For the last 6 months, the focus of the Enkidu regulatory team has been on managing taxation at source, and we had been focussed on solving this issue by severely limiting the subset of countries we work with, and working very closely with regulatory bodies. Because we had clearly structured Enkidu’s roadmap into that of regulatory clearance of cross-border company entities and then into product development, we had moved into a more “closed-doors” approach, attempting to solve the regulatory hurdles before us before we set forth writing too much code. This approach has seemingly been met with friction from the community, requesting us to build out product features that don’t solve the core of the problem.
In our last article, what we’ve noticed is that individuals from the community with close to no regulatory or technological background drop in with random suggestions on product that we cannot possibly implement without violating either tax laws or simple entrepreneurial concepts (eg: one suggestion we received was to remove vesting, which would cause all sorts of problems).
We’ve been overwhelmed with your support and suggestions, and to be fair, it’s sometimes hard for the team to do justice to each one of these, especially when they might seem to be over coming from over-enthusiastic, yet, casual participants.
There’s a reason some of these rules exist in current corporate structures, and we’re trying our best to find out how best to integrate it in a new-age platform. While we ALWAYS appreciate suggestions and integrate quality feedback, we used the last article as an opportunity to remind folks that most challenges with this particular product are not technical, they are regulatory, and conversations around regulation move painfully slow.
However, that idea seems to be met with friction, with folks demanding us to add features to the current alpha just to display product progress, putting a strain on Avalon Lab’s own capital resources (we still have the amount raised from the private and public sales in escrow, having liquidated very little of it).
Having built (and sold) several products over the years, we were looking for the best product-market fit for Enkidu, which means thinking over the problems and finding a niche opportunity rather than mindlessly writing code and releasing new features. We’re gung-ho about crypto, but the market adoption for tokens isn’t strong enough for small entrepreneurs to jump ship and start using the product and abandon a conventional dollar (or equivalent) revenue source. When serious small entrepreneurs are given a choice, they will always integrate a Stripe over an Enkidu, and it will take years to change that mindset. This is a 5-year game, and we’re a little early to the party.
Pressured by the community to continue releasing features (simply to see a version number increase on a screen) is a resource hog considering that we will most likely have to go back and change the code on a better understanding of the problem. What’s generally happening with most crypto teams is that pressured by the community, the management puts counter pressure on the development team to continue building when the product flow is still maturing. We have a full-time + freelance team and we pay for all of the developer’s costs from Avalon’s own revenue rather than wasting Enkidu’s raised amount (we’d lose a lot of money liquidating our raise at current market value).
Most other cryptocurrencies see fast market growth purely based on speculation, without any real progress on product and business end. We are not in the media game, and would prefer not to be.
With that being said, it seems obvious to the team that privatizing the project and keeping only the most serious of investors onboards seems like the right thing to do. If this means refunding all of the other investors and losing all the money, time and energy we spent on conducting the token sale in 2018, then that’s a decision we’ll have to live with as a team. After having committed over $100k of our own capital to the project (and an additional $72k of our own capital we had put into organizing the token sale), we’re still quite committed to building Enkidu out, albeit over a slower timeline with solid, jurisdiction backed features. Enkidu at its heart is a legal-tech product that solves a major inconvenience, and we’d like to keep that at the center of our focus.
After a long conversation with our lead investors (Purvi Capital, Chicago), we’d like to announce a refund to all the public and private sale investors who are/were looking for quick returns. Purvi Capital is doubling down on their investment and so are we, hoping to build out a solid product and business over a longer, less rushed timeline. We understand that some investors have a shorter horizon, so we’re doing what we feel is the right thing — returning their money.
Refunds will be initiated in Quarter 4 of 2019, with enough time to build infrastructure that will make the refund process go smoothly. If you’d like to stay steadfast and committed to the project, then you need to take no action, as your tokens are still protected and we will work towards getting on an exchange as soon as we figure out our regulatory challenges.
For those that chose to accept the refund and move on — we wish you all the best and thank you for your time, consideration and interest. It has been work, but an extremely gratifying experience that the entire team has learned from. We’ve seen entire markets be birthed and entire markets fall, a once in a lifetime lesson that very few people receive. We hope you’d still be interested in the launch of our product sometime in early 2020!
Click here to apply for the refund: https://forms.gle/8GCrJU94dQBM1mw29