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Strategy for Bitcoin Entrepreneurship

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Bitcoin entrepreneurs have yet to appreciate fully collaborative nature of the Bitcoin economy and its implications for entrepreneurial strategy. Every successful entrepreneurial act improves the Bitcoin economy and attracts more people in, thus raising the value of the coins. Each new service benefits everyone else who is already invested. Consequently, Bitcoin businesses do not necessarily need to see themselves as competitors to one another. Even if they have the same business model, they both have more to gain from the influx of new users from outside than by taking customers from one another.

Furthermore, the growth of any Bitcoin business is limited ultimately by the growth of Bitcoin itself. Since the number of coins is strictly capped, the currency must grow with its price. This means that few businesses, if any, can be expected to earn a much better return than the coin itself over time. Entrepreneurs should therefore invest in coins, not businesses, because coins are where the profit is. In addition, if Bitcoin fails, then the Bitcoin businesses fail—so Bitcoin is less risky than any Bitcoin business too. Thus, Bitcoin entrepreneurs should be less interested in making money than in making bitcoins into money. An entrepreneur who follows that precept should generally be expected to be more successful than otherwise because the potential for Bitcoin itself is so much greater than any Bitcoin business he could invest in.

Of course, Bitcoin cannot succeed without businesses, or at least some sort of entrepreneurship. What is the best way to fund ventures in an environment in which they are relatively poor investments? The trick, I propose, is to think of these ventures more as donations to the Bitcoin economy than as profit-seeking ventures. Any useful Bitcoin service will tend to make the Bitcoin price increase because it adds value to the network. It may, therefore, be perfectly rational for a Bitcoin investor to contribute the service to the economy for free. Furthermore, the success of such a business being desired by everyone who holds coins, such a business can be run more like a non-profit or open-source project than an business. Thus, a new venture may attract investment even if it is not profitable as long as it provides a service the Bitcoin world needs.

In mid 2013 Armory, an open-source Bitcoin wallet project, received $600k in seed funding without even though nobody knows how it will eventually be monetized. These people have the right idea, but they shouldn’t try to monetize it at all—it is obviously making all the coins more valuable.

Don’t be a venture capitalist—be a speculative philanthropist.

Labor Is Scarcer than Ideas

The task ahead of us is monumental—the construction of a new financial economy to replace the one built around the national currencies. This will take a lot of work. Unfortunately, a lot of work is being wasted right now. The venture capitalists are looking to invest in a sharp team with a cool idea but the group of people that matters most is the entire network of Bitcoin users, and the idea that matters most is Bitcoin itself. Big new ideas get hyped up almost every week around here, and the Bitcoin economy will work a lot better if people would try harder to ignore them.

There are lots of business ideas floating around and limited time to create them. Only ideas that have a very high probably of being an important part of the future Bitcoin economy should be implemented because that is all we have time for and those are the only ideas worth risking Bitcoins on.

The proof that ideas aren’t scarce is that anybody can make his own altcoin at any time. Already there are hundreds, and every one of them a bad idea from people who don’t understand the cumulative benefits of cooperation. Since entrepreneurs don’t understand Bitcoin very well yet, it is easy to dazzle them with technobabble and funnel investment into flawed projects like Protoshares, Mastercoin, and Ethereum that have a very low probability of furthering Bitcoin adoption to any significant degree.

There is no real reason to keep secrets because the more that everyone knows about what everyone else is doing, the more easily they can decide what the Bitcoin economy most needs of them. Everything about a business can be done openly for the benefit of the entire industry. Product development, future plans, market research, finances; everything except private customer data, which shouldn’t be collected anyway, and, in the case of illegal Tor businesses, the real identities and locations of the owners. We need open business and open businesses.

Entrepreneurship as a Collaborative Scientific Enterprise

In an open-business world, less experimentation is necessary to produce a workable system than among other businesses because there is no reason to keep secrets from one another. All trial-and-error should immediately benefit all the other Bitcoin entrepreneurs so that everyone can more easily figure out the most effective way to work. Open business as a generally accepted best practice would have eliminated terrible businesses like MtGox and Butterfly Labs early on. But even that would have been too late. Everything possible should be done to try to eliminate ideas before they can turn into failed businesses. That means sharing all ideas with the community, and investing in nothing that does not already have widespread community support.

Much of the Bitcoin world already works very openly. Lots of terrible ideas get shot down all the time in the Bitcointalk.com forums. All the software is open source. However, more is required: Bitcoin entrepreneurship should be run more like scientific research than a gold rush or an Internet bubble. There should be open research into the future Bitcoin economy, complete with peer review and consensus over which ideas are the most useful and important. Investment should focus on ideas that already have been vetted by the community. It should be considered reprehensible for startups to invent their own cryptographic algorithms.

It is too much of a waste of resources to test ideas in experiments with real businesses. All business models ought to be carefully critiqued beforehand and only the most necessary ones that we have time for should be created. This is not central planning; it is consensus-based entrepreneurship. No one shall be forced to follow any idea at all; it is simply in everyone’s best interest to cooperate. If I am right, then soon investors will learn to back only heavily vetted ideas and entrepreneurs will it as well.

In the early Renaissance, mathematics was practiced in secret and mathematicians carefully guarded their own discoveries because a mathematicians’ career depended on being able to show patrons that he could solve problems other mathematicians could not. However, in 1545, Gerolamo Cardano sparked a new trend with Ars Magna, the first published work to include the general solutions of the cubic and quartic equations. He even included secret work (with citation) by Niccolò Fontana Tartaglia, which whom Cardano had promised not to reveal. Gradually, mathematics transformed into a tradition characterized by publication rather than secrets. Open-access publishing is now demanded. Entrepreneurship is in its Renaissance still.

Conclusion

In a low-growth economy, one grows rich by carefully leveraging one’s skills and assets so as to negotiate the most profitable trades. In other words, wealth comes from performing better than everyone else. It makes sense to guard closely any edge that one might have. Whereas in a high-growth economy, wealth comes from doing as well as everyone else. It is more difficult to improve one’s state relative to everyone else than to enjoy the overall growth that improves everybody’s state.

The Bitcoin world understands this instinctively, but needs to take it to its logical conclusion. The entire Bitcoin economy needs to be open-sourced. This is how to make Bitcoin succeed most quickly and with the least effort, which is the best outcome for everyone.

Let’s get to work.

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About the Author

This article was written by Daniel Krawisz of the Satoshi Nakamoto Institute. see more. 

Entrepreneurship

Women on Top in Tech – Daphne Ng, CEO of JEDTrade

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Daphne Ng is the CEO of JEDTrade, a blockchain technology company focused on trade, supply chain, and financial inclusion projects in ASEAN. She is also the Scretary-General at ACCESS and Exco. of Singapore Fintech Association

What makes you do what you do?
I was introduced to blockchain technology in 2016 after I left my corporate banking career after 10 years. It was my mentor who first got me interested in this technology, which I then went on to delve further into, on its potential applications in the lending and trade finance space – domains where I came from.

How did you rise in the industry you are in?
Being in the space for 2 years and actively involved in the ecosystem, I was able to bring on the projects, network and a good degree of thought leadership in this vertical. Early on in the startup journey, our team faced many challenges. And to me, the key to rising above failures are two essential factors – resilience and support. While resilience is innate, I received a lot of help be it in terms of connections or advice. ‘Nobody succeeds without help’ rings very true for me.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
From the start, I focused on my domain expertise in trade finance and the application construct of how blockchain and DLT can be applied to these use cases. Also, my strategy from the start was to build a technology company made up of 80% tech and engineers, which is also our key competitive advantage today. At the end of the day, deliverables are about strategy and execution, which includes building and leading an ‘A’ team.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work?
I have many mentors, which includes our company advisors (all of whom are well-known in this industry) and mostly informal mentors I meet via my connections, and on various occasions and circumstances. Creating opportunities also means putting myself in the right place, at the right time. And in my case, these were mostly organic and genuine friendships formed from the initial connection.

How did you make a match if you and how did you end up being mentored by him?
To me, a match in values is very important. It also takes humility to ask for help and be willing to listen to advice, which is important in order for mentorships to be successful – be it formal or informal.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I love this question! I am passionate about building strong teams and helping my people grow. I abide by the 3Rs when identifying talents: resourcefulness, resilience and right values. And then I invest in the ‘potential’ and this means giving them room to lead, make decisions and take risks.

Do you consciously or unconsciously support diversity and why?
My support of diverse talents, skillsets and characters can be seen in the make-up of our core team – all helming specific roles and each bringing their own value to the table. We need the sum of all parts to build a great company.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
Great leaders emerge in times of failures and challenges, never abandoning the team, and always putting the team’s interests before her own. And I consciously live by these mottos every day.

Advice for others?
My advice to other entrepreneurs: be resolute and dare to be different. If you are going to follow others, then you will end up on the same path as them. No right or wrong; but I would rather chart my own path. This June, we are officially launching our blockchain project, Jupiter Chain (www.jupiterchain.tech), which have garnered much interest in the industry, even before we made it public. We believe this project is the epitome of marrying innovation with practical implementation, and we want to be the first to truly operationalize blockchain for our ecosystem projects in this region.


If you’d like to get in touch with Daphne Ng, please feel free to reach out to her on LinkedIn: https://www.linkedin.com/in/daphne-ng-%E9%BB%84%E7%91%9E%E7%8E%B2/

To learn more about JEDTrade, please click here.

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Callum Connects

Jace Koh, Founder of U Ventures

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Jace Koh believes cash flow is the lifeblood of your business. Understanding it will enhance your ability to run and manage your business.

What’s your story?
My name is Jace Koh and I am the Founder of U Ventures. I’ve always been inclined towards investment and entrepreneurship. I’ve played a hand in starting businesses across these industries – professional services, cloud integration, software and music. I believe that succeeding in business is tough, but that’s what makes the rewards even sweeter.

What excites you most about your industry?
Everything excites me. These are my beliefs:

  • Why is accounting important?
    The accounting department is the heart. Cash flow is like blood stream, it pumps blood to various parts of the body like cash flow is pumped to various departments and/or functions in a business. It is vital to the life and death of the business.
  • Is accounting boring?
    Accountants are artists too. They paint the numbers the way they want them to be.
  • What makes a good accountant?
    A good accountant can tell you a story about the business by looking at the numbers.
  • Why is budgeting and projection important?
    Accountants are like fortune tellers, they can predict the numbers and if you wish to understand your business and make informed decisions, feel free to speak to our friendly consultants to secure a meeting.

What’s your connection to Asia?
I was born and raised in Singapore, and here’s where I want to be.

Favourite city in Asia for business and why?
Singapore is my favourite city. We have great legal systems in place, good security and people with integrity. Most importantly, we have a government that fosters a good environment for doing business. I recently went for a cultural exchange programme in Hong Kong to learn more about their startups. I found out that the Hong Kong government generally only supports local business owners in terms of grants. They’ve recently been more lenient and changed the eligibility to include all businesses that have at least 50% local shareholding. But comparing that to Singapore, the government only requires a 30% local shareholding to obtain government support. In the early days of starting a business, all the support you can get is precious. It’s great that we have a government that understands that.

What’s the best piece of advice you ever received?
The best time ever to plant a tree was 10 years ago as the tree would have grown so big to provide you with shelter and all. When is the next best time to plant a tree? It is today. Because in 10 years time, the tree would have grown big enough to provide you shelter and all.

Who inspires you?
Jack Ma. His journey to success is one of the most inspiring as it proves that with determination and great foresight, even the poorest can turn their lives around. I personally relate to his story a lot, and this is my favourite quote from him, “If you don’t give up, you still have a chance. Giving up is the greatest failure.”

What have you just learnt recently that blew you away?
I’ve faced multiple rejections throughout my business journey, and recently came across a fact on Jack Ma about how he was once rejected for 32 different jobs. It resonated very deeply and taught me the importance of tenacity, especially during tough times.

If you had your time again, what would you do differently?
Nothing. I live a life with no regrets. Everything I do, regardless of whether it is right or wrong, happy or sad, and regardless of outcome, it’s a lesson with something to take away.

How do you unwind?
I love to pamper myself through retail therapy and going for spas. I also make a conscious effort to take time off work to have a break outside to unwind as well as to uncloud my mind. This moment of reflection from time to time helps me see more clearly on how I can improve myself.

Favourite Asian destination for relaxation? Why?
Taiwan! Good food with no language barriers and the people are great!

Everyone in business should read this book:
I don’t really read books. Mostly, I learn from my daily life and interactions with hundreds of other business owners. To me, people tell the most interesting stories.

Shameless plug for your business:
We’re not just corporate secretaries, we’re “business doctors.”
U Ventures is a Xero certified advisory firm that goes beyond traditional accounting services to provide solutions for your business. You can reach us on our website: http://uventures.com.sg/

How can people connect with you?
Converse to connect. You can reach me via email at [email protected] or alternatively, on LinkedIn here: https://www.linkedin.com/in/jacekoh/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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