Thursday, April 23, 2020

Pioneer (https://pioneer.app/) - Convexity Machine breakdown





This post breaks down Pioneer (https://pioneer.app/) in terms of being a Convexity Machine.

TLDR;
Pioneer exhibits nearly all of the characteristics of a Convexity Machine(CM).

However, Pioneer's central roles as the gatekeeper limiting participation and the sole Selector stop it short of being a fully fledged CM.

This suggests that Pioneer's only path to venture-scale is expanding both the number of gatekeepers that decide which projects make it into their accelerator and the number of Selectors that bestow status, money, and other rewards to projects.

[note: This is written purely for fun :) Pioneer is a cool idea that is working, fun to watch, and part of an exciting trend of discovery networks.  Curious to see where they go 💫]


What is Pioneer?  

Pioneer is a web-based startup accelerator and early-stage venture capital investor
  • Pioneer uses a tournament model to generate leads for its 1-month online accelerator/community.
  • That 1-month program gives Pioneer more information on a given project. This ostensibly guides their decision for doubling down on the investment, or not.


Assessment of Pioneer as a Convexity Machine


For a deep dive on the criteria I've made up for this: 📈Convexity Machines 🤖 Roles & Characteristics

TLDR;
Pioneer exhibits nearly all of the characteristics of a Convexity Machine(CM).

However, Pioneer's central roles as the gatekeeper limiting participation and the sole Selector stop it short of being a fully fledged CM.

This suggests that Pioneer's only path to venture-scale is expanding both the number of gatekeepers that decide which projects make it into their accelerator and the number of Selectors that give out status, money, and other rewards to projects.








Yes 
  1. User-generated randomness is real. You can join any tournament, no matter your idea. 
  2. The potential for money and status are both present. 
  3. Mishits are harmless. There is little-to-no downside to starting an idea you later abandon
  4. Users have optionality across all 3 phases: tournament, accelerator, follow-on funding. The platform has this optionality too. 

Nope 🚫
Pioneer falls short of being a pure, unbounded Convexity Machine for 2 reasons:
  1. Pioneer plays a strong gatekeeper role.  To access Pioneer's online accelerator program one must be reviewed by a Pioneer team member (Pioneer 2.0)This gatekeeping then continues after the 1 month accelerator, "At our discretion, we’ll offer Pioneers the chance to advance to any of three other levels" of funding (Pioneer 2.0 )
  2. Pioneer is the only Selector, the sole bestower of status and money. You can contrast this with Instagram or TikTok where money/status is granted by Selectors that are off platform.



[blogger makes it hard to ensure images are not blurry - sorry]


Where does Pioneer go next?

Let's work under the assumption that they intend to grow into a venture-style business. This is not immediately obvious after looking at Pitchbook and Crunchbase. Their About Us page is also not super helpful, "So far, we're proudly funded by Stripe and Marc Andreessen. We will likely raise money from other investors over time."

Alright, so assuming they intend to grow, it appears they are limited primarily by two related factors:
  1. Capital to invest 
  2. Number of Selectors making investment decisions
With that in mind, I see a few obvious paths for them:
  • Remain the sole Selector, raise more money 
    • They are an web-only version of YC or Techstars
    • I'll put a stake in the ground and predict this is their path. They are YC+ . An interesting way to open the entrepreneurial funnel and find talent at the edges. 
  • Add more Selectors, become a lead generation platform
    • Enable other investors to access and compete to fund their deal flow
    • This could be a big opportunity, and rides the pre-COVID trend of founders seeking investment from other well-capitalized founders/operators. 
  • Add more digital environments, become a platform
    • Allow other accelerators and accelerator-like programs to use their software to run their own online tournaments
    • Seems like a smallish opportunity. It appears such programs number in the hundreds, and I don't know why that number would grow substantially in the near (10 year) future 
Time will tell. I'll leave my thoughts on Pioneer there for now.

Notes/Research

Introducing Pioneer (August 10, 2018)

  • "It’s an attempt to find the most brilliant people in the world, wherever they are, and to identify cheap and scalable interventions that might help them achieve their goals"

The Road Ahead (November 29, 2018)
  • "We originally thought Pioneer was a search engine. Our main effort would be finding the creative outsiders."
  •  "People really enjoy the the motivational aspects of Pioneer and the encouragement from other players. It helps them accomplish what they couldn’t have done alone"

Pioneer’s Holiday Tournament (December 13, 2018)
  • "Our mission is to scalably identify and nurture the creative outsiders of the world."
  • "We’re trying to find these “Lost Einsteins” by building an online game."
  • "Every month, we fund the best with a $1,000 grant and up to $100,000 in follow-on investment."

Pioneer 2.0 (January 30, 2020)

  • "Pioneer will soon hit a big milestone: we’ll have funded 100 people from around the world"
  • "about 30% of our Pioneers that started companies have gone on to raise follow-on funding"
  • We launched with the idea to fund anything. Music, art, non-profits, etc. We’re going to take a dose of our own startup advice and focus on funding small projects that might turn into businesses"
  • "We’re removing our $1,000 cash grant"
  • "In exchange for this, Pioneer gets 1% of your company."


Ex-YC Partner Daniel Gross Rethinks the Accelerator (February 19, 2020)

  • Daniel Gross: “With Pioneer, the product experiment we’re running is an attempt to build a San Francisco or Mountain View — to build a city on the internet.”
  • "That lofty goal has required quite a bit of tinkering on Gross’s part over the past 18 months since he launched the startup. During that time, he’s shifted the program’s structure from a Reddit-like online contest to win cash grants to what he calls a “fully remote startup generator” that can help remote founders create companies that later apply to Y Combinator or raise money from Pioneer."
  • "Pioneer is hoping their efforts can provide opportunities to founders in underserved geographies and regions"
  • "For Gross and his investors, Pioneer also represents an opportunity to scout deal flow earlier in the pipeline."
  • "An earlier structure gave Pioneer the right to invest up to $100K in startups emerging from the program if they went onto raise, but just 30% of grant awardees went on to found companies, Gross tells me"
  • "In its 2.0 form, Pioneer wants participants to give up 1% of their company to join the one-month remote program"
  • "The biggest evolution is the more formalized investment structure for founders exiting the program. If Pioneer is excited about the progress of a particular startup, they may give it the option to raise directly from Pioneer upon completion, sticking it in one of three investment buckets and investing between $20K and $1 million"

https://pioneer.app/ (a/o 2/22/2020)

  • Pioneer is open to all. There is no country limit. There is no expertise limit. You just need a project and an internet connection to apply.
  • We occasionally offer Pioneers the chance to advance to any of three bonus levels. These deals are standard.
  • Join with your project --> Compete in the Pioneer Tournament --> Reach the Global Top 50 --> Get selected by an expert to become a Pioneer






May 2020 Learning List

Info from the past month I'd actually consume again.