David vs Goliath in The Push for Digital Disruption
One of the benefits of technology is its ability to shift power back to the hands of the individual user. Thanks to technology, today anyone with a smartphone can become a filmmaker, create their own media or launch a business. Only 20 years ago, such activities would have required millions of dollars worth of capital and equipment.
Not only are today's entry barriers to starting a disruptive business lower than ever but the costs are close to zero and free educational information is abundant. We live in a world where any kid with a computer is a potential millionaire.
Indeed, never before have we seen more young millionaires and billionaires as today. Fifty-six of the names on Forbes' 2017 World’s Billionaires List were under the age of 40, with some in their 20s. Thirty of them were self-made and 23 of them made their wealth in tech.
Among them are the 26-year old John Collison and his brother Patrick, 28, founders of online payments startup Stripe. Their company, founded in 2010, was built as an alternative to behemoths like PayPal, Google's and Apple's payment solutions. Despite the competitive space, the two young founders must have done something right. In 2016, their company raised $150 million in funding which valued it at $9.2 billion. Google's parent company Alphabet Inc., through its investment arm CapitalG, was among the backers.
Ripe for disruption
The blockchain is magnifying this power rebalancing even more. As fascinating as it is, making a high-quality video and publishing it to a potential audience of millions of viewers, doesn't look as revolutionary anymore. It is empowering users in an unprecedented ways, allowing them to take on industries like banking, insurance, healthcare, even space.
In the age of disruptive changes, no traditional industry has remained immune to competition.
One such industry is, arguably, cloud computing. With incumbents like Amazon and Google, the space seems pretty much well-guarded. Yet, there is no shortage of startups taking aim at the market.
One example is internxt.io. Based out of Spain, the company intends to use the blockchain to create a “decentralized Internet”.
Its founder is 20 years old and already sold his first business.
The company is a late-stage blockchain adopter, having conducted a successful initial coin offering (ICO) in September 2017.
Its first two products are aimed at decentralizing cloud storage and web hosting. At the core of the concept is utilizing individual users' excess computer capacity, not unlike Uber and Airbnb allow private owners to utilize their underused automobiles or properties.
Its X Core infrastructure is a Peer-To-Peer (P2P) cloud computing network which “allows users from all over the globe to cooperate in the creation of a decentralized Internet”, the company says in its white paper. Users can provide unused resources on their machines to those looking to host their data in a secure, private and efficient way.
Out with the old
internxt.io founder Fran Villalba Segarra, who got into coding when he was 13, believes “governments and corporations have too much say over people”, while admitting some regulation is needed to avoid illegal activities.
Equally interesting is the story of Vitalik Buterin, the co-founder of the Ethereum platform, currently with a market capitalization of almost $82 billion. The Russian-Canadian programmer and entrepreneur laid out the concept of Bitcoin's main rival cryptocurrency in 2013, when he was 19.
Institutions like the Thiel Foundation, funded and managed by PayPal's co-founder Peter Thiel have been designed to help young young entrepreneurs' project come to life. It is intended to encourage college students under the age of 23 drop out of school and pursue their dreams.
It is, in part, the reason why Buterin was able to focus on building Ethereum and growing it into the billion-dollar network it is today. A year after he wrote Ethereum's White Paper, he won the $100,000 Thiel Fellowship in 2014. This led him to drop out of the University of Waterloo to focus exclusively on the Ethereum project.
He and his team, held a public crowdsale, pre-selling the new coin, known as “ether” to the public. His idea was to create a new cryptocurrency which featured a more general scripting language allowing for application development.
Selling before launch
Today, the platform is used by almost all of the startups funding their projects through ICOs.
Including internxt.io. During its 2017 crowdsale, it raised 980 Ethereum (ETH), at the time worth some $221,000 and about $871,000 today.
It is one of a myriad of companies using the method to raise funds. In 2017 alone, there were a record 435 ICOs, raising $5.6 billion, up from mere $240 million the year before, according to a research by investment fund Fabric Ventures and cryptocurrency data provider TokenData.
The hype has attracted a huge number of businesses to the space.
A notable example of a company disrupting a century-old conservative industry is an app called Robinhood. Initially created as a no-fee stock trading app, Robinhood announced in January 2018 that it intended to roll out a commission-free crypto trading service.
Why bother compete with stock trading platforms, you may ask? Because technology allowed them to. Thanks to social media, the young co-founders were able to amass a waitlist of more than 1 million users. That is before they even had a product.
Later, Vlad Tenev, one of the co-founders who was 26 at the time, said they had to go through more than 70 rejections from venture capital firms. In 2017 the company was worth more than $1.3 billion and Snoop Dogg was an investor.
And it was able to repeat the hype from its first pre-launch. In the first four days after Robinhood announced the new crypto-trading service, it saw more than 1 million users join the waitlist. An impressive amount of interest, considering that service was slated to launch in February in just five US states.
A token of the demand for technological novelties nowadays.
Similarly, internxt.io was able to raise funds and start marketing before it had a product. Its founder Segarra, who is nominated for Forbes 30 Under 30 2018, hopes to be able to roll out the alpha version of their X Cloud service by the end of February 2018. A commercial version is coming up in the summer.
The founder is pretty ambitious for his young age. After selling his first company OneSite, a traditional hosting service provider, he set his sights on large, legacy businesses, leveraging the decentralizing power of the blockchain. Now he hopes to be able to launch a service, capable of snapping up market share from heavyweights like Google and Amazon.
The jury is still out but as the appeal and capabilities of new technologies become more abundant, the plethora of innovations they allow will only grow.
Then, one day, some geeky kid may come along whose invention will revolutionize how we do X forever.