Making Lean Our Own
The ultimate goal of lean is to get out in front of your customers early and iterate quickly. Many of the tools and ideas are built around B2C consumer plays. We learned in week one that a large part of our value at BTC Alarm would come from integration with key infrastructure in the Bitcoin economy. Without that infrastructure little value could be relayed to end users. In fact, the Bitcoin community is very much a show me the goods hacker community that doesn’t want to be “marketed” to. All of our efforts have been focused on creating value and also further introducing ourselves to the Bitcoin community.
Use the right tool
For the purposes of the competition several assumptions were made in terms of what a business would need to engage their customers. The suggested tools provided are great for web B2C companies. For B2B, deals are made on the backend and usually without a lot of fan fair that is publicly visible. The announcements are made when the parties involved are satisfied and the results of the engagement have a positive affect on business.
So first off, don’t be overly public with business deals if doing so will invite external actors to throw in a monkey wrench. Lean is about engaging your customers. If those customers are other businesses, be respectful of their timelines and marketing strategy. Apple is the largest tech company in the world and they keep most things under wraps. Loose lips sink ships ;)
What’s the lean takeaway? If you are a B2B play figure out what the best way is to engage your first handful of customers. For most that is going to be email and the phone. You will spend your time gathering feedback and developing relationships. Being a blowhard on your blog isn’t going to inspire confidence. Especially if you’re in a hyper competitive fledgling market, like Bitcoin.
Plan Going Forward
This is a reprint from my post on the forum.
Difficulty increases as time marches on and we are fast approaching the time next year when the amount of bitcoins awarded will be half. Here’s the rub. There are a fixed amount of blocks and that number decreases by one approximately every 10 minutes (much faster on Deepbit right now). Every block gone permanently reduces the maximum amount of revenue you can make in Bitcoin. Also new miners can pile in at any time to make the work you are doing harder if the network has to adjust in an extreme way. Unless you have significant hashing power and can earn multiple blocks per days solo mining it makes more sense to participate in a pool and get a cut of every block. As continuous time spent increases your payout statistically should be what you would be making solo mining minus fees of 0-3% without difficulty risk. Difficulty risk meaning that in reality your fastest worker in your private pool contributing to your overall hash rate is way to slow to realistically find a block before the fastest workers in the network. Slowest workers being CPU miners at around 20Mh/s and fastest being over 700Mh/s.
Bottom-line: For $20K you could build 20 machines to gross 4,345 BTC worth $60.8K@14BTC . That’s $40K in profit in year one if prices hold, but of course they can go up or down. So mining is literally a business that runs itself and with significant hashing power that is maintained you can make it Ramen profitable running a shit load of machines. You can boost profitability and get geometric gains when the market is volatile, but for the majority of Bitcoin’s life it hasn’t been. The run up to $30 was something special as well as the volatility afterwards that day traders love. I think for a while we will just be seeing a lot of sideways trends both bullish and bearish.
In the end Bitcoin is just money. Build something of value and sell it if you want to make money. I think the pool providers are an excellent example. They are selling longterm mining insurance for a 0-3% fee. In exchange I think Deepbit is easily pulling in over $200K/yr conservatively. I don’t think mining is worth it you can’t afford a hashrate that expects several blocks a day. Most of the professional employed technical guys can make a lot more money just working. Building out a 50 machine server farm to net $151K for example is a poor allocation of resources. With that upfront allocation of resources you could build a business that accepts any form of payment and earn a ton more.
For the record I’m a miner with about 2Gh/s. I can’t justify the throwing a ton of cash into miners vs buying a ton of Facebook stock when it IPOs. Going long on mining at this stage is gambling. I would be interested in a pool where membership requires a 2Gh/s minimum. That could be really cool and ultra profitable. Like the ladders for Bticoin miners, LOL!!! See you all in NYC for the conference!
Core to the Lean methodology is the concept of Pirate Metrics (AARRR). These stand for acquisition, activation, retention, referrals, and revenue. For week one we decided to focused on acquisition. More specifically we focused on the acquisition of mind share. Our product is focused on a couple of distinct groups: end users, service providers, and affiliates. We strongly believe that we don’t have a product if it’s not useful to other service providers. Of our service providers they mainly fall into the category of mining pool operators and exchanges. Using forum.bitcoin.org, we reached out to several existing service providers in private. We also made a public introduction to the community. We also shared some additional posts on our blog related to our security efforts. Here is a breakdown of the numbers:
Steps for Week Two
If you are going to start a Bitcoin related business on the web HTTPS is a requirement. Public key encryption (PKE) is a basic technology that has democratized security for the web. If you don’t know what I’m talking about, PKE is basically the “https://” you see when you’re visiting a secure site on the web.
HTTP over SSL (Secure Socket Layer) is pretty much the gold standard for security on the web and what’s what most people are use to when it comes to securing their financial transactions. Our first goal at BTC Alarm was to make sure we got our core infrastructure right. We’ll go more into that in the future, but for now let’s stay on the topic of secure transactions.
So for our first task we wanted to make sure no matter how you come to find out about btcalarm.com online you are forwarded to a secure connection. There is one ideal way to reach btcalarm.com: https:/www.btcalarm.com (secure web). Unfortunately here are the other ways that we need to handle; for each on we have to convert to the proper root:
Give it a try yourself. And share your comments on what you expect in terms of security for Bitcoin related sites? We are trying to build a secure service that can be leverage by the entire community. More details on what we are actually building will be shared soon.