Founder – Bruno Faviero, Magna

Hey everyone! We’re about to dive into a chat with Bruno, the brains behind Magna. Imagine starting out as a software engineer in fintech, hopping into the world of AI, and then landing in the midst of Web 3 and blockchain tech. Yeah, Bruno’s been there and done that. He’s not just a spectator; he’s been in the thick of it, leading teams and even getting a company acquired by the giants at Palantir.

Let’s get started!

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Welcome to the interview with Bruno, the founder of Magna. Bruno, could you please provide a brief overview of your journey, leading up to your role as the CEO of Magna?

In reverse chronological order, I’m currently the founder and CEO of Magna, a role I’ve held for approximately a year and a half. It’s been an exciting time, navigating the peaks and lows of the crypto market since 2017 and the tech industry since 2000. Prior to this, I was fully immersed in the crypto space for two years. Before that, I started two AI companies, one specializing in computer vision and automating airport x-ray machines, which involved challenges and collaborations with airports worldwide and U.S. Homeland Security. After three years, we were acquired by Palantir, where I led their geospatial product and later their AI platform. Subsequently, I ventured into starting an AI company focused on improving model quality and understanding. My journey began as a software engineer at a Fintech company, creating tools for banks’ market research. Now, in the crypto world, it feels like I’ve come full circle as I witness the integration of crypto into real-world assets.

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Tell us more about your experience in investing and running funds.

Throughout my career, I’ve been both an angel investor and involved in managing small funds. My approach is highly opportunistic, driven by the belief that founders need practical advice from those who have been in the trenches. It’s not about extensive sourcing; it’s about being able to provide valuable, hands-on insights to help startups grow. I typically make one investment per quarter, focusing on areas where I have deep knowledge and can genuinely assist founders.

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Given your experience and education in machine learning, what led you to the world of Web 3 and blockchain?

My journey into Web 3 began during college, when I was introduced to Bitcoin enthusiasts at MIT around 2013-2014. I bought some Bitcoin back then but didn’t fully engage with the technology at the time. It seemed niche and attracted researchers and enthusiasts. However, as Ethereum emerged in 2016-2017, I started to notice a shift. It became clear that serious projects were developing, backed by mainstream investors. I got pulled into crypto through NFTs, thanks to some friends who were deep into the NFT communities. I actually started with the Solana community. Super welcoming and approachable people. And man, I saw some serious action happening there. Amazing founders and smart developers were building solid companies, I thought, “Okay, this is it.” I love building tools for startups, and there’s a huge opportunity here for me.

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Now, let’s discuss Magna. It’s described as the ‘Carta’ of Web 3. Can you tell us about Magna’s current stage of development and how you came up with the idea?

I saw these passionate founders having to start from scratch for every part of their business, from the product to devops to back office operations. It hit me – why not build a Web 3 company in a box? A place where everything’s taken care of – legal, finance, accounting, HR, you name it. I realized crypto tokens are the new form of value and ownership. I thought about the tools needed as the operating system for managing and distributing those tokens. And that’s how the idea for Magna was born.

Referring to Magna as the ‘Carta’ of Web 3 is a useful way to convey our mission. We’re building a token operations platform that serves as a system of record for ownership and a platform for on-chain operations. Throughout a token’s life cycle, from pre-launch to post-launch, we offer tools to track equity promises, allocations, legal instruments, and token valuations. We bridge the gap between on-chain actions and off-chain operations, simplifying complex processes for founders and operators.

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Magna’s approach to monetization is unique (for Web3) , as you’ve been generating revenue from the start. Could you elaborate on this strategy and its significance in the crypto space?

In the crypto industry, experimentation is common. However, charging for a product is the ultimate test of its value and product-market fit. It also fosters a more committed customer relationship. When customers pay, their feedback is driven by genuine interest in the product’s improvement. Offering something for free can lead to customers continuously asking for more features without ever committing. By monetizing from the beginning, we establish trust and ensure a sustainable path for our company. It aligns incentives for both us and our customers to continually improve the product.

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Magna’s pricing plans and approach seem to align well with the long-term needs of projects in the crypto space. Can you explain how your pricing strategy benefits both your company and your customers?

Our pricing model, based on monthly subscriptions, resonates with the lifecycle of crypto projects, which often span multiple years. It creates a mutual commitment. Customers are incentivized to stay with us, as our platform evolves to meet their growing needs. In return, we continuously enhance our platform to provide more value, building a strong, trust-based relationship. The goal is for customers to feel that they are getting a better deal each year, further solidifying our partnership. And they’re not paying twice as much. I think that’s part of the economies of scale of stocks. We’re able to serve customers in parallel, and they get the benefits of an improving product just by virtue of us being out in the market and learning more things. So, you know, is it a good business model? Yeah, but I think that’s also part of the reason the problem is exciting because if they’re using it for four years, that means that, okay, as these companies grow, they’re also not static, right?

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Yeah, that’s a long journey together with the companies.

Exactly, that five-person company that’s using us four years from now might be a 200-person company with a finance CFO, in-house general counsel, and a head of HR. So, there are challenges as well, where we’re building for customers that evolve and grow even while they’re using the product. And that’s the challenge that we really want to step up to and say you should be able to find Magna valuable from five people to 200 people.

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I really like this approach. Do you have any plans to implement AI since it’s in your background? Probably you’ve thought about it, even though you left the AI space.

It’s my background, it’s my co-founder’s background. I think we want to ship things that are most valuable to customers today. We have some neat ideas about how AI could make things like customer support and customer success experiences better. We’re looking at AI for some projects to help our customers benchmark their tokenomics when they’re launching. So I think there are ways that it could be valuable, and it’s something we want to experiment with in the near future. Right now, AI is more like an area of experiments. There are many interesting experiments we could run, but in terms of our core product experience, we’ve found that a lot of teams use AI when they want to massively scale.

In some ways, they want to support thousands, tens of thousands of people without having to hire thousands of in-house people. But I think right now, we’re learning so much from our customers that a lot of those interactions, I wouldn’t want to hand off to AI.

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True. I wanted to ask you more about your early journey with Synapse Technology that was acquired. if I’m correct, you worked with airports, private security companies as well, detecting guns, knives, and dangerous objects in scans, right?

Yes, exactly.

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Just tell me about the experience.

Sure, the multi-year journey started like any other product, with identifying a problem. In this case, my co-founder had done research on the cognitive science of X-ray screeners and found that they fatigued after 15 minutes, missing 90% of objects. There were difficulties with humans staring at a screen for 12 hours a day. We knew there were quantifiable problems that had a quantifiable impact. There were risks of dangerous items being missed and tangible costs associated with having humans perform these tasks.

The technological shift that enabled solving this problem was the growth of convolutional neural nets, which allowed multi-object detection in a reasonable amount of time. This enabled us to finally address the problem. So we had a problem, a market opportunity, a technological shift, and it was possible to build a solution. We spent the first six months researching, understanding the problem better, gauging customer willingness to pay, and networking. Once we felt comfortable, we decided to go all-in.

We began with a minimum viable team, and the journey was different from a traditional startup. We had to deal with hardware, which meant managing a supply chain, inventory, and more. Hardware has to work; there’s no moving fast and breaking things. You have to pay close attention to detail, do extensive quality assurance, and even offline updates.

We also learned to get feedback more quickly and ship things more efficiently. Hardware taught us to be more scrappy and plan carefully. It was a challenging but rewarding experience.

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How different was the process of building the company compared to a traditional software startup?

Hardware is indeed challenging. It’s expensive, low bandwidth, and has to work flawlessly. You need a supply chain, inventory management, and even assembly details to be meticulously planned. Every part of the process requires a high level of attention to detail, and there’s no room for moving fast and breaking things. The ability to ship, maintain, and upgrade hardware adds another layer of complexity.

With software, you can iterate quickly and release updates without much hassle. Hardware demands rigorous quality assurance and long-term planning. The experience was different but valuable in its own way.

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How long did you stay at Palantir after the acquisition?

I stayed at Palantir for one year.

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You had connections in aviation and probably defense. Why didn’t you continue in that direction?

Defense is very interesting, and I’ve often thought about going back because it’s high-impact work where you build tangible things. However, I had the opportunity to explore something entirely new. Crypto represents the next generation of finance, commerce, and money. It’s a rapidly evolving space, and I wanted to be part of it. I saw many smart people going into crypto, and as I delved deeper into it, I became more excited about the possibilities. It’s an opportunity to build an entire ecosystem from the ground up, and that appealed to my zero-to-one thinking. I wanted to join everyone else in the crypto space who is also figuring things out. It’s a fascinating journey, and I love being part of it.

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​It’s incredible how you’ve transitioned through various domains and challenges in your career. Thank you for sharing these insights into your journey.

You’re welcome. It’s been dynamic and rewarding, and I’m excited about what lies ahead.

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Absolutely. So, as we wrap up our conversation, what would you say are the fundamental principles or pieces of advice you’d offer to those starting their first venture or aiming for their first successful startup?

Well, there are two essential aspects I’d emphasize. Firstly, pick something you’re genuinely passionate about, something that you’ll stay committed to even when things get tough. I recall moments at Synapse when we lost significant contracts or faced substantial challenges. But our passion and belief that what we were building had to exist pushed us through those darkest times. It’s about having that unwavering commitment to your mission. Secondly, surround yourself with smart people. Seek out advisors, co-founders, employees, and investors who can provide diverse perspectives. Don’t blindly follow their advice, but always consider different viewpoints. It’s crucial to tap into the wisdom of people who have seen companies grow and can offer insights. When it comes to advice, you’ll usually encounter two types: advice on company building and advice on your specific industry or space. While company building advice is often timeless and proven to work, strategic advice can vary. Sometimes, people may be cynical about an opportunity based on their past experiences. In such cases, reflect on whether the circumstances, market dynamics, or technology have changed since then and whether your approach can be different.

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Thank you for sharing those valuable insights. Are there any books or podcasts you’re currently enjoying or would recommend?

I do have some favorites. In the realm of podcasts, I particularly enjoy “How I Built This” by Guy Raz. He delves into the biographies of founders and extracts interesting lessons from their journeys. I find it fascinating, especially when he features individuals from entirely different fields. For instance, the Christopher Nolan episode offered a lot of parallels to building companies.

As for books, I’m currently reading one on creative thinking and how artists approach their work. I believe that business, too, involves creativity, whether it’s in developing models or crafting go-to-market strategies. So, I’m exploring ways to inject more creativity into how we build our business. It’s been an enjoyable read, and I look forward to delving deeper into it.

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Thank you for the recommendations. It’s been a pleasure talking to you, Bruno. Best of luck with Magna, and I hope we can catch up again in the future.

Thank you. It’s been a great conversation, and I appreciate the well-wishes. I look forward to our next chat.

That’s it!