Public Companies v. Crypto Companies

Mark Lurie:

Welcome to WTF Crypto, where we peel back the layers of the onion of the crypto universe to understand what's really going on and how it affects you and your portfolio. I'm your host, Mark Lurie and as a caveat, nothing in this podcast is legal or investing advice. And to the listener, if you like this podcast, or even if you hate it, I want to hear from you. Our team works hard every week to find the topics you care about most with the most thoughtful people in the industry. So please leave a review on Apple podcast to let me know what you think of the show. We read every single one. Thanks for listening. Today we're trying a different episode format where we talk with key people on the Shipyard team about their hot takes on crypto.

Mark Lurie:

To begin we're talking about the parallels between public companies and crypto teams with Angie Malltezi, Shipyard's Chief of Staff. I'm so excited to have you. We talk every day and sometimes I wish other people could sit in on our conversations because they always end up in some very interesting intellectual place. So to start, Angie, can you give the listeners a little bit of context for your background prior to Shipyard so that they have a little bit of understanding of what makes you a good guide with respect to public companies and then what you do at Shipyard and so how you know about crypto companies?

Angie Maltezzi:

Yeah, absolutely. So prior to working for Shipyard Software, I worked for a global management consulting firm in the strategy division. A lot of my job was working with executives so CTOs, chief digital officers, with CEOs primarily helping them think through innovative business models that they could stand up. I had a interest in artificial intelligence, and I primarily was interested in the capabilities of new and emerging technology. What can we do with large scale data teams and essentially, how can we find new ways to generate revenue or minimize operational expenses. So the companies that I worked with were multi-billion dollar companies, they were massive organizations and then transitioning from that space into the world of crypto has been fascinating.

Mark Lurie:

So you have jumped into the proverbial ice bath of crypto from the world of big companies and one thing that happens, I think when you do that so suddenly, is the differences are very stark, right? I'm used to crypto at this point and so some things don't amaze me and aren't as absurd as when I first started. So let's start talking about that. In particular, public companies, they have a lot of stakeholders, customers, and investors, and they talk about them and work with them in really specific ways. Crypto teams have similar needs because they have users and they have token holders who care about the value of tokens and so in a lot of ways it's analogous, but in other ways it's not. So I'd love for you to just kind of talk us through how you think about the comparisons and what's most striking to you about what crypto does or doesn't do.

Angie Maltezzi:

Yeah. You brought up a really interesting point in terms of the different stakeholders. What I found really interesting when I jumped into the space was that the stakeholders are very similar. When you work with a public organization you report to your investors, there's these shareholders, there's a board of directors and then there's the employees and you have this complex ecosystem in which the CEO's responsibilities or other executives have very specific and defined responsibilities and ways of engagement for how they communicate about their business within specific timelines. And then you sort of jumped into the crypto world. Same stakeholders, arguably. So for instance, you can think about token holders as the shareholders of the organization. However, what I found kind of interesting about this particular space is that it didn't have the same level of terms of engagement. If you were a project lead, you didn't feel the responsibility to talk about your business in the same specific way that a CEO of a larger public organization might talk about it.

Angie Maltezzi:

And what I mean by that is because it feels so informal in crypto, you might forget that your words have an impact on the markets. I remember you asked me that question when I'd joined the company around the way that we do business development or the way that we articulate about our business, or even how we talk about our specific users and demographic. Both companies, so public and private have a responsibility to the users that they serve. However, what I find kind of interesting is that crypto leans, if there's a little diagram on the user obsession, I would say crypto leans very heavily on the user obsession whereas public companies are trying to balance shareholder needs and for them, the user and shareholder are separate entities.

Mark Lurie:

That's interesting. I mean, that seems to create a big tension because if you're a public company, you need to be communicating to shareholders, but there's all these regulations about what you can and can't say and that has some overflow implications where then you can't always say what you want to say to customers because you're constrained about how you talk to your investors. It seems tough to not be able to say what you want.

Angie Maltezzi:

You're totally, you're absolutely right. I think it is really tough to be in that position because you have to be very meticulous with the words that you use. And I'd be curious to hear your perspective on why that regulation exists. In my opinion, I feel that, that guidelines or that pressure on the executive of a public company exists to not cause drastic changes in the market in terms of the value of the shareholder price. There's specific timelines that they can talk about specific things and how they articulate that. There's talking points around that and there's a very smart group of people that have thought through how to communicate losses as well as gains of the business.

Mark Lurie:

I think it's tough. As a public company leader, what you say moves markets and you are legally responsible to your shareholders. A public company CEO has a fiduciary duty to act in the best interests of shareholders, not users. There is no legal obligation or stated obligation to act in the best interest of users, it's shareholders and so that's a very clear mandate in the law and you constantly are worried about being sued. I mean, Matt Levine has a great Bloomberg article or email list and he constantly talks about how everything in security is fraud, whether tokens or whether stock goes up or down, what you say, at least in the context of securities, is going to annoy someone. And so it creates this weird dynamic, which a, isn't necessarily best for users, but is a little bit stifling on speech.

Mark Lurie:

It's hard to be honest and so then you see people like Elon Musk get up and they seem like they're just kind of spouting out and being honest and they get sued right and left. And I think there's good reasons for that. There's great reasons for that. Not good reasons, there're great reasons for that because a lot of people have done frauds in the securities industry and over 200 years we've learned that the hard way that you can't just let leader of a public company spout off. Right. And so the SEC settled with Elon Musk and made sure his PR team and legal team reviews every tweet. That was part of the settlement for his like, I'm going to take Twitter private. But it's tough because it stifles speech and I don't know where the right balance is and I'm not even sure how in public companies they strike that balance. How much do these people have second, third, and fourth reviews of everything they'd actually say before they say them, you know.

Angie Maltezzi:

Yeah. Those are really great points. What I find interesting within crypto and I've seen this quite common now, and it seems to be just this pattern of you spun up a project and you have this charismatic leader who's just very passionate about a specific thing that they're selling. And then you have this group of individuals who effectively act as shareholders because they buy into project expecting some sort of return, whether that's a token and they say that very publicly. They say, I'm doing this because I believe in the growth. I want to see you scale. I want to see this get bigger. I want everyone to use this and so all of a sudden you have this very clear articulation of incentives between why somebody's supporting something, but there's no kind of regulatory body that puts that person that all of a sudden has this money, this influence has this level of trust from their demographic, from their user base to not take that money and run and I think that's sort of why rug pulls are just so common in the space.

Mark Lurie:

Yeah. It's like a lot of times you just look at these people spatting off and it's like you can see a rug pull a mile away and it's remarkable. And it's frustrating because it creates a playing field that makes it harder for projects that are trying to be responsible to be responsible. Right? It's like how do you compete with a Wonderland guy whose CFO is like a normal fraudster and for those listening, I don't actually know too much about that situation, but it turned out some senior leaders of a project were known bad actors and it creates a lot of noise that has a signal and you got to say something for public markets where that's less of a problem because people aren't allowed to just do random, crazy things without suffering consequences.

Angie Maltezzi:

One thing I would add is if you can think about a business, the analogy I always use is in biology, we have biological ecosystems where we have on a... And there's a system for everything. You can make it on a micro level, a cell, or even further down to that and you can think about, or on a broader scale would be like the ecosystem of the ocean. And so I tend to think about companies as ecosystems and I tend to think about their specific players within that ecosystem, that if they're gone they really disrupt the balance of the organization. And so in the context of public companies you had mentioned, those stakeholders, your shareholders, they represent the biggest animals or things in this ecosystem that can do the most damage.

Angie Maltezzi:

And so as an executive that's really where you put all of your effort in, however, within the context of crypto companies if your ecosystem is really fragile, if a bunch of token holders that might not hold a material amount of tokens within your business, however, they might have really massive networks or social media is a really big thing in crypto. Then all of a sudden that becomes a problem for the organization from a reputational risk perspective and so from a crypto perspective, if you're an executive running a crypto project, you just don't know the influence of the users that come into your discord and so you sort of have to pander to everyone. You have to try to make everyone happy because you just don't know who has the lever and the ability to completely crush the spirit of what you're trying to do.

Mark Lurie:

Super interesting. And human connection is a way to grease the wheels of emotions and so if you create community then if anyone does have an issue, they're going to give the project the benefit of the doubt, because they feel a personal connection to it.

Angie Maltezzi:

Yeah, I think the psychological aspects of being the human aspect of that relationship between the project leaders and the sense of community is just also really interesting dynamic. So you talked about the level of trust, how do you, how do people really trust a particular project? How do they know that they can trust when a project leader says, sorry, we didn't deliver right now, but we will in X, Y, Z weeks. And then somebody says, okay, I'm choosing to believe you. I think that's also the interesting tactics that we see from Web 2 and Web 3 for how we form those relationships with others. I think in crypto in specific, it's like your standard go out into an arena and talk to the people, shake their hands. But when I say arena, I mean, this digital world that we call an arena where we have an image of our faces, this name that we've come up for ourself, this personality that we presented and curated and thought very carefully about our digital representation and then we go out and we try to form relationships with others to sway an opinion.

Mark Lurie:

You know when you put it like that it makes interacting with a community in crypto a lot more like politics than like a public company leader.

Angie Maltezzi:

Yes. That is such a good analogy to how I... Yeah. That's exactly how I think a lot of people really approach being a leader of a crypto project, because what you're really incentivized to care most about is how many people like you, very similar to, I think, a politician.

Mark Lurie:

Wow. There's so many analogs to politics. I think we probably should do a whole episode with some politicians to talk about those.

Angie Maltezzi:

I think that's a great idea, asking questions like how do you instill trust? How do you get all these people to vote for you? How do you go out and do community planning? Because that's essentially what we do as a, for instance as a community manager, your job is to go out there and gather the community to talk about their concerns and to rally around a specific effort and to get them to drive them to a specific behavior that you want.

Mark Lurie:

Yeah. It's like how do you build a movement?

Angie Maltezzi:

Yeah.

Mark Lurie:

And it turns out there's people who professionally build movements.

Angie Maltezzi:

I know I...

Mark Lurie:

And we should talk to them.

Angie Maltezzi:

Yeah, I do wonder why or maybe there aren't political planners in crypto and just these political advisors or maybe they are and we just don't know.

Mark Lurie:

Maybe they're on their way and we just haven't seen them yet.

Angie Maltezzi:

What are some lessons that you think we can learn from the public markets that we can apply to how we conduct ourselves, our value systems, how we engage with the people that are part of our community?

Mark Lurie:

I think that public companies work at a certain scale and have executives who have been doing this for so long that they've worked out, it's like a machine, you know how you interact with shareholders and the market as a public company. Every quarter you do an update, you publish quarterly update, you do an annual update, you have analyst calls. There's like a cadence and a system to it that people appreciate and keeps people happy and satisfies expectations and a lot of those patterns that the broader framework for that has been set by the regulators, like when do you have to have updates and what do you have to disclose, but there's a whole lot of best practices around how you do that and how you keep stakeholders happy that in crypto, like I just, is a little bit haphazard and I think could use some structuring.

Mark Lurie:

And I think the lessons from public companies could help with that. The thing I would hope doesn't happen is that it stifles the ability to kind of speak frankly and honestly, because of litigation in particular and that's, that would be too bad because I don't think it's good when people are stifled. But I also think it's really important to depart from, to not do it exactly the same, because the reality is that in crypto the token holders are also the users or at least they should be. And so, that creates a very different dynamic. It's also like who is the project core member actually accountable to. It's not the token holders. Is it the users? If so, who determines what the users want and what's in the best interest of users. What if the best interest of users is, what if what users say they want is illegal. There's just all these, it's a tough situation, but I think there's definitely lessons to pull from public companies and I think there's a lot of people who depart too much and that is a problem.

Angie Maltezzi:

Yeah. I would echo all of the things that you had mentioned and stress the importance of just essentially being mindful of what you say and recognizing that, because if you're in a specific position or you're part of a team in a crypto project, for instance whatever role you may hold, your words may hold a different kind of weight. You and I talk a lot about that. Like these positions of power, essentially these positions of power influence the way that things may be impacted. It might influence the way that the community interprets or a specific initiative or part of the roadmap, or even some words that you might say. And so learning to be very mindful and trying to think about how might this be interpreted by 20,000 people that are reading this, that are in a very sensitive head space, maybe they're vulnerable because they feel like they've been scammed by another project.

Angie Maltezzi:

Maybe they're on their last sense of hope and I think even the user base that we work with in crypto is just so interesting because it's these people come with like... They come with stories, they come with this baggage from other experiences, especially if you've been in this space for a very long time. And so now it's almost up to the project leader fortunately, or unfortunately to recognize that the people that they're talking to might interpret things in a different way, based off the experiences that they've had, which is, I know in our team, we really stress transparency and we stress the importance of how do you authentically communicate your intentions as a project?

Mark Lurie:

Yeah. It's interesting and that's a great point and it really speaks to, at public companies a lot of different eyes do go on messaging before it goes out and that's to your point that's, that has benefits beyond just red tape. It gets a lot of eyes on the problem and it also speaks to the importance of diversity. Like if you have a lot of eyes on the problem and they're not diverse, then you're not going to consider the implications of what you say or what you're messaging from all angles.

Mark Lurie:

And so it's like a real business case for having diversity and you know, getting feedback on what you do before you do it because yeah, you're right, it can be interpreted in a bunch of different ways and it's hard to know how things will be interpreted. Communication's hard. Angie, thank you so much for joining us today. I'm really glad we got to delve into this. I think we should do these hot takes more often, especially when we notice interesting things that happen in crypto. We can just get on in this format and talk about them and share our reflections with the community.

Angie Maltezzi:

Thank you so much. I'm so excited for other listeners of WTF Crypto to hear from other team members. You've talked about the importance of diversity of thought and I think they're going to experience a little bit of our diverse team.

Mark Lurie:

And Angie, is there anywhere that people who are listening can follow you or learn more about your thoughts?

Angie Maltezzi:

Probably on the clip or Discord. I am very shy when it comes to social media. Perhaps one day I'll be releasing my own thought leadership pieces within the Shipyard Software website. We have a pretty robust thought leadership tank in which we write our interesting perspectives from all the members of our team. So you'll probably find me there in the near term.

Mark Lurie:

Sounds good. Well, thanks so much. We appreciate it.

Angie Maltezzi:

All right. Thank you.

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