Thanks, Chase. Although, I won’t give the author very high marks, there are some very good points worthy of my comments.

Quite often there is a “pioneer penalty” as apparent in the case of Bitcoin. As much as Bitcoin is still enjoying the “first mover advantage” with substantially higher market cap than all the other coins combined, Bitcoin is saddled with “pioneer penalty” that it may never be able to sufficiently overcome and gain mass acceptance.

Our upcoming press release scheduled for publication on Monday will be quite telling as we reveal part of our road map for 2016 and beyond. Being positioned to be the trusted global digital currency for everyone worldwide to participate, we believe that DNotes has a great chance to take the leadership position one day.

“Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes?”

Innovation leaders are often consumed by the excitement of their innovative ideas and failed to recognize that being outstanding in just a few areas while being weak in others areas is a failing strategy and not sustainable.


“The basic premise of the book is that management optimizes around protecting their existing business and fails to recognize and react to disruptive threats.”

This is true even with established business. Sometime, reacting to disruptive threats may not be sufficient. Understanding, the threats objectively, with winning strategies to deplore multiple action plans may be the best course of action. Major banks today are responding to the disruptive threads from Bitcoin and other digital currencies like DNotes. Perhaps the optimal strategy here, may be, to collaborate with an innovative small player like DNotes and benefit from their strengths in multiple areas, including being nimble, agile, and innovative.

 “it takes a different set of skills to start a company than it does to sustain a company”

This is very true, even in the case of DNotes. We will bring in professionals at the appropriate time.

“Lessons for entrepreneurs;
•   Never stop innovating
•   Build a well rounded management team early
•   Value sales and marketing talent as much as technical talent
•   React quickly to disruptive technologies or business models
•   Don't be too proud to imitate when it makes sense”

They are all good points with too many more to list, such as being the best in class, and be great across to board as opposed to being exceptional in one area but poor in others. I am still trying to find time to finish my book which will cover this subject in details.

•   Apple Newton ->Dauphin DTR -> Palm Pilot -> Blackberry



The author certainly did not have a very complete list. There are many more than what he listed. Dauphin DTR was the leader of the pack and dominated the news in the personal computer industry. http://articles.chicagotribune.com/1993-05-20/business/9305200013_1_pen-based-dauphin-technology-risc-system

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Quote From Chase – Oct. 2, 2015:

This story is the same age as bitcoin, so it's getting on in years, but I really enjoyed it and can see a lot of similarities here in cryptocurrency.  




Better business model, better marketing, better timing, better management

Innovation drives our industry, attracts the best talent,  attracts VC money, and wins fame for its leaders. Innovation leaders burst onto the scene, win early market leadership, but sometimes can't sustain the pace. Why do "fast followers" often jump in later and make fortunes? Is management responsible for the success or failure? Or, are these innovation leaders acquired by larger players before they have a chance to evolve into successful stand alone companies?

I have been on the leading edge, sometimes bleeding edge, of technology for most of my career. I have been fortunate to be part of start-up teams that have created "first-of-its-kind" innovations at companies like Forte Software, AltaVista, Napster, Bowstreet, and Groove Networks. All of these companies were first in their field, yet few of them realized the financial rewards one would expect. Is it all timing and luck? I don't think so.

Before exploring the reasons for success or failure lets review a list of innovation leaders and fast followers.

There is a rare breed of technical visionaries who are also great business leaders. Bill Gates, Gordon Moore, Larry Ellison, and Scott McNealy are examples. They are truly extraordinary and rare


•   AltaVista -> Google
•   Napster -> iTunes
•   VisiCalc -> Lotus 123 -> Excel
•   Word Perfect -> Word
•   Netscape -> Internet Explorer
•   Apple Newton -> Palm Pilot -> Blackberry
•   IBM PC -> Compaq -> Dell
•   Double Click -> Google Ad Sense
•   Ofoto -> Flickr
•   Compuserve -> AOL -> @Home -> Comcast & Verizon
•   Nintendo –> Xbox
•   Friendster –> Facebook
•   Blackberry –> iPhone

All of these companies were innovation leaders and market leaders. Yet, they were eclipsed by fast followers, in some cases multiple times, who imitated their innovation. My belief is that the technology was outstanding. The management was not.

Clayton Christensen wrote The Innovators Dilemma which I reviewed in an earlier post. The basic premise of the book is that management optimizes around protecting their existing business and fails to recognize and react to disruptive threats. However, the examples in Christensen's book play out over 10 or 20 years. The above examples played out in 5 or less years. Are the same factors at work here? Lets take a look.

AltaVista was the first search engine and the clear technology leader. The management at DEC didn't understand what they had and didn't invest the necessary resources to make it a business success. Later Compaq and CMGI squandered the search opportunity and tried to imitate Yahoo, Excite, Lycos, and AOL in the consumer portal game. Big mistake. Fault management.

Napster was the first P2P file sharing application to bring together search, FTP, and Instant Messaging. Brilliant technical synergy. There are lots of reasons for failure here, mostly management decisions and unfortunate timing.

VisiCalc was the first spreadsheet, invented by Dan Bricklin and Bob Frankston. I know Dan fairly well but have never asked him why he thinks VisiCalc fell behind and Excel moved ahead. This topic deserves its own post. My memory is that VisiCalc was slow to adopt the DOS platform. Lotus 123 moved ahead on DOS and achieved market leadership, but failed to jump onto the Windows platform fast enough. Excel did make the move and the rest is history.

IBM created the PC revolution and was the early leader. Compaq was a fast follower focusing on "transportable" PCs and won huge market share. Dell came in later and trounced them all with a better business model.

Compuserve was the first dial-up service provider. Together with Prodigy they dominated the market. Later AOL entered the game with superior marketing and original content. AOL absolutely dominated in the 80's and early 90's. Then @Home created the cable Internet market and took the early lead. It wasn't long before Verizon, Comcast, and other cable providers owned the broadband market. AOL never really made the transition from dial-up to broadband.

In nearly every case the early innovators were eclipsed by fast followers. Why did the fast followers take over market share leadership?

•   Better business model (Google, Ad Sense, Dell)
•   Better market position (Word, Excel, Comcast, Verizon)
•   Better timing (iTunes, Flickr)
•   Better platform choices (Blackberry, Word, Excel)
•   Better management (all the fast followers)

It is overly simplistic to pin the success or failure of these innovators on one factor. There were a combination of factors at work. But in most cases the problem was not inferior technology, it was inferior management decisions.

So, were these early innovators led by technical visionaries who were not good managers? Will the imitators  and "fast followers" suffer the same fate and be overtaken by new fast followers?

The list of "fast followers" above are more than just imitators. They have continued to innovate far beyond the original idea or feature set and have maintained market leadership. If you look closely at these companies they have a  mix of technical visionaries and business management leaders. I discussed this with Robert Scoble who pointed out that it takes a different set of skills to start a company than it does to sustain a company. This balance of skills, I think, is the key to sustained market leadership.

Cisco is an example of an early innovator that kept their market leadership position over time. Their technical founders brought in professional managers to take them to the next level.

There is a rare breed of technical visionaries who are also great business leaders. Bill Gates, Gordon Moore, Larry Ellison, and Scott McNealy are examples. They are truly extraordinary and rare. However, I suspect that each of them has a strong business management team behind them. Bill Gates has Steve Ballmer. Larry Ellison had Ray Lane. The early innovators who failed did not have the business leadership necessary to sustain them.

Lessons for entrepreneurs;
•   Never stop innovating
•   Build a well rounded management team early
•   Value sales and marketing talent as much as technical talent
•   React quickly to disruptive technologies or business models
•   Don't be too proud to imitate when it makes sense
Source:
 http://vator.tv/news/2009-06-29-why-fast-followers-beat-first-movers#V53zpWR7c8EHzQFt.99

My idea is to run a strip with the Digital Currencies rates from L to R as it runs on other digital and tv media nets or as it runs on SQR Times. we even can illustrate a central global new square of our own to be the background of this strip. such image can work. people are very interested on the rates of properties in general and their own especially. this idea is kept with me also for the moment our team will decide to create the "New Global Economy" - a daily newspaper ---- which I suggested to establish a few weeks ago

This is by no means a positive or an inspiring article. I hesitated if I should even post and comment on this. In my mind here is another “pioneer penalty” that should be added to Bitcoin’s long list of pitfalls causing it to stumble time and again, delaying or preventing mass acceptance altogether.

Bitcoin cannot blame the media for lack of coverage. There has been some news coverage about Bitcoin everyday; may be not by network TV, and not always the most complimentary, but none the less, it still helps this nascent industry to become known relatively quickly.

There has not been a shortage of investment poured into Bitcoin ecosystem either. As pointed out, BitPay alone raised $30 million and the industry as a whole have raised well over $1 billion, mostly venture capital (VC) money.  One would think that this is the smart money; since they typically have some of the smartest people on their team going over hundreds of business plans, and do, on average, one deal for every 100 they analyzed and scrutinized. BitPay is indeed the leading Bitcoin payment processor. For that alone, it is very telling that Bitcoin is not ready to go prime time as a medium of exchange and I do not see any plan to help Bitcoin get there.

This was part of my message when I made my presentation at NASDAQ on June 22, 2015 and it still holds true today:

“The Currency:  As the pioneer, Bitcoin has struggled as a currency with countless negative headlines. It is failing to meet the full functions of money. It has been struggling to gain mass acceptance as it has been too volatile as a store of value and medium of exchange. It seems to have settled with a limited purpose as a speculative trading vehicle.”

At DNotes, we believe that meeting the full functions of money, as a unit of account, as a medium of exchange and as a store of value, is critical for DNotes to be successful as the trusted global digital currency for everyone. The “jewel” is in the medium of exchange but achieving mass acceptance to use DNotes as the medium of exchange is one of the biggest challenges in the world of commerce and seriously under estimated. I personally believe that it has to be engineered with a very complex sustainable plan, systematically executed over an extended period of time. It takes a tremendous amount of ingenuity, hard work and tenacity few would care to commit.

DNotes has been doing precisely that by virtual of our growing ecosystem. It is a huge commitment on our part. It has the least short term payoff but absolutely essential for DNotes to be superior to fiat currency without a doubt, in the minds of reasonable people, one day. Most likely, the values and the importance of DNotes ecosystem are not even reflected in the price of DNotes. With mass acceptance, DNotes will become most valuable when the vast majority of the transactions are between two parties with nearly zero transaction cost. At that point nothing else can beat it. Though not obvious, that is the value of DNotes in contrast to other digital currencies, including Bitcoin.

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Leading Bitcoin startup BitPay is cutting costs, suggesting that the currency won’t be catching on soon.
In 2014, a Bitcoin startup called BitPay raised $30 million from investors and was dubbed the “PayPal of Bitcoin” for helping companies such as Microsoft accept payments in the digital currency. But 2015 has been less kind. Last week BitPay made significant layoffs, and earlier in the month it admitted to having $1.8 million in Bitcoins stolen.

The company’s travails neatly demonstrate two problems with Bitcoin as a currency and payment mechanism.

First, no one much wants to pay with Bitcoin and there’s not currently good reason to think that will change. BitPay’s business model was to help merchants take Bitcoin payments—often converting them directly into dollars—and take a cut of transactions. The company has enabled Microsoft, retailer Newegg, and many other companies accept Bitcoin payments.

Unfortunately for BitPay, just about no one gets paid in bitcoins, and for most people there are not clear reasons to bother with the trouble of buying bitcoins just to spend them again. The people with the best incentive to buy stuff with the currency are those who bought it several years ago and are now cashing out their gains after Bitcoin’s rise in value.

BitPay’s CEO Stephen Pair admitted as much in June, when he told BusinessInsider that the company was trying to find another business model. “We keep adding merchants—we’re up to over 60,000 now—but they’re selling to the same pool of Bitcoin early adopters.”

Gavin Andresen, who in 2010 was picked by Bitcoin’s mysterious inventor to lead work on its code, recently told me that he didn’t see that changing soon (see “The Looming Problem That Could Kill Bitcoin”). “Until part of your paycheck is regularly paid in Bitcoin, I’m not sure how it would really go mainstream,” he said.

BitPay’s embarrassing loss of 5,000 Bitcoins worth $1.8 million, revealed in court documentsthis month, highlights another challenge facing both the company and the idea of Bitcoin as a currency. The thief was able to trick BitPay’s CEO into transferring the funds just by sending e-mails from the account of his CFO.

That reflects badly on BitPay’s compliance mechanisms. It also adds to the short but very rich history of spectacular Bitcoin thefts (see “Bitcoin’s Rise Constrained by Heists and Lost Fortunes”). They suggest that the currency’s design is not well suited to being used like conventional digital payment and money tools. Although digital, bitcoins are like cash in that transactions cannot be reversed if something goes wrong. Researcher Nicholas Weaver at the International Computer Science Institute has called that Bitcoin’s “fatal flaw.” Conventional electronic transactions such as credit card charges and bank transfers can all be undone if fraud is detected.

All this presents a big headache for BitPay—and for many other people and companies betting on the idea that Bitcoin would become a widely used payment mechanism. In addition, the Bitcoin community is currently faced with tough decisions about adjusting the cryptocurrency’s design (see “Leaderless Bitcoin Struggles to Make Its Most Crucial Decision”).

The e-mail BitPay’s CEO sent to his staff announcing layoffs last week said that the company needed to “reduce costs” so as to “better align with the pace of growth” in the Bitcoin industry. BitPay may have stumbled for reasons specific to the company. Or we might see other companies start to show the strain as hopes that Bitcoin would quickly gain traction as a currency and payment mechanism prove to be false.

Source:

http://www.technologyreview.com/view/541901/the-troubles-of-bitcoins-paypal-show-why-the-cryptocurrency-is-not-a-good-payment/

Tom Simonite
September 29, 2015

I agree - it sounds great!

You mentioned before that people would not be limited to one entry.  Do you want them spaced out, such as 1 or 2 per week?

If we are trying to get as much coverage as we can, should we do anything for the most amount of shares?

How does this sound?

10 DNotes per social share. Could be a retweet, FB share, or G+ share. The first 1000 social shares will be paid directly, but every social share counts as an entry into a random drawing for 10 prizes of 1,000 DNotes, and one large prize of 5,000 DNotes.

The rules would be to go to the site, and share any and all articles they wish using the share buttons at the bottom of the page.

The contest will last 1 month. They must provide links to all social shares as proof.

I would like 1 + 2. Be rewarded for sharing and a chance to win a bigger prize.

Our philosophy has always been wanting to promote widespread ownership of DNotes. We are however, often constrained by low liquidity for DNotes, and the the risk of abuse, by use of duplicative registrations. We have always been very generous in rewarding people for their contributions as long as we still have the resources to do it. 

That number is certain to grow as people talk about it at the water cooler. Nice to see some stats on this.