What is 21 Inc doing? A favorite among bitcoin believers, the fledgling firm is long on talk about plans and disruption, but short on tangible results. After the flop launch of its headline miner, 21 Inc has introduced a series of APIs on its marketplace, accepting fractional payments per call. The company, backed by over $100 million in venture capital from respected sources like Peter Thiel, Max Levchin, and Mark Pincus, and well-known firms Andreesen-Horowitz and Qualcomm, is led by Stanford graduate Balaji Srinivasan. An impeccable pedigree, strong funding, massive potential; why isn’t 21 Inc producing results?
A missing element in 21 Inc’s offerings so far is a strong incentive for users and developers to operate on their platform. Simply put, why would anyone choose to pay trivial amounts for hardware and software that is available at cheap one time prices with no residual fees, however small? The folks at 21 Inc have claimed their long term goal is to offer a platform for future development, with a business model that operates in the background of what users and developers are doing; the middle man. Most middle-men and platform operators offer something valuable to the customer: Payment processing, hosting, dispute resolution, tools, and analytics to name a few. With 21 Inc they’ve really only offered what amounts to a small tax on a barely used platform that currently doesn’t have much value to users or developers. So what gives?
It could be that the current marketplace represents a proof of concept. The mundane products could serve as a road map for developers, helping retrain the market in 21 Inc’s preferred method of monetization. But this doesn’t match the level of funding that 21 Inc has received. Most start-ups that draw in over $100 million are farther along, with a clearly defined value proposition and a clear product or service. Without some market validation it seems more and more likely that the venture capital thrown at 21 Inc was a bet on the pedigree of the employees and the potential of blockchain technology, a “Well they’re smart, they’ll figure it out” $100 million bet.
Hopefully, somewhere in a deep dark basement, the talented and well-educated members of 21 Inc are preparing to launch the next Big Thing. Some witty blockchain tie-in that monetizes common actions, or a service that enables more people to make use of blockchains. Something. They’ve got to be doing big. $100 million big. Right?