Ship or Die at Accelerate 2025: Crypto's Biggest Innovation Is a New Business Model

In a groundbreaking presentation at Accelerate 2025, Sam Andrew unveils the hidden powerhouse behind cryptocurrency's success: a revolutionary business model that's reshaping the industry and driving unprecedented growth.

Summary

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Sam Andrew's talk at Accelerate 2025 reveals that while crypto is primarily known for speculation and technological innovation, its most significant contribution is a new business model. This model combines great products with a revolutionary approach to ecosystem development and cost structure.

Andrew argues that truly revolutionary products in the tech world have always paired innovative technology with new business models. He cites examples like Microsoft's direct software sales, Facebook's ad-based revenue, and Salesforce's SaaS model to illustrate this point.

The crypto business model, as explained by Andrew, exists on a continuum from memes to infrastructure to applications. Each segment has its own product, monetization strategy, and valuation metrics. However, the focus of his talk is on the "protocol" segment, which encompasses infrastructure and applications.

Andrew highlights two key advantages of the crypto business model: a collapsed cost structure leading to higher profitability, and a superior incentive mechanism for ecosystem development through tokens. These factors allow crypto businesses to scale faster and more profitably than traditional models.

Key Points:

The Importance of Business Models in Innovation

Sam Andrew begins by emphasizing that while crypto is known for speculation and technological innovation, its most significant contribution is often overlooked: a new business model. He argues that truly revolutionary products in the tech world have always paired innovative technology with new business models.

To illustrate this point, Andrew provides historical examples. Microsoft, for instance, not only developed Windows but also pioneered the direct sale of software, which was previously bundled with hardware. Facebook created a platform for social connections but also innovated with ad-based revenues. Salesforce extended the software-as-a-service (SaaS) model, while Google combined its search engine with targeted advertising.

These examples demonstrate that the combination of a great product and a new business model is what truly drives revolutionary change in the tech industry. This sets the stage for understanding why crypto's business model is so important.

The Crypto Business Model Continuum

Andrew describes the crypto business model as existing on a continuum with three main segments: memes, infrastructure, and applications. Each of these segments has distinct characteristics:

1. Memes: The product is the meme itself, monetized through narrative and valued based on mindshare. Fundamentals don't matter much in this segment.

2. Infrastructure: This segment sells enabling technology, such as "blockchain at NASDAQ speed." It's monetized through the "money-ness" aspect and valued based on total economic value on-chain. Some fundamentals matter here.

3. Applications: These sell user experiences, are monetized through cash flow, and are valued based on earnings multiples. Fundamentals matter significantly in this segment.

Andrew notes that while these segments differ in many ways, they all contribute value to the crypto ecosystem. Memes drive engagement, infrastructure provides the foundation, and applications offer functionality.

The Protocol: A Breakthrough Business Model

The focus of Andrew's talk is on the "protocol" segment of the continuum, which encompasses infrastructure and applications. He identifies two key reasons why the protocol represents a breakthrough business model:

1. Collapsed Cost Structure: Traditional industrial businesses operate at about 10% margin due to high incremental costs. Software businesses improved this to about 40% by reducing the cost of selling additional units. Crypto protocols, however, can achieve around 70% operating margins because they run on autonomous code and outsource much of the infrastructure development to users.

2. Ecosystem Development: While tech giants like Apple and Google have leveraged third-party developers to enhance their platforms, this approach is capital-intensive. Crypto protocols have developed a better incentive mechanism through tokens, which coordinate and incentivize ecosystem development. Additionally, the crypto ecosystem is permissionless and composable, further enhancing its efficiency.

These factors allow crypto businesses to "hyper scale" - growing faster and more profitably than any other business model. This combination of collapsed cost structure and efficient ecosystem development is what makes the crypto business model truly revolutionary.

Facts + Figures

• Crypto is primarily known for speculation and technological innovation, but its new business model is its most significant contribution
• Traditional industrial businesses operate at about 10% profit margin
• Software businesses improved profit margins to about 40%
• Crypto protocols can achieve around 70% operating margins
• The crypto business model continuum includes memes, infrastructure, and applications
• Memes are valued based on mindshare and narrative
• Infrastructure is valued based on total economic value on-chain
• Applications are valued based on earnings multiples
• Tokens serve as a mechanism to coordinate and incentivize ecosystem development
• The crypto ecosystem is permissionless and composable

Top quotes

1. "Crypto's biggest innovation is a new business model."
2. "A great product alone is not revolutionary. But actually, it's a combination of a great product and a new business model. That's what's truly revolutionary."
3. "The protocol is a breakthrough business model for two reasons: First, the protocol collapsed the cost structure. Second, ecosystem development."
4. "In the crypto business model, you have a collapsed cost structure, which means you're more profitable. You have a better incentive mechanism for ecosystem development."
5. "The crypto business model is breakthrough because it's collapsed the cost structure and it's developed a better incentive mechanism for ecosystem development."

Questions Answered

What is the most significant innovation in crypto according to Sam Andrew?

According to Sam Andrew, the most significant innovation in crypto is its new business model. While crypto is primarily known for speculation and technological innovation, Andrew argues that its business model, which combines great products with a revolutionary approach to ecosystem development and cost structure, is its most important contribution to the tech world.

How does the crypto business model differ from traditional tech business models?

The crypto business model differs from traditional tech models in two key ways. First, it has a collapsed cost structure, allowing for much higher profit margins (around 70%) compared to traditional industrial businesses (10%) or software businesses (40%). Second, it has a better incentive mechanism for ecosystem development through the use of tokens, which allows for more efficient and rapid scaling.

What are the three segments of the crypto business model continuum?

The three segments of the crypto business model continuum are memes, infrastructure, and applications. Memes focus on narrative and mindshare, infrastructure provides the technological foundation, and applications offer user experiences. Each segment has its own product, monetization strategy, and valuation metrics.

How do tokens contribute to the crypto business model?

Tokens play a crucial role in the crypto business model by serving as a mechanism to coordinate and incentivize ecosystem development. They provide a more efficient way to encourage third-party developers and users to contribute to and build on the platform, compared to the capital-intensive methods used by traditional tech companies.

Why does Sam Andrew believe the crypto business model allows for "hyper scaling"?

Andrew believes the crypto business model allows for "hyper scaling" because it combines a collapsed cost structure with an efficient mechanism for ecosystem development. This means crypto businesses can grow faster and more profitably than businesses using traditional models, as they have lower operational costs and can more easily leverage community contributions to expand their platforms.