Creating A Fortune 500 Blockchain Department
This is a story of why three developers built an app and decided not to turn it into a startup. We decided to attempt to carve out the right department with the right organization. These days, when a group develops an idea with commercial potential, the first steps often taken are:
- Nail down a viable business model
2. Build a prototype
3. Register the business
4. Shop the startup to investors
Our team did nothing on this checklist. We have 7 patents pending with our first product in public beta and a handful of Fortune 500s engaged in platform dialogue to help transform the Proof Dashboard and Sidechain into an exemplarily enterprise blockchain solution. We have (and are seeking) $0 in funding, conduct product development in free spaces like Google Campus Seoul, and engage in interesting conversations with people asking to license our technology or hire us as a consultancy. It’s a bit difficult to contract a company or license something from a company that doesn’t exist. The natural question is: Well, then, how do you guys make money?
We started our group under the name Think Consortium on Blockchain earlier this year, in an attempt to make it clear that we were independent developers working together. It might be easy to confuse us for a startup: We work 9 to 9ish and onwards, and we’re typically programming in rooms full of startups.
Our goal: create a successful department within the right company with the legal might, government pull, international bandwidth, willingness to innovate and the right corporate culture for bringing blockchain solutions into mainstream enterprise usage. Before we began building our first product, we created a 50-page report on the global blockchain landscape with projections of what current conditions mean for 2017, dubbed the 2017 Outlook on Blockchain for Enterprise & Government. From there, we noticed one small issue when analyzing the blockchain and distributed ledger landscapes: many of the large companies and government agencies were experimenting with different ledgers that can’t communicate with one another. We found that counter (the word?)… counter-everything, because the point of blockchain for highly regulated institutions, in our view, was to cut costs and improve efficiencies by making certain information and stores of value more freely interchangeable and, in certain use cases, accessible across organizations. Additionally, as we conducted our study, we noticed that while there were many great technologies popping up, only a handful were being built with compliance standards in mind. Fewer project had reached the point of easy usability. Most solutions, because the technology is very new, were also still in the proof-of-concept phases, even with some companies spending tens of millions of dollars on the technology. So, naturally, we decided to to something about that.
Meet our team: https://www.youtube.com/watch?v=OCgaN5jSwRA
As a group that had a couple decades of startup experience between us, we understood the importance of the Lean startup methodology to get products ready for testing and focusing on end-user experience, versus some Gannt chart-esque product development methods still in use by many large institutions today. We are extremely honoured when partners tell us that after spending quite a bit from their budgets researching enterprise blockchain implications, that when finally seeing our solution in action, there’s an “aha moment”. Triggers that warm and fuzzy feeling every time.
Let’s take the trip back to before the product creation. After we published our 2017 Outlook, we wrote a white paper about what we felt needed to be created based on our findings, posting the paper to Github. From there, we then set out to build the solution, updating our whitepaper as we built the solution based on Github reader feedback and technical realities. The public beta version of the solution is now available as the first cross-blockchain contract and asset management platform for the enterprise. It’s an early release, but we can now iterate on it daily based on real user feedback: essential. Big league essential, as America’s president-elect might say. Here’s hoping he’s a blockchain fan. Don’t mention that China is.
Our platform currently allows users to easily create assets and contracts to be represented and transferred between the Ethereum, Bitcoin and Hyperledger Fabric blockchains. We are currently working on introducing Corda, Chain and Eris interoperability,
So, why aren’t we turning our app into a startup? Our research early-on suggested that t bringing some of our ideas to fruition will cost millions, having nothing to do with the actual solution (cross-organizational C-suite buy-in, hurdles thrown from legacy solution vendors caught without a competing solution, general bureaucracy). After those costs, we conducted strategic business design sessions and determined that changing the way companies transact value and enter agreements would require the might of large corporations with access to the best lobbyists in various strategically important countries around the world. That’s a tall order for a startup, even a significantly well capitalized one. Money doesn’t necessarily buy political and industrial connections or the motivation by the right players to push an initiative through.
As we worked with more large entities in our innovation program while in private beta, we saw another justification for not pursuing our initiative as a startup. Confidentiality, sensitive information, and trade secrets. Many of the methods with which large companies transact value and record sensitive information is tightly sealed (and for good reason). This is your banking information, proprietary trading algorithms that account for much of a company’s bottom line, and/or business method super-top-secret trade secrets. Some so secret, they don’t even exist. This poses major barriers to any outside organizations trying to sell solutions for transforming the ways governments, consumers and/or enterprises conduct business, especially when the provider is a startup. Let’s not even get started with the military. Something going wrong is not a risk many of these institutions have the appetite for digesting.
A few headhunters for these firms have asked us how we would like to structure a deal with our destination organization, given that we’re bringing our own intellectual property, are not a company, and are expats based in Korea. It’s quite simple, really. Our model is licensing our Proof solution and IP to the right company with a future option to acquire lifetime licenses, while we run the department focused on leveraging the blockchain and Proof to introduce new business models into the company, while improving existing ones. That’s going to require much more than us and a few recent grads we could hire for a few million bucks.
So far, we are in talks with a few of the world’s leading tech and financial institutions. There’s no rush. We want to find the right company, much like startups want to find the right investor. Little by little, we intend to transform how daily business is conducted to create new regulatory processes, means of transactions, methods of creating and executing agreements, and the idea of direct ownership in the next age of the Internet. The blockchain era.
This department/group model is not entirely new. Earlier this year, Stripe introduced a method called Bring Your Own Team (BYOT), with the theory that bringing in pre-established teams is better than bringing in individuals. We plan to accelerate this concept to another phase where not only teams are brought in, but intellectual property and departmental visions.
Maybe it’s a Millennial thing. The experiment continues.
