Bitcoin and the False Dichotomy

This post originally appeared on Geekwire.

You might have asked someone recently, what the heck is going on with Bitcoin? Or maybe you are still wondering what Bitcoin is, or even questioning its relevancy?

A lot has changed in the last year in the cryptoworld — most notably Bitcoin’s price. It’s a good time to dissect a few points about Bitcoin and the cryptocurrency market, things I couldn’t help but notice during my first year in the industry.

The biggest point is the false dichotomy in the general perception of Bitcoin. I’d like to unpeel this and provide a deeper evaluation of the industry, because people who commit the mistake of false dichotomy do themselves a disservice by not taking a full view of what’s going on.

First, a definition to help us here:

A false dichotomy is a logical fallacy that presents two opposing views, options or outcomes in such a way that they seem to be the only possibilities: that is, if one is true, the other must be false, or, more typically, if you do not accept one then the other must be accepted.

As one of the few people here in Seattle who frequently (attempts) to explain Bitcoin to non-technical people, and being the one who handles customer interactions for Coinme, I have noticed a problem. The media, tech executives and the general public talk about Bitcoin mostly by committing to a false dichotomy. Quite amusingly, I find people either preach the positives of Bitcoin or they dismiss it, like Gagnam style. One side thinks we’ll live in a libertarian world where Bitcoin will eventually be an anonymized currency to rule us all, and the other believes it’s only for crooks in the shady, dark interwebs. “It’s doomed to fail!” they pronounce enthusiastically.

Well, neither are true.

When I read about a new random Bitcoin startup here, or a larger funding round there, I start to understand how things are changing, and in what direction. The more I talk with highly technical people who mine Bitcoin or build on top of the blockchain, I learn we’re very early in something very special. Even though we aren’t living in Crypto-utopia, there is a subtle rumbling deep within the Internet we should pay attention to.Studying Bitcoin and watching the markets adjust has taught me a very important lesson: nothing ever ends up being 100% of what you think it will be. Innovation cannot be predicted, and the future cannot be known ahead of time. Correctly predicting the future is simply a function of luck. But seeing around corners can be a function of deep listening, observing and learning. So the best action for success is to (safely) get as close to the something as possible, and learn as much about it as you can, so you start to identify where the world is heading. Only then are you equipped with perspectives on where to invest your time, capital and energy.

My time around Bitcoin has shown me that our world will not be changed as much by the cryptocurrency you read about today as by the underlying technology.

Joichi Ito, who has been involved in building many layers and pieces of the Internet — from helping start the first commercial Internet service provider in Japan to investing in Twitter and helping bring it to Japan — recently wrote about the similarities between Bitcoin and the internet:

The similarity is that Bitcoin is a transportation infrastructure that is decentralized, efficient and based on an open protocol. Instead of transferring packets of data over a dynamic network in contrast to the circuits and leased lines that preceded the Internet, Bitcoin’s protocol, the blockchain, allows trust to be established between mutually distrusting parties in an efficient and decentralized way. Although you could argue that the ledger is “centralized”, it’s created through mechanical decentralized consensus.

What Ito is saying is that we could actually be witnessing the early stages of the next phase of the connected world, a time not so dissimilar to what we experienced in the early 1990s.

An often quoted example of a false dichotomy was when the Internet first gained media attention in the early to mid-nineties. Back then, many people thought it was a fad, hard to understand and a waste of time and money.  They simply couldn’t get their head around the fact that there were more than just two possibilities: A (success) or Z (failure).

And therein lies the fallacy of the false dichotomy around Bitcoin.

What we witnessed with the Internet was the invention of the web and the browser, which commercialized the internet and brought with it every major corporation in the world. By ending up somewhere between A and Z, the world changed forever.

It’s clear to me and many others in the industry we are still in the “pre-browser” era of Bitcoin and blockchain technology.  It’s there, but you really don’t know how to interact with it. What happens when we reach the “Netscape” moment of Bitcoin?

Could Bitcoin — the currency — pop and crash?

Yes, it could.

But seeing investment dollars in the cryptocurrency/bitcoin market grow each quarter, one has to believe that if Bitcoin the currency pops, then something else will emerge even better and more suited for the general public.

What will that be?

I could take a guess but in reality I don’t have a clue. Yet committing the false dichotomy sin here is a grave mistake. An important point to understand is that Bitcoin, the cryptocurrency, is just one app that runs on the blockchain technology. People well-versed in bitcoin are familiar with the blockchain, the underlying open-source technology (or rails) that bitcoin the currency runs on. Looking deeper, theblockchain stack presents interesting solutions to problems which have hindered our society for quite some time — outside of finance. Issues such as trust, security and identity can be improved with applications built on the blockchain.

In fact, here are a few other areas where the blockchain serves as underlying technology.

  • OpenBazzar: An open peer-to-peer marketplace not controlled by any specific organization such as eBay or Craigslist. Ideas like this, using a decentralized platform to exchange goods and services, could change e-commerce as we know it.
  • Factom: A conceptual framework for a system that secures and proves the authenticity of records, documents or other important types of data that are later enshrined on the Bitcoin blockchain. This could transform how we handle record-keeping online.
  • Counterparty: An example of digitizing property and identity. Developers are starting to build networks that work in parallel to the Bitcoin blockchain to perform tasks that the bitcoin network can’t, but that make use of the bitcoin blockchain to, for instance, timestamp or validate work.

The reality is that no one really knows what will happen next — that is why it’s called innovation.  But something is going to happen in this area to improve our lives and I hope you don’t get caught up in thinking only A or Z is possible.

Most likely somewhere in between A and Z we’ll see Bitcoin technologies enhance our digital lives. There’s more down there than you think.

 

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How Do You Meet Other Cool and Smart People In The Startup Community?

coffeeI was at an event last night and started talking to a person who was younger and newer to the startup community.  During our conversation he asked something that slightly caught me off guard, given his current job at a fairly well known tech resource here in Seattle.

“How do I meet more cool and smart founders and engineers around Seattle?  I mean, what do you do?”

Although he is young – about a year out of college and just getting his feet wet in the professional world – I was still taken aback.  It struck me as odd that someone wouldn’t know where to go and where to look to meet other entrepreneurs.

But then I realized it might not be as obvious to others as it is to me.  I’m a bit more social than most and have had the opportunity to get tied into the Seattle startup community over the course of the last few years.

So if you find yourself asking the same question this person did, here’s a few ideas on how to meet more people doing cool stuff in your community.

Go to a lot of events

It may seem obvious but going to local startup events is one of the best ways to meet new people.  The only drawback is you have to get over the awkwardness of being around a lot of people you really don’t know and looking around to find someone to talk to.  There’s no point in taking the time and energy to go to an event and just sitting on the side by yourself waiting for someone to come talk to you.

Just bite the bullet, find someone in the crowd who is not mid sentence in another conversation, put out your hand, introduce yourself and start the conversation.  BUT remember – only stay in conversation with one person for 5 or 10 minutes before gracefully wrapping it up, grabbing a card if you want and moving on.  No one likes to be cornered by a stranger for an hour.

Go to Hackathons and specific meetups

Hackathons, by their very nature, attract smart and talented people.  If you want to find the people who are hacking away on the newest ideas, you need to start going to local hackathons.  By the end of the first night you will have found a new team to help  build something new and in the process make a handful of new friends.  

Also, seek out a few meetups that fit your interests and just show up.  There are groups meeting in your city on almost anything imaginable.   If you can’t find something that interests you – start one!

Ask your close friends for introductions

Asking the people you already know to introduce you to someone they think is smart and would be a great connection is another way to expand your network.  It’s best if you identify the person you want to meet and specify the reason for meeting them, it makes their intro a lot easier.  One thing to remember on intro’s:  The person doing the introduction is putting their reputation on the line when they introduce you – so make sure you follow through and act professional.   If not, it looks bad on you as well as the  person who connected you.

5o coffee dates

Mark Suster wrote a while back about committing to 50 coffee meetings in a year.  While extreme, the point is clear – committing to having coffee with others in your community will lead to introductions and opportunities you never would have thought were available to you.  So next time you are out at an event or meetup, simply ask the person you are talking to if they can meet for 30 minute coffee next week.  At the end of the coffee meeting, ask the person who they would recommend you meet next.  It works…

Start writing

When I started blogging and guest posting on other media outlets, it opened up another channel for people to reach out and connect with me.  In fact, that is how I founded Seconds (actually, my cofounder read an article I wrote on GeekWire and he cold emailed me to ask if we can meet for coffee – see how it works!)  Putting your thoughts and words on screen and publishing them out into the world allows others to “virtually” get to know you and how you see the world.  On your blog, make it easy for others to connect with you, via Twitter, Facebook or email.  Trust me, it does wonders for your future.

So there you have it.  Don’t be afraid to put yourself out there and get noticed.  Go to events.  Put out your hand.  Say something.  Write something.  And for god sakes book some meetings!

What It’s Like Inside SURF Incubator After A “Wild And Unforgettable” Year

Screen Shot 2013-02-24 at 6.52.04 PMIt’s 4:45pm on a cold and wet Thursday afternoon in downtown Seattle. Perplexed and a bit agitated as I walk down 2nd Avenue , I find myself rushing back to the office like I’m late for an important meeting. Being February – still cold and rainy in Seattle – it’s not a good day to be trekking back across a PNW city. In fact, it’s blistering cold. You know those days where it’s a wind-whipping-your-face type of evening, making your walk that much worse. A better idea would be to stop and wait inside a warm building for a cab or grab an Uber.

But I don’t care! It’s happy hour at 5pm at SURF and I ain’t missin’ out!

Over the past few weeks, I have been reflecting on my last 12 months and I cannot talk about the year without mentioning SURF. SURF Incubator opened their first full time location in Seattle almost a year ago and Seconds had the opportunity to be a tenant pretty much from the day they officially opened.

I wanted to take a moment and review the last year with SURF Incubator, what they are about and what they are looking to do next, because I believe it’s one of the best things to happen to Seattle’s tech scene in quite a while and you should probably hear it right from the source.

To begin with I must admit I wouldn’t be here today – not only writing this but as a startup – if it weren’t for SURF Incubator and the support of the two individuals running the show, Seaton Gras and Neil Bergquist. If only to speak for the larger group, I feel the support, encouragement and the SURF community is truly a blessing for an early stage startup still trying to find its way.

Seconds could easily be the prototypical startup Seaton loosely refers to when he describes SURF and its story of survival, evolution and filling a need for early stage startups.

According the Seaton:

“For three years, prior to being in the Exchange Building, I ran SURF Incubator at numerous locations – including Regus, friends’ offices, FiberCloud, restaurants, coffee shops and even my condo’s meeting room. It was a wonderful time to experiment with different ‘products’ from consulting and meetings to networking and roundtable discussions.”

“The sad thing was that I did not have enough square footage to offer any long-term working space for my members. Even so, the membership in my two Meetup groups continued to grow and was more than 1,000 strong when I began looking in earnest for a permanent large space to call home and fulfill the bigger vision that I had for SURF Incubator.”

For those who aren’t familiar with SURF, it provides office space for tech-oriented startups so they don’t have to work out of their homes or in random coffee shops around Seattle. They host events, organize meetups, partner with local service providers (legal, recruiting, etc…) and help young fledging startups with the nuances of getting out of the gate on the right foot.

Maui Huge Wave

Realizing SURF needed a permanent home, Seaton secured office space in the Exchange building in Downtown Seattle and officially opened their doors in April 2012. “Now, with the new location at the Exchange Building with more than 15,000 square feet, we have been able to create and/or host some amazing events. Having a permanent location has really helped SURF Incubator do much more. We have also been able to host some wonderful happy hour events as well as some fantastic networking parties and meetups.”

Four years into their journey and almost a year into their permanent residence (and seeing it first hand) I can say Seaton and Neil have pulled it off. I am quite impressed and it’s only the beginning. Walk down to any coffee shop or talk to entrepreneurs at various events and their ears perk up when you mention you are a SURF startup. It is obvious SURF has exceeded expectations of both their tenants as well as the greater Seattle startup community.

But more waves are forming on the horizon.

SURF just announced their biggest deal to date, and in my opinion have just set in motion a chain of events no one inside SURF could have predicted. The newly announced B2B accelerator 9Mile Labs will be taking residence inside SURF and holding their 3-month program in SURF’s office space.

This is great news and you can literally feel the change taking hold inside SURF. It’s like we just dipped down on the rollercoaster and are now speeding up the other side.

According to Gras, 9Mile Labs was attractive for a few major reasons. First, they are unique because they are focusing on Business-to-Business startups and are offering follow-on support. “Their program was of particular interest to me because they offer more than just a 3-month program. Three months, in my opinion, is not enough time to really gain adequate traction and in the B2B space, this is even more of an issue. So, I think it is wonderful that 9Mile Labs is looking at 3-months to Demo Day, followed by 3 months of continued support.”

And although 9Mile Labs is a newly formed accelerator, they have already gathered amazing traction and a strong board of mentors. The long list of high-quality mentors is very impressive and will positively impact 9Mile startups as well as the larger SURF community. “These mentors offer a vast amount of experience and since experience can make all the difference for a startup, it’s a great opportunity for the chosen group of 9 startups,” Gras added.

Very true: with experienced professionals by your side startup founders are much less likely to make fatal mistakes.

The 9Mile Labs deal cannot be understated. For a fairly new incubator space still in its infancy, SURF just further solidified its place in the larger Seattle tech ecosystem. In addition, by partnering with an “accelerator” program SURF now expands the opportunities it can offer early-stage entrepreneurs.

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Every day is unique at SURF. With the diverse companies inviting friends, families, customers and advisers to take a tour, we have always a different mix of people. The companies run the full gambit from medical and educational to gaming and cloud services (and payments!) and any given day you will find yourself in a conversation with someone who can teach you about a new industry or business model.

In addition to local visitors, people from more than 30 countries have stopped by for a tour.

This is especially interesting for Seaton, since he spent so many years traveling around the world. “For me, it is such a pleasure to get to meet these wonderful entrepreneurs, get to learn about their plans and see their vision unfold. And sometimes, I get to ‘lend a hand’ by sharing my own perspective, which was learned the hard way … my own struggles with building my businesses,” said Seaton.

According to Neil Bergquist, the year has been “Wild, it’s nothing what I expected but has become everything I wanted it to be!” He also added it has been a huge learning experience for not only him but also the entire SURF management team.

To say the last 12 months have been wild is an understatement. My take is it’s quite possibly the best place to plant yourself as an early-stage founder in Seattle looking to soak up startup knowledge and wisdom. You could meet possible cofounders like I did, engage in numerous happy hours and gatherings, learn from various service professionals and continuously meet interesting people. All those are important, especially when you are just getting out of the gate.

“During the last 12-months, we have held about 200 events. Topics covered included two main areas: Business Development and Programming. For the business development, we had professionals present detailed informative sessions on marketing, corporate formation, intellectual property, employment issues, graphic art, go-to-market strategy and much more. For the Programming side, we held meetings where programming languages were discussed and demonstrated. For example, Ruby on Rails, PHP, MySql, Scala, Android, HTML5, XCode and Windows8.”

So what’s next for SURF?

Neil mentioned expansion is on the horizon but the need to operationalize (which comes with growth) is paramount. They will soon be adding a complex educational program for members – both in programming and business development. Seaton strongly believes programmers need to constantly learn about the new features of their particular programming language and hopes the education can be supported by a grant.  “These languages are very dynamic with new features added almost every day. Without vigilant study, a programmer may actually go backwards and may ultimately ship an obsolete project. I know this … because it has happened to me.”

He’s totally right. No matter how seasoned an entrepreneur may be there is always a need to learn the latest perspectives. For example, Twitter and other social media tools have forever changed the way businesses promote their products, services and even their existence. We all, regardless of age or experience, need continual education on how to leverage the latest technical advancements.

I can tell you 12 months ago I had no idea I would be sitting here thanking these two individuals for not only opening their doors for me and my team but changing the Seattle startup landscape in the process. It’s amazing what they have accomplished in such a short period of time and I can only imagine what this next year will bring.

I know one thing for sure – those typical “two guys in a coffee shop”, even though they are working dutifully, are definitely making a mistake.

3 Reasons Why Non-Technical CEO’s Need To Go To Hackathons

SHDI am not the typical person you would find at a hackathon.  I don’t code and would be described in the industry as a “non-technical” cofounder.

As a non-technical CEO I tend to focus on things like marketing, branding, positioning, investors, and customers.  I do it because it’s my job and during the early stages of a startup no one else on the team is responsible for those things.

This is all nice and good but it doesn’t build a product.  And if you don’t have a product you can’t actually have marketing, branding, positioning, investors, and customers.

So if you are a non-technical CEO what you need is a techie bootcamp of sorts, short but intense periods of learning and doing so you can start to understand what its like to be a developer.  And trust me, if your devs don’t feel like you understand the hows and why’s of their work you will soon find yourself standing alone at the alter.

So what is a Hackathon?  It’s a room full of developers focused on building the coolest product they can in a 54 hour period.  It’s a self-inflicted bootcamp, challenging you and your team to execute on a new idea with little time, resources or sleep.

Crazy huh?

My team and I participated in the recent Sports Hack Day at the Hub over SuperBowl weekend in Seattle.  It was a great experience.  Obviously, the focus was building something oriented around technology and sports – two of my favorite topics.  While we didn’t take home any of the prizes, we did take home a kernel of an idea we think might actually be something substantial.  More on that later.

I want to review some lessons learned over the weekend and possibly help other non-techical CEO’s who are serious about building a startup realize how important the time spent at a Hackathon can be.

Lessons 1. Become part of the community

There is a strange brotherhood between technical people – developers, hackers, coders, designers – anyone who considers themselves one with the terminal.   It’s like they just have look at each other, head nod without saying anything and instantly know each is in the club.  I have to admit this was quite foreign to me as I began my entrepreneurial journey (uh, what’s that say on your screen?)   I credit the few CTO’s I have worked with for their patience and understanding with me being a non-technical person.  Yet weekends like the last one spent at a hackathon do A LOT to not only further educate me on technical aspects of software/web development but also include me into the community.

The quote “showing up is half of the battle” comes to mind here.  By simply showing up and intuitively saying to others “What’s up?  I’m right here on the front lines with you!” goes a long way to gain respect and inclusion from the community.  Also, asking questions – lots of questions – about various languages, platforms and API’s tells your fellow technical team-members you are interested in learning about their world.  THIS IS HUGE.  You will learn a lot and gain respect from them just based on the fact you are taking the time to know what’s going on.

And the coolest thing is I am actually starting to retain this stuff!

Lesson 2. Execute under pressure

A weekend is barely enough time to take an idea and deploy a working product around.  In fact, it’s not really much time at all since our code deadline was at noon Sunday and Demos started about 12:30pm.  This means you learn to make quick decisions.  There is no time to battle back and forth about a specific feature or naming structure.  You must decide and JFDI.  With less than 54 hours available, Hackathons are all about execution and swift decision making.

You know what?  Swift decision making is incredibly valuable in the real startup world as well.  Hackathons help you to become agile, testing what works and what doesn’t and quickly make corrections if needed.  This is arguably the top advantage of being a startup so being able to polish the diamond during the weekend has tremendous benefits in the long run.  Also, it can be crazy stressful as you get down to the deadline.  The team learns to work in a “crucible” where intense pressure hangs over you as people work tirelessly to get something “respectable” completed and deployed.

Hackathons are not for the faint of heart.

Lesson 3. Find the value proposition

I’ve written previously about the value of pitch competitions, so I will talk more about the process of how you get there than the actual pitch.  During the weekend as you are building out your product you still have to keep in mind what value your product brings to the world.  Remember, after the deadline you will be standing in front of the group and a field of judges describing your product and why it should be used.  There really is not much use for a product that doesn’t solve a problem or pique someones interest in one way or another.  Don’t be the guy/gal who doesn’t even understand how or why their product would be used.

So in addition to building really cool tech you are challenged to figure out the value proposition – both are required to winning a Demo competition.   The condensed timeframe places increased pressure on you to figure out what problem you are actually solving.   Quickly evaluating the market, determining if there are existing players and what problem they are solving.  Finding holes in the market and quickly determining how to meet them.  Evaluating potential business models, although not fully required during a hackath0n, will stretch the creative mind farther than anticipated and lead to interesting business developments.

The benefits can be compared to exercise:  the more ‘reps’ you accomplish at a higher stress level the better (stronger) you become at that particular activity.   Especially for non-technical founders, hackathons provide a great training ground to hone value proposition skills.

Whew, what a weekend!

For all the non-technical founder/CEO’s out there: Don’t shy away from hackathons.  Trust me, you need them more than they need you.

Café SURF: How A Startup Incubator Turned Tech Hangout In Less Than A Year

The Seattle startup scene just gets better by the day.  One of the coolest things to come out of Seattle this year has to be SURF Incubator, which opened in April and is now home to more than 40 startups.

Yes, there are other startup spots in Seattle (ones where I have thoroughly enjoyed spending my time), but the progress SURF has made in less than a year is staggering.  Over the last five months they have grown from just a glitter of an idea into a strong argument for the tech startup epicenter of Seattle.

Not a week goes by where something’s not happening in their massive office space.  They’ve thrown a raging launch party, hosted entrepreneurs from 23 countries, facilitated a number of members to join forces and become cofounders, hosted various meet-ups and weekly tech gatherings, and let’s not forget the frequent and tasty happy hours!

Community-supported space for digital startups

SURF is dedicated to advancing the ideas and passions of technology-focused entrepreneurs.

I believe the vision of SURF founder Seaton Gras and Director Neil Bergquist for a better startup experience is the main reason SURF is seeing such awesome adoption.  That, and the fact that paying an arm and a leg for office space is pretty much a non-starter for most early stage startups.

Entrepreneurs around the world can be more productive when they collaborate and have access to a broad network of business and technical resources. Working at home or in a coffee shop makes it difficult to gain exposure to fellow subject matter experts. It’s also hard to maintain momentum or gain any serious traction.  SURF can reduce the barriers of entry by providing flexible and affordable space with a robust community of resources. This reduces entrepreneurial risk and enables startups to operate incredibly lean.

Realizing people love hanging out at SURF, today they are announcing their latest concept, Cafe SURF.

Entrepreneurs who may not be ready to lease office space and typically work in low-cost locations such as coffee shops or local cafes now have another option.  SURF Incubator just created its own cafe inside the incubator’s 15,400 square foot facility in downtown Seattle and has opened it up to the public.

SURF is building the cafe to help integrate the startup ecosystem thereby helping entrepreneurs collaborate with one another and engage with the various support resources available at SURF Incubator.

Highlighting the technology and companies built within their walls.

The thing is, Café SURF isn’t your ordinary coffee shop. With the contributions of resident startups, Café SURF is Seattle’s first tech-focused, fully self-serviced coffee bar. Patrons pay just $50 per month and receive unlimited coffee, 100Mbps internet access, and designated work space.

Additionally, food and tea are available for purchase via Seconds, my company and a SURF resident startup, which deploys a text-based mobile payment system. Café SURF members can also provide feedback to the management through a text messaging comment service provided by another SURF resident; Talk to the Manager. Thanks to the various technologies from SURF residents such as Seconds and Talk to the Manager, Café SURF will be sustained as a fully self-serviced operation.  SURF has also partnered with local coffee roaster, Caffe Vita to help establish the cafe.

Café SURF members may attend open office hours with investors, mentors, and SURF Incubator’s corporate partners who provide counsel and startup services. This startup centric cafe is anticipated to become a central link for innovation and networking within Seattle’s technology community.

The technologies and services being integrated into Café SURF are outlined below:

Seconds – Deploying a text-based mobile payment system.

Talk to the Manager – Text message comments to the SURF Café management

Knotis – Online marketing, advertising, daily-deal promotion

Imaginative Design – Creative work

Equilitree – Logo and SURF Café page design

Best Practice – Space design and architecture planning

Caffe Vita – Coffee