Blockchain is certainly a buzzword right now, and there is no stopping the number of blockchain startups popping up all over Europe.
One to watch is elrond, a team that is completely rethinking the public blockchain infrastructure. Incorporated in Malta in 2017, and now building its operations out of Romania, this startup is currently the 2nd best funded startup in Romania. The team promises to give anyone, anywhere, easy access to the digital economy, by bringing a 1000x improvement in blockchain speed, scale and cost.
We got a chance to speak to their CEO Beniamin Mincu about the future of blockchain, how they locked down their funding, how blockchain is bring more transparency equity crowdfunding, and why he thinks its important to have team members working on-site (you got it – not remotely!).
Hi Beniamin, thanks for joining us! There’s a lot of competition out there right now for blockchain startups. What’s unique about elrond?
The potential implications of blockchain technology for virtually all business and internet areas has sparked excitement all over the world. Entrepreneurs, programmers and enthusiasts are coming together via specific internet platforms. Virtual teams collaborate remotely and produce various advancements in the field, with the occasional hackathon at conferences that gives their work a temporary boost.
elrond is very different from the space in this regard: all our team members are on-site, all the time – we are in a permanent hackathon mode. Anyone can see this by the rate at which we push out new releases in our public code repositories.
We also have solved some of blockchain’s hardest problems, have a clear adoption strategy, are propelled by incredible partners like Samsung and Binance, have glued together a hive-mind global community and are looking to release complementary products as part of our grand design. But executing the above are clear consequences of our non-stop on-site hackathon mode.
What is your opinion on the status of the blockchain industry today?
There are two distinct sides of blockchain which can be observed. The first one newcomers encounter is related to the price of Bitcoin, the cryptocurrency markets and its volatility. A lot of startups and companies dedicate their efforts to this area, trying to capitalize on the promise of an alternative internet currency and the new related financial instruments.
The other side of blockchain is the increasing amount of silent workers that are building the infrastructure to advance the more complex implications of the technology. Industrial applications, smart cities, data markets, information privacy, encrypted communications, anonymous collaboration and so many other fields are being silently revolutionized by patient builders.
Both these sides will eventually converge to change the internet forever in ways that, if done right, will be imperceptible in the experience of the daily user, but with important implications to security, privacy and cost efficiency. Before we get there, we must understand that it is still very early. In a word, we would define the blockchain industry as “nascent”, even 10 years after Bitcoin was released.
How, in your opinion, is blockchain contributing to startups raising funding, via crowdfunding for example?
Funding a blockchain-related startup was very easy until not very long ago. A whitepaper, website and some half-famous team member could secure €30 million in a matter of minutes, not more than 2 years ago. That goldrush-like sentiment has cooled off right now, but there are still a lot of crowdfunding related initiatives.
The most important change blockchain technology is contributing to the crowdfunding space is to add increased transparency in the funding, spending and product delivery. The emerging “Security Token Offering” model, in which traditional startups leverage blockchain technology to sell equity, is seeing moderate success already.
As awareness increases and regulation in the various jurisdictions becomes more clear, blockchain technology will further add transparency, increase trust and decrease costs for existing crowdfunding processes.
How do you see the industry changing in the next 5-10 years?
We currently refer to the industry as “the blockchain space”, as it is relatively still small and all the various initiatives are perceived to somehow fall into the same category just because there is a blockchain component to them.
Much like how “the internet space” was irreversibly fragmented into many different types of business verticals with specific goals and intended audiences, so too “the blockchain space” will eventually be absorbed into the larger “technology space”, “fintech” et al, with several key components soon to be inextricably linked to areas like “money” or “data privacy”.
elrond is the 2nd best funded Romanian startup. What is your funding strategy?
Before we went out to seek funding, elrond was privately supported by the founders. The goal was to incentivize research about the problems in the space at that time (circa 2017), potential solutions and the roadmap towards solving them with a truly innovative architecture.
Once that was crystal clear, we reached out to the investors we knew appreciated the underlying technology and understood the solid research and groundbreaking results. Sounds easy when talking about it, but breaking through the many filters these funds put up to funnel their investments was a lot of hard work.
We are now proud to be backed up by “smart money” – senior investors who understand the value we create and help us overcome the many obstacles we encounter via their experience and network.
You have a team with backgrounds in big companies like Google, Microsoft and HP. How have you gone about building your team?
Finding the right people to solve the complex problems that we are tackling is a matter of finding the right skill set stemming from relevant experience at similar companies, or so talent hunters would tell us. But just how highly organized research leads to nothing new, so too hiring the best CVs in the field will likely lead to nothing new.
Our team is made of highly educated and competent people who share one mandatory quality: they build and shine in an environment of mutual respect and open discussions. We acknowledge each other as different-minded people and articulate constructive feedback, creating an environment where there are no silly ideas and stupid questions.
What has been your biggest challenge up until now?
There were many situations in our history where we struggled to see the way forward. There were times when we felt like the problems we set out to solve were insurmountable. Then we felt like the bleeding edge of innovation was not appealing enough to investors. Our technical implementation had to be started over completely at some point. We saw long periods of time where our growing efforts were met by an ever increasing negative market sentiment.
And the list could go on for a while. The only means of breaking through these deadlocks, and the ones to come, was by the team pulling together and pushing even harder, especially when it was needed the most. This is also our hardest ongoing challenge – scaling the team with the very special kind of people that make elrond what we are.
You were founded in Romania. What is your opinion about starting up there?
There are many bureaucratic hoops to jump through when starting a new business in Romania. But the environment is overall business friendly, especially for tech startups. There is a lot of local expertise available and the overall environment is very effective in terms of costs, with very good infrastructure available at reasonable prices.
There is still a lot of improvement possible in terms of governance and administration, but with the right network and careful planning, Romania can be the perfect starting point for a tech startup.
What are your tips for other founders working in blockchain?
The number of startups in the area can seem intimidating at first, so it’s important for founders to come up with a very specific idea and realistic execution plan, which should be the basis for reasonable founding. The gold-rush feeling and related opportunities have all but evaporated. Bringing a successful blockchain startup online now requires perhaps a lot more hard work than some other fields, due to the large amount of competition and scarcity of resources.
But the next Amazon and Google will come up from the blockchain space and there is still a lot of opportunity to be discovered. New founders should thus arm themselves with knowledge, ambition and patience to grow their idea into the next big thing.