Founders

Uber’s driver network is closed. That’s what makes it so hard for new entrants - a competing ridesharing app without supply can’t offer a useful experience.

That’s the cold start problem created by closed supply.

Now imagine if Uber’s supply were open:
- A new app could piggyback on it, solve the cold start problem, and compete on the demand side.
- Eventually, it could aggregate so much demand that it could vertically integrate and attract its own drivers. 
- At this point, it could sever its relationship to Uber and siphon away riders and drivers from these incumbents.

That’s crypto.

Supply is open by default. New apps build on top of incumbents, win users, and then launch their own stack - only to be disrupted the same way.

This recursive loop defines crypto’s competitive dynamics.

@jacklongarzo and I call it the fractal pattern.

Here’s how it works - and how to defend against it:

Uber’s driver network is closed. That’s what makes it so hard for new entrants - a competing ridesharing app without supply can’t offer a useful experience.

That’s the cold start problem created by closed supply.

Now imagine if Uber’s supply were open:
- A new app could piggyback on it, solve the cold start problem, and compete on the demand side.
- Eventually, it could aggregate so much demand that it could vertically integrate and attract its own drivers. 
- At this point, it could sever its relationship to Uber and siphon away riders and drivers from these incumbents.

That’s crypto.

Supply is open by default. New apps build on top of incumbents, win users, and then launch their own stack - only to be disrupted the same way.

This recursive loop defines crypto’s competitive dynamics.

@jacklongarzo and I call it the fractal pattern.

Here’s how it works - and how to defend against it:

https://blog.variant.fund/fractal-protocols-strategies-defending-against-open-supply-in-crypto