I have a few core beliefs that animate Not Boring:
Startups are key to solving really big challenges.
More people should be able to invest in, and support, startups.
We need more optimistic stories about technology.
I also have a few less-core-but-relevant-here beliefs, which I’ve written about:
Bottoms-up narratives are a powerful way to build worlds. (Story Time)
In Story Time, I wrote that “In a world of abundance, attention is the scarcest resource, and people’s attention is hard to earn.” I suggested that startups should shift from top-down storytelling to bottoms-up narrative building, in partnership with their fans and communities, and that they could take lessons from NFT projects, which create worlds and then largely turn narrative-building over to the people who own the NFTs.
The connection between NFTs and startups in Story Time was loose, just a source of inspiration for the progressive decentralization of narrative. I wasn’t suggesting that startups should actually create NFTs or encourage their fans to do the same.
Then, in October, I read Jacob Horne’s Prophecy Markets, and my brain blew up. Horne proposed a structure for positive sum prediction markets in which anyone can make a prediction, mint the prediction as an NFT, and let it trade freely. If a bold prediction paired with beautiful art comes true, might that NFT be worth more than it was when it was created? What other benefits come from giving people shared ownership in the prediction? Horne asks:
Even more interestingly, what does it mean when predictions become positive sum with that level of granularity? Do more people start working together to make something a reality? Or stop something from happening? Who knows.
In the spirit of cc0, I’ve been remixing this idea in my head ever since I read the piece four months ago, and can’t stop thinking about how beautifully it applies to startups.
Swirl all of that together, and here’s the idea: Startup Prophecy Markets.
Startup Prophecy Markets let anyone timestamp predictions about the startups they believe in most by creating art, videos, stories, analysis, and more about the companies’ futures and minting them. Theoretically, if the predictions are bold enough, the content is good enough, and the startups they’re attached to are ambitious enough, those NFTs might be worth more in the future than they are today. A quick scan of eBay reveals a booming market for early memorabilia from today’s great tech companies.
Even more interestingly, what does it mean to create a rich positive sum ecosystem around startups? Do more people start working together to help them succeed? Do NFTs associated with startups tackling the most important problems become more than those associated with startups that merely become valuable? Does it encourage founders to make bolder bets, and provide them with an army of supporters when they do?
That’s what we’ll explore today. To start, let’s dive into the details of Prophecy Markets.
Prophecy Markets. brainwormed me like nothing I’ve read in a while.
The core idea in Horne’s October essay is that it might be possible to create positive sum prediction markets by using NFTs to capture “equity in a moment.”
Traditional prediction markets are zero sum. A prediction market ends in a binary outcome - $0 or $1. Right now on Kalshi, you can go long Everything Everywhere All at Once winning Best Picture at the 2023 Oscars for $0.70. If it wins, you get back $1. If it loses, you get nothing.
Equities, on the other hand, are positive sum. You don’t need someone to take the other side to invest in a startup, for example, and the upside is uncapped.
Sequoia made $3 billion from its $60 million investment in WhatsApp. Accel’s 15% Series A stake in Thefacebook was worth roughly $9 billion when Facebook IPO’d in 2012. Masa Son’s $20 million investment in Alibaba was worth an eye-popping $60 billion when the Chinese ecommerce giant went public in 2014.
No one lost money when those companies succeeded (although the outcomes must have been painful for investors who passed), but early believers were rewarded enormously. Of course, many venture investments go to $0; the difference is that they’re not capped when they succeed.
What would it look like to design prediction markets that behave more like equities?
Horne proposes minting predictions as NFTs. But he starts the thought exercise crypto-free.
He gives an example of an artist who predicts that an alien spacecraft will visit humanity for the first time on December 1, 2025 by hovering over the Eiffel Tower. The artist paints 10 pictures of the spacecraft floating above the Eiffel Tower, asks a journalist to timestamp in print, sells two copies for $100 each (one to the journalist and one to an amused reader), and locks the rest in storage.
Lo and behold, against all odds, on December 1, 2025, there it is: an alien spacecraft hovering over the Eiffel Tower. What would those original paintings be worth?
Are these paintings worth $100? Perhaps $10,000 each? Maybe more? It’s hard to imagine a case where they are the same price or cheaper—but admittedly it is hard to say how much they would be worth. If they are selling for more, then the artist has effectively created an object that represents ownership over that prediction, and has been able to capture value as a result without having to find a counterparty. They have created equity in a moment—aka positive sum prediction market.
So now let's imagine instead of the artist painting physical works, they simply minted it as an NFT—**
“NFTs?!” you might be asking yourself. “Aren’t those dead? JPow gets a little dovish and we’re back to talking about NFTs?”
Horne anticipates your pushback (emphasis mine):
—not because we like NFTs (we may or may not), but because we get all of the functionality that the artist had at lower cost and effort. By minting as an NFT this means that they get the time stamping functionality out of the box (impossible to fake), visible to the entire public (by nature of being on the blockchain) and also happens to be tradable before and after the fact.
The Official Not Boring Take™️ on NFTs has always been that they’re an incredibly useful primitive that will get more useful with time. As I wrote in Web3 Use Cases: Today:
Simply, NFTs give physical properties to digital items, making them unique, ownable, and tradeable, in addition to digital properties like programmability and composability. Over time, NFTs will represent things that are more useful than the things they represent today, but even today, the collectibles use case is a real one.
Even now, the NFT market is coming back to life, seen more clearly in the number of trades than in the dollar volume:
And it’s evolving. Checks by Jack Butcher is one of the most fun projects I’ve seen in a while. Visible is using NFTs as digital titles to homes. DIMO is using NFTs to store your car’s data. And Prophecy Markets feels like a truly native and novel structure that could only exist in its fullness with NFTs.
Prophecy Markets is one of those “start out looking like a toy” ideas that could become really powerful. It takes advantage of all of the things that NFTs are uniquely good at to create a new market structure designed for a world of abundance. After I read it, I became more convinced that NFTs are going to become an increasingly important piece of our digital lives.
Because the real value isn’t in the price of the predictions, but in the rich worlds that can develop around them.
What would happen to the startup ecosystem if we introduced Startup Prophecies?
Startup Prophecies are a derivative of Prophecy Markets that allow anyone to permissionlessly create and mint predictions, art, analysis, code, videos, stories, and more around their favorite startups.
Here’s how it works, at its most basic:
Create. Anyone can create predictions, art, stories, music, code, spreadsheets, whatever related to a startup that they think will be more valuable or important in the future than it is today.
Mint. They can mint those items as NFTs, and give or sell editions to other people who believe that those startups will be more valuable or important in the future than they are today, or to those who just want to support the company’s mission.
Trade. Between now and the prediction, there’s a liquid market for the NFTs that roughly tracks sentiment around those companies.
Appreciate. If those startups end up being more valuable or important than they are today, maybe those NFTs will be more valuable than they are today.
**I don’t think that the value of the assets will tightly track the value of companies, and I don’t think that there will be a market for every company’s NFTs. Companies can become valuable without becoming important, and my guess is that NFTs associated with the ones that become important will be worth more than those for the ones that simply become valuable. Which, in my opinion, is a feature.
Startup Prophecy NFTs are not shares in the company. They’re loosely connected not by legal documents, but by memes. People will naturally be more attracted to the stories attached to companies that can take us to Mars, cure cancer, or birth AGI – Hard Startups that do new and important things – than they are to those about yet another CRM or an iterative workflow product. Startup Prophecies will reward Good Quests.
A few hypothetical historical examples might paint the picture.
Imagine that a digital artist created an image of a SpaceX rocketship landing on Mars in 2040 way back in 2003, when the company was founded, minted ten of them, and sold them for $100. It’s hard to imagine those wouldn’t be worth more than $100 today, and harder to imagine they wouldn’t be much more valuable if SpaceX actually lands on Mars in 2040.
Imagine that way back in 1976, Apple minted 100 editions of its original logo and gave them to its first 100 customers. Those would be worth something today.
Imagine that a sci-fi writer wrote an optimistic short story about a world in which OpenAI figures out AGI when the company launched in 2015, minted it, and sold 1,000 copies at a market clearing price. The proceeds might have allowed her to keep writing full-time. NFTs of the short stories would likely have increased in value with each breakthrough the company made over the past few years, and exploded with the launch of ChatGPT. They’d probably be worth even more if OpenAI ultimately achieves its mission.
Forget the NFT piece for a second. As you read this, there are multiple first edition Isaac Asimov books for auction on eBay at over $1,000, with a signed First Edition Trilogy as high as $32,000.
There are dozens of old school Apple t-shirts on offer for hundreds of dollars, and this signed Steve Jobs Time Magazine cover is up for $124,995.
Maybe a CyberTruck Hot Wheels signed by Elon Musk himself is more your speed? Good news. It can be yours for only $49,999.99 (or Best Offer).
By contrast, the most expensive Salesforce t-shirt on offer is $39.99 and there’s practically no market for TikTok company swag despite the product’s popularity, adding credence to the idea that Startup Prophecies related to companies that become both important and valuable will be worth more than those related to companies that merely become valuable.
Of course, one way to bet on the success of a younger company like Stripe or Replit or OpenAI would be to find something autographed by Patrick Collison or Amjad Masad or Sam Altman, put it in a protective case, and wait. And given that we’ve focused on the monetary value of the hypothetical NFTs or real collectibles thus far, I wouldn’t blame you for going that route.
But the value of the assets is probably the least interesting piece of the Startup Prophecies idea. The greater benefits would come in the form of the impact on the companies, the NFTs’ creators, their holders, and the communities and products that form on top of them.
To understand what those might be, it’s helpful to go into the attributes that make NFTs uniquely suited for this purpose. Why NFTs?
Timestamped. Every time an NFT is created or traded, it creates a timestamp associated with the NFT. Timestamps are useful for proving that you predicted something early. A 2023 prediction should be worth more than the same prediction made in 2025.
Permissionless. Anyone can create a piece related to their favorite company and mint it. Once minted, anyone in the world can buy or sell. Narratives and worlds can build up without the company’s direct involvement.
Attributed. It’s easy for the public to verify who each NFT was minted by – the digital equivalent of a signature – and who owns them at any given time.
Composable. The real magic of NFTs is that they’re essentially a file format that can be plugged into a number of different applications over time. Ownership today unlocks access to an evolving ecosystem in the future.
That last piece – composability – is especially important. Key to Startup Prophecies is the fact that anyone can build experiences for NFT holders. In the simplest form, that might mean access to a company’s community-run Fan Club Discord. The companies themselves may choose to give holders tokengated access to events, discounts, or limited edition swag. People can show off their NFTs passively in their wallets or actively in galleries like OnCyber and build up a richer picture of themselves online. Creators can create derivative works to expand and reinforce the ecosystem, as is happening with Checks and Nouns. DAOs can form to coordinate holders’ activities and provide grants to projects that support the company (see this grant-funded Nouns video). Developers could build apps – as simple as Startup Prophecy-specific NFT marketplaces or as rich as games and virtual worlds – that incorporate the NFTs. All of this can be done bottoms-up, without any involvement from the companies themselves. It’s already happening with digital art.
By creating a new layer, Startup Prophecies adds a whole new dimension to the startup ecosystem and turns supporting companies into a big, open game.
The fun thing about open, permissionless systems is that they’ll evolve and grow in unpredictable ways. I can’t know all of the different ways that people might run with the idea, but there are a few categories of things I can see happening that have little to do with the price of the NFTs themselves. Here are a few.
Broaden the Community of Supporters
Would Startup Prophecies broaden the community of supporters around the most ambitious companies? Would artists and videographers and writers find rich new source material in companies aligned with their beliefs? Would companies themselves create tokengated experiences for people who hold their NFTs? Would fan clubs spring up? Might a DAO of NFT holders even take a board seat one day?
Anchor NFTs to “Real World Assets” Without Legal Hoops
Would conceptually tying NFTs to real companies create a 3D side-market on those companies’ performance? Would company-related NFTs be more valuable than a random NFT project by association with something real and important? Could Startup Prophecies be an informal, web3-native bridge between traditional and crypto markets without the legal headaches? Would Startup Prophecy NFTs provide a crowdsourced way to assess the value and cultural relevance of companies in between funding rounds?
Showcase Missions You Believe In
Just like art collectors hang their pieces in galleries, Punk owners use their Punks as PFPs, or angel investors list their best companies in their Twitter bios, might people create wallets and galleries filled with NFTs related to companies and missions they believe in? Would the ability to show support for space exploration or cell therapies expand the universe of people who hold digital assets? Would community members with expertise curate the most exciting companies working in Climate, Biotech, Space, web3, and a number of different categories? What would the internet look like if people could more easily show what they’re for than shout what they’re against?
Build a Fantasy Startup Portfolio
Might aspiring VCs use timestamped collections of Startup Prophecies to build up a track record? Could a company build a Startup Prophecy Fantasy App to rank collectors across a number of metrics and give visibility to people who might not otherwise get noticed by top funds or be able to launch their own? Would the popularity of certain NFTs even inform VCs’ decisions about which companies to invest in?
Encourage Optimistic Visions of the Future
If there were a market for Startup Prophecies, would more people use their skills – as artists, writers, videographers, musicians, analysts – to create more optimistic visions of the future? What would the world look like if the incentives for expressing optimism on the internet outweighed those for expressing pessimism? Might the market’s desire to own assets that represent grand but possible futures push creators towards definite optimism and sharp analysis instead of pie-in-the-sky guesses?
Incentivize Good Quests
If my intuition that NFTs related to companies that become valuable and important will be worth more than companies that simply become valuable, will the existence of Startup Prophecies create incentives for more people to Choose Good Quests? Would the knowledge that free marketing and support will exist for the most ambitious companies tackling the biggest challenges tip skilled founders towards doing something harder than they otherwise might have? Would that same knowledge give investors more confidence to back those Hard Startups? Would iterative or copycat ideas fall out of favor?
Accelerate Positive Outcomes
Most importantly, could a positive sum market of Startup Prophecies be self-fulfilling? “Do more people start working together to make something a reality?” If they do, would it tip the scales enough that a bold company might succeed where they otherwise might have failed? Would ownership and community involvement provide enough activation energy to turn people into advocates?
I framed all of these as open questions because I have no idea how it might play out.
It’s very possible that the vast majority of Startup Prophecy NFTs don’t find an audience and fizzle into obscurity. Some might attract buyers for a while, but fade after the predicted event even if it comes to pass. Interest in projects might wane between funding rounds or big announcements, creating falsely volatile swings. This being the internet, there might very well be a market for negative predictions about companies, and the associated efforts to bring those to life. There’s a good chance that the value of the NFTs never quite connects with the value of the companies they represent. There’s no way to predict how a complex, dynamic market like this would evolve, or that it would even take off in the first place.
But I think there’s something magical here. Instead of trying to shoe-horn everything into becoming a Crypto Thing, it lets the core asset (in this case, a startup, but it could be a movie, or a team, or a game, or whatever) focus on what it does best while a loosely-tethered community of loosely-incentivized supporters forms around it. If nothing else, it’s a new form of company merch and memorabilia.
There’s only one way to find out.
I want to experiment with this idea. The easiest way would be to mint deep dives I’ve written about companies, and I might do that, but there are more native ways to do it. I want to write optimistic short stories about the world in which they succeed. I … just need to learn how to write short stories first, so I’m timestamping the idea here in the meantime.
If this idea takes off, I want Not Boring Capital’s Portfolio page to be an OnCyber gallery full of the NFTs related to the companies we’ve invested in.
For now, I’ll start by minting this post here. If this version of events comes to be, if a rich ecosystem of Startup Prophecies develops, maybe this post will be worth something one day. Who knows. The point here isn’t to make money now – I’ll donate the proceeds to charity – but to watch what happens when more people are aligned behind missions they believe in and the people bringing those missions to life.
Let’s see what happens.
P.S. Startup Prophecies is just one riff on Prophecy Markets. There are many riffs left to explore.