Blockchain is a global business, decentralized blockchain organizations are the industry norm. With coronavirus threatening business continuity, maybe other industries can learn from the model.
Photos: The Atlantic
The current novel coronavirus outbreak is a reminder of the risks pandemics pose to firms with large workforces at one location. In contrast, globally distributed teams like decentralized blockchain organizations face low risks of business interruption. Running a distributed, decentralized team is business as usual for blockchain projects and companies. Due to the nature of the industry, going global is a must, not an option.
A case in point: blockchain protocol Harmony is based in Silicon Valley, but its team is spread all over the world. Team members work in China, Greece and Turkey. Previously, teams had been located in the Netherlands and Denmark as well. Founder and CEO Stephen Tse sees a global, distributed team as an advantage. “We do truly value the global perspective,” he says. “It’s not just the culture.”
As the coronavirus outbreak shows, location matters. The disease, though in its present form – thankfully – not extremely life-threatening, is highly transferrable. A single staff member in a large, open-office workspace can potentially infect dozens of colleagues in one day. The knock-on effect, which we can see in the daily news, is huge and growing.
But working remotely with global team members – as is the case with decentralized blockchain organizations – means that no single pandemic event can threaten a company’s entire workforce at once. This is not a small matter to consider: the insurance industry regards the risk of a global pandemic as a “when, not if” risk. Just as the premiums for a life insurance policy are based on a probability assessment of when the policyholder will die (and not whether the person might just happen to be immortal or already dead), insurers sell pandemic business interruption (BI) covers designed using risk modelling software that estimates when the next global pandemic will occur. Food for thought.
Companies like IBM that largely allow their staff members to work anywhere they want – at home, at their own offices, at co-working spaces or in coffee shops – may have a big advantage when the next global pandemic hits. In fact, we at Blocks99 also pursue this approach. We have a development team in Vietnam, I and my editor are based in Germany, but in different cities. Our writers also come from different places like India, Nigeria and the US. And our advisors are in Europe and Asia.
Another downside of central offices: commuting
Between December 2018 and June 2019, I spent a lot of time in Bangkok. There, I chose a nice co-working space 2km away from where I was staying. As short as that distance is, I found myself spending almost an hour from home to office, in the crazy Bangkok traffic.
I found an alternative: the massive risk of jumping on a taxi bike to get home faster. Riding a taxi bike through Bangkok center in the Sukhumvit area is like acting as a stunt man in a Hollywood action movie. Think of James Bond movies where he races motorcycles through crowded Asian streets and you’ll get what I mean.
Not only in congested and chaotic cities like Jakarta, Bangkok and Ho Chi Minh City is commuting to work a headache. On my flight back to Ho Chi Minh City this week, I chatted with a passenger sitting next to me who said it takes him an hour each way to drive from his home to work in Tel Aviv. According to CNBC, traffic jams cost the USA US$ 87bn, UK nearly £8bn in 2018 in lost productivity in 2018.
Think global talent
Think about the cost of hiring a skilled engineer who lives in a developing country like Indonesia, India or Vietnam compared to those living in expensive cities such as San Francisco, Munich or London. The annual salary of a blockchain engineer in San Francisco is between US$ 150,000 and US$ 175,000, while the cost of hiring an equally skilled person in Ho Chi Minh City could be between US$ 36,000 and US$ 60,000.
In the blockchain space, companies know these benefits and many fully utilize remote, distributed workforces to get the right talent. This is especially the case where there is a lack of skilled talent in their local area, which is typical among decentralized blockchain organizations. On top of that, as Stephen Tse of Harmony pointed point, a global perspective is crucial for the success of a new tech venture. Research shows a positive correlation between the diversity and performance of a company.
Coronavirus epidemic: loss in productivity
China may lose US$ 60bn this quarter alone to the virus. On February 3, 2020, the Shanghai index tanked by 8%, its biggest daily fall in four years. Despite the Chinese government’s effort to pump money into the market, a sign of a dramatic economic downturn for China seems unavoidable as the coronavirus epidemic advances with no sign of stopping.And of course, China is not alone. It is the largest trading partner to many countries, with a volume of US$ 479.7bn in the US alone. But the WTO estimates that global corona-related GDP losses may reach 5%, more than US$ 3tn.
Online collaboration tools for decentralized blockchain organizations
Of course, sometimes we miss the real-life office environment where you can connect spontaneously. It’s also interesting to note that a lot of investors question whether remote teams can really function. Some of the early-stage venture capitalists who have shown interest in my business have told me outright, “I don’t believe in a remote, distributed team. I don’t think it works.” My reply is that it’s hard, but not impossible.
Like a long-distance relationship, you need to find a way to make it work. And trust is the first thing you need to build, while at the same time setting clear guidelines and high expectations upfront. Since you cannot see your team members physically, managing them based on an hourly measurement of work is impossible.
So here are some insights gathered in the months of setting up and getting the business up and running: I tested out different applications and software to make work and life easier while boosting efficiency. The applications we use include:
● Slack: all-company communication channel
● Google drive: for all documents within the company and for sharing with third parties
● Trello: for project management
● Zoom: for team calls. We used Skype and Google hangout in the beginning, but I have decided to switch to Zoom having realized that it is the best tool.
As a startup in the superfast-paced media tech industry, we are under pressure. Having the right team members on board with the right mindsets and attitudes helps tremendously. Having the wrong (remote) team members costs lots of time and money.
These are lessons learned the hard way running a global, remote and distributed team. It has worked well over the months for us. Traditional companies should consider how to adapt this new workstyle to hedge against epidemics and potential pandemics like coronavirus. The savings in business interruption cost and human suffering could be significant.
This piece reflects Sophia Ha Hos’s personal opinions and does not necessarily represent the views of Blocks99 as an independent media portal.
About the author
Sophia Ha Ho is a Vietnamese-born technology entrepreneur living in Munich. A proud mother of a bright seven-year-old Vietnamese-German boy, Sophia lives between the two cultures. She is a global citizen who believes in the power of connecting people across geographical, cultural and political borders to foster positive changes. Sophia is the founder of CryptoStories and co-founder and CEO of Blocks99. While passionately building Blocks99 as a blockchain media tech company, Sophia enjoys coaching C-level executives and entrepreneurs on how to embrace social media and other channels to build an appealing personal brand and promote their businesses in the digital sphere.
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