Interview with Solana Labs Co-Founder & CEO

JD Durkin: Solana Labs is bringing crypto into the mobile era with its new mobile software stack and flagship phone. It's called the Solana Saga - big announcement for the company. Solana announced on Thursday that the Saga is now available and will be shipped on the 20th of April for those who pre ordered and open for orders on May 8 for everyone else. 

Here to discuss the new phone and really how it might be able to revolutionize web3 itself is Anatoly Yakovenko. He's the co-founder of Solana and CEO of Solana Labs. Anatoly, thanks for being here. Great to have you.

Anatoly Yakovenko: Thank you for having me. 

JD Durkin: Of course. So let's begin with the most obvious question, at least to me, why the need for something like Saga right now in the marketplace? 

Anatoly Yakovenko: Well, if you've ever imagined what crypto should be like, once we actually get to full adoption, you can imagine that world with a phone that's not your hardware wallet, it just makes sense. Right? Like it's the device you use every day, it has all the technology necessary for signing and transactions to be secure. It's just not enabled yet. So myself, I spent most of my career at Qualcomm and some of my closest colleagues worked on the technology that we're using to enable this. They literally built the Snapdragon trust zone. So as soon as I started working on crypto, it was just always in the back of my mind, when are we going to enable this on a Qualcomm device. So I'm pretty excited to actually get this to market and the level of security that this provides, I think, is so close to what a mobile phone could do, in terms of being a hardware wallet. So I'm really excited to bring that to consumers. 

JD Durkin: And to the point about bringing that to consumers. Talk to me about how you envision this new look, web3 experience to be especially on a device, an Android device and, and something like this for people who have some familiarity, but are pretty eager to learn more.

Anatoly Yakovenko: So we want to get the experience to be as kind of slick and exciting to people as and seamless as what you expect on an Apple Pay, or the Google Wallet. So when you sign transactions, you just tap the fingerprint scanner, and it automatically detects your fingerprint, does a biometric checking inside trusts out in a secure environment, and that signature happens and your transactions go through. The nice thing about doing this in Solana is that it's cheap and fast and it feels like you're using, you know, Google Wallet or Apple Pay as well. So you're own experience is kind of a slow network effect that you do on a theory or other networks.

But there's more. I think one of the fundamental reasons why this is necessary isn't just the security part, it’s actually the applications part of the web3 DAP store that Solana released as well. There's a bit of a fundamental difference with web3 business models, that doesn't really work with web2. When you own web3 content, you actually own it. You own those NFTsYou know, when you own music that you bought from iTunes, you don't actually own that music. It's still Apple, so you can't transfer it. You can't sell it on eBay, right? You can't give it to your kids, in theory. But then NFTs, you can actually own those digital goods. So that just doesn't really quite work with the App Store models, like applications, like magic eaten in their iOS app, they can't list the digital items that are for sale in their marketplace, at 30%. higher price in the iOS App Store because they don't own that content. They can't eat those costs internally. And they can't list it higher because there's no way somebody's gonna pay $30,000 for an NFT in the Apple App Store, if it's available for 10,000 bucks on the desktop, that's just never gonna work. 

So there's a bit of a conundrum there. How do we get the app the big app stores to change those policies and to actually re-script to let these new business models, you know, be discovered and for people to figure out how to monetize them in a way that's fair to everyone. So I think we're taking that first step to really enable that for consumers and developers to see what happens.

JD Durkin: Anatoly, was it always part of your your calculus or your dream to have a separate Solana App Store, especially given how the App Stores of today, Googles and Apples have very strict payment system rules and to your point, one of the big headaches for developers, of course, is this 30% figure and a lot of the rules and regulations under the companies that basically control the market share of the space, at least up until now.

Anatoly Yakovenko: Well, you know, Solana is a platform. It's a platform for developers. So I talked to developers all the time, it's just kind of my day to day, probably half of my day is spent talking to external developers that are building some applications. And I would say their number one concern is how am I going to get these web3 features through the Google approval process for the Apple approval process? So as soon as we started gaining traction with devs, this was always something that they brought up. So immediately it became something that I've kind of always had in the back of my mind.

JD Durkin: Do you expect web2 companies to try and do something like this? You did a good job a response or two or go laying out some of their challenges, but is it your expectation that even the web2 kind of legacy names will be forced to sort of adapt?

Anatoly: I would love to work with every web tech company that's thinking about this, and with all the tech we built is open source, we will gladly work with them to do the engineering work for them to start leveraging this platform. That would be awesome. 

JD Durkin: Have you, if you don't mind me asking, have you had any conversations with any of those names?

Anatoly Yakovenko: Nothing deep that we want to announce yet. 

JD Durkin: Okay. All right. Fair enough. I'm a journalist. I'm just asking the questions I'm sure you understand.

First, give me your sense. Give me your sense about why this has not yet been done already and why is Solana the right foundation for mobile, and of course your for more mainstream adoption?

Anatoly Yakovenko: I mean, it's probably because I'm the founder that worked at Qualcomm for over a decade. So I knew exactly what pieces of technology we needed to build to ship this. So it didn't take a 100 person team. It was a very small team of labs, you know, I think about five to seven engineers that we got the ball rolling to get this out.

And Solana the network is really well suited for the mobile experience, users really can't wait, you know, 10, 20, 30 seconds, let alone minutes for transactions to settle. That has to happen within one to two seconds, and it has to be so cheap that for the mobile experience, developers can actually pay for the user. 

So if the unit economics for using these web3 applications have to be so low that you can start doing the same kind of adoption, you know, product market fit loops that you see on mobile applications today. And that means users don't actually care about what network it’s running in- they don't deal with gas costs. And all that stuff is kind of hidden behind the scenes for them. And for that to be possible, the network has to be cheap, as fast as to be scalable. I think Solana is the only one that really fits that bill right now.

JD Durkin: Any close competitors you have who might launch a competing phone or something like that, not even on your radar just yet.

Anatoly Yakovenko: Yeah, it's not even on my radar. Anonymously, everything we built is open source. I think we would love to get contributions from anyone on the Ethereum community or Bitcoin community to add support for those networks.

JD Durkin: Whenever you talk about mobile pay operations, this opens the doors to a conversation for general security questions, security concerns. Talk to me about the assurances, and really the work that you and your team have had to do with regards to privacy considerations, especially for any person out there who might consider getting involved, but say, hey, when it comes to mobile pay operations, you're really dealing with some pretty intimate personal information.

Anatoly Yakovenko: So as everybody knows, public permissionless networks are public by default. So any transactions that you do are recorded in a public ledger. So this is something that folks need to be mindful of. And there are technologies to make transactions more private, like elusive is a technology that does as your knowledge proof when you want to do transfers and things like that. So you would have to intentionally use those technologies. And because all of those are available as smart contracts, it is really outside of the hardware wallets kind of domain to take care of the wallet, the only thing that it provides is the secure signing capability. But everything else you can basically access via smart contracts.

JD Durkin: How many pre orders do you have on the phone? What does interest look like?

Anatoly Yakovenko: Before we launched, we had about I think 5,000 pre orders, we were targeting developers and from my perspective, it was..our DBT units that we shipped are very well received. So we have a very excited developer community that loves the device. 

JD Durkin: So it sounds like that was largely your expectation about that 5,000 number. And again, keep in mind, it's early, right? We're not even quite yet at the shipping distribution phase of it, but you get the sense that that largely matches the excitement you had hoped for for people?

Anatoly Yakovenko: Yeah, so the thing is that like, I've worked on every major phone launch at Qualcomm, like as an engineer, remember the Amazon Fire the Metro phone from Microsoft. It's very, very hard to launch a phone with a million units sold on day one. And this is actually I think ..this was never our time, when you look at daily active users on  the most popular web3, networks like applications like OpenSea, it's about 10 to 20,000 people that generate 20 to $30 million of volume per day. So our goal is to actually get the most heavy web3 users on this device. And because there's no restrictions for web3 content on this device, that's a better distribution channel. If you can target those 10 to 20,000 users directly as an app developer, that's a much better distribution channel than the big app stores because of the restrictions. So that's really what matters. Can we get the right users? 

JD Durkin: And how about targeting users that may not yet be too involved with the web3 space? I think at this point, most people, if not everyone has heard of it. But as you know, not everyone has necessarily felt confident as of yet to dip their toe into the market. You do a great job laying out the case, I would argue in terms of going to that core constituency that you know, we'll be supportive. I think your pre-order numbers suggest that, but how about other people that are sort of on the sidelines? Is this something they might be able to consider, if not now, for potential future application? 

Anatoly Yakovenko: This is an awesome Android device on its own. It's built by an amazing company, the founder literally designed the iPad Pro. I mean, like when I worked at Qualcomm, and I would compare the phones that we had to iPhones and I was always like, why can't we have nice things. This is like the first phone that I feel like the build quality is better than Apple’s.

So I would suggest that anyone that's like, loves phones and wants to check out Android, we've literally I think the first time that I've ever seen people tweet on Twitter, I'm going to switch from iPhone to an Android device because of this. So I would genuinely recommend that people go check it out simply because it's an awesome phone. And then maybe if they're curious about crypto, check out those features too. 

JD Durkin: Anything like this is undoubtedly a huge labor of love. Talk to me personally, what most excites you? I can only imagine here, right, but just covering enterprise and covering big companies, and covering people with big ideas for a living. There's such an emotional part about this. It's such a deeply personal thing you and your colleagues are undoubtedly pouring all of yourselves into this. What most excites you personally about this, that you would want someone watching this interview to take away? 

Anatoly Yakovenko: Oh, man, yeah, we literally call it chewing glass. But the process of launching a product like this, we had to chew a lot of glass. What I love about it is I think all the ideas that we have, and all the dreams that we have about having this like full web3 adoption with privacy, and people with self custody, having full control of their funds, of their digital content, it's all kind of coming together. And it’s all.. the technology is there. It's possible, and the user experiences can be wonderful. It could be joyful, right? You're using Apple Pay or any other Google Wallet experiences, but now for crypto. 

So that to me is really, really exciting. And I want to see people that are so excited about the applications that this is the best reason that they get this phone. They're not just curious, but they actually see somebody that built something that gives them so much value that they want to go get this phone and then enjoy that.

JD Durkin: I mean, you work in this space, you're on Twitter as much as I am, if not more - so you know, web3 has its fair share of critics. What do you say to people that may still be on the outside and not they're not on the outside, because they just haven't learned enough to get involved, they're on the outside because they have learned a lot and they are firmly in the camp of being adversarial to a lot of the efforts that you're describing?

Anatoly Yakovenko: I think their skepticism is very warranted and welcome. And I think it's going to take a lot of work for us to prove that there is real value here. And I think that's very fair to say, like we haven't yet seen an application and crypto in web3, that has broken out to consumer success that everyone's using it on a day to day basis. 

So we're trying to kind of like remove all the speed bumps for developers to get there. And that's a lot of work in and of itself. But I firmly believe in the idea of self custody, that you own these cryptographic keys that are secured with math, and that gives you tremendous power to transact and coordinate with people online. It's a very powerful thing – it expands to human human rights, right? That's maybe a bit too much. There's much bigger problems in the world, but it does empower people to go do really cool things on the internet, so I think that's awesome and I'm excited to see the kinds of applications people build.

JD Durkin: And then talk to me a bit more about especially for people that are kind of accustomed to having a more traditional provider, let's say an AT&T or Verizon - what does this look like specifically with Helium 5G? First, a lot of mobile, especially if you're introducing some names that some people, not all of your demographic base, of course, but some people are only really learning about for the first time.

Anatoly Yakovenko: I mean, if you're a wireless network nerd, this has got to be the coolest thing ever. Because, you know, all these massive networks, they're effectively almost like government mandated monopolies. These are very big companies. They require licensing from the FCC and a lot of work and deployment to go build, build these towers and deploy these towers and everything. And Helium is doing it from the ground up, basically volunteer driven, and people are doing it for tokens, which are like, you know, more or less doing it for fun, right? They want to see if this will actually work. And I believe Helium was at about 8,000 5G cells, and these are like four GCB, you know, 4G+ CBRS spectrum band cells, similar to what other folks call 5G as well. If you want to get technical, there's a bunch of differences, but it's a high quality network at like 8,000 cells. AT&T and Verizon, I think are about 50,000 cells. 

The United States probably needs like a million. These are the estimates that I've seen before people talk about online. Some will say as high as 10 million to really get wall to wall coverage. So there's a lot of work left to do for the big carriers. And I think there's a very good chance that Helium passes them. And like overtakes and is maybe the first one to actually get to that, you know, 500,000 or a million number of like 5G cells in the United States. And that would be awesome. That means a bunch of volunteers coordinating with cryptography, right? Just with a bunch of math on a public blockchain, we're able to outpace in very critical infrastructure for United States for communication. I think that would be the coolest thing that's ever happened, I think in technology.

JD Durkin: You told me earlier about the number of pre orders. Are you able to give me a sense about your own internal projections? How many of these are you hoping to sell? And what does that kind of long term base case look like? 

Anatoly Yakovenko:I would be super happy if we get 25,000 hardcore users that love this device. To me that's like, that's something that I know, developers that I talked to, would find very compelling as a distribution channel. And that's a good enough start. Obviously, it would be amazing if we were 10x that. And that would be awesome, but we'll see what happens. It's very hard to build phones, we build a really great device. But you know, it's very, very hard to sell phones. It's a very competitive market. So we'll see what happens. Startups are here to take big swings and take risk. That's what we're doing. 

JD Durkin: Yeah, my man, you got to take big swings, you're swinging for the fences out there. If it were easy to develop a phone, truly everyone would do it, and there's a reason so few are. Finally, what would you most want either anything we didn't directly talk about or anything that kind of keeps you up that you would most want people to know about this new iteration for you and the company?

Anatoly Yakovenko: This is a work of love from Solana labs, and another startup Awesome Privacy, that have really poured their heart into the hardware and the software. I really want people to go check it out and really just go see if they can enjoy the experiences that we've built for them.

JD Durkin: Anatoly Yakovenko is the co-founder of Solana and the CEO of Solana labs. My congratulations to you for the labor of love, I have no doubt that it was you and your colleagues. Thanks a lot for taking the time to join us here on Public and great conversation. Congrats again.