Mark Jeffrey is the award-winning co-founder and CEO of Guardian Circle, a service tackling an extremely critical industry most of us take for granted… emergency response. He’s also a serial entrepreneur with five exits, a published author, named one of ’50 to Watch’ by Variety, and worked closely with some of the biggest names in tech including Jason Calacanis and Travis Kalanick.
Previously, Mark founded and sold The Palace to Communities.com in 1998, Zero Degrees to InterActive Corp/IAC in 2004, Mahalo, and ThisWeekIn. The Palace was selected ‘The Best of 1996′ by Entertainment Weekly, secured a Webby Award nomination, “Cool Innovation of the Year” nomination and the Chicago SUN-Times’ Best Website in 1998. Prior to joining TargetClose, Mark served as the founding CTO of Mahalo.com, backed by Sequoia Capital, CBS, Newscorp and Elon Musk. I had the pleasure to interview him to learn more about his thoughts on cryptocurrencies and the upcoming blockchain revolution.
With the big diversity of ICOs and altcoins and your experience in tech, can you tell me about the most interesting projects you are looking at in the market right now?
Altcoins are alternative cryptocurrencies launched after the success of bitcoin. They are also better substitutes to bitcoin, which being a first-generation P2P digital asset, is incredibly volatile and risky.
NEO and EOS technologies and ecosystems both look very exciting to me. Each are very solid third-generation coins that fix a lot of the issues with Ethereum and other second-generation coins. EOS tokens and NEO NEP-5 tokens have a lot of potential.
With the NEO ecosystem, you have the NEON wallet, which is end-user friendly. Much more so than MyEtherWallet — even your Mom could use it. The NEON wallet allows you to participate in NEP-5 token sales directly in the wallet. You can find out about new investment opportunities and get in without going anywhere else. There’s also an API that lets you integrate NEON into any app — so once you create NEP-5 tokens, using them in an app ecosystem is very, very easy.
I also like ICO’s where there is solid, working and deployed product even before the first coin is ever sold. Guardian Circle is of course one; WorkCoin (decentralized gig economy with 0% commission) is another. There’s also QLink — a NEO token — for mesh decentralized mobile networks where you get paid for lending your device to power the mesh network. Solid products with experienced management and seasoned tech teams are the most exciting ICO’s to me.
From your entrepreneurial mindset, what are the things that most excite you about ICOs? Is there anything that worries you about this new ecosystem?
It’s clear there is a massive, multi-billion dollar, pent-up demand worldwide to invest in tech companies. Beyond Kickstarter and GoFundMe, this demand is at such a scale that it’s entirely realistic to bypass Sand Hill Road to fund projects directly for the very first time.
This means that projects that will never get funded by venture capitalists — because the founder didn’t fit a certain profile, because the project doesn’t fit into a box (the Uber of X, etc.) — can now actually become real. The entire world now has a say in what it wants to be built — not just a very small number of people concentrated in a single geography. That is massively exciting.
Ethereum itself is a great example of this. Ethereum never would have been funded by Sand Hill Road so the team did an ICO in 2014. Just three years later, Ethereum turned out to be the №1 investment in the world in terms of ROI.
ICO’s also allow for different success models and ‘success sizings’. The game venture capitalists play requires them to invest in 10 companies, nine of which fail, and one of which must become a Facebook or Google-level success. That means every company they invest in must be something they think has ‘unicorn potential’. And any company that even moderately succeeds is then pushed to ramp up wildly — whether this makes sense for the company or not.
There is no room for a more sober kind of success. A $100M or $300M valuation is simply not good enough, even though that may be the best natural size for that company. VC’s tend to destroy companies, pushing them to an unrealistic massive scale rather than allow a moderate success to stand.
By contrast, token sales allow for a much wider variety of ideas and ‘success sizings’ to occur. This is far better for entrepreneurs and for the token holders, who can still make a very nice profit since token holders don’t require unicorns.
Token sales are also a lot better for investors. Tokens are always liquid, right from the beginning. In the venture world, returns take 7–10 years on average. This means that a company must IPO or be acquired for you to get your profits. ‘Always on liquidity’ is an unbeatable feature.
What is frightening are the number of ICO scams — companies that have no intent to build anything, yet collect money and vanish without a trace (like Maksim Zaslavskiy). However, this has been a good learning exercise. The worldwide public is learning to invest for the first time. They’re learning to discern — very quickly — between legitimate founders and projects, and those that seem ‘off’. These new investors are communicating with one another on Telegram and other channels, they’re comparing notes, and telling each other to DO YOUR RESEARCH. A whole new angel investing culture has arisen worldwide, really overnight. Although they’re amateurs now, they are quickly becoming more sophisticated.
The other worry is the United States falling further behind in missing the next big tech wave. Right now, the regulatory climate in the United States is so chaotic that its simply easier to domicile your token sale offshore and prohibit US participation. This is really bad for US citizens, who are now effectively barred from participating in token sales.
Think about that: the most important technology revolution since the internet is underway (blockchain), and the United States has zero access. It’s as if the US barred investing in internet and mobile companies back in 1998. Google, Facebook, Amazon and Uber would have sprouted everywhere else but here.
I’m hopeful the United States will move to make the environment ICO-friendly. The state of Wyoming has passed legislation recognizing utility tokens as a new asset class. This is a great first step but first, the US has to get serious about making the legal environment crypto-friendly.
Who are the people that you respect the most in the blockchain arena and why?
Brock Pierce — There is no question that Brock was one of the inventors of the modern ICO with MasterCoin. He also did a LOT for bitcoin and the early crypto ecosystem. He understood what crypto was and what it would become very, very early — and he never had a single doubt. He is one of the most important figures on the scene.
Dan Larimer and David Moss — These are the two main tech leaders behind EOS. Both have very impressive track records of creating working, deployed products. If they are involved, what is being built is both brilliant and real.
Da Hongfei — CEO of NEO. He is a great leader, and has been spending a lot of time in politics with governments in the East, paving the way for NEO to be the dominant platform in that region of the world.
Vitalik Buterin — Ethereum was an important second step after bitcoin but I personally don’t believe it will ever scale properly. Ethereum will likely become MySpace: the also-ran that set the stage for what comes next. Something else — a third-generation coin like NEO or EOS — will become Facebook. Vitalik’s contribution was essential and historic. I doubt he will fade away personally.
What is one thing you feel either investors or blockchain startup founders usually miss and you feel is a must in a project?
The one thing missing is a working product or MVP. This is the giant hole in most coin-oriented companies. These entrepreneurs are very good at the crypto end of things, the ICO end of things, but they have never created a consumer or B2B product.
Many are not good at UX/UI. Ethereum didn’t even have a UI (it was all command-line based) until MyEtherWallet came along and finished their product for them. They don’t know how to get their app in the App Store, much less adopted by users.
One example of a company that has done a stupendous job getting this right is Abra. Abra just released a wallet that is also an exchange — but doesn’t feel like an exchange at all. You can ‘shape shift’ between over 50 fiat currencies and 20 crypto’s.
Originally published at medium.com