Building a Web3 Unicorn without a token

Kenzi Wang

For Matthew Gould, the co-founder of Unstoppable Domains, the most exciting aspect of Web3 is the ability for people to have more control over their digital lives – everything from having their cryptocurrency in their wallets to being able to own their data. 

In the recent Web3 Unlocked episode, he spoke about his founding journey from Web2 to Web3, startup ideation, and building a Web3 unicorn without a token. 

Disclaimer: The views expressed in Web3 Unlocked podcast are those of our guests solely, and none of this is financial advice.




Every founder has a mission that drives them, and for Matthew, it is the right for people to own their digital identity and to be able to verify the information that they see online.

“I think that Web3 gives us a chance to add some new tools into our digital life, which will make the internet a lot more trustworthy and easy to use… Though crypto is a little  hard to use, we’ll get there and expand the number of things we can do online that we couldn’t do before.”

Web2 to Web3:  Inception of the startup Idea

It takes a few years for good ideas to incubate, Matthew says, and the power of good ideas is underestimated. While he believes that the principles of hustle culture, like operating efficiently and pushing through, are essential, it is even more prudent to spend time and really incubate an idea. 

“Most people who have started companies and have been successful, they want to solve something they have been bothered about.”

This was Matthew’s experience: what started out as playing around with the technology, running a node in his house, building Bitcoin apps, and going to different coding courses on the weekends evolved into an interest in solving some of blockchain’s glaring problems:

“I found NFT domains–actually just blockchain domains before they were NFTs–I thought that it was a very interesting place to try to address some of the problems we have around,  verifying data or just improving the UX for Web3 products.”

The founding story of Unstoppable Domains: Rejection and Acceptance 

Before getting into UD, Matthew worked on a couple of products built on blockchain technology that did not work, like Forum (verified reviews of Bitcoin transactions) and Verified News (verified Facebook posts).

It was then that he started working on Unstoppable Domains, specifically on ENS, which had launched around that time, in 2017. He was one of the first people to register domains on ENS and, at one point, used to be one of the largest ENS domain holders. The UD  team then decided to launch their own naming system after building a system for users to register an ENS domain after paying with a credit card.

His team decided to build naming systems for different blockchains like Ziliqa. Today, there are a lot of naming systems for different blockchains. In 2017, however, when Matthew approached to work with them, they declined. And so, his team decided to launch their own system, .crypto, which they still have. Over time, they launched more blockchain extensions like .nft, .wallet, and even .blockchain, which was launched with

“When you’re early in the game, you can look back at your pitch deck from five years ago and see the things you had then are starting to happen now. If you look at our pitch deck, [it said] every blockchain will have a naming service, and today, that’s actually happening. We said everyone’s going to use this for sending and receiving crypto payments, and people are starting to do that. We said people are going to tie back their social profiles; now you can see people doing this on their Twitter.”

Matthew emphasizes the need to be early on technology so you can be ahead of everybody to figure out how the technology will pan out. He also advises writing down predictions of how the market will go to see whether these predictions will prove right over time, signaling whether you are going in the right direction. 

On how founders can distinguish good and bad ideas

What makes one decide if a business idea is bad? 

“If you’re a founder and if you want to start something, there are some ideas you shouldn’t work on. One of the criteria I use for an idea is, do you think it is inevitable?”

This is where the name for Unstoppable Domains comes from: Matthew knew that there was a 100% chance (not even 99%, but 100%) that people would use NFT domains for sending cryptocurrencies. If, as a founder, you are picking an idea to work on, question yourself on whether that idea is inevitable:

“Uber: it was inevitable that you would order a car with a phone app. Tinder: it was inevitable that you were going to want to do dating from your mobile phone. These things are inevitable and I think that those are the best startup ideas because if you spend time on them, you know it’s going to be worth it. It’s just a matter of sticking with it.”

The biggest differences between Web2 and Web3 users

There is a lot more uncertainty in Web3, which makes it more challenging. At the same time, there are many more engaged consumers in Web3, making it a lot easier for founders in the industry.

“As a builder, I’m okay with rebuilding something if it doesn’t work. But, if you’re comfortable with changing things up because you’re not heading in the right direction, then I think Web3 is great because you also get a lot of customer feedback.”

The lack of customer feedback is what plagues Web2.

Web2 startups are built with a lot of time and effort only to have no one care about them. With Web3, on the other hand, there will be engaged, incentivized customers who want to try out the product and will specify what worked and did not work. On the downside, with Web3, there is a lot of uncertainty, whether it is regulatory, or design, or others.

At the same time, Web2 is saturated with so many SaaS products that it is hard to cut through the noise. Matthew adds that because there are a lot of Web2 apps out there, it is “kind of boring.”

This is another key difference between Web2 and Web3. Web2 companies will want to go after a well-defined, big problem that has an immediate solution. In contrast, in Web3, startups have more leeway to try an iterative approach with their product because the design space is open.

For instance, when it comes to Unstoppable Domains, only a few people know they have a problem with online privacy. While Unstoppable Domains is an NFT domain company, what they’re really trying to work on is solving digital identity:

“So we have to pick a smaller part of the problem to solve first to get people in the door. Then we can teach them more about how we think this is going to change the other things that they interact with.”

On being an atypical founder

“If they have a list of rules that you should not do when starting a company, Unstoppable Domains basically did all of it.”

When Unstoppable Domains raised funding in San Francisco, the company’s founders moved out of the city to work remotely. In the pre-pandemic era, this was detrimental: if a startup was raising funds in San Francisco, it had to stay in San Francisco. Nevertheless, this team moved to Las Vegas.

“We broke all the rules. We left, and the founders don’t live in the same place with each other because we’re remote. We didn’t have a token when every crypto project has a token… I would say we’re very atypical founders.”

However, there are two things Matthew believes are important for all founders to consider, whether they are typical or not: why you’re doing it, i.e., are you in it for the problem you are trying to solve, and whether it is the right time in your life to build a company.

“If you’re going to start a company, you want to do it for the right reason and the right reason is different for different people.”

Another thing people have to consider is whether it is the right time in their life. 

“What life choices are you making right now? Does that fit into building something impactful? If your life priorities next year is to get healthy, then I would suggest that starting a startup is not a good idea.”

On making decisions to survive downturns

When Matthew started Unstoppable Domains, there were many times he felt that they might “go out of business.” Every time it happened, Matthew and his team would brainstorm and try to come up with an idea to help the business survive. This is how Unstoppable Domains ended up launching .zil and .crypto at a time when they could not find customers for .eth. At one point, one of their team members was ready to leave, but Matthew was able to convince him to stay.

“As a founder, you may have early employees or even other founders lose faith. You just need to be real with those people, open up with what the outcomes could be. Just say the worst case scenario happens…why not take another roll of the dice?”

He believes that the current downturn is the worst yet that the crypto industry has faced and that it could be a five-year winter. He equates it to the early 2000s recession which did not get resolved until 2006-07. 

“When new technology comes out, like the internet in the 90s, you have multiple, quick, successive investment cycles. Once you get to a certain scale, you have to be useful in people’s everyday life. I think that crypto has finally hit that size; maybe we’ve got one more cycle in us where we’re getting close, where people have to use you all the time.”

He says that this is what happened in the early 2000s, just before the internet became a household technology across the world a few years later. Matthew believes crypto is currently in the same place.

While blockchain technology is evolving, there are not enough transactions per second in crypto, and the user interface is not up to the mark. 

“Wallets have a long way to go to become user-friendly, there are all sorts of backend plumbing that simply does not exist.”

He believes that it will take longer than people currently estimate for things to recover because the crypto industry has to build its way out of it. 

“All the problems are actual human interaction problems with blockchains and those have to be solved. So this is going to be a longer investment cycle and that’s what we’re preparing for over here at Unstoppable Domains.”

On raising equity instead of doing token rounds for funding

“We already have tokens; they’re NFT domains, they’re ERC 721 blockchain assets.”

In his view, a lot of NFT projects don’t need tokens to be successful because they’re focused on the utility of the product and users in order to generate sales. He also emphasizes the regulatory uncertainty around tokens in the US, adding that it was not a risk they were willing to take. He also tells us that Unstoppable Domains is able to have a revenue stream from its utility as opposed to depending on token economics.

If a system was going to have a token, Matthew says that it needed to be a requirement for an internal token, like Bitcoin. He adds that there are a lot of other use cases where tokens do not serve a product and are hampering product development and consumer adoption, therefore being harmful for those protocols.

“I haven’t seen a great system built for tokens. We just haven’t seen anything that we’re really excited about to put into our system to make it better. I think most of them would make it worse.”

In fact, in 2017 Matthew believed that the crypto industry would be able to issue equity on the blockchain in a few years and he believes that it has not happened yet due to regulatory failure. 

On building a community without tokens

“Unlike other crypto projects, we don’t have a native token. So we don’t have the same situation where we need to have people out there evangelizing to get their friend to buy our tokens so that they can push the price up.”

Matthew says this lets Unstoppable Domains spend more time focused on building the product. He says they measure their success not by how many people talk about them on Twitter but by measuring how many people are actively engaging with their product.

“We want to be more of a utility than, like, a fashion statement so that we will be successful; we just see people using us every day. Zoom doesn’t have a bunch of people out there trying to pump Zoom tokens, but billions of people use Zoom every year. And I think it’s going to be the same thing with Unstoppable Domains.”

On reaching a $1 billion valuation

Matthew emphasizes that one of the essential things for founders is to go out and secure funding when their venture is having an excellent quarter or even just a good month. 

“You want to strike when the iron is hot, you got to have good timing, and we did it at Unstoppable Domains… Go out and get your fundraising when your numbers are looking good, not when you need it”

Another thing Unstoppable Domains focused on was their Total Addressable Market (TAM), which Matthew believes for Unstoppable Domains is closer to 10-20 billion, as the company is a naming system for individuals and there are 3-5 billion internet users.

He also adds that it is important for the company to make significant pivots.  This means that while Unstoppable Domains had an initial focus on digital identity, they built more features like crypto payments and adding more data, and creating profiles. 

“Step back and be okay with changing your direction. Be more open-minded about what your product can be… You really want to stretch out there if you want to be a company that has world impacts.”

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