Cryptocurrencies,  Distributed Leisure,  Innovators

Entrepreneurs lament lack of diversity in blockchain and cryptocurrency

Young male teams often just develop things their mothers no longer do for them

[Modern Consensus columnist Michael Hillmeyer checked out the blockchain and cryptocurrency panels at the Propelify tech and music conference in Hoboken. Below is his review of the first panel, called, “Diversity in the Blockchain Industry and Why It’s Important to Get It Right Now”. Also check out his review of the second panel (“Is Crypto the Future of Money?”) and the third panel (“Is Blockchain the Answer to Big Data Problems AND Does Blockchain Create Existential Threats to Intermediaries?”)]


Just a few short weeks after braving the PATH Train for a blockchain and artificial intelligence coding event at Jet, we found ourselves back on the waterfront in Hoboken for the annual Propelify technology festival. Propelify is an annual outdoor technology and music festival held along the Hudson, across the river from the Manhattan skyline, where one can listen to keynote speakers like Arianna Huffington (2017), local technology startups and interesting bands with a craft beer and some local food in hand.

Departing from downtown Manhattan, we were able to use the Kaiju train station for the first time. Kaiju Station sits beside the World Trade Center in downtown Manhattan. [Okay, we’re not entirely sure about the official name of the station, but it seems self-evident, so we don’t think it’s necessary to look it up.] Disappointingly, the interior is just a mall. To be more precise, the $4 billion station’s interior at midday seemed to be little more than a fairly empty mall hosting eerily empty “alt subway” trains to New Jersey.

World Trace Center Oculus
Not actually Kaiju Station (Photo by Michael Hillmeyer for Modern Consensus).

The driving rain and windstorms of the previous night combined with morning drizzle seem to have kept attendance at this year’s Propelify down a bit overall, but when we walked up Sinatra Drive to the festival in the early afternoon, there were plenty of tents, a good lunchtime crowd, and reasonably dry seats to watch the day’s speakers.

“Warning possible sewage overflows during and following wet weather. Contact with water may cause illness.” (Photo by Michael Hillmeyer for Modern Consensus)

This year’s festival was set up roughly in the shape of a dumbbell along the Hoboken waterfront with stages and some exhibiting companies at the north and south ends and food stands in the middle. Before settling down for a panel discussion at the south stage (“Stage of Inspiration”), we tried to do a quick walk-through of the entire festival, but the busy food-grabbing crowd at the choke point in the middle made that impossible.

While this year’s conference set up resembled last year’s, earlier iterations of Propelify were held closer to the Hoboken PATH station on a large pitch of grass next to the river. That space made for a more concentrated event and allowed for a bigger audience for the band at night, but was far muddier in the rain.

The title of the first panel that we attended was, “Diversity in the Blockchain Industry and Why It’s Important to Get It Right Now.”

Venture capital firms have been the traditional gatekeepers of startup technology company funding in the United States for decades, and they often tout their “pattern recognition” abilities for business models and management teams born of extensive experience. However, it seems to us that in many cases, this “pattern recognition” for teams has devolved into a groupthink that only funds management teams made up solely of young white and Asian guys.

It could also be argued (and has been) that “pattern recognition” for the business models getting funded for these mostly young male teams often amounts to things their mothers no longer do for them.

Proponents of ICOs say that one of the main reasons for their popularity has been their ability to circumvent the “tyranny of VCs” to fund new companies that might not fit into their preconceived notions of acceptable management teams, business models, or even geographic location. For this panel, we were interested in learning how the blockchain industry and/or the underlying technology might play a part in improving diversity in the rapidly growing and evolving space.

The moderator of this standing room only panel, Amy Vernon, vice president of product at Rivetz and a founding member of Crypto Working Group, led off by saying that cryptocurrencies and blockchain companies can’t change the world if they don’t look like the world.

The panelists included self-proclaimed “blockchain evangelist” Kelcey Gosserand, founder of Trellis NYC and also a founding member of Crypto Working Group. Gosserand noted that while people in the cryptocurrency and blockchain industries are diverse, the investors in those companies are not.

This also may be changing. In our other work, we have seen that many investors in private equity firms (including in VC firms) are insisting—or have changed their own bylaws to require—that they invest only in funds that reflect some level of diversity.

Vernon’s and Gosserand’s subsequent comments around the lack of representation of women in the industry reminded us of a panel discussion at last year’s Startup Columbia festival. A search through our old notes unearthed the following. The moderator of the “Women in Entrepreneurship” panel, Deborah Johnson of Plum Alley Investments, had recounted some revealing statistics circa 2016-17: Around 42 percent of startups in the United States are founded by women, but only 7 percent of female founders are funded by venture capital. Perhaps not so coincidentally, only 7 percent of VC investment professionals are women.

A member of that panel, Haley Barna, co-founder of Birchbox but now a venture partner at First Round Capital, had described her frustrations with the VC community when trying to raise money for Birchbox. Despite being armed with comprehensive data around the interest of women in trying out samples of beauty products, she felt that the male VCs she pitched to ignored that data, and “just thought I really liked lip gloss.”

Back to this year’s Propelify, Gosserand went on to say that while Blockchain 1.0 is essentially bitcoin and other cryptocurrencies, Blockchain 2.0 will involve solving real world problems over the next five to ten years.

David Park, founder of Coins & Keys, said that the cryptocurrency meetups he runs attract very diverse groups of people. He also added that while cryptocurrencies so far have been extremely volatile, they make a lot of sense for countries in crisis that are experiencing hyperinflation like Venezuela.

Last but certainly not least on this short panel discussion, was Leah Callon-Butler, co-founder and chief impact officer of intimate, a London-based startup. The company has an upcoming ICO and describes its token (ITN) as a cryptocurrency that will facilitate payments and trust for the adult entertainment industry. Callon-Butler said that banks have become moral arbiters for financial transactions causing participants in the adult entertainment industry to have trouble establishing secure methods of payment.

This is a problem right in the wheelhouse for cryptocurrencies and blockchain to solve. In fact serving the previously unbanked is an opportunity that is being attacked around the world, not just in the Bay area, by companies with deep roots in their own communities and countries.

The schedule for these panels and talks at Propelify was tight, so this discussion had to be ended, ahem, somewhat prematurely.

We then had some time to wander around the festival in the mid-afternoon before the next cryptocurrency panel began on the same stage. In the spirit of the diversity panel, we should note that all participants in the second were male and white, although the third related panel later that evening was more diverse.

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Michael Hillmeyer has primarily been an independent consultant in the financial services, technology and healthcare industries since 2004. Prior to this, Michael was a senior sell-side equity research analyst at Merrill Lynch covering several technology industries. He owns no positions in any cryptocurrency but writes the “Distributed Leisure” column for Modern Consensus.