I want to share a little bit about my thoughts on the ShapeShift layoffs. And a lot of empathy I’m having for Erik Voorhees right now. So first off, I think it’s pretty cool that he was upfront about these layoffs. There are definitely things that companies can do to not let it leak out to the public that there have been layoffs. There’s lot of techniques for doing that, [00:00:30] if you’re into HR. And he didn’t do it. He didn’t do any of that, any obfuscation. He wrote a Medium post about it, and because he wrote a Medium post it was covered by almost all the crypto publications. CoinDesk. The Block, etcetera.
So the headline is that they let 37 employees go. So, if you haven’t heard of ShapeShift, which is unlikely if you’re in the crypto space. It’s a non-custodial [00:01:00] exchange. So, kind of think about exchanges as existing on this continuum between centralized exchanges on one extreme, and decentralized exchanges on another examples of centralized exchanges would be like, Coinbase or Binance. And then on the decentralized extreme, you would have decentralized exchanges like Radar Relay, Paradex, [00:01:30] etcetera. And then there’s kind of hybrid decentralized exchanges like IDEX. And if you’re interested in decentralized exchanges and the spectrum in general, check out the latest [inaudible [00:01:43] podcast we’ve done about this. It’s a two part series about decentralized exchanges. It’s a really deep dive. It’s much more professional than this podcast.
So anyway, they let 37 employees go. And when I read his blog post about doing this, [00:02:00] the thing that stuck out to me was his statement that they made 1,000 mistakes. But the most thematic of them has been lack of focus. And I really can resonate with this. You know, I think this is something that, a mistake I made in the past, and at previous companies. I think if you’re a product person, [00:02:30] and you love product, there’s a certain joy that comes with launching a product. And, when you launch a product and it has immediate success, like ShapeShift did. I mean, they grew incredibly fast. I think they grew 3000% in 2017.
But when you have that kind of immediate success, you think it’s, or you can think it’s pretty repeatable, right? That you just got, you got the “It” factor and you can do it again. And again, [00:03:00] and again. So, ShapeShift not only did ShapeShift, which was their core business and brought in almost all of the revenue. They created CoinCap, which is a Nomics competitor, I guess. A CoinMarketCap competitor, etcetera. And so, that was at coincap.io. They purchased KeepKey, which is a hardware wallet. They created a smart contract, [00:03:30] like index fund thing called Prism, which I used. It was really great, I actually liked it quite a bit.
But they did a bunch of things that weren’t essential to their core business, probably ’cause they had a bunch of cashflow, and they could, right? It’s fun to create products if you’re a product person. And Eric Voorhees is. But I think [00:04:00] that’s really hard to scale. I think the first thing that’s hard to scale around creating multiple products is just the founding DNA. Like whatever confluence of circumstances and talents and people that led to your existing success, it’s generally hard to reproduce. Like most startups fail. And whenever they work, it’s a combination of skill and luck and timing and [00:04:30] a whole bunch of other factors, right? To try and do that over and over again with product after product, when you’re still a startup, right? Like not when you’re at Salesforce size, or Google size.
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