Neuroware: New bit on the blockchain: Page 2 of 2
By Gabey Goh December 4, 2014
Taking Bitcoin from alt. to mainstream
Neuroware is on a mission to help developers take advantage of blockchain technology, enabling and supporting them as they rebuild financial services across the globe.
Asked about what makes it different from the others in this space, Smalley claims that those that come close to competing appear to only be tackling sub-sections of the problem, while Neuroware has taken several steps back and is looking at the challenges as a whole.
“There are several commercial Bitcoin APIs available in the market, many of which have generous amounts of funding – but in all honesty, after spending time trying to build things with the different APIs, it became apparent that those companies couldn’t have spent much time using their own APIs.
“The data output and presentation of data was sub-optimal. By building our own open-source software on top of our APIs, we not only get to ‘dogfood’ our APIs, but also get to provide a host of starting points for other developers to build cool things,” he declares.
In addition to this, according to Smalley, Neuroware appears to be one of the only companies out there “totally obsessed by modularity,” which allows it to be much more reactive and introduce additional features later on with ease.
“For us, adding a new digital currency to our wallets is as simple as adding a few lines of code wrapped up as a new module,” he says.
Basing its headquarters in Kuala Lumpur was also a deliberate decision, as the company works towards becoming Asia's first provider of blockchain infrastructure-as-a-service.
Apart from having laid down roots in the country, it is also the team’s genuine belief that South-East Asia is where the need for this next generation of services is most required, and in turn, most likely to see the fastest industry-wide adoption.
“Eighteen years in Malaysia has taught me that making payments online or trying to start up a business that does so is an absolute nightmare,” says Smalley.
“I strongly believe in the potential of blockchain technologies here in the region, and feel that there is no better place to do that than in Kuala Lumpur.
“Not only is there exceptional technical talent available, but it is far more affordable than other technology hotspots such as Singapore or Silicon Valley.
“It’s also a great central location with easy access to the surrounding regions where this technology will likely see the most growth," he adds.
According to Smalley, blockchains give back freedom and control to the developers, such as the ability to get started without a bureaucratic approval process.
Because transactions are completed within seconds, and do so with minimal fees, startups now have the most cost- and time-efficient way to accept payments online that are not at risk of being frozen or suspended overnight, he argues.
This gives their businesses instant access to global markets and international distribution channels, bypassing the encumbering payment facilities that are unable to maintain the same pace of innovation as entrepreneurs in the region.
“The next generation of payment systems are likely to use blockchain technology. Singapore remains one of three worldwide players that will likely adopt the brands such as Bitcoin, but they remain miniscule markets from a domestic retail perspective and is an extremely expensive place to set up a business, with limited technical talent.
“From an Asian perspective, Malaysia is the place to be, especially when thinking about the future of blockchain technology and adoption,” Smalley adds.
The benefits the adoption of crypto-currencies have been expressed many times in various articles by various individuals. But the blockchain technology also holds the potential for applications that have nothing to do with money.
Joel Monegro of Union Square Ventures recently noted that because the blockchain is not controlled by any one person or entity, and information in it is freely available to other software programs.
Some projects that are expanding beyond finance include a protocol called La’Zooz for real-time ride sharing and OpenBazaar, a protocol for a peer-to-peer trading network that could disrupt eBay. Both use the blockchain for some basic computing tasks.
Before such applications take off though, the technology’s use in powering financial transactions remains its most developed front.
However, Smalley believes that true mainstream blockchain adoption may end up relying upon “the removal of crypto-currency from the conversation” to the consumer.
“A utopian world would allow the free markets to make their own natural decisions, but we are a long way from having true freedom.
“For crypto-currency the brand to survive, politics will first need to be radically re-engineered and the chances of that happening are slim – but nonetheless something I hope my children will feel is not impossible,” he says.
Reflections and motivations
If there was one takeaway from Neuroware’s experience as an incubatee under 500 Startups, it was the realisation that the team joined too early in its life-cycle.
“On our way to Silicon Valley there was a certain feeling of expected trajectory. We were one of the first companies ever to be accepted into the programme with nothing more than an idea – the other companies in our batch were far more developed, having been going for between one and two years,” says Smalley (pic).
He notes that 500 Startups is designed to help with marketing and growth, but with Neuroware still in the product development phase, the team felt they weren’t able to fully extract all the benefits from the programme.
They were also surprised that many companies in the batch had already gone through other smaller accelerators, and were using 500 Startups as another stepping stone on their journey.
“To be honest, we feel like we could also benefit from another run-through an accelerator as we’re now in a much better situation to take advantage of it,” says Smalley.
“We don’t want to come across as negative on 500 Startups – it’s a great programme for growing your business, full of awesome people, and its alumni network is very supportive.
“They showed great faith in the Neuroware team by funding us so early in our life-cycle, and for that, we’re eternally grateful,” he adds.
Neuroware received US$100,000 in seed funding from 500 Startups, along with an additional US$50,000 from a Malaysian angel investor. Collectively, the three cofounders currently hold over 75% equity in the company.
The team is currently in the process of raising another round of funding, targeting a sum of US$150,000.
For a ‘techie’ personality such as Smalley, the biggest challenge to date in the Neuroware journey has been the opportunity cost of raising investment funding while being based in Asia.
“Every hour spent raising funds is an hour I can’t work on the product. The overhead of fundraising has forced us down certain paths, forced some decisions, and generally slowed us down,” he shares.
But despite delays and bumps along the way, he remains committed to the Neuroware mission, confident in the vast potential of this technology and how it’s going to revolutionise not just financial services, but other areas of society too.
“That pretty much guarantees that I get out of bed with a spring in my step, and the thought of my children having something to be proud of by the time they are old enough to understand what I've been up to is pretty much all I need to get through the day.
“Of course, this wouldn't be possible without the support of my wife who is going to regret giving me that one last chance before getting a real job!” he quips.
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