I’ve been reading with interest the reports on the rise and fall of Bitcoin exchange Mt. Gox over the past week. It had the world at its feet but I believe that the collapse has at its core a number of pertinent lessions for us all:
Details really do matter
Mt. Gox forgot that if you look after the pennies then the dollars will look after themselves. Ensuring that the site was secure was one of those really important pennies. Sure, security isn’t much fun and you’re having to wage a silent unforgiving war against people attempting to hack your site but it’s vital to your business. Mt. Gox forgot this…..and they were hacked repeatedly.
Once you end up with several thousand domain names it’s really difficult to keep track of each and every one of them. This is especially true if you’ve been playing the drops and they are at a large number of registrars. It’s vital that you have in place processes and disciplines that allow you to keep track of your valuable assets at any point in time.
Reading about Mt Gox highlighted the lack of controls not only in the technical area but also the financial. To misplace $460 million is obviously a problem for the entire business, not just the technical department.
One of the things I really appreciate about my business partner is that he’s incredibly focused on the details. A missing domain goes and gets hunted up and if we are out in the accounts by a few cents then it becomes a mission to find out what’s going on.
Don’t get distracted
The Mt Gox CEO, Mark Karpeles, was distracted in the business by everything and left the core business to flap in the wind. Whether it was setting up another server, playing with gadgets or establishing the Bitcoin café.
Ask yourself, what am I being distracted by? Is this a worthwhile distraction or a waste of time? As soon as you become moderately successful you’ll be like honey to busy little bees. They’ll come and buzz in your ear all sorts of wonderful things and try and pull you away from what really makes you successful.
For example, being on a board sounds like a great idea but it takes up your time to do it properly. I can almost guarantee that those opportunities that sound so good really aren’t. So my word of advice…..don’t be like Karpeles and get distracted by what’s not central. Worse than that, don’t believe all the hype that the little bees are saying about you. Keep your feet firmly on the ground.
What are you good at?
As Mt Gox disintegrates one thing has become clear. Mark Karpeles was not a good CEO. He was a techy that loved playing around with gadgets and starting new things. That is his skill and he should have stuck at it. No one can take away from him the vision that he saw in Bitcoins but they can say that he executed poorly.
When you know what you’re good at then you don’t have a problem with getting good people in to fill your skill gaps. For example, although I can be very detailed, it’s really not my strong skill. Before starting ParkLogic I searched for a person that I felt that I could work with that I could learn from and had the skill set that would complement my own. Seven years later I’ve learnt a lot, become a better person and we both have a thriving business together.
Think of your skills. Be really honest with yourself. Then get a mentor, partner or even a good friend that can help you learn how to improve your weakness….not just increase your strengths.
There are many other lessons that we can all learn from the Mt Gox fiasco but like everything in life make sure that you learn the lesson and learn it well. I’m not sure what’s going to happen to Mark but in the eyes of the law, ignorance is not an excuse.