Diana Biggs: Building Early-Stage Ventures in Web3

Diana Biggs got into hacking at the age of 11. She was a natural. At age 15, on a lark, she hacked into the website of Tom Green. The comedian was amused and made her a regular guest on his weekly radio show – she appeared as “Hacker Girl.”

Years later, Biggs earned an MBA, worked for a management consulting firm, focused on finance, spent time in sub-Saharan African banking and eventually helped launch an e-commerce company that operated between Kenya and New York. But transferring funds to Africa was a headache – cumbersome and full of fees. Was there a better way? Her younger brother, a programmer, said to her, “Oh, check out bitcoin.”

Diana Biggs is a speaker at CoinDesk’s Consensus Festival in Austin, April 26-28.

Suddenly, Biggs discovered a field that combined her teenage obsessions (computers and hacking) with her adult vocation (banking and fintech), and she’s been a fixture in the crypto space ever since. Biggs served as HSBC’s private banking global head of innovation, she was the CEO of Valour and now she’s a partner at 1kx, an early-stage venture capital fund.

“It’s really tough to be an entrepreneur,” says Biggs at a recent interview at a Denver cafe. Biggs knows. She’s been on both sides of the table – in scrappy startups and in deep-pocketed investment firms. So she shares some hard-earned advice on what founders can do to get noticed by VCs, what it’s like to work at a fund (Spoiler alert: It’s not a cushy gig) and why her prediction for the space is “tremendous growth.”

Interview has been condensed and lightly edited for clarity.

You joined 1kx in October 2022, right in the depths of crypto winter. How has the bear market impacted your work?

In some ways it hasn’t. One of the reasons I was excited to join 1kx is because they are very crypto-native, working with builders across crypto and Web3. So I’m getting closer to the tech.

And when you get closer to the tech, you’re less fazed by the macro environment?

Yeah, I would say so. Especially for earlier-stage projects. When you’re a larger company and you have clients across lots of different sectors, then the overall economy will affect you more in broader strokes.

What most excites you in the space right now? What are the use cases that most of us are overlooking, that no one is talking about?

Well, I don’t really know what people are talking about, but one new area we’re really interested in is on-chain gaming. It can unlock a lot of interesting opportunities both on the demand side and the supply side, with people creating games. That could inspire games that you haven’t even thought of.

There are a lot of interesting new projects coming out around co-creation. A collaborative creator economy type of thing.

Song Camp, which is one of our portfolio companies. People come together not only to create music but to create your own record label.

OK,I’ll ask the old question, “What problem is that solving?”

The way the music industry tends to work now, if you’re a solo artist and collaborating with your producer and mixer, there are so many stories of musicians getting screwed over by their label or record company. So to be able to create that all together from scratch [via smart contracts] I think is super.

Let’s pivot to your job itself at 1kx. What’s the job like? What are your goals?

The real focus of my role is to help our portfolio companies, mostly with institutional connectivity. Helping them to reach broader audiences and bridging the gaps between traditional companies of all types. And understanding, what are the needs of these types of companies? Can they be building or partnering with our portfolio, and then helping the portfolio through different types of growth?

Interesting. Stepping back a bit, people might think that once they have a brilliant idea for a Web3 startup, then all it takes is some quick coding and they’re good to go.

But it’s much more complicated than that, right? And it requires the right connections and communication and marketing.

Yeah. Some people might just need conversations to understand an institutional market. Others might need other kinds of support. There’s one portfolio company I’m working with that’s a highly technical proposition, so I’m helping them develop their messaging and working it through in a hands-on way.

What are the most common things you help the portfolio companies with?

I’d say a lot around messaging, developing propositions, making introductions and helping to frame certain strategies.

What’s the average age of people you work with? Are they all 22-year-olds?

Not everyone, but most people are probably mid to late 20s.

What are your hours like?

The team works extremely hard. And I’m kind of always on, just like the space. But they love it. This is a group of incredibly passionate individuals. They would have to be for the amount of work we do.

For real, though, what kind of hours do you work, if you don’t mind sharing?

Yeah. I’m not a healthy example. [Laughs.] And having been in the space for the last nine years, a lot of my social network is also crypto. Then it all kind of blends into one. [Editor’s note: This answer is strikingly similar to what fund-manager Magdalena Kala shared in a recent interview.]

And when you work with early-stage companies and as a VC, you need to be testing, trying, experimenting and reading up on all of the latest things. And it’s a highly technical space as well, so there’s always so much more to learn.

To that point, how do you stay up to speed? What are your productivity hacks for media consumption? What tools do you use?

Yeah, I don’t have a hack. But definitely Twitter, and also Telegram groups of trusted people I’ve known for a long time. Discords are a necessary evil; not my favorite thing, but that can be really helpful to get plugged into specific communities. Conferences are also really helpful to actually meet people and see where there’s energy and movement and whatnot. As much as crypto can be a never-ending conference circle, it’s a really important aspect.

What are your specific goals when you attend conferences? Are you trying to discover new projects? Make new connections?

For me, it’s more about meeting people. In Denver, it was great to meet our existing portfolio, the people that I’m actually working with. To actually meet them in real life.

What advice would you give to founders or to people who are creating in the space right now, who might want to one day be one of your portfolio companies and work with you?

For people who want to get the attention of a VC or an investor, I think you really need to be part of the community. It will depend on what you’re doing, so this is not advice to everybody. But to be deeply involved in what you are building and to actually be participating. For crypto specifically, I’d say you should be participating in that community or network.

Say I was interested in doing a ZK [zero-knowledge proofs] startup. There are ZK-specific hackathons happening all the time. We’re actually sponsoring one right now. Going to those hackathons, building and doing whatever you can to prove and test your idea and be prepared for the conversations. I think there’s a surprising amount of people who are like, “Oh, I have this idea. Like, do you wanna chat?” You have to really have done your homework.

And there’s a lot to be said for demonstrating enthusiasm.

Just from what I’ve seen in my experience, when you watch some entrepreneurs become very successful and build out different companies, when people are really, really passionate about what they’re doing and truly committed to that idea, that can come across.

What would you say separates the projects and founders that flourish from the ones that, for whatever reason, don’t quite make it? What characteristics or attributes would you cite?

I would say the willingness and ability to take feedback, for personal growth.

That’s very self-serving of you to say, because as an adviser you’re the one giving feedback, right?

This is also from my experience having been on the leadership team of a number of different startups.

When you’re building a startup, from experience, it takes over your entire life. You have to really believe in your idea when everyone else is telling you, no, it’s crazy, and that it can never happen. That’s how the best ideas start. So on the one hand, you have to stick with your idea and really believe it.

And then on the other hand, you have to be able to understand when something isn’t working and then be able to pivot and grow. I think it’s very difficult to think of any company that didn’t have some kind of pivot, or a need to change course.

To your point, it’s been a while since Apple has focused on desktop Macintoshes.

Yeah. So that ability to evolve and take feedback. And also to make the tough calls and then stick with it. I mean, in crypto you can easily find out who’s fair-weather, right? Everything’s happening at 100 times the speed of normal life. So you see, who’s gonna stick it out? Not everybody can. It’s really tough to be an entrepreneur.

Any predictions for the space over the next few years?

I think that we’re going to continue to see tremendous growth. Obviously, it’s difficult in terms of waiting for regulatory clarity. And there’s so much more scrutiny now because of recent events. But what feels different [from previous cycles] is that institutions aren’t leaving like they were before. In every other bear market we saw people saying, “OK, it’s over” and closing things down. And there are some corporations that had a blockchain team and they didn’t continue. But you don’t see that in the big banks, you don’t see that in media and entertainment. This is not going away.