As much as Crypto zealots like to think that their little part of the world is different than any other place, both past and present, the truth is that one trend that has transpired in every other nascent industry is about to take hold in all things crypto in 2019. Can you guess what this trend might be? It actually goes by the buzzword of “Acqui-Hiring”, the process by which large industry players wait on the sidelines until the right moment, then swoop in to buy up expertise at bargain prices, rather than deal with expensive one-on-one hiring negotiations.
Crypto Winter has not been kind to investors. We continually hear about the meltdown in valuations from 80% and up, but we seldom hear about the toll it has taken on crypto development companies. Most all of these funded their operations through exchanges of proprietary tokens primary for Ether, but occasionally for Bitcoin, as well. As it turns out, only a few of these enterprises listened to treasury management advisors that counseled that the ETH or BTC or whatever token was used should be converted to fiat for safekeeping, until the funds were needed at a later data. A few of the wiser hands on deck chose to hedge their reserves with options, another way to ensure future cash flow.
For those firms that did not follow this sage advice, and there seem to be many of them, the consequences have been severe. Development plans have been delayed, changed direction, or, worse yet, laid off critical staff until better times. Fortunately, it turns out that there is a silver lining to this ominous staffing “cloud”. While the demand for crypto assets fell off the proverbial cliff, the hiring demand for blockchain developers escalated. Much as with the Internet craze of decades past, companies tangent to and disparate from the crypto ecosphere have been climbing over one another, trying to build internal development teams of their own to leverage the benefits of blockchain technology.
When the Internet bubble burst in the early 2000’s, developing expertise was freed up in a similar fashion as is happening today in the crypto space. We are only at the very beginning of this trend, where major corporations have been moving defensively by building their proprietary units to prepare for the expected “embryonic stages of a potential massive paradigm shift”.
Recent evidence of acqui-hiring occurred last week when Facebook acquired the small London-based blockchain outfit called Chainspace. Zachary Schwartzman, an Internet analyst with Royal Bank of Canada, shared these comments with CNBC: “On the surface, it may appear that Facebook purposefully hired the technical team related to DECODE. But we don’t believe this was the case. Our view is that this was simply an acqui-hire to expand Facebook’s internal crypto team’s expertise.”
Facebook is not an anomaly. Google, IBM, Amazon, Samsung, Microsoft, Oracle, and JP Morgan are notable behemoths that are also in hiring mode, ostensibly building blockchain development teams to enhance the security, efficiency, and transparency of existing operating systems.
ICOs raised some $21 billion in 2018 for new crypto development efforts, while venture capital firms added another layer of funding to this total. The meltdown in valuations has dampened these activities to a degree, but recent reports have revealed that as many as 1,000 firms shut their doors during the year, as well. While the industry deals with contraction and consolidation, others are watching. According to one analyst: “The tech and internet monopolies are definitely paying attention and are circling like sharks in a digital pool that is filling up with fresh talent as the crypto winter continues.”