The Six Challenges Facing Crypto CEOs
Being the CEO of any organization is challenging, but being the CEO of a crypto startup comes with an entirely new set of uniquechallenges.
History shows that
cryptocurrency markets don’t always play nice. Valuations fluctuate. Technologies evolve, and regulators work to make crypto work smarter and safer within the digital world. Challenges range from mild headaches to catastrophes that can take a bite out of a company's bottom line, and crypto CEOs must be ready to tackle these emerging challenges.
Many cryptocurrency leaders (and leaders of companies with ties to crypto) fail to fathom the dangers of being unprepared and don’t anticipate the obstacles they will have to overcome. I’ve learned a lot as a crypto CEO over the past three years, leading a team of over 40 employees worldwide across four different offices. These are the top challenges I've identified that other leaders in the crypto space should be mindful of.
Every investment market is volatile, but crypto markets experience volatility in an entirely new way. The unpredictable future of crypto requires CEOs to maintain a long-term perspective in the face of wild short-term swings. The volatility is prevalent today, often dubbed the “Crypto Winter,” an industry state where investment and adoption into crypto have remained stagnant.
Smart as they are, crypto CEOs must remember that there’s no Warren Buffett of digital currency. The markets are too risky and too speculative for companies to place big bets on individual currencies and see sustainable success. Businesses that added tons of risk to their portfolios in late 2017 learned that lesson all too well. In today’s crypto markets, the risk-averse approach will be the best bet until (and unless) things finally quiet down.
More than anything else, CEOs are leaders of people. Without the right staff, crypto companies can’t respond to market challenges and prepare for the future. Crypto competency is as rare as it is valuable, which means leaders of crypto companies must be vigilant in their efforts to attract and retain the best technical and nontechnical talent. But, doing so can be exceptionally and uniquely difficult because people want to work with credible companies. The world of crypto has many nefarious members and even companies that border on and pass into the gray zone. It can also be challenging when onboarding new staff that knows very little about the principles and core of crypto and
Aligning yourself with other legitimate organizations, joining in partnerships and following compliance is a great way to show your credible status as a company and employer. Of course, salaries matter, especially in competitive markets, but today’s employees value culture as much as anything. People in crypto want to learn and grow as they work at the forefront of an exciting new technology. Companies should encourage mentorship and collaboration among employees to help new hires learn the ropes quickly.
Every company must be careful about how it spends and tracks its funds, and this is especially true for crypto companies. Crypto CEOs can’t be too careful forecasting with both crypto and fiat currencies on the balance sheet.
When investing in the future of promising but volatile markets, crypto businesses can’t let small mistakes slide. A two-year run rate could shorten to a few months if the company overexposes itself to risky assets before a downturn. Leaders must weigh whether to buy or sell next to their tolerance for risk.
Crypto arose partially out of a desire to escape traditional regulation, but it won’t stay in the Wild West for long. As regulators rush to control the crypto scene, companies should proactively plan to comply with new rules and be deliberate in regards to taxation and regulation.
Not many regulating authorities punish companies for being too prepared, so crypto CEOs should err on the side of caution. Detailed records and compliance-specific savings will help soften the blow if anything goes awry overnight. Because of the extra risk, crypto companies need to budget more money and time than other businesses in order to account for potential regulatory swings.
Blockchain continues to evolve at an incredible pace. As more companies get involved in the space, new and disruptive advancements will change the way crypto companies operate — and how their partners engage with them.
CEOs of crypto operations can’t afford to play catch-up after the fact, but they also can’t adopt new technologies without vetting them. Every crypto leader should make a point to read industry publications, regularly consult with technology experts and keep tabs on the latest developments. Even if those advancements don’t seem immediately relevant, the company may need to implement changes during future integrations.
Crypto’s inherent volatility and high-profile scams give these companies a bit of a sketchy reputation in the eyes of potential customers. Marketing teams must be energetic and active on all platforms to keep a brand top of mind in its space and in the know on current issues.
Advertisements get expensive quickly. As Google, Facebook, Instagram and other social platforms continue to ban crypto ads, marketing teams are getting creative about how and where they engage with their audiences. CEOs must be willing to let marketers explore unusual avenues to boost the brand and grow the customer base.
Cryptocurrencies won’t disappear, but plenty of crypto companies will close shop before things settle down. CEOs of these companies must be ready to tackle these challenges and more if they want to weather the storm.
With a mix of caution, clarity and commitment, successful crypto leaders will enjoy the substantial fruits of their hard work in time.