Innovation

INTERVIEW QUESTIONS AND ANSWERS
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• Address “why”(idea, passion), “how”(financing), “who”(just you, family), “When”(when created, first business?), and “Where”(original location)??
o Why, my business started as a renewed passion for software engineering. After 13 years working for Thomson Reuters on traditional finance software (Tax and Accounting) the newness and challenge had faded. I was approached to do some work on the side for backend services surrounding blockchain (specifically Ethereum cryptocurrency) and found an industry I believed very strongly in and offered new and challenging problems to solve.
o How, I started off with a pretty steady contract with a company so financing was not really an issue. Being a software engineering / consulting company I did not have overhead that might exist in brick and mortar businesses.
o When, I started this July 2017
o Where, being a small start up company I was working completely remote from my home, this also helped reduce overhead without having to rent office space.
• Industry/Niche background
o The industry was incredibly niche in 2017 and still remains somewhat so today. This brought its own challenges, being so new there was limited documentation or examples of how the blockchain should work.
• Customers/Market
o I started with a contract so I had an initial and viable customer from the beginning. I had other clients here and there as I got more involved in the space and made more contacts. I’ve created new projects from scratch and provided auditing and advisory roles to other projects.
• Why you?
o Because I could and because I had to drive to learn and help build a new technology that I found to be fundamental for the future.
• Why this product/service?
o Software engineering has been in my blood since I was 9 years old. I have always been coding even when I was in the Navy and not directly working in the industry I was still writing code and useful programs on the side because it is fun and interesting to me. The question of whether I would be in software engineering was never in question, but I moved from a stable job to starting my own business because I believed in the project I was recruited to work on. Blockchain will change trust assumptions in our growing internet based world. Traditionally, centralized financial institutions played the role of trust mediators. When a person wants to send money to someone they don’t know they can issue a check, wire transfer, paypal etc. But all of these methods have settlement layers where the recipient’s bank must receive the money from the sender’s bank and credit their account. This requires multiple layers of trust, between the user and their bank, bank to bank etc. Blockchain has the ability to allow transactions between parties on the internet without a middle-man (Bank) in a trustless way.
• Did you have a “business plan”?
o I did not have a formal business plan, I had a rough understanding and documentation about what would be required to run a business as far as regulatory (business TIN), tax payments, etc. But because I started with a steady client I did not have to attract investors and as an engineer I jumped in to developing rather than administration tasks for the business. In retrospect some more planning might have been prudent.
• What is your vision for the future?
o My vision for the future is to see wide scale adoption and use of Blockchain software. It will change the way we interact on-line and the way we deal with traditional financial institutions. Things like stock brokerage firms, banks, paypal, western union, etc. can all be replaced with blockchain. Not only can we eliminate the middlemen (and fees they charge) but gain an increased level of trust in financial transactions. Blockchain also allows many financial constructs traditional financial instruments lack to provide to everyone
• Resources required: Money, time, collaboration, etc.
o The biggest resource was definitely time. I spent many hours just learning new things about this new technology in order to be able to do my job effectively. Being a startup and being in a new field I often worked 80+ hours a week, in odd hours throughout the night as well. Being in such a small startup meant that virtually every task that needed to be done was effectively my responsibility, this was a big change from a huge very structured corporation like Thomson Reuters where often it was “not my job, not my prob” as everything was very siloed and everyone had very specific areas of responsibility.
• Biggest risks?
o The biggest risk was uncertainty, would the business make it. This has been the greatest few for many years, even when you feel certain in your abilities and position there is always the very real possibility that the promises of this new industry will not come to fruition and everything will collapse around you.
• Hurdles encountered
o I’d say the biggest hurdle was tax compliance, I didn’t fully estimate my tax liability before the business began so when I got an accountant I was a bit surprised by the taxes required. Being a sole proprietor you pay taxes on everything you make twice! Once as income the business made as the legal entity but then that profit is ultimately disbursed to you as the owner and you pay personal income taxes. The other hurdle was probably more planning surrounding uncertainty and always having a buffer. There were times of slight downturns that brought more uncertainty and though it didn’t cause major issues, planning and having a better buffer for uncertainty would have been more prudent.
• Surprises
o Tax liability as I said, also sudden downturns in the market. Each invoice I generated for time worked for a client was paid in crypto currency; this was vastly superior to using the financial system and trying to deal with checks or transfers. But since crypto currency at this stage is still highly speculative, it is also highly volatile and any changes downward in price could cause the amount invoiced to drop in value if ‘cashed out’ when prices were down. This was problematic at times when I needed to actually sell crypto currency for cash to use to pay bills in the traditional world.
• Advice for new entrepreneurs?
o Plan for uncertainty and then double it. You always expect things to go well and then when they are going well you can easily forget the need to plan for bad times, try to have several to 6 months buffer. Also fully research regulatory or tax compliance issues and get expert advice as much as possible. Learn everything about the industry but don’t delude yourself about the negative possibilities as well, just because you believe in a product or industry does not mean it is a given that it will work out.
• What is the worst advice you received?
o The worst advice I received was not getting advice, I didn’t have enough advisors early on and I learned after several years that I could have saved tens of thousands in tax if I had structured my company as an S Corporation instead of a sole proprietorship. In hindsight I should have researched and gotten more advice in the beginning.