May 12, 2022 – Joe Suliman, managing director and head of Daversa Partners’ Boston office, is bullish on cryptocurrency and NextGen companies in general. Supply is high, executives want to hear about opportunities with these businesses, and demand is through the roof. In 2021 alone, Mr. Suliman points out, the latest evolution of internet technology, known as Web3, reaped $33 billion from venture investors; $10 billion of that came in the fourth quarter alone, surpassing all such investment from the year before. “My opinion is that within the next year to 18 months, half the companies that we work with will be directly or tangentially involved in building the Web3 economy,” he said. “This isn’t going anywhere. This is the future of how technology businesses will start, scale, and generate liquidity for their investors and employees and the best-in-class operators. Executives are either going to join that movement or get left behind building antiquated technologies.”
Mr. Suliman’s faith is bolstered by current market dynamics that bode well for this decentralized version of the internet driven by blockchains. “Inflation will continue this year,” he said. “That will create a tidal wave of interest in decentralized currencies. Global investors fending against the dollar collapsing will further validate smart contracts, digital exchanges, and create demand in innovation that will continue to fuel the blockchain adoption. All of this is going to continue to drive an exodus from traditional corporate career paths to the new frontier and put even more pressure on the FANGs to retain their talent from the allure and seduction of being ushered into the decentralized economy that will emerge.”
For recruiters like Mr. Suliman, who find leaders for the fastest growing companies in the technology sector, that means that business for 2022 and beyond is likely to maintain its fevered pitch. “It’s wildly competitive,” he said. “The speed to hire is fast. I usually tell our CEOs to budget about 90 days, but competition has been ramped up in the last 18 months so that our average time to close is actually much lower than that. If you want to win and hire the best talent out there you need to be in buying mode, not shopping mode, or your top candidates will get scooped up by someone else.”
And more and more executives want to get in on it. In fact, leaders are increasingly departing major Silicon Valley firms to join crypto and other decentralized tech start-ups and endeavors. “We’ve been very busy over the last 24 months in the crypto and Web3 market building leadership teams for these businesses,” said Mr. Suliman. “This is the pioneering group of leaders that’s going to be building companies that are the first of their kind.”
The massive growth in Web3 companies makes the appeal obvious. In addition to the billions of dollars invested, cryptocurrencies have generated over $3 trillion from liquid value creation. “I think candidates are seeing this, watching software multiples get squeezed, spending the time to learn more, and their eyes are now wide open for the next available seat that opens on one of these hypergrowth crypto projects,” said Mr. Suliman.
There’s also the allure of being part of the next big thing. For company builders, the Web3 economy presents fundamentals that have never existed before. “The executives who we’re talking to don’t need to understand the zeros and ones, the bits and bytes—unless of course you’re running the engineering organization—as to how these technologies are operating,” said Mr. Suliman. “But they are taking the time to really take a close look at the fundamental differentiators that are making these businesses scale so quickly, the key difference being ownership. This allows businesses that are tokenized to incite growth in ways that’s never been done before. Effectively you can generate a $0 CAC, cost of acquiring customer model, that can propel a huge amount of growth in these communities. And the executives we’re talking to are really getting excited about these unique fundamentals.”
Joe Suliman is managing director and head of Daversa’s Boston office. He works closely with founders, CEOs, and boards to execute on critical executive leadership searches for the fastest growing companies in the technology sector. Mr. Suliman has spent the last eight years building deep functional expertise and product, engineering and general management having placed over 100 executives in industry sectors such as consumer internet, enterprise SaaS, frontier tech, security, fintech, and health tech.
Mr. Suliman has eight years under his belt spent in Silicon Valley helping lead the firm’s West Coast practice before moving to the East coast to run Daversa’s Boston office. Mr. Suliman has placed C-level executives at companies like Reddit, Nextdoor, Postmates, Brex, Dataminr, Google, Podium, NexHealth, Nylas, Cruise Automation, NerdWallet, Scopely, and ClassPass, among many others.
A major attraction, of course, is money. With investment dollars flowing in, many Web3 companies can provide highly lucrative compensation. “Normally an exec would be paid in base and bonus and equity,” said Mr. Suliman. “Let’s say 300K, 30 percent bonus gets them to just under $400,000, and then equity will be worth a couple million dollars walking in, hopefully. That grows into a life changing amount of money. Now execs are getting paid effectively in a base salary and the rest of their comp is in token. These are harder to evaluate. We can’t do the simple SaaS metric multiplier that we’ve been able to lean on over the last decade to associate value to those shares and the growth trajectory that we can expect. There’s volatility absolutely affiliated with that. But these companies don’t need to go out in the New York Stock Exchange, or NASDAQ; they can list on Coinbase and you get liquidity much quicker. So it is a bit of an education moment for certain, which we’d have to do at any Web2 company otherwise when we’re talking about equity. But the token can at times make people a little resistant until you think about it in terms of, ‘This is a piece of ownership in the company, in the same way options have been in Web2 companies.’”
Mr. Suliman and his team are not seeing executives flocking to a great concentration in any one particular subcategory of Web3; instead, there’s been an explosion across every subcategory—NFTs, defi, gaming, metaverse, exchanges. Two areas he expects to see a surge of interest in are infrastructure and security layers for Web3, with companies like Polygon, as well as marketplace businesses like Braintrust.
“When you get a chance to work with an infrastructure-level company, it really is a way to de-risk or take an index of the broader market,” said Mr. Suliman. “That’s why I think infrastructure and security is going to be really interesting: How do we build and protect the technology that’s supporting this market? That’s what those businesses are solving for. On the marketplace side what I think excites candidates is that you now have an ability based on Web3 fundamentals to incentivize the supply side of the marketplace to participate in a very different way than they have ever before. And that’s through ownership of the platform,” he added.
In terms of building out executive teams, Web3 businesses are not much different than more traditional companies. Leaders are needed for marketing, engineering, product, and operations, among other roles. High profile hires across the Web3 ecosystem in recent months have been instructive, said Mr. Suliman: “There’s Jack Dorsey stepping down from Twitter to take over at what is now Block; former Lyft CFO Brian Roberts joining OpenSea, the NFT platform; Gaurav Garg from Uber going to CoinTracker as head of engineering; Pranesh Anthapur, who was also with Uber, joining cryptocurrency exchange platform Kraken as chief people officer; Dzmitry Markovich joining Dapper Labs from Dropbox as their new CTO. Even on the investing side we’re starting to see some of these shaking up a little bit. It feels like every week, we’re adding to that list of executives coming from more Web 2.0 economies and businesses that are joining the Web3 ecosystem.”
The Web3 company founders and board members that Daversa Partners works with are smart, capable leaders who tend to have a good sense of what they need to solve for when it comes to talent. “As their executive recruiting partners, it is our job to guide them to the right hunting grounds to source for these people,” said Mr. Suliman. “And it really does depend on the function you’re recruiting for. There’s some nuance in having relationships with these people that is important. If we were hiring a partner for a venture firm, and they wanted to talk to the most influential chief product officers from software companies, it’s not going to say on their LinkedIn, ‘Hey, I’m running product at Company X, but I’m ready for 180 degree career shift and joining a venture firm.’ You have to know these people, you have to talk about their career ambitions. These people are coming from Lyft, from Instagram, from Dropbox. And they don’t have blinking red lights on their LinkedIn that say, ‘Hey, I’m actually a contributor to these protocols across X, Y, and Z crypto projects.’”
Where to find the right talent, he says, depends on the function, be it engineering, marketing, product, operations, or any number of roles. “One common theme among the Web3 companies that we’re working with is that most of them are growing at breakneck speed. So we start with executives who have seen this movie before, who have been participants in hyper growth environments, and that leads us to companies like Airbnb, Dropbox, Meta, Twitter, and Google.”
Over time, Daversa has witnessed the emergence of certain guidelines taking shape. “If you’re hiring a chief marketing officer, these are going to be category creating marketers, someone who can build and leverage communities to scale a business,” Mr. Suliman said. “If you’re hiring a product leader, they’re going to understand complicated distributed ecosystems, and how to pull those together to leverage either consumer or B2B outcomes.”
Mining Talent for the Crypto Revolution
In this brand new episode of ‘Talent Talks,’ Rob Adams is joined by Joe Suliman, managing director of Daversa Partners. Mr. Suliman works closely with Founders, CEOs and Boards to execute on critical executive leadership searches for the fastest growing companies in the technology sector. In this episode, Mr. Suliman discusses the crypto and web3 revolution and how it is impacting the war for talent. Mr. Suliman also shares what skills are highly sought after and how talent in this sector is being compensated. Listen Now!
And then there’s engineering: “Every executive hire is important, but engineering now is the domain expert in these businesses,” said Mr. Suliman. “They are the executives that are leading your engineering org. That’s the backbone for the products that you’re going to be shipping, who really set the bar for the caliber of future leadership that will come in and that the team will be built around. So these are engineering leaders that are coming from complicated enterprise ecosystems, payment systems, even gaming, and odds are that they have directly or indirectly been involved in crypto projects over the last few years. They’re going to have networks of engineers that have written code on these projects. They’ve participated in DAOs (decentralized autonomous organizations), and host private dinners and meetups. And that’s really where the innovation is happening.”
For all their differences, the candidates that Daversa recruiters seek out for Web3 businesses have certain commonalities as well. “They’re going to be smart, they’re going to be curious, they’re going to be energized,” said Mr. Suliman. “They’re going to be good communicators, they’re going to be good recruiters. They’re going to be able to hire great teams, and sell the vision. And selling that vision is so important, not just to investors, not just to your customers or users, but to your teams.”
Certainly some prospects are wary, especially having seen massive fluctuations in valuations of some crypto companies. Mr. Suliman does hear skepticism around the volatility of specific currencies, or the uncertainty around the NFT trading market. “We’re still early on in building Web3 economies,” he said. “But if we can agree that Web3 and cryptocurrencies are here to stay, then the infrastructure that supports these businesses seems like a way to almost bet on an index vs. a specific token or NFT.”
“Web3 is a broad market,” said Mr. Suliman. “There’s defi, there’s metaverse, there are NFTs. The subcategories that we’re seeing more attraction to is less about, ‘Hey what amount of dollars should I allocate in a specific cryptocurrency,’ but more, ‘Who’s building the plumbing? Who’s building the backend technologies that these things are going to be scaling on top of?’ That’s a seat that everyone wants to be sitting in right now.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media