Today is a dark day for Status, as you probably know, we’ve had to let go of 8 talented individuals from Status. By now, we’ve informed everyone whose contracts are being terminated.
The move has little to do with their skillset or dedication to Status - it’s largely a financial decision. This is a move I take full responsibility for and is one of my larger mistakes in being a leader.
I wanted to outline the reasoning, address my shortcomings and highlight some of the immediate changes and the plan ahead. I also want to thank Nabil, Jonathan, Ceri & Carl for doing a lot of the heavy lifting and helping navigate through this. I must admit this hasn’t been as transparent as I’d would have wanted if I were in different shoes, it’s a sensitive subject and its tough to balance morale, the offsite and our financial reality - I do recognize we’re all adults and we’re all in this together.
On transparency, the first step is giving everyone transparency into our financial reality at the offsite, Yessin did an amazing job and the slides are available for your review, this is something we are looking to make more transparent with the community moving forward as well.
As an entrepreneur, big mistakes are par for course, and this is not the first time I’ve made this kind of mistake, it happened once before in another business Carl & I operated, and it ultimately comes down to a combination of black swan events, inadequate foresight and planning. It’s hard when other people have to pay for your mistakes, especially so many at one time, and I wear that heavily so as it further burns the lesson into my brain.
Both instances my foresight rested on certain assumptions of the environment and I want to recognize certain realities.
For all I talk about principles and how great they are, especially with our prerogative of building a public good that upholds human rights, they handicap us. Even though we are praised & envied in the crypto-community for our commitment to our principles, I’m keenly aware that every time we make principled decisions we often shoot ourselves in the foot, at least in the short term.
For example, we can’t collect behavioural user feedback the ‘easy’ way because we do not allow any intrusive tracking tools in our app, and now we can’t even collect bug reports easily. Moves like this lengthen our development timelines and causes confusion when I don’t offer clear alternatives.
This is hard to gauge and balance, because if we don’t make these decisions now, we may end up shooting our users in the foot should this technology be successful in reaching a mass audience. Having that said we also may be shooting ourselves in the foot in terms of market share by doing so. So far we have a good reputation and standing within the community which gives us a head start but that time will run out.
It’s easy to say we’ll fix things later, but often by the time that comes, we’re too committed to the monkey-patched idea or have forgotten the alternatives.
At the same time, these decisions can and have slowed us down significantly. I’m not sure if there’s anything to do at this level, but highlight and give this issue recognition.
Balancing principles matters, creating accountability for trade-offs is mandatory.
Experimentation & Training
This space is highly experimental, we are pushing the front of what humans are capable of. If you get into the tech, the penny will drop when you realise the implications of what we can achieve.
We have tried too many experimental things at once, especially given the level of where everyone is at within the Status GmbH.
We have to train people better, which will lead to better collective decision-making.
It will pay off to build on stronger foundations, although I do fear we run the risk of losing some of spirit that compelled me to work on Ethereum in that process.
Hopefully, we can better determine what makes more pragmatic sense, prioritize our experimentation, and execute hopefully our planned GmbH to Status Network upgrade path will be symbolic of this.
Building on Platforms & Scaling
Whenever you build on a platform your entire effort is subject to the whims of what you build on. I felt this strongly when I used to be a flash developer, from that day forward I vowed never to build on proprietary platforms as it’s essentially allowing someone to pull the rug out from beneath your feet at any time.
As Nabil pointed out in our town hall yesterday, we do run the risk of being too early, we’re building on Ethereum’s promise of a DApp platform, something Ethereum has yet to deliver on. Whisper hasn’t made any significant progress in the past 2 years and IPFS is now outpacing Swarm in terms of development (although IPFS is not as well-considered imo). Like us, the EF’s Swarm team suffers from an expansive scope, large-scale refactoring and also are very principled. No decentralised file storage offers true light clients, making them impractical for our usage at the current time.
I have often referred to building Status like building a castle on sand, without strong foundations our job is much more difficult, and now with Nimbus and our new Protocol research, we are learning that we must commit to building the underlying infrastructure. Ultimately this will make us stronger and give us a stronger position on the grand chessboard as well as raising our core competencies. But we must be careful not to spread ourselves too thin.
My assumption was not only that Ethereum’s foundational layer would be more or less ready by now, but our principled approach to light clients relied on the assumption that Ethereum would be using Casper by now, LES under Proof-of-Stake would be adequately scalable in the short-to-medium term, now it looks like POS and Sharding will be implemented at the same time under Serenity.
The realistic timeline for deploying Serenity is 2 years. 2 YEARS. By then at our current burn rate, it is likely that we will have spent all our money budgeted for development, leaving no room for error or maintenance once deployed at scale. If we are too early, then we need to build well, ensure our survivability and make our timing right to ride this wave of opportunity.
Token Sales & Funding
In spirit of experimentation, token sales as a funding model are new as well, it’s not like traditional models where you can dilute shares and continue to raise money, in the model we went for, you raise money once and that is it.
Many projects who went down this path are in a similar boat to us, although few have openly admitted it.
We planned for this by having the reserve SNT but to really utilize this, we have to deliver our promises before utilizing it becomes acceptable, in order for the market to have confidence in the token and in the project.
We also don’t have shareholders, it may be the case that having smart money would have helped us identify certain issues earlier? Keeping in mind under a shareholder structure, it would make it difficult if not impossible for us to create something truly a public good, a truly user-owned network.
Either we can learn to become focused on our own and make better decisions, but the idea of finding an equivalent function is paramount, we should be more effectively utilizing the community as a steering tool.
Our voting dapp is a step in the right direction. We can do better by giving more information to and getting more feedback from the community.
Hindsight is 20/20, Carl and I were kicking ourselves for not exiting larger positions in the network to fiat at the peak of the Eth price in the last bull run. If we did that we would have had a larger buffer.
Having that said, network alignment was more important to us in both signaling to the community (and has afforded us interesting business opportunities) and ensuring we make decisions that benefit the network. To signal our alignment we have avoided Eth sales.
On a positive note, if we had that buffer, maybe we would not be learning this lesson at this point, maybe we would be content to let things continue to slide.
Incentivizing core contributors by creating network alignment in SNT has also been a challenge, mostly because people joining have largely been seeing a downward trend in the markets. When you have SNT and it goes up, it’s quite amazing what that does to people’s emotional state/drive - when it works.
Quite frankly, I assumed that our software would be much further along. This has largely been influenced by experimentation, half-implementations of structural ideas, gaps in our collective knowledge, the unfinished platform we build on and just the plain difficulty of what we have set out to do.
Decentralised applications are hard. There’s a reason there are no real mainstream p2p messengers, let alone ones that additionally manage finance and browsing.
In summary, we will be implementing more structure, creating more accountability, creating more visualisations to display progress, upgrading the GmbH into an efficient and effective powerhouse for delivering software.
The Status Network will be essentially a procurement and supply-chain management for software that only cares about deliverables and can quickly expand beyond our own efforts, running our processes in parallel by utilising the greater community.
Currently, our paths to revenue all hinge entirely on a well-functioning, usable application. Until our development processes are tight and our software is mature, finding paths to revenue is exceptionally difficult.
Finding revenue sources and implementing the basis of a strong token economy for SNT capable of supporting the Status Network (and thereby the Status GmbH) needs to be our top priority.
Until we can get to this point we are forced to be more conservative. We have to operate from a point of long-term survivability and if we scale, we are forced to grow by scaling outside of ourselves, which is what the Status Network will help us do.
Ultimately we will be working to maximise the utility of what we have at the moment, raise our core competencies and become lean, effective and efficient. In our current strategy, the success of Status relies entirely on a well-functioning client.
While Carl and I will look into other means of survivability, the demand asked of you is to continue to learn about the technology and to give 100% in delivering quality software.
I am committed to being a better leader and while I can’t make promises that things like this won’t happen, I am always doing the best of my abilities to minimize the impact and strive to create a stable, meaningful working environment.
Ceri, Jonathan and Nabil are fielding questions/comments/concerns/feedback, and of course, if you would like to chat or call with me about anything, please reach out to me in Status (or via Erin for call), my door is always open.
I am confident in our ability to push forward and excel at engineering, we’re already one of the best development powerhouses in the space, second only to Ethereum Foundation. We can, and will become the best.
Deepest regrets and sincerest apologies, but with courage and readiness for the future,