Blockchained social media platform

Competition is good

I'm a big proponent of Blockchain based social media/ blogging sites. As anyone who has read my earlier blog posts on this platform would know, I believe the future is bright for content makers that want to earn online without middle men or censorship.

I also believe that Steemit will not be the only game in town. It is (and should be) the first of many blockchain based social media sites. Competition will help the technology strive and prosper.

The early frontrunners

One of the early contenders that promised to offer content creators an alternative to Steemit is Synereo. I've blogged previously on the pros and cons of that proposition. I've also blogged on my first impression of their alpha demo.

Full disclosure, I (still) own a fair amount of AMPs (Synereo's token) and haven't sold any recently. For me, it was a sensible way to diversify my crypto-investment. They seemed like a talented team with a solid enough proposition.

A faller at the first?

A couple of days ago I noticed the price of AMPs drop dramatically. At first I dismissed it as whale manipulation. Or maybe, someone's rent was due or they needed the money for Christmas shopping. However I searched the forums and found that something more alerting was afoot.

On Wednesday, the Synereo team held a public meeting ("the November 30th meeting"). The meeting was uploaded to Youtube. It was like watching a car crash. A three hour car crash at that.

Unbeknownst to most investors, the Synereo Team is rife with infighting. Most people would expect a degree of disagreement, personality clashes and office politicking in any organisation. To some degree this is healthy.

The fractions within the Synereo organisation however have become toxic. Don't take my word for it. Watch pretty much any part of the meeting for a few minutes and you'll soon see what I mean.

Most unfortunate for Synereo is that the chief protagonists in this "boardroom beef" are CEO/ founder Dor Knoforty and CTO/ founder Greg Meredith.

Dirty laundry

In all honesty the November 30th meeting should have been held and concluded behind closed doors. However it is clear that Greg at least felt he had exhausted all options (including it appears mediation). For Greg it was imperative that his issues be heard publicly.

Greg's view

Greg opened the meeting with a 15 minute monologue that revolved around asking Dor to step down from his role as CEO of Synereo. Greg's main reasons were that Dor alienated people he worked with and hadn't given due consideration to the budgeting document and plans for RChain. Or as Greg puts it,

"Dor hasn't been able to absorb the reality of what it would take to build software."

This for Greg, was indicative of Dor's unsuitability to be CEO.

'[Dor] should step down from a management role so he can get some mentorship or guidance so he can get to a management role in Synereo and learn how software is developed and what the risk are.'

In Greg's view Dor was someone that thought purely in "black and white" terms and lacked the tact of CEO. Dor needed to be shifted to a position where he could shine. A CEO needed to be someone who could understand the nuances of the situation and bring people together.

Dor's view

Dor has clearly lost confidence in Greg. Dor believes Greg came to Synereo selling himself as someone who could deliver an already working solution to Synereo's smart contracting requirement (that solution being Special-K, apparently it is more than just a cereal). Two years later, Greg hasn't delivered a working product.

Now Greg wants Synereo to throw even more money at a more ambition project, RChains, that Greg solely controls. RChains is a generic decentralized computation and storage platform, where the users of the network provide the resources a la Maidsafe or Ethereum. In fact RChain even has much of the same blueprint as Ethereum, it will be a 'virtual machine', a "World Computer" no less. It will run other 'dApps' (not just Synereo's Attention Economy). It will have its own programming language. It will even have a Caspar Style Proof of Stake consensus algorithm. It will be fast and scalable.

Big promises, big aspirations.

In Dor's view however, Greg wants Synereo to commit to and bankroll Greg's vision eventhough,

"no-one on the [Synereo] team has any confidence in [Greg]'s ability to deliver anything."

That could be a slight problem!

What will Synereo deliver? Anything? Ever?

This is a question any serious investors need to ask themselves.

He said, she said...

The current CTO believes the current CEO knows little or nothing about software development.

The current CEO believes the current CTO will not deliver anything, not Special-K, not RChain.

According to Greg,

"Timelines have been blown out-of-the-water... by at least two and a half months."

If the two most senior people in the organisation have no confidence in one other, why should anyone else?

$2m shoestring budget

On top of this, there was a follow up meeting yesterday. Dor did not show up (apparently the time was switched last minute and he couldn't make it).

At yesterday's meeting, Greg spelt out how he would spend the $2.1m needed to complete RChain.

$840k would need to be spent before the first milestone will be reached. The bulk of the $840k will be to pay for the annual salary of 4 senior devs (yet to be identified or recruited). It could take 3 - 6 months to hire these devs.

In an ideal world Greg stated he'd have 10 devs on RChain (based on a similar project he worked on at Mircosoft, that was a third of the complexity). The $2.1m is the shoestring budget. In all likelihood RChain will need further investment to bring the product to market. The Synereo investment is needed to entice further investors.

If Synereo commit to RChains and RChains cannot secure further investment, what then?

I want half!

In many ways, what is happening now in Synereo is a messy divorce between Dor and Greg. Dor will likely continue as CEO of Synereo. Greg will likely spin-off and work exclusive on his baby, RChain. What's happening now, in my view, is largely around how to split the money raised in the recent second "ICO".

What did people invest in?

Greg's argument is that the vision of RChain is what enticed a lot of people invest in the second round of Synereo fundraising. The problem is investors got equity in Synereo LTD and/ or received AMPs. They didn't buy RChain. There is no way of sensibly knowing how much of a factor RChain played in investors decision-making. RChain was part of the package yes, but certainly not the whole package.

Milestone planning

Greg has budgeted $2.1m for RChain development and wants those funds from the money raised in the second ICO.

Reading between the lines, Dor doesn't seem adverse to giving him some if not all of it, provided Greg delivers a working product, which Dor is highly sceptical about. Dor wants to be able to break as soon as Greg looks like he won't deliver. Meaning early milestones and limited upfront payments. I'm sure in the back of his mind Dor will be working on Plan B, should RChain not materialise.

Greg on the other hand, doesn't trust Dor not to screw him over at the first opportunity. He thus wants independent third parties to adjudicate on whether milestones have been delivered. Greg also wants as much as he can get upfront and as much slack as most IT projects invariably end up needing.

Rebuilding trust: face-to-face

Whatever the outcome, it appears that Dor and Greg will have to work together to some degree in the short term at least. They've sold a vision of Synereo built on RChains. They have an obligation to make some effort to deliver it. Whether as one company or Synereo sub-contracting Greg's company RChain to do some of the work.

This will require Dor and Greg to re-establish some level of trust.

Skype and hangouts are great tools for allowing people to communicate across the globe. However sometimes there is no substitute for face-to-face communication. I don't know how often (if ever) Dor and Greg meet face-to-face. But that is what this situation needs. Afterall 80% of communication is body language.

As an investor, I'd have like the November 30th meeting to have been held face-to-face and in private, with as many people in the same room as possible. With no-one coming out until a unified position was reached (even if it meant someone parting ways with the company).

Being open and transparent is one thing. However the market has given its verdict on the value of openly washing your dirty laundry. The price of AMPs fell by over 50% in two days.

The Synereo Team may have thought that the issues between Dor and Greg were intractable and rebuilding trust between the two was near-on impossible. However if they continue to air their grievances in such a public and unprofessional way, they may find that re-building the trust of the market and investors is even more difficult.

Other cryptos -please take note!