, so too does Filecoin allow individuals, small businesses, and new businesses to compete with the data monopolies of the world by putting zettabytes of latent storage to use.
Fundamentally, this changes the paradigm of the global data storage industry. Businesses can now provide differentiated services to compete with each other and with industry veterans, creating an economy where the market sets pricing instead of a corporate pricing team.
Web3 Data Storage Use Cases
“You can’t qualify as a Web3 startup if you aren’t already looking at how you handle the storage of data.” - Jamie Burke, Outlier Ventures
Filecoin and IPFS are general purpose platforms, so the range of use cases are wide:
- Consumer use cases: Dropbox-style platforms like Slate, Space, and ChainSafe Files.
- NFT storage: Opensea, Curio, Mintgate, and Flame all use nft.storage.
- Data Markets: projects like Wolfram Alpha, Ocean, and Filehive.
- Video: platforms are using Livepeer and VideoCoin to transcode, store, and retrieve video files.
- Audio: services like Audius are providing capabilities similar to Spotify, but on the Web3 stack.
- Others: decentralized identity, retrieval markets, DeFi and finance, browsers like Brave and Opera, and verifiable storage platforms like Starling.
Driving all of these use cases forward is an extraordinary developer ecosystem. Through hackathons, the FIlecoin ecosystem witnessed 10,000 developers engaged in the last two months alone. Grant programs are funding thousands of companies. And accelerators such as Filecoin Base Camp with mentors like Outlier Ventures are playing a crucial role in helping those ideas become real businesses. All of this is supported by impressive funding; $50 million is earmarked for the Filecoin ecosystem by VCs.
Unknown Use Cases of the Future
Some of the creative business cases are those that are difficult to see or predict right now. Two previously-impossible use cases that are beginning to emerge are the financialization of data and compute.
Financialization of Data
For most companies, data is a cost (how do they store it in an economic way) and a liability (securing customer and user data is impossible). Through the financialization of data, the relationship between business and data can flip: user datasets can be opt-in, permissioned, and collateralized, and used to create altogether new revenue streams.
Technologies like IPFS and Filecoin provide the opportunity to shift the primitive of data storage from being a service to a commodity, like oil. Currently, as a service, data storage pricing is controlled. If data storage transforms into a commodity 一 where the market sets prices and creates various parameters, derivatives, and instruments to get a bunch of folks to store data within that commodity 一 then that changes the paradigm from a controlled industry to a decentralized one.
Today, the main way data is consumed is in the context of compute. A complete decentralized cloud, therefore, must be both storage and compute. The compute power of the Filecoin stacks comes from modularization. Individual cloud providers on the Filecoin network can specialize in specific services (think video transcoding, large data genomics, machine learning, etc.). Rather than “one size fits all” storage solutions, the ecosystem can have different layers of the stack that can be composed into needed storage services.
The Filecoin Base Camp Accelerator by Outlier Ventures
The FIlecoin Base Camp Accelerator is a three-month remote program focused on accelerating the growth of early-stage projects, ideas, and concepts focused on the Filecoin, IPFS, and libp2p networks. Up to $250,000 is available for projects that are part of Base Camp. Applications are open at outlierventures.io/base-camp.