Max Kordek, founder of Lisk shares his story about how ICO helped him as a young entrepreneur get funding in our interview at Token2049. Watch the video to learn more.
We’re here with Max, the founder of Lisk. Thank you very much for your time!
We’re at Token2049 and we just want to learn a little bit more about Lisk. You guys were obviously one of the landmark ICO’s where you raised 6 million in 2016 and you’ve been very successful since then. Obviously, there have been a lot of ICO’s since then, we just want to get your general thoughts and your views on ICO as a funding mechanism, and how do you see the market playing out in the next year or two in terms of ICO’s?
I think an ICO funding itself it’s an extremely great idea. Back then when we did, it opened up so many opportunities for us. I was studying electrical engineering in Germany and I knew no one in the business. I didn’t know any VC’s, I could never have raised any money, but I did this ICO and people believed me. This showed and still shows the potential of the ICO’s, you can invest in ideas you believe in and into individuals you believe in. You don’t need to have heavy funding rounds were you just travel the world to speak to investors, and that’s why I think it’s a great mechanism to democratize investment.
I think the points that you say really run home to me, especially when we were preparing for the interview where you feel like it’s a way to support young entrepreneurs with an idea who don’t have the traditional connections. Do you feel that regulation has any kind of role in this space for the ICO’s? Recently there’s been a flood of capital coming in and you know, with respect, not every idea is as good as yours, and not every team is executing as hard as yours, how do you feel about that? Should regulation play a stronger role in this space?
If we are talking about the idea alone, then I think it’s very hard to separate a good idea and a bad idea. I think it’s more like an experiment, people are having this mentality, let’s give it a shot, let’s try it out. In terms of regulations, I think it’s extremely important, I think it needs to happen, but more in the sense of securing investors so that the people don’t run away with the funds. At the end of the day, what I feel as right is a very light regulation, nothing too heavy, nothing too crazy so that we as entrepreneurs don’t get injured. There should be no wall put in front of us only because the government might be afraid for their citizens to not get scammed. I think it should be in a way that individuals that are raising money for an ICO can register in an official way, but this has to be done very quickly and it has to be processed within days otherwise, it’s again a wall in front of an entrepreneur. Nothing really more, they should just make sure that the individual that is doing the ICO is public, it’s a known person to whoever authority is taking care of him and nothing else.
So a kind of a baseline protection for investors, but in no way hindrance to prevent creativity and the generation of great ideas and great companies.
Yes, exactly. ICOs are a great tool just to try things out as well you know, and that’s what I meant early on with good and bad ideas. In the end it’s not so much about the idea, it’s more about the outcome because ideas change all the time during the process of developing the idea. You will see that this doesn’t work and this works and maybe an idea which in the beginning didn’t sound as good as the outcome will be, this is not a problem. The problem is when someone takes the money and spends it on a nice car, nice watch or just runs away with it.
You know, I think one thing that really run home with me is, compared to a lot of other ICO projects, after you raised money you have been very explicit about not really focusing on price and returns, but really focused on building the product and strategies and building libraries and going to development conferences trying to recruit CTOs. How do you stay focused on the execution? Obviously it has been a very speculative environment these last few months, how do you stay on that path? What is your strategy going forward?
It might be one of the special talents of my partner and myself to stay focused. We just don’t get sucked in to this monetary pool and financial world where we are checking CMC every 10 minutes and were super happy if the price goes up and super sad if the price goes down. We just take it from a principle where we just care about technology. This is where we came from. We were early adopters of Bitcoin and other blockchains, and we feel like price doesn’t matter, especially not at this stage. We are so early. If someone comes and says, “yeah, but I want to make money early on” then yeah, trade a bit, but this is not what this is about. This is about enabling developers in the future to build their own blockchain technologies. The price will probably be greater than it is now in 5-10 years and people will benefit from it financially. But why should this be priority number one? Priority number one should be that the technology is benefiting people. That’s where we put the focus everyday. When the price goes up, people get very euphoric. Everything is happening around them so fast and in such a good light that you often forget to work, but if the price goes down, then it is often the opposite. People are getting afraid and think that I have to work now to make it go up again. These price rings are quite good in terms of focusing and putting a lot of effort into development because if it goes up, you get all this euphoric sensation and motivation that really makes it a lot of fun. But if it goes down, then now you think “I have to work harder than ever”. One of the most [notable] cases that I have lived through is the two-year mark in 2013 where everyone worked extremely hard, and in some sense, this has just stuck to me. This mentality of working hard and staying focused–not looking at the price because it went down everyday anyways and in 2017 it went up everyday anyways so why look at it? You don’t need to know it on a daily basis.
It’s clear with your strategy and execution path that you’re trying to get fast, widespread adoption for this through getting more developers developing on it. What would you say is your barometer for success? How do you measure how fast adoption is? Do you have certain targets or metrics that you’re trying to hit next year? How do you define success?
I define success when im helping people. Help can be achieved in many different ways. I have the tools that we’re building at Lisk, or the price going up, and someone in Africa could afford to buy a car finally because he invested early on in Lisk. These stories exist and I’ve heard many of those. This is success for me and it makes me happy if I could help someone. In terms of metrics and parameters, the great thing is that the blockchain is transparent, so you can track everything there. There are great statistics on the blockchain itself: number of accounts, number of transactions per day/month/year, acceleration of new accounts, and so on. You can use these statistics to figure out what your growth rate is, and depending on that, you can also figure out what marketing works and what doesn’t work. For example, we could go to a conference and suddenly the amount of accounts spikes, or suddenly there is more volume on the exchanges. It’s a weak indicator but it’s an indicator that works. When were spending, let’s say, $200,000 on search advertisements and nothing happens, it’s just more people on our website, then it didn’t seem to work. These are some stats that you can use to define success, or at least success for strategies with the ultimate goal to just be beneficial or to help people at the end of the day. I see Lisk itself more as an enabler, where the software just enables the developer to build an amazing software application. I am more of an enabler for success. I want people to become successful by building on the thing I’m building–on the Lisk platform.
When do you think the first successful application will exist on Lisk? Do you have a timeline expectation for this? Do you think it’s a Crypto Kitties equivalent or something like that? Or is it the number of applications or one big one that takes off?
Yeah, so in today’s panel discussion, Julian said physically there are no real applications yet in the production industry that are successful. Everything is still quite early on, and is more in the experimentation phase. Projects are finding themselves. Until we see a really successful application being used in the real world by people, not by two people, but by a massive amount of people. Until that happens, I think several years will pass. People always talk about how fast this industry is moving, and it’s definitely moving faster than other industries, but at the end of the day, it’s still not as fast as people might think. If you just look back one or two years there were less ICOs as projects, but in essence not much has changed. People still went to conferences back then, they still go today, and they’re still working on those projects. It’s not like Ethereum, Lisk, or Bitcoin suddenly changed the fundamental technology. It’s still the same.
It feels like more people are coming to the market and are paying attention to the prices going up.
Exactly. The development still takes a lot of time and it lags behind the appearance of the market. Prices might go up, but the technology might be much slower going up because it just takes longer. The value is sometimes being built slower than the price going up. In my opinion, price falls back to the real value of the technology. Coming back to your question, I think the first live application will be released in the end of 2018 or 2019 on this platform. They will be polished by the middle or end of 2019, regarding the user experience and so on. Maybe in 2020, 2021, 2022, we will see more and more applications being used in regular life. These applications might not be those fully blown decentralized applications everyone nowadays is speaking about. These might be mixed ones, or ones which might have components of a blockchain which makes it decentralized, but other components might not. Crypto Kitties, for example, the core part lives on Ethereum, but the website itself and the images and so on are centralized–it was a mix. And it was successful. It was the first step on Ethereum which was quite successful and it was not fully decentralized.
How have you found your role has evolved since two years ago? You’ve obviously been in the space a long time, you started in 2013. You guys, I think, grew from 25 to 50, and now looking at getting to 75 people. You have marketing teams now. How has your role changed? What are you doing differently now than you were two years ago?
The Lisk foundation is working together with many different contractors so it’s difficult to say how many people are actually working on the project because people join and people leave and that happens all the time quite dynamically. The main contractor in Berlin, Lightcurve, grew from basically my partner, Oliver, and myself. We also found the main contractor in order to take development into our own hands. It grew from two people to over 40 now, and if I were to define my role there, it changed from being the guy for everything, for office management, to finance, to HR, to development and management, over to only management. I have a great team with people in terms of HR, office management, and finance who can take the majority of the tasks in these realms away from me. We have many developers so I don’t have to go to github again and change some text on the website or adjust an image to make it look nicer. We now have the people for that. I delegate these task away. If were speaking about the foundation, not much has changed. We have our board meetings, about four or five a year, where we discuss all topics which involve Lisk itself: the project, the financials, the legal matters, and so on, but here you clearly see, of course, that we have become more knowledgeable. Because of this knowledge, we can assess different topics better than we could back in the day. Back in the day we learned new things in every meeting. Now it’s becoming a routine and we can progress in a better way. You just get into the company and its foundation and it just grows dynamically, but organically. You just see what needs to be done. You’re slipping into that role then, which might be ten roles in the beginning, but becomes less and less. Sometimes, even today, I just put things away or clean a bit. I think that’s good because being hands on is good. It just happens automatically.
What would you say you’re most excited about in 2018 for both Lisk and the broader blockchain community?
For the blockchain community, for me, it’s the lightning network. I think we need some scalability solutions for Bitcoin today because it hit capacity. People taking it as a mechanism to spread FUD, you know, which is not good for the entire industry. I think we should be cooperative, we should work together, we should be happy, we should have fun everyday and not attack each other on Twitter. That’s not how it should be. For Lisk, it’s definitely the SDK. It will be rolled out over the years in different steps so we can gather feedback with every step, that we can adjust it, that we can make it better with the end goal that developers like it. I look forward to these steps and for the feedback from the community in order to see what they are thinking. We’ve worked now for two years towards this time where we can work on the SDK and can gather public feedback. Before, it was just staying in the foundation, it was basics. We, for example, didn’t really have any feature additions until this point in core, in Lisk Coin, the main backbone of the decentralized network. But now, with the soon to be released Lisk 0.1.0, it will be drastically different. We can, because we have a good foundation, work on new features. Exciting stuff. Really interesting topics from a cryptography standpoint, usability standpoint, user experience standpoint, and also of course from the standpoint of developers to play around with blockchain technology because we made it easier for them.
Thank you so much Max, I really appreciate you taking the time to share your thoughts on Lisk’s journey.
Thanks as well for this opportunity!