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Mar 7, 2022

So, What's the Story Behind Flip?

Jack Burt
Jack Burt

Writer

It starts with a trio of founders (Sam Hotchkiss, Brian Krogsgard, and Jennifer Jacobs), a tractor, a podcast, and a rude awakening . . .

The Right Time

Sam Hotchkiss:

Preceding his exit from Automattic (the owner of WordPress.com) in 2018, Sam Hotchkiss’ initial, semi-serious goal was to “ride around on my tractor for a few years, play with my kids, and figure out what I wanted to do next.” The tractor riding though, only lasted about six weeks before he caught an acute case of entrepreneurial-restless-leg-syndrome.

And there he was, working passionately again, now as Founder and CEO of Reconnect, a start-up that uses technology to improve outcomes in the criminal justice system. It was not just a smart move, but a benevolent one. Yet, as the company moved from acorn to booming oak tree, Sam noticed how the focus evolved from creating a product to politically selling it.

With Reconnect facing more marketing and less technical challenges, Sam digested the realization that his role as founder and CEO at Reconnect were complete.

He was ready again — to build something new, something that would require his left-brained, shape-rotating mind. Meanwhile, at this point, Sam had a few years of crypto digging under his belt, but didn't know yet where the experiential dots were going to connect.

Soon, he’d find himself chatting with fellow WordPressoooooor, Brian Krogsgard, but this time not about WordPress.

Brian Krogsgard:

You may not know that before ‘Ledger’ achieved meme-status on UpOnly and Crypto Twitter, Brian Krogsgard had quietly, thoughtfully begun his exit from the WordPress space, an industry where he’d spent over a decade cranking away as an analyst, building websites, and leading a small but dedicated community.

A loyal and incisive person, it was not a simple decision for Brian to leave the shores of Web2 — he’d been around since 2008 and was fortunate to have watched the WordPress ecosystem mature (today it’s being used by roughly 43% of all websites.) At the same rate, Brian had seen the writing forming on the wall: WordPress was evolving into a more professional ‘lifestyle’ as opposed to the early days where it was still a hobbyist and tinkerer-lead endeavor for many. Certainly, he could have gritted his technical teeth and pushed forward with WordPress, but his interest and subsequent impact in the crypto community were overwhelmingly eclipsing the former.

Even while talking to Brian about WordPress versus crypto career paths, there was an audible difference in his tone; WordPress was tonally equivalent to labor, while the web3 trail, despite being riskier, sounded exploratory and playful.

Thankfully for the crypto collective, Brian swerved right toward adventure and decided to sell his remaining half of his WordPress business for a modest sum of dinero, money that we, the onlooker, can’t help speculating has found a new home in NFTs, Flufs and the like.

From there, it was a rather natural progression to full-time degen — Brian already had one foot heavily anchored in crypto, as well as a wealth of community-building experience — before long, he was fully committed, adding to a number of crypto-related projects including personal investments/research, collaborative podcasts (UpOnly), and content creation (Weekly Open & LedgerCast).

Jennifer Jacobs:

A sort of corporate navy seal trained in land (business,) sea (finance,) and air (operations,) Jennifer Jacobs, most recently worked at Reconnect with Sam where she was the Chief Financial and Operations Officer.

Like Sam and Brian, Jennifer went through a career transition a few years back. She jokes that she had “an early mid-life crisis”, a reckoning which essentially entailed her waking up one morning (after decades of building a fulgent resume working for Fortune 500 companies such as General Electric, Unum, and Fidelity,) proceeding to stare at herself in the spiritual mirror and recoiling at the idea that if she didn't change something now, like right now, then she’d spend the rest of her life working in legacy insurance.

Which is to say, when Jennifer finally walked away from big-corporate, she did so with unflinching, nothing-to-lose confidence. She immediately started dipping her feet into Maine’s entrepreneurial waters where she fatefully met Sam and later joined Reconnect — a perfect opportunity to give back through an exciting start-up.

And while compared to Brian or Sam, she might not have been on the crypto scene since 2017, she was certainly not peter-schiff-ian, she admits that she was always open to observing crypto from afar, and like watching a tsunami rolling towards the shore, she intuitively felt the decentralized-wave was coming.

After all, she’d seen the various limitations and chaos that accompanies a centralized approach — she was just waiting to connect with Sam and Brian before she’d find herself talking about NFTs and surfing for the best yields in DeFi.

The Right Place

Sam and Brian first met years back at WordPress conferences but remained industry-acquaintances for some time, that is until they finally connected on the topic of crypto. Sharing alpha and riding the occasional rug pull to zero together, it wasn’t until then that their friendship blossomed. In hindsight, it would be this virtual volley of crypto chatter between Sam and Brian that would eventually form the conversational substrate for Flip.

Although the precise context is a bit of a mystery, it was sometime in early 2020, when Sam first formally approached Brian with the idea for Flip. The idea was based on a simple premise: Are you seeing what I'm seeing — massive companies discreetly vying for access to crypto order flow and on-chain data (what are people trading, where, and at what volume, etc,.) And while they certainly wouldn’t be the first to recognize the need for crypto market intelligence, Sam believed they could be the first to build a DeFi Intel product that was not cumbersome, unfriendly, or disjointed.

And so Sam, as all great buddies do, nudged Brian, let's be the solution, let's flip DeFi’s on-chain data inside out, create something that can show what lies within the market's gut, but do it with an enjoyable, elegant design. He was adamant that Brian’s extensive knowledge of the crypto marketspace would be vital to creating an unparalleled product. Just as well, he knew that no matter how well-designed or well-marketed Flip’s product was, they’d need Jennifer, someone they could trust unequivocally to keep Flip dynamically managed.

The leadership breakdown would begin as such: Sam would head product and engineering, Brian would head marketing and help on product, and Jennifer would be the financial and organizational glue.

Call it coincidence or call it synchronicity, but the timing could not have been better. Not only was there an opening in the market, but there was room for light in their calendars. They had an idea, they had a team, and they had time. They thought, “Let’s put together a deck and see if we can sell it to ourselves.”

Except they didn’t just sell it to themselves, but turned it around and promptly sold it to investors, too. Not only did Flip secure their initial funding with myriad friendly investors (a major one being CMS Holdings), but they did it in a matter of hours. They even had the Hollywood problem of turning down other potential investors. Sam and Jennifer’s experience with slowly, meticulously trying to acquire backing at prior start-ups was upturned in the course of a day.

Nevertheless, they needed a minute to process and gather themselves. Brian jokes that he hadn't even told his wife about Flip yet. But Flip didn’t care. Flip, as a project, had grown legs and was eager to walk/run into things. The trio used the first round of funding to hire the core product team and start building out the prototype for Flip.

The Right Product

The scrappy team of six went to work designing and prototyping a Defi toolset. But they still hadn’t told anyone about Flip yet. So they rolled one of the fun, fast-moving tools they’d worked on (dubbed FlipFOMO) into a public announcement of the company.

Over the next couple of months, they realized just how much potential was on the NFT side of the on-chain landscape. They’d known from the very beginning that on-chain data was going to be at the core of Flip’s product, but now arose the question of where to apply that on-chain data so that it positively impacted the most people?

Sam explained, “We started off thinking we were going to create Bloomberg for DeFi and ended up realizing there's a whole lot more value potential in creating Zillow for NFTs.” While this thesis is mildly counterintuitive because DeFi is still larger than NFTs in dollar terms, Sam and Brian were betting that NFTs were the more nascent and far-reaching market. NFTs indeed has onboarded far more people on-chain than DeFi. And they knew they could build really awesome stuff for NFT degenerates (as they themselves identify as such).

So, with a slightly revised thesis in hand, the Flip founders talked things over with initial investors and were grateful once again for receiving enthusiastic support — the investors saw what they saw, over 1,000 NFT collections were being launched every month, and it was a matter of time before the volume pie sliced up well beyond just OpenSea (where the vast majority of NFT trading takes place).

There’s a not-distant future where NFTs trade across dozens of siloed marketplaces (both decentralized and centralized) and it becomes an enormous challenge to collect all that bifurcated market data back to a singular hub.

That’s what Flip does. Flip aims to fill the gap by building an elegant NFT aggregator that gathers the various NFT marketplaces under one cross-chain roof, simultaneously combining multiple wallets, on-chain intelligence, and even some of the social aspects of NFT trading.

From there, they took the finished prototype and their refined vision and raised a Seed fundraising round, which would enable them to further grow the team (including yours truly) and build out an ambitious roadmap to secure Flip’s place as the crypto world’s preeminent NFT hub.

Of course, they are just getting started, but with a dedicated team, an unwavering investor-base and a 4k vision for their product-market fit, their confidence in Flip is . . . based.

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