Former JP Morgan and SEC Cryptocurrency Steering Committee tech lead Will Martino co-founded Kadena and explains the advantages of being a tech-savvy leader in the business of blockchain.
What’s your background, and what are you working on?
I’m Will Martino, CEO and co-founder of the hybrid blockchain platform, Kadena. I met my Kadena co-founder Stuart Popejoy at JP Morgan, and together we built an early payments pilot private blockchain for the bank (called Juno). We led the pioneering blockchain tech team at JP Morgan, who have since built Quorum and JPM coin. After we open-sourced Juno and presented it to the Hyperledger foundation, we left JP Morgan in 2016 and founded Kadena.
Kadena’s blockchain platform solves crucial scalability and security issues, and offers powerful, yet easy-to-use software development tools and solutions for building on a blockchain. Our enterprise (permissioned) blockchain platform is used by Fortune 500 companies to streamline distributed database and unlock their trapped liquidity; our upcoming public platform Chainweb, allows our current clients, including entrepreneurial startups like Rymedi and international organizations like Alteum.io to build hybrid applications at scale. Tying it all together is our open-source smart contract language, Pact, which is simple, easy-to-use and formally verified.
We raised $12.5 million in 2018 and are on track to launch our public blockchain this fall. We’ve launched our private blockchain on Amazon Web Services Marketplace for free to make trying out blockchain easier and frictionless.
What motivated you to get started with your company?
While at JP Morgan’s blockchain team, Stuart and I were experts at vetting enterprise blockchain platforms for the bank’s strategic investments and potential adoption. That’s where we first identified the fundamental challenges to wide scale blockchain adoption: the technology just isn’t there yet.
At the time, we did in-depth analyses of early versions of Hyperledger, Axoni, Symbiont, Tendermint, Ripple, and Ethereum. My team found that the blockchain options in the market were technologically subpar for real enterprise use cases. These tech problems ranged from having contract code compiled down to bytecode — which both adds complexity to securing the system and renders the business logic that actually executes utterly unreadable — to running so slowly that all but the most basic, smallest business flows were fundamentally out of reach. We used to joke if we were to go to our bosses at JP Morgan and tell them that you couldn’t upgrade your business smart contracts in Ethereum without hard forking the entire network, we would be laughed out of the room and likely fired.
So we built our own payments pilot to learn about why the problem of developing a technically capable solution was so difficult. We ended up with Juno, effectively JPMCoin v0, which at the time was the fastest and most scalable private blockchain ever made. We eventually realized that a big bank like JP Morgan wasn’t the right place to push this bleeding-edge technology. JP Morgan is a big brand in finance and at the time (2016) they weren’t comfortable putting their name behind blockchain as a tech. They didn’t even open-source Juno under their name when presented to the Hyperledger foundation. So we left to build Kadena, focused on making a platform for enterprise blockchain customers.
It’s now three years later, Juno is still in the top 5 best solutions out there and is still faster than JPM’s next private chain project, Quorum, even though Juno hasn’t been supported by engineers since we left. And the reality of the situation underscores one of Kadena’s core engineering values, which Stuart and I learned from our time at JPM: when it comes to blockchain technology, don’t overvalue prior implementations. Instead, strip everything down to its foundation, learn from what came before, and rebuild from first principles with a specific purpose in mind. While ideas and concepts behind blockchain are good ones, the technology is still in its infancy and much of it can’t be repurposed for other uses like enterprise-grade applications.
What went into building the initial product?
Kadena’s first product was a truly scalable, deterministic Byzantine Fault Tolerant protocol (aptly named ScalableBFT). We were lauded in CoinDesk as the first real private blockchain. A private (aka permissioned) blockchain differs from public blockchains like Bitcoin, Ethereum, or Kadena’s Chainweb, in that only invited users can join and access the ledger data within the network.
Technically speaking, our private blockchain is one of the fastest, real (meaning actually Byzantine Fault Tolerant) blockchains in the enterprise world; it’s been tested and proven to consistently support ~8K transactions per second and scale well beyond 250 nodes.
We’ve always believed, even at the height of “decentralize-everything” hype, that there was a place for permissioned distributed applications, especially in the enterprise space. Moreover, we believe that the world will never see real adoption until there is an enterprise-capable blockchain solution available.
But the real killer app we developed was Pact, our smart contract language. Back in the day, my co-founder Stuart developed a simple scripting language for JP Morgan algorithmic traders that reduced trade execution times from months to days. His experience taught him that a purpose-built programming language should be very good at the thing it’s intended to do, and ONLY what it’s intended to do. If you let a Turing complete language into a high-consequence environment like finance (or blockchain), you risk terrifying, costly bugs and demand more from your programmers to use the Turing-completeness wisely. Human error will always exist if you let it exist. Pact protects people from the most costly human errors in blockchain.
How have you attracted users and grown your company?
We have always sought the forward-thinking, tech-savvy executive who wants to take their company to the next level and unlock trapped liquidity with blockchain. Part of our core values include integrity and practicality, which is why we open-sourced our smart contract language, Pact, the testnet of Chainweb, and provide a free-to-use version of our private blockchain on AWS. This attracts investors, developers, and businesses that see the same potential in blockchain and want to avoid laborious onboarding and consortia politics.
Kadena’s advantage is offering an all-in-one platform for hybrid blockchain applications; our product allows any off-chain computations or secure data to run on a private ledger and link to our public blockchain through our shared smart contract language. This creates a whole new marketplace for turning cost centers into revenue generators.
Kadena is often the one people turn to after they have tried out other blockchains (IBM Hyperledger Fabric, Ethereum, etc.) and realized how miserable it is without a scalable, purpose-built platform. For instance, we tell Ethereum app developers that Kadena’s Pact has error messages, and often they’re immediately sold.
What’s your business model, and how have you grown your revenue?
That’s the billion-dollar question that affects the entire blockchain sector. We’re still in the emerging-tech phase of blockchain, despite the fact that blockchain as a concept has been around for a decade. It’s tricky to accurately describe; the metaphor I use is: “It’s as if we are trying to describe what a Software-as-a-Service (SaaS) model looks like before the Cloud existed.”
In blockchain’s case, we can talk about business models broadly, but until the enabling technology exists, we can’t get too specific… there are a number of potential multi-billion dollar use cases and the spectrum of those solutions is wide. On the more familiar end, big-ticket use cases are relatively straightforward, like supply chain. In the middle, you get importable contracts that offer data and operational services, e.g. oracles through the lens of Bloomberg’s API product. And on the far end, things get rather strange. Some big-ticket use cases leverage decentralization to disrupt monopolies that are prone to enforcing their territory via predatory lawsuits and other anti-competitive behavior. Others end up looking like corporate-entity cyborgs where smart contracts replace entire subsidiaries with a grey-ish level of legal rights. It’s the far end that’s especially difficult to describe in detail as various bits of the approaches need to be tested in the field. Luckily, the more familiar end of the business application spectrum represents substantial value, if it were to be realized.
The lag between blockchain as a concept and as a mature tech is almost entirely due to the decentralized nature of public blockchain. With centralized tech, e.g. Web 2.0 or Cloud, you can throw money and people at problems to get to a mature product faster. This is NOT the case with decentralized tech, because “not having strict control” is a feature, not a bug.
Besides exchanges, which are well understood, much of the sector is still experimenting. Kadena, largely due to our focus on business and enterprise from day 1, has a relatively simple answer:
There is real business to be done with blockchain, but the tech just isn’t ready. So first, we fix the tech problem: deploy a general solution to scaling POW, secure smart contracts and make them usable by regular folks, demonstrate how a hybrid approach to applications works, and finally make sure our solution won’t fall over when big enterprise comes knocking by working with enterprises in the earliest of stages. Then, once we have the platform, it’s time to build the next generation of scalable business applications on it, and that’s where the sustainable business models come into play. We’re working on around a half dozen of these use cases at the moment, with structures ranging from joint-ventures to revenue sharing to regular consulting arrangements.
Kadena launches and helps to maintain the platform. But it’s the work we do after launch that generates revenue for the company. However, to be clear, the platform we’re launching is open and trustless. We expect and welcome competitors who want to deploy onto it. There are far too many business verticals to explore with a hybrid blockchain platform for us to be a gating factor.
What are your goals for the future?
Our goal is ambitious: We want businesses big and small to adopt blockchain to make the lives of everyone easier. We want to scale public blockchain to be a viable path to creating new decentralized marketplaces while maintaining enterprise-grade capabilities for security, privacy, and speed.
Now that Chainweb, our public proof-of-work blockchain, is in testnet as of March 2019, the rollout of mainnet is an inevitability. There is still the challenge of adoption, but we’ve been working with our enterprise clients on hybrid applications that tap into the public network’s features, meaning we may be the first blockchain to launch with use cases ready.
This is a big year for us and we’re really excited to be in the process of shipping tech that will make a big splash in the space.
What are the biggest challenges you’ve faced and obstacles you’ve overcome? If you had to start over, what would you do differently?
The first challenge was that our philosophy of “build it from first principals” meant we needed to start from scratch, and there was a lot of work to do. For this, we leveraged the Haskell programming language to accelerate the development process. Nine months after founding Kadena, and we had a new challenge: we had made enough progress that we were solving problems people hadn’t even encountered yet.
We were always three steps ahead of market education. For example, at the first Stanford Blockchain Conference (formerly BPASE) in 2017, Stuart presented our work on Pact and Formal Verification. We had gotten smart contract formal verification — mathematical methods for turning code into proofs — working in Pact a few months after it was open sourced, and only then we ran into the “but how will people use it” problem. Stuart was presenting about how in Pact you could write one line of property code and it would result in a test that covered what would otherwise need an infinite number of unit tests, and no one knew what we were talking about. Now, formal verification is one of the trending topics in blockchain smart contracts.
Pact has a few features (e.g. autonomous endorsements, capability-based security, automated cross-chain interactions via SPV and coroutines) where we only discuss the most basic bits publicly because the education required to describe the bleeding edge of the work is too great. Our plan, instead, is to have good documentation and show it in action.
I also encountered friction in fundraising between “west/east” coast mentalities on blockchain’s purpose and future. For the east coast, it’s about a new way of representing value and doing business. For the west coast, it’s about web 3.0. I’ve had (mostly west coast) investors tell me to abandon our private enterprise blockchain and focus solely on building a public platform to issue tokens. We refused to listen to them, and now we’re being proven right. The market has since moved to where we are standing, at the intersection of public/private blockchain and enterprise adoption.
Another important takeaway for me is that the best tech doesn’t always win, so despite being technologically leaps and bounds ahead of our competition, it’s important to remember the story and narrative of why we’re doing the things we’re doing. I’ve learned to tell that story first before getting into the weeds. We’re here to help people solve real problems, today. We’re releasing real tech that you can use right now, not simply raising money and delivering empty promises.
While there are bits that — if I had to do it over again — I’d do differently, everything comes with the benefit of hindsight. Most of the calls we made that didn’t pan out made sense at the time.
Have you found anything particularly helpful or advantageous?
It’s extremely helpful, for one, to have a fantastic co-founder for whom I have limitless trust. Stuart and I are absolute equals; we run Kadena as a pair, and we’re not a typical pairing. Both of us are technical, but we’re not from the same generation. We have very different personal hobbies and interests, but also a shared love of programming, and this eminently practical approach to all things.5
Oddly enough, my technical research background and what I studied in school has also helped me. I never, ever thought years of messing around with fractals during my Econ/Math degree would be this useful. I thought that I’d always be a programmer, but now I’m wearing the non-technical founder hat with Stuart leading the charge on the tech side. Still, it’s been invaluable having a programming background and knowing how to build a blockchain or a formal verification compiler for Pact from scratch. There’s a lot of noise in crypto, and most of it can’t be filtered out without a deep technical background.
Finally, I’ve also followed a simple algorithm for years that helped me shift from a core developer to an executive (CEO) role. A huge part of my life as CEO has been rapidly building expertise in many areas that are completely new: Culture, HR, Marketing, Sales, Operations, Accounting, etc. So, step one is: “ask for intros to an expert to talk to.” Step two: when I meet someone who’s top-tier in their space, I often ask, “Is there a defining book for your industry? Something that can get me up to speed quickly?” Most of the time, the answer is no. But when it’s yes, I get to skip forward in my learnings dramatically. Some of the most useful book recommendations I got were:
- “Difficult Conversations” — when it comes to people management under high stress when you’re scaling up rapidly, it proved incredibly valuable
- “Who: The A Method for Hiring” — this is THE manual for hiring. No need to look further.
What’s your advice for entrepreneurs who are just starting out?
I don’t have any general advice of what to do, just what worked for me leading up to founding. 1) Find things that confuse you and learn about them until they are no longer confusing. 2) Keep jumping from job to job where you find yourself feeling dumb because the people around you are that smart, and be on the lookout for the right opportunity.
Do that long enough and, when you have an idea for what you want your startup to do, you’ll have a strong network to lean on and a wide knowledge base to draw from.
I can offer one piece of obvious general advice of what NOT to do: do not, under any circumstances, close your fundraising round the same week you get married. I really don’t know what I was thinking.
Where can we go to learn more?
Kadena.io for our website, our Discord to chat with our team and for our AMAs, Twitter for official announcements, Medium for in-depth thought pieces. Sign up for our newsletter and feel free to ask me questions in the comments.