Bringing Web3 to the World
Alchemy’s Toolkit for Innovation
Every wave of innovation requires the same elements: a new foundational technology, and a platform of tools that enable developers to build the apps that take that technology forward.
In 2017, startup co-founders and longtime friends Nikil Viswanathan and Joe Lau saw how the rise of Ethereum had significantly advanced the field of web3, yet it was still far too difficult for developers to create projects that further evolved the blockchain technology. Following an early, challenging attempt at a crypto analytics platform, they realized what people really needed was infrastructure to easily create web3 apps.
“We had this moment where we realized it was so difficult for us – as people with master’s degrees in artificial intelligence and computer science – there was no way web3 could be accessible to people all who are just getting started to code,” says Viswanathan. “We wanted to figure out how to make it accessible to the entire world.”
That realization became Alchemy, the backend developer platform that is now powering most of the top web3 applications around the world. Officially launched in 2020, Alchemy achieved $10 billion valuation in less than a year and a half, and is the technology behind every major NFT platform such as Makersplace and OpenSea. Today, it is widely known as the “AWS of web3”
I sat down with Viswanathan on the Greymatter podcast to discuss Alchemy’s rapid growth, its famously tight-knit company culture, and his outlook on the future of web3. This episode is part of Greymatter’s new crypto-focused podcast series Mint Condition.
You can listen to the episode below, or wherever you get your podcasts.
Hi everyone. Welcome to Greymatter, the podcast from Greylock where we share stories from company builders and business leaders. I’m Christine Kim, an investor at Greylock.
Today, we’re excited to kick off Mint Condition – our new Greymatter podcast series devoted to all things crypto and Web3. Joining me on this first episode is Alchemy CEO and co-founder Nikil Viswanathan.
Alchemy, which is known as the AWS of web3, was the fastest-growing company in history last year, going from public launch to being worth $10B in 16 months. Alchemy is the developer platform powering $100 billion dollars in transactions for the top web3 applications around the globe. If you’re looking at NFT online, it’s probably coming from Alchemy underneath the hood. While other companies this size are many thousands of people, Alchemy has the smallest team to impact ratio ever with only 39 people at the $10 billion dollar round and is known for its extremely tight-knit culture.
There’s lots to get into here, so let’s dive in. Nikil, thanks so much for joining us today.
Thanks for having me, super excited.
Yeah. So maybe in getting into the specifics of what Alchemy does as a product, who the customers are and just to kind of refresh/kind of get everyone up to speed on that. And we’d love to get into some details about how you guys are thinking about this current market and what the kind of progress has been to date from 2017 till now.
Yeah, totally. Let’s see. Summer 2017 rolls around, we start building crypto stuff. We’re just hacking on things. One to two months in we actually, the first product we built was this hedge fund, data science machine learning platform. Because again, our background was actually in hardcore data infrastructure, machine learning, computer vision, these kind of things. We built this kind of complex machine learning model that helped people identify things that were going on the blockchain and trade on that information.
We realized about a month or two in that it was just this kind of moment. We’re like, “Wow, this is so difficult for us to do.” And we have a master’s degree in artificial intelligence from Stanford, computer science. And if we’re struggling with this, how are we going to make Web3 accessible to people in Africa or India who are just getting started to code, and they’re in elementary school and they want to play?” It’s like, “How do we make it accessible to the entire world? It can’t be this difficult to use.”
We drew this diagram, if you check on the Alchemy website, there’s this nine-grid diagram. And fundamentally the core idea is this: in each [sector] of the computer, internet, and blockchain, the industry’s actually formed in a similar way where you have some platform that lets people build apps. Because at the end of the day, technology is only here as a utility for people’s daily lives. There’s no value in technology, inherently, besides what it could do for humans.
When you look at the computer, there were two companies that really provided the platform layer for computing, which was Apple and Microsoft. They built this thing called the operating system. So we know it as Windows or Mac. What it does is it lets developers build applications on the hardware. So it abstracts away the complexities of hardware, of RAM, of CPU processors and makes it really easy for people to build applications.
And then the really interesting thing here is what spins a cycle of innovation in the industry. Because now developers come and build apps like Microsoft Word or Excel or Chrome or whatever it is. And then normal people like me and you come here and use those things, use those products. And then that adds value to our life. Then we get more excited about it, we tell more and more friends. Then developers see a larger market, then they build more apps, so more users come in and so on and so forth. We call this kind of the circle of life internally at Alchemy.
With the internet, you actually see a very similar thing. There’s actually this business called Amazon that powers the entire internet. Whenever you go to open Uber or Airbnb or DoorDash or whatever it is, the apps are actually all run by Amazon. Amazon runs all the infrastructure for those apps. AWS on its own is a truly known business.
And it was actually really funny because I remember Jeff Bezos – when I was a freshman at Stanford – Jeff Bezos came and gave his talk. I was so excited to hear about Jeff. Amazon wasn’t what it is today then, but it was still like a really legit company. And it was really cool and I used the product. So he comes out saying Amazon Prime is super smart, and then he gets to this talk – it still sticks with me, because basically it was a sales pitch for AWS. They were launching AWS. They had just made the shift from like Amazon selling books to Amazon selling everything. And now they’re like making this shift. He said, “People will look in the future and say, wow, Amazon sold stuff? They weren’t a compute service?”
And to me, one, I was really annoyed, because I was like, “Man, you can be telling your story and about how you built Amazon, and instead, you’re coming here talking about AWS for sales pitch.”
Number two, I was like, “That’s crazy, Amazon sells stuff today. And you really think that’ll be a small business compared to compute?”
And looking back, it was kind of cool. I got to witness a moment in history that in retrospect was masterfully played out over the last 15 years.
Going back to that diagram, when you think about Microsoft and Apple doing that for computing, and AWS and Google cloud and these kinds of things doing it for the internet and powering all the applications, what we saw is there will be a development platform for Web3. And we said, “We need to build that. We need to make it really easy.”
And the reason it’s really important is two things. Number one, that’s what drives and enables innovation in the whole industry and can bring Web3 to the world. Just like computing. Computers would not be what they are today without Microsoft and Apple. And then the second thing that was really interesting to us, this was kind of the key thing where we get a gut intuition that this could be really big. But when you look at Apple, Amazon, Microsoft, those three companies, that developer platform…there are thousands of companies in technology, probably millions of companies in technology.
I think there’s a quarter billion company, 250 million companies in the world, finance, real estate, entertainment, all these things. What are the three most valuable companies on the planet, Apple, Amazon, Microsoft, right? And that shows you how powerful that developer platform is, because the most impactful businesses on the planet are the ones that enable new technologies for people around the globe.
So we said, look, if this works, this is going to be really massive, but we’re just not sure if crypto’s going to be a thing. Fast-forwarding the story, we waited a year to build and release a product. Actually we built this other product because we’re just like, “The market’s too early.” We built this hedge fund data science machine learning platform. A year in, we’re like, “Okay, I think the need is here.” So we started building it, and we just went heads down for years, building the product. August, 2020, we launched publicly. Anybody could sign up and use it.