Full Transcript: AMA with Binance Labs

Binance Labs held a 45-minute live AMA (ask-me-anything) to talk about the upcoming programs of Binance’s investment arm. Click this link or the picture below to watch the full video.

[This transcript has been edited and condensed for clarity.]

Christy: Hey, this is Christy from Binance Labs will be hosting the gaming today and I have Yele and Teck, who are my teammates from Binance Labs on the line... I believe many of the folks on this line don't really know what Labs does so I just want to give a quick overview. Teck, do you mind explaining what Binance Labs is?

Teck: Sure. So Binance Labs is essentially the venture arm of Binance, and our mandate is to help the crypto ecosystem grow and thrive in a healthy way. We engage with the ecosystem and the crypto community in a few different ways. We make direct investments into projects and startups, and we've been doing that for the past 10 months or so. In the past quarter, we also started an incubation program, and the purpose of that is to help very early-stage teams and projects with pretty much all the aspects of getting a project off the ground and eventually going to market and achieve growth and sustainability.

And then we also started a fellowship program this year. We’re trying to support talented developers and researchers who may have a good idea for a project that may be better off as an open-source project because a business model is not immediately apparent. So we give out small grants in the form of monthly stipends, and we help the project to cultivate an active community. Then, if a commercial idea comes out of that, we can incubate it with our Incubation Program. That's pretty much what Binance Labs is, in a nutshell.

Christy: Yes, thank you, Teck. So basically, Binance Labs is a venture arm We do three things these days: we do direct Investments, we do information, and Teck just explained what the fellowship program that we're ready to launch is about. I think we have Yele online at the moment. Do you mind introducing yourself?

Yele: Hi everyone, I'm Yele. I'm the latest member of the Binance Labs team. I'm based in Lagos, Nigeria, and my mandate is about developing the blockchain ecosystem here in Africa. We're doing it through an incubation program, running the first chapter in Lagos, and it's really exciting to be involved in building this ecosystem from the ground up.

Christy: Thank you Yele. Today we're going to focus on talking about the Incubation Program, which we actually launched in San Francisco last October. We are having our Season 2. So that's actually the purpose of this AMA today. The incubation program which we launched last October is a 10-week on-site program that we designed to help the top entrepreneurs in blockchain to deliver something as soon as possible with a product-market fit. So we launched the first batch of teams last October. They've worked together, gathered up in San Francisco for 10 weeks, and have been working towards delivering a working product with a product-market fit. And thankfully, everyone was able to deliver a working product during those weeks, and we were simply amazed by how quickly people can BUIDL things.

We call these teams BUIDLers. I think CZ has been using that word pretty often these days. But basically, we are willing to build the strongest network of these BUIDLers in the early stage of a crypto scene.

My team has organized some questions beforehand after collecting some questions through Twitter. So we might want to go through the questions first and then let's go through the open AMA questions.

On incubation, for those who have just started in, what area should we focus? Team? Financing? Project scalability? All? (@dfcorradini)

Yele: Okay, I think the focus really is on building your product and trying to get product-market fit. So that's what we're trying to do at the incubation program. We think there are a lot of projects that have been built in the last 18 months, but very few focus on product-market fit and actual usability. That’s where Binance Labs’ incubation program differs from, you know, just the traditional VC fund. We also look for very strong technical teams that can actually build the product and move as quickly as possible during that time period.

Q: What are the main functions, in addition to recruiting projects, of Binance Labs within the Binance ecosystem. (@MBGBuzzer)

Teck: We engage the ecosystem with a few programs. We have a fellowship program where we give out grants to developers with an idea, but not necessarily a business model around the idea. They can go ahead and build software and put in open source for other entrepreneurs to use on other projects. And then, if there's an idea of a project that has a potentially sustainable business model, we would like to incubate them to the incubation program. If the project has graduated from the incubation program or is further along in a path towards traction within a community, or even a business model, we will engage them through direct investment on their project. I think those are the three ways we engage with the community.  

Q: How many projects will be accepted in each region (@stevegachau)

Christy: It really depends on the quality and the quantity of the application. We're still getting applications at the moment. It's still open at Binancelabs.co, but I do expect that there are going to be less than five projects per region. But it really depends, so we'll be finalizing when we're done with the application review, which we’re still conducting, and then we'll see how it goes.

What specific business models are Binance Labs interested in helping? DApps, STO markets, on-ramps, gaming, gambling, banking/loans/finance, leverage trading, etc.? (@Bitcoin0nly)

Teck: To be honest, we are very open-minded as to the business models ideas that we are like to incubate, but the one general guideline is that we like founders and entrepreneurs to focus on delivering the benefits of crypto and blockchain towards solving real problems. We focus on projects or founders with the mindset towards product-market fit. During the incubation program, we’ll be helping a lot on both your go-to-market strategy as well as iterating on your product’s solution towards that goal.

Binance Labs Director Christy Choi

Is it possible to join Binance Labs without seeking Binance investment? Just need the brains and resources. (@justcharz)

Christy: I think this kind of relates to how we see our investment and what investment means for us, but I think when we become an investor, it's more like us becoming like a supporter. It's going to be more like us becoming a partner for you guys. So it's just aligning our interest with your team’s interest. So when we actually help out the incubation program projects, we're not just making the investment, but we're aligning our interest by making the investment and helping out so that the teams bootstrap and figure it out as soon as possible. So, the short answer is no, because we are becoming a partner to you guys by becoming an investor. But yeah, we certainly are there as soon as you guys are into the incubation program.

Christy: Those were the questions that we compiled beforehand. I think we want to answer some questions that come up often as well.

How is the incubation program different from pure investments?

Yele: The main difference between the incubation program and direct investment is centered around the fact that you journey with other entrepreneurs and projects building a business at the same time. That creates a sense of family and comradery that you don't get as an individual or independent project. We also do our very best to connect you to the strongest network of mentors and advisors. That will be very difficult for you to have access to without being in the incubation program. And then, obviously, this is the second season. So you're going to get plugged into our alumni network of over eight projects that are in Season 1 and also a global network of entrepreneurs and projects that give you a very broad perspective of what's going on across the blockchain world. And then finally, we're doing our business day in Singapore and we expect hundred-plus investors who will be there to listen to your pitch and invest in your projects.

So we believe that the incubation program for any early-stage project is actually the best platform in the world for you to come and build your product with a market fit. And then, finally, you get to the like work day in and day out with the Binance Labs team, which are some of the very best individuals in the crypto space. So that my key reasons.

What happens during the incubation program?

Christy: I'll talk based on what happened during Season 1. The incubation program is a 10-week program, and in the beginning of Week 1, we have the opening day where all the teams and mentors gather up together, and we talk about what's going to happen for the next 10 weeks. During the 10 weeks, we have mentoring sessions, which are not just by Binance Labs ourselves, but we have mentors across different sector and expertise. [These are] mostly mentors who understand what crypto is very well, but also come from the startup world and know how startups are formed, how business development works. [They] talk about growth and user acquisition, and also technical support around crypto as well. And then, we also have a weekly fireside chat, where all the teams gather up. We'll have weekly fireside chat guests come in who could be or cannot be mentors who would be talking about a specific topic either around general startup advice or on crypto or blockchain.

For season one, we had people such as Will Warren from 0x, Avichal Garg from Electric Capital or Gary Tan. They shared insights about crypto and gave feedback to the teams as well so that they can build a more personal relationship, which I think is also very beneficial for the startups, not just during the incubation program. It's a beginning for them to really build a build a network necessary, and I see them becoming like real mentors going forwards.

We end our incubation program with the so-called BUIDLers Day. We call them it BUIDLers Day because it's not just HODLing, but it's all about BUIDLing, because people have been BUIDLing something very meaningful for the past 10 weeks. We all invite over strategic partners and strategic investors in a very private setting. All the project teams will be pitching what they've been working on for the past 10 weeks, and they've been working on stealth mode for the past 10 weeks, but there will finally come out of self and be public.

So that is basically what happens during the incubation program, or at least for Season One. For Season Two, we are actually operating across different regions. We're going to do it in six different regions, six different cities. Teck here would be in Berlin.

Yele is going to be in Lagos, Nigeria. I will be in Singapore. So, for the first seven weeks, we will be all distributed every Labs teammates will be running their own chapter in different regions. And then in the last three weeks, we're all going to gather up together in Singapore. And for the last three weeks, we will be working towards a BUIDLers day together.

Binance Labs Partner Teck Chia

Do all teammates have to be physically in the region during the program?

Teck: We required two members of the founding team to be co-located in the selected location of incubation at least during the first seven weeks. The last three weeks will be in Singapore. We think that is a good idea to have face time with their fellow members in incubation. I think a lot of interesting and creative collaboration of business development opportunities come up when you team members or fellow core members interact in there when they're not working. And also, there's peer support and peer accountability when you're together working towards a goal at the end of the program.

Christy: So not everyone has to be there but it would be good to have at least two teammates during the program.

What do you look for when you're choosing the teams?

We really care about utility and building products that we think would be adopted by a lot of users. So when we’re looking at an application, we're trying to think if, say, is this something that solves a problem? Is this something that people want? But then it's not just about having an idea or having an MVP. We're looking at the quality of the team and we ask, “Can this team execute against the vision or the idea that they have?” Making sure that you have some sort of domain expertise or the right skill sets to build the product or application is essential. And then, I think it’s also a plus when a team has thought around how they get this product into the hands of users -- about distribution and customer acquisition. Then, finally, I think that in crypto, the community is very important, so the companies that tend to do really well are very good at building a community that's around both developers and actual users. So if a team has shown that they can develop a community, then that's really strong. And when you do have a token, we want to make sure that this is not just something that was added on for the sake of fundraising, that it’s actually essential to incentivize the entire sort of different set of participants in the network. Really strong token economics is also very essential. I think those are four or five key points that I personally look for when looking at a crypto or blockchain project.

Is it too late to apply for the incubation program?

Christy: No, you're not late at all for the application. We're still getting applications at Binancelabs.co. Many people actually do email us, saying I have applied at Labs.Binance.com, but in order to be considered as a candidate for the incubation program, you need to apply at Binancelabs.co. You need to apply until the end of February. That's when our Season 2 application is open.

What kind of support can I get from Binance Labs

Teck: Besides the obvious financial investment we make at the beginning of the program, each location will have a set of mentors that that incubation participants could book office hours with to ask for advice, referrals and maybe intros to people they don’t know. The Labs team members are also by default available for office hours, advice, and [contacts to] portfolio companies that we invested in. The founders are usually ones I run towards, so you can access them as well at the end of the program. We have a BUIDLers Day in Singapore where we invite the best crypto funds out there to hear the pitches from all our incubation companies. And then we provide ongoing support after the incubation program to help with fundraising, to help with anything that we can help incubation companies succeed in their respective markets.

Christy: In general, we're trying to become your partner. I think one of the takeaways from the Season One incubation program was that we at Binance try to be your first customer. We try to at least support you to acquire your first batch of users. We really sit down and help you guys try to figure out how you can do your business development, how you can get very meaningful partnerships, how you can think about your users, and how you can adapt your products or your business strategy according to your user feedback. I think it's simply how much time that all the Binance Labs team and the mentors really spend with the project teams one-on-one to help them out figure out the problem as soon as possible. I think that’s the key differentiator of the Binance Labs incubation program.

We started this incubation program because we were frustrated that we don't really see innovation happening [in blockchain]. We don't really see people building something that people need and want. We really focus on the essence of what a startup really means, what startup is supposed to be doing, which we think is building something that the users want. And so we really encourage people to go out to BUIDL, and then go out and talk to your users and test it out, and then come and BUIDL again. So I think this is kind of iteration happens really quick during the incubation program. And because you're not the only one going through the process, we'll have other batch mates in the season together who are going through the exact same process, and we at Binance Labs have experienced founding and running a startup ourselves. So we really sympathize with how difficult it is starting a company, building a product and talking to users. These are always very nervous but also very exciting moments, and we are there to share the moments together. So. that's the sort of thpport that you can get.

Teck: Binance, the exchange itself, is a business, and sometimes the companies we incubate are providing a service or product that the Binance exchange itself could potentially use, so we try to introduce them to the right teams within Binance to get them to look at the product and also give feedback or potentially also adopt the service.

Are there any differences for applying to different regions?

Yele: I think what we have tried to do in terms of how we set up the different chapters is actually taking into consideration the unique strengths of each director. To give something like a more concrete example: in the Lagos chapter, there is a very strong focus on connecting the old financial infrastructure to the new world of like crypto and blockchain. So it’s really focused and driving the adoption of blockchain and cryptocurrencies across the continent. And so the mental network is a combination of like very strong fintech entrepreneurs and top execs in banks, as well as some of the top African blockchain projects. It gives a founder who comes into that network immediate access to the types of of people that it needs to scale the project or the business. We try to do the same thing across all the different chapters.

Teck is probably the most technical one on our team, and he's going to be leading the Berlin chapter. So the difference is that we try to connect what we believe should be happening in that particular region with the entrepreneurs, and we then connect those entrepreneurs with the very best support network for them. But in aggregate, the project teams can connect to like the global mental network. And obviously, we then connect everybody on the end of the program in Singapore.  

Teck: For me personally, I like to remain open-minded and let the entrepreneurs come up with the ideas. Usually, the ones that are most unexpected are the ones that really get adoption and attract a user base. I would expect that the Berlin and San Francisco chapters would attract more technical projects, more protocol-level projects. But then, you know, I'm pretty open minded. So anyone is welcome to apply to those locations.

Christy: In Singapore where I'll be located, and in Hong Kong, we are in the financial hubs in Asia. We're looking forward to see more innovations happening in financial products. So we do see a lot of applications coming out in that sector and vertical as well. But again, I think from when I reflect back about season one, we did also have our own investment-like verticals that we looked for, but we ended up with ideas that we did not expect investing in as well, because first of all we always think we want to bet on founders who actually are more creative and have thought about the problems harder than we did. And there were teams that were simply amazing, and we thought there were teams that are best suited to solve that problem as well. So I think that is what happened for Season One and will happen in Season Two as well.

Binance Labs Director Yele Bademosi

How do I write a good application?

Christy: There are a lot of people who say they want to write as much as possible, so that they convey their passion and they convey what they're actually doing to the Binance Labs folks as much as possible. So there are some teams who write paragraphs upon paragraphs. But I think one of the characteristics of a good founder is the ability to share their ideas a very concise and simple way. Try to be as concise as possible. Just hit the core and get to the point straight ahead. And then, I think that ideas are pretty much clear.

At Binance Labs, we really go through all the applications one by one. There's no chance your application will be missed. Just give it a try. The higher purpose of having the incubation program and why we're getting online applications is because it's basically expanding our funnel. We want to enlarge our opportunity to talk to as many teams as possible. So. how everyone joins and applies for the incubation program.

If we didn't get in season one, can we reapply?

Christy: The answer is yes. There are many reasons why you people are not accepted and season one first of all, we had very high competition. It might not necessarily be your fault. And we do believe that if you have witnessed significant development between season one and season two application, which was almost six months, I think it means that things have changed a lot. If you made a lot of big progress, we will certainly be surprised by how you have made such a great development over time. It also shows your passion, how you are serious about joining the Binance Labs incubation program. You have survived the crypto winner, and we’ll be very happy to see you guys apply.

How involved is CZ with Binance Labs and the incubation program?

Christy: Though CZ is not with us today on the AMA, and I'm pretty sure he’s super busy, we like to give you a background of how Binance Labs was born and how it's being run.I think that the founders of Binance are super passionate about the mission of spreading the freedom of money. And they're very passionate about realizing the full potential of blockchain, which is our mission at Labs. We're getting full support from the founders. Wwe were very surprised and happy to see how CZ has been taking his time to talk with our BUIDLers, testing out their pitches. So I would say they're very much involved with our incubaitions program.

What do you guys look for when investing in a company? Do you invest in media companies?

Yele: So our mantra is: just apply. We're not biased against any type of company. So we just want people to apply and like there's just no downside to applying. And then we’ll take things from there.

Is Labs investing in Bitcoin-specific projects?

Teck: Yeah, we're open to Bitcoin-related projects as well.  Bitcoin started this whole space so we definitely consider it.  

If I get a Binance tattoo, does it increase my chances?

Christy: I don't think it'll increase your chances of acceptance, but I will make sure you get tweeted.

Teck: We’ll give you a hoodie though.

Christy: If you do guys have any questions, feel free to email us anytime at labs@binance.com. Please apply at Binancelabs.co for the incubation program. Remember to apply by end of February; that's when our incubation program online application ends. Thank you so much for joining our AMA session today! Have a good day!