(A post after a long time. One, I’ve been meaning to write)
I’ve worked on a few projects in the crypto space over the past years in different roles. The project I’m basing my thoughts here on is one I’m no longer associated with but did form a significant part of my experience in the space. I do not see the point of naming the project. This post is aimed at being informative, with the belief that it can’t be the only one that’s doing some of this. I’ve encountered some of these ‘red flags’ even while dabbling with investing or trading in the space. The cryptocurrency space has thousands of projects, and many set up businesses overnight with claims of changing the world. Hopefully, if you working there or even researching these projects, some of these points may come in handy. Ideally, some of these should have been red flags. I learnt my lessons late enough 😅. You need not.
So, here goes,
- No accountability: One of the first things I’d heard when I had casually mentioned that ‘I ought to be fired if I don’t do my job properly’, was ‘No one gets fired here. We haven’t fired anyone since……’. Many of you will think of this as great. But think of this – why would you keep someone on the team if they are incompetent at their job?
- Lack of rules: I worked in environments which are sticklers for rules. I hated it. Come at a certain time, go at a certain time, log every action you do, and so on. At the other end is – Come when you want, if you want, go when you want, take holidays as you wish, any number of them. That’s what happened here. In a space which is increasingly competitive by the day, there is very little space to get lax. You don’t need to implement or stamp authority, but if there’s zero respect for some basics, that’s a massive problem. No wonder, this spilt over into delayed timelines, unvisited roadmaps, and more. A lot more.
- Nurturing a “Yes-people” culture: How about honouring your partner’s son as a C-level employee of the project? The only criteria being here “He’s spent a lot of time with me, the CEO”. That could have been a great move in an ideal situation. It isn’t one when the C-level spends 90% of the time in front of the screen watching every tick of Bitcoin. That’s one example. I’ll stop here. No point venturing to the other C-levels, Head of Business Development (that’s a completely different tale in itself) and more.
- Overspending: This is a trap many projects, for that matter, even startups across sectors fall into. Spending beyond the means. In the space of cryptocurrencies, this can range from paying influencers outrageous sums to shill one’s project, to sponsoring events which may have very little impact from a business point of view, to investing in real estate the size of a football field. All to maintain a certain impression you’ve created of yourself in your own eyes, now aiming to project it to others. Some may call this narcissism.
- The mantra is ‘We Overpromise, Underdeliver’: A trap some projects in this space end up in is overpromising. Be very wary when you hear statements like “We are the world’s first…..”, or “We are going to be the Revolut of crypto”. A first meeting with a potential client can be tweeted as the final steps of signing a contract bigger than anything the space has seen. I’ve fallen into this trap while handling communications at the project I’m mentioning, taken up by the WhatsApp message shared immediately after that first meeting. This same behaviour trickling into roadmaps is a sign of impending disaster.
- Idea overload: We are going to buy a bank. We are going to sponsor an F1 team. We are going to buy out the card manufacturer. We can print our cards. We have investors from Fund ABC (I’d have listed the names of the investors here, but I’m not doing so to save me some embarrassment). So and so investor needs us to be in the space. Let’s launch a new token. You get the point. A massive red flag.
- Bandwagon mentality: “Ah, today AI tokens are trending. Let’s push out a tweet on how we adopt AI in our business”. “Oh, it’s NFT season. Let’s launch an NFT collection”. “Ah, it’s Metaverse season. ur Greek partner has developed a Metaverse. We will buy it”. And that Metaverse by the Greek partner was one YouTube video. Overnight adoption of popular trends without careful consideration is something that happens a lot in the space. Business models are changed overnight. You can argue that it’s not a bad thing. There’s a need to stay nimble-footed. But what if I said, both of those examples listed in this point were true, and one saw all resources devoted to building an NFT collection with everything else put on the back burner?
- Who needs revenue when we have projections?: This may sound like an exaggeration. Unfortunately, it’s not. Think of this – beginning of the year, you’ve set certain revenue goals. “We will have $10M in our bank account end of the year”. How? I don’t know. I didn’t ask. I told you, I was swayed by the plans. Grand plans. End of the year revenue is 0. Time to set next year’s revenue goals. “We will have $30M in our bank account end of the year”. How? This time I asked. I’ll save you the effort of reading the explanation. Your eyes would burn. (Just a hint: Haven’t we got an investment of $XXM!). That investment (or should I say loan against tokens, is another topic in itself). I’m glad this was a red flag I caught on, even if it were late enough.
- Hiring “talentless” people: You’re often told to hire people who bring experience and value to a setup. So, it defies logic when you see a startup, especially one which talks a lot about The Lean Startup, hiring people to fill in key roles which defy sensibilities. I will stop here. I wish them all the luck in their careers. Maybe, just maybe, blockchain isn’t the field.
- I’m good with discussion, as long as I’m not questioned: Unfortunately, that’s a line some top-level managers adopt. They are so taken up by their way (in some instances, by the lies they’ve woven), that any line of questioning is seen as a threat. I’ve seen a couple of startups go down the drain where this has been adopted.
Again, the intent of this post is hopefully to educate. I’ve learnt some of these late, thanks to some colleagues, a better understanding of psychology, and a small degree of sense prevailing. I’ve not been associated with the project in question for over 6 months now, and I hope some, if not all of these, have been tackled, and they are on their path to becoming the “First _____ project of the world” in reality.
Personally, I take this as a learning experience. High time 😅. Whatever, the case may be, this space is entertaining.