The Importance of AI and Crypto-First Approaches

The next big companies will be rooted in AI or crypto from the start

In a recent conversation with a friend about a startup idea his son was considering, my advice was clear: if the concept isn’t AI or crypto-first, it’s time to return to the drawing board. This conversation epitomizes the mindset with which we will be investing moving forward. Starting a company today that doesn’t start with AI or crypto-first principles will make it exceedingly difficult to secure funding, attract top talent, and compete effectively in the startup world. This isn’t to say that successful companies outside these domains won’t emerge, but as we look ahead to the next decade, it is difficult to envision many large companies being started today that are not rooted in AI or crypto from the start.

The AI-First Approach

With the rapid development of AI technologies, we are on the cusp of another technological revolution. Much like the move from PC to Mobile, massive new companies will be created that couldn’t have existed without this new technology (e.g., Instagram couldn’t have existed without a mobile phone). These new companies will leverage artificial intelligence to carve out a sustainable competitive edge by utilizing data to continuously learn, optimize, and automate their operations and offerings. The rise of OpenAI exemplifies how companies that weave AI into the fabric of their products and services will dominate in the future. While the release of ChatGPT in 2022 showed the potential of large language models to consumers, enterprises like Microsoft had already begun implementing OpenAI into their own technology, along with countless other startups.

AI-Enabled vs AI-First

Almost all companies today are quickly becoming AI-enabled, integrating AI into their existing processes or products to enhance or improve them. For example, it might be used to improve recommendation engines like those behind Netflix or Spotify. In these cases, AI is utilized to make the existing product or service better or more useful, but it does not provide most of the product’s value (for Netflix and Spotify, value ultimately is tied to content).

AI-First companies, on the other hand, are fundamentally centered around AI. Their success is tethered to the advancement of AI as a science, they are deeply involved in research and development, and their business models, organizational structures, and competitive advantages are built around AI capabilities. AI is intrinsic to their functionality, design, deployment, operation, and maintenance. In other words, it is deeply integrated into the company’s DNA, affecting all aspects of the business.

How to Establish an AI-First Mentality

Starting an AI-first company requires a clear vision that is reflected in everything from technology to talent. To truly embrace an AI-first philosophy, organizations must weave a coherent AI strategy throughout all business functions to ensure that more thoughtful, faster, and efficient workflows are the backbone of the company from its inception. No matter what industry the startup is targeting, a critical foundational attribute of the company will need to be a robust data infrastructure capable of collecting, storing, processing, and analyzing data in real time. This not only leads to high data quality, but it sets a data-driven tone throughout the organization from day one.

Advantages of Being AI-First

Companies that are AI-first will enjoy numerous benefits over the competition:

  • Brand New Markets: The leadersin the AI-first economy will be providing critical new products that were unheard of just a few years ago. Whether it’s reimagining how consumers search for products (e.g., ChatGPT, Claude, Phind) or fundamentally changing how businesses interact with their customers (e.g., voice assistants, chatbots, conversational AI), breakthrough AI technology will radically change the way consumers and enterprises interact and transact. Monetization strategies might be directly tied to AI capabilities, such as subscription models for AI-powered tools, pay-per-use models for AI services, or value-added services powered by AI insights. Much like we saw in previous internet revolutions, the companies that develop this new technological landscape will become massive businesses.
  • Continuous Optimization and Better Decision-making:Companies developing the next AI technology will be best equipped to continuously learn and adapt based on new data and feedback. Powered by models rather than traditional software systems, AI-first companies will quickly analyze massive datasets to identify correlations, anomalies, and trends. Since the models themselves will automatically optimize as more data is reviewed, strategic decision-making will get more refined at every business level over time.
  • Scalability: One of AI’s key advantages is its ability to handle massive amounts of data and usage without the need for proportional increases in human resources. Unlike traditional manual processes that require more people to handle increased workloads, companies built on AI can scale up or down automatically based on demand. This facilitates incredible efficiency throughout the business.
  • Personalization: AI can analyze vast amounts of data to identify patterns and preferences at an individual level. This allows AI-first companies to deliver highly personalized experiences and anticipate any issues before they arise. The ability to adapt without the need for manual customization will drastically improve engagement and loyalty for AI-first companies.
  • Enhancing Talent:The teams at AI-first companies will include specialists in AI, machine learning, data science, and related fields, along with the necessary domain expertise to apply AI effectively in the startup’s target industry. This will put AI-first companies in the best position to utilize AI to augment and enhance those talents. Whether using AI to automate routine tasks or provide intelligent insights, employees can focus on higher-level, creative, and strategic work. By contrast, incumbent organizations trying to bolt-on AI into a more traditional talent structure will likely encounter growing pains when implementing new processes and integrations.

Fully committing to an AI-first strategy allows companies to keep pace with innovation and set the tempo. It positions them to leverage AI as a core aspect of their identity, leading to a sustainable competitive advantage.

The Crypto-First Approach

A crypto-first company places data integrity and being onchain at the heart of its operations. Being “crypto-first” means that leveraging trustlessness nature of a blockchain not just part of the business model but are central to the company’s identity and methodology. This aligns a company’s offerings and processes with the ethos of decentralization and the unique advantages of blockchain.

Advantages of a Crypto-First Strategy 

  • Decentralization: Building onchain technologies enable companies to create more resilient frameworks resistant to failure and censorship. By decentralizing their operations and data storage across a distributed network, crypto-first companies eliminate single points of failure that could bring down their services and add redundancy. This decentralized architecture enhances security and attracts users who value privacy, autonomy, and the ability to transact without relying on centralized authorities. These architectural choices also enable users and other participants in that ecosystem to play a role in keeping the data secure and be rewarded for contributing. The censorship-resistant nature of blockchains ensures that users can access services and funds without interference, fostering trust and reliability.
  • Transparency and Trust: One of the core tenets of blockchain technology is its inherent transparency. All transactions and records on a public blockchain are visible and verifiable by all participants in the network. This fosters trust since anyone can audit the integrity of the data and transactions and trace any undesired behavior. By providing a tamper-proof and immutable ledger, crypto companies demonstrate their commitment to accountability for every participant in the network and strengthen their credibility in the market.
  • Tokenization: Crypto-first companies harness the power of managing incentives often through tokenization, which involves representing anything from real-world asset ownership (art, commodities) to governance decisions (what features to add/remove), to profit sharing of a product’s revenue. By creating digital tokens that represent ownership rights of assets and votes in decision making these companies unlock new investment and participation opportunities at global scale and help provide liquidity and upside for previously unrewarded participation. Tokenization allows for the democratization of being part of a shared community, enabling individuals to invest in assets that were once accessible only to high-net-worth individuals or make a living doing something that benefits everyone in the network. Furthermore, it facilitates faster and more efficient trading of assets, as ownership can be easily transferred on the blockchain without the need for intermediaries.
  • Global Reach: Crypto networks, being digital and decentralized, enable companies to transact globally without relying on traditional banking infrastructure. This is particularly advantageous for crypto-first companies looking to expand their reach and tap into emerging markets and simply being available in every part of the world on day one. Accepting cryptocurrencies as payment allows companies to circumvent the limitations and costs associated with cross-border transactions, such as high fees and lengthy processing and banking setup times. Moreover, cryptocurrencies democratize access to financial services, allowing individuals in underbanked or unbanked regions to participate in the global economy independent of the strength and stability of their local currency.
  • Financial Innovation: Crypto-first companies are at the forefront of driving innovation through decentralized finance (DeFi). DeFi refers to a new paradigm of financial services built on blockchain technology, offering alternatives to traditional banking products. These companies develop and deploy decentralized applications (dapps) that enable users to access a wide range of financial services, such as lending, borrowing, trading, and insurance. By leveraging smart contracts and decentralized protocols, DeFi platforms offer greater transparency, accessibility, and control over transactions, as well as providing users with more choices and autonomy in managing their finances without requiring barriers like an individual’s net worth as a prerequisite.
  • Smart Contracts: Smart contracts are self-executing contracts with the terms of the agreement written into code on a blockchain. Crypto-first companies leverage them to automate and enforce agreements between parties and other contracts directly. This eliminates the reliance on lawyers or escrow services, reducing costs and minimizing the potential for disputes and enables more conditional logic on handling payments allowing money to be truly programmable. Smart contracts ensure that the terms of the agreement (and code) are automatically executed when predefined conditions are met, providing a transparent and tamper-proof way of conducting transactions making every onchain transaction a more streamlined and predicable operation, reducing manual intervention. 
  • Identity: The integration of a user’s identity on the blockchain offers numerous benefits that revolutionize the way we manage and interact with personal data. Representing a user’s identity on a blockchain allows users to have complete control over their information and eliminates data silos by letting all applications automatically inherit context of what other services and products you have used. This enables interoperability, allowing users to seamlessly utilize their verified identity across various platforms and services and streamlines verification processes, improves compliance, and opens possibilities for innovative use cases. Importantly, blockchain-based identity has the potential to empower underserved populations, promoting financial inclusion and access to essential services. With a focus on user privacy, consent, and trustless interactions, blockchain identity lays the foundation for a more secure, efficient, and user-centric digital identity ecosystem that can be globally used and accessed.

When AI Meets Crypto

The convergence of AI and crypto represents a potent blend of two transformative technological movements. This combination points to a future where AI’s intelligence and blockchain’s security and enforcement of data integrity birth a radically new paradigm. Ethereum co-founder Vitalik Buterin envisions these capabilities merging to enable a more open, democratic financial system, with AI algorithms operating on blockchain to automate market-making, optimize network resources, and participate in decentralized governance.1

For example, AI could be an intelligent layer powering sophisticated interactions such as automated smart contracts and driving predictive analytics for decentralized applications and protocols. Other potential applications include using AI to optimize DeFi trading strategies and risk management; allowing the creation of a global network where individuals with GPUs can join a network and get paid to let researchers and developers train their AI models and provide an alternative to supercomputing clusters or GPU shortages for setting up their own grid.

Blockchains also simplify the distribution of open-source foundational models by providing a decentralized, immutable, and transparent infrastructure. Models can be stored on decentralized storage networks, ensuring availability and integrity without relying on centralized servers. You can enable granular access control, licensing mechanisms, and incentivization through smart contracts and token-based rewards to let anyone earn for the work they produce and their direct contributions. The transparent and auditable nature of blockchains allows for easy tracking of model usage, attribution, and compliance.


Here is an example of the potential overlapping market map that shows the intersection of AI and crypto:


Success in this new market would necessitate cross-pollination since AI can uncover insights from vast blockchain datasets that humans cannot and help determine what is real and what is synthetically generated. Blockchains provide a tamper-proof trail of information, ensuring data integrity for AI systems and building trust. Striking a development balance will be difficult but crucial, as real issues such as scalability, privacy, ethical AI, and security vulnerabilities must be addressed.

That said, the intersection represents a frontier of untapped potential, marrying AI’s predictive power with blockchain’s security and transparency.

Looking Ahead

In today’s rapidly evolving tech landscape, AI-first and crypto-first companies are charting the course for future business success. As these technologies mature and intertwine, they promise a fundamental redefinition of commerce, governance, and social interaction.




Ronny Conway Founder & General Partner
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