E125: SUI NETWORK FOUNDER: I Left Facebook at 50 to Build What Crypto Couldn't

0:00Every business can benefit from decentralized technology Because every business can do away with responsibility they don't want to handle. If you're using a phone, a tablet, smart TV, some payment happen, or you're buying something, selling something, that's most likely Involve Street. Why is Sui the best blockchain out there? So, Evan Cheng is the co-founder and CEO of Mistin Labs. The creator of Sui, a next-generation Layer 1 blockchain. Formerly an engineering leader at Apple and Meta. He's now building the foundation for the future of Web3. What is Misten Labs? Misten Labs is the inventor and builder of SWE.

0:36We're building the AWS decentralized future. The company's mission is to enable decentralization. What is SWE Network if you had to explain it to a mom? It's a software company, but you don't need to know the details. All you need to know is if you're using the internet, there's a good chance it touches the SWE Network. Some people call SWE the next sol. Does it make sense? No. Why? There's never a new version of something that is successful. It's like, is Airbnb a better way to hotel? We have very first principle about identifying what problem we're solving, building a solution to solve that problem.

1:09What do you think has won in the crypto ecosystem? Nothing in this space has won. Bitcoin hasn't won. I think Bitcoin has established itself as incredible asset class. I don't even think even the Ethereum folks will argue they won from their perspective or their vision. You said at the one year anniversary, we're probably going to be at 1 % forever. what's the day where you can say I'm proud of what we've achieved and it really made a difference I think

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2:56Welcome to the podcast room of the Miston Labs office. Well, thank you. I heard that it was never used before for podcasts. It's the first time. Really? Yeah. I wouldn't thought it happened a few times. How are you doing, Evan? Yeah. Yeah? Yeah. How is life treating you? It's a lot going on. It's very busy. Incredibly busy. the life of a CEO in this crazy market, crazy industry. Very much so. If you had to summarize what it is you do and why you do it, what would you say? We're building the most advanced infrastructure that is going to enable a way for business transformation to actually finally fulfill the vision of the founders of the internet.

3:47That's what we do. That's what is driving us, right? We're seeing how it went from this peer-to-peer platform for everybody to have the equal playing field to build anything, get the audience in need, to being completely controlled by a centralized middleman to extract value from the customer, to the evolution of introduction of crypto to see it being re-centralized yet again. This is what drives us, right? The mission is much, much bigger than pretty much anybody realized. That's what drives us. You said finally. Finally. Why do you say that? Because it hasn't been done. It has completely, repeatedly failed.

4:39Why? It is really, really hard to build. And we have seen over and over again that any chance, any mistakes you make in terms of the infrastructure you're building, it is very, very convenient to fall back to centralization. And every time you fall back to centralization, the same thing happens. Which is? it's almost forcing companies to go back to being evil because with centralization comes responsibility. You are forced to you'll be holding to contain the integrity of your customers information, their assets their data and something has to pay for the work you have to put in to be responsible for the information, for the data, for the content.

5:44And the way to do it is to take a cut. Central as an entity, everything from a bank to a web service, they all are providing

6:02assurance of some sort. You're almost like insured. Like I leave my information, my content with you, you better not kind of when I need to retrieve it, it better be pristine. Hasn't been compromised. I'm, I'm trusting you with my secrets, my key. Okay. It's fair for me as a customer to pay you some, something, right? That that's, that's the take, that's the cut. so it's a very convenient way to it's a very convenient business model and for everyone it's not their fault if I have to do the work I want to get paid for it so what we are trying to do is say you don't have to do the work when we talk about business transformation imagine you're building business where you don't have to do the work to to care for customer secrets because it's guaranteed because the decentralized infrastructure guarantees and all of a sudden you don't have to do the work then you don't have to think about how I get paid for providing that trust providing the assurance You mentioned you said finally right and then you said there was a few attempts that all ended up going back to being centralized?

7:33Do you have some examples of a few attempts that didn't work? Well, take the most recent example, Ethereum. I'm going to elaborate on that. Well, Ethereum was supposed to be this coordination layer for the world, the world computer, everything completely permissionless, accessible, and all that. And look what's happening on the Ethereum ecosystem today. Where are most things happening? The number one, L2, is base. They don't even pretend it's decentralized. They're very proudly saying it's centralized. And that's where things are happening, right? That's a re-centralization in Ethereum is happening right in front of us.

8:20Why do you think that's happening? Well, the infrastructure doesn't work otherwise. Right? Who is I mean, everything about the scalability, the cost issue, which they cannot solve because architecture is built incorrectly. The how to access the network, how to onboard customers and all that, it doesn't work. Security-wise, it's proven to be very fragile. It's very easy to hack. You know, you go down the list. so now you have a big company comes along and say we solve those problems for you trust us because we're coinbase the biggest player in crypto is behind it you trust them they're reapplying you know they're providing our trust once again we have a centralized entity incoming and providing trust and and there's no wonder remember the the infrastructure is built on top of optimism so So it can't even say it's fundamentally better than other L2.

9:28Why is the one that's growing the fastest? Because you have a public company behind it. It's trusted. So, you know, distribution is much simpler. A lot of people have Coinbase account. So onboarding customers is much easier. But nowhere, and it's probably centralized, right? and we're seeing the freshest example of once again peer-to-peer or decentralized model just very very hard to scale very hard for it to be performing very hard to build for customers I actually had Jesse Pollack on this podcast and we talked about that and also kind of poked him with a tweet that Kyle Samani who is very pro Solana obviously he often says the future of Ethereum is Coinbase and I'm not trying to make an ethical moral judgment here this is the thing that's hard if you I think this industry is very naive in a lot of ways look at the narrative we've been pushing for many years what's good for consumers for consumers to have control of the asset.

10:52We talk about not your key, not your Bitcoin, or not your key, not your crypto. It's a very naive way of thinking about it because what's the flip side of that? Somebody have to build service, product, and business. And if you're building a business, you need to make a living. If you don't have a path to make a living, nobody will be building business or services that's good for customers. so there's a two-sided dynamic and if your infrastructure doesn't allow that to happen because you have all these other issues inconvenience, too slow, too not scalable I can't trust it of course you're going to fall back to a centralized solution that's very refreshing to hear I mean we're here in Palo Alto, Silicon Valley San Francisco and I'm here recording a bunch of podcasts with other people who are very down to earth like you.

11:49There's not many people like that in crypto. Talking to Brandon from Phantom, right? And I can definitely feel also your kind of Facebook background and like just being on earth and being like, hey guys, if we don't know two keys, it's great, right? It's a great concept in theory, but in practice, it's very complicated for normal people. And also even for people who could do it or who can do it when you have a certain amount of money, you don't want to do that. Right? We want to delegate the responsibility we said before, right? And so, very complicated. Very complicated. And very refreshing to see someone who is just down to earth in this very nerdy world where everybody thinks, you know, it's very theoretical always.

12:34So you are a down to earth person. Who are you? Well, I mean, I was an engineer for, or technical leaders, you know, if you would say for 20, 25, 26 years before I decided to leave the comfort of big tech, comfortable, cushy position and to try to do something that's really hard. That's who I am. That has sort of been my MO for my entire career is I like to take on things other people find very difficult. Dear When Shift Happens family, the following message is probably the single most important thing you should take away from today's podcast. If you're serious about your crypto investing journey, please take some time to learn how to self-custody your assets to make sure that nobody can take your coins away, ever.

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14:06And now back to the episode. What made you wait 20 years to start to something that is extremely hard? Well, there are many factors, including personal reasons, but ultimately two reasons. One is I feel like if we don't do it, we have to prove ourselves, right? If, you know, we can just talk about it. if we don't do it I don't see anybody else recognizing it and have the ambition or the ability to execute on this vision the other one is we feel like we had an edge at that point in time when we in late 2022 this is the time for us we have the talent we have the know-how so that combination the conversions of those two two understandings is what drove us to come out and start a company there's a common pattern across many people I talked to on this podcast were very successful working on very hard things taking a lot of risks they have something that happened in their life either in their childhood or later on in their life that gave them a chip on their shoulder and that's why they're such they have this fire in the belly what happened in your life that might explain your hunger for success and huge fire in the belly um just give you a couple examples um I worked at Apple for 10 years um I was recognized internally if you ask around at Apple at that time one of the people who know what they're doing who do hard stuff um And I remember we, my partner and I received this ACM award.

16:05It's a pretty big deal. Once a year, they give it to some project, typically open source project. They have made like massive contribution to the world of computer science. It's kind of like software system everybody uses. Apple didn't even say anything. I read that the World Wide Web inventor also received this award yeah or Unix Java web browser so you were recognized externally externally but for something that you did at Apple yeah internally there was not a peep why

16:48it's yeah it's a good question like I didn't think a lot about it at that time. Later on, I recognized it doesn't matter for the business. It didn't matter for the company. It didn't necessarily immediately at that time contribute to the business. Therefore, there was no recognition. We can talk about the politics, company politics as well. But that part is not really important, right? I'm sure if the world comes with a billion-dollar contract to Apple, they would care. They would recognize. That's how it is, right?

17:36So I think that one understanding, one realization at the time was, well, I need to go somewhere where my work is really fully recognized. clearly there's something that I need to do better for myself to get the recognition the reward I deserve and also understanding there's only so much I can do to influence the direction of a very big corporation like Apple which is was kind of reinforced that learning later on at Meta, at Facebook. It is very, very difficult to change people's minds because they focus on what is in front of them. And that applies to big companies too. What is the big company's focus?

18:38What they want to accomplish? You can't be just shouting. You don't have your soapbox. I could stand on a soapbox and yell about how important it is to decentralize, otherwise the world is going to go to shit, right? And that sort of was the understanding. It's like, if you want something, you want to enable change, you kind of have to do it yourself. You have to do it yourself. Yeah. That's pretty simple in a lot of ways. Especially because in these big companies, there's not only people doing what is in front of them, but then you have also doing what's best for themselves as an individual in the company just because, hey, I want to do well in my career and therefore, yeah.

19:31How, just a parenthesis here, how did this Apple experience of not being organized influence the kind of culture we're building at Miston Labs? because it's probably much easier in, again, theory than in practice to even say, hey, let's build a company that at a certain scale, we have a certain amount of people. We make sure like if something happens that's really important to someone, we are even aware of it, right? Let alone celebrate it, but it's much harder than it sounds like, you know, make it work. Yeah. I mean, people often say, oh, it's a big company problem. then a smaller company wouldn't have the problem.

20:12That's completely not true. It's where every individual feel like if they have the agency to do what's right, what's important. If their first thoughts, do I do this? Do I do it this way? If it's important for the company first, rather than thinking about, is this good for me? So that's ultimately the difference. So the company culture has to be everybody has an agency to do what's right. Can you define agency? What's a high agency person? They are not asking for permission. They know exactly what needs to be done. They are now waiting around for somebody's permission. That doesn't mean they're just kind of reckless and go ahead and do things, right?

21:06First, they have to have recognition of what's right. secondly they have to have the ability to pull it off and number three is to convince other people you know their team members and the people who need to know and help them to accomplish things you know they have to be able to convince them with concrete information concrete data so that's the kind of company we have here everybody have the agency to you know basically say this is how it should be done let me explain to you let me prove it to you this is what needs to be done they're not waiting for someone to tell them to do something how do you find those people?

21:49how can you judge in the beginning this is a high agency person? you know I think a lot of people are like that you know I think if you if you talk to there's a lot of smart people and everybody will agree this is the kind of environment that we want to be in I think it's most importantly just

22:14you know I think the whoever's starting funding the company needs to show lead by example that's how we do things they need to believe they have the trust of the founders to do that right this is why using an example of Meta again a founder let company typically enable changes like shift in how company operates much much quicker much faster because they don't have to look over their shoulder and I think that's come from the founder first and foremost setting example most people want to operate that way most people love to be in an environment that allow them to do what's right and don't have to ever watch, worry about company politics and waiting for permission.

23:14And the waiting for permission part is really hard. At big company, sometimes we get sort of almost beat down, afraid to ask for permission, right? Because you think about the amount of work you have to do, the people you have to convince. A lot of people would misalign with what you want to do. You know, we remove all those friction, remove all those worries. So it's very, very easy. It just kind of naturally happens. That's the way we operate. So you mentioned you have quite a few things that happened with this chip on the shoulder. You mentioned the Apple story. What else comes to your mind that makes you really want to kill it with 30 and Mr.

24:02Labs? I can tell you early on, in the conversation about building a Misten lab and building SWE, the number one question, the question we get asked the most is what's your EVN compatibility story? What do you think about the Solidity engineers? You know, all that feedback we receive about oh, Ethereum is already one, Solidity is already one. If you don't have a solution, don't have a story there, we're not interested. That is very much, you know, the make the chips on the shoulder even bigger. So it's to prove people that they can be wrong or that they are wrong, or it's based on all the feedback that you had from the actual field saying, actually, hey, the way it's being done until now is not going to work on scale?

24:59Or is it a combination of both? I mean, early on, there were no evidence of that. I think we have high conviction. We're right. And we very much want to prove people wrong. Because I think it's almost like it was a statement. It was not a question. And it was not one that's invite debate. It was not one that invites, you know, sort of this very principled discussion about why, right? There wasn't a lot of like, you know, why do you not do this? Rather than we believe that should be true. The market tells us that's true. Therefore, what's your answer to that? And I mean, I think even today's, right?

25:57I say most of the projects, a lot of infrastructure projects still very much focus on being compatible and attracting the few thousands of developers to the platform, which to us, given the background we have, is insane. It's a small, tiny developer base. it sounds like again it sounds like a corporate problem where you go around and there's things for example in the IT space some reports or systems hey why are we looking at that or why are we looking at that that way and they're just saying ah it's because we've been doing that for 10 years they don't really question the thing and try to yeah to get better and like we that's kind of the human way of thinking is like we like to feel comfortable I guess but just I mean how many times have you heard some kind of statement something has won right surely this is all you need what do you think has won in the crypto ecosystem nothing do you think there's one thing that can say no for example Bitcoin you would say Bitcoin hasn't won I think Bitcoin has established itself as a credible asset class do I call that won.

27:19I don't even think even the Ethereum folks will argue they won from their perspective or their vision. Remember, the vision of Bitcoin is really money. It's a form of money. I don't think they won. It was a pure-to-pure cash system, not just all value. He's evolved into something that's different, which is great. I hope Bitcoin, believe in Bitcoin, but now Not necessarily, I would definitely not say as one as money. So nothing in this space has one. How did you get so fascinated by the world of the blockchain and cryptocurrencies?

28:05It really is, it's really, really, really different. That's the first reason why people are fascinated by it. people are fascinated there are people fascinated by this phenomenon you know a lot of people outside the industry are looking for when it's going to blow up that's a form of fascination and I think there's a lot of people fascinated by it because it's once you understand it just seems so right you know a form of hard money a way of infrastructure where you can trust something that's infallible rather than human who are you know fallible by definition and not trustworthy by definition so it's really really easy to kind of understand those concepts and you know same thing how I got into this space fascinated by this concept of distributed trust and trusting software rather than trusting human.

29:11Totally can understand the fascination. And this was while at Facebook? This was while early days of Facebook. I actually discovered Ethereum and blockchain and Bitcoin late 2015. You worked at Facebook in something, in a team called Novi Research. What was Novi? So Novi was the subsidiary of Facebook that was kind of responsible for not just building the blockchain, the Libra DM project, but also building financial services on top of it.

30:00What's the single most important thing that you learned while working at the Novi team? I

30:11it's a good question there's a number of learnings I think perhaps the most important learning is I saw with first hand how a motivated highly talented group of people who are believing in the same thing and moving in the same direction how much you can get done my teams before were much bigger much much bigger and I somehow forgot the early days of Apple when just basically two engineers started a project that actually changed the world in a lot of ways right my software my partners work on this thing together it's literally in billions of devices now and impacting billions of humans. I mean, probably not billions, but maybe I don't know how many people own smartphones and smart devices, but it's probably approaching it.

31:13How many millions of developers using it? The foundation of a lot of software. We started with two people and growing into a bigger team. Somehow through that process, then from Apple, then Facebook, I forgot what it's like to have this lean, and highly motivated, highly talented team, what can be done. And that sort of reawakened that desire to do it again, to show what's possible. Novi research got shut down? The whole project got shut down. So the Libra DM project got shut down. So then Novi as an entity within Meta, I think it merged with the broader sort of financial service or payment organization that lived for a while.

32:11But effectively, everything that was involved in blockchain was shut down. How did you feel when that happened? to be honest by the time it was shut down it was we knew you know the moment that hurts the most when when we were now you know we sort of shut down the blockchain development came earlier the you know the you know the mission was to have this kind of new payment rail that will power everything that was killed earlier and we struggled along trying to identify a different product using the blockchain technology we developed for a few months I think roughly about four months before I left for good we tried again to use it for for internal other kind of project later on remember Instagram adopted polygons that you know we were meant to build something before that was there really an adoption it was more like a I remember the headlines and everything but the ambition was bigger the ambition was much much bigger but it was supposed to be this identity layer supposed to have a way of it never got anywhere again internal challenges working at a big company made it impossible So by the time the group was shut down, sort of like we were kind of numb, right?

33:57Because it's sort of the first regulator came and said, you can't launch this. You can't launch your currency. You can't launch your blockchain. That was shut down. And then we struggled a bit for another product and it wasn't going anywhere. So by the time we were ready to leave, we were not feeling anything at that point. So you left directly with the idea of Miston Labs? Mm-hmm. That's what happened? Yeah. You left with your team members and started Miston Labs? I left with my co-founders. I left first. My co-founders want to join, you know, for various different personal reasons. they couldn't join right away, but I was fine leaving first to get things started.

34:51But we already knew directionally where we're going. We didn't know, we didn't have a design for three yet. We didn't have a design for, definitely not worse yet. We didn't have a design for what that future would look like, but we had a directionally know where we're going. You left Facebook to start your first company, Mr. Labs, around the age of 50. I think I was 51 or 50. So past 50. What's your message to anyone who feels they missed their entrepreneurship chance in their 20s or 30s or even 40s? And who think they're too old to start a company? Clearly it's not too old to start a company.