Meet an Investor: QUBIC Labs Co-Founder and CEO John O'Keeffe
While blockchain by its very nature is decentralized and global, the organizations and entrepreneurs making advances with the technology need a supportive ecosystem and place to call home. That’s where QUBIC Labs comes in: the nonprofit supports founders and startups with funding, PR, legal and OFO, access to its network and office space in Quincy, Massachusetts that acts as a hub of innovation and creativity. The goal is to spur advances in this relatively nascent field, and further stimulate Quincy’s economic development.
Startup Boston caught up with QUBIC Labs Co-Founder and CEO John O'Keeffe to discuss his work, his thoughts on the blockchain space and what he looks for in a founder.
Startup Boston (SB): Tell me a little bit about QUBIC Labs and its early days.
John O’Keefe (JO): My business partner and I were looking for opportunities and felt that Boston and Cambridge, while terrifically innovative places, were starting to present barriers to entry for entrepreneurs. This included the scramble for talent, real estate costs and overhead, transportation, parking and the commute. Concurrently, we noticed the economic development and revitalization of the South Shore, which did not have these issues and offered a better cost of living and lifestyle. We felt we could position something post-accelerator stage for entrepreneurs who had done their homework and needed to execute on their plans, and a home to do it in. We figured that they would rather spend money on things that move the needle like strategic hires, product development, sales and marketing, as opposed to rent, overhead etcetera.
As well as being the birthplace of two presidents, Quincy had the first industrial railroad, a thriving granite industry, 20th century successes in Dunkin Donuts and Howard Johnson’s, and recent successes with Dive Technologies and IntelyCare. We knew there was a DNA of innovation here and we also felt we could tap into that. We approached some local organizations who were generous with capital and real estate, which allowed us to create a low cost model for our startups.
Finally, we fundamentally believe that while technology (automation) can take away jobs, it can also create more jobs. The caveat is that we have to invest in these emerging technologies to help them get off the ground. This is one of the reasons why QUBIC Labs became a tax exempt organization. This helps us engage with all the different stakeholders (public/private/academic etcetera) and coordinate between them as a trusted partner. Our commitment is to create 1000 new technology jobs in the next ten years regionally.
SB: What kind of incubator did you want to create, and how did you go about getting that started?
JO: We realized quickly we didn't want to compete with other incubators, and didn't want a really heavy programmatic type of incubator. The majority of successful entrepreneurs are not college dropouts, but have spent five to 20 years in big business. So the sweet spot was finding people who know their market, have a very specific idea, the ability to pivot, and a financial runway to stay at it for a year or two.
We felt the best way to execute on our commitment to economic development was through emerging tech, and settled on blockchain because we knew it was also one of the Commonwealth's key strategic initiatives. Algorand offered us $1 million to scale up startups for them. We took that commitment and asked the state to match it, and in June last year it stepped up with a $2 million grant to create a blockchain R&D facility in Quincy. We matched that with $2 million of private capital.
We were also asked by Pillar VC to launch the first ever Boston Blockchain Week, which we did last year. We had about 500 people, and the feedback was exceptional. We are in the process of planning the second annual event for September 2023. We want Boston Blockchain Week to become a signature tech event on the Eastern Seaboard over the next couple of years.
So we have R&D, events, and a unique incubator building an ecosystem of like-minded people encouraging cross-pollination of technology and ideas, particularly in the emerging technology space and specifically at the moment around blockchain.
SB: And what kind of blockchain projects are you looking at?
JO: We wrote a grant specifically on DeFi, and now we have some govtech and other initiatives that we're just bubbling to the top. And if someone comes in with an awesome project that’s not DeFi, we don't turn them away.
SB: How do you see the blockchain industry evolving, especially against the backdrop of the recent slowdown?
JO: We were going to build out what I call blockchain as a service (BAAS), which sits on top of a protocol as an application, but identified several problems as we received quotes from developers.
Number one, they didn’t understand the markets they were selling into. They knew what the blockchain could do, but they couldn’t get in a room and explain to an executive level officer how it would impact operational efficiencies and generate bottom line revenue. So they're throwing out ideas hoping something gets picked up without actually really understanding the industries they’re trying to sell into. You have to be able to apply the service to the industry you're trying to sell into. This communication gap between the technology people and the business heads is a problem for mass adoption of the technology. I have personally co-founded a consultancy advisory group around web3 and blockchain called Blockwise Advisors to help translate the technological impact into terms that executives can understand.
I also suspect that bigger firms are filing patents without telling anyone how effective these things are because they have a competitive advantage. So that's not helping create general adoption either.
So we realized we had to take a further step back before building a BAAS and create some compelling case studies, and are currently fairly deep in that process. This will help to facilitate the adoption of blockchain technologies, as well as create those useful case studies that we need to drive greater adoption.
The other takeaway too would be that blockchain is just a tool, a decentralized ledger technology. It does not exist in a silo. So that gets back to understanding what you're selling into, and having it sync with other things. While blockchain is awesome, having a product person on the team is probably more important.
So we're heads down a lot of the time working with startups, trying to build new products, and eventually will have our own fund as our companies mature.
SB: I also understand you focus on fintech and govtech. What do you look for in a good product there?
JO: We’re heavily focused on emerging tech, particularly web3 and blockchain. A lot of our blockchain projects are DeFi. Given the way things have been going from a regulatory perspective, it may be that the most successful startups are those who manage to straddle the DeFi and Trad-Fi worlds most successfully. I do notice that, especially around fintech, the typical analysis around a startup is accompanied quite a lot now by an increased focus on the regulatory landscape, which can cause a lot of barriers to success.
It is worth noting that blockchain properties are particularly well suited to the challenges that governments face, local, state and federal, around record keeping and asset provenance. It may be that this is where a lot of successful case studies build up and we are already seeing RFP’s coming from municipalities and state departments on this. So we keep a watchful eye on the space.
SB: And finally, what do you look for in a founder? What kind of qualities stand out to you?
JO: I'm really focused on the person first. You take for granted that they have to know their market, and have a compelling product. The timing has to be right, but it goes beyond that. Do I trust the person? Understanding that nothing is a sure thing, does this person have the character to see this through? The ability to pivot and to adapt? Are they pragmatic? Do they have the financial ability to stick with this in terms of runway? Do they have a good team around them? Those are just some of the questions investors have to ask.
About the author: Randall Woods is a former editor at Bloomberg News and currently is a Senior Vice President at SBS Comms, a communications agency for technology companies and startups.