Finding Solana's Next Breakthrough App | Emon Motamedi

The Solana Incubator: Nurturing the Next Generation of Blockchain Startups

The Solana ecosystem has been rapidly evolving, and at the forefront of this growth is the Solana Incubator program. In a recent episode of the Lightspeed podcast, host Jack interviewed Emon Motamedi, the head of the Solana Incubator, to discuss the program's focus on fostering real-world adoption and innovative startups in the blockchain space.

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What is the Solana Incubator?

The Solana Incubator is a program designed to scale knowledge and expertise across the Solana ecosystem. It brings together four to six teams for a three-month intensive program in New York City, aiming to create the next blue-chip company on Solana. Emon Motamedi explained:

"We bring in four to six teams to our New York office for three months at a time, and really build alongside them to help create the next blue chip company on Solana."

The program keeps its cohort size small to provide a customized experience for each team, addressing their specific needs and challenges. This approach allows for a more hands-on and tailored mentorship, setting it apart from other incubator programs.

The Evolution of Solana Labs

Solana Labs, which initially developed the Solana blockchain, has shifted its focus to nurturing Solana-based companies. This transition reflects the maturation of the Solana ecosystem and the need for specialized support for startups building on the platform.

Real-World Adoption: The Focus of Cohort Two

The second cohort of the Solana Incubator program placed a strong emphasis on real-world adoption. This focus was driven by several factors, including a more favorable regulatory environment, especially in the United States, and the increasing maturity of the Solana ecosystem.

Emon Motamedi highlighted the importance of this focus:

"We expressly decided to focus the cohort on real world use cases and support teams that were trying to drive those use cases."

This approach resulted in three main areas of concentration:

1. Institutional finance and real-world assets
2. Data and machine learning
3. Payments and stablecoins

The Changing Landscape of Crypto Startups

The podcast discussion touched on the evolving nature of crypto startups. In the past, many projects focused on short-term gains through token launches. However, the Solana Incubator is encouraging a shift towards more sustainable business models and real-world applications.

Emon emphasized the importance of building sustainable businesses:

"Using the token in support of a sustainable business, I think is really the key piece. And the framing of using it to solve a problem that you wouldn't otherwise be able to solve without the token is important."

This approach aligns with the broader goal of demonstrating the tangible benefits of blockchain technology beyond speculation.

Innovative Startups from Cohort Two

The podcast highlighted two particularly interesting startups from the second cohort:

Easy: Revolutionizing Payment Processing

Easy is tackling the challenge of high payment processing fees for merchants. Their innovative approach allows consumers to continue using their credit cards while leveraging stablecoin technology on the backend to generate yield and offset processing fees.

Emon explained the concept:

"Let people pay with the same credit card they're paying with today. Let that end merchant receive their working capital, their proceeds from that payment in the same, whatever, seven days or whatever it is. But maybe in that seven day timeframe, when the transaction goes through, let's take that payment, let's immediately put it on stablecoin rails."

This solution is particularly beneficial for low-ticket items, such as school lunches, where traditional processing fees can be disproportionately high.

USDM: A Sovereign Stablecoin

USDM is developing a sovereign stablecoin in partnership with the Marshall Islands. This unique approach provides regulatory advantages that traditional stablecoins may not have access to.

Emon highlighted the potential of this project:

"Having sovereign status as a stablecoin carries with it a lot of regulatory advantages that everyday stablecoins might not be able to have, for instance, I think they're the first nettable stablecoin under USDM."

This sovereign status opens up possibilities for global adoption and use cases beyond typical stablecoin applications.

The Impact of Regulatory Changes

The podcast touched on the changing regulatory landscape in the United States and its impact on crypto startups. With a more favorable environment, there's been a shift in the types of projects being developed and the geographic distribution of founders.

Emon noted:

"People now feel more comfortable driving products for consumers that are in at least in the US, but probably more broadly as well that the use cases that people are able to go after probably more."

This change has allowed for a greater diversity of thought and approaches within the incubator program.

The Role of the Solana Policy Institute

The recently launched Solana Policy Institute aims to give Solana companies a voice in Washington and help remove regulatory roadblocks. This initiative demonstrates the ecosystem's commitment to working within regulatory frameworks and fostering positive relationships with policymakers.

Encouraging Long-Term Thinking in Crypto

One of the key themes discussed was the importance of encouraging long-term thinking in the crypto space. The Solana Incubator is actively working to shift the focus from short-term token gains to sustainable business models that can withstand market fluctuations and regulatory scrutiny.

Emon emphasized this point:

"A lot of my lens with the incubator specifically, but I think founders broadly would it would be good to sort of think about this is one of the teams that are actually building to sustain that have a long term vision that aren't just capitalizing on on a trend that's that's in market."

This approach not only benefits individual startups but also contributes to the overall health and credibility of the Solana ecosystem.

The Importance of Founder Market Fit

The podcast discussion touched on the concept of "founder market fit" and its importance in startup success. Emon highlighted that while market validation is important, founders should also have a deep understanding of the problem they're trying to solve.

He explained:

"You kind of want your founder to have founder market fit around whatever the idea is that they're building in a way that like they so deeply understand the problem that they don't need to crowdsource to the masses to say, Hey, is this a problem worth me going out and solving?"

This perspective emphasizes the value of founder expertise and passion in driving startup success.

The Future of Solana Incubator: Cohort Three

As the podcast was recorded, applications for the third cohort of the Solana Incubator were about to close. This new cohort, set to run from early September to late November, will continue the program's mission of fostering innovative startups in the Solana ecosystem.

Emon encouraged interested founders to apply:

"There's an application on our website, Solana incubator.com. Feel free to go check that out. I'm also on Twitter at emonmotamity. If you have any questions, feel free to reach out."

The Broader Impact on the Solana Ecosystem

The Solana Incubator program is playing a crucial role in shaping the future of the Solana ecosystem. By focusing on real-world adoption and sustainable business models, it's helping to build credibility and demonstrate the practical value of blockchain technology.

Challenges and Opportunities in Crypto Startups

The podcast discussion highlighted some of the unique challenges and opportunities faced by crypto startups. These include:

1. Balancing innovation with regulatory compliance
2. Finding product-market fit in a rapidly evolving industry
3. Navigating the complexities of token economics
4. Building for long-term sustainability in a often short-term focused market

The Role of Community in Startup Success

One of the key benefits of the Solana Incubator program is the community it fosters. By bringing together talented founders, mentors, and industry experts, it creates a collaborative environment that can accelerate startup growth and innovation.

Emon highlighted this aspect:

"Being in the same room as some of the best builders in the ecosystem. So both within the cohort, the cross cohort synergies that that arise being in the same building as, you know, Solana Labs Foundation, Anza in the same building as teams like Drift, Tip Link, Artemis, et cetera. You're kind of in the nexus of the salon ecosystem."

This community-driven approach is a significant advantage for startups in the program.

The Importance of Customization in Incubator Programs

The Solana Incubator's approach to customization sets it apart from many other startup programs. By tailoring the experience to each team's specific needs, it can provide more targeted and effective support.

Emon explained:

"We really sort of customized the week to week or even the day to day experience for each team based on what are the roadblocks they're facing and how we can help accelerate their progress."

This level of customization can be particularly valuable in the fast-paced and complex world of blockchain startups.

Measuring Success in the Incubator Program

While traditional metrics like the number of successful exits are important, the Solana Incubator takes a more holistic approach to measuring success. Emon emphasized the importance of doing what's best for the founders, even if that means pivoting away from their original idea.

He stated:

"It's less about, Hey, having 80% of the cohort be be successful. And it's more about doing the right things by by the founders because at the end of the day, we started this, this, this program to, to drive the ecosystem forward, right?"

This founder-centric approach reflects a long-term vision for building a strong and sustainable ecosystem.

The Role of Tokens in Startup Success

The podcast discussion touched on the complex role of tokens in crypto startups. While tokens can provide funding and incentivize network growth, they can also lead to short-term thinking and regulatory challenges.

Emon advised a cautious approach:

"If you see a real problem that a token could be solving in terms of whether it's setting up the right incentive structure or doing something else, then by all means leverage a token to do that. But if it's just like, hey, let's launch a token, token go up, let's pump the token, that I think we have a much harder time with."

This perspective encourages founders to think critically about the role of tokens in their business model and to use them strategically rather than as a quick path to funding.

The Importance of Real-World Use Cases

A recurring theme throughout the podcast was the importance of focusing on real-world use cases for blockchain technology. This focus not only helps to build credibility for the industry but also leads to more sustainable and impactful businesses.

Emon emphasized this point:

"That's always been the promise of cryptos. How are we going to impact individual people's lives?"

By encouraging startups to focus on solving real problems, the Solana Incubator is helping to push the entire blockchain industry towards greater relevance and adoption.

The Role of Institutional Adoption

The podcast touched on the increasing interest from institutional players in the crypto space. This trend is opening up new opportunities for startups, particularly in areas like financial services and real-world asset tokenization.

Emon noted:

"On the institutional side. The institutions are here. They're excited. We had a ton of them come in to the incubator, meet with a lot of these teams."

This institutional interest is a positive sign for the maturation of the blockchain industry and can provide valuable partnerships and customers for startups in the space.

The Future of Blockchain Innovation

As the Solana ecosystem continues to grow and evolve, the Solana Incubator program is playing a crucial role in shaping the future of blockchain innovation. By fostering startups focused on real-world adoption, sustainable business models, and long-term thinking, it's helping to build a more robust and impactful blockchain industry.

The success of programs like the Solana Incubator could have far-reaching implications, not just for Solana, but for the broader adoption and acceptance of blockchain technology across various industries.

Conclusion: Building a Sustainable Blockchain Future

The Solana Incubator program, as discussed in this Lightspeed podcast episode, represents a significant step towards building a more sustainable and impactful blockchain ecosystem. By focusing on real-world adoption, encouraging long-term thinking, and providing customized support to promising startups, it's helping to shape the future of the industry.

As the program moves into its third cohort, it will be exciting to see what new innovations and breakthroughs emerge from the Solana ecosystem. With a continued focus on solving real problems and building sustainable businesses, the future of blockchain technology looks brighter than ever.

Facts + Figures

• The Solana Incubator brings in 4-6 teams for a 3-month intensive program in New York City.
• Cohort 2 of the Solana Incubator focused on real-world adoption, with teams working in institutional finance, data/ML, and payments/stablecoins.
• Easy, a startup from Cohort 2, is tackling high payment processing fees by leveraging stablecoin technology on the backend.
• USDM, another Cohort 2 startup, is developing a sovereign stablecoin in partnership with the Marshall Islands.
• The Solana Policy Institute has been launched to give Solana companies a voice in Washington and help remove regulatory roadblocks.
• Cohort 3 of the Solana Incubator is set to run from early September to late November.
• The Solana Incubator program keeps its cohort size small to provide a customized experience for each team.
• The program involves collaboration with teams from Solana Labs, Foundation, Anza, Drift, Tip Link, and Artemis.
• Easy has grown their potential pipeline from $25 million to $1.5 billion in volume pre-program.
• The Solana Incubator application includes a question about building apps interesting from a Solana mobile perspective.
• Nikita Beer, former founder of Gigster, has joined as an advisor for Solana Foundation and Solana Labs.
• The podcast was recorded on the last day of applications for Cohort 3 of the Solana Incubator.

Questions Answered

What is the Solana Incubator program?

The Solana Incubator is a program that brings 4-6 teams to New York City for a 3-month intensive experience aimed at creating the next blue-chip company on Solana. It offers customized support, including office hours, workshops, and direct collaboration with Solana Labs experts. The program focuses on helping teams overcome specific roadblocks and accelerate their progress in the Solana ecosystem.

How does the Solana Incubator differ from other startup incubators?

The Solana Incubator stands out due to its highly customized approach. Instead of offering a one-size-fits-all program, it tailors the experience to each team's specific needs. This includes bringing in relevant experts based on the teams' requirements, setting up targeted meetings with Solana Labs leadership, and providing hands-on support in areas like design and marketing. The small cohort size allows for this level of personalization and direct engagement with the Solana ecosystem.

What was the focus of Cohort 2 in the Solana Incubator?

Cohort 2 of the Solana Incubator focused primarily on real-world adoption of blockchain technology. The teams were working in three main areas: institutional finance and real-world assets, data and machine learning, and payments and stablecoins. This focus was driven by a more favorable regulatory environment, especially in the US, and the increasing maturity of the Solana ecosystem. The goal was to support teams developing practical applications of blockchain technology beyond speculation.

How does the Solana Incubator encourage long-term thinking in crypto startups?

The Solana Incubator encourages long-term thinking by focusing on sustainable business models rather than short-term token gains. They advise founders to use tokens strategically to solve real problems or create necessary incentive structures, rather than as a quick funding mechanism. The program emphasizes building businesses that can generate revenue and achieve profitability, ensuring they can sustain themselves beyond initial hype or funding rounds. This approach aims to create more resilient companies that can withstand market fluctuations and regulatory changes.

What role does the Solana Policy Institute play in the ecosystem?

The Solana Policy Institute aims to give Solana companies a voice in Washington and help remove regulatory roadblocks. It works to accelerate the progress of teams by addressing regulatory challenges they might face. The institute represents an effort by the Solana ecosystem to engage proactively with policymakers and shape a favorable regulatory environment for blockchain technology. This initiative demonstrates the ecosystem's commitment to working within regulatory frameworks and fostering positive relationships with policymakers.

How does the Solana Incubator measure success?

The Solana Incubator takes a holistic approach to measuring success, focusing on what's best for the founders rather than strictly adhering to traditional metrics like successful exits. They recognize that sometimes the best outcome for a founder might be pivoting away from their original idea or even deciding to pursue a different venture entirely. The program's ultimate goal is to drive the Solana ecosystem forward, which sometimes means supporting founders in making difficult decisions about their startups' futures.

What types of startups came out of Cohort 2?

Two notable startups from Cohort 2 were highlighted: Easy and USDM. Easy is working on reducing payment processing fees for merchants by leveraging stablecoin technology on the backend, allowing consumers to continue using their credit cards while merchants benefit from lower fees. USDM is developing a sovereign stablecoin in partnership with the Marshall Islands, offering unique regulatory advantages due to its sovereign status. These startups represent the program's focus on real-world adoption and innovative applications of blockchain technology.

How has the changing regulatory environment impacted the Solana Incubator?

The more favorable regulatory environment, especially in the US, has led to a shift in the types of projects being developed and the geographic distribution of founders. More US-based teams are now comfortable building products for US consumers, and there's a greater focus on use cases that extend beyond the crypto-native audience. This change has allowed for a greater diversity of thought and approaches within the incubator program, and has encouraged more traditional companies and institutions to engage with blockchain technology.

What advice does the Solana Incubator give to founders about using tokens in their startups?

The Solana Incubator advises founders to use tokens strategically and only when they solve a real problem or create necessary incentive structures. They discourage the use of tokens purely as a means to raise funds or pump value. The program emphasizes the importance of building sustainable business models that can generate revenue and achieve profitability, rather than relying solely on token economics. This approach aims to create more resilient companies that can withstand market fluctuations and regulatory scrutiny.

How does the Solana Incubator foster community among startups?

The Solana Incubator fosters community by bringing teams together in the same physical space, allowing for cross-pollination of ideas and collaboration. Being in the same building as Solana Labs, Foundation, and other successful Solana-based companies creates opportunities for networking and learning. The program also brings in subject matter experts and successful founders to share their experiences and insights. This community-driven approach is seen as a significant advantage for startups in the program, providing them with a support network and valuable connections within the Solana ecosystem.