Originally published on September 5th, 2022

The minimum viable product (MVP), a concept popularized by Steve Blank and Eric Reiss, has dominated startup culture for almost 20 years.

An MVP is “a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development.”

If this sounds like a simple and obvious idea, that’s because it is. But it’s also profound and overlooked by most entrepreneurs.

I won’t get into the MVP idea, (for that you can read The Four Steps to the Epiphany and The Lean Startup) but instead I’ll highlight how it has been successfully applied to blockchain protocols.

Ethereum is one clear example. Vitalik and the team had spent enough time trying to develop on Bitcoin to conclude that a more programmable blockchain was needed.

Let’s walk through how the product was taken to market.

Ethereum’s initial version was revealed in 2014 and launched in 2015. It had a unique competitive edge yet was far from optimal:

Unique element:

• Programmability: Ethereum was the first and only Turing-complete smart contract blockchain.

Suboptimal elements:

• Consensus mechanism: The team wanted to use PoS as Ethereum’s consensus mechanism from the start, but it would have taken too long. Instead, they borrowed the tested PoW from Bitcoin.

• Execution environment: It’s no secret that the EVM could use a lot of work. It’s frequently criticized by people inside and outside the Ethereum community. But much like Javascript, it worked well enough.

Instead of seeking perfection, Ethereum launched and found product-market fit with a community eager to build on new cryptoassets.

Why was it important to launch when it did?

Validated learning, of course. Ethereum needed to get popular and congested for the team to:

• Build a war chest: They parlayed traction into scaling solution research - iterating through ideas like execution sharding / plasma and landing on rollups. 

• Find the right strategy: They pivoted to a rollup-centric roadmap.

By prioritizing rollups, the Ethereum team and community accepted that their execution layer (the market leader) would not be where the future of decentralized applications would run. It would instead, if all went well, likely fade into the background as settlement infrastructure.

This pivot is often under-appreciated. A decision to let other chains slide into the spotlight takes serious humility - a kind learned from the battlefield (AKA years of saturated blockspace and high fees). So far, no other leading programmable blockchains have explicitly prioritized being a settlement layer despite some being surprisingly well-positioned.

Polygon is another clear example. A slow and expensive Ethereum demonstrated a clear need for fast and cheap blockspace. The Polygon team identified this and moved quickly.

Much like the first version of Ethereum, Polygon PoS (Polygon’s first product) had a unique edge yet was not considered an optimal solution:

Unique element:

• Ethereum-alignment: EVM-compatibility was clearly important but just one part of the story. The PoS chain was initially framed as an EVM-compatible Layer 2 for Ethereum, differentiating it from the many other EVM-compatible chains.

Note: The Polygon team gets a lot of heat for calling the PoS chain a Layer 2, but I’d argue that the definition has morphed over time. Layer 2 used to be a reasonable term for any solution technically built on Ethereum (or another base layer).

Suboptimal element:

• Monolithic design: The Polygon team was well-aware of Ethereum research, but they knew rollups were not yet practical. In the interest of speed, they borrowed the tested Tendermint consensus mechanism from Cosmos.

Let’s ask the same question we did of Ethereum. Why was it important for Polygon to launch when it did?

The Polygon team needed momentum and feedback from the market to:

• Build a war chest: They grew a massive treasury, acquired quality tech / teams and allocated $1 billion to ZK rollup R&D.

• Find the right strategy: They pivoted to an Ethereum-only solution suite.

Many people don’t realize the extent to which the Polygon team pivoted.

Initially, they used Ethereum as a beachhead but were not outwardly dedicated to it (similar to StarkWare today). One 2018 article reads, “We have chosen Ethereum as the first platform to showcase our scalability”. This is in stark contrast to a more recent Bankless episode, where co-founder Sandeep makes clear that “if in the future Polygon starts focusing somewhere else, I will not be there.”

Ethereum and Polygon teams both launched solutions that they knew weren’t perfect. They did one important thing really well and got scrappy with the rest. They tripled down on what was working and iterated on what wasn’t. They weren’t afraid to pivot and change the narrative.

They built. They measured. They learned.

The result? Both projects are wildly successful and well-positioned for the future.

And some of their original visions are becoming reality after all!

Originally published on September 5th, 2022

The minimum viable product (MVP), a concept popularized by Steve Blank and Eric Reiss, has dominated startup culture for almost 20 years.

An MVP is “a version of a product with just enough features to be usable by early customers who can then provide feedback for future product development.”

If this sounds like a simple and obvious idea, that’s because it is. But it’s also profound and overlooked by most entrepreneurs.

I won’t get into the MVP idea, (for that you can read The Four Steps to the Epiphany and The Lean Startup) but instead I’ll highlight how it has been successfully applied to blockchain protocols.

Ethereum is one clear example. Vitalik and the team had spent enough time trying to develop on Bitcoin to conclude that a more programmable blockchain was needed.

Let’s walk through how the product was taken to market.

Ethereum’s initial version was revealed in 2014 and launched in 2015. It had a unique competitive edge yet was far from optimal:

Unique element:

• Programmability: Ethereum was the first and only Turing-complete smart contract blockchain.

Suboptimal elements:

• Consensus mechanism: The team wanted to use PoS as Ethereum’s consensus mechanism from the start, but it would have taken too long. Instead, they borrowed the tested PoW from Bitcoin.

• Execution environment: It’s no secret that the EVM could use a lot of work. It’s frequently criticized by people inside and outside the Ethereum community. But much like Javascript, it worked well enough.

Instead of seeking perfection, Ethereum launched and found product-market fit with a community eager to build on new cryptoassets.

Why was it important to launch when it did?

Validated learning, of course. Ethereum needed to get popular and congested for the team to:

• Build a war chest: They parlayed traction into scaling solution research - iterating through ideas like execution sharding / plasma and landing on rollups. 

• Find the right strategy: They pivoted to a rollup-centric roadmap.

By prioritizing rollups, the Ethereum team and community accepted that their execution layer (the market leader) would not be where the future of decentralized applications would run. It would instead, if all went well, likely fade into the background as settlement infrastructure.

This pivot is often under-appreciated. A decision to let other chains slide into the spotlight takes serious humility - a kind learned from the battlefield (AKA years of saturated blockspace and high fees). So far, no other leading programmable blockchains have explicitly prioritized being a settlement layer despite some being surprisingly well-positioned.

Polygon is another clear example. A slow and expensive Ethereum demonstrated a clear need for fast and cheap blockspace. The Polygon team identified this and moved quickly.

Much like the first version of Ethereum, Polygon PoS (Polygon’s first product) had a unique edge yet was not considered an optimal solution:

Unique element:

• Ethereum-alignment: EVM-compatibility was clearly important but just one part of the story. The PoS chain was initially framed as an EVM-compatible Layer 2 for Ethereum, differentiating it from the many other EVM-compatible chains.

Note: The Polygon team gets a lot of heat for calling the PoS chain a Layer 2, but I’d argue that the definition has morphed over time. Layer 2 used to be a reasonable term for any solution technically built on Ethereum (or another base layer).

Suboptimal element:

• Monolithic design: The Polygon team was well-aware of Ethereum research, but they knew rollups were not yet practical. In the interest of speed, they borrowed the tested Tendermint consensus mechanism from Cosmos.

Let’s ask the same question we did of Ethereum. Why was it important for Polygon to launch when it did?

The Polygon team needed momentum and feedback from the market to:

• Build a war chest: They grew a massive treasury, acquired quality tech / teams and allocated $1 billion to ZK rollup R&D.

• Find the right strategy: They pivoted to an Ethereum-only solution suite.

Many people don’t realize the extent to which the Polygon team pivoted.

Initially, they used Ethereum as a beachhead but were not outwardly dedicated to it (similar to StarkWare today). One 2018 article reads, “We have chosen Ethereum as the first platform to showcase our scalability”. This is in stark contrast to a more recent Bankless episode, where co-founder Sandeep makes clear that “if in the future Polygon starts focusing somewhere else, I will not be there.”

Ethereum and Polygon teams both launched solutions that they knew weren’t perfect. They did one important thing really well and got scrappy with the rest. They tripled down on what was working and iterated on what wasn’t. They weren’t afraid to pivot and change the narrative.

They built. They measured. They learned.

The result? Both projects are wildly successful and well-positioned for the future.

And some of their original visions are becoming reality after all!