Yuga Labs Founders Share Advice, Future Plans on Rug Radio
Yuga founders Garga (Greg Solano, @CryptoGarga) and Gordon (Wylie Aronow, @GordonGoner) made a special appearance on today’s Rug Radio show, which was fittingly "rugged" halfway through the interview.
The pair talked through how they met, the BAYC origin story, growing the company, fundraising and VCs, advice for other founders, managing their various assets, and what to expect in the near future.
Here is a recap of the conversation for those who missed the show.
How They Met
Gordon and Garga grew up in Miami and met at a bar several years ago. They started talking about books and got into a 1.5-hour argument over David Foster Wallace before Gordon left to go flirt with the bartender.
The pair texted on and off over time, bonding over their love for MMORPGs (Massive Multiplayer Online Role-Playing Games). Their dream was to create the ultimate MMORPG, which they think is ultimately a metaverse.
Their relationship formed digitally, and Gordon commented that when he thinks of Garga, he thinks of him as his World of Warcraft avatar (of course now by his BAYC).
The BAYC Origin Story
Originally they hoped BAYC could become "a web3 Supreme," or a really cool fashion brand.
From their perspective, there wasn't much utility in the NFT space when they started, and that felt like a gap.
They started designing a project around a bathroom, and if you were a token holder, you could drop an image on this collaborative art board. Like in a public bathroom.
They had this beautiful vision of this great collaborative art, and then got feedback that the first thing people will do is "draw a giant penis." That idea hit home and helped inspire the dive bar bathroom concept, which is central to the early BAYC lore.
The pair honed in on what utility could look like, and built out a "ten-page rambling essay" of ideas, which included the words "Bored Ape Yacht Club." Not all of the ideas in the essay stuck, but the name did, and they "were off to the races."
They commented on how they were one of the first projects to give away IP rights and to have a roadmap, and that set them apart. As early as day two, holders were starting to use their rights to make derivatives, and then the excitement started building around the merchandise milestone, and it all snowballed from there.
Credit was given to the early Discord community as well, which was "fun" and had a "different spirit" in their terms, as well as the early NBA Top Shot community which came over and rallied around the project to help build early momentum.
Growing The Company
Garga mentioned that his only regret is not scaling sooner. In January 2022, they were still under a dozen people and they feared losing their culture and arthouse vibe with expansion.
Fast forward to now, and they have a team of nearly 90 people. At this point, when Gordon and Garga come up with an idea, they have other successful people to take the ideas and run with them (i.e. Creative Director).
The two are very proud of how they've managed to keep their culture as they've scaled. Both commented on how surreal it is to be leading such a large company after a such short time. Gordon said, "it hit him at Ape Fest, when The Strokes came on (one of his favorite bands), just how big they had gotten."
And then the next day it was back to work.
Fundraising and Venture Capital (VC)
The Rug Radio team asked the pair about raising at a $4B valuation and how it has helped them. Gordon mentioned how he feels good about how and when they raised capital.
The founders luckily had the foresight to see the bear market coming and prepared accordingly. They used fundraising to "signal we have a massive war chest" both to holders and other projects, and to assure holders that even if it's a "three-year bear market, we have the resources to outperform everyone else."
When they met with VCs early on, they didn't have a great idea of the VC world outside of the television show Silicon Valley (which they said is very accurate). They were hesitant to give away equity, as they did not want to lose control of the company and "get ousted" down the line.
They received advice that it is okay to say "No" to VCs, but not to one VC in particular - a16z. The Yuga founders met with a16z, were very impressed with them, and were ultimately happy to have them onboard as strategic advisors.
In hindsight, they mentioned how a16z was "exactly what they needed." The founders had built BAYC in isolation, didn't really know anyone in crypto, and had virtually no connections. Thus a16z was perfect to help plug that gap.
In a note to listeners, they shared how they have received feedback on some team decisions and that the community blamed the move on VCs. Gordon and Garga were quite strong on this point not to blame the VCs, that the VCs own ten percent of the company and that the Yuga founders "do whatever the fuck they want."
Advice for Founders
As first-time founders, learning how to grow, they have been focused on protecting their creative energy. At the same time, the pair is aware of how rapidly the space is changing, indicating that founders have to stay nimble as it changes. In their words, "it doesn't matter your creative spirit if you can't stay ahead of the market."
Crypto is all about being first to something, and being the first to bring concepts together and go fast is very important.
It is also important for other founders to know that the Yuga team still struggles. They deprioritize and reprioritize all the time, and note how it's really hard, and they try to shield their employees from that "thrash."
The pair shared their stories of burnout, how they were trying to do everything all at once and it hit them after Ape Fest this year. They made the conscious decision to slow down and build up the team, ultimately to avoid burnout and get everyone up to a high operating level by end of the year.
They also shared that what worked in the bull market won't work as well now. For instance, their BAKC drop worked, but Gordon called companion drops "dilutive" and does not think they work as well now. They also commented on their pseudo-anonymity, which in their words made since last year, but much less sense now.
On Managing Yuga Labs' Assets (Punks, BAYC, Meebits, The Otherside)
At a high level, they do hope to have the classic founder's dilemma one day where "they wouldn't be qualified" to work at Yuga. To that end, they have hired successful people to lead each of their brands.
Their goal with CryptoPunks is to preserve and steward that brand, and they feel Noah (@NonFungibleNoah) has been doing a great job.
BAYC will always be their baby, and they will always "be meddling" there. In fact, Gordon's title is Chief Meddling Officer. They feel the BAYC Creative Director has the hardest job in the company, because of that meddling.
The pair view Meebits as an important part of the brand, calling them the "first premiere, metaverse-ready" assets. Gordon talks about being on vacation and heading back to his hotel room to map out the whole long-term strategy for Meebits on napkins. He has been focused on what they look like three years down the line - though no spoilers were provided.
The Otherside is described as their "passion project," one that each of the founders has personal ties to.
Gordon elaborated on being sick for ten years and only experiencing the world on this computer, digitally - and that is the person he wants to build The Otherside for.
Ape Fest was four months ago, and The First Trip (for The Otherside) was three months ago. So what's next?
They recognize that the team has been moving slowly, but that is because they've been building the team up. That job is now done, and the team is working hard.
The market should anticipate Yuga-related items to heat up from December to January. They noted it will be more clear to the public who the leaders of which projects and brands are, as well.
They pair know they have areas to improve, and communication is a major one. They promised the community will see that change dramatically soon.
For Gordon's closing comments, he shared how they are not interested in low-effort stuff, that they want higher-effort stuff, but it takes time. He wants the reactions to their next release to be “holy fucking shit this is the weirdest or coolest experience I’ve been a part of in web3."
Mic drop on that last comment. Catch the recording here.