The world of Blockchain and Crypto is experiencing significant acceleration. The worldwide regulatory environment is converging, and is converging in an operational model that allows a broader range of products and services. The companies that were sitting outside are jumping and those that are already working are working through how to bring a range of new products to the market.
In most technological markets, the first winners are determined long before the adoption of the mass market. As we are now entering the era of mass adoption for blockchain (my opinion), the options faced by some companies now act quickly or spend the next decades playing. If his CEO says: “There is no hurry, they are still the first days,” your company has already renounced the fight.
For those who stay in the fight, the speed kills. It is true on the road and is true in business. People always forget that “moving fast” came with “breaking things.” That is why for those who get ahead in this market, risk management has never been a more critical ability. Made correctly, there are several ways for companies that wish to run ahead in this market minimize the risk of catastrophic failure. There are three that I have in mind.
The first step is to establish controls and operations that close the door on past problems that other companies have experienced. This can hit it like screwing the barn door after the horse is already gone, but it is necessary because if it does not, it runs the risk of repeating the story and that is much more humiliating than to make completely novel mistakes. The basic concepts are not particularly difficult: external auditors, commercial controls and standard best practices. We are also fortunate to live in an era in which, for the first time, we have a good supply of experienced blockchain and experienced cryptographic who can apply real -life lessons learned.
Secondly, I think it is essential that companies think strategically and explicitly about the type and number of risks they wish to take. There is technological risk (very relevant with intelligent contracts and defi). There is market risk. And there is a risk of counterpart.
You can learn critical lessons from the three, but it often makes sense to have controlled learning environments. One of my frustrations has been to see people reaching tremendously incorrect conclusions when things go wrong, sometimes because they take too many risks at the same time and cannot separate what the causes were.
Finally, it makes a lot of sense to be strategic about what you do internally and what is done externally. In technology companies, especially when engineers are in charge, temptation is always building. I know. I have an engineering team. It is more fun than managing a supplier. “I Built it” is a million times more satisfying than telling someone “I bought it.” I never thought I would quote Mr. Beast in business, but as he said: “The consultants are a trick code.” It’s that simple: someone else has done it before. Take that to reduce your risk and complexity.
There is no way to growth without risk and that risk increases with growth rate. Therefore, for companies that seek accelerated growth, particularly in ecosystems promoted by emerging technologies, good risk management policies are essential. Please fart your own security and keep your eyes on the way.
Discharge of responsibility: These are the author’s personal opinions and do not represent EY’s opinions.
