Joe Zhou. He’s the founder and CEO of FirstBlood, an eSports startup that recently broke the speed record for crowdfunding, specifically in the crypto world. Prior to founding FirstBlood, Joe co-founded Alt-Options, a Boston based fintech or financial technology startup that built the first American style option trading platform for digital currencies. Joe holds a BSBA from Boston University Questrom School of Business and an entrepreneur residence at Babson College.

Famous Five:

Favorite Book? – Lean Startup
What CEO do you follow? – Elon Musk
Favorite online tool? — Slack
How many hours of sleep do you get?— 6
If you could let your 20-year old self, know one thing, what would it be? – Joe wished he was less concerned about how he was perceived in school

Time Stamped Show Notes:

02:11 – Nathan introduces Joe to the show
03:00 – FirstBlood is a platform that allows players to play games, not just for fun but for money
03:23 – FirstBlood charges money for each game or tournament played
03:49 – FirstBlood was launched in April 2016
- 03:55 – Joe’s co-founder, Anik, is also a big gamer
- 04:08 – They were both fans of League of Legends
- 04:14 – They attended a Hackathon where they were challenged to build an application that has never existed before
05:00 – Joe co-founded Alt-Options while he was still in college
- 05:15 – The technology was built from scratch
- 05:18 – There were about 2K users during the testing phase
- 05:50 – It was bootstrapped and $50K was raised from families and friends
- 06:02 – There were a group people who wanted to get into the space and Joe worked with them as a consultant for half a year
06:44 – Joe decided to do the token issuance because of the support they were getting
- 06:55 – DAO was successful until hackers were able to get into it due to a bug
- 07:19 – FirstBlood was one of the most promising projects that was going to DAO
- 07:26 – DAO or Decentralized Autonomous Organization is like a decentralized venture capital firm; it was managed by every person who has a token in it
- 07:52 – FirstBlood was operating under Project Tron in the DAO community
- 08:15 – After the bug, FirstBlood started building what was needed to run a successful crowdfunding campaign
- 08:52 – Joe and Anik gave talks and presented multiple ethereum meetups regarding their project
- 09:37 – Joe came home with a budget of 3-5 years runway for the entire team
- 09:46 – They’ve raised $5M in funding
- 09:52 – Team had 6 people and now they have 15 people
- 11:14 – They’ve calculated the ethereum’s pricing and deployed the contract to the network
- 11:51 – FirstBlood raised the money in just the first four blocks and processed in just 7 minutes
- 12:41 – FirstBlood has sold 465,313 ether tokens
13:10 – Joe shares why they released their own FirstBlood tokens
- 13:16 – Ethereum has some limitations
- 13:34 – The FirstBlood tokens are given unique utilities that are crucial to making the network work
- 13:42 – First layer is the transactional level utility where both ether and FirstBlood tokens work
- 14:20 – Witness program utility can only be run by FirstBlood tokens
14:52 – DotA is the first mobile strategy game and now is a stand alone
- 15:53 – When a game is settled, a set of information is sent to a network of witness nodes
- 16:02 – Witness nodes will then run tests using computational power to fetch the data and cross reference the data to make sure that it is valid
- 16:14 – The data then gets published into the blockchain and smart contract
- 16:32 – The winner of the games will pay a small percentage fee to the network
17:40 – The token price isn’t that important for the team
18:14 – The ratio of the token is arbitrary
19:24 – A lot of Dapps don’t have a real money function yet
19:39 – FirstBlood is closed to launching the beta
19:59 – Currently, there are 1592 people who have FirstBlood tokens
20:51 – Joe doesn’t think that it’s risky for them to have a lot of people handling the network
- 21:06 – The selection process has a cap rate on how one will get selected
- 21:19 – “We did cap at 1% for a maximum impact”
22:20 – Joe can’t disclose the amount he owns from FirstBlood tokens
- 22:50 – The allocation for founders is around 10% of the tokens
23:24 – Nathan asks Joe if it’s possible to cash out a million tokens into real dollars if he ever needs it
24:35 – FirstBlood made the headlines because they raised a $5M equivalent to ether
- 26:38 – The fund is owned by the project
- 27:08 – The ether can be used to keep buying the project
27:30 – Some of the money from the funds are used to pay the team
28:03 – FirstBlood liquidates 80% of the ether post cross-sales and 20% remains in the smart contract
28:39 – FirstBlood has around $4M in the bank that pays salaries and other company expenses
29:55 – The technology of FirstBlood has made people more interested in the project
31:00 – The decision to raise $5M was from the advice they’ve received regarding what it takes to increase network profitability
31:51 – Ether was valued when Joe liquidated the 372K shares at $11 per share
32:38 – Joe didn’t wait for the share value to increase because they needed the money to get the project running
34:25 – The Famous Five

3 Key Points:

In crypto, startups create their own currency if they think their network will be better of with it.
Listen to your advisory board—if it’s time to raise for specific purpose, your business might be better of because of that decision.
People will become interested in your project if it’s first in the space and they believe in your technology.

Resources Mentioned:

Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
Klipfolio – Track your business performance across all departments for FREE
Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books

Show Notes provided by Mallard Creatives

784: Crypto: How ICO Companies Turn Money Raised Into Cash-In-Bank To Fund Growth

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