California Tech Incubator Science Blockchain Developing Its Pipeline – ICObr>
Science Blockchain is a Santa Monica, California incubator focused on sponsoring and growing leading companies in the blockchain space. It launched its own ICO and will continue the sale for the next 13 days
Science Blockchain has been selected as the first developer-pool grant recipient by BLOCKv, a blockchain-based development platform for the creation of smart, secure and dynamic virtual objects.
As part of the grant, BLOCKv will contribute $500,000 of its V tokens to Science Blockchain projects over the next two years, improving the ability of Science and its portfolio companies to leverage BLOCKv technologies to create virtual goods and consumer-grade multi-media experiences called vAtoms.
Unlike so many companies in the nascent blockchain space, Science Inc. already has a track record of success growing young companies. The company has co-founded and invested in more than 70 companies, including Dollar Shave Club, DogVacay, HelloSociety, FameBit, Earny, Pray and Mammoth, the media company that reaches 30% of U.S. teens every month through social broadcasting and App Store top 100 apps like Wishbone and Yarn.
The recent turn to blockchain is believed to be the first incubator funded through an ICO and focused on blockchain. The Incubator will partner with what it views as leading entrepreneurs to invest in and build a portfolio of blockchain and cryptocurrency related businesses that it feels are positioned for long term success.
Science Blockchain CEO Mike Jones spoke with Block Tribune about the plans.
BLOCK TRIBUNE: So let’s start at the beginning here. You founded Science Inc. and had some highly successful companies, including Dollar Shave Club and a few others?
MIKE JONES: That’s right. We’re a six-year-old incubator and investment fund and we help co-found, incubate and invest in different startups. We originally focused on the commerce sector, where we were the original incubator and investor in Dollar Shave Club. Then we went into marketplaces. You may have heard of DogVacay. That’s one of our largest marketplaces. And then we went into mobile apps, where we have a company called Mammoth Media that has some top mobile apps. Then we dove headfirst into the blockchain world, where we’re now incubating a series of startups in the blockchain space.
BLOCK TRIBUNE: What was it about the blockchain world that intrigued you?
MIKE JONES: Well, four years ago I fell in love with it. I became a super active trader and believer in bitcoin. I loved the thesis of a globally-transmittable currency that was driven with a finite supply through mining, and as a technologist for a long time, I just kind of love the whole story of it.
But four years ago when we started building companies, what I didn’t love was the super-complex legislation and high risk it took to actually build companies in the blockchain space. So after we had experimented heavily on building things, we actually retreated into just basically taking a position in bitcoin from different altcoins.
About nine months ago, when we felt that the ICO market was becoming something special and that suddenly there was a renewed interest in the funding and development of block chain companies, and the blockchain as a platform now, suddenly, was an actual platform, we as a group decided we want to build things. So we decided to focus, for the next few years at least, on developing blockchain-based businesses.
BLOCK TRIBUNE: Why did you decide to do this as a separate division?
MIKE JONES: So, generally we raise kind of bespoke pools of capital, and so we had raised capital for our mobile-focused incubator that’s developed some great mobile apps and businesses, and in thinking through blockchain, we decided that we wanted a bespoke pool of capital. We really liked what the ICO vehicle allowed us to do, which was have a token that people could own and then, as we incubate businesses we give them, if those companies also had tokens, we can send them their position and those tokens. So it’s a special structure you don’t generally see in venture firms or other incubators. So we loved it.
We felt also if we were gonna be in this community, we had to be true to this community, and this community is highly self-supporting. And we felt that doing a registered ICO, so in our case a Reg D Exempt ICO, was the right way to protect us legally, and then also a way to kind of let the community participate in our incubator.
MIKE JONES: Overall, in working with a lot of different founders and a lot of different, very diverse companies … First off, it’s all about the people. So we first start with: Are these great people involved? Whether it’s the CEO, the CTO, the development team, the founding group … Who are they? What’s their vision? What do they want to do?
The second piece is if we’re looking at things for traditional venture capital, we do have to take into mind what does the funding climate look like for this type of venture capital business? I think in the blockchain world, we really ask ourselves, “Does it make sense for this company to be on the blockchain? Does the concept of a distributed ledger actually make sense here? Does consensus trust make sense here?” And often, the answer’s no. Often, they’re just jumping onto the bandwagon of this ICO-tokenized excitement. But when we find great teams that also have businesses that are super-enhanced by being on the blockchain, then we become excited to work with those teams.
BLOCK TRIBUNE: What is the state of the Southern California blockchain community? There’s a lot of interest and activity obviously in the Bay Area, and then New York. But what about here?
MIKE JONES: There’s a ton of activity share. I have not been to all the different cities or meeting with all the different startups, but I would say that the people I speak with seem to indicate that LA is a highly active city. I’m not sure if it’s the most active city, but I would assume it’s close to the most active city. The startups in blockchain here are deep and the reality is the participants in the bitcoin world have been here for many, many years. So I think you’ve got a lot of people who have believed in this actual currency for a long time, and now the fact that they get to build things, even more exciting. So I think you’d find a very highly supportive community here, of people building and investing in the block chain space.
BLOCK TRIBUNE: Are there enough development talents out here to sustain a large number of companies?
MIKE JONES: In LA, there’s definitely enough. Certainly, Snapchat has a major pool of developers. So does Facebook and Google, YouTube, et cetera. So there’s big developer pools out here, and our universities graduate more engineers. The LA-based university ecosystem graduates more engineers than almost any other city. So we have a ton of engineering talent here.
I would say that the talent pools that have experience in blockchain is very thin, though. So we have a handful of blockchain developers that we employ that work with various companies, but finding experienced blockchain developers is very, very difficult, and I think in most cases, these ICOs and these early teams are actually building people to learn that technology platform.
BLOCK TRIBUNE: How will that affect growth?
BLOCK TRIBUNE: So what are we going to do? Are we going to import more?
MIKE JONES: I think what we’re going to find is that there’ll be a lot of people that build applications on top of the blockchain, but there’s be very few companies that build absolutely new blockchains. I think you’ll find there’s a lot of non-venture-backed companies that will find their way into the space who probably shouldn’t be in the space, and the reality is the companies that are gonna be engineering-led with deep expertise in blockchain will probably put out the greatest-impact tokens that we can all watch.
BLOCK TRIBUNE: When people think of Los Angeles they think of Hollywood and show business. Tell me a little about what their interest is in the blockchain community? Is there a lot? Do they understand it or is there hardly any interest?
MIKE JONES: I think that there’s always interest within that Hollywood show business sector in anything that’s new and exciting and has mass seduction, whether it’s mobile apps or early-stage startups or whatever. I think in the blockchain world you have a lot of curiosity, you have a fair bit of excitement, but no one’s really sure how and where and what. So I think they’re reluctant to dive in head-first. We’ve certainly seen a few celebrities or brands throw their names behind certain tokens, but that’s probably not the right way to think about it. I think there’s bigger questions like, for instance, IP ownership in Hollywood is very complicated. It has a lot of parties. Honestly, in most cases IP ownership in Hollywood ends up with a lawsuit, because people end up suing each other over the way money moves through. Certainly a transparent ecosystem around proceeds from IP that would automatically pay individuals based on a smart contractor’s really compelling.
I think there’s some people in Hollywood that love the idea of a deep-level transparency over the funding and proceeds from IP development. There’s a bunch of industry that may really not like that idea. So there’s areas of Hollywood that actually the block chain becomes highly relevant for. But today I think it’s really, really early. But I do think that they’re paying attention and they’re interested.
BLOCK TRIBUNE: Tell me the details of your ICO.
MIKE JONES: So we’re a Reg D exempt. We’re doing our ICO under the Reg D Exemption from the SEC, which basically means that we’re not just a utility-driven ICO, we’re actually considered a security token. As a security token, there’s certain things that we have to do differently. We don’t allow discounts. We have a certain amount of lockup depending on what country you’re based in, and we can only have a certain number of US investors. So there’s certain restrictions to being a security token.
The way that our ICO works is we’re just over ten million dollars subscribed to our ICO. The proceeds from our ICO will be used to incubate companies that will be building in the blockchain. So teams come and pitch us in the way that you can imagine teams pitching anybody. Some of those teams that we feel have a great team or a great strategy that we think we can help, we will offer them to work with us. We also provide them with capital that’ll come from that ICO. We’ll typically provide them with space if they want to house with us here in our building in Santa Monica. And then we’ll work with them as they develop and further their business. So in the case of Dollar Shave Club, we were involved at the very beginning. We were instrumental for all of their fundraising process. They housed in our offices for around sixteen months. We joined their board and stayed on their board until the acquisition.
So what we look for as teams that we can spend of time with over a long period of time and really find the kind of industrial outcomes that we seek, which is eventually an (exit) event. And we do the same thing with the blockchains, so we want to find early teams that want to be incubated by us. We’ll use the proceeds from our ICO to fund the incubation process with those teams, and hopefully they’ll go off to become long-term, successful companies.
BLOCK TRIBUNE: What is the pitch process like? Is it in stages or is it just one shot? What’s that?
MIKE JONES: It can be in stages. We have teams that we’ve been talking with for weeks, and we actually have teams who we’ve been talking with for years that are kind of sorting through their strategy. One of our most recent successful companies, which is a company called Pray, that CEO we actually have met on a former business … It might be three years ago.
So when we find management that we like we spend a lot of time working with that management, getting to know what that partnership looks and feels like. Sometimes it happens quickly where that team is excited about working with us right away and they move into our offices and we jump into it, and sometimes it’s more … It takes a longer period of time.
BLOCK TRIBUNE: You’re announcing your first developer pool grant recipient. Now how many do you have in the pipeline coming up and how quickly will they roll out?
MIKE JONES: So we announced that there’s a company that we’ve been incubating called Spring Roll which is actually about to release their business on the blockchain. So that’s really exciting, so that’s great. They’re doing a reputational system with full rewards particularly tuned to employment. So they’ve been a business that is a venture-backed business that runs profitably for some time and they work with a lot of top corporations on recruiting and developing talent. And they’ve always had this interest in rewards-based introductions. It’s almost like a blockchain-oriented InMail system. And so they’ve actually now built a functional product on the blockchain. They haven’t fully released yet, but I’ve used it and it’s a working product that registers all activity on the blockchain. And they haven’t announced their ICO, but certainly they’re on an interesting path and they are our first company that we’re incubating.
BLOCK TRIBUNE: What else is in the pipeline?
MIKE JONES: There’s a bunch of other stuff in the pipeline that we have not publicly spoken about yet, but in the next few weeks you’ll start hearing about more and more companies.
BLOCK TRIBUNE: How many more companies will I hear about?
MIKE JONES: I would expect that we’d probably do four to six companies a year, kind of in-depth. It depends a little bit about the companies. Sometimes it’s gonna be more, sometimes it’s gonna be less. But it’s similar to the original science incubator. We have a fairly steady flow of companies we’re looking at and we’re working with.
BLOCK TRIBUNE: OK. What’s the craziest pitch you’ve ever heard?
MIKE JONES: We get a lot of crazy pitches. I’ve been pitched by treasure hunters before that are funding sea vessels to go and recover buried treasure. I’ve looked at gold mines, a lot of property use kind of stuff. And then I get a lot of things that in retrospect are crazy pitches like, “I’m gonna to disrupt Facebook” or “I’m going to disrupt Google.” And the question with those are obviously, are they crazy or are they the next people to actually disrupt those giants?
So I love meeting with entrepreneurs. I love spending time with them to kind of accomplish their dreams, and I’ve made a career out of doing that. I’ve luckily ran a bunch of successful companies. I’ve run a bunch of unsuccessful companies and learned a lot in the process, and I’m really happy to syndicate that knowledge. I meet with people that have all sorts of dreams, and sometimes it’s people building next-gen financial systems on Kryptel and sometimes it’s not. Sometimes it’s people with new commerce products or brands they want to develop. And sometimes the occasional completely off-topic entrepreneur will stumble in my office with a really interesting business idea as well.