For a new industry to grow, it needs smart, dedicated people. However, despite the promise and potential of bitcoin and its many companies, attracting qualified employees can be surprisingly challenging.
The simple fact is, although many startups are founded and initially run by small, experienced teams, bitcoin entrepreneurs must hire skilled staff in order to execute their company’s vision. BitPay, for example, one of the industry’s largest merchant processors, is now in the midst of expanding its team by 70 employees.
Adam Draper, whose startup accelerator Boost VC incubates bitcoin-related companies, has observed other bitcoin companies dealing with the challenge of talent acquisition firsthand.
Speaking to CoinDesk, Draper said that despite enthusiasm surrounding bitcoin, the fact is many people simply don’t have the skills necessary to succeed in the industry:
“So many bitcoin companies are emerging in the startup space, but when it comes to hiring after co-founder status, all companies are competing very heavily for a very small pool of talent.”
Further, given the bitcoin industry’s issues explaining its message to the broader consumer public, a portion of the qualified applicants may be getting turned away.
Michael Gronager, chief operating officer of San Francisco-based exchange Kraken, said that, even in the technology nexus of the Bay Area, many job opportunities in the cryptocurrency space might still seem like a gamble to prospective job seekers, adding:
It is always hard to attract talent to startups, and it is even harder to attract talent to a startup in a new ‘risky’ technology.
This need for top-tier talent, in a wide range of specialities, was also on display at recent Bitcoin Job Fair events. Held in San Francisco and New York, the meetings drew hundreds of job seekers along with top industry companies such as BitPay, Coinbase and Xapo.
Investments don’t guarantee talent
Owing to the immense potential of bitcoin and its underlying technology, as well as the now proven abilities of some of its top companies, the size of the industry’s investment rounds has been on the rise.
Bitcoin wallet provider Xapo, which has secured $40m in funding over two rounds, has lead the pack so far in 2014. However, the California-based company has been closely followed by BitPay and mining chip manufacturer Bitfury.
But acquiring capital isn’t the hardest part of building a top-tier company, Draper told CoinDesk, saying:
“It is harder to hire than raise money for bitcoin companies.”
Boost VC’s newest accelerator class has 12 bitcoin startups. That’s more bitcoin companies than Boost VC has ever had previously, and it means, in due time, those companies will be looking for marketing, customer operations and, most importantly, software development talent.
However, despite difficulties attracting talent, not to mention how much it costs to hire developers in and around the industry’s central hub of San Francisco, bitcoin observers think the cryptocurrency industry is on the cusp of breaking through.
Bill Tai, an investor, early miner and board member of ASIC manufacturer BitFury, thinks the bitcoin ecosystem has enormous potential to expand:
“Everything about [bitcoin] is very much in its infancy. The aggregate market cap of bitcoin in the whole scheme of the world’s value of all currencies, it’s negligible. You wouldn’t even notice it. It’s like a rounding error.”
Considering bitcoin’s primary competitor right now is fiat money, Tai says that the attraction to bitcoin-related career opportunities has a lot to do with how digital currency is perceived by the majority of people.
“I think it takes time for people to build trust and credibility [in bitcoin] both as a currency and as a place to bet your career.”
Fans but not fanatics
There has been plenty of discussion about how bitcoin can revolutionize a number of sectors ripe for improvement, with financial services, legal contracts and capital markets being but a few examples.
That’s why hiring managers in the bitcoin industry are looking for people who want to play by the rules even though entrepreneurial cryptocurrency ventures do, of course, require some risk-taking by nature.
Kraken’s Gronager said:
“We want highly skilled, hard working people that are fans of bitcoin as a technology, and perhaps less as a movement – you need to be able to separate business from politics if you want to operate in the highly regulatory space of financial services.”
A migration is slowly starting to happen. People with development skills, in particular, are increasingly moving from big technology companies to bitcoin startups.
Some time ago, litecoin creator Charlie Lee left Google, and he now works as a software engineer at Coinbase. Similarly, Ben Davenport moved from Facebook to become a co-founder at multi-signature startup BitGo.
Tai told CoinDesk that engineering talent migrating to bitcoin companies might require network effects to take place, citing the rise of social networking companies in the firstÂ decade of 2000 as an example:
“It wasn’t very common to have the mainstream engineers of that era going to Facebook. It took Facebook, to get that credibility, several years.”
Filling the need
The issues facing bitcoin need to be solved by smart people with the skills to develop, communicate and strategize its success. At the same time, though, there hasn’t yet been mass migration of talent from social media or enterprise software over to the digital currency.
Even so, the ones who do get in early may have opportunity to create real change and perhaps receive a windfall.
Kraken’s Gronager said:
“Bitcoin has some issues that need to be resolved in order to unlock the potential for its mainstream use as a payment and ledger technology. The startups will be vastly rewarded for doing so.”
As the adage goes, for success, startups need to find a problem and provide an elegant solution. This could well be why there is a recruiting company in Adam Draper’s most recent Boost VC class trying to tackle the talent issue.
The startup, called Honyebadgr, is run by three experienced recruiting professionals who focus solely on finding skilled workers for bitcoin companies.
Draper told CoinDesk:
“One of many reasons for Boost accepting a bitcoin recruiting company [is that] the bitcoin services space is heating up with necessary product.”
That ‘product’ Draper is referring to is talent. And there’s not enough of it; a situation that will probably continue for some time, especially within the field of computer science engineering.
For bitcoin, at least, Honeybadgr could be a valuable connector in the industry.
We believe that by exclusively aligning ourselves with a niche vertical like bitcoin, we can provide a more tailored candidate experience, said Ryan Peterson, one of Honeybagdr’s co-founders.
Cryptocurrency-focused recruitment agencies are one resource to help this, but positive developments, such as Dell accepting bitcoin, help raise awareness and legitimacy for the digital currency – especially in tech-oriented crowds that might be looking for new job opportunities.
Yet, Tai believes that most people don’t want to bet on a job in bitcoin right now. He said:
“I think it’s because people just aren’t paying attention. To many people, the US dollar is good enough. So they don’t bother [looking for work in bitcoin].”
Honeybadgr’s Peterson said from his experience, however, there are more people working on bitcoin than perhaps some realize.
That’s the reason he co-founded the company, and why Draper has put Honeybadgr in its latest Boost batch – they can help make career connections between talented people and bitcoin startups looking to hire.
“We have found that many of the ‘smartest people in the room’, so to speak, are working on bitcoin, albeit from behind closed doors. We can help coax them out of their shell and turn their passion from a moonlight hobby into a full time career,” said Peterson.