The NEAR Foundation (“NF”) is a unique kind of organization. It helped to launch both a technological platform — the NEAR Protocol — and the ecosystem around it.
The Foundation, which was introduced briefly last year, is a Swiss-based nonprofit, non-beneficiary organization which uses the power of its financial and operational resources to support the same mission as the overall NEAR Collective, which is the grouping of all active participants who make up and drive the NEAR ecosystem. This mission is:
…to accelerate the world’s transition to open technologies by growing and enabling a community of developers and creators.
In line with the core value of Openness, the goal of this post is to provide more clarity about how the NF organizes itself, how it operates, how it defines success and what vision it is working to achieve.
The Vision of the NF
While it shares a mission with the entirety of the NEAR Collective, the Foundation’s role in this is to realize a more specific vision:
…a self-sufficient ecosystem of creators, developers, entrepreneurs, community members and tokenholders whose collaborative efforts make the NEAR ecosystem the best place to build massively impactful projects in the Open Web.
This vision requires that NEAR become the best ecosystem in the world on several fronts:
NEAR needs to have the best ecosystem-level clarity. This means that all participants in the ecosystem have a clear understanding of what the platform is good for, what’s going on in the ecosystem and how to access resources. Large-scale decisions that affect the community, for example large resource allocations or technical governance, are done with proper community input.
NEAR needs to have the best onboarding. Within seconds of first hearing about NEAR, a prospective builder understands what they can build with NEAR and how it’s different from other options. Within the first minute, they are connected with a real human being who can help “sherpa” them through available resources. Within a few more, they are embedded in whatever communities can best support their journey by answering questions, testing products and driving early adoption.
NEAR needs to have the best founder experience. When building their organization, they have easy access to the information they need to make good decisions about hiring, incorporation, compensation, legal and regulatory matters. They have easy access to a clear menu of financing options and support as they navigate them. They have access to an informed, engaged and highly competent pool of human resources for all the roles they need to hire for.
NEAR needs to have the best developer experience. When building their product, devs are confident that they are building on the most reliable and effective technology possible. They have easy access to basic explanations, working examples and documentation. They clearly understand the ecosystem of tools, products and projects that are available to help them and their journey from idea to launch is rapid, iterative, painless and supported by an active, inclusive community. They are also supported by a wide range of project integrations (for example, wallets, payment processors and custody) both to help them build their product and take it to market.
NEAR needs to have the best go-to-market support. When initially testing their product, builders have easy access to an engaged community of early adopters who can help them rapidly find product/market fit. During launch, this community helps them evangelize the product. Builders have access to open knowledge bases of best practices for everything from consumer onboarding to security to growth strategies. After launch, they are supported by broad access to customers, deep secondary markets and continued access to partnerships, capital and exit opportunities.
The NF’s goal is to accomplish these things indirectly. Thus, rather than operating in the ecosystem as an active participant, wherever possible it will make sure this vision is realized by other members of the community in a high quality, scalable and ultimately self-sufficient manner.
What does success for the NEAR ecosystem look like? Ultimately, it comes down to adoption — that the platform and its underlying protocol are in active use by a huge number of people and businesses around the world. While there are many ways to measure this, the most straightforward 3 which can be used to determine success in the next 18 months are that the NEAR ecosystem generates the most economic activity (GMV), support the highest total market cap of projects and host the most active users of any other blockchain-based ecosystem.
Analogues for understanding the NF
The NF’s mandate to provide support for the ecosystem, without actively operating it, doesn’t map exactly to any existing business model. It is closest to a full-service venture capital firm like a16z — its “portfolio” comprises all of the applications and companies that operate within the NEAR ecosystem. The NF’s job is to allocate them the resources they need to be successful while supporting them in whatever ways possible. All of this occurs within an extremely fast-moving, tech-forward and competitive space.
There are a few key differences between the NF and a full-service VC:
- The “return” of the portfolio is not capital but adoption of the protocol by each of the key stakeholder groups. So the NF will place its allocations with the intention of receiving better adoption above all else.
- The NF operates at one level of abstraction higher than a VC firm. Rather than making bets in individual companies, it needs to operate more like a fund-of-funds model and make generalized allocation decisions across asset categories like other VC funds, DAOs, grant buckets and so on. That allows the NF to stay out of the day-to-day capital allocation game and focus on the high level ecosystem support.
- The NF operates at a much larger scale than a typical full service VC. Rather than just a portfolio of dozens of companies, the NF needs to support hundreds or thousands of developers, founders, integrators and beyond. So its support efforts need to scale to become fully open and community-driven wherever possible.
- The NF takes on some aspects of a venture accelerator as well, in that, if the ecosystem is missing a particular element, it may incubate the team which develops this particular component or business until it is ready to spin out.
The NF shares another similarity to a defined-horizon VC fund — its long term mission is also to make itself completely unnecessary. In this case, that’s because a completely well-functioning antifragile ecosystem has all the components it needs to be successful regardless of the efforts of a foundation. Ideally, companies and communities combine to handle all of the governance, roadmapping and capital allocation activities that the NF handled during the early days of the ecosystem’s development.
In fact, success in 5 years means that the NF has wound down its core entity and sustainably handed off each of its core functions to teams within the ecosystem which have sustainable mandates.
The team of this foundation needs to combine a fanatical focus on adoption with an open source, community-first, inspiration-driven approach to creating alignment among ecosystem participants. Each person needs to be incredibly values-aligned with the 5 key NEAR values and each of its leaders will need to craft and communicate strategy both to internal teams at the NF and to the ecosystem overall.
Responsibilities of the NEAR Foundation
As a “portfolio manager” of the NEAR ecosystem, and inline with the vision above, NF is ultimately responsible for driving the success of the applications which make up this ecosystem via 3 major categories of activities:
- Awareness: Raise awareness of the NEAR technology, platform and ecosystem such that more developers, community members, enterprises and entrepreneurs build new portfolio companies and projects. This combines education, evangelism, communications, PR, tokenholder relations, analytics and more.
- Allocation: Spend both its discretionary (100M NEAR token endowment) and advisory (major ecosystem token buckets) tokens to capitalize the best initiatives within the ecosystem. This is primarily via a fund-of-funds level of abstraction, so the NF is allocating resources to other people who will actually deploy them “on the ground”. Its only granular allocation tool is the Grants Program, which accepts applications for small grants for a wide range of ecosystem-supportive activities, which are at least partially informed by the NF’s roadmap.
- Support: Create as much value as possible for ecosystem projects without actually stepping in and operating at all. This means supporting in a number of key way, including creating the operating framework and coordination so the NEAR community is well organized, well supported and capable of routing people, answers and resources to the teams that would benefit most from them.
- Operational Advisory: Create the self-serve resources, best practices and events which give projects the resources they need to solve problems with hiring, HR, legal, regulatory, financial and operational challenges.
A key question is also what the NF is NOT doing. Except in truly extraordinary cases, the NF is…
- NOT going to market: NF is NOT operating GTM initiatives for any specific products or technologies to generate revenue or reach end-users unless it is a test case or early stage incubation for something that will be spun out as an independent initiative. When a project or initiative starts pushing to a market, it must be helmed by an entrepreneur and spun out.
- NOT developing: NF is NOT providing direct development support to deals, companies or projects in the ecosystem. This is not a development shop.
- NOT running a true VC or syndicate: NF is NOT allocating to specific projects or entrepreneurs outside of the Grants Program because that doesn’t offer enough leverage.
- NOT a lawyer, accountant, etc: NF will contribute to legal and regulatory discussions but will never be a substitute for hiring professionals in these categories.
In each of these categories, NF may have some exposures but they are only temporary such that it is bootstrapping an effort or supporting an entrepreneur who can spin these things out.
How NEAR’s Success is Defined
The NEAR ecosystem’s success is driven by 3 key priorities, which are shared by the NF:
- Awareness: How many people know about and can accurately describe NEAR’s value proposition?
- Adoption: How much usage is the platform getting from each of its key stakeholder groups:
- Consumers (Monthly Active Accounts, “MAA”)
- Financials, (Total Value Locked, “TVL”)
- Developers, (Monthly Active Developers, “MAD”)
- Apps, (Total financing raised)
- Community Members, (Onchain Community Members)
- Credibility / “Legitness”: Do people within each stakeholder group who know about NEAR have a very high opinion of its quality and prospects for success?
The NEAR ecosystem’s overall success is difficult to measure, but two metrics which represent opposite ends of the spectrum are the total market cap of projects within the ecosystem (but which can be influenced heavily by market forces) and the gross marketplace value of transactions driven by the platform (both on chain and off).
How Culture and Values Apply
NEAR has always been primarily driven by deeply technical people trying to apply the lessons of Silicon Valley startups to actually build something real humans want using the blockchain technology. This project wasn’t started and doesn’t continue because of commercial intent but rather to create a rippling wave of change and value creation across the application stack.
Our values reflect this and everyone actually works hard to live by them. Below are the values themselves as well as the way the NF specifically embraces them and where it needs to do better:
- ECOSYSTEM-FIRST: always put the health and success of the ecosystem above any individual’s interest.
- The NF works tirelessly to create value for participants in the ecosystem. Everything from resource sharing to team vesting contracts are structured such that what matters most is the overall health of the ecosystem.
- OPENNESS: operate transparently and consistently share knowledge to build open communities.
- The NF has historically been strong in the sharing of resources and education but needs to put the time into better communication around its activities in order to better include the community.
- PRAGMATISM OVER PERFECTION: find the right solution not the ideal solution and beat dogmatism by openly considering all ideas.
- The NF doesn’t play favorites and is ultimately here to make everyone successful, regardless of where they come from. It has avoided many pitfalls of bureaucracy along the way, and has a healthy dose of pragmatism.
- MAKE IT FEEL SIMPLE: strive to make the complex feel simple so the technology, platform and ecosystem are accessible to all.
- The NF doesn’t make first party products but it is a service organization. Some of its services to teams in the ecosystem (eg routing deals or help requests or just making internal team requests for resources smoother) could be greatly simplified, which has been a focus in early summer 2021.
- GROW CONSTANTLY: learn, improve and fail productively so the ecosystem and the community are always becoming more effective.
- The NF has liberally supported team members in their personal (eg managerial) growth. Early summer 2021 efforts are focused on helping spread the resources for ecosystem participants to also learn and grow themselves, for example by contributing to the Open Web Atlas.
Operating the NF
The NF is a porous, open organization so many of its activities will be done as openly as possible but it still has many internal processes to keep the team aligned and performant. Its rhythm is as follows:
- Performance reviews across all teams (NFC, leadership, team leads, members)
- Review of Mission, Vision, Values and multi-year Objectives (NFC, leadership, team leads)
- Review individual team Missions and Visions (leadership, team leads)
- Review prior quarter’s OKRs (leadership, team leads)
- Submit, review and approve forward-looking quarter’s OKRs (leadership, team leads)
- NF Council meets officially (NFC, leadership, team leads)
- Coordinate or seed the hosting of external-facing Town Hall events with the community (community team)
- Prepare and publish the Ecosystem Review to NFC and to the community (leadership support team)
- NF Council calls informally (NFC, Leadership)
- Internal All Hands sessions to coordinate internal teams (everyone)
- Review KR progress (leadership with team leads, team leads with members)
- Coordinate 2-week sprints (team leads with members)
The Future and Scorecard of the NF
The NF has provided — and will continue to provide — many of the early resources that have been helpful to the early ecosystem but its ultimate goal is to make itself completely redundant and unnecessary by establishing robust communities across the ecosystem to handle all of its core functions.
As noted in the vision previously, the role of the NF is thus the role of any great entrepreneur — to scale itself out such that better teams and better leaders are able to take up the charge. It will bootstrap where necessary and then empower the ecosystem around it to improve and scale each of its areas of focus.
The NF has made extraordinary progress in less than 2 years towards creating a self-sufficient ecosystem but there is still plenty to bootstrap and many more handoffs to coordinate. NF will continue to deploy resources heavily to support key efforts but it will make sure all core support activities it provides are eventually made self-sufficient and are run by great entrepreneurs with sustainable businesses.
Success for the NF in 5 years thus means that it has wound down its core entity and sustainably handed off each of its core functions to teams within the ecosystem which have sustainable mandates. It’s an ambitious goal but an achievable one.
In the long term, the NEAR ecosystem itself will become the hub of a global universe of blockchains which support the Open Web. While there are many paths to get there and it will ultimately be driven by the founders and developers of the NEAR ecosystem, the NF is here to guide and support their journeys all along the way.
Erik is a serial entrepreneur who leads the NEAR Foundation, a nonprofit dedicated to enabling community-driven innovation via the NEAR Protocol, a decentralized app platform built to drive the consumer mass adoption of blockchain primitives like NFTs, DAOs and tokens.