
Ask HN: My friend is a founder of a blockchain startup. I'm skeptical. What now? - throwaway9235
Hey HN! I would like to ask you guys for some advice. Up until recently, I was vaguely aware of one of my friends being involved in some side business. Just yesterday, I found out that the business - a startup - was going to use blockchains for whatever reason. Not only that, he is the founder of said startup! His team has received some investment and has conducted a blockchain workshop or two, and they seem to have no signs of stopping.<p>Now, I know that there are probably blockchain and cryptocurrency advocates among the HN crowd. That being said, I am skeptical about him running a startup that focuses solely on blockchains. The problems he wants to address (e.g. fraud prevention in charity money transactions) could be easily solved using conventional databases with basic security measures. While I laud my friend for embarking on this venture, I can&#x27;t help but feel as if this will lead nowhere. His team is basing their tech stack off an open source blockchain developed for a Chinese cryptocurrency, though they are not in charge of it directly - they have an IT team for that.<p>Both of us are still university students. I have no intention of discouraging him, but at the same time, I would like to nudge him in the right direction. Feel free to ask any questions, but please note that I won&#x27;t bring up any names unless absolutely necessary. I would really like to hear your take on this.<p>Thanks!
======
muzani
Your friend is a student? Then let him do it.

Students normally have the best touch in upcoming technology, even risky ones,
better than people in the industry. The whole idea of a risky venture is that
there's a very low chance of succeeding, with very high rewards if he does.

But what if he fails? That's exactly what you should be doing in your early
20s. You can't take risks when you're older, so this is when you start. It's
not a waste of time either way as you learn a lot, in a related field that
you'd normally not explore because it would be unprofitable. It beats learning
via grinding homewoek and algorithm questions.

I would treat it sort of like a college friend starting a band. It may or may
not lead somewhere useful, but it's all good fun and good memories later on.

~~~
notahacker
Yep. Thought when reading it the headline OP's concern might have been that
his friend was actually trying to scam consumers with crypto-based marketing
scams, but it sounds like he's spending the money of investors with money to
spare genuinely trying to build a solution a market quite likely won't want.
Which is actually what a lot of startups end up being, regardless of how good
their original idea sounded on paper and whether it involved blockchains and
college students with outsourced tech teams or not. The tech ecosystem relies
on some startups massively succeeding, not on none failing.

I mean, I wouldn't encourage the friend in the OP's situation, but I wouldn't
see anything more than politely sceptical responses when solicited for
feedback as appropriate (you don't have to pretend his band is actually great
either!) or likely to make any difference. Of course, feedback can be a lot
harsher if you expect that, wittingly or otherwise, a friend is in danger of
breaking money transmitting laws or leaving charities out of pocket...

------
kochikame
_The problems he wants to address (e.g. fraud prevention in charity money
transactions) could be easily solved using conventional databases with basic
security measures_

Blockchain in a nutshell

------
verdverm
Don't criticise, condemn, or complain ~ Dale Carnegie

I feel you though, one of my best friends got too deep. Hanging out in the
ecosystem has changed him in non good ways.

I have another friend like the one you speak of. Naive on BC tech, convinced
some naive investors. Never really went anywhere, he doesn't really talk about
it. With time it will likely pass.

Doing things and not having them work out is valuable learning experience.

------
32032141
This isn't uncommon. There's hundreds or thousands of companies that combine
[blockchain x thing], in some vague hope of getting people in the [thing]
industry will give them money. There's never a technical reason for this to
happen, other than someone thought it was an attractive sounding idea.
Generally speaking there's very few things which could be conceivably solved
by a block chain, it's not a solution which can be pasted over any interesting
sounding problem, and manages to create a multitude of problems when it is.

------
patatino
"..but at the same time, I would like to nudge him in the right direction"

Who are you to know the right direction? Only because of blockchain is just
another database? Uber is just another taxi service, amazon is just another
online shop. This point of view is pretty naive.

You have no idea what he will create, what if he creates something people
want? As long as he doesn't do something illegal everything is alright, he
should explore.

“No-one ever built a statue of a critic.” - David Nicholls

~~~
AznHisoka
And maybe on the path of building that idea, he'll discover an even better
one. So you never know what the right decision is at any time.

------
a-saleh
I thought about this, and I would approach it differently based on who my
friend is. Are they a competent person, surrounded by other competent people,
not shying away consulting lawyers, and navigating difficult regulatory
environment? You might still be right to be skeptical, but if they are have
their bases (and backs) covered, even if it explodes under them, it will be
mostly a story you laugh about few years down the line (and you will be able
to be all "I told you!" ;)

Or they actually pull it off :)

On the other hand, "fraud prevention in charity money transactions" sounds to
me a regulatory nightmare, regardless of enthusiasm for the underlying
technology. So if your friend and their team don't sound ready for that, I
would try to dissuade them, lest their enterprise is just a lawsuit in waiting
(or a large fine).

To be honest, the most successful enterprise (mostly because they actually
didn't hodl bitcoin :P) in this space I know about, was a small consultancy,
doing small proof-of-concept in our local startup ecosystem. As they say, in a
gold-rush, money is in selling shovels?

------
danieka
Maybe your friend is making a mistake betting on this startup, maybe he isn't,
either way it's his mistake make.

Sure, it might not be the optimal path to wealth but there are other positive
things you get out of running a startup. A failed startup will (most probably)
not ruin your friend, and might just set him up for future success. Also, it's
at this stage in life that you can take the most risky gambles.

ps. I'm a former student that is happy he founded a startup, eve though it did
not succeed.

------
RantyDave
He's still at university so the experience will be useful (provided he doesn't
quit his uni work to do it). The investors are cretins. Get him to buy you
beer :)

------
AKhoo
Ask him if he's talked to prospective customers and keep urging him to! The
risky assumption in this whole venture might be whether customers have the
problem and want their solution, not the technology behind the solution.

------
ncmncm
Your friend will have a painful learning experience. You might not be his
friend anymore by the time he learns the thing. Or you might be there to help
him recover from a painful learning experience. Either way is OK.

------
algaeontoast
Your friend is probably an idiot or a wanna be scammer or a bifurcation of
both.

~~~
DamnYuppie
Not really helpful. Youth, and the lack of worldly experience it brings,
provides an excess of exuberance for ventures that more mature individuals may
lack.

There are viable uses of blockchain, this does not appear to be one of them
though. Naivety does not a scammer make.

~~~
algaeontoast
I've been deeply involved in the space since 2015. People like this kid's
friend are the reason the perception of the industry / space is trash now.

~~~
verdverm
Almost every persona in the space is the cause for disillusionment with the
general public and tech knowledgeable.

