Seed Club's Demo Day last week featured nine incredible startups. As one of the best-known accelerators in the consumer crypto space, Seed Club is a leading indicator of what’s next. In this piece, I discuss the common trends and highlight my main takeaways from this batch.
This Demo Day cohort had several products bridging the online and offline worlds. Sidequest takes IRL to URL in its most literal sense by utilizing AR/VR technology to gamify real-life actions; you can earn experience points (XP) by doing everyday activities like petting a dog or walking. LISA Foundation utilizes blockchain technology to democratize the ownership and stewardship of physical artworks. Chipped Social brings social media to reality through profiles that are only accessible through their NFC-embedded press on nails - creating a hybrid social club. Members can identify each other in the wild through Chipped’s unique styles, creating offline camaraderie for those in the know.
The consensus around social media has skewed negatively post-pandemic, with social products focusing on smaller networks, less screen time, and greater authenticity. These products, particularly Sidequest and Chipped, diverge from this trend by viewing the online and offline worlds as collaborative entities that can improve each other. Unlike their off-chain counterparts like BeReal, 222, and others, these products seek not to encourage users to separate themselves from online life but to blur the lines between both worlds.
The best way to onboard the public onto blockchain products has been a topic of conversation for a while, and Bracket and Chipped Social are leveraging familiar and well-loved products like sports betting and press-on nails to bring non-crypto natives into the fold.
For obvious reasons, crypto still has an image problem. Embedding blockchain into well-loved products allows people to get comfortable and experience how the technology can improve their online experience, helping them look beyond the headlines and develop their own opinions.
Press-on nails and sports betting are ideal for crypto adoption for different reasons. Press-on nails have existed for a long time, making them easy for the general public to understand. Neither the nails nor the network they connect to don’t require token speculation, making it a low-risk use case. On the other hand, sports betting abstracts the risks of holding and using crypto because you’re already gambling, and there is a built-in expectation of losing money, softening the blow of any losses.
What sports betting and press-on nails do have in common is that they are bothpopular and growing categories. Last year, Americans made about $120 billion in sports bets, and the industry is estimated to grow by 11.2% each year. Press-on nails made an estimated $160 million in sales in 2023, and the market value of the category is expected to reach $2.23 billion by 2030. Both categories are strong entry points for the crypto-curious and skeptical alike.
Another trend I noticed during the Demo Day is products improving the social content experience. Ponder is a Farcaster add-on that enables you to curate the best content. You’re given a points allowance to allocate to helpful posts across topics like venture capital and Base, which increases with earlier and more frequent usage. Unofficial uses your social graph, interest graph, and machine learning to place you in communities that best reflect your interests and serve relevant content.
The shortcomings of centralized algorithms have been apparent. I wrote about them last week as they apply to streaming. Offchain social media faces similar issues—algorithms prioritizing engagement above all else incentivize rage bait, misinformation, and other low-quality content. Ponder gives users a voice to select content helpful to them directly, making builders better able to bring higher-quality content to your TL. Unofficial creates niche communities based on your existing online relationships and topics you’re interested in, increasing content quality by bringing together people with similar interests.
Integrated networks and marketplaces made an interesting showing at Seed Club Demo Day. Enjoy, the first tradable token on Zora Network, is evolving into a full-blown creator network compatible with multiple chains. Fora is a Discord-based platform that simplifies the process for communities to launch headless marketplaces.
Integrated networks and headless marketplaces represent a shift in how B2C products are launched. Rather than constructing networks from the ground up, these products leverage existing networks to build their initial user base, effectively overcoming the cold start problem. This approach focuses on meeting customers where they already are and rewarding them for their existing activity, eliminating the need to convince them to migrate elsewhere.
Going forward, consumer founders will launch on existing platforms rather than broadly targeting individual users. The new questions that consumer founders must ask will be “What platform do my users frequent?” rather than “How do I get people to use my app?”
This isn’t technically a trend - since Xhibit is one of a kind in this batch. The creative platform uses generative AI to usher in the next phase of the digital mood board. Unlike similar tools like Pinterest or Cosmos, Xhibit enables users to create their own digital twin and virtually try on clothes from various labels, influencers, and digital creators. This approach empowers individuals to experiment with their style with minimal risk and arrive at their perfect style quickly and efficiently. By incorporating generative AI, Xhibit adds new functionality to the digital mood board, transforming it from a simple collage tool into a dynamic platform.
This aligns with a broader trend of AI as a visioning tool in creative industries. I made a similar prediction about AI-generated music. Rather than replacing human-made creative output, AI will be used as a brainstorming tool for creatives to work out their ideas before executing a project, giving creatives a clearer idea of what they want and saving money and resources.
Congratulations to all the founders who presented last Thursday! I look forward to observing how they disrupt traditional paradigms and bring new possibilities to the digital and physical worlds.