Episode 147: Steve Beauregard on Developing Businesses

Kelley Weaver: Welcome to Crypto Token Talk, a crypto one-on-one podcast, exploring how blockchain applications like , , and other crypto assets could change the world. Learn from blockchain experts, thought leaders, and founders of some of the most innovative companies and world changing ideas our time. I'm your host, Kelley Weaver, CEO of Melrose PR, a leading blockchain communications agency. Thanks for joining us today. Today I'm here with Steve Beauregard, who is the Founder and Chairman at GoCoin, and is the Chief Revenue Officer at Bloq. Welcome Steve.

Steve Beauregard: Thank you Kelley.

Kelley Weaver: Really great to have you here today. I know you have a long history in technology. Tell us a little bit more about who you are and your background.

Steve Beauregard: Oh Wow. If I go back to the early parts of my career, I was originally a software developer. In the mid 90's, I started a software firm that focused on mainly enterprise solutions. Through that period, we got into everything from building websites to eventually mobile apps, and mobile games and then, later on, into building things like big e-commerce websites.

Kelley Weaver: Fantastic. How did you first discover crypto and blockchain?

Steve Beauregard: Ironically, it was a project I was doing for my wife's startup. She had a kid-facing website called Pure Spring, and they wanted to incorporate Bitcoin as a way of incentivizing people to either comment, or sign friends up, that sort of thing. I assigned one of my engineers to go off and research it, and he stayed up all night and came to work the next day and said, "I think we should stop every project we're doing and just do this."

Kelley Weaver: How did your wife's team discover Bitcoin in the first place as something that they wanted to implement?

Steve Beauregard: She's actually a heavy researcher, so she had found it just through some of her research, and this was back in 2011. The first thing I did was call the only person I knew in the space, which was Brock Pierce. I had known Brock Cryptotokentalk.io #askCryptoKelley @cryptotokentalk

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for probably half a dozen years at that point, just in the LA tech scene. And Brock said, " You know, we've been experimenting with it in the early days, but there's really not anything very interesting right now. It's kind of a cult following. It's sort of a lot of libertarians and crazy people, and just talking about the early days of crypto." So, he sort of dissuaded me in 2011 against doing this for her website, which, you know, at that point it certainly was too early.

Kelley Weaver: Interesting. How did Gocoin come to be, and what is that?

Steve Beauregard: Actually, it was a little bit later, after the initial look at Bitcoin. It's probably a year later. Once again, we found, at least my wife, she found Bitcoin, and she found BitPay in particular that was now allowing payments. Rather than using a credit card at checkout, you're getting paid for things with Bitcoin. So she said, "Well, maybe I will just implement that as a starting point, but I really like this technology. There is a lot of interesting aspects to it." Ironically, I'm going back to that email that he said she sent in 2012, and read it, and she had a really, really good view of exactly what it was, and what the strengths were back at that point.

So, we researched it a little bit, looked at the BitPay interface. Kevin, my engineer, and I sort of sat down and said, "Well, okay. If we were to build something in this space, would it be a wallet? Would it be an exchange. Would we build a payments processor that would compete with BitPay?" At the end of the day, that's what we ended up doing, was building a competitor, but our vision really was not just to take Bitcoin. We saw the trend coming of [inaudible 00:03:35] and other . So, we really designed the ground up to be another payment processor that could accept not just Bitcoin but you know, and others as they matured.

Kelley Weaver: That's awesome. Your wife sounds amazing. I'd love to interview her.

Steve Beauregard: She is. She is.

Kelley Weaver: Very cool. Where is GoCoin in the ecosystem today?

Steve Beauregard: GoCoin is still a going concern, and still profitable. It's probably one of the only companies in the space of its kind that has been turning a profit for three years. We took a very lean approach. Rather than building out a huge team, we sort of grew organically along with the customer base, and kept the team lean, and so that's where we've been profitable. I'm still sitting on the board as Chairman, Cryptotokentalk.io #askCryptoKelley @cryptotokentalk

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and still very interested in their success going forward. But, I have stepped out of the day to day as of March of 2017.

Kelley Weaver: Is it something where businesses can just plug it into their, similar to BitPay, they can just plug it into either an e-commerce site or if you're a business like ours, you can accept payments through that portal, and just kind of plug and play?

Steve Beauregard: That's right.

Kelley Weaver: And then it accepts all different altcoins?

Steve Beauregard: Yeah. It plugs right into the shopping cart, but we still are pretty selective. We don't just allow any coin to be used, just because operationally, it's not all that easy to add all of the different cryptocurrencies. So, we take the popular ones. Bitcoin, Litecoin, , . I think there's a handful of others pretty close to turning on in theory in payments as well. That will also open up the world to a number of select ERC-20 tokens.

Kelley Weaver: I think I've used it for event tickets. There was a couple plugins where I've used GoCoin. How does it work on the back end for the businesses? Do they receive fiat funds, US dollars, or do they receive the coins themselves?

Steve Beauregard: It's entirely up to them. They can do either. They can have coins. They can have fiat into their bank account or any combination thereof. They could take a 50/50 split. For example, if they wanted to get [inaudible 00:05:36] coins and have some exposure to the potential upside. Obviously that comes with potential downsides. Or, if they just want fiat currency, we usually give 99 cents on the dollar, which is much cheaper than credit cards.

Kelley Weaver: That's awesome. I think for businesses, one thing that's challenging is because the price of these tokens and coins is so volatile, it's hard to charge in real time. So, you kind of take the guessing game out of that, by ...

Steve Beauregard: That's right.

Kelley Weaver: Yeah.

Steve Beauregard: We're reducing that risk.

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Kelley Weaver: Yeah, that's great. Really helpful for businesses. Really cool. So, I know you started at Bloq around that same time frame, I think March, 2017, right?

Steve Beauregard: That's right.

Kelley Weaver: You've been there about a year and a half.

Steve Beauregard: That's right.

Kelley Weaver: Tell us about that. How that came to be, and what you're doing there.

Steve Beauregard: Matt Roszak was one of my investors at GoCoin, and always was very supportive every time I would send out an investor update for GoCoin. One of the few people that would respond every single time, encouraging, always, "What can I do to help?" Just a great person to have in the space, especially as an investor. He and Jeff Garza got together in, I think, early 2016 to form Bloq, and that was really them looking at the development in the crypto space, and sort of saying, "I think large enterprises are going to have a lot of benefit from blockchain technologies." Jeff, who had been 15 years with Red Hat, also was an enterprise software guy. Also, Jeff was one of the original contributors to the Bitcoin project with Satoshi directly back as early as 2010.

So, Jeff had a really long history. He and I had met each other at a couple conferences, speaking and so forth. I always had a lot of respect for the two of them. When I expressed to Matt at one of the conferences that I was starting to look around after four years at the helm of GoCoin, he's said, "Why don't you join Bloq?" He flew me out to Washington, DC to meet the team, where they were having a sort of an all hand team meet up. At that point I decided that I could be more effective in the blockchain industry inside of Bloq than I could in sort of the niche payment processing aspect of GoCoin. So, I joined the team and it's been an incredible life.

Kelley Weaver: That's awesome. Isn't Bloq mostly a distributed team, like everybody is remote for the most part?

Steve Beauregard: Yeah, very much so. Our headquarters is in Chicago. Jeff is in Atlanta. We have a team down in Buenos Aires. We have some people in Europe. We have people in Asia. I'm in Santa Monica, California. So, very much a distributed team.

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Kelley Weaver: That's awesome. What challenges are you guys tackling in the enterprise blockchain application space?

Steve Beauregard: Well, if we kind of break the customers of ours into what we call the fortune 50, and then the crypto 50. Our services are really focused towards the largest of the large in those two segments. We have customers like Discover, and Fidelity, and City on the regular 50, if you will. In the crypto 50, we're looking to target exchanges, and wallets, and companies that need to run infrastructure, but don't want to necessarily chew up their time with dev ops functions, and writing APIs and things to just run the infrastructure. They really want to focus on their core business. So, we see our services there. We have a product called Bloq Enterprise which is a behind the firewall solution. And then, Bloq Cloud is a new set of APIs that companies will be able to tie in directly, without having to run all those pieces in their own infrastructures.

Kelley Weaver: That's awesome. Who are some of the clients that you're working with, or is that all private information?

Steve Beauregard: On the one side we work with, I mentioned Discover, Fidelity and City are a couple of our customers on the commercial side. In the more blockchain 50, some of those folks are a little bit more secretive about who they're working with, so they prefer not to be mentioned. You can do the math. If you think of 20 of the top companies in the crypto space, we're probably working with five or six of them.

Kelley Weaver: What are some of the opportunities and challenges that you see today with the state of the blockchain networks, for example, and how you're trying to apply these to large enterprises that have huge scale?

Steve Beauregard: Yeah. You really have a big challenge around that. The regulatory challenges is one of the bigger ones, at least here in the US. Not only do you have the federal regulations overhanging, you also have the state by state situation you have to navigate through successfully. Some of our customers that I thought would be probably live by now with some solutions haven't released yet. I think they're still sort of navigating those. We also are big supporters of the Chamber of Digital Commerce in Washington, DC. Perianne Boring runs that organization. The people on Capitol Hill, they're at every one of the hearings, and really have their head in the tent in terms of the developing regulations, both on the state by state basis, as well as federally. So, that's a great organization.

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I think that's one of the things that's sort of impeding some of the growth. On the GoCoin side, I'd say the number one thing that really impacted that business was the IRS guidance back in 2014, which basically made it so that every single transaction that you had in crypto would be taxed as a property, as opposed to treated like a currency. That means somebody who bought their Bitcoin back then at say $400, and then they bought a cup of coffee, and the spot rate at the time of the coffee was $600, they're going to owe a gain on that purchase of a cup of coffee, which I think is just completely ridiculous. I think you have to be realistic, and look at the usage of the coins and really apply it to the situation. If somebody's buying a $100 thousand dollar car, sure. Of course they should be taxed on that because that's a serious gain that they're getting, versus a cup of coffee or something. Let's just call it anything below, say, $600, I think should just be treated like a currency and there shouldn't be any gains on those.

Kelley Weaver: Yeah, I totally agree. We ran into that challenge last year when we were using crypto actively for sending and receiving payments. It was just sort of tax challenge at the end of the year about having to just account for that, and I think-

Speaker 2: I use the Shift card because I wanted to really support the ecosystem, so I use that Shift card for every single purchase. I think it was in 2016, and it took me three days to do my taxes. It was just painful, trying to download all that information in the spreadsheets, and figure out what my gains were on every single credit card transaction I had in 2016. I just unfortunately stopped using the card because it was just so painful.

Kelley Weaver: ... yeah. How did you get through that?

Steve Beauregard: Just three days of spreadsheets, and I'm not exaggerating. It just was arduous, and I had literally hundreds and hundreds, if not thousands, of transactions. I had to come up with the formula of how it calculated gain, and what the basis was, how the purchase changed the basis. Anyway, once I finally got it sorted out, it was still not very manageable, because you also think about the fact that you have multiple exchanges you work with. Each of them is going to dump their information in a different format. That's part of the tax reporting, which is just so difficult.

Kelley Weaver: Yeah. I'm working with a company called Coin Taxes that's looking to solve for that, and aggregate all of your information from across different exchanges, and make it super user friendly, which I'm excited about this type of- Cryptotokentalk.io #askCryptoKelley @cryptotokentalk

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Steve Beauregard: That's [crosstalk 00:13:10].

Kelley Weaver: ... exactly. Exactly. Anyone's who's been through that process is like, "Yes. Please." Awesome. What are some of your favorite applications of blockchain technology? What are the things that you're really excited to see?

Steve Beauregard: Yeah, there's a couple of really cool ones that I like. I like what the KODAKCoin is doing. I liked how you're rewarding creative folks who are out there taking the photography, giving them ways to monetize it through the coin. To me, that's sort of the epitome of a true utility token, even though I know they launched this as a security token for regulatory purposes. I liked that project. There's a group out of Venice also, called Lucidity, that is putting on blockchain the tracking mechanism for ads, whether your ads are actually displayed, whether they're actually consumed. I think that's a great use of blockchain, because at the end of the day, how does a advertiser really know that their ads were displayed, whether they were really looked at it, and whether the clickthroughs are real or whether they're just bogus. So, I think that's another interesting use of technology.

Another startup that I advise on that I really like is the AUX token project. That's A-U-X. What they're building is a network of auctions, and the idea is to give liquidity to non-liquid tokens or digital assets. What that does is gives you a platform for actual price discovery, versus the now early ICO market, where a new token would come to market, and they would say, "Well, the initial sale is going to be at 25 cents. The next traunch is going to be at 50 cents, and then the final traunch is at a dollar." All of those are just arbitrary numbers that are chosen, and not subject to any type of price discovery. In some cases, they may be leaving a lot of money on the table. Other exchanges they may be overpricing their offering based on what the market forces might be.

Kelley Weaver: That's super interesting. Really cool. Who are some of the people that you really respect in this industry, or mentors that you might have? You've mentioned a few great people, but any others you want to highlight?

Steve Beauregard: Yeah. Andreas Andopolis is a ... I always mess his last name up. I think he's one who's been a pioneer out there speaking about this since the early, early days. Two of them I actually worked with Jeff Garza and Matt Roszak. I have tremendous respect for both of them. Both very straightforward, honest, trying to do the right thing. Gentleman, very, very generous. Matt started what's called The Bitcoin Supper Club along with Brock Pierce back in December of Cryptotokentalk.io #askCryptoKelley @cryptotokentalk

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2013. Really, what that group was about, was getting the entrepreneurs in this space together at the conferences, and really being able to have a forum to communicate ideas, tell each other what they're up to. I think he's probably done probably 30 or 40 of those at the different conferences. It's taken on a little bit different flavor than the early days, but if you talk about the first one, the people in the room, it was just an extraordinary crowd. Everyone from, there was Charlie Lee there. Sam Cole from KnCMiner, Jesse Powell from . The list just goes on and on, of the entrepreneurs in that room.

So, I really have tremendous respect for Matt. Jeff, he's more obviously on the technical side. Erik Vorhees, is another one who I have tremendous respect for. ShapeShift used to spin a lot of very interesting things. He's also seen as a very strong voice and advocate for the crypto space. No list is complete without mentioning Brock Pierce. I know he's always been a very controversial figure, but he's a dear friend. I just consider him to be a major force in the industry, and whether people, believe it or not, his heart is in the right place. He's always looking out for the industry, and its growth, and how he can help people, rather than ... A lot of people mistakenly think he's just out to help himself.

Kelley Weaver: Yeah. Awesome examples, thank you. You mentioned that obviously the folks in the industry, and the landscape, has changed dramatically since you first got involved. What's your sort of opinion of where things are at today in terms of people's involvement?

Steve Beauregard: Well, I think it's shifted tremendously. One example I give is, Howard Marks with StartEngine had a conference here at the Fairmont in Santa Monica. I hadn't even heard that the conference is taking place first of all, and for somebody who's been in the space since 2012, and deeply entrenched at going around the world speaking at conferences, I think I've given about a dozen keynotes. I've probably sat on a hundred panels, and given speeches at all sorts of different conferences. For a conference to be in my town, and have close to a thousand people at it, and I didn't even hear it was in existence just shows you how fast it spread.

I was invited by a company I'm advising to that conference. They were sponsors. I attended the conference, and knew probably half a dozen people at the conference. Most of them I knew not from crypto circles, but from just the LA tech scene. So, really great to see the number of new entrants and people that are really coming into the space, and understanding that this technology is a monumental shift in the invention of blockchain technology, and what it offers, Cryptotokentalk.io #askCryptoKelley @cryptotokentalk

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and really putting a lot of focus, investment of time and money, and to the technology to build a better tomorrow.

Kelley Weaver: Yeah, that's awesome. I was actually at the conference as well, and had the same experience. Saw people from all different places that I had known from LA tech but not necessarily from blockchain.

Steve Beauregard: Right.

Kelley Weaver: It was phenomenal. And packed.

Steve Beauregard: Exactly.

Kelley Weaver: Really cool. When people approach you, like friends and family, about how they can get involved in either in the industry, or get involved with cryptocurrencies and start experimenting, what are your recommendations as first steps?

Steve Beauregard: Yeah. Usually those conversations with, "God, why didn't I listen to you five years ago?"

Kelley Weaver: Shame on them.

Steve Beauregard: My response is, "I've never heard that before." I really sort of look at it from what are your goals, and I ask them, "Are you interested in the technology? Are you interested in getting involved from a consulting angle? Are you a developer? Are you just looking to make money? If you're just looking for tips on which coin to buy, that's going to end badly for you." That's usually a thing I tell them. I am very consistent in that I don't think anyone should invest more than they can lose. This is still a high risk portion of your portfolio, but I think it's important that people pay attention, and that if they are investors, that they need to have some exposure to cryptocurrencies, even if it's just Bitcoin and Ethereum, because those two still have the network effect, and they're still the 800 pound gorillas in the room. At the same time, you don't want to ignore new innovations like EOS, like Nexus Earth, like other that are trying to solve the scalability problems in ways that Bitcoin won't be able to, quite frankly.

Kelley Weaver: Yep. You mentioned a little bit of resources, like Andreas Antonopoulos has a lot of YouTube content that's fantastic, but what other resources might you

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recommend for those looking to learn more, like books, or websites, or podcasts that you like?

Steve Beauregard: Boy, I actually have an email that I usually forward to people that has a going list on it.

Kelley Weaver: That's awesome.

Steve Beauregard: I can send that to you as well.

Kelley Weaver: That would be great. We can include those links in the notes if you wouldn't mind?

Steve Beauregard: Sure. Yeah, I'd be happy to do that. It's hard to find good information. It's hard to sort through the Reddits of it. I usually point people just initially to a CoinDesk, and say, "Just start reading, and absorbing, and go into Reddit." Reddit, realize you're going to have a lot of troll wars, people that have other ulterior motives that are posting things that aren't necessarily true. So, you have to learn to weed through it and really understand if that's what you want to go with. People are looking for technical help, there's also some really good technical videos out there that can get people started. Another company I advise on is Academy token.

The Academy of Blockchain is, I think, the name they're officially going with. They have a whole educational track for people that are new to development and want to learn how to develop on blockchain. So, it has a track for new developers, and teaches the blockchain. Another track for developers that don't know how to develop on blockchain yet, but they have strong strengths in certain languages, and so that track. Then there's a executive track for people that are working in large corporations, or corporations that should benefit from blockchain, and from an executive standpoint, it's what they need to know about blockchain and how they need to think about it.

Kelley Weaver: That's awesome. That's great. I'm so impressed by the way that your wife was on Reddit years and years ago, finding that stuff. That's very cool.

Steve Beauregard: She's a great researcher. Yeah [crosstalk 00:22:25].

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Kelley Weaver: That's really cool. That's really cool. Awesome. Well, thank you so much for your time. How can people get in touch with you or keep up to date with what you're up to?

Steve Beauregard: Yeah. Just watching my Twitter feed. I'm pretty active on there, although I'm not out there everyday, but I do monitor that pretty closely. That's just gobloqsteve, so G-O-B-L-O-Q Steve. You can follow me there. I usually will send out things that are sort of industry developments and so forth. Those that want to reach me, that's probably a good first way. My email is pretty easy toof. [email protected], but I do get a flood of emails there, so it's sort of hard to keep up with all that, so don't be discouraged if I don't respond right away.

Kelley Weaver: Awesome. Well thanks again Steve. Really appreciate your time.

Steve Beauregard: Sure thing.

Kelley Weaver: That's all for today's episode of Crypto Token Talk. To learn more about blockchain and keep up to date with this fast paced industry, subscribe at cryptotokentalk.io where you can also find today's show notes. If you have suggestions for topics or guests, please drop me a line on Twitter at cryptoKelley, or you can follow the show on Twitter at cryptotokentalk. If you enjoyed this show, please rate and review it on iTunes, and share it with family, friends, and colleagues who want to stay up to date on how blockchain technology is changing the world. Thanks for listening. This podcast is for entertainment and informational purposes only, and does not constitute financial or investment advice of any kind. Cryptocurrencies are an extremely volatile and risky investment. You should not make any decision, financial investment, trading or otherwise, based on any of the information presented in this podcast without undertaking independent due diligence. Anyone wishing to invest should seek his or her own independent financial advisor.

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