The popularity of cryptocurrencies has brought to fame a crop of industry leaders. One such person is Changpeng Zhao (CZ), CEO of Binance – the largest crypto exchange based on daily trading volumes globally.
Binance accounts for nearly 70% of all crypto volumes globally making it the dominant player in the space.
Besides facilitating crypto exchanges, Binance is one of the main players in the race to develop blockchain infrastructure. In 2017, CZ wrote a Linkedin post where he outlined his thought-process around deciding to do an initial coin offering (ICO).
ICOs are a method for startups (paticulary blockchain projects) to raise funds by offering crypto tokens to investors or to the public, in exchange for fiat currencies or more established cryptocurrencies such as bitcoin. Also called token sales, the first ICO, by a project called MasterCoin, occurred in 2013, before Ethereum also issued an ICO in 2014.
However, 2017 saw a boom that sent ICOs into popularity. Still, ICOs were fraught with suspicion and risk since cryptocurrencies and blockchains were not an established fields of technology, and often investors relied just on whitepapers to make their decisions.
Recently, Binance celebrated its 4-year anniversary. To celebrate the exchange’s impressive success over this short period of time, CZ took us back to the early beginnings of the exchange.
Here are some 3 lessons that any startup in the blockchain and crypto space can pick and learn from this letter penned 4 years ago just one week after Binance completed its successful ICO.
Build a Strong Network
One of the key lessons from CZ is to build a strong network over the years.
When venturing into doing the ICO, often CZ relied on relationships he had built over years to support his organization. For instance, when he had no customer support staff to handle the requests of almost 5, 000 investors who were interested in his project, he did not have to stress too much. An “old friend” he had worked with 2 years before, reached out and wanted to participate in this new project in “anyway possible.”
As a result, within a three minute conversation, CZ had secured a “full experienced exchange customer support team.”
CZ also relied on his network for advice, such as bouncing ideas.
Build a Strong Reputation
Another key lesson CZ offers is to build a strong reputation. People reached out to support his organization just because CZ was running the project.
For instance, the response of some investors who received their whitepaper was, “Can’t understand a thing. But we should invest. CZ is always lucky.”
Finally, and perhaps the most important lesson that CZ offers in his post is to move quickly. Before he made any move first, CZ had to establish if he was truly passionate about his project.
For that, he asked himself 2 questions:
* If I could only do one thing for the next 10 years, what would it be?
* If there is one thing you must do in this life, what would it be?
With answers to both questions being ‘YES,’ CZ moved quickly with his intention to do the ICO.
He advises that moving quickly has its opportunity cost too. However, not everything is going to work out fully as planned.