Our whole organisation itself is the innovation, says Aaron McDonald co-founder and CEO of Centrality.
“We are creating a centralised app store with a twist,” says McDonald, on the startup that he built and which is now one of the fastest growing tech firms in New Zealand.
“Instead of having applications that are all fighting one-on-one against their incumbent competitors in the non-decentralised world, Centrality has built an app store framework that allows applications to work together to gain scale.”
These decentralised apps?mdash;?or dApps?mdash;?help each other to acquire users, content, data and merchants, so that their applications can be richer, he explains
“This means startup businesses can get a leg up in the race against some of the incumbent providers. It’s not one dApp fighting against all the others in their industry, it’s a thousand apps working together,” he adds.
“Think of it as a thousand zebras, running in a herd against the competition, rather than one unicorn.”
Centrality, he says, has developed unique world leading technology in the fields of blockchain, P2P communications, Byzantine Consensus algorithms, smart contracts, machine learning and IoT.
To talk about each of these would be an application in its own right but if we drill down into the systems, we need just to run our business in this totally new technology space, says McDonald.
Today, he says, Centrality is sought by industry leaders and regulators in New Zealand and around the world.
He says the idea for Centrality came about when he was exploring new business ideas in 2016.
“There were so many hurdles to creating a startup that my problem statement quickly morphed into ‘how do you create an environment where startups have a greater chance of success by removing (or reducing) the barriers?’ and ‘how do you do this with a new kind of respect for the digital profile of that ecosystem’s users’?”
He says lightbulb moment came following a conversation with a friend in Zurich about the disruptive power of blockchains on existing economic models.
“I realised that decentralisation (enabled by blockchain) was the key ingredient to level the playing field and give those with big ideas the same opportunities as established corporates,” he says.
With a decentralised future at the core, McDonald says his masterplan is to eventually make Centrality redundant, by investing in open-source technology to develop an ecosystem and building a community that will, in time, self-manage and deliver true value to all participants.
Under their model, consumers own their own data and can choose how it is used by the applications they choose to interact with.
“It removes many market entry costs and barriers for startups, as the platform allows applications to share potential customers, data, merchants, content and services,” says McDonald.
Businesses using the Centrality ecosystem don’t need to start from scratch. They can use the already-established global base of assets, customers, services, data, merchants.
This means any application building on the Centrality ecosystem not only has a step up, but also a head start, on any competing application, he says.
“It levels the playing field and assures that you don’t need to be a technology titan to take your great idea to market.”
Future growth has been funded using the technology that drives Centrality, blockchain tokens.
The innovative nature of this funding model has sparked the interest of the investor community. In January 2018, Centrality raised US$80 million during its initial coin offer (ICO), which sold out in just six minutes.
This, he says, is a global recognition to the steps the Centrality team has taken to build a fairer economy.
A new ecosystem
Centrality is a new type of ecosystem which has a core group of six different companies, each building elements of a combined core platform and 40 businesses building on that platform together.
These independent businesses have mutual goals, shared capability and are dependent on each-other, explains McDonald.
However, they aren’t a single commercial entity so there is no top down approach to getting things done.
The structure, resources and commercials are decentralised.
“This gives us an interesting challenge,” says McDonald, “to co-build a platform, between six companies while supporting a 40-company venture ecosystem that’s dependent on that platform.”
This technology space is evolving there are no clear patterns to build the technology from, says McDonald.
“A lot of what we have developed has come from ground up experimentation and research, he says. “While having multiple teams developing independently helped speed this up, it became a problem when we started to integrate.”
Initially they had issues with different team builds not lining up when they tried to bring them together.
Different priorities across the organisations drove conflicts in the personalities and timelines. Different frameworks were used to manage projects and different tooling was used to deliver them making it more difficult to manage in-life, says McDonald.
To overcome these, McDonald says they created a new role and a team: a collaborative chief integration officer and integration committee structure that includes internal and external teams for architecture and product design.
This team helps agree the patterns that different external teams can use to build their projects, design the core points of interactivity and agree joint roadmaps, he says.
“We now have the ability to move people between the six different companies to work on projects together depending on the opportunities and priorities across the group.”
The Centrality “UNcorporate approach” means we can only get things done through collaboration, says McDonald.
“This requires me taking the time to research and understand what each organisation’s challenges and opportunities look like and getting alongside their leadership team to help them make an impact.”
McDonald says he had to overcome challenges that most startups face, but on top of that created a successful business in a volatile market, where regulation is unclear, technology is emerging, and business systems (like payroll and accounting and compliance for blockchain tokens) didn’t exist.
“My answer was to design and build the systems that we needed to operate the business. These systems have now morphed from necessary internal infrastructure for maintaining financial compliance, accounting and payments, into products in their own right.”
MacDonald is a board member, advisor or founder of 20 other technology ventures.
“Having held roles in my career across customer support, engineering, product, marketing and business leadership, I have had the unique opportunity to be in the shoes of the people I deal with on a daily basis,” he says.
He and his team share knowledge with the technology and business communities hosting and supporting meet-ups and technology forums, hackathons and sponsoring and mentoring university programs.
McDonald is a member of Ngai Tahu, and supports initiatives to develop Maori in technology.
One of these is Dig My Idea – a challenge to attract Maori youth to the industry. He is also a Fellow with the Edmund Hillary Fellowship, which brings innovators to NZ to develop game-changing initiatives for the planet.
He is encouraging the next generation of C-level executives with Centrality Accelerator. This innovation hub fosters entrepreneurs, developers and technologists who have great ideas, but need some support to get the ideas to market.
At Centrality, he encourages a culture where people can express their creativity, along with their concerns on how they can get on growing the organisation in an emerging marketplace.
“Equality is at the core of what we are trying to build as an organisation,” he says.
McDonald has deliberately adopted Centrality’s hiring process to increase recruitment of female programmers and ensure they have a diversified workforce.
“We take extra care to give female applicants the chance to demonstrate their skills, as they are often less likely to overstate them in their CV and could be screened out earlier in an interview process,” he says.
“An in-person interview can uncover skills not addressed in written correspondence, so we nowmeet with allcandidates whose backgrounds look to be a fit.”
“We are a tech company, so tech is at the forefront of every discussion in every team. As a startup, our business is about taking great ideas and transforming them into great outcomes, but 10 times faster than the average business,” he says.
He shares interesting insights on the different challenges startups face once they have the resources and the momentum to scale.
“When we transitioned from being a small startup on the bread line to a superfast growing company with a lot of capital and resources, I had to learn very quickly that managing growth with a large amount of resources can create a lot of problems that aren’t initially apparent.
“The biggest lesson I have learnt is that more resources do not always make for better faster outcomes. In fact, having too much can lead to fatal errors.
“When we raised a lot of capital we grew very quickly as an organisation and the scope of things we became involved with across all areas of the business grew,” he states.
As they went from 10 to 30 to 100 to 400 people, each team became more autonomous from the core exec team and lost sight of what was happening.
“Instead of finding innovative solutions to problems, resources were put in place, instead of making hard choices which forced us to focus on the core value, we opened up new battlefronts,” says McDonald.
It took them six months to realise what was happening.
“Once we had realised this, the executive team came together to put a new framework in place for deciding priorities,” he says.
“We made the deliberate choice to artificially constrain our resources to focus our decisions and we optimised the structure of the business and the daily operations to get closer to what was happening on the ground.”
Combining these with their experience over the past two years, he says the Centrality team now ascribes to three core values:
Think big: “We’re here to change the world and we’re not ashamed of that,” says McDonald. “It’s a lofty goal, but our team aren’t the kind of people who are looking for simple and unambitious goals.”
Have fun: “We want the people who work here to enjoy what they are doing, to be learning new things all the time, to feel challenged, respected and rewarded for the things that they do.”
Lastly, and most importantly, get shit done: “You can talk and promise the world, but if you’re not executing, then none of that means anything,” says McDonald.