"Assume nothing. Test everything." The story of CoinJar so far
Monday 24 March 2014
Two years ago, Asher Tan read a newspaper article about a 17-year old computing prodigy who had set up the world’s first margin trading platform for bitcoin. It was called Bitcoinica and was so successful, the founder, Ryan Zhou, sold it on in less than three months because he could not manage the site at the same time as his studies.
“I was so fascinated that someone so young could have been so successful at such a young age that I did not believe it,” admits Tan. “I tracked him down and we have been friends for a while.”
“I was kind of cyber-stalked,” laughs Zhou.
A few months later, Tan and Zhou were in regular contact and through their relationship, Australia’s leading bitcoin platform, CoinJar was born.
With both coming from startup backgrounds, they have learnt to, “Assume nothing and test everything” and it is this ethos, which has seen the company go from strength to strength.
The Melbourne-based firm have signed up over 20,000 new users to their platform, which offers wallet and exchange services and is on the brink of launching their merchant payment services. In their first eight months they have already traded over $24million and have found investment and support from several backers including venture-capital firm, Blackbird Ventures.
The upside of down under
CEO and co-founder, Tan, is a firm believer that being based in Australia has been fundamental to their success so far. “All our business is based in Australia at the moment and uptake has been phenomenal,” he says. “I think a lot of it has to do with the community approach. Everyone I’ve seen in the Australian community is really helpful and reaching out; it is less competitive, I think that has helped us to gain a lot of ground.”
The pair admit that early on they had questions over the Australian location, despite people liking their product domestically, Tan says, “You always look to the US – San Francisco is bitcoin central.” But they have been surprised by uptake down under. “Someone told me early last year that Melbourne would be the bitcoin capital of the world,” says Tan. “I kind of laughed it off and said, ‘you can’t be serious,’ but seeing the growth not only in Melbourne but in Sydney, it’s really promising and I think it has legs.”
“Actually the penetration rate of Australians in the bitcoin market is quite high compared to other countries,” adds Zhou, saying, “It is similar to Germany and the Netherlands.”
In fact they now have plans to expand overseas and say they “have people on the ground” to try to forge relationships and open offices in Europe and by April they should have a staff of ten, all based out of Melbourne.
"...we have to move away from some of these really technical terms
and address these issues in a more human manner."
The secret to the success
An open mind and looking at innovative ways to overcome the challenges facing bitcoin are what is driving CoinJar’s success to date. “We’ve learned a lot about not replicating services that already exist,” explains Tan. “We are actually experimenting and testing new ideas.” He adds, “Bitcoin is so out there that we can’t make too many assumptions about how people are going to use it or what people are going to think of it so I think having a bit of humility and testing all our ideas is the way to go.”
The company is focusing on how they can bring bitcoin to the masses. Asher Tan revealed that if they could attract as many women as men, they would almost double their market, with males currently making up 93% of their client base.
“Part of what we look at with CoinJar is our brand, our image and our design, even the language we use such as how do we refer to very technical terms in a friendly way.” Tan believes it is similar to how you would treat money. “You wouldn’t go to someone on the street and start talking about fractional reserve and the gold standard so I really think we have to move away from some of these really technical terms and address these issues in a more human manner,” he says. “We are looking at ways we can communicate our ideas a lot better.”
Come the second half of this year, CoinJar hope to have their fully functioning merchant services up and running and roll out CoinJar for Business. “We have a really basic payment page where you can pay for items but right now we are learning about the behavior of bitcoin merchants and looking at new ways we can make it easier for people to accept bitcoin,” Tan says.
But they are not planning on becoming the Australian version of CoinBase or BitPay and as such, “not looking over their shoulder”.
“[Bitcoin] is a two-sided market; you need buyers and sellers so we’re just testing ideas on both sides and seeing where we go from there,” Tan says.
“I think it’s quite apparent to a lot of people right now to buy bitcoin, to invest; it’s a speculative asset but I think it has a lot more potential than that and so the challenge is to make a really easy-to use, trustworthy interface.”
The other challenge has been for Ryan Zhou, who has faced a small backlash from some members of the bitcoin community, particularly on Reddit, after the new owners of his first startup, Bitcoinica, struggled to operate the site securely. “I was not involved with anything regarding Bitcoinica after I sold the company in late 2011. People have their information wrong,” Zhou states.
Tan backs him up. “I think just like bitcoin, there is plenty of speculation. I think there were also question marks over whether someone so young could build such an amazing platform but as someone who has worked with Ryan pretty much everyday for the past year… Some things you’ve got to see to believe.”
He ends by telling me, “The popularity and the Coinjar platform exhibit that Ryan is a very capable individual and if it’s the right team, we can do anything we want.”
Thanks to Asher and Ryan for the interview.
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