a16z Partner: Being in the Flow of Capital Is the True Moat
A16z Partner: Standing in the Cash Flow is the True Moat
Historically, many of the strongest companies built their moats by positioning themselves within "cash flows"—facilitating value creation and transfer in a network and taking a cut. The more value flows, the larger they grow.
Crypto is the first modern technology natively built for this. With open ledgers, programmable settlement, and stablecoins enabling internet-speed global value transfer, it allows startups to inherit network effects from day one. Well-designed tokens align users, developers, and the protocol towards network growth, distributing value to contributors.
This model isn't new (e.g., railroads, Visa, Google, AWS) but Crypto democratizes it. It lets entrepreneurs target areas with high inefficiency and profit extraction—like traditional finance's payments, custody, FX, and settlement—to compress costs, increase speed, and redistribute value by standing in the new flow.
The opportunity extends beyond finance to emerging markets like GPU/compute, AI training data, energy, and space, where new, programmable infrastructure can be built without legacy constraints.
Key questions for founders: Are you already in the cash flow? Does your revenue scale 10x with network activity? Where is profit extraction highest relative to value created in your market? The strategy is clear: compress the old cost structure, position yourself in the new value stream, and let the network compound.
marsbit06/11 07:16
