Surviving and Thriving over Crypto Winters

okay cool so we'll get going I want to talk about this there's actually a really important topic and it's probably going to be helpful but for what it's worth talking about surviving crypto winter who's been in crypto for longer than five years longer than like four years two years who's new to crypto like brand new my man all right nice okay cool well basically crypto winter is the idea that you know you have these bull markets and then on the other side of it everything goes dark everything gets really cold everyone's businesses start closing and everything starts falling flat on its face and Bitcoin die as the theorem dies and everyone thinks the party's over just a quick like summary for us we started in 2013 so this is crypto winter number two and a half for us we work with really awesome companies we've done a lot of your transaction volume we focus on bridging the gap between fiat and crypto so processing payments we process payments for large exchanges we process payments for institutions and then we process payments for adapt developers so the whole spectrum so the idea we're talking about is just surviving crypto winter what it is what it's going to look like for you guys as developers or enthusiasts enthusiasts in the space and I'm just going to go through it piece by piece and then I'm gonna give you some examples of crypto winter and how that's affected other teams and there might be a couple of surprising examples for you all right so how do people go into a crypto winter people raise a [ __ ] ton of money really really easily and if you're not familiar with 2017 but I think everyone is basically in 2017 there was you know over two billion dollars in capital injected into crypto teams so what happens is people start vaporizing money really really quickly so I don't know if anyone went to consensus this week from Tron so does anyone here a big fan of Tron like raise your hand yeah big fan okay awesome typically what's happening is you raise a lot of money and then you're gonna spend a lot of money to buy attractions so I used Tron but another great example is going to be Ripple if you see ripple has done XYZ or a pilot program with ABC Bank typically a lot of that comes to sort of like generate the flywheel of traction so there's not as much substance underneath it as well a lot of teams that are doing really good work and they're you know actually building great product they end up finding crypto winter very very challenging because they've got really long sales cycles so for entrepreneurs we've experienced this firsthand as well a huge company says hey we want to partner with you we want to use your product we want to use your service whatever it is and then they just string it along and obviously we know like as developers and you know people in the startup community [ __ ] moves really really quick like just like five minutes ago someone was like no don't bother emailing me just like text me or do something telegram me because it's way faster and so when you get engaged with all these like really big companies like whether it's like a PayPal type or it's some big bank that's gonna promise the world you're not really a priority to them so teams they're not falling down this illusion of like you know mo use and all these kind of other kind of acronyms that basically promise traction in the future and its really unfortunate because it's it's actually really heartbreaking because a lot of very talented people rely on this but it's really insignificant to the big company then the last one is over engineering the reality is you have got it wrong you are wrong and you're going to be wrong again don't bother over engineering it hack it together and figure it out really really good example is who sort of in stood up not sick awesome people I work with basically basically instead app is a hackathon project from last year's eighth India so if New York this is India and that's literally what it was and now they're one of the most promising DAPs in the space if you look at uni swap which is an exchange where you swap different ERC 20 tokens those guys what now it's three people but that was one person for the longest time and it was like a hackathon project really so that's because they're shipping very quickly and iterating very quickly so that's like a super super key point is don't over engineer [ __ ] has anyone here heard of hash graph yep cool so hash graph is not live yet I don't think is it are they public are they live no okay yeah a lot of teams build brilliant products like brilliant scientific products but if you are over engineering it and you are too scientific about it you're going to assume that you know every single parameter that's gonna make your system work or every single want a need and the reality is you can't you can't predict that stuff so it's not even a point in trying it think MVP and don't think overly scientific okay welcome to winter what is winter look like it's really [ __ ] by the way part of my language sorry for this so basically there's a few things that come to mind investors some people have you know a handful of investors all these people are under the illusion or under the illusion they're under the promise or the dream or the vision that you're selling as a you know as a founder as an entrepreneur they want to see that come to fruition so when deadlines a kickback or push back when pivots start happening it introduces all this sort of confusion around you know how reliable is it going to be so disappointment I'm extremely familiar with it because just always when shits going badly everyone starts thinking or loopy not loopy but just like indecision confusion uncertainty everything becomes more difficult so team members fight you know founders go part separate ways yeah just makes everything really difficult and the worst part about it as well you're now behind square one so you're gonna wish you had the chance to start fresh and you don't have the chance to start fresh basically so but those are money emojis flying into a trash can I just realized I left those there so just don't vaporize money basically so what's actually gonna happen so I just sort of touched on it if you raise money from investors so let's say you raise money from consensus or you raise money from you know andreessen horowitz or you're raising money on the public markets you pretty much get one bullet and if you execute extremely well it's going to be very very simple to get more bullets from them for the next adventure that you want to do but if you're wrong and you've articulated this really perfect dream because you're so sure of yourself and you're so sure of everything then you are going to have a really hard time finding that money again so where do people go people go and shake hands with the devil sort of so to speak because there's no money left in town what they do is they now have to go and speak with competitor chains so to speak so let's call EOS a big evil nemesis of etherium but EOS has a lot of money and they want what you're building on aetherium to be moved over to EOS or to be to be compatible with EOS so everyone's heard of EOS cool nice okay electron imagine Tron Justin Sun wants you to move to Tron and like [ __ ] I'm out of money it's like entries and don't make me do it I really like etherium it's like come to Troy like you know and like sort of a hypnotizing kind of way it's so it's like it's it's against a lot of people or a lot of founders sort of original motivations and stuff like that that's why it sort of looks like shaking hands with the devil talent talent starts leaving remember when everyone sort of topsy-turvy and all shits hitting the fan we don't know what's going on uncertainty is going to find all those question marks resulting in talent leaving so I mean I've got a picture of Balaji he's the CTO at coinbase obviously coma is a fantastic company and they've executed so fast it's like absolutely incredibly but recently he left and he was the CTO before that Dan Romero left and then their head of risk and payments left and you've seen this sort of trickle out now what's going on under the hood not sure but as competition heats up as market uncertainty becomes more apparent and all these kind of question marks people don't think rationally so I mean I'm not saying that it's an irrational move for them to leave I'm saying any kind of issue is amplified significantly when you're under the like under the pump basically the pressures on and then the last one like like I just said you're behind the eight ball like you're gonna wish you could start fresh and now you've got to kind of reclaim yourself reinvent yourself and then get back to square zero and now it's like now it's an even playing field with the new entrepreneur that's coming into the space that's really excited and enthusiastic oh [ __ ] sorry does that make sense cool just interrupt me like literally interrupt me if there's anything that makes sense or you want to talk about something else what's good about a crypto winter if you avoid all the previous stuff and you you manage expectations successfully or you manage your financing successfully it actually opens up a huge amount of opportunities so that the teams that do well are actually going to be doing exponentially well it's it's the time way like you can basically take something that's worth one and make it worth five for your company long term so you basically can get a lead the reality is crypto winter after 2013 I went to you know twelve hundred and forty-five dollars November 28th in 2013 then it draped like basically drained down tons of VC money went into the space and tons of VC money basically ended up getting vaporized so that winter because it's a brand new technology that winter offers nothing for anyone really exchanges can't operate because the base layer of people you know trading trading crypto or anything like that it doesn't exist yet so they haven't even built a core base and now that means basically it's like a crypto winter global warming equivalent the more the more crypto winters you go through the more of a base is built so you know we had these crazy years like 2017 which are basically going to go you know $700 to $20,000 coin and then it comes down to say $3,000 it's you know 20 steps forward 15 steps back so it's gradually building the base so anyone that starts a company now they have a way bigger audience to work with than someone starting in 2014 or 2015 the total addressable market is growing and that's a natural function of technology adoption when shits hitting the fan like it when things are good and they're crazy people have support tickets out the wazoo everything is on fire not in a bad way but just you know people don't even know what's going on there's just so many things happening so if you're in the middle of 2017 you would pray for just like a week's worth of silence on support tickets so that you could actually focus on building product and shipping product instead of focusing on cleaning up house re yeah okay that was meant to be a broom emoji bit it's not basically people are talented like almost I think almost every single person here this room specifically no I bet every single person in like in the ecosystem or interested in the topic is talented at something now even if they rate if let's say they raise one hundred million dollars and the company goes to [ __ ] or the pro and they lose all their money it doesn't mean that they're not talented it means that they're not talented at what their role was so there's brilliant engineers that find themselves who are like sitting on huge amounts of money being expected to deploy this capital successfully and not being able to do so that doesn't mean that they're an amazing fit for another team or a CTO position in somewhere else that's actually what happened with Balaji the famous guy from coinbase is the Big C CTO he was he raised a hundred and sixteen million dollars as well in the company that he was out it was called 21 Inc and it was basically a small device that was planned to be a mining up like a mining chip for you know smartphones toasters and all this [ __ ] I don't think toasters were actually on it but the idea was that he was a fantastic he's a very talented person but he wasn't the best person to bring you know this huge amount of capital out in 200x return on investment for the you know for the fund which was andreessen horowitz and so he went as CT only did an exceptional job as a CTO coinbase and so that's sort of you know the opportunities that arise if you position yourself safely as a company you can take advantage of crypto winters does it make sense I feel like you had a question did you have a question yeah trust me you have not met me yet so yeah if you've got some if you go to Subic question feel free to fire it away or you can ask after a bit it's [ __ ] medic good I have to talk to them in a minute yeah no they're very nice people America me personally well I'm pretty tired I went out last night no I'm just joking but what's really going on like where's actual substance to all this [ __ ] like instead of people just throwing money at you and doing this and stuff like that where's like the who like big yeah they are this is this is as serious as it gets basically like this is the biggest thing that they've ever seen in their life and that's why there is so much excitement enthusiasm from like they are horrified of it yes not at all no it's not at all that's and that's the thing about this space is there is we are all idiots it's so early I'm not saying you're an idiot it's okay it's just it's just a matter of how enthusiastic you are so newer people are gonna know less all right survival skills so basically how do you prevent this [ __ ] from happening or how do you not be part of it or how do you not feel the pinch in crypto winter essentially humility look we already said everyone here is very smart everyone here is intelligent in their own right the reality is humility is the single most important skill that you can have in a space that doesn't have any answers it doesn't have any certainty and it doesn't have a track record so if every single person here is absolutely brilliant but they're not humble enough to admit that they could be wrong that means that you're going to have a very difficult time staying agile and being adaptive to what the space is doing because of the amount of unknowns you need to be quick to say that you're wrong so yeah basically you are wrong you're going to be wrong many many more times so just get comfortable with it yeah ability like you're gonna have some sort of ability if you're working on something that's relevant to your skillset then that's obviously going to be advantageous but ability doesn't just mean technical ability ability can mean networking ability relationships experience all this kind of stuff it's not just a technically driven world in fact it's probably the farthest industry from being technical only because this industry is different from startups and that whole world the whole world of traditional startups and early-stage stuff it's all about moving quickly well the difference between startups and something like crypto is crypto is network based so networks inherently rely on relationships and the strength of those relationships is what keeps a network intact so when it comes to technical technical abilities obviously technical technical competency is very advantageous but everything in crypto because it's a value transfer network it's all open source so things are open source that means there is no black box special secret source that you're selling you are you are competing for someone else against their path to distribution so if your network the growth of your network and the strength of the connections in your network that's your distribution and the stronger they are and the wider they reach the harder they become to displace so almost that's your kind of defense ability or your secret sauce in this space so yeah it is very very good to acknowledge your multi facets of skillsets and that goes into teamwork obviously teamwork is many hands make light work so a lot of people like I said anticipate amphibious kind of hybrid words and it's called coopertition so it's like where you're cooperating but you're also competitors the best teams then the most successful teams will always work together so if you look at I just put like that's balanced and that's an incredibly pixelated picture and balance is building you know a bank interface where it's leveraging all the other things that people are built and servicing that as a product have you guys heard of revolute do you guys know what revolute is cool okay so revolute is a digital Bank it's a digital Bank aimed at being faster smoother slicker cooler friendly or whatever then Wells Fargo chase blah blah blah revolute doesn't know [ __ ] about insurance nor do they know anything about pension plan they find the expert that knows of our pension plans so there's a service provider they find the expert that knows about cross-border payments and that might be transfer wise and they stitch it all together because the the person that you're trying to displace is so difficult to move there's a century-old like I mean yeah these are incredibly big financial institutions you can't compete with them unless you all work together and that's what's really important for surviving is working together it's not a like it's not a it's not an ego trip so kind of tying that back with humility it's not about your ego it's about your position on where you stand with the technology so are you for the technology or are you against it and people that are for it should all be working together as much as possible as frequently as possible because everyone wins that way um history of wrong so I said be wrong it's really good to be wrong and that's not like a circle jerk II kind of tone in that that's like legitimately just be really good at being wrong really quickly Bryan Armstrong 2015 he said that so Brian Armstrong they only listed Bitcoin they didn't have like corn they didn't have a theorem they didn't have all the other altcoins way back in the day that's because Bryan and Fred were very adamant at the time that Bitcoin would be the winner and the network effects that Bitcoin has gained over other competitive you know crypto currencies or networks is too far ahead and that's a waste of time anyway so turns out they were wrong and they were really really good added you know adapting in that regard but they had they had some quarrels internally I think where some people wanted to leave because they thought oh I thought this is Bitcoin only and all these kind of things but they were wrong they acknowledge that and they move forward as quick as they could and now you know coimbra is probably arguably the biggest company in the in the world in the space if it who's heard of it bit before okay nice if it's now called paxos so have you seen PA X the stable coin and if it were trying to sell their exchange business this is public knowledge by the way it's trying to sell the exchange business for about 18 months almost two years I think and I could be wrong but it's I think it's like over a year they're literally trying like sell this exchange because they're like oh my god like these things crypto winter is busting their balls so bad that they're actually trying to get rid of it turns out 2017 happened and that's the smartest thing ever he's having their exchange and now they're incredibly the success of the company is largely derived from the traction that they had with their exchange being in the right place at the right time essentially sort of an app called Bourbon nobody who's heard of an app called Instagram yep Instagram was an app called Bourbon for photographing and logging beers and basically you take a photo of your beer or your bourbon or whatever it is and and that was the original idea behind Instagram and Instagram pivoted to be okay those photos are the the photos that we're taking of the Bourbon the filters we put on them yeah maybe just make it for everyone let's put them for actual people just interacting and so Kevin Systrom I think it's Kevin Systrom basically they pivoted to focus purely on photography based social like rich media social networking Zuckerberg bought them for a billion two years later who they were willing to pay two billion and now it is worth over a hundred and twenty billion which is mental chain comm has anyone heard of chain calm cool so chain calm they merged with stella last year or they sold to stella they were wrong too and they were really embraced the wrong and they ended up selling to stella last year which was i think it was reported like 400 million dollars worth of stella or like it ended up being 70 million dollars worth of US dollars I'm not sure what that is but I'm just going by headlines yeah so obviously why I haven't mentioned us here that's because we needed a whole page we're like yeah we're really good and in six years you get pretty used to these kind of like you know just taking the punches we've done Bitcoin payment processing so people right now they think the number one thing is merchants adoption you can't spend crypto anywhere you can't spend oh sorry you can't spend a theorem anyway you can't spend it's got no like utility value so we were doing that in 2013 we worked with Microsoft in 2015 where people would earn Bitcoin for searching with Microsoft anyone here use Bing yeah neither well I actually forced you because there's a bug on my phone with Google but the reality was being offers you incentive to search with them it's like oh you know what's that cool hotel in that area if you use Bing it takes up a point and then you accumulate points you can go redeem it so we worked with Microsoft to allow Bitcoin as a Redemption option next to PayPal credits next to Amazon giftcards things like that we have done wallet management API is so well liked as an infrastructure so for the people that are trying to build their own coin bases or their own exchangers we've done cross-border payments and we've done utility team in China that built a custom iPad not a customer pad but a custom Android tablet that had our software baked in and we literally went around to San Francisco we ordered 500 of them and we wanted to basically make San Francisco the capital of spinning in you know spending and receiving crypto for merchants because we thought that would really aggressively up the ante for people to get comfortable with it literally couldn't even give them away and I'm not even joking like I walk in and be like oh is the manager there a bit like look one of you guys came through the other day we're fine thanks I'll be like oh like drop this iPad with like stickers and swag and [ __ ] and then just like run out they're like man we don't want your trash that was that's how much it was like that you couldn't it could not give him away so yeah so anyway that's us being a whole page of wrong and I could go on like many many more examples but yeah that is all I have on crypto winter does anyone have any questions does anyone have any stupid questions I got a stupid question no I'll save it my man define needs weather is spinning for food consumption or needs is in accumulating wealth spending it spending it like as a currency never or almost never is that the only thing that it's good for though Oh once upon a time it was once upon a time it was but because we're always wrong we had to change the goal basically personal level to basically give all the mistakes that we've made wrap it up into a product and make sure it doesn't happen again because if we've spent all this time making these mistakes if we can help teams dodge those bullets in a really really easy way and amplify their business then that's what we want to do how'd you hear about Tron by the way oh I'm a fan too it is good for a it's a good way to incentivize machines to communicate with one another if that makes sense okay okay let's sync that laptop well let's imagine two robots two humans walking down the street if I wanted to say hey can you go check this in the bin for me here's a $1 bill keep it I just I'm in a rush and you're like sure I $1 good for me right you want a dollar so you go do it imagine those are two robots and they don't they can't do anything with the dollar forget they're a robot they don't need to go buy groceries and eat for themselves they need maybe energy or maybe they need something else like new parts but they've got their own needs as machines they operate differently so maybe it's probably a million other better explanations in here hit it