Skyseed: VC Fund & Incubator for Bluesky and AT Protocol

A New Fund for the Bluesky Ecosystem: Skyseed Launches with $1 Million

Peter Wang announced a call for proposals on November 15th, seeking concepts for a novel incubator and funding initiative. This initiative would be dedicated to fostering experimental projects within the rapidly developing Bluesky/AT Protocol environment.

Just four weeks following this announcement, Skyseed was launched, backed by an initial investment of $1 million.

Rapid Development and Growing Interest

This swift development is notable, especially considering the fund currently operates without a dedicated website. However, Skyseed does maintain an active presence on Bluesky.

The speed of Skyseed’s emergence highlights the considerable excitement surrounding Bluesky. It is increasingly viewed as a potential alternative for the millions of users who have left X, formerly known as Twitter.

The Promise of Decentralization

There is a strong belief that building anew on a decentralized, open network like the AT Protocol could help us circumvent the issues prevalent in today’s social media landscape.

These issues include the dominance of advertising and the creation of closed, proprietary platforms.

The Core Difference: Open vs. Closed Protocols

“The majority of Facebook’s income is generated through advertising. Most large, centralized social media companies are fundamentally advertising businesses,” Wang explained to TechCrunch in a recent interview.

“This means they prioritize user traffic and attention. A key distinction between open and closed protocols lies in the fact that closed systems will not permit applications that divert content or user attention from their own platforms.”

Open protocols, like the AT Protocol, offer the potential for a more user-centric and less commercially driven social media experience.

Decentralization is a core principle, aiming to avoid the pitfalls of walled gardens and ad-focused models.

The Decentralized Web Landscape

Jessicah Wang serves as the co-founder and chief AI and innovation officer of Anaconda, and previously held the position of CEO. Anaconda is a company centered around its widely-used open-source Python and R distribution, empowering data scientists throughout the entire lifecycle of their data projects – from creation to deployment.

Beyond her role at Anaconda, Wang has consistently championed the decentralized web movement. This commitment is demonstrated through financial contributions to initiatives like Blue Link Labs, the developers of the peer-to-peer, open-source web browser, Beaker.

Support for Beaker officially concluded in 2022. Following this, its creator, Paul Frazee, transitioned to Bluesky, initially as a “protocol engineer” and later assuming the role of CTO in April.

The groundwork laid during the Beaker project proved invaluable to Bluesky’s development. Frazee articulated this connection in a statement announcing Beaker’s end, expressing hope that their prior efforts would ease the transition for users.

Currently, Wang is formalizing her dedication to decentralization through the establishment of a seed fund. “This marks my first venture into creating a fund with the responsibility of managing external investments,” Wang explained. “I had been providing funding to Paul [Frazee] and his team for several years.”

She continued, “Their explorations into decentralized web technologies, though not always successful, provided crucial insights that informed the design, protocol, and applications of [Bluesky].”

Although the concept of a decentralized web isn't new, a significant user base adopting a framework like the AT Protocol has been elusive. This protocol is built on open standards and open-source principles, aiming to give users control over their data and the freedom to move between platforms.

“Within the decentralized web community, there are individuals who have long anticipated this opportunity,” Wang stated. “We’ve generated numerous promising concepts, but lacked widespread user adoption. Now, we are witnessing that adoption.”

Key Aspects of the AT Protocol

• Open Source: The protocol’s code is publicly available.
• Open Standards: It adheres to publicly defined standards.
• Data Ownership: Users maintain control of their own data.
• Platform Portability: Users can migrate their data and identity across different platforms.

The emergence of a substantial user base represents a pivotal moment for the decentralized web, potentially unlocking the full potential of these technologies.

A Surge of Innovation: The Skyseed Fund and Incubator

Following his call for proposals in November, Wang reports a significant influx of interest, a response he compares to the early days of the internet in 1996.

He emphasized the necessity of empowering early adopters and innovators within these emerging technical ecosystems. According to Wang, the caliber of initial projects demonstrated the potential for substantial advancements stemming from this initiative.

Skyseed is structured around two primary components: a venture fund and an incubator program. The initial $1 million in funding is largely provided by Wang personally, supplemented by six-figure investments from several angel investors.

The fund’s assets have already increased to approximately $1.5 million, and this growth is anticipated to continue given the current level of interest. Formal accredited investors may be included in the future.

While currently reliant on angel funding, Wang has received expressions of interest from potential limited partners since the fund’s announcement. He believes there is considerable capital available for investment in these early-stage ventures.

Initial investments are projected to be around $100,000, allocated to projects demonstrating viable business models, capable teams, and functional products. This funding aims to facilitate progress towards key milestones and attract further investment.

However, what is the potential scale of the Skyseed fund itself?

Wang suggests the fund could grow to $5 million to $10 million, particularly as initial projects begin to show promising results.

Beyond equity investments, Skyseed will also offer developer grants, mirroring a strategy employed by Bluesky. These grants will range from $5,000 to $25,000.

Grant allocation will be highly selective, requiring a strong level of trust in the applicant’s technical expertise and execution capabilities. Generally, funding will be directed towards developers who have already created tools demonstrating quality and value – either through personal use or positive feedback from others.

The first developer grants are expected to be awarded before the end of the year, with equity capital deployment beginning in the new year.

“I am already identifying several exceptional projects,” Wang stated. “These projects won’t require substantial capital, and enabling developers to focus solely on building is a priority.” He noted that many projects are driven by individuals or small teams working in their free time, minimizing funding needs.

The incubator component of Skyseed will serve as a collaborative environment for individuals with shared interests. This will foster idea exchange and potential partnerships, especially among projects with complementary functionalities.

“A significant mentorship aspect will be included, alongside a network designed to facilitate mutual support,” Wang explained. “Many projects across different areas share common objectives, and a key function will be connecting founders with synergistic opportunities.”

Dunbar’s Number and the AT Protocol

Bluesky, fundamentally, represents another application within the digital landscape, and is currently confronting similar content moderation issues that have plagued X, formerly Twitter, since its beginning. The potential for advertising revenue on the platform also exists. However, this situation underscores the prospective advantages of a robust ecosystem developing from the foundation of the AT Protocol.

Understanding Dunbar’s Number

Dunbar’s number, a concept originating with British biological anthropologist Robin Dunbar, posits a cognitive boundary on the number of stable social relationships humans can maintain. This limit is generally accepted to be around 150 individuals. Traditional social media platforms often disregard this constraint, connecting billions of users within a single social sphere, frequently resulting in instability. These large networks can compel interaction with individuals one might actively avoid in offline settings.

The AT Protocol offers a different approach, enabling the creation of diverse, specialized networks built upon a shared foundational framework.

The Potential for Diverse Applications

“We aren’t obligated to be confined within a single, universally designed application,” explains Wang. “The core principle of the protocol is to facilitate the development of numerous distinct applications and allow a wide range of user experiences to thrive.”

Within the initial days following its launch, Wang reported receiving approximately 50 project proposals. While definitive funding decisions are still pending, he shared insights into the types of tools that could emerge if the AT Protocol is allowed to develop organically.

Beyond Bluesky: Niche Networks

The AT Protocol envisions alternatives to Bluesky itself. One possibility is a platform specifically designed for children and families, featuring social connections branching from parental accounts and offering detailed data privacy controls. Alternatively, a network could be created to support investigative journalism, whistleblowers, or marginalized communities.

Furthermore, applications resembling Reddit, or social extensions of platforms like SoundCloud, Bandcamp, and even Google Maps are conceivable. “Some developers are creating photo-sharing applications similar to Instagram, while others are exploring event-coordination platforms akin to Eventbrite or Partiful, integrated with social graphs,” Wang stated.

Building a Modular Ecosystem

The ultimate goal is for these products to serve as the infrastructure for a completely new ecosystem of applications. This ambition lies at the heart of Wang’s funding initiative.

“Currently, core functionalities embedded within major social media companies could be extracted and transformed into modular components of an ecosystem, allowing for independent development and innovation,” Wang suggests.

Advertising and Sustainable Models

This modularity doesn’t preclude advertising or subscription-based models; it simply expands the available options.

“Advertising-supported platforms are certainly viable, but must be implemented responsibly as part of a balanced business model,” Wang clarified. “The major social media companies inadvertently prioritized advertising and the attention economy, and by that point, they were already heavily indebted to investors. This represents a key distinction. We aim to pursue a different evolutionary trajectory.”

Ultimately, the AT Protocol seeks to foster a more diverse and user-centric social media landscape.

A Branching Path

Despite considerable discussion surrounding openness and decentralization, a significant factor remains: Bluesky, responsible for both its application and the foundational open-source protocol, operates as a private entity supported by venture capital. History demonstrates that open-source status isn't invariably enduring.

Essentially, potential for complications exists, both within Bluesky itself and concerning the protocol it utilizes. However, Wang doesn't perceive this as a critical issue.

“Within nearly all open-source environments, the user base ultimately serves as the deciding factor,” he explained. “Should a large corporation attempt to exploit an open-source project, its impact is negligible if users abstain from its use. Furthermore, users retain the ability to create a fork and pursue alternative development if they disagree with the direction taken.”

Many of the projects receiving funding are likely to be developed as secondary endeavors. This is comparable to the nature of Skyseed’s own development.

“This is a project I am undertaking in my spare time,” Wang stated. “However, there is substantial support, and many individuals are optimistic about its success. I have actively sought their contributions. A key focus during the upcoming holidays will be establishing a more formalized structure.”

The Power of User Choice

• Users can abandon projects exploited by corporations.
• The ability to fork allows for alternative innovation.
• Open-source ecosystems rely on user participation.

The success of the protocol hinges on the active engagement of its user community. A vibrant and responsive user base is crucial for long-term viability.

Establishing a clear organizational structure for Skyseed is a priority. This will facilitate more efficient collaboration and development efforts moving forward.