Alex McDougall discusses Bicameral Ventures’ blockchain investment approach

0:01I'm Ashlyn Addison from event chain for investmentpitch media and FinTech news network and today on blockchain interviews with Alex MacDougall the CIO of bicameral ventures Alex thank you so much for taking the time to be on the show today it's a pleasure to have you here no problem we'll miss didn't happy to be here is gonna be fun very fun let's focus on bicameral ventures first of all

0:23what does bicameral ventures mean and how would you best describe your company's investment philosophies sure so I come from the mergers and acquisitions world historically as an investment banker before and I've seen some of the challenges around combining a bunch of different pieces together to try and solve complex problems and a lot of mergers end up destroying by so what

0:46we tried to do with my camera was let's pick a big challenging problem with today and instead of trying to solve it via a merged Bini let's create this big interconnected fund where we're really focused on the synergies that our portfolio companies have with each other and focused on solving these big problems from a from an interconnected perspective so whether that's different

1:09layers of a technology stack or different solutions in different verticals that are working together we really place a premium on the companies working together from a synergy perspective so where the name bicameral comes from and how we think about our investment philosophy is first and foremost bicameral means something that's governed by our two chambers of

1:29thought so first and foremost everything we invest in needs to be a wonderful venture capital investment for 18 great business model great upside and pretty runway but secondly where does it fit within this interconnected model that we're building within this ecosystem where does it fit within that bigger picture so we really take this sort of bicameral approach to every investment

1:49that we make and that's some of the full philosophy that we think about when we're making investments and having to get deeper into some of the bigger picture stuff as well as we go that's great Alex and what does the portfolio look like I know you're looking at this interconnectedness what are all of the different pieces that you guys have accumulated so far sure so we focus in

2:09the web 3 space so in the blockchain space and because blockchain is such a great tool towards helping us interact better on the Internet's and that's one of the biggest things that we look at from a from a big-picture thesis perspective is how do we create more trust in between peer to peer interactions on the Internet and so whether that gets actually back to from

2:29a blockchain perspective from what we're specifically invested in is the core protocol itself at the bottom layer generates a lot of these building blocks that allow us to have these decentralized interactions on the Internet whether it's provable reputation whether it's instant settlement a lot of just the reasons that we have challenges in doing digital

2:49commerce today can theoretically be solved by blockchain but what the hell the fun when we're trying to put together the fun we are putting together as salt is going from not just the core protocol to something that's built on top of it but allowing the people who are building the experiences that users actually touch and feel or enterprises to touch and feel those end experiences

3:12that are powered by blockchain likely need some additional layers in the middle similar to how the web 2.0 stack works with AWS and other sort of things there's abstraction layers that take away view the rawness of that underlying technology so when we think about our portfolio were invested in the core protocol technology we're also invested in these middleware plates which are

3:35much more blockchain as a service and a pretty standard business model to be honest and then we have certain projects that are what we call layer 2 protocols so whether it's a data transmission play or another way to let the blockchain and then we have certain projects that are actually what sort of above the technological abstraction of projects that people conduction feels so gaming

4:00working with a wonderful project called palácio that's about to go live in Miami that's helping the city and sent Trent people to get around the city different ways so to improve congestion and traffic and a few other projects in that thing so we think about it from a lot of different layers of the stack as well as a lot of different verticals and different business models but that are

4:21all working together to solve all these problems it's an interesting perspective and I saw that a lot of the investments revolve around the a on blockchain and why a on and why is it so good sure so the reason we like getting on is for two things that are key to our focus and mandate as well interoperability and accessibility and so when we think about

4:44what's actually going to move this Web 3 complex forward it's going to be experiences that are seamless and are viscerally better than what we have today so whether it's cheaper faster more provably private and more tailored something where it makes it an objective no-brainer for an enterprise or a consumer to move over and use that and those experiences aren't going to be

5:08built based on a monolithic blockchain so whether it's one that does everything there's going to be several different ideas and several different technologies that power a full real business model in the real world today so when when a on thinks about what the run rate decentralized world is going to look like there's room for a lot of different technologies to fit within that and the

5:32other thing that we really like about the protocol especially recently is they've launched something called as the first java based virtual machine that runs on top of blockchain called the AR virtual machine and so one when we think about how do we get more developers who are skilled in more different areas and more different verticals to build on top

5:52of blockchain one of the big things is what's the toolset what's the actual libraries that these developers can play with and the more that you can speak their language and the more that you can create these things that they're already familiar with the java virtual machine is one of the most well known pieces of code in the world so the more that you

6:11can take that and apply this this technology to the bottom of it essentially abstraction built right into the core protocol layer so when we look at building a universe of solutions at the top layer that are leveraging this decentralized world at the bottom Haven has those kind of two teen things that really make it appealing to us and our pride in our portfolio very interesting

6:32and you spoke a little bit about interoperability that comes to mind that a theory on blockchain having such a wide developer focus and years of you know developers working on gaps on a theorem right now is there any etherium interoperability or just with the programming languages to allow people to more easily understand how to code onto a on and make it easy for

6:52people to develop applications sure good question and so the actual the initial production launch of interoperability was something that a on released in November of last year called the a token bridge which was a bridge Suzanne was initially launched as in the RC 20 on top of the etherium blockchain so it was a token bridge that allowed in a purely

7:13decentralized manner about a hundred million tokens of ERC 20 tokens to be sent over this bridge from from etherium to EA our main net coins afterwards so the majority of the tokens that are on am maintenance today were once actually our c 20 tokens so there there's definitely a lot of compatibility the original a on virtual machine was an enhanced version of the etherium virtual

7:39machine so some of different changes in there to make it run slightly faster better solidity is definitely something that can still be compiled within the within the area enhanced aetherium virtual machine and within the amber so absolutely there's there's only a lot of overlap that makes it easy for aetherium developers to come over and build on top

8:00of a on but where a lot of the focus is is in the eaves blockchain developer community is very small compared to the macro developer community out there so as much as we want to migrate and work in Travelers we don't really think about it from a competitive perspective as much as we want to enhance the toolkit of people who are already developing on

8:21blocks we really want to make it as accessible as possible to people who are net new to the industry and saying hey you can develop on whatever you want also here is 15 modules that can add different targeted features to whatever you're building and that's really how this is all going to work – together it's a great ideology Alex now I looked into the clan play application that is

8:46part of your guys portfolio and being a game it has quite a lot of traction already how important does your firm's the gaming industry in advancing blockchain adoption bringing it to the mainstream now gaming is fantastic and it just Familia even a fundamental a bunch of really technologically enabled users already they're already familiar with the simulation of value running

9:12through a digital game they're already familiar with some kind of digitized version of their own life where what they do create scores and allows you to do things which is one of the potential implications of web 3 for reality so it's gaming is a simulation of a theoretical web 3 world and so it's a perfect place for blockchain to take hold and take root so what frankly does

9:37and there's there's a lot of games that work on an underbite open side and and just sort of using value within a game from the blockchain which is all very very cool and interesting what clinically does that we really find fascinating and this is what so that they were invited to in census at CES Asia this appeared to showcases the ability to add a blockchain layer to

9:59existing games so clinically is integrated with for tonight they're integrated with pub G clash of clans clash royale and essentially without getting too technical into it they use the api's from those games as Oracle's to trigger smart contracts so what that allows you to do and in simplest iteration is create massive tournaments where players from across games can all

10:23get together and compete on a level playing field it also allows you to create provably fair tournaments if you're competing against somebody one on one and you want to have a real crypto prize pool you can have the results written to a blockchain and actually trigger that that that's a centralized base things where we see clinically going long-term which is really

10:41interesting is the ability to accumulate a self sovereign gamer profile so every time right now every time you play in the game you do stuff in that game your character in that game earns experience or insight concerns their reputation of what they've done but the second you go to another game you're starting that new again so as you can start to add layers

11:03up on top of games so have your profile follow you around or this meta profile of works across a bunch of different games you can really add a lot of value the entire game of landscape rather than having it siloed off in between these games you start creating clans that play across games together you having much better direct link between developers and players as

11:26you can see it players entire profile the advertisement industry of targeting and figuring out exactly who is playing what there's just so much a deeper richer experience you can have when you start layering on some of this decentralized technology to even existing games yeah it's interesting to see how popular games have become on the blockchain and it's funny that that's

11:48one of the first use cases sort of in the mainstream world that's gained adoption and boy yeah and with the market as well going up there's a lot of gambling going on with that specifically but that doesn't really you know make it go past gaming and gambling to the mainstream world with this blockchain technology and so what does bicameral ventures see as their investment horizon

12:12for your portfolio is is this like a really really long-term game or you guys looking at shorter investment horizons no definitely I mean we we think there's a big dearth of capital in this industry that actually looks at it from a venture capital mindset and you see some numbers thrown around especially earlier with like a billion dollars has been invested

12:33or two billion dollars and what have we done with it and really it's important to high boss what the actual long-term capital is compared to what these short-term speculators are essentially putting in and as importantly which projects are looking for that long-term capital and which are essentially just vehicles to capture that short-term hot money which I would argue was a lot of

12:55what happened in 2017 was short money finding short vehicles and making a match made in hell to a certain extent so our our mindset is really is long-term and we think about it actually is a little bit over time so we do want to be exposed to certain projects that makes sense today with in today's crypto markets that can use today's technology to do

13:18things so if we could just announced an investment this morning fantastic new custodian I called balance based on Toronto that is looking both that that should be existing way of just storing and safeguarding assets but as importantly or potentially more importantly they want to give you an ability to actually operationalize those assets in a way that's a similar

13:38interface the way you see with your online banking today project has a bill hope is that's actually looking to use them for grants and payments and rewards and things like that they're not going to go to a vault every day and do that stuff an enterprise that's looking to use tokens to buy data or to actually interact better with advertisers in their clients they're going to need an

13:59easy way to make that actually happen so within all of our projects we want to have something that makes sense today but that vision of what's it's going to be in seven ten years and then we do have certain projects that are farther down the line that are really built towards this full run rate with three world a lot of that is on the data self sovereignty personalized AI provably

14:24private tailored experiences consumable data so a lot of this stuff where we think the world is going to go towards we want to have projects that are building that world and also will have the tools in place to make the experiences that when that actually happens mm-hmm that's great and congratulations on on balance thank you yeah now what's next for bicameral

14:44Ventures the next steps are you guys looking to expand your portfolio further and where are you specifically looking to make an impact definitely so we're absolutely looking to expand a portfolio further and I think we're where we started to look is these adjacent virtualized technologies so as you go through on the real value proposition blockchain one of it is

15:08obviously programmable money so when something happens money will pay itself to somebody or value will transfer itself to somebody which allows you to take a whole layer of human interaction and centralization ever the equation but all of those actions need to be digitized and we live in an analog world so things like the Internet of Things has a huge tangential impact on how

15:33valuable blockchain can be because when you have a fully run rate Internet of Things world you can have all of these Oracle's and all of these decentralized signals that trigger the smart money to actually pay itself around same with the artificial intelligence when you're creating these networks that run on specific black and white rules and they start running a machine speed we're

15:56going to need great AI to be able to actually manage those networks otherwise they'll spin out of control similar to how they've ever built an Excel model when you filled in a circular referenced and you don't do it right everything love L up so you need these sort of advanced level systems that were running and machines need to operate their genes in commerce world so we're

16:19we're looking now is in the terms of these building blocks and how we're creating is this platform for these experiences to be built on so we're really looking at broadening out the bottom part of our technological base so we want to have more types of tools more types of relationships and we've recently joined the decentralized a Alliance which is run by singularity

16:43dependence but we're really getting close into that decentralized AI world we're looking more as some relationships with with IOT accelerators we want to broaden out to span this building block and then when we look at these top-level projects work with them to incorporate all of these different technologies and also when we're looking at the middleware layer look for middleware

17:05that instead of just extracting away the blockchain side is looking at how to actually make it simple to incorporate IOT and watch-chain or IOT and AI watching so Hayes's is sort of adding these core technologies and ways to make that operational and the projects at the top that actually use those layers amazing sounds like you guys have a great plan

17:27in the works and your portfolio is expanding so that's all the time we have for now Alex but I really appreciate you taking the time today to come on the show and all the best of luck moving forward with bicameral ventures no problem thanks very much ash didn't appreciate you having me