Hi! Thanks for questions. Happy to answer them.
Question #1: Am I reading 18K in quarterly revenue correctly? Is that a typo? That number isn’t even equivalent to one part time employee’s salary . . . Am I misunderstanding something?
Answer: We’ll be sharing a Q1 update in the next day or so and I think this will be helpful to guide everyone on the status of revenue, projects, ROI, and the reorganization in general.
Regarding the $18K, it’s actually higher than what was reported in the last update. Annualized revenue is ~$400K USD and the first payment toward that revenue is was ~$20K USD (meaning that’s what has been deposited in the NF bank account.) Sidenote: Proof of payment was sent to Core Team during Q1 audit. It showed bank statements, partnerships in motion, agreements and contracts.
Business Development typically falls into this cycle: 1.) Partner meeting/service discussion, 2.) Gathering data/goals from the partner meeting, 3.) Preparing the scope per the partner, 4.) Presenting the scope to the partner, 5.) Revisions of scope per partner feedback, 6.) Legal review, 7.) Signed agreement, 8.) Legal public announcement (when applicable), 9.) Implementation of phases of contracts. 10.) Payment of contract per scope completed.
So $18K in the bank isn’t unreasonable considering the timeframe and conditions. It’s pretty remarkable that any revenue was achieved during this time. Let me share why.
In Q1, all 70+ Foundation MoUs/partner contracts worldwide had to be compiled, reviewed, vetted by global legal teams and managed according to the reduction in staff and resources. Then new teams were then assigned to the projects and support had to be structured accordingly. Also remember that we went through a massive reorganization (with a new leadership team), launched a fundraise and dealt with global layoffs so it’s fair to say that focus wasn’t on 100% on revenue in Jan - Feb. It was on the restructuring of the Foundation.
2. Why so many organizational spin off structures? Why so much money spent on architecture . . . something smells weird. There’s the Blockchain Center, Nem Studios . . . Nem Ventures . . . its starting to feel a bit like a shell game. Why spend so much on architecture? Seems very fractured and distracting.
Short answer: It’s healthy to have many players under one ecosystem. Failure rate for startups is high – Harvard Business School research shows that 70% of all startups fail to deliver a return on investment to investors and ~90% fall short of meeting projections. Now add on the complexity of blockchain being a new industry… You can see why having a wider ecosystem is a good thing, not bad.
Long answer, let’s take a look at the ecosystem players and the role they play in the NEM ecosystem.
NEM Foundation - Foundation supports the adoption and development of the NEM blockchain technology by adding partner support, contributing code and tools to the platform (new frontend studio), and providing education and training to grow the ecosystem. (Think of Foundation as a voice/face to humanize NEM while also building out tools needed for global adoption.) Foundation is also an important voice at the table for blockchain industry lobbying including participating in V20, Token Taxonomy Initiative, Blockchain Research Institute, United Nations, and Blockchain for Europe.
Blockchain Centre - The Blockchain Centre falls under the category of NEM Foundation. It’s owned by Foundation and run by Foundation. It’s not a separate ecosystem partner. In the upcoming Q1 update, we talk about the significant changes the 2019 NF team made to management and viability of the Centre. Spoiler: We cut costs dramatically (hundreds of thousands of dollars) and implemented an entirely new strategy for operations that resulted in bringing in $400K in annualized revenue. There was no revenue shown on record for the NBC in 2018. Currently, the team residing in the NBC report directly up into the new 2019 product teams – specifically tech, marketing, finance, operations, business development, and product management.
NEM Ventures - Ventures is the venture capital and investments arm of the NEM Blockchain Ecosystem. It keeps the NEM ecosystem competitive with other platforms by being a vehicle for investing in vetted projects (including NEM projects) that will help ensure funds are replenished and managed well for the NEM community.
Tech Bureau Holdings, Corp. - Tech Bureau Holdings, Corp. is an important partner and contributor to the ecosystem. They are a SaaS company (Crypto-Fintech Lab) that has successfully developed mijin, NEM’s private blockchain software. They’ve been a key partner for Catapult development. They serve a completely different role in the NEM ecosystem from both Foundation or Ventures.
NEM Studios - Studios assists in the delivery of backend development for Catapult and also offers enterprise strategy solutions. They’ll fall under the same CTO as Foundation but they serve as boutique dev studio (hired by Foundation). I expect to see a lot of great things come from this new studio.
I personally think having one company attempt to do all these things would be cumbersome and potentionally problematic if – for whatever reason – that one company failed. I see diversity in ecosystem partners as a strength, not a weakness. The NEM ecosystem is stronger with decentralized and diverse participation.
For the Foundation, we’ve been able to pivot and succeed in less than 6 months in part because of strong ecosystem partners like Tech Bureau, Studios and Ventures. I welcome more.
3. In a recent YouTube interview Alex mentioned an educational onramp in the works - is that only in Latin America / through a third party?
I think you’re misunderstanding the internal educational onramp Foundation is building (called Codename: NEM Academy) and the Latin America partnership with Tutellus. They are 2 different projects. Tutellus recently announced a partnership with NEM where they provide a course on Catapult. This is good because they have ~1.6 million users in more than 160 countries. Also, the Tutellus team is world-class. So going wider to show the ease of building on NEM is super helpful and again, we want more partnerships like this because it leads to a stronger ecosystem.
As for the internal educational onramp Foundation is building (called Codename: NEM Academy), it serves a much broader purpose that includes revenue mechanics built in. It’s a centralized collaborative learning community that empowers NEMbers to develop and cultivate their blockchain skills and create.
The Foundation believes NEmbers should be able to learn where they want and how they want, regardless of where they are in their understanding and skill set of blockchain and it’s why we created Codename: NEM Academy.
We will be providing a wide range of learning tools for NEMbers to choose from including an online learning portal with video tutorials and interviews, SME classes and ongoing network opportunities to connect with NEMbers and NEM ecosystem partners worldwide.
Foundation aspires to have NEM be the most adopted open source blockchain technology in the world and through NEM Academy we think we can develop and nurture NEMbers skills and teams. The goal is to launch it later this year.
4. In the same video - Alex mentioned a rebranding. Is this underway - and does this mean that there could be a token swap . . .
Let’s be honest… a brand refresh is long overdue. Our website hasn’t been updated since 2017 and a lot has changed in the industry in the past few years.
Our market research showed we need a brand refresh to be competitive in the marketplace. This led us to contract with David Shaw (NEM Studios) as a service provider under our new platform and help refine messaging, positioning, and get a deep understanding of market analysis so we can move forward with a strong go-to-market strategy plan for Catapult. A steering committee comprised of myself, David Shaw (NEM Studios) and Nate D’Amico (Tech Bureau) was set up and meets regularly for progress and collaboration on the go-to-market. It’s exciting and long overdue.