Dialogue with RSS3 Founder Joshua on AI & Web3 Entrepreneurship Insights: Trends are unpredictable, stick to doing the right thing

Author: Zelda, R3PO

In just two to three months, the information dissemination protocol RSS3 successfully developed a new plugin "Web3 User Activity," which has recently been officially launched in the ChatGPT store. This plugin greatly fills the gap of on-chain data in the AI field, allowing ChatGPT users to freely access vast amounts of on-chain data from the open network, enabling a more comprehensive and straightforward understanding and participation in the Web3 ecosystem.

The launch of this plugin is significant as it combines with ChatGPT to open the door to the open internet for users, allowing them to conveniently experience the fairness and decentralization of the open internet, and providing a broader space for information acquisition and communication. Against this backdrop, R3PO interviewed Joshua, the founder of RSS3, who is an experienced serial entrepreneur in the traditional social field. Joshua stated, "Following navigation, search engines, algorithm recommendations, and other information distribution methods, large language models are expected to become the next generation of information distribution for the open internet." Moreover, by explaining and conveying information through AI, large language models can communicate with people in a more humanized manner.

Three years ago, when Joshua realized that a single application could not solve the problem of content monopoly on the traditional internet, he resolutely turned to the open internet and founded RSS3, hoping to achieve the freedom of the open internet, that is, efficient and secure information flow. This idea has also received support from several established investment institutions such as Coinbase and GGV. In our conversation, we discussed how AI influences the internet and Web3, as well as where the opportunities lie for entrepreneurs in the current bear market, hoping to provide some insights for practitioners in the Web3 and AI fields to find new breakthrough opportunities in this rapidly evolving domain.

1. Where are the opportunities for Web3 startups in the ChatGPT ecosystem?

Since OpenAI released the ChatGPT plugin, many have compared it to Apple's App Store. NVIDIA AI scientist Jim Fan stated on Twitter: If the emergence of ChatGPT is the "arrival of the iPhone," then the launch of the plugin feature is the "iOS App Store" event. He believes that the App Store is just the beginning, and OpenAI's overall plan is to create an "everything app"—it can read documents, connect various applications in real-time, and impact the world.

Packy McCormick, founder of Not Boring Capital and advisor to a16z's Web3 fund, delved into how OpenAI challenges the positions of Google and Meta in his article "Attention is all you need," becoming the preferred entry point for the future web. He believes that the potential of ChatGPT is much greater than that of the App Store; it not only attracts consumer attention but also captures the imagination of developers. Currently, about half of YC entrepreneurs are using OpenAI's API to build products. "With the browsing plugin, it will do everything that search does and can be customized; with third-party plugins, it becomes a platform where all vendors will add more features to the platform."

A wave of AI innovation and entrepreneurship is sweeping the globe, with giants like Amazon, Google, Alibaba, and Baidu entering the fray, and AI startups are also booming. According to research firm PitchBook, in 2018, when OpenAI first released the initial version of the GPT model, the total annual financing in the entire generative AI field was only $408 million. After the release of ChatGPT last year, this figure soared to $4.5 billion in 2022. This year, in just the first quarter, generative AI startups have already announced about $11.6 billion in transaction funds across 46 deals.

For the AI field, these transactions are just the first step in a long journey. This wave of capital has also reached the Web3 domain, and there have been many financing deals related to AI and Web3 this year, but the market generally has doubts about the integration of AI and Web3.

The plugin launched by RSS3 on ChatGPT further demonstrates the potential for the combination of AI and Web3. Joshua shared his views on this trend and explored potential ways of combining AI and Web3. He stated, "Wherever liquidity is, people will be attracted there; this is a real situation. Especially for smaller projects, they are more easily attracted by changes in liquidity."

He proposed three possibilities for the combination of AI and Web3. The first is to use Web3 to solve the AI computing power problem, converting decentralized computing power into computing power that can be used for training AI; the second is to solve the training data problem through a game-theoretic mechanism, allowing authorities in specific fields to participate in the generation of training data, making the training data more aligned with their preferences; the last one is to use Web3 as an information source and feed it back into the AI model, which is what RSS3 is currently doing. Initially, this may mainly serve application scenarios within Web3, but as information in the open internet increases, it will gradually break through limitations and bring greater imagination.

So, will this scenario be exclusive to large enterprises, and where exactly are the entrepreneurial opportunities for small companies? Joshua believes that although large companies have advantages in users and information, smaller companies can have clearer positioning in certain specific core technologies and scenarios. For example, compared to the general-purpose language models of large companies, RSS3 has stronger competitiveness in handling and distributing decentralized and open information. He believes that in vertical fields such as finance and healthcare, small companies will also have their own advantages.

"Large companies currently have advantages in traffic, and this advantage will not disappear immediately." Joshua stated, taking people's aggregation and redistribution of information needs as an example, the emergence of social media has not weakened the demand for search engines; different tools solve different problems. Generative AI may address needs that traditional projects have already met, but technical challenges remain. For instance, current language models cannot accurately identify the specific scenarios and needs of user requests. When you ask, 'What is an apple?' the model may not clarify whether it refers to the fruit, the phone, or the tech company, which requires further research and technical support.

However, RSS3 can already accurately track on-chain data. For example, when you ask who Vitalik is, the answer is no longer limited to wiki and his recent news; instead, it reflects Vitalik's recent activities on-chain.

2. Breaking the monopoly, RSS3 creates a new era of open internet information distribution

RSS3 is one of the few companies that deeply integrates Web3 and AI from the early stages of its startup. "When we had an AI team, there was a certain conflict between Web3 and AI because Web3 was seen as decentralized, while AI required centralization," Joshua recalled. Although the situation at that time was not ideal, it has now proven that we were doing the right thing, and we see the value of persistence.

As an experienced serial entrepreneur in the traditional social field, Joshua deeply understands that relying on just one or two applications cannot solve the problem of content monopoly on the internet. Over the past two decades, a few super companies have monopolized content while controlling user data, leading to a centralized environment and stifling the vitality of innovation—no matter how well-designed an application is, it cannot compete with data monopolists. In contrast, blockchain technology ensures the security and privacy of data through encryption and adherence to the principle of "code is law." With the rise of Web3, people are increasingly eager to break free from the constraints of traditional centralized platforms and to have the rights to create, disseminate, and distribute information.

To improve the efficiency and freedom of information flow on the internet, three years ago, Joshua decided to invest all his resources into the open network and founded RSS3. RSS3 is positioned as an information platform for the open internet, unlike traditional centralized platforms, RSS3 does not directly participate in the encryption process of information but acts more like a courier or transportation tool to ensure absolute ownership of information and data security.

In our interview with Joshua, he mentioned three core aspects of the company's future development: data coverage, information distribution methods, and the degree of decentralization. First, RSS3 hopes to comprehensively cover the data range of the entire open network, ensuring that the covered information is readable and effective. Second, in addition to information flow, search, and large language models, RSS3 will continuously enhance and develop information distribution methods to meet user needs. Furthermore, RSS3 aims to achieve a higher degree of decentralization and ensure the openness and fairness of nodes.

Joshua revealed that RSS3 plans to open external nodes in August. Initially, there may be a limit on the number of nodes, which will gradually reach a dynamic balance. In the early stage with limited node numbers, there may also be some soft requirements, such as participants related to the project or active in the community may participate in testing earlier; however, these requirements will not be too strict, as RSS3 hopes to attract more spontaneous node operators to participate.

In terms of business model, RSS3 is similar to Chainlink and The Graph. Their network structure can be compared to Ethereum, where Ethereum nodes are responsible for ensuring the security and confirmation of transactions, while RSS3 nodes index information and provide it to users in specific ways. Once the nodes are developed and opened to the outside, they may charge a fee for providing information services.

Regarding future financing plans, Joshua places more importance on collaborating with investors who have a strong mission and vision for the development of the open internet, rather than just pursuing short-term profits from financial investors. In terms of fund usage, RSS3 plans to focus on node and community building, as well as continuous investment in user experience and development tools to continuously increase user numbers and enhance user stickiness.

3. Insights for Web3 entrepreneurs: Trends are unpredictable, stick to doing the right thing

In the past few years, the cryptocurrency market has experienced significant volatility and challenges. What feelings and experiences can Joshua share? He pointed out, "In the past, people generally believed that Web3 represented concepts like decentralization and ownership. However, with the emergence of various projects, people began to view Web3 as a new stock market or investment opportunity, leading to a shift in narrative from decentralization to a focus solely on tokens. This reflects changes in the market and people's pursuit of speculation to some extent."

However, "smart choices in the short term are often not particularly helpful." Joshua gave an example: when we started our business, traditional social media projects like Clubhouse were hot in the investment track. As the founder of the Chinese version of "Clubhouse," Jujun, Joshua was also sought after by many well-known venture capitalists at home and abroad. If Joshua had chosen to engage in these projects at that time, it might have seemed like a wise decision, but as time passed, these projects quickly faded away. In contrast, projects like RSS3 are thriving in the Web3 field.

"Throughout the entrepreneurial process, including myself, we faced various temptations. Sometimes, we consider pursuing things that may bring short-term benefits or following current hot trends, but ultimately we did not do so." He stated, "Even if these opportunities may yield benefits in the short term, in the long run, they do not belong to the entrepreneur's own opportunities."

The characteristic of entrepreneurs is that they are not just entrepreneurs; they are also in pursuit of self. As an entrepreneur dedicated to improving the efficiency and freedom of information flow in the open network, Joshua emphasized that in the Web3 era, short-term temptations and trends should not be the basis for entrepreneurs' decision-making. Instead, they should stand on a broader perspective, focusing on long-term social impact and value creation, as society will ultimately reward you.

"Many people who start businesses in the Web3 field did not anticipate that cryptocurrency would become so popular, and similarly, practitioners in the AI field did not foresee that large language models would suddenly become so hot." Joshua stated. In fact, before the rise of language models, the AI field had experienced seven to eight years of silence. Whether in cryptocurrency or AI, changes in trends are unpredictable, so entrepreneurs should maintain independent thinking, adhere to their beliefs, and persist.

Currently, the cryptocurrency market is in a bear market, which further requires entrepreneurs to have patience and perseverance. Short-term liquidity or market volatility issues will not significantly affect the overall development of the industry. Although the growth rate may sometimes be fast and sometimes slow, from a developmental perspective, the popularity of cryptographic technology and the open internet will continue to expand.

At this time, what entrepreneurs need to do is to stick to their values, focus on long-term social impact and value creation, rather than blindly following short-term temptations and trends. As Joshua said: "Stick to doing what you believe is right and beneficial to society; if you're lucky, you may receive rewards early; if you're not, you need to persist longer."