What Makes a Successful CEO of Blockchain Company
Richard Pooley, Partner and Head of the Blockchain Practice at Odgers Berndtson, looks at the kind of background a CEO needs to successfully lead and grow a blockchain business
Despite all the hype surrounding it, blockchain technology is already recognized as a legitimate disruptor across a multitude of industries. Virtually every US and European financial institution is studying blockchain options, with significant investment budgets approved. Beyond the financial services sector, this technology can revolutionize entertainment, media, manufacturing, government, consumer retail, and personal identity security, to name just a handful of other areas.
The plethora of “get rich quick” predictions surrounding NFTs and the cryptocurrency space are diminishing as blockchain companies concentrate on building revelatory and sustainable businesses, instead of obsessively focusing on valuation enhancement in preparation for a sale, or ICO.
But given that this sector is still relatively nascent (albeit evolving rapidly), how can you truly evaluate what the CEO of a successful blockchain business should look like?
The first priority for a blockchain CEO is to never forget the needs of your customers and potential customers, whether they are a B2B, B2C or an industry ecosystem play. The impact of blockchain is already affecting virtually all of us in our daily lives, but we care about whether or not blockchain can help us find better practical solutions to our everyday problems, rather than what the technology looks like that underpins it.
Also crucially important is the need for a CEO to use blockchain technology in conjunction with other new technologies like IoT and AI. Collectively this will help them understand what their customers want, and whether a customer actually needs that blockchain product, and if so, when?
However, understanding the target market of a particular blockchain company (and therefore how a CEO makes it successful), depends on what category of blockchain company it falls into. When asked to define a blockchain company, most people think of payment companies, supply chain companies, digital identity companies, digital transformation services companies, and digital asset companies, i.e. companies for whom blockchain is the key underlying innovation. And yet the CEO for a blockchain payments company may well have a quite different profile to someone that runs a blockchain supply chain organization.
Furthermore, as crucial as it is to understand your individual target market, there is also a need for the CEO to constantly develop their networks in their relevant blockchain space, including developing close relationships with key external partners. This enhances the ecosystem that the CEO needs to build around their core products or services, which also includes creating the right culture within the business.
Almost all businesses run on specific blockchain mainnets, and many use technology solutions or applications built by other blockchain businesses. Being part of this ecosystem and having strong relationships with the people in it, is core to leading a successful blockchain business.
More so than with other high growth technology companies, blockchain companies tend to contain an eclectic mix of solution architects, sales and marketing professionals, investors, and usually key innovators. These innovators are the people responsible for conceiving and developing the technology upon which the business is built, and their value cannot be underestimated.
Therefore, the successful CEO will need to unite the working styles and expectations of both the investors and the technical innovators to try to maximize the company’s harmonious culture and commercial performance.
Fundamental to a CEO’s primary mission to lead their blockchain business through its early stages of development, is their ability to lead various rounds of successful fund raising. This will require the individual to have built transactional relationships with a wide range of investment firms and gained significant experience of successfully developing and implementing a blockchain & NFT strategic business model.
Given that this sector is still comparatively immature, the pool of individuals who genuinely possess both of these credentials is unsurprisingly, quite small.
As the blockchain sector continues to consolidate and organizations develop strategic operating models that focus on long term consistent growth, every blockchain CEO needs to recognize the importance of the regulators and the increasing need for effective regulations which keep pace with the rapid evolution of the blockchain and cryptocurrency sector.
Ironically, despite the existence of a large number of cryptocurrency investors and blockchain firms in the US, the country has not yet fully developed a clear regulatory framework for the asset class. The SEC typically views cryptocurrency as a security, while the Commodity Futures Trading Commission (CFTC) calls Bitcoin (BTCUSD) a commodity, and the Treasury calls it a currency.
Right now is perhaps the most exciting time to lead a blockchain business. We are in a new phase of adoption and global experimentation. More and more people and businesses are getting on board and understanding the huge benefits of blockchain technology. But it’s important to keep in mind that while blockchain is disruptive, it is bound by the same rules as most businesses.
Above all else, blockchain companies need to find good talent, build strong cultures, and deliver solutions that address the most important issues that their consumers face.