#01 – The Serial Entrepreneur
So I Just Met Pascal Leblanc a few Fridays ago. Pascal is a serial Bitcoin entrepreneur and blockchain expert. He built his first company back in 2014 and is now working on different projects, still very active and willing to disrupt organisations with blockchain technology.
We discussed Bitcoin, entrepreneurship, how to handle failure, what to look for in the blockchain space. Jump in for an overview of what is being built in Montreal.
On the menu: - Bitcoin the Tech Crush - Success and Failure: Two Sides of the Same Coin - What to Look for When Starting a Business? - The Current State of the Industry
Bitcoin the Tech Crush
Welcome Pascal, I am super happy to meet you. I have done some research about you and I’d say in a few words that you are a learner, an entrepreneur and a very curious mind. You started studying blockchain in 2011 and 3 years after that you built your first company and you built several companies afterwards. So, my first question would be, how would you describe your first interest in blockchain technology and Bitcoin? How was it in 2011? What lead you to have this interest?
I describe with two words that specific moment when I first encountered Bitcoin back in 2011: tech crush. Having a technical background really allowed me to appreciate deeply the potential of Bitcoin. Most developers they just make useless projects just for the sake of coding and recoding snake and other games and whatnot.
Ever since I got exposed to Bitcoin and blockchain tech, everything related to coding, 100% of my fooling around as a coder was gravitating around stuff in Bitcoin or mining or cryptocurrencies. The many companies I have built over the years still also revolve around cryptocurrencies or enterprise adoption so it literally was a life changer for me because my interest was so high that I started gravitating my whole coding around that sector.
I think you spent about thousands of hours coding in blockchain technology. You said some coders are playing around with snake games or other useless tools. So, why did you believe that this technology was different from the many other open-source technologies that exist? You could have worked on any open-source source project, but you felt this one was different, is it only the technology or is there an economical aspect that was also considered? Why this one and not another one?
Back in 2011, if you put everything in context, it was a point where Bitcoin and blockchain were not known at all. There were only a few people active in the space. Everything had to be done and it felt like a super recent and immature technology. There were more low hanging fruits, more easy stuff on which I would have an impact.
With other technology, let’s imagine I would want to create a new Word processor, it would be tough for me to build something that has an impact whereas in Bitcoin blockchain, everything had to be done and there were many of small things that had a good impact that could be done. So, it was easier for me to do them.
Also, as the years unfolded, it was easier for me to identify needs. In 2014, having three years of coding experience and exposure to the cryptocurrency space where most people had 6 months to a year of experience, the fact that I was an early adopter gave me a unique position in the growth of that industry compared to other tech pieces I could have built. Of course, when there is a new tech that interests you and you start making money with it you are even more interested. The sheer price of Bitcoin from 2011 to 2014 to 2016, just that was kind of the icing on the cake and got me motivated to the next level.
I totally understand. Basically, I would say that you did an asymmetric bet in the sense that you were very early. A lot of work had to be done, so everything incremental piece that you would build would have a lot of impact. That is very interesting.
I would not call it a bet because that’s what I wanted to do. I did not compromise on any other option. There was nothing on the line. That’s what I wanted to do, and I was doing what I wanted to do so there is no kind of compromise.
So, it was a perfect move in a sense. We have been talking about Bitcoin and blockchain. My question would be since you have been involved in the space in a long time, how would you describe Bitcoin to someone who has no knowledge on the subject. So, let us pretend that you are talking to a listener and the person you are talking to has no idea what it is and would like to have a first idea. What would you say to this person?
Bitcoin is a digital currency, a cryptocurrency. It is like any other currency. It is like a form of asset. It is a form of store of value, but it’s controlled by the users of the Internet. Let’s say USD is controlled by the US government, a country. The currency that represents the country of US is used by people in the US and it’s controlled by its government. I would say Bitcoin is the money of the Internet, so the country of the Internet. It’s controlled by the Internet. So, really nobody, nobody owns the Internet. Nobody came up with the Internet. It’s a network effect that makes it possible. Same thing for Bitcoin. It’s been used on the Internet by people on the Internet. It’s like the federal money of the Internet. Where you have access to the Internet, you have it. It’s 100% digital, there is no bills or coins.
To this person, to a precoiner, someone who has never touched Bitcoin, what advice, what kind of message would you like to send? Would you suggest them to get interested? To pass their way? What would you tell them if you had the opportunity?
There would be two points I would like to highlight to a precoiner.
First one is: Bitcoin is made to be deflationary. A term many people are not used to, but they’re used to the opposite term: inflation. Most currencies are designed to lose value over time. That’s how they’re engineered: there is more and more supply. The supply is always increased but in the case of Bitcoin it’s engineered to gain value as the supply decreases.
If you compare a pair of something designed to be deflationary and you try to compare it to something else made to be inflationary, like Bitcoin and USD, it’s obvious that the deflationary will tend to gain value especially when denominated in a currency that’s being devalued.
That’s one of the important mechanisms when trying to do the comparison with government money, fiat. It’s designed to gain value with the injection of new units diminishing over time. That’s the first point.
The second one is that currently, even as of 2019, there is some risk, inherent risk of owning Bitcoin. You need to control your own keys. There is no kind of bank equivalent or number to call if something wrong happens. Most of the time it’s not on the technological side, it’s not like the Bitcoin chain was compromised, that does not happen. It’s more on the governance side, it’s how people forget their password. There is a hacker stealing it. There is no emergency number you can call. There is a risk in there.
So, to summarize for the listener, the value of Bitcoin is built in a way that each unit is more scarce than what you have with regular money, in the sense that no one can inflate the supply, which means that over time each unit may tend to be more valuable.
And with respect to the risk, I would summarize it as this is a piece of technology where people are put in charge. They become more sovereign and it comes with the downfall that you are responsible for what you do. So, if you are interested in Bitcoin at some point and don’t take the time to learn the good practices, you may face big problems in loss of funds. Because indeed there is no emergency number at all. No one can help you. If you lose your keys, you lose your coins.
There is a certain burden coming with being the owner of bitcoins. There is currently no popular service to do the custody for you.
We can imagine the Bitcoin industry will build those services for the people. We are kind of early, it has only been ten years so we can imagine a future where you would have some banking institutions that provide you simplified bitcoin accounts. Those kinds of services will probably emerge because there will be a need.
Yeah and even if you pay like half a percent of your balance per year. The value of having guaranteed is worth something.
Exactly. I have another question regarding Bitcoin. So, we defined it. We sent the messages to the public. My next question would be, do you envision a way for Bitcoin to fail? If yes, what would it be? How would Bitcoin disappear from the face of the Earth if there is a way?
By failing you mean stop existing?
Yes I know it is a weird question. I am trying to think like someone who’s a precoiner and would say “okay this looks interesting but I fear that this is something that would disappear so I would lose my money or this is a stupid idea”. The idea is to answer the question of the ultimate failure of Bitcoin. Do you think it is doable? Or on the opposite, why would it never fail?
Failure is a generic term. Is it possible it is worth nothing one day is a different question that would it disappear?
Will we be unable to run a node or access a wallet? I would say it is a weird question. If it is wiped out and impossible to reaccess a wallet or rerun a node, a lot needs to disappear way before. Including the Internet, digital storage. If there is a solar storm and every bits of every data gets erased, then it’s possible. There would be way more stuff that would disappear before or at once. The issues that would make Bitcoin disappear from the Earth are not specific to Bitcoin. It does not worry me that much.
Then for it to be worthless….. it’s hard. The way I see it, Bitcoin is the first instance of censor proof digital asset that has some kind of value. I think there will always be a form of digital scarce units that are valuables. Bitcoin as a trademark, will it disappear? I would be super surprised. What is for sure is that people will always want to have stuff valuable online.
I would say that in a sense if we consider Bitcoin simply as the idea of digital scarcity that you can trade online, it’s just an idea and it’s just text (code is text), then this idea would never really disappear. Because people need to be able to store their value online and trade it easily.
It’s a need that’s been somewhat validated already. With hundreds of billions of value in cryptocurrencies mostly dominated by Bitcoin. That’s not going anywhere. There is some validated purpose for it. Will the trademark disappear, the logo and the word itself? Unlikely, super unlikely but it’s tough to predict the future.
But you could say that as long as there is this need to store value and wealth, the idea will not disappear. And I think it is a very primitive need, this need to store what we have. It has been what humans have been doing for hundreds of years. As long as you have some production, you can put some to the side to prepare for the future, for the unknown. In a sense, we could even imagine Bitcoin as a way to try to protect yourself from future unknown events. So, you want to put some to the side so that in the future you can deal with uncertainties.
Success and Failure: Two Sides of the Same Coin
Thank you for all this thinking. I have some more personal questions regarding that you are working in the Bitcoin industry. One question that is a bit personal is what is your biggest achievement? What is the thing you are the most proud of that you did in the past years?
It is hard to pinpoint one thing. There is one thing that comes in my mind that I am super proud of. It’s from my first business YAAMP: the fact that the software that we wrote my cofounder and I back in 2014, 2015 is still being used right now. We got acquired by NiceHash. It has been pivotal in their business model that acquisition. They became a world leader in mining software and mining pool. That’s what they acquired from us. To break it down, to make it super easy, I am super proud that I have brought code six years ago that is still being used today and has a bigger footprint than myself.
Because in a sense you contributed to the way miners are securing the network. It’s a great contribution that you did there.
Exactly and even outside of the cryptocurrency world, the Bitcoin world, as a coder, there is a hard truth. When you are a house builder, you build that building and it will be there in 60 years, you will walk your kids there and say “Yo, I worked on that stuff”. In the technology space, as a developer, pretty much 100% of the code you write is disposable. Even in my current company Mantle, there is not even 5% of the code base that was there a year ago. Every year the code base changes. That’s what I mean by disposable. So, I am super proud to have managed to build a piece of tech that has such a big footprint that it’s still relevant 6 years after. That’s super rare as a coder.
Good contribution on that, good job. My next question will be the reverse side. What is your biggest failure? What is the worst thing that you did regarding business and Bitcoin development? When did you tell yourself oh my god, what a moron?
I have a weird conception of failure. I think one of my most important skill that I have is to be able kind of to turn failures into trampolines and bounce from failure.
I said it earlier on: I think it’s impossible to predict the future. So, it’s tough to know where you go and even if you’re here today and say that’s where I want to be in 3 months or in 3 days, or whatever time frame. Maybe in an hour or a day, you will know more information and where you wanted to be is not the best place to be with that new information.
So, you have to constantly readjust your target and your goals. And failure can be more of a pivotal point, a moment where you need to reassess that. Because I don’t believe that firmly sticking to what you said all the time will make you do what’s desirable because I think you can do a lot of good things, but doing the best thing, the single best thing, that’s different from doing the right thing.
And to do the single best thing, you need to be able to reassess all the time. I think the ability to turn that failure into a reassessment opportunity is important. I am super happy of where I am right now. And never 6 months I would have thought I would be there and 3 years ago, never would I have thought I would be there. If every time I ended up going where I wanted, where I was aiming, I would be in a less good spot that where I am currently. So, I think it’s more about a capability of turning failures in trampolines.
That’s a very good piece of advice because I really believe that this applies in our everyday life It’s hard at the beginning this kind of mentality but it’s very the key to progress.
To see when there are some constraints and when things are going against you, it’s very a moment to stop. And like you said, it’s a pivotal point where you have to reassess what’s happening. If you are trying and it’s not working, maybe you are not using the right path. Maybe you have to go left, or right, or above, or below. You have to rethink and reassess.
What to Look for When Starting a Business?
Very inspiring. Maybe what I could ask as well, what piece of advice would you give to your past self? If you could talk to yourself five years in the past, would you be able to tell yourself, avoid this, do that, this is good, this is bad? What kind of advice would you give to yourself? I ask the question because I suspect that maybe some listeners will be interested, they have projects in their mind, but they don’t know how to start, what to do. Maybe if they had some advice from someone who built things, it could help to empower themselves and start building things.
It’s funny you ask that because there is one screaming thing that I would have wanted to know in the past. I give it as an advice at least five times a week to the persons that I meet.
I hope that it’s goods then haha !
It is super good. It is to get a good grant guy. You need a good grant guy. A good CFO or grant guy. If it’s somebody internal as a CFO, he has to pay for himself just in the money they bring.
That’s not Bitcoin specific, it’s more entrepreneurial. Having a good grant guy, a CFO that pays for himself is crucial. It’s like step one. Most entrepreneurs are not CFO type of people: they don’t thrive at filling forms and sitting down for coffees with ministers and that kind of stuff.
And there are people who thrive doing that. It makes a whole difference. Even if you are a good founder and you are able to raise money, you will be ten times more efficient. Even if you raised half a million dollars, you will be able to grow as fast as someone who raised five million dollars if you have the right grant guy and the right CFO.
If your CFO pays for himself, he’s good. As a founder, as a technical person, the last thing you are able to do is to evaluate if your CFO performs correctly. You need great grant guys that pay for themselves.
Something that’s always undervalued: the most important thing is not money, it’s your team yes but more importantly, your mentors and your team. You want to be able to have great mentors. That’s like more important than the rest. It’s more important that what your business wants to do, more important than who does your code or who does what. Having great mentors is good to make the business successful but even as a person it makes you a better person faster.
I would summarize as bringing the right people with you will help you grow faster than anything else.
More importantly, good grant guy consultant and one or two great mentors: people 20 year older than you, people you want to be like in 20 years. If you pick them correctly and if they do their job correctly, you will be there in 10 years. They should aspire for that, as a mentor you would want that.
Do you see yourself as a mentor in 10 years?
I started mentoring. There are two businesses that I invested in as an angel. I started but I am not that good as a mentor compared to how good my mentors are. I want to be better and I am working on a pivotal project for 2021.
So, mentoring and using the right people at the right place is a good help. Does this apply when you are starting? When you have totally nothing? I feel this advice is more when you have a clearer idea of what you are doing. When you are at the beginning of your ideas of your project, I imagine the CFO could be too early?
CFO maybe but the grant guy, the grant consultant no.
What is his role exactly? How would you explain it to someone who does not know?
The grant consultant will make two things for you. He will make sure that you can have as much back as possible every time you spend a dollar. Using programmes and incentives and the like. Second thing he will do: he will help you navigating different RFPs. Governments and big companies say “I need that kind of stuff” and you will be able to capture value there.
These guys plug you where there are needs. RFP stands for request for proposal. It means that a company has an internal need of development. They are looking people to fill their need.
They find internal problems and are asking people “Come solve that”. They already defined what’s their problem. “Yo yo come help me”. Big companies, like Bell, they have a department of tens of people just replying to RFPs all over the place. That’s one company, right? There is not every RFP that applies to them. Having a grant guy will help you file the one or three most relevant of the year. That’s a leap forward for a start up starting.
Yes, because you are directly filling a need, solving a problem. So, it’s very helpful to have that kind of information, that kind of plug. Very cool, thank you for those advices.
The Current State of the Industry
I would like to go back to the present moment. So, you’ve built many companies. You are consulting for different companies now as a blockchain expert. Could you describe what are your present challenges, what you are working on for the moment? What does it look like for someone who’s been an OG in Bitcoin to live now? What are you doing? What do you plan to do in the future? Maybe start with the present and then we can try to project ourselves.
I have been tackling the same big challenge since the end of 2016.
I have been tackling the enterprise adoption of blockchain technology. I want to accelerate that. Make the innovation that powers Bitcoin relevant for enterprises. I have been tackling that for the past four and half years. Still am. It’s a tough nut to crack. I call it my ‘bear fight’. I am fighting a bear right now.
It’s a tough one but I have good support. It’s going decently. That’s the bear I have been fighting for four and a half year. It was tough to reach milestones and targets in 2018 and early 2017 because the crypto bubble burst. The whole industry was super cold. They call it the “crypto winter”. During the crypto winter, enterprise appetite was not there. People that would do the financing had negative appetite. They would not even touch it with a 10 feet pole if they heard the word blockchain and crypto. It was a tough kind of place to be in. It resulted in somewhat of a purge in companies that are still there today. They are bigger than what they used to be when the hype was there. Now the storm has passed a bit but that was a huge challenge 2018 and Q1, Q2 of 2019.
When you arrive Monday, what will you do that is blocking you? What is your current blocker?
Currently I am working hard with a grant guy because there is a deadline: I’m applying for a big grant on the 4th of May. That’s funny because it’s a tech grand and I don’t know if it was voluntary, but there is a geek reference in that because the deadline is on Star Wars day. It would be nice if the government was that thoughtful.
I am working hard on that grant. I told you about two companies I invested in; one is closing a big fund raiser in the next couple weeks, so I am super excited about that. There is support I want to give there.
Outside those small micro things, I am super hopeful with the enterprise adoption. Over the years I have managed to identify two or three super precise value propositions. You don’t sell blockchains, you sell directly benefits. You don’t even mention the word blockchain before five minutes in the meeting. I am super enthusiast about seeing those kind of use cases and those big customers being flagships that we can point towards to progress the whole adoption of the industry.
Would you mind sharing what are those value proposition? Or is it more internal to your company?
I’ll share one with you and the listeners here.
It’s an offering that we call Clerk. Basically, it’s an information sharing platform that allows to enhance the data privacy of what you share. There is no data duplication and no kind of sensible information that ever moves. There are only insights sharing instead of actual data transfer. So, it’s way safer and way better to address data privacy. For highly regulated industries that’s super welcome that the regulators don’t become themselves honeypots. It’s an insight sharing platform for regulated industries.
That’s powerful because they gain additional privacy and can be more confident when they collaborate, I imagine.
Definitely. The big game changer is not moving your sensible data: they stay offline and don’t move. They are not duplicated in emails or in platforms. What’s being shared are insights. There is no tracing back to the data.
Data are isolated and you can have data of data but not the original data in a sense. Interesting. We talked about the current challenges. The request for grants and the support of companies. Where do you see yourself in 3-6 months. I know it’s hard to predict future, but I imagine you have some kind of horizon in mind, would you like to share it?
It will be quite similar because I spend of my time tackling the enterprise adoption challenge with my company Mantle. I will be working hard at Mantle. I hope that by the end of the year we’ll have some flagship customers that we will be able to name. Like a government that uses that information sharing platform or big enterprises. The idea is to use those flagships to accelerate adoption. That’s totally where I want to be.
Mantle itself is having a fundraiser wrapped up end of June. We will try do some press release on that and start making more noise. A little bit more communication and public facing, more swag on the Mantle front in 6 months and couple flagships to prove our worth. Not every enterprise is convinced blockchain is a value-added technology. It looks like the new shiny thing, the new snake oil. It will be pivotal when they’ll look towards the flagships that extracted value out of that tech. I think it’s going to change the whole industry. Best practices will be enhanced. This will be a growing technology and not an emergent technology anymore. Just like cloud or AI. The infancy is over and that’s where my fight with the bear will be.
You will be in a very good position because you have all these years of training, you have already the company, you are already addressing the market. You are in the best position to address this kind of move. That’s very cool.
Yeah, I’m excited!
I have asked most of my questions we can relax now ha-ha! How do you feel about the recent events?
I am super healthy. Business has not slowed down that much. For most of the businesses in the tech space, it’s easy to do the work from home shift. In terms of productivity it’s not that much impacted. There’s been many new kinds of governmental programs. More work for my grant guy but that’s fine.
You are quite enjoying yourself since you have lots of projects and perspectives basically.
Yes, and the whole current situation, which forces work from home for most businesses quicker than expected for a lot of deciders, also created more data exchange. There are less secured environments, people on their personal computer using the Internet instead of the intranet. This forced deciders to give more thought over cybersecurity and data privacy. The fact that one of the offering that we are strong about right now is in those waters, may end up creating opportunity to roll in quicker that value proposition.
Very very interesting. Thank you for all that information. I have learned a lot about your core business. What would you say to someone who’s interested in contributing to this industry? What would you suggest him or her? What would be your advice?
It depends whether they are a technical person or not. If they’re technical, just hang on githubs and telegram channels or discord channels.
Get your hands dirty.
Yes, just help a project or a business. Help the first project you see. This will force you to understand stuff you did not know so you will be able to better know what projects you want to work on. Go on github, go on coinmarketcap and pick one of the 200 cryptocurrencies, go on their github. As a developer get your hands dirty.
As a non-developer, get familiar with all the digital asset space, from ICO, to STO, those new words where the movement is going, ERC-20 implementation, the collectibles with crypto kitties. Get familiar with that because I foresee in the near to mid future somewhat of a convergence point between regulations, securities, and the digital asset space.
There will be a convergence point coming up in the near to mid future. As a nontechnical, this is where value can be captured. I see an emergent industry with lots of low hanging fruits to go for where everything has to be done. That’s the next one that I see in the companies that I am mentoring. One of the two companies I am mentoring is specifically in that space.
If you are a lawyer for example, you could try to understand how the regulations could apply to these new kinds of securities and try to see what’s coming in the mid to near future.
Definitely. Get familiar with all those movements because the next convergence point will go in that direction, I think.
Maybe one last question, just for the fun, is the halving priced in? For the listeners, the halving is the fact that the issuance rate of bitcoins will be divided by two in a few weeks. Some people are arguing whether this event is priced in. What would be your idea? It’s just for the lols.
Normally it’s already priced in. Historically speaking, we have seen that people priced it. The longer you go in time, the earlier they start pricing it in.
The price has been somewhat stable in the past year, in the past six months, it’s been not too bad. Whenever it went down, it recuperated almost the same week, so I think it’s getting less and less volatile. Is it priced in? Yes, I think. Historically speaking we have seen a drop on the halving day, a small drop. I still think we currently are at 7500$, we will end up the year higher than that. My prediction is 10 000$ end of year.
Interesting. I would tend to say that it’s very hard to understand exponentials so we may be surprised before the end of the year depending on how the world situation evolves. We’ll see if your prediction holds true or not in a few months.
Thank you very much for this information. Is there anything else you would like to add to the conversation?
Get your hands dirty. Put 20$ in Bitcoin. Get your hands dirty.
This will force you to tip your toes. Once your toes are in the water you will be forced to be there because you own some. You will start having more advanced thinking. Just the fact that you own some bitcoins, you will start thinking of stuff when you are walking, when showering.
That’s the best way to get exposure: by getting your hands dirty. It’s not reserved to technical people and developers. Yeah go and buy some bitcoins, like 20$. It’s not about the amount that you buy. It’s about the fact that you buy, the exercise of buying. Go to your favorite Bitcoin buying app, Shakepay or your favorite Bitcoin ATM. Get 20 bucks.
Try it. I think that’s very important if you are curious about the subject to have some skin in the game because it helps reflect a bit faster on those questions. I would support that.
(If you use the referral link for Shakepay, you can get free bitcoins by signing up and then shaking the phone. You have to be referred by someone for the feature to be enabled. No need to buy to try it.)
Yes you are more driven. The 20 bucks of Bitcoin that you buy is still worth 20 bucks and then you have like 20 grands worth of drive to kind of get exposed more to the industry.
We switched to French and Pascal suggested to ask a last question
What is your opinion with respect to Bitcoin versus altcoins?
We have to keep in mind there will always be altcoins. People will always want to create their own cryptocurrency. There’s something fun to create your own. I think I created 5 cryptocurrencies. It’s fun.
To derive value from it … I see a lot of cryptocurrencies where their model is just to force people to use their own channel. That’s kind of weak in a sense because they could accept Bitcoin or could have their own lightning channel. Forcing a payment channel is one thing but also force a denomination it’s weird. It’s just weird because the code is open-source, and somebody could fork the code and do a lightning channel integration and it would become more popular.
I strongly believe that factually speaking Bitcoin is king. It’s always been dominant in market value and I think it will remain this way as long as cryptocurrencies are out there. Bitcoin is king, for sure.
Blockchain and cryptocurrencies are strange technologies. They are decentralized technologies. This means there is a high importance in the community and how it adopts it, how many people use it. Bitcoin is the number one. It has stronger support. It’s more immutable than others. There is more financial backing into it. There is a bigger bug bounty if you can hack it. It’s the most solid one.
And in price changes, a good analogy is to think the whole cryptocurrency space as boats on the sea where Bitcoin is the tide. The tide goes down, every other ship goes down. Bitcoin is in its own class. I see it as the tide. All the others they float on Bitcoin. Even semantically speaking to acquire those coins you need to acquire Bitcoin first because so few of them have fiat pair. You need to go through Bitcoin. It further down reinforces that Bitcoin is the king in that world.
The mothership. I would add to that for the listeners that if she/he is interested in cryptocurrency, I would strongly suggest to not look into altcoins before having understood Bitcoin because like you said it’s the tide.
It’s important to understand the tide before using the boats.
Thank you for this. Thank you very much for your time.
Perfect, have a good day Emmanuel.
Thank you for reading!
Jun 1, 2020