A Letter from Brian Cai（Founder and CEO of FORTUNA) #005The success of an enterprise depends on the first 10 people
Hello everyone! My name is Liangbin (Brian) Cai, I’m founder and CEO of FORTUNA. I’ve started a series called ‘Founder Blogs’ to share some of the ideas me and my team have, that do not fit anywhere else. Welcome!
After graduating from Yale University, I won first prize at the International Mathematical Contest in Modeling. I worked in various segments of the financial industry all around the world (New York, London, Hong Kong, Shanghai and Hangzhou), in the fields of investment banking, supply chain finance, Anglo-American law trusts, civil law trusts, and private banking. At the age of 26, I was able to work my way up in a state-owned bank. Prior to leaving, I was the general manager of the private bank and was responsible for over 30 billion in assets. After these great experiences, I decided it was time for something new, something bigger. That is when I founded Fortuna.
UpdateMany friends have asked me what I am doing recently. It seems that they haven’t heard my voice for a while, I have been working tirelessly and have not been able to tell them about Fortuna yet. That is also why I originally chose to write “A Letter from Brian Cai（Founder and CEO of FORTUNA)”. To keep everyone up to date on what is going on.
I would like to start out and say that we have been very busy recently. Busy with building products and recruiting people. But especially with achieving the goals we had set for ourselves to be completed per the first quarter: the design and development of FORTUNA’s derivatives trading system of single-node version.
Why will we start with a single-node version of the derivatives trading system (and not with a multi-node mainnet)? I am happy to share this with you and get a little technical:
Excellent methodology with both mobile internet and blockchainThe most powerful methodology of the mobile internet is the A/B version test. This simple and crude method was born in the mobile era and enables a company to try different versions simultaneously and compare results. It is a type of experimentation that is short, frequent, and fast. This methodology has become notorious for pushing out traditional companies that were focused on one-year-version updates.
One of the most important features of blockchain as an autonomous and self-managed distributed network is that it cannot be tampered with. Data can’t be tampered with, rules can’t be tampered with, and this means that many mobile internet era’s methods are not fully suitable for the blockchain domain. How to better inherit and use the excellent methodologies and tools of the mobile Internet? Personally, I think that using a single-node version as a trial and leveraging the rapid verification and continuous trial-and-error methodology can be very beneficial before publishing a fully distributed main net version.
Data formatting and risk control modelingSome of the core components involved in managing derivatives are the risk control and pricing models. These models are so important that they are said to determine the survival of the investment companies that make derivatives their main business. Because of the quantitative complexity, the core of the derivatives-related companies is usually run by experts from the quantitative fields. After the subprime mortgage crisis of 2008, the quantitative risk management department and the model validation department started to play an increasingly more important role in many large organizations and hedge funds.
To attune the quantitative models, it is important to have real historical data. So, how can we quickly accumulate historical data? Using a crawler is one method. Self-done accretion is another method. A single-node version of a derivatives market will become a great business data accumulation method. Just like our Chief Product Inspector Z. T. said, “Sooner or later, the digital currency space will also become a data processing and service company akin to Bloomberg. Given it’s bound to happen, why can’t it be us?”
Environmental Construction and Investors’ EducationIn the past China’s derivatives exchanges had derivatives that linked to stocks, such as options and warrants. In 2005, the Chinese market had launched seven additional stock-linked warrants (similar to derivatives such as stock and options). It is said that at that time, relying solely on the trading volume of these seven warrants, China ranked first in the world in terms of trading volume of stocks and warrants.
However, due to the failure of investors’ education at that time, many investors did not know that warrants should be exercised on the exercise date. Many investors did not exercise their rights before the expiry of the exercise date, resulting in zero value of these warrants once they expired. This led to many unfortunate incidents.
Fortuna’s (single-node) derivatives trading platform will prioritize beneficial and simple derivatives: ‘Option Iron Butterfly’ and ‘Binary Synthetic Option’ based on mainstream digital currencies, and all options will have an “automatic exercise” mechanism that will be set up to avoid unnecessary trouble for investors.
In summary, designing and developing Fortuna’s single-node derivatives trading platform is not only an explanation of Fortuna’s vision, but more importantly the overall strategic deployment of Fortuna’s product. As I often say, the “technology roadmap” is very important. Promises and commitment are very important, but the most important thing must be the team and making the business tangible. Otherwise, all this is just a game of “weaving bubbles and dreams together”, leaving codes but leaving no productivity, creating memories but not making sense.
In fact, the success or failure of a business often depends on the first ten people who joined the company. The advantage of starting with a small team is not in being small, but because you can choose members.
I remember an analogy from the book “Hackers and Painters.” It roughly says that big companies are like giant ancient Roman warships. One thousand crew members paddle at the same time to make the battleship go forward. However, there are two core factors that make this giant battleship unable to be fast:
Firstly, nobody notices that their efforts to paddle makes the battleship move faster;
Secondly, the speed of battleships depends on a thousand people, which greatly averages individual efforts and achievements.
Ancient Roman BattleshipIf you select 10 people from a thousand people to make a relatively sized boat, it will move faster than the battleship itself. It will be faster, because working hard is encouraged, and inactiveness is discouraged. The boat is a cooperative park and athletic field that is naturally suitable for the survival of the fittest.
At this point Fortuna has only existed for three months. As you can imagine this is a very short time spent for a project, let alone running a company. We have grown rapidly during this time and I have spent the most time and energy in attracting like-minded and talented people to join the party. I believe that this is one of the most important things in the development of Fortuna.
Fortuna has now gathered a small group of powerful “fans” in their respective fields (blockchain technology, financial derivatives, trading systems, business operation, etc.) and together we are making progress very quickly. This is one of my happiest and proudest experiences.
Thanks for reading and see you next time!
Brian Cai.
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