That Bitcoin Startup in the Philippines
It’s been 2 years and 7 months since I first met Jardine Gerodias and Miguel Cuneta at a coffee shop in Bonifacio Global City in the Philippines. We had one agenda. We were going to start a Bitcoin company.
Today, that company is known as Satoshi Citadel Industries (SCI). It has been a wild ride, so far, and as we take one big step forward, I’d like to share with you our storied journey into becoming that Bitcoin startup in the Philippines that just wouldn’t quit.
At the coffee shop, introverted tendencies aside, I immediately felt a connection with Jardine and Miguel. It was a pleasant surprise to meet fellow Bitcoin diehards in real life blabbering about how lines of code can be so world shaking. I almost felt a remote sigh of relief from my wife as she no longer had to endure hours of Bitcoin fuelled prattling no thanks to her husband. I finally found eager ears in my two co-founders.
Wait. That’s not completely accurate. In the spirit of full disclosure there was one other person in that meeting. His name is Nick Galan. More on our ex-co-founder later.
Starting up (BTC: $1,200)
As we went on with the process of starting up in the months that followed, we held meetings at Jardine’s office in Makati every morning for 2 hours a day, 3 times a week. That dragged on for what seemed like forever. In retrospect, I find that’s usually the problem with tech startups.
With all the excitement over magical technologies and eye candy websites, it’s a struggle to move down the list of boring business action items that needed to be done. But coming from traditional businesses, we knew those were the to-do’s that will make all the difference. Still, its hard not to dwell on the more exciting parts. Oh, and the libertarian chitchats that seem to be part and parcel of Bitcoin gatherings added unwanted fodder to the fiery mess of tangental discussions.
I distinctly remember, it was Jardine that threw the grown-up gauntlet as he uttered in frustration: “We need to get this business started or it will never happen.”
And so we got serious. We pirated Erica.
In that one stroke of hiring luck, everything became real. We started incurring expenses. We even hired our first employee. Pirating Erica from Jardine’s other business proved to be the key move that would propel us from familiar shores anchored by regular (boring) day jobs into the wide open sea of risks, actual work and the wonderful world of startups. Everything, it seemed, started to take shape. We soon had a corporation and a roadmap. We even gave ourselves C-level titles. I was CTO, Jardine was COO, Miguel was CCO and Nick stood as our CEO.
How I wish it was that simple.
The initial idea was to keep this venture within two goals: We want to be in the Philippines, and we want to use Bitcoin. In hindsight, minding these north stars, ironic as it may seem to have 2 of them, has given us the versatility to weather pivot storms and sleepless second guessing nights that was to come.
Raising money was unknown to us at that time, and so it was easy for us to be all over the place without investors forcing us to focus right away. We built for ourselves a playground where we can explore different product possibilities.
The lowest hanging fruit was a Bitcoin payment processor. That was to be our first product. It was fairly easy to build and more importantly, it had the fundamental components of the ecosystem we intended to establish. The Bitmarket idea was stop #1 on our road map. Our next stop was finding talent.
Talent, as it turns out, was down south in Cebu.
In February, Anthony announced an order book exchange he was working on called Coinage on the Bitcoin PH Facebook group. It was easy to see the genius behind Coinage, and so we made it a priority to fly to Cebu to woo Anthony, his reclusive co-founder/designer Oscar, and Michelle into joining the team. With visions aligned, Anthony and Oscar agreed to join us. In 2 months, we had our first Bitcoin product for the Philippines called Bitmarket.
While the Coinage guys were busy coding up Bitmarket, Jardine and I went on a recruiting campaign. We already had the beginnings of an able development arm, so we sought to build the other half of the team. That’s when we met Cole, and the rest of our founding employees.
Things then really started to take shape. With Jardine and Nick’s seed money, we officially started our first day of business on the 6th of May in 2014. There wasn’t much business, though. Not much space, too in the 30 square meter empty room at Jardine’s office. But that didn’t matter. We were finally open for business.
First order of business: get some bitcoins into the hands of Filipinos. And so to follow-up on Bitmarket and Coinage, we started to execute one of the many crazy ideas we had, Bitstars. Bitstars was a daily contest where people get rewarded some bitcoins for whoever gets the most likes for their selfies. Don’t bother clicking on the link, though. We killed that site in 2015.
By month 3, Bitmarket was struggling. It was easy to get merchants on board, with the help of our sales team, but bitcoin, at that time, plunged from over USD 1,200 to a low of around less than USD 150. No rational customer would spend their devalued bitcoins on coffee. We needed to shift gears and move on to the next idea. (To this day, I maintain that a Bitcoin payment processor, ahead of its time in utility as it may be, will become a crucial component for Bitcoin to succeed as a currency in the future.)
Rebit was the natural next step for us. We already had a Bitcoin to Philippine Peso processor in Bitmarket, so repurposing the idea for cross border payments wasn’t that much of a stretch. Anthony had initially proposed a remittance service that would run on the Bitcoin rails, but since he was busy with Coinage and Bitmarket at that time, we assigned the development to another developer. In July, our best performing product to date was launched.
In between improvement sprints on Rebit through 2014, we had launched a bills payment service (now merged into Rebit), a Bitcoin scratch card product, and Coinage. Our first attempt at building our Bitcoin wallet, Bitbit, had failed. (They didn’t like my suggestion to call it Manny.) Bitbit is my unicorn. It is what I want in our core to power all of our products eventually, and failing at launching it for the first time only proved to me how much I badly believed in it.
True to our plan, we’ve released varying Bitcoin powered products to test the markets. It was like throwing wet tissue paper balls to the ceiling, and waiting for which ones will fall and which ones will stick.
Reddit God
To those who have a Reddit addiction, don’t let up! If there’s anything good that has come out of Miguel’s thousands of logged hours on Reddit, its that he has earned for himself an enviable reputation (and the power it comes with) as Godfreee. (He is a favourite at r/buttcoin, too.) Of course, this was one weapon in our arsenal that we used frequently. His non-hard sell posts (at least, we think they weren’t hard sell) brought in a sizeable amount of customers, page views and VC radar pings. This is how, we believe, Barry Silbert found us.
So apparently, people just put in money into unproven start-up businesses! Barry was our first actual interaction with any venture capitalist. Up until he emailed us, we had resolved into bootstrapping SCI into a profitable business. Hours after Barry’s email, we saw it fit to categorise ourselves as a fundable tech start-up. A pitch deck was in order.
About Nick
From the get go, the shared Bitcoin fanaticism, religious ideologies, and sense of nationalism among us 4 co-founders, I thought, make us a great team. We spent countless hours on Telegram discussing everything from politics to underwear ideas, and of course, the business. There was one glaring difference though. Growing up in Canada, Nick has had a rather rough childhood and a not-so-clean professional past. In between his juvenile years and run-ins with authority, he has grown to be the kind of guy you’re either friends or enemies with. Suffice it to say, he is by far the most vocal and blunt among the four of us. Add libertarian passions and patriotism to one’s motherland into the mix and you have yourself a weapon of mass destruction.
The Philippine Bitcoin Civil War
In 2014, everyone who was into Bitcoin in the Philippines was part of the Facebook group called Bitcoin PH. That’s where I met my co-founders, and that’s how we met Ron, our competitor.
They say a rising tide lifts all boats. Apparently, that adage didn’t quite take hold with Nick. Soon, discussions in Bitcoin PH turned into disagreements. Then those turned into arguments which degenerated to a heated barrage of threats and accusations. Ron is an American who was setting up a competing service in the Philippines. To Nick, he’s the second coming of Ferdinand Magellan and his fleet of Spanish Galleons. As our CEO, we let Nick take the lead. We should have stopped it, but we defaulted to complacency. It did not end well. I consider the civil war between Coins.ph and SCI as the single worst move we’ve done as a company.
Suddenly, the tall tale of the money laundering gangster startup spread like wildfire within local start-up and Bitcoin VC circles and we were getting written off by everyone. It’s silly to think, what money laundering gang would try to raise money from VCs, right?
It wasn’t particularly easy for Nick, having been the apparent source of this bad reputation being assigned to all of SCI. The company we built as a sort of fuck you to the oligarchs and the status quo, and our way of helping our countrymen, was spiralling down a hole that very few ever get out of. And in all honesty, it was mostly Jardine, Miguel and I running the day to day of the business, anyway. And so all those culminated into Nick stepping down as CEO. My co-founders assigned me as interim CEO. It should have been Jardine all along, but he wanted me to be CEO.
During all this drama, it was business as usual for the rest of the team. As founders, we made huge efforts to insulate the team from all of the spectacular turmoil we were in. It was our problem, after all. So following Coinage’s launch, it was Anthony’s turn to try to bring Bitbit to life.
That Other Bitcoin Start-up in the Philippines
BuyBitcoin was founded by Sam Kaddoura, Lasse Birk Olsen and 2 others. I imagine, while the delinquent name calling was happening during the civil war between Coins.ph and SCI, the BuyBitcoin team were laughing their asses off with popcorn on hand.
BuyBitcoin offered an easy way for Filipinos to buy and sell Bitcoin. Jardine and I had always had our sights on this promising product. We even had our own little version of it, which we’ve since shuttered. Little did we know, the seemingly formidable competitor was slowly dying of obsoleteness. It was not long before their CEO, Sam, had confided in us this fact and that merging with SCI was the best path to take moving forward. We took over operations silently in October and Sam took on the role of CFO at SCI.
On the Ruby on Rails side of the team, Rebit was blowing up. (Or so we thought.) From moving a few tens of bitcoins a month to moving a few million pesos, it seemed to us that we’ve finally thrown a tissue ball that will stick. It also became obvious to us that we actually required an infusion of cash. That’s when we stumbled upon Boost VC. I pitched Rebit, and just for fun, we forced Anthony and Oscar to send in their pitch for Coinage. We had a couple of practice sessions among us where there was some dissent among our ranks about whether Anthony’s Coinage had any chance to get in.
Team Volatility (BTC: $480)
Coinage got into Boost VC. Rebit did not.
Coinage was genius. It still is. I’m not at liberty to divulge its technical innards, but hands down, this order book exchange built by Anthony and Oscar is one of the best executions of ideas in code I’ve ever seen. I was thrilled that Boost VC recognised that.
Too bad, though, that the Coinage team, after their 3 month stint in the Valley, decided they did not need SCI anymore. That decision subsequently marked Bitbit attempt #2 as a failure as well.
Nick was furious. At this point, he has all but divested his shares at SCI. But hearing news of Anthony’s decision, he did not take it lightly. He saw me, Jardine and Miguel as weak to have allowed it, and admittedly, there is truth to that. Having no signed contract to protect our verbal agreement with Coinage was a huge oversight. It was a knockdown we had to endure.
Nick, in a very Nick way, had burned bridges with us and scorched the SCI grounds with his fury. The team was petrified. I was pissed to my core. Those were the worst second guessing nights I’ve ever had. I was about to walk away from it all.
But Jardine reminded me that we still had the rest of the team. We have with us a group of millennials that decided to take the red pill because Jardine and I somehow convinced them that we were onto something bigger than any blue pill there was out there.
It worked. I stopped giving up. Despite the departure of Coinage and the fact that we couldn’t raise, Jardine, Miguel and I weren’t about to call it quits just because of Nick’s outburst. SCI still has a future because we have our team and we still have a tissue ball on the ceiling in Rebit.
After the hot mess that was Nick’s exodus, we came to terms with him legally. We found an angel investor to buy him out. And then Sam said something to me that I credit as the best wake up call I’ve ever had: You’re CEO. You need to fucking step up.
That night, I told Jardine that I’ve always considered him as my CEO, but if he didn’t take the position, I would take it and that I needed him to follow my lead because everyone else that mattered would follow suit. He gave me his blessing and so in June 2015, I took over as CEO officially. I was no longer a placeholder.
In a span of a couple of weeks, I reorganised the team, decision making process and all. Frowns were made, resignation letters were submitted, but overall those who believed in me towed the line. Those who didn’t, lingered. Company culture was corrected. Those who did not fit the culture became collateral damage eventually.
To this day, Cha, Cole, and Erica continue to toe the line. They remain a crucial part of SCI.
CTO Again
There was another problem. My 2 senior developers had left within a span of 3 months. No one else was technical enough to fill the empty seats and so I had to take over maintenance of Bitmarket written in PHP, and Rebit and Prepaid Bitcoin, both written in Ruby. Rebit was turned over to me with missing features that was supposed to be there so I had to learn Ruby on Rails. We badly needed new engineers. Oh, and our 3rd attempt at building Bitbit failed without much fanfare. It was not looking good on the tech side of a tech startup.
Right before 2015 ended, Bitbit had another false start. It was dead in the water. Luckily, Rebit was striking gold. We were also about to close our seed round.
Patching things up with Ron
One of the first things I did when I officially took over as CEO was to reach out to Ron. I made it a priority to remove any more animosity between us and among all the other Bitcoin companies in the Philippines. After all, a rising tide, indeed, lifts all boats.
Still Alive (BTC: $430)
A new year. An almost totally new team and a new office. Slowly moving along was our attempt #5 at Bitbit. This time around, it looked like Bitbit will stick. The first quarter of 2016 proves to be the best quarter, so far, for Rebit. We more than tripled our best month’s volume in 2015 in January. It looks like we’ve finally hit our stride.
Glue Guy
What makes SCI different from all my other businesses? I have one answer to that. Its not just the idea, execution, or the team. Those are all integral parts of a business, as aptly published all over business and tech circulations, yes, but I believe there also needs to be something else that’s holding all of those together. There should be influencers within the organisation that project a specific kind of authority. In basketball jargon, they’re loosely comparable to glue guys. Beyond assuming a role player position, or putting up key contributions, glue guys evoke a certain aura of initiative and malasakit (a Filipino word roughly translated as protective concern) from the rest of the team. They make all the difference between 9–5 clockers to those who go out of their way to run the extra mile. Jardine is SCI’s glue guy. He puts in more hours than anyone in the team. It’s not obvious from the outside because he would never be front and center in the public eye. Nonetheless, the respect and authority he commands from all of us is what keeps SCI from imploding, and more substantially, what keeps the team performing at high levels. Without a doubt, we are where we are right now because of him.
Life with Lifebit
Talent is down south. Lifebit is a startup based in Davao City, around 600 miles from the capital and a stone’s throw away from armed conflict and unrest. Lead by Eric Su, you would not believe such world-class showing would be rooted in such a remote, obscure place with highs of 5Mbps in Internet speeds. In 2015, I met Eric at a hackathon where he easily landed first place with his passion project Hopchat. We hired them to create Bitbit’s iOS app. Impressed by their performance, it was a no-brainer to acquire the company as soon as the opportunity presented itself. Eric is now our Chief Product Officer, and I am thrilled to have him lead product development. Eric and his band of hand-picked engineers, JM, Tim, Jed, Kevin, Viktor and Jethro, are a much needed addition to our team, giving me full confidence to finally call ourselves a tech company.
Soldiers
You wouldn’t be wrong to judge an army’s capabilities by its soldiers and officers. That holds true for SCI. Cha, Cole and Erica together with the rest of the team at SCI are some of the best I’ve ever worked with. I do no justice by merely mentioning their names, but nonetheless, to past and current employees: Abby, Aica, Aileen, Allan, Althea, Angie, Anthony, Aoi, Ash, Bryan, Carlos, Chris, Clarence, Dondi, Ecks, Floyd, Harry, Homer, Janine, Jeremie, Joey, Jomel, Joy, Kassy, Kenneth, Kevin, Kim, Kin, Kit, Kris, Luis, Maan, Maika, Marco, Mark, Michelle, Micholo, Mika, Mill, Nick, Oliver, Oscar, Richard, Rod, Rodino, Sabina, Tiara, Tom, and Tristan: Thank you.
I, Jardine, Miguel and Sam owe every iota of SCI’s continuing success to all of your efforts and malasakit. I keep to my promise that your sacrifices and contributions will not be for naught.
An army isn’t complete without weapons, of course. KVG has armed us with just that. We are now more capable to meet and exceed our goals, thanks to the trust they have given us and our envisioned ecosystem.
With Lifebit and KVG with us, we march forward.
We march forward
In the months to come, SCI will be working harder to bring our ecosystem to new heights. Our vision needed 2 years to get into its stride, but I’m confident now that we are that much closer to hitting full speed. My intention for this post is to serve as a savepoint for our story, and not at all to conclude it. I only hope that by recounting our steps at this point, we are reminded to remain as hungry, crazy, and relentless in pursuing what we’ve set out to achieve 2 years ago. I hope that we’ve learned from our mistakes and more importantly, we keep learning from our future mistakes.
As Freud puts it, “One day, in retrospect, the years of struggle will strike you as the most beautiful.” That’s not to say we are where we want to be already. Far from it. This “day” that Freud speaks of will come because of one reason alone: The people behind the company will make it happen. I am sure of it. For now, we revel in this vindication of tissue balls still sticking on the ceiling. Tomorrow, we march forward.
