The world of blockchain and cryptocurrency is undergoing a significant acceleration. The regulatory environment globally is converging, creating an operating model that permits a wider range of products and services. Companies that have remained on the sidelines are now actively entering the market, while those already involved are strategizing on how to introduce new offerings.
In technology markets, early winners are typically determined long before mass-market adoption. As we transition into what I consider the mass adoption era of blockchain, companies face a critical decision: act quickly or risk spending the next few decades catching up. If your CEO suggests, “there’s no hurry, it’s early days yet,” your company may already be conceding defeat.
For those committed to advancing in this competitive environment, understanding that speed kills is paramount. Just as it applies on the road, the same principle is true in business. Often overlooked is the accompanying notion of “move fast and break things.” For companies eager to lead in this burgeoning market, risk management has become an essential skill. However, successful navigation does not preclude the possibility of minimizing catastrophic failures; in fact, several strategies can facilitate this process.
The first step is to implement controls and operations that address the past issues faced by other firms. While this might seem like bolting the barn door after the horse has fled, it is crucial to prevent history from repeating itself. Experience teaches that overcoming prior mistakes can be more beneficial than innovating new errors. Basic measures, such as external audits, robust business controls, and adherence to best practices, seamlessly integrate into effective risk management. We are fortunate to have access to a wealth of experienced professionals in the blockchain and crypto space who can provide invaluable insights.
Secondly, it is vital for companies to engage in strategic planning regarding the type and volume of risks they are willing to assume. This includes evaluating technology risk — particularly pertinent with smart contracts and DeFi — as well as market and counter-party risk.
Learning from each of these risk categories is essential, and creating controlled environments for such learning is beneficial. A frequent observation is that when challenges arise, teams may leap to incorrect conclusions, occasionally exacerbated by taking on multiple risks simultaneously, obscuring clear insights into what went wrong.
Lastly, companies should be discerning when deciding what tasks to handle internally versus externally. In tech-driven companies — especially when engineers lead — the allure to build in-house is compelling. I understand the draw; building is often far more gratifying than outsourcing. That said, as Mr. Beast aptly put it, “Consultants are a cheat code.” Leveraging external expertise can significantly reduce risk and complexity, allowing for a more streamlined approach to innovation.
Ultimately, there is no route to growth without risk, and the urgency of growth compounds the associated risks. For firms aiming for accelerated growth, particularly within ecosystems powered by emerging technologies, robust risk management policies are essential. Therefore, as you navigate this dynamic landscape, fasten your seatbelt and stay focused on the road ahead.
Disclaimer: These are the personal views of the author and do not represent the views of EY.
