The buildout of the working parts of the new financial ecosystem gains momentum amid mixed signals and uncertainty in the markets. Perhaps the biggest way to control for best outcomes lies in the creation of trusting collaboration between those who manage the Now and those who are building the New.
Broad Adoption Continues
In the current market sometimes it may feel like both the bears and the bulls are asleep :) but adoption of crypto and Web3 capabilities continues to advance across multiple fronts:
- Fidelity to add Bitcoin to 401k plans this summer
- The first house purchase with crypt collateral opens the door to getting home loans without selling your crypto (ie without incurring a taxable event).
- Goldman mulls NFTs for investment banking “exploring NFTs in the context of financial instruments" per Mathew McDermott, global head of digital assets at Goldman Sachs, at the Financial Times Crypto and Digital Assets Summit this week.
- Central African Republic - one of the poorest nations in Africa - passes legislation creating a framework for crypto regulation and establishing Bitcoin as legal tender.
- In Latin America Panama moves toward crypto adoption and Buenos Aires rolls out new crypto provisions including the ability to pay taxes in crypto.
Some of the language used in the Latin American announcements makes me wonder if this is the start of a new “offshore finance” hub based in Latin American vs the Caribbean? Are Latin American leaders seeing this as a chance to recreate offshore finance success that Caribbean nations have enjoyed (Or is this just a misunderstanding of the financial history of the region)?
Amid these developments, iconic invester Cathie Wood is doubling down on her earlier prediction that Bitcoin will hit $1M by 2030.
Q1 Review and Outlook
Coinbase Ventures has just released their Q1 Review and outlook - with excellent insights and charts in the full text here. In addition to the adoption noted above, the buildout of crypto and Web3 infrastructure seems to be accelerating.
In spite of the crypto market downturn Q1 2022 set another record for crypto and Web3 deals with large activity in the cross chain infrastructure.
As noted before in this newsletter, the industry seems to be shifting from the FOMO based participation of 2020-2021 to more of a value based adoption here in 2022...ie from quick wins to long term value. A lot of building is happening right now. It may not be as splashy and fun as some of the previous phases, because this industry is growing up. There are working parts that need to be engineered and integrated before crypto can shoulder the heavy responsibilities that come with being the better faster cheaper more inclusive orchestrator of the world's economic activity.
Coinbase Ventures has invested in 300+ crypto & Web3 teams building everything from layer 1 protocols, Web3 infrastructure, centralized on-ramps, decentralized finance, NFTs, metaverse technologies, developer tooling.
Bonus: Crypto Reading List
Highly Recommended: If you or another leader you know is trying to get up to speed on crypto, don't miss this an excellent reading list curated by Jump Crypto. Links to best papers and resources organized in a learning progression, with coverage of both technical and business concepts you need to know.
Getting the Now and the Next to Row Together
Change leaders - whether in technology, finance, healthcare or other fields, often find themselves living and working in two worlds:
- The Now - the status quo and norms in which the current systems operate, and which the world depends on for mission critical functions.
- The Next - the emerging next generation capabilities - which promise to be better faster cheaper and more inclusive - and which often can be mutually exclusive to similar functions in the Status Quo
The Now and the Next represent two kinds of people, who likely have a tendency to row against each other. How do we align and row together?
This is a critical dilemma for so many change scenarios across our world today: how is it possible to be objectively critical of the status quo - and remind others of the urgency to drive change - while at the same time preserving your ability to work with and not alienate people who have responsibilities within that status quo?
The starting point
Its helpful to start with the recognition that you - if you consider yourself a builder of the Next - are also part of things that aren’t optimal, aren’t the best, and aren’t the way they'll be in the future. And likewise if you are an owner of the Now, you may be keenly interested in innovating and driving change.
From that lens its easier to realize that all of us are really in the same boat - we all have things to learn. Its not accurate think in terms of us vs them. Its just us. We have to work together to learn and do better.
Whether we are among those who embrace the Next or those who embrace the Now, we need each other! Yes, some of us are more tied tightly to and maybe have a stake in the status quo, while others of us have a stake in the next chapter. That’s OK we still need each other.
Carefully planned transitions
Think of this analogy:
If you’re adding a new addition to your house, or if you’re setting up a new system, there is always an element of the old that can’t just be unplugged "right now." A transition is needed. Especially when thousands or millions of people depend upon what is being transitioned.
The transition has to be carefully and thoughtfully planned and executed with close partnership between those who own the Now and those who are building the New.
This is tricky. Working relationships always require the management of personal fears:
- Those who own the Now may fear the Next isn't fully baked, and there will be big messes to clean up. Owners of the Now - the highly effective ones - are trained and wired to be wary of unnecessary or careless change because it causes instability and risk. The messy history of innovation fully justifies their perspective.
- Those building the Next fear that those who own the Now will resist and delay the Next. Builders of the Next are hard wired to be very sensitive to delays and resistance to change. Their fear also is justified: those who benefit from the current status quo may resist change because it threatens the margins and benefits they receive from the current system.
Working in a way that builds trust
The only solution that works is building trust. We have to work closely together in a way that increases our ability to believe in each others motives:
- The Owners of the Now need to have reason to trust that the Builders of the New are not going to run ahead of them and ignore their expertise and perspectives.
- The Builders of the Next need to have reason to trust that the Owners of the Now are not milking the status quo for their own comfort, and are truly committed to moving toward change every day.
This kind of working relationship model requires change leaders to question the popular "disruption" mindset which sends vibes like:
- You're obsolete, You will be replaced
- We'll do to you like Netflix did to Blockbuster
- We're the future, You're Not.
These are alienating, threatening messages. Their most likely result will be to slow down the important change, and spawn mistrust and wasteful conflict.
In addition to trust, there needs to be a healthy respect for the roles played by the Now and the Next:
- Those who manage the Now, have the heavy responsibility of managing stable operations of mission critical functions for their part of the world's systems. This is not easy work. It is indispensable. The Builders of the Next could not do what they do, if the Owners of the Now were not doing what they do.
- Those who build the Next, have the heavy responsibility of de-risking the future while providing future job security and continued relevance for the Owners of the Now. This also is not easy, and it is indispensable.
And keep in mind, these roles can reverse. Today's new systems are tomorrows legacy systems. Today's operators can be tomorrow's innovators and vice versa.
Collaboration vs acquiescence
To be clear, non of this should suggest that its ok to condone wrong behavior - inequities, damaging or harmful practices need to be called out. But in almost every example that I can think of it is possible to objectively point out where incumbents are contributing to things that are wrong, while at the same time recognizing that people within those incumbents are trying very hard to change the wrongs and do what’s right. In addition those incumbents are usually making progress on changing and have advanced - perhaps slowly - beyond where they were at some previous point. The art is to continue that progress and even accelerate it. Work together on new solutions that allow it to happen sooner.
Its important to help people see the clear line between between "milking the system" versus changing it. As noted above, systems that exist today often provide certain margins and benefits for insiders, while tossing problems and inequities to the rest. So yes, those who benefit from the current system may be tempted to resist change.
Perhaps this is what makes change leadership such a fascinating discipline to learn about: it resides at the crux of being
- alert to the fears and trust levels of your collaborators
- thoughtful about transitions
- open to learning how to do better.
It just may be the Olympics of diligence, humility and collaboration.
Birdcast rolls out new Migration Dashboard
Previously Birdcast offered predictive and realtime maps showing migratory activity for each evening. Now they have added a new Bird Migration Dashboard with additional tools that show much more detailed radar based measurements for nocturnal bird migration. You can enter a zip code and see specific data from that location.
New Milestone for Legendary Iditarod Dog Sled Race
This past month Apayauq Reitan became the First Trans Woman to Complete the Iditarod Trail Sled Dog Race. Historic first and a wonderful achievement for Apayauq set against the backdrop of the Alaska wilderness.
In the story link above, I was especially touched to read about the Red Lantern award given to Apayauq. It is given to the last finisher, and has the significance of "We are all home safe."
For me that phrase was stunning and inspiring reminder that we all need to care for our trans neighbors - young and old - in such a way that ALL feel that they are finally "home safe." Each of us can do our part through kindness and support.
Thanks again for reading and sharing. Hope this helps you get all S3T up for success! Feel free to forward this to a friend and continue the conversation on the S3T Discord, Twitter or LinkedIn. Have a great week ahead!
Opinions mine. Not financial advice. I may hold assets discussed.