Update: How We're Navigating Running A Bitcoin Exchange In 2022 [From Vietnam]
This is a follow up story for BitcoinVN. If you're interested in reading how they got started, published almost 2 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Hi, my name is Dominik, I am one of the founding members of BitcoinVN, Vietnam’s oldest Bitcoin Exchange service,which will soon complete its first decade of operations.
Besides our online exchange & swap platform, we also have a few sub-departments which operate our fleet of Bitcoin ATMs, provide news & educational content or help to provide our customer base in Vietnam with access to hardware wallets and other auxiliary Bitcoin-related items.
The company has been gradually but steadily growing.
Since we’re fully bootstrapped from day one, we have no pressure to attempt a “moonshot” - but rather build on providing long-term value for our client base and build lasting relationships.
Tell us about what you’ve been up to. Has the business been growing?
Our online platforms and services have seen consistent growth; despite the general “bear market” which certainly drove away a lot of speculators & tourists.
Since we’re looking mostly to provide a reliable and convenient service to actual users - we have been less impacted by the general market downturn.
On the “physical side” of things the months-long military lockdowns in Saigon in the past year certainly slowed us down, but we’re running the business luckily lean enough to make it through such dry periods.
2021 has been a pretty horrific year for Vietnam’s economic development as a whole; borders remained closed until spring of 2022.
We are just now beginning to bring all our team members back on the ground together and go back into a sustainable expansion mode after the storm has passed.
One of the undertakings which we hope will pay some decent dividends in the years to come is our increasing commitment to doing our part to build out infrastructure for the Lightning Network, the payment layer on top of the Bitcoin blockchain.
While building out our routing node (ranked as one of the Top-60-capacity nodes in the world) as one of our incipient steps in our in-house infrastructure, we also helped with the initial funding round for Vietnam’s leading Lightning Payment processor Neutronpay.
What have been your biggest challenges in the last year?
Without a doubt, the military lockdowns were imposed on Saigon.
It’s probably very hard to imagine for many Western readers how bad things got here in 2021 - but you could not leave your house for any reason (barbed wire and armed soldiers patrolling the streets made sure of that) for close to half a year. At the peak of it, even food deliveries were shut down (you had to survive on what you managed to pack away upfront & hope to be one of the beneficiaries of the rations which got handed out by the military).
It was physically and mentally a very challenging time for everybody who remained in town.
Having gone through such a phase in your life certainly changes your outlook rather drastically in terms of the importance of preparations for hard times.
As for us as a business:
Remaining lean and having switched already since early 2020 to fully remote helped us to come through this time.
While revenues certainly halved in these times due to all the various challenges stemming from the situation in Vietnam in 2021 - we’ve had at least sufficient financial buffers to make it through that period relatively unscathed.
We unfortunately also saw many of our entrepreneurial friends driven out of business due to plummeting revenues (depending on the business sector) while they had high ongoing costs to maintain their operations.
We are entering very volatile times in the world, and the strategies of the past decades might not work anymore for what’s to come in the years ahead.
Preparing for hard times means: Keeping operations lean and flexible, and keeping a sufficient war chest to adjust.
Committing too much of your resources to a single path is an extremely risky strategy to take when you might have to adjust and pivot on the spot.
Be it relocating or reorganizing your business - remaining flexible and having options is of utmost importance if you want to stay in business for the long run and don’t just want to gamble on “being right” - when being wrong leads to the demise of your business.
What have been your biggest lessons learned in the last year?
As I mentioned previously, the world has entered a very volatile period.
We are at the end of a great debt cycle, and with that come historically always very rapid and drastic changes to the way the world and societies are structured.
These changes include localized chaos and upheaval - and you’re not immune to that if your area of operations is affected by it.
So the focus must remain to keep the actual footprint small enough to be able to reallocate resources swiftly.
If you’re stuck with expensive office rents and a high payroll that you can’t reduce fast enough if “disaster strikes” - you are playing a very risky game.
The likelihood of tail risk events realizing is increased by orders of magnitude in such volatile times - which means you must take your preparations to not be taken out by them when they occur.
Focus on improving the optionality & flexibility your business operations provide - and if you have to do any fixed commitments, make sure that none of them prove disastrous if they don’t play out as planned.
You also should take sufficient time to understand in which direction you want to go - then move in this direction swiftly and with conviction; while also being ready to adjust on the fly if you start to understand that it was not the right move (don’t double down if you know it was not the right move!).
You must increase your excellence in making risk-reward-based decisions.
As long as you have a realistic view of the risk you are taking and make sure that none of the decisions you make can prove fatal, you should be able to make it through rough times.
What’s in the plans for the upcoming year, and the next 5 years?
Building on what we’ve built so far.
Bitcoin itself moves for good reasons at a very cautious, but deliberate pace - and we aim to replicate the same in our firm.
Speed of execution still matters, it is not an excuse “to drag things out”.
Being deliberate and decisive in your choices is about making sure that what you are working on and the building is something that is here to last - rather than just running after the latest hype and having to rebuild from scratch every cycle.
If you are not well-prepared with experience and data to make decisions, it is far more likely that you get framed into a decision that somebody else wants you to take for their benefit and which very often ends up not being in your best interest.
Having the luxury of having such a long-term ambition is what allows us to build our moat - we are on no specific timeline to provide a return for investors; we are profitable and are looking to build long-term value.
We have since day one focused on becoming a convenient on- & offramp for our customer base in Vietnam and beyond, and we aim to further improve the user experience and value we can provide in that realm.
I expect that Lightning and possibly another layer 2 solutions will see increased usage in the years to come.
There are a lot of building blocks amiss, and it takes time to get everything in place - but we’ve also come a long way over the past decade.
What’s the best thing you read in the last year?
I am mostly focused on the classics these days and working through them with our local group here, as well as keeping up with various “online bubbles” and networks while doing so.
You quickly recognize that there’s not much new under the sun - and that the lessons passed down from centuries or millennia ago… that there is usually a very strong reason why those lessons were written down to guide the path for the following generations.
As usual, most people don’t read or are unwilling to learn or think “this time it’s different” - but back then, people also thought that they could bend the rules of nature and their all-encompassing hybris inevitably led straight into the abyss.
As for specific book recommendations, there I’ve got many - but just to give out one relatively short book with very condensed lessons every business operator should know:
Read Sun Tzu’s “Art of War”.
You must understand the principles laid out in the book and out and on a very fundamental level.
It’s worthwhile re-reading certain chapters again and again and taking your time to ponder over them.
Advice for other entrepreneurs who might be struggling to grow their business?
Be extremely careful who you accept money from.
Ideally, you can avoid it altogether - and/or only take people on board with which you have a very high personal alignment.
And while VC funding might work for some people, I would personally look to avoid it altogether.
With Angel investors, you usually work with fellow entrepreneurs who risk their capital and have been through tough entrepreneurial journeys themselves.
VC funds, on the other hand, are very often stacked with people with very little experience in building a business from ground up, they risk other people’s money and they get evaluated solely by what returns in the shortest time frame possible they can bring in for the fund.
Any type of “deeper personal relationships” and long-term thinking takes a backseat there (the incentives of the VC fund structure are simply set up this way) - so if you take a deal, be fully aware that you give up a lot of control over your business while dramatically increasing your risk of failure (VC funds don’t seek for slow but steady and sustainable growing companies - moonshot or bust and only a few make it out successful on the other side).
If that’s your thing, go for it - just don’t sign up blindly for such deals.
If your business is “your baby” and you want to make it an expression of your values to the world - then in all likelihood it is not a good choice for you.
To run a successful business, you must focus on:
- Providing clear value to your target clientele
- Run a lean and balanced budget
Getting “free money” upfront from investors deprives you of these essential lessons - it is something money can’t buy, but just blood, sweat, and tears (lots of it!).
Experience is something you have to attain via sacrifice.
Are you looking to hire for certain positions right now?
We are looking to grow rather incrementally and aiming to find the right people.
While there are a few positions that might need to be filled over time - we are in no rush.
One of the lessons we have learned over the years is that you will have over the long-term a much better return to invest in the right people rather than taking on “anyone” just to fill a spot and then “try to make it work”.
We prefer to work with people over the long term and grow together - and it’s a huge waste of our scarce time and resources if we dedicate it to the wrong people.
That does not mean that every new team member is a guaranteed fit - but we are looking to have from the get-go the odds set towards a long-lasting relationship.
Skills, speed, and eagerness to learn and adapt are crucial - but nothing can replace the character.
If that one is a miss, it won’t be a lasting relationship and shouldn’t be started from the beginning.
Where can we go to learn more?
If you want to follow along with what we’re doing on the business front, you can follow us on Twitter, Telegram or subscribe to our email list.
Otherwise, I am also fairly active onTwitter.
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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