“Luca, I am considering working in crypto; can I pick your brain?”
You work for a large tech or finance organization; perhaps you were an early employee at a promising startup that became too big for you or didn’t really take off. You love to keep up with technology and maybe have bought some bitcoin not to miss out; or perhaps allocated some capital to it and had to defend your investment with people who missed the boat and convinced themselves that crypto is too risky, not backed by fundamentals, or it’s too late. You are surrounded by news and blogposts about crypto and the mental energy dedicated to thinking about what’s next for you keeps pushing you towards crypto.
There’s very little doubt that the crypto revolution is amongst the most exciting forms of innovation our generation will witness and we can now agree that it’s moving much faster than people predicted just two years ago (perhaps the absence of crypto conferences in ’20 and ’21 shifted the focus on #buidling).
Many people reached out to me asking to pick my brain to evaluate whether jumping to crypto is the right move for them. Even though I expect to refresh the argument often in the months ahead, I want to share an exercise that will help you answer the question “Shall I work in crypto?“. It boils down to five questions:
What user do you want to serve?
While the vision is what fuels the energy to move forward, the ability to execute generally requires different levers. From the cloud to the financial system, crypto companies have been reinventing the primitives and the infrastructure of large traditional industries; pushed by the need to validate their products, they targeted early adopters and often motivated them with financial incentives to offset the risks and the friction.
As of now, crypto adopters can probably be described with these categories:
- Active and professional crypto traders → who want to maximize their returns by performing sophisticated trades
- Passive and unsophisticated crypto traders → who want to put their crypto to work without moving their money around
- Fintech users → who want to buy and sell bitcoin and ethereum inside the apps they use
- Blockchain Layer 1 companies → who want to attract usage, create more wallets, outsource some platform work to fill some gaps in their infrastructure, etc.
- Blockchain Protocols and Dapps → who want to build distribution, attract users, and validate their incentive model
- Blockchain infrastructure companies → who want to sell standardized products to solve clients’ recurring needs
- Financial service companies → who want to increase their performance by upgrading their infrastructure
- Enterprises → who want to solve problems specific to the vertical they operate in
- Enterprises’ innovation centers → who want to explore new use cases and increase the perception of the company by running internal research projects
Each segment comes with a different set of challenges and influences the activities you will be working on on a daily basis; you want to make sure you are not only comfortable with but also positively challenged (someone would say ‘passionate’) about dealing with.
What challenges do you want to solve on any given day?
Blockchain is fascinating because it requires an understanding of technology, markets, incentives, game theory, legal frameworks, and product-market fit at the same time. You will have to have a point of view, understand and anticipate trends, solve problems that no one else has ever solved before. You will have to be comfortable making decisions without history and data, you will have to justify your ideas with stakeholders who may have different views and reads of the same situation. You will have to keep your team focused while the industry evolves but you will have to have the courage to kill what won’t work based on new information. You need to be ready to sustain an unexpected crypto winter.
You will have to solve very different challenges: one day you discuss what development framework you want to support, then jump on a call with legal teams to understand the European data regulation, then go back to unblock an engineer stuck on a data format of a transaction, and so on. Working in blockchain means being exposed to a variety of aspects that define what you learn and how you grow. My advice is to spend a lot of time thinking about this question.
What’s your contribution to the industry?
Blockchain evolves every day because the people who are in it push it forward; something is impossible until someone does it and becomes the new norm. But it is still very small relative to other sectors and operators know each other and talk to each other to figure out what’s next, which projects to support, what’s the next natural step for a certain topic. You become the point of reference for something inside and outside your company and you need to know 1) what you want to spend your energy on, 2) what you want to be known for, and 3) what you can do better than peers.
What’s your timing?
The Blockchain narrative comes from Venture Capitalists, Enterprises, and the Media.
Venture Capitalists have a 10-year vision, have the ability to wait a bit longer if they are wrong on timing, and are in a position to place different bets and profit only from the ones that work. As an operator, you don’t have this luxury: you have one bet which needs to work out in a reasonable timeline and your chances to place multiple/competing bets are really limited.
Enterprises make money with their core businesses and can afford to dedicate 1% to big innovations, especially when the market rewards exposure to it. If you use “enterprise adoption” as a metric, you’d better understand which enterprise, which adoption, from whom, why, at which cost, and how close to production the proof of concept is.
It feels superfluous to talk about the Media.
In short, it’s very hard to use someone else’s narrative to justify your own decisions. In the end, what you learned, the people you worked with, and the things you did day after day are the real value of your experience, which brings you to the previous questions.
What metrics do you want to own?
This is my favorite question. I purposely left it at the end because you will use it to validate the conclusion you got to by answering the previous questions. If you like the metrics you will own, bingo! If you don’t, you may want to reconsider your reasoning or even your intention to work in crypto. It goes without saying…you need to like the metric per se AND the realistic results you can obtain in the time frame. you established for yourself.
People get into crypto from very different angles and for many different reasons but your personal metrics for success matter, hence, the alignment between reality and your expectations will determine your own success. In an industry that evolves every day, in a World dominated by so much noise and so many opportunities, approaching crypto without knowing what to consider success is almost certainly a mistake you will regret. On the other hand, doing your homework will open you the doors to an experience you will tell your kids about.