The world of blockchain and crypto is undergoing a significant acceleration. The worldwide regulation environment is converting, and it converts to an operating model that allows a wider range of products and services. The companies sitting on the sides are jumping and those who are already working through how to bring a set of new products to the market.
In most technology markets, the first winners were determined long before the adoption of the mass-market. As we enter the time of mass adoption for the blockchain (my opinion), the options that some companies face now act quickly or spend the next few decades playing catch-up. If your CEO said, “No more haste, early days,” your company has surrendered to the fight.
For those who remain in the fight, the speed kills. This is true on the road and this is true of business. People always forget that “moving fast” has “breaks things.” That is why for those who are in a hurry to this market, risk management has never been a more critical practice. After all, there are many ways for companies that want to print in advance of this market to reduce the risk of disaster failure. There are three on my mind.
The first step is to put in place controls and operations closing the door to past problems experienced by other companies. It may strike you as a barn door after the horse leaves, but it is necessary because if you do not, you risk repeating history and that is the way it is more embarrassing than making full mistakes in the novel. The basics are also not difficult: external auditors, business controls, and usually best practices. We are also fortunate to live at a time when, for the first time, we have a great supply of experienced blockchain and crypto people who can apply real-life lessons learned.
Second, I think it’s critical for companies to think strategically and clearly about the type and number of risks they want to take. There is a technology risk (very linked to smart contracts and defi). There is a market risk. And there is a risk of counter-party.
You can learn critical lessons from all three, but often make sense to have controlled education environments. One of my frustrations is watching people jump into wildly incorrect conclusions when things go wrong, sometimes because they have many risks at the same time and cannot separate what the causes are.
Finally, it makes a lot of sense to be strategically about what you do inside and what can be done outside. In technology companies, especially when engineers are in charge, temptation will always be built. I know. I have an engineering team. It’s more fun than managing a vendor. “I built it” is a million times more enjoyable than telling someone “I bought it.” I didn’t think I was going to check Mr. Beast in business, but as he said, “Consultants are a cheat code.” It’s simple: something else has done before. Take advantage of that to reduce your risk and complexity.
There is no path to growing without risk and the risk rises at the speed of growth. Therefore, for companies looking for accelerated growth, especially in ecosystems enabled by emerging technologies, good risk management policies should be. Please sprout for your own safety and keep your eyes on the road.
Denuch: These are the personal views of the set and do not represent the views of the ey.
