ConsenSys, the Ethereum incubator and overall promoter and investor in the Ethereum ecosystem is about to undertake a strategic shift away from underperforming projects towards more rigour and accountability, a shift the entire crypto community and industry can learn from.
News of the strategy shift was first reported by Breaker who got access to a letter which ConsenSys’ founder and CEO Joseph Lubin sent to employees as well as interviewed Lubin about the new strategy.
ConsenSys 2.0 – From Experimental Lab to A Rocket Ship with A Destination
Based in Brooklyn New York, ConsenSys was founded by Lubin in 2015 has now grown to over 1,100 employees globally. The private company covers a wide range of activities including incubating Ethereum based startups, developing Ethereum products in-house and providing venture capital and advisory services to other Ethereum based startups.
Lubin in his letter to employees and his interview with Breaker identifies the increasing competitiveness in the crypto universe as the impetus for the shift.
ConsenSys plans to look through their vast array of projects and trim those which are underperforming. The new focus will be on return on investment, the benefit to the Ethereum ecosystem and social good in a move to improve efficiency, accountability and ultimately revenues.
In the letter to employees, Lubin provides an analogy for his vision of where the company is headed.
Entering into this new phase of the company has also likely been precipitated by the ongoing crypto market sell-off which has hurt Ethereum particularly hard.
Ethereum Down but not Out
2018 has been a rough year for crypto and Ethereum is no exception. ConsenSys which was at least partially funded by Lubin’s personal crypto wealth gained as one of the co-founders of Ethereum must be feeling the pinch of Ethereum token ETH’s nearly 85% drop in price year to date. Performance against the benchmark of crypto, Bitcoin (BTC), has also seen ETH slide in value.
Ethereum Performance YTD in USD and BTC
The reduction in ETH value has also begun to affect other Ethereum related businesses. With projects such as Steem laying off more than 70% of its staff, leaner times are sure to come for projects and companies who may have based business plans on crypto asset price peaks.
For companies such as ConsenSys who have bigger bankrolls than many projects thanks to Lubin’s wealth, there is time to refocus. But for others who may have raised money during the ICO boom of late 2017-early 2018 cash may be getting tight.
However, there is still reason to be optimistic about crypto if you step back and look at the bigger picture. The technology and user adoption have come a long way in a short amount of time as Lubin wasn’t shy to highlight in a recent tweetstorm.
Market cap doesn't reflect activity. Decentralized networks are growing.
— Joseph Lubin (@ethereumJoseph) December 1, 2018
Is this a Sign of Crypto Growing Up?
With crypto asset prices down, the weak projects in the crypto ecosystem who aren’t able to generate interest or funding will begin to be shaken out. Just as Consensys is beginning to trim the projects from its portfolio, so too will the market begin to write off the cryptocurrencies and ICOs who can’t demonstrate a viable use case or the ability to scale.
Attention can now shift away from the day to day volatility of crypto asset prices and towards evaluating different projects business case and ensuring the team is executing towards a roadmap that will provide utility for end users.
As Lubin explained in his interview to Breaker regarding Consensys projects, until now ‘it has been enough to show up, it has been enough to do something cool, it has been enough to make a splash.’
But being cool or making a splash isn’t enough anymore. Now its time for crypto projects to grow up begin to look to the next stage of the industries evolution in growing a substantial user base and providing real-world utility through a sustainable business model.
The results from this next stage in the evolution of the crypto industry likely won’t be seen for some time, but companies and projects that begin to refocus on performance now will set themselves up for success down the road.