Introducing Interchange, from The Picks & Shovels Co.
tl;dr: Matt, Dan, and Clark are co-founding The Picks & Shovels Co., and are working on their first tool, Interchange—the first institutional-grade cryptocurrency portfolio management solution for funds and professionals.
First, some background
In 2017, talk about cryptocurrency was all but unavoidable. While many of the headlines focused on Bitcoin, Ethereum, and handful of other assets, the whole class saw an absolutely meteoric rise — going from a market capitalization of just $18 billion on January 1, 2017 to an all-time-high of $620 billion on December 21st. By the end of the year Coinbase was the #1 free app in the App Store and had more users than Charles Schwab , celebrities were promoting Initial Coin Offerings (maybe not so good), and a sovereign nation announced they were launching a cryptocurrency of their own, among many other headlines.
But while the retail investor world seemed to be going crazy for crypto, the institutional world — all but non-existent in years prior — started a trend of its own. According to Morgan Stanley by the end of 2017, 84 cryptocurrency-focused hedge funds with over $2 billion under management were off to the races. One might have felt the intense jealousy of Wall Street when it was revealed that a cryptocurrency-focused hedge fund had seen an eye-popping 25,000%+ return for the life of the fund (yes, that’s 25 with three zeroes behind it, and no that’s not a typo).
Some background and…the problem
Despite all of the madness, the vast wealth being generated, the billions being invested every day, and the sophistication of the technology being developed, there was a simple reality that I was shocked to learn when I did the deep dive into cryptocurrencies early in 2017…
My initial interest in the space was piqued early in the year when my girlfriend (now wife) had mentioned she had a Coinbase account with some bitcoin in it. I’d seen friends digging in on the blockchain, cryptocurrencies, and all of its related subject matter for years, but I hadn’t had a front row seat until then. Now I finally had an excuse to learn about it all — and after a month of reading white papers, studying the technologies, and trying my best to learn about the market, I emerged with a single thought: I need to dedicate the next decade of my life to participating in this industry.
Fast-forward to a few months later, and I was invited to attend a meetup at IDEO’s CoLab where they’d be showcasing their latest cohort of projects all built around blockchain technology. It was there that I met one of my soon-to-be co-founders, Dan Held . He was working for Uber at the time, but had previously been in the crypto space from 2012–2015. Back in 2013, he had built of one of the most popular mobile crypto apps called ZeroBlock, the first real-time price checker app. ZeroBlock would go on to get acquired by Blockchain.info in the 2nd-ever acquisition of a company for cryptocurrency. The dialog ranged from talking about the recent upward price movement, the early crypto scene (Dan had been into Bitcoin since 2012), but settled around the thing I was shocked to learn those few months prior:
Every single one of the professionals investing in cryptocurrency that I had interviewed earlier in the year was using Google Sheets to manage their portfolio.
For an industry built entirely on top of truly groundbreaking technology, this simple fact consumed me until there was no choice left but to do something about it — start a company to solve the pains that cryptocurrency investors and traders were feeling. Addressing the nightmarish user experiences and wrangling a user’s disparate data seemed like a solid place to start — so at the end of July 2017 I sent in the articles of incorporation for The Picks & Shovels Co. to the State of Delaware.
The team
After that meeting with Dan, I’d gone back to the drawing board to come up with a solid roadmap for what Picks & Shovels would build. Unbeknownst to me though, Dan had a plan of his own: chatting with his former colleage from Blockchain.info , Clark Moody .
Back in 2011, Clark had launched the first real-time market data website in the Bitcoin space. Mt. Gox was the only exchange, and Clark Moody Bitcoin was where you’d find charts and a live order book. He later launched RTBTC , the first multi-venue Bitcoin trading platform (think mini-Bloomberg Terminal) which saw hundreds of millions in trades before getting acquired by Blockchain .
In September Dan told Clark about our initial chat and the ideas that we tossed back and forth about creating a seamless, automated single source-of-truth for cryptocurrency portfolios. A few phone calls later, Clark hopped on a plane to San Francisco to jam with us on the ideas. The collective vision and excitement was clear from day one, and none of us could shake the feeling that this was the right partnership — and a few weeks later we became co-founders.
All the while that this was going on, I’d been raising a small friends and family angel investment round, to get us off the ground. We’ve been lucky to bring on some incredible partners in the $1mm+ round who will undoubtedly help us reach our goals, but the best result of this raise was the two other team members we recruited: Flora and Buddy . They’re both incredibly talented engineers and dedicated to perfecting their craft. Every team is defined by its earliest members, and I feel proud to embark on this journey with these folks.
P.S. We’re hiring, so check out our opportunities page!
The solution
After our market research and learnings from our personal experiences, we decided to focus our first efforts on cryptocurrency portfolio management, with an eye towards the burgeoning wave of professionals joining the space. Later this year, we will launch our first tool as a team: an institutional-grade cryptocurrency portfolio management solution for funds and professionals called Interchange .
Going back to the core pain that I’d heard from people, we’re first working to make manual portfolio management a thing of the past. The world of cryptocurrencies is a massively complex one, and managing one’s portfolio in Google Sheets is an exercise in unreliable data sets, constantly broken plugins, and extremely tedious data entry.
Interchange will solve that by securely connecting to the exchanges that funds and individuals operate on, as well as keeping track of their holdings in the various wallets they use. The tool will wrangle all of the data, sanitize and normalize the cryptic CSVs that come in, and create a reliable single source-of-truth for ones portfolio.
Because our focus is on the professional world we’ll be addressing the laundry list of needs that they have:
- Automatic tracking of all assets, across multiple portfolios and investment strategies
- Real-time insights on a fund’s individual key performance indicators
- Clear data generated for fund administration
- Clean reports to send to investors and limited partners
- Granular access controls, ensuring teams and service providers are able to access information on a need-to-know basis without fear of critical data leaks
- A great user experience that doesn’t seem to feel like it’s held together with duct tape and string
While these features and capabilities were envisioned to serve institutions and professionals, we’ve got a keen eye towards the many “prosumers” out there actively trading. Once we’re through evaluating the platform with our earliest customers, we’ll be pushing to open the floodgates to everyone who we can help.
What’s next
We’re hard at work on all of the above, and it’ll be a while before we’re able to be very public about much of it, but if you’d like to stay in touch with us head over to our website and sign up to find out when the beta is ready. You can also reach out to us on Twitter , we’d love to hear from you!
