20VC Opensea Founder, Devin Finzer on Scaling GMV from $150M to $3BN in 18 Months, How Brands and Celebrities Will Harness NFTs To Change Their Business, The Impact of NFTs on Gaming & What is in Devin's Metamask Wallet!

In a dynamic conversation with Devin Finzer, co-founder and CEO of OpenSea, the world's largest NFT marketplace, the discussion delves into the evolution and potential of NFTs beyond art and collectibles. Finzer reflects on OpenSea's journey from its Y Combinator days during the "crypto winter" to its recent explosive growth, with transaction volumes soaring from $8 million to $3.4 billion in a matter of months. He highlights the importance of customer-centric development, the challenges of scaling rapidly, and the symbiotic relationship between NFT marketplaces and game developers. With insights from industry figures like Dylan Field and Alexis Ohanian, the conversation also touches on NFTs as a tool for creators to monetize directly, the role of digital property rights, and the cultural impact of NFTs as status symbols and community builders. Finzer envisions a future where NFTs fundamentally alter societal structures, offering a more inclusive economic model for artists and creators globally.

• Devin Finzer is the founder and CEO of OpenSea, the largest NFT marketplace.
• OpenSea is a platform for discovering, collecting, and selling NFTs.
• Finzer has raised over $423 million for OpenSea, with the last funding round valuing the company at $13.3 billion.
• Prior to OpenSea, Devin co-founded Claim Dog, which was acquired by Credit Karma, and worked as an engineer at Pinterest.
• OpenSea was recognized as the startup of the year in 2021 by Samuel Shah.

"And today we're joined by likely the most prominent figure in the industry as the founder of the world's largest NFT marketplace. You guessed it, OpenSea."

This quote introduces Devin Finzer and establishes his significance in the NFT industry, highlighting his role as the founder of OpenSea.

• Devin Finzer's journey into crypto began in 2017 with an academic interest in the subject.
• He explored smart contracts, read white papers, and attended meetups to deepen his understanding of the crypto space.
• Finzer and his co-founder initially considered a decentralized marketplace for sharing internet bandwidth.
• They were accepted into Y Combinator with their original idea but pivoted to focus on NFTs after being inspired by CryptoKitties.

"I mean, it really started with just an interest in crypto more generally."

This quote explains Devin Finzer's initial intrigue with the crypto space, which eventually led to the founding of OpenSea.

• The idea for OpenSea emerged from the concept of a generic marketplace for digital items, anticipating the growth of NFTs.
• Finzer was motivated by the potential of building in the gaming ecosystem and the mainstream appeal of NFTs demonstrated by CryptoKitties.
• OpenSea was envisioned as a platform that would accommodate the increasing variety of NFTs.

"And this idea of sort of a more generic marketplace for digital stuff, which the idea was that more and more nfts would come online over the coming years, became really exciting and compelling."

This quote describes the foundational concept behind OpenSea as a marketplace for a wide range of digital items represented as NFTs.

• NFT stands for non-fungible token, representing digital ownership akin to owning physical items.
• Unlike digital items in video games or social media handles, NFTs provide full property rights to their owners.
• NFTs allow for actions such as selling, gifting, or trading on open marketplaces.

"So an NFT stands for non fungible token, but you can kind of think of it as like a digital thing on the Internet that you own in kind of a similar way that you might own a physical."

This quote defines an NFT and compares its ownership properties to tangible, physical items, emphasizing the concept of digital property rights.

• NFTs are intriguing because they establish property rights on the internet for the first time.
• They possess unique properties such as immutability, liquidity, and global transferability.
• These properties create new possibilities for building applications that leverage digital objects with inherent rights.

"Well, I think they're really interesting because it's the first time that we have had property rights on the Internet, right?"

The quote captures the revolutionary aspect of NFTs in providing internet-based property rights, which is a novel concept.

• Initially, NFTs were popular as collectibles, but they are expanding into other areas like game items.
• Games like Axie Infinity, Decentraland, and Sandbox illustrate the potential of NFTs in gaming.
• NFTs enable open economic systems within games, allowing for the transfer of digital items across different platforms.

"So certainly around collectibles, I think game items is another emerging category that has taken off to some extent with games like Axie Infinity or Decentraland or sandbox."

This quote highlights the growing use of NFTs in gaming, indicating a shift from collectibles to more dynamic applications within virtual environments.

• NFTs have introduced the concept of interoperability of valuable digital assets across different platforms and games.
• This shift represents a departure from closed systems where digital assets were confined within a single game or platform.

"I think that concept of open worlds, open economic systems inside of games is one that's very early and is going to be really exciting."

The quote emphasizes the emerging trend of open economic systems in gaming facilitated by the interoperability of NFTs.

• Interoperability is a compelling idea in the NFT space, yet the market has grown significantly without it being widely adopted.
• Early experiments like Loot show potential for items that exist independently from any individual experience.
• Game developers are skeptical about opening up their economies for interoperability.
• New games and developers interested in experimental business models may lead to open worlds that embrace interoperability.

"But there are sort of early experiments like loot, for example, where you could have these items that kind of exist independently from any individual experience around them."

This quote highlights the potential of NFTs to exist across different platforms, pointing to early experiments like Loot that showcase this possibility.

• Attending YC Demo Day was fun despite it being in the middle of a crypto winter.
• Only a few crypto companies were present, and Opensea had early traction.
• Reception from VCs varied, with some showing interest and others being skeptical or uninterested.
• Post-Demo Day, Opensea raised funds from a mix of traditional and crypto investors, during a more conservative funding environment.

"We had sort of built the product, launched it, and kind of gotten early traction."

The quote reflects on the state of Opensea during YC Demo Day, indicating they had a product and some initial traction despite the challenging market conditions.

• Treating Opensea more as a project than a high-growth company helped maintain conviction during the crypto winter.
• Despite slow growth, there was consistent transaction volume and a supportive early user base.
• Positive signals from the developer community, who were excited to build NFT projects, contributed to the conviction to keep going.

"There were people who thought Opensea was cool and there were a lot of kind of early users who were like, this is a really nice service that you guys are providing."

This quote emphasizes the importance of user feedback and support in sustaining the team's motivation during challenging market conditions.

• Opensea does not solely focus on Gross Merchandise Value (GMV) as a success metric.
• Number of transactions is considered a healthier metric to gauge marketplace activity and user value.
• The team also monitors basic metrics like website visits with wallet connections to assess growth.

"We look at number of transactions. So number of sales as a more healthy metric."

The quote clarifies that Opensea values the number of transactions over GMV to measure success, indicating a more nuanced approach to evaluating marketplace performance.

• Having a small, passionate team helped maintain morale during the crypto winter.
• The lack of a preceding bull market meant the team did not experience a sharp downturn in transaction volume.
• Morale was high even during slow periods due to the exciting nature of the NFT space.

"I actually would say morale was just as good when things were slow as it is now when things are fast, because it's just such a fun and exciting space to work on."

This quote suggests that intrinsic interest in the NFT space played a significant role in keeping team morale high regardless of market conditions.

• The first inflection point occurred when competitors entered the market and interest in NFTs grew.
• A significant increase in transaction volume over three months signaled a tipping point for Opensea.
• Another major increase in volume from $350 million to $3.4 billion marked a second wave of growth.

"In February we did 95 million in transaction volume. And then in March, it was like 160,000,000."

This quote denotes a period of rapid growth in transaction volume for Opensea, illustrating an inflection point where the platform's traction significantly increased.

• Customer support becomes a challenge with fast scaling due to increased user base and complexity of the product.
• Platform stability and handling web traffic are critical as more users impact the risk associated with deploys.
• Operations such as HR, finance, and legal become crucial as the company grows.

"First, a couple things like customer support becomes a really big challenge."

The quote addresses the difficulties that arise when scaling a platform like Opensea, particularly in providing adequate customer support amidst rapid growth.

• Importance of customer support in a growing platform.
• Necessity of trust and safety measures to prevent fraudulent activities.
• Core platform stability is essential for user confidence.

"I would say the two main ones are sort of customer support and relatedly, trust and safety."

This quote emphasizes that for any platform dealing with transactions, especially in emerging markets like NFTs, customer support and trust & safety are critical components to address.

• Surprising role of cultural movement in driving NFT popularity.
• Profile picture projects as a significant trend within the NFT space.
• The collectible nature of NFTs has become a driving force for community and excitement.

"Yeah, I think the thing that surprised me was just like that the cultural movement around crypto was what drove the NFT movement to be so like, you know, you look at these sort of profile picture projects..."

The quote reveals the unexpected impact of cultural trends on the adoption and excitement surrounding NFTs, highlighting the importance of community and digital representation.

• NFTs serve as digital status symbols akin to luxury goods in the physical world.
• The role of NFTs in signaling membership in exclusive communities.
• NFTs facilitate the transition of social patterns from physical to digital realms.

"Yeah, I mean, I think that's sort of like the first, it seems to be the first kind of killer use case, right? Is just purchasing this to symbolize that you're part of some exclusive club."

This quote discusses the primary use case of NFTs as status symbols, drawing parallels between traditional status symbols and digital collectibles.

• Balancing trade-offs and expanding execution capabilities as a company scales.
• Customer-centric approach in product development.
• Focus on building a trusted marketplace and improving user experience.

"So the more we can bring on the right people, build the right processes internally to be able to effectively execute on new initiatives, then the more of that priority queue we can tackle effectively."

The quote speaks to the strategic approach to growth, emphasizing the importance of team and process development in order to address a wider range of product features and enhancements.

• OpenSea's role as a primary marketplace for in-game NFT items.
• Symbiotic relationship between OpenSea and gaming projects through sales commissions.
• The varying degrees of interaction between OpenSea and different gaming ecosystems.

"Yeah, well, I mean, it depends on the project, right? So for a lot of games, we're the main place where people will buy and sell the items."

This quote outlines OpenSea's relationship with gaming communities, highlighting the platform's pivotal role in the NFT ecosystem for games and the mutually beneficial arrangements that can exist between marketplaces and game developers.

• Concerns about NFTs exacerbating short-term income inequality.
• Potential of NFTs to enable artists and creators to monetize their work directly.
• Long-term view of NFTs democratizing opportunities for creators from diverse financial backgrounds.

"Long term, if you think about the potential of nfts, really what we're talking about is a way for artists and creators to directly monetize their work and directly tap into their fan bases and have those people support them."

The quote addresses the criticism of NFTs in relation to income inequality, suggesting that despite short-term disparities, the long-term potential of NFTs lies in empowering creators with new monetization models.

• Expectation that mainstream artists like Taylor Swift may engage with NFTs.
• The importance of creativity and utility in resonating with fans.
• Ongoing trend of major brands and artists entering the NFT space.

"Yeah, yeah. I mean, I don't see why not. You look at people, artists who've already done nfts, there's folks who are kind of in that territory."

This quote reflects the anticipation that high-profile artists will eventually explore NFTs as a new avenue for engaging with their fan base and creating additional revenue streams.

• NFTs can provide immediate utility such as access to exclusive content or act as tickets.
• Post-utility, NFTs can serve as collectibles, retaining value over time.
• Ownership of certain NFTs may grant access to future experiences or additional content.
• Ecosystems can emerge around NFT projects, with traditional brands building on top of them, creating interplay between crypto native and traditional entities.

"You could have really cool experiences where people who own a Taylor Swift ticket can then have access to something else in the future and even the opposite direction." "Now there's all these additional projects where if you own one of these things, you get access or you get something new, and that's really like an ecosystem emerging on top of it."

The quotes emphasize the potential for NFTs to provide ongoing value beyond their initial use, creating a dynamic ecosystem where ownership can lead to future benefits and experiences.

• Devin owns a variety of NFTs, including virtual land in Decentraland, wearables from Crypto Voxels, and ENS names.
• His collection is diverse but not particularly rare or impressive.

"I have a bunch of random nfts... I have some decentraland land... I have some crypto voxels... Wearables. I have a cool cat... I have some ens names."

Devin describes the contents of his NFT collection, showcasing a range of items from virtual land to domain names, indicating his broad interest in the NFT space.

• Setting up a wallet and acquiring cryptocurrency is essential to start.
• Participating in virtual games like Crypto Voxels can be a good entry point.
• Newcomers may start with cheaper items like wearables before moving on to pure collectibles.

"A good starting place might be like participating in some of the games that are out there... crypto voxels is a cool starting place... The wearables are pretty cheap."

Devin suggests that beginners engage with interactive NFT platforms to gain a deeper understanding, recommending starting with affordable items to become familiar with the ecosystem.

• Crypto Punks are highly expensive NFTs, costing hundreds of thousands of dollars.

"A crypto punk? Those ones are really expensive. So you're talking hundreds of thousands of."

The quote highlights the high cost of acquiring a Crypto Punk, indicating their status as valuable collectibles within the NFT market.

• Devin does not have a single favorite book but recommends "Homo Deus" for its forward-thinking perspective on technology and society.

"I really like homo deus. That's a sequel to sapiens."

The quote reveals Devin's interest in books that offer insightful views on the future of technology and its societal impact.

• Personal time management is one of the hardest aspects of his role at OpenSea.
• Ensuring effective use of time is crucial for focusing on critical business needs.

"Maybe personal time management... being very rigorous around what I do and what I don't do."

Devin expresses the importance of prioritizing tasks and managing time well to address the most important aspects of running the business.

• Dylan Field, founder of Figma, is one of Devin's mentors.
• Dylan has provided guidance on company building and NFT strategy.

"Dylan Field... Founder of Figma is a really close mentor of mine."

The quote acknowledges the value of mentorship in Devin's career, particularly from individuals who have a diverse skill set and knowledge in both company building and the NFT space.

• Devin would choose the serenity prayer for a billboard in New York.
• The message reflects the importance of acceptance, courage, and wisdom.

"Grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference."

This quote indicates Devin's appreciation for the serenity prayer's message and its relevance to life and decision-making.

• A common misconception is that NFTs are solely about art and collectibles.
• NFTs encompass a wide range of utilities and applications.

"I think the biggest one is just that they're only about art and collectibles."

The quote addresses the narrow view many people have about NFTs, emphasizing that their use extends beyond just art and collectibles.

• Volatility and technical complexities in the underlying blockchain and wallet layers present challenges.
• The rapidly changing landscape could complicate application development on top of NFTs.

"There's a lot of volatility up and down the technical stack... There's just so many moving pieces."

Devin expresses concern about the instability and complexity within the infrastructure of NFTs, which could hinder development and user experience.

• Devin envisions NFT technology impacting billions of people across various sectors.
• The long-term potential of NFTs could significantly change societal functions.

"We really do think that this is like a technology that will ultimately, over the long haul, impact billions of people."

The quote reflects Devin's belief in the transformative power of NFTs and their capacity to influence a large number of individuals and industries globally.