Fireside Chats: Wally Xie (QChain) — ‘The Challenges After ICO Funding’
Wally Xie is best known as the founder of QChain, a cryptocurrency company building the first blockchain-powered custom content marketplace. Their platform enables marketers to reach targeted and engaged audiences, and opens marketers up to an array of technical solutions to support an ecosystem of blockchain applications.
Wally was kind enough to spare some time to have a chat about Qchain, and we dug into a few topics surrounding funding after ICO.
Wally will be joining us at Blocfest as a panelist on the discussion topic: “An Honest Account Of The Challenges Building A Blockchain Startup After Initial Funding”.
Sean: “Hey Wally! What’s new in your world?”
Wally Xie: “I think a nice thing is that we’ve kind of sunk into a pattern which is nice. We kind of have a working groove now. In a day, we’re just chugging along at the startup in terms of tech dev and biz dev. In terms of Qchain itself, we’ve been regularly updating our demo and other than that, nothing too exciting which is actually great news!”
Sean: Sometimes no news is good news! Let’s go back all the way to the beginning — I’d like you to tell me a little bit about your journey into blockchain and how it all began.
Wally Xie: “I started reading about it in 2011 when I was at college. At that point, what caught my attention was the pizza transaction and it made me think “Oh wow, 10,000 bitcoins for a pizza”, and without knowing at that point, that market speculation would eventually make it one of the most expensive pizzas to ever be sold.
I had a feeling that it was going to be something very special, but I didn’t get in on the trading or mining until about 2013. Sunny Kang, another early developer that was involved in Peercoin, had another project called Primecoin in the works. I found Primecoin incredibly interesting because Primecoin’s mining or proof of work, was discovering a special form of prime numbers. Again, this fits with my academic interests (being the math and science), and I thought “Wow, the proof of work could be a really useful thing”.
I remember in 2015, there was Blockchain 3.0 and how it started to crop up and it just so happened that in late 2016 when I was doing my PhD, I was able to ferment some ideas and build a team culminated in Qchain.”
Sean: Nice! So, in terms of Qchain, it’s positioning itself into the space of digital advertising/marketing space yes? And is that a field you were previously interested in?
Wally Xie: “So, film was one of my majors in college. And commercials, be it for better or worse, was one of the larger parts of filmmaking. After graduating college, an initial job that I took was as a digital marketing specialist at a Chicago tech startup called Sprout Social and I did more of their organic stuff and less banner ads. Initially when we launched Qchain, we had the thought that this large market of display advertising, could benefit from the decentralisation that blockchain provides. However, we made a huge pivot in August in the form of moving away from display advertising. This was because we realised that the world wasn’t as into display advertising, especially millennials and how they’ve grown immune to.
It was at this point that we realised that there was a crisis in the display advertising market, and everyone was looking for other business models. With people on our team being experienced in content creation, we thought about moving towards branded content which we find more engaging.”
Sean: “Awesome! It sounds like you’re filling an important hole in the content advertising space. Building on that, how does Qchain intend to un-break advertising? What are the sort of angles you’re going for here.”
Wally Xie: “We’re going to start more humbly since transforming digital advertising overnight is an impossible task. But one of the value propositions that we’re looking at, is the sale of branded content. We believe that that is a very cumbersome process. For example, these larger publishers such as The New York Times, have smaller companies calling them up asking for collaborations over phone calls or emails. And on the advertiser’s side, you have the accounting executives fishing out for clients, browsing the internet looking for individual publishers. There isn’t a convenient medium for branded content transaction to take place I feel. Well there is now, because other people have also touched upon our idea, and we’ve competitors right now, and that affirms to us that we’ve stumbled upon an idea that needs to be spruced up.
So that’s one angle we’re looking at. Ultimately, we’re looking at building a space that’s an easy-to-learn marketplace that facilitates these branded content market transactions, and the creation of content itself between advertisers and publishers. In our case, how blockchain really helps us is that with it being a very convenient backend, essentially saving people a lot of work and time. And this public ledger is not only useful for keeping track of things in a transparent manner, but it’s also quite easy to build on in an ideal setting.
We really would like to contribute towards a better society by jumping into the journalism aspect. As part of our marketplace, we also want to implement a patron journalism system, whereby patrons can support pieces by journalists, with the journalists and publications maintaining editorial rights. Branded content is a two-way street between publications and advertisers, whereas the journalism side is more of a one-sided picture.”
Sean: “Incredible. One burning question that I’ve when I was looking over your project, was why you chose to build on both the NEM and Ethereum protocols. What led to that decision?”
Wally Xie: “When we started in March, the ecosystem hadn’t really shaped out, so we checked out a lot of blockchain software, and that time it became apparent to us that there only a handful that people could build on. We looked at Ethereum and realised that they were a cut above other blockchain software. We also built on NEM because we realised that NEM was one of the rare blockchains that has functional production in their ready product that can be both built and tested on.”
Sean: “Let’s talk a bit about the utility of the tokens. How does it serve to be of interest to investors and what can users get out of it?”
Wally Xie: “One of the things that we are going to implement in our ecosystem, is that people with a certain number of tokens can serve as backup nodes for the marketplace. We’ll have a stacking system eventually, as part of the motivation for the utility of the token. Additionally, we really want to create an easy-to-use product in which advertisers will not have any apprehension in participating in the model.”
Sean: In a recent interview with NEM, you elaborated on how you set yourself apart from Basic Attention Token. Are they the direct competition here?
Wally Xie: “I like what they’re doing. They’re very different in the sense that they’re trying to reinvent the whole ecosystem, which we really applaud them for. They’re creating a browser and they really want to directly reward content creators. In our case, our most direct competitor is non-blockchain based and they’re called Pressboard. They’ve a branded content marketplace as well. We’re looking to target a more niche market, and based on our research, we think that this niche for branded content is still something to tackle.”
Sean: “Overall, what’s your ideal vision of a future decentralised digital marketing economy. What’s the utopia for you?”
Wally Xie: “I think there’s a lot of hate towards advertising, and of course I harbour a lot of that as well when I see another unskippable Youtube ad. I think advertising is something that exists outside of capitalism, and it’ll always be there no matter what. Even if there’s a massive change to our global economic system, advertisers will always be there. What I hope is that, we’ll be able to create a less intrusive system where the ads are interesting, and products are more targeted towards people that need them. In addition, I hope that advertisers can contribute to interesting content, rather than just trying to multiply their bottom line. Of course, this is something that blockchain itself cannot fix as it also involves changes in our value system and governmental system.”
Ultimately, my ideal utopia is when I can see cool short films or content, that advertisers have a hand in creating, and as a result, I’d then buy products that I actually need.”
Sean: “Let’s reel it back to Blocfest. We’re really excited to have you speak. You’ll be speaking on the topic “An Honest Account Of The Challenges Building A Blockchain Startup After Initial Funding”. In your opinion, how has the ICO revolutionised the way businesses raise capital?”
Wally Xie: “I think in our experience, it has very much changed things, but in some ways, things are still very much the same. That’s something that investors have yet to realize is that although the funding comes at an accelerated pace, actual development can happen very slowly. This is because we hear so much about ICOs, but after you get your money, there’s a whole slew of problems. Just because somebody’s building a blockchain, doesn’t mean we can escape the age-old problems that has plagued companies since the dawn of company building.
The structure of an ICO has in some ways, allowed for more accessibility for the laymen. However, unfortunately with legislation in China and the U.S. coming in, it’s becoming more of a closed sphere. For example, in the U.S. all ICOs are Reg A+ and you need to be an investor to jump in. At this point, my honest opinion is that it started out as a gamechanger and some people took advantage of that, and at this point, it now resembles a more traditional fundraising system. Even if it’s different, the challenges are still similar to building a traditional company.”
Sean: “In your opinion, what has been the biggest challenge for companies, post-ICO?”
Wally Xie: “I think the management and team-building aspect of it comes to mind. It’s really hard to find good blockchain developers. In our case, a lot of people advertise themselves as blockchain developers but they’re not entirely up to the task. It’s essentially the Wild West right now and with all these cowboys jumping in, you’ve to be wary of who you hire. Another thing that we had to learn, is also related to the previous question: what are the challenges of the ICO? To answer this, I find that a lot of people view themselves as board members or shareholders. And to me, that often takes a major psychological toll that weighs down the whole team. For example, when someone puts down 100 or 200 USD in your ICO, and they say “Hey, I’m an investor and I’ll sue you guys if you don’t do this” and it’s very true that one very angry person can sink your project by taking legal action, and at the same time, you’ve to find balance for these individual requests.
In my case, I had to eventually remove Telegram from my phone because I was always bombarded with requests, and as a result I became a lot more disciplined with the types of messages I respond to. This was because I realised that I’d spend 14 hours a day answering messages and conversing with people and although that was part of my job, I wasn’t able to jump into actual product development at that point. So that’s one of the challenges of building a blockchain company, striking the balance between weighing the community factor with actually building the company.”
Sean: “Absolutely, it’s a double-edged sword isn’t it? I mean in one way, we now have access to all these active users and people who want to engage in the community. On the other hand, that can totally overwhelm the whole development process and everything else that’s going on. With that being said, where do you see the future of ICOs headed? There’s obviously a lot of work to be done, lots of new regulations are coming in. What do you think’s coming next in 2019 and beyond?”
Wally Xie: “I think with regulations coming in, ICOs will become a tool of venture capital as we’re already seeing existing venture capital funds doing ICOs, taking advantage of Reg A+ in the U.S. especially in California and Chicago. I think blockchain will be revolutionary, and I think ICOs will be here to stay but I don’t think ICOs will be the most revolutionary part in blockchain. I’m not saying that ICOs will die, I think they’ll just become another thing to consider when they consider funding. “Do I go to a VC? Do I go to an accelerator? Or do I go for an ICO?”
Sean: “Cool, let’s round this up Wally. Is there any upcoming news about Qchain that you’d want our readers to know about?”
Wally Xie: “We welcome people to check out our demo, and we welcome feedback for the demo as well. We’re actually looking to launch our front-end UI at the end of this month, and in August we’ll be looking to launch our functional product. It’s also important for users to go into our demo as it’ll tell us if our product is easy to use or not, so that’s really the thing we’re driving home now.”
Sean: “Nice one, and what’s the thing you’re looking forward to at Blocfest when you’re here?”
Wally Xie: “I’m really excited about the networking on the Asian side. I’ve spoken to a number of Chinese blockchain developers and there’s lots of cool stuff happening there. But with the spectre of government pressures, there’s definitely a sense of nervousness there, and I’m really looking forward to the development of blockchain technology in other countries.”
Sean: “Awesome, we’re really excited to have you over here. Thank you so much for your time!
Find out more about QChain here.
Connect with Wally Xie on Twitter here.
At Blocfest, Wally will present an honest account of his team’s adventure and discuss lessons learned and mistakes he made that he would like other people to be wary of. Learn from Wally as he discusses:
- Management of ICO assets.
- The age-old struggle of hiring and building a compatible team.
- Co-founder relationship management.
- The predatory behavior of some centralized exchanges.
- Balancing communication with ICO investors after the ICO.
With a raft of respected blockchain thought-leaders from Malaysia and around the world set to feature, Blocfest’s focus will be on blockchain’s immense potential in the Southeast Asian region, where the technology has already made great headway.
Blocfest is set to launch 26–27 September, and guests are invited to also join us for KL Blockchain Week.
Find out more about our speakers by clicking here.