Long before Facebook terrified law-makers around the world with it plans to create a new global currency they controlled, there was Morgan Beller, a young investor running around the social network like a chicken with its head cut off (her words) trying to figure out how to keep the social media juggernaut from being disrupted.
The Cornell University grad and veteran Forbes 30 Under 30 list member was at venture giant Andreessen Horowitz when it had a series of revelations about the future of crypto, leading it to become one of the most aggressive investors in the space. After joining forces with former PayPal president David Marcus, Beller applied those lessons to conceive of the libra currency, which would be backed by a number of global assets stored in accounts owned by Facebook.
Until now, how that happened was shrouded in the closed-lipped mystery of the social media giant notorious for controlling its employees’ interactions with press. But in 2020 she left Facebook, prior to Libra’s formal launch, to join venture firm NFX as a general partner, and for the first time ever she’s telling that story. At least part of it.
In this exclusive interview with Forbes she explains why she left, what she’s doing now, and how she believes her latest investments could change the future of not only Facebook, but Big Tech generally speaking.
Subscribers of the Forbes CryptoAsset & Blockchain Advisor first read this interview in early June 2021. Click here to stay ahead of the curve.
Forbes: What’s the one thing at Andreessen Horowitz that you did that you’re most proud of?
Morgan Beller: No one’s ever asked me that before. I am proud of helping restart their seed effort. When I first joined, Ronny Conway was leading the company’s seed program and he was great. But he left to start his own firm, and those seed efforts were scaled back for various reasons. Fast forward six-nine months, they realized there was actually value to having those seed founder relationships. So there was the prompt of: “we don’t want to necessarily do seed fully, but how do we make sure that we still provide value to seed founders in a way that they call us first for the next round?”
Forbes: And how did that prepare you for your next step?
Beller: There’s something about a founder’s psychology. If I could go back to school, I probably would have studied philosophy or psychology. Because at the end of the day, that’s what our job kind of is now. When we restarted this program, unofficially, we weren’t necessarily writing seed checks. Instead, we asked: what value can we provide to seed founders so that they call us when they are going to raise more money? There was a whole menu of services that we could offer founders, but where do they need help the most?
Actually, this is kind of a fun story. I don’t know if he wants me to tell this, but I’m okay telling it. Through that, me and my friend, Eric Thornburg, who was not at Andreessen, realized that founders are a bit lonely. In Silicon Valley, when you go to cocktail parties, everyone asks how things are going, and you can really only say: “Great, everything is awesome.” But in reality it’s not. Because maybe your head of sales quit or you lost a customer or your partner is mad at you because you haven’t eaten dinner with them in two weeks or whatever it might be. So we started something that we colloquially referred to as Founders Anonymous. It was basically a monthly drinking club, where we would invite founders to dinner, and the rule was you could not talk about anything that was going well. You could only talk about things that were going poorly.
So how did that prepare me for my next role? At Medium, there were a lot of highs but there were also a lot of hard moments. I think that outlet allowed me to see that before I got to a startup.
Forbes: You must have told this story a thousand times, I’m sure. But what’s the origin story of Libra?
Beller: I actually have never really told the story. It all started when I joined Facebook in May 2017. I initially joined the corporate development team. Shortly after joining, I realized there was no one working on blockchain, crypto, decentralization—whatever today’s noun is. So I went to my boss at the time, Amin Zoufonoun, who runs the corporate development team, and said: “I think this is going to be a thing. Is it going to happen in 1, 5 or 10 years? I’m not sure. Is it going to be 1%, 5% or 10% of the future? I’m not sure. Do we have any chance to play the game because we’re a giant centralized entity? Probably not. But we are going to be caught with our pants down and we need a game plan.”
I was at Andreesseen Horowitz when they had their come-to-Jesus crypto moment: when Balaji [Srinivasan] joined, and when Marc Andreessen had written this op-ed in the Wall Street Journal about bitcoin, and when they invested in Coinbase. I, admittedly, was too dumb then to dedicate my life to it. But I paid enough attention to know that when I got to Facebook and saw there was no one working on it full time, that was probably a miss. Then I ran around like a hammer in search of a nail or chicken without a head or whatever visual you want. I was speaking to anyone who would answer my email about what groups could blockchain actually help propel further faster; did it make sense to tokenize groups; did it make sense to add crypto as a payments method for WhatsApp; did it make sense to get into bitcoin mining—a whole host of things. The longer story, which I will tell one day, is through this effort I reconnected with David [Marcus]. The two of us joined forces in what became Libra, and the longer story we will tell soon.
Forbes: What about the departure? Again, we’re focusing on transitions. You have now moved on to the next thing. But what triggered your departure and how did it play out?
Beller: I was not looking to leave. I was really happy. I love David. I love the team. I felt I needed to see this thing launch and was not looking to leave. Now, I’ve known the NFX guys for a while. I met them when I was at Andreessen Horowitz, working with other seed investors, and that’s how I initially met James [Currier] and Gigi [Levy-Weiss]. They had been reaching out, looking to add someone to the team. They kept calling and I kept telling them, “don’t waste your time.” Gigi was very persistent over quarantine. One day, he called and said, “here’s the deal. We are just going to give you an offer. Do what you want with it.” I had dinner with my husband that night. I’m like, “this guy is crazy. They don’t know me that well. And it’s a serious offer. And I’m not leaving Libra. They’re wasting their time.” And that became this moment of reflection, where I realized I love Libra, or Diem, and I really was not looking to leave. But one, this was a very unique opportunity. Also this is really corny (I don’t want to be one of those corny VCs, but I’ve become one in the past three months), I guess I really love the zero-to-one phases of projects. And with Diem and Novi, we were way past that point. But I’m still an advisor to the project on both, Diem and Novi, sides, and we are all still friends.
Forbes: How does it feel to see them going through their struggles and their accomplishments, and kind of being on the sidelines, even if you are still an advisor?
Beller: Part of it is there’s a bit of frustration and FOMO (fear of missing out), because you’re on the outside. There’s a part that really misses being in the room where it happens. I spoke to David on the phone recently and I got really nostalgic. They’re just good people and you’re rooting for them. It is also interesting—being on the outside in a different way. Libra was like a 24/7 job, just trying to keep the train running as close to on time as you can. It took all your time. I feel there were a lot of aspects of crypto that were not necessarily relevant to Libra, at least in v1. For example, decentralized finance (DeFi). I didn’t have time to pay attention to a lot of what was going on in the crypto world, ironically, because I had my hands full with Libra. Now that I have time to see what else is going on in the crypto world, it’s pretty exciting and I think Libra will get into those worlds over time. That is my hope.
Forbes: I recently spent time with Tyler and Cameron Winklevoss and had a chance to ask them: “If you could go back in time and do it all over again, would you even want to be running Facebook?” They said: “We’d be disrupting ourselves right now because social protocols are going to make stuff like Facebook a thing of the past soon.” You mentioned DeFi and this concept of social protocols. With a little bit of distance, though, obviously, you still have some skin in the game, even if only emotionally, what do you think about social protocols and the future of social networks? Pick the most important thing.
Beller: I think the most important thing is the ownership economy. The second is pseudonymity/anonymity—what’s your internet presence? Speaking of the ownership economy, if Facebook was started today—in the crypto mindset, where users are owners, they are incentivized for the platform to grow and take off and rewarded for their usage of the platform—all these incentives can be baked in for all users of the products that aren’t really there today. And that is the biggest pillar.
Forbes: The idea that these big juggernauts might someday self-disrupt is intriguing. Coinbase bought a couple of decentralized exchanges, Binance has launched a decentralized exchange. There seems to be a trend of big juggernauts sort of anticipating disruption and self-disrupting or at least making early steps towards that. Where do you see that intersection between the future of big tech and these decentralized protocols that might make them unnecessary?
Beller: I think that decentralized protocols are inevitable. Software is eating the world, decentralized protocols are eating the world. So it’s happening. Big tech needs to figure out what is their play. So if Facebook’s play is Libra/Diem, and maybe there’s some other plays that they can make…Everyone’s going to have to make some play to stay relevant. At one point you needed to switch to mobile to stay relevant or get on the internet to stay relevant. The same way, you need a crypto play to not only stay relevant but to both attract and retain users. I think that’s the model we’re going for.
Forbes: So as an investor, how do you capitalize on that?
Beller: If you think this is where the world is going, you have to make a lot of assumptions. As my partner James says, unlike other areas of venture where we look at something and have to believe X, crypto is more like a bet, on a bet, on a bet…You have to believe that Ethereum is going to work and scaling is going to work and there’s going to be an on-ramp for consumers. So just for this one application to work, you have to believe in all these other things. I think that you have to assume that all the IF statements are going to be true.
When the internet started, you had Pets.com because people were familiar with a pet store and you just put the pet store online. No one could have conceived Amazon, Uber, Netflix because we didn’t have mental models for that. I think, similarly, a lot of the DeFi protocols or crypto applications you’re seeing today are things that we have mental models for. But the ones that end up eating the world are going to be the things that we can’t even think of right now.
Forbes: Have you made any investments in the protocol space, if you want to call it that?
Beller: I’ve made two investments from NFX (and a few more that haven’t been announced). But of the two that have been announced, one is called Radicle.XYZ, which is like GitHub for Web 3. There’s irony to the fact that Web 3 and crypto code for all these projects not only live on a centralized repository but a centralized repository owned by Microsoft. So that’s the Kumbaya pitch. But then also, it is crazy to me that you can’t directly incentivize open-source developers to work on or contribute to your projects. So on pull requests or open issues on GitHub you’re kind of hoping for goodwill or that people care so much about your project that they’re going to come around. But there’s no way to directly pay them or have them directly incentivized to have your projects grow. So Radicle is dealing with or addressing all those opportunities, as well as some more.
Then, there’s a company called Ramp.network, which is an on and off ramp for crypto. I think it is really important. People have said many times before “maybe this time it’s different”— maybe it’s not, but we’re crossing the mainstream awareness chasm.
Forbes: Looking to the future, what’s the single biggest area you see yourself investing in within crypto?
Beller: Broadly, DeFi. Financial markets are huge, and if there’s any way to recreate any percentage of that, it’s a huge thing. And then products and experiences that get people who aren’t using crypto products today to use them, whether or not they realize it’s crypto or not. I just think that crypto will be an infrastructure of choice. There will be marketplaces and fintech companies and media companies built on the blockchain, and the end consumer might not even realize it. So those are the things I’m looking for as well, where the end consumer doesn’t necessarily need to know what the infrastructure is. But the user experience does need to be as good as centralized products, because people like convenience.
Forbes: Thank you.