Steemit: Where Was The CFO?
I will start by saying I know Steemit is a private corporation that reports only to it's owners. The numbers are not public nor are they under any obligation to reveal them. Thus far, @ned decided to share some of the situation with the community.
For what he did, I do applaud him standing up and taking the heat. Being open in a time of crisis is commendable although there usually is little option.
The positive out of these entire episode is that there are a lot of people who are getting reflective. Many questions are being asked which will take the entire ecosystem to a higher level over time. We see a banding together of the community with many people stepping up with ideas. There is simply a determination on the part of many not to let this fail. Failure is being removed from the table.
One question that came to my mind is who was watching the numbers? Where was the CFO? I will say I am not sure if Steemit had one but there has to be someone responsible. Companies tend to do the numbers on a quarterly basis, at a minimum. Whether it be an accountant, bookkeeper, or someone with an excel spreadsheet, the numbers are there.
The problem with this is that only two possibilities exist. The first is the numbers did not reveal what was going on. Another possibility is they were overlooked.
Here is the bottom line: the numbers always reveal what is going on when someone looks.
Thus, we are down to someone was overlooking what was there.
I applaud the difficult decision being made to let go of staff. That is not easy especially when it is 70% of the entire company.
Yet, why were the warning signs missed? Who was minding the proverbial hen house?
Steemit did not suddenly enter into their predicament overnight. They knew what the monthly costs associated with the running the blockchain. However their revenues are derived, that is a number that is easy to monitor.
I understand that the massive price drop in STEEM caused a great many problems. The challenge I have is the price was dropping all year. If the price suddenly dropped 80% due to an insane market, then I could accept that as a cause.
The only conclusion I can make is that warnings were not heeded. Whoever was responsible for watching the financial situation feel asleep. This is of great concern.
Again, I realize that this is a private company that few of us have any involvement with. It is also true that it really should be none of our business how the operation is run and what is does financially. However, Steemit is a 3rd party risk to everyone on this blockchain. Because of the position they are in, the areas of responsibility, their financial instability puts every Steemian in jeopardy. All the businesses build upon this blockchain can be affected by Steemit.
Therefore, I think it valid to ask these questions in this time of reflection. Who was watching the numbers and how do we know this will not happen again? Even if Steemit does "catch it's breath" and move to the thriving stage, who is going to prevent this the next time?
Call me biased since I am a bit of a numbers nerd but they tell the story. We now have a community that is aware the risks Steemit poses to the entire ecosystem. While there are many questioning and coming up with solutions on the technical side, I think the financial side is worthy of similar consideration.
If Steemit insists on maintaining control over blockchain development, what assurances does the community have that it is capable of handling it's financial affairs? Who is even going to monitor it and do they understand about the need for the community to know they are financially solvent?
These are questions I hope we get an answer to over the coming months. Operating in the dark is no longer acceptable.
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There is serious problems with their business plan. It only has one direction which is to bank everything on the value of the currency. Imagine if Amazon never broke free of just selling books on-line... Where would they be today? Most likely out of business. What is more ironic is that Steemit Inc did nothing to promote the value and availability of STEEM currency. You would think they would at least spend resources protecting their only source of revenue.
Now they are in a situation in which they need to "adapt and overcome". @ned needs to create other sources of revenue for Steemit Inc prosper. Think of the Amazon model. They didn't just stick with one thing.
If @ned is a real CEO, we will see adaptive measures put in place. Cost cutting is only a band-aid. It will never fix the root of the companies ability to generate revenue.
I am going to finally have 10,000 sp by the end of this week hopefully... If the prices go lower somehow I will try to get even more, maybe will just hold onto steem hoping for a x5-x10 increase
I cannot argue with that logic. I am doing the same thing.
Although at these prices, I expect a much bigger multiple return down the road.
in order to be attractive to speculators the price needs to be HIGH :) the best performing in trades are the highest prices, somehow that makes it attractive to big money and one billionnaire > one million plankton
but id be comfy if it vibed between $5 and $10 really, stability is another issue, especially for a utility token like this
and yea, alas i'm a broke f*ck but if i had 20k to spare now i'd throw 10 or 15 at it ... all or nothing :p
no risk = no gain, unless you're already rich, in that case you can just live off of the noise
Good point, Steemit is clearly run by inexperienced executives.
I had no idea that a private corporation had the life of this Blockchain on its hands.
We need to truly decentralise this.
The Blockchain must find a way to survive even if SteemIt.com fades away.
There are many other platforms to use Steem besides Steemit.
Yes, but it seems that the Blockchain wouldn't survive without SteemIt.com. That is not good enough. We need to find a way to survive if they walk away from this.
The Steem blockchain lives on the computers of the hundreds of witnesses out there. We should be fine, someone else will take on the mantel to keep this blockchain worth hundreds of millions of dollars up.
only sorta kinda true. For pretty much every app and front end built on top of the steem blockchain to run, they depend on the api nodes that Steemit, Inc. runs at the cost of several million $ a year. If Steemit, Inc. stopped subsidizing the rest of the players on the blockchain by paying the costs of running the servers for the api nodes, nothing would work. It is possible that things would eventually start back up if someone else decided to foot that cost, but currently it doesn't look like any of the apps or front ends could bear that cost. So pretty much, if Stinc goes under, the blockchain for all intents and purposes stops even if witnesses are still running.
If they walk away from the blockchain we still have plenty of time to figure out how to continue development. How many people do you know that want to revert back to a previous hard fork? We could probably halt development for an entire year and be fine.
Here here. Steem is not decentralized until the development is fully decentralized!
"The only conclusion I can make is that warnings were not heeded."
I'm an accountant and CPA, and I so agree with you on this one remark. Not only were they not heeded, they were not even known or anticipated. I am not one to get involved with numbers when it is "not my job" and the numbers are not to be found here in any case.
But this revelation by @ned after so much silence has me very worried for the future of this place. I have never been sure of it, this recent communication makes me feel much worse.
Back in accounting school, a prof stated that when the focus changes from growth to cost cutting, look for the business to fail soon after. I then saw that exact process in many places I worked over the years as well as at least 5 other social media platforms that have failed while I was on them over the last 8 years.
I hope steemit bucks the trend, but I don't feel hope. For now I just keep posting and trying to stay active with my other platforms.
it's gotta be a new dawn, otherwise it'll be a new sunset
I am sure the warnings were indeed heeded and they held on as long as they could hoping the market would turn around. I have seen it happen this way many times. It is hard to let staff go.
The CFO only started in August (IIRC), after the opportunity to accumulate some years or runway.
While that is a sad coincidence, the timing of a CFO fits in any regular startup. In fact, Steemit may have recruited one before any usual progress already. A CFO normally comes only in the later stage before B-round, often early after the B-round even.
Most companies don't reach that stage before 3-4 years. The B-round is the most difficult of all to achieve and thus while the title's question is valid... the CFO was there but they only started after the golden opportunity. That was unlucky timing but not a poor decision in itself.
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There are certain structures and controls in a company that should prevent this kind of thing. Why was the fate of the company dependent on market volatility? Why weren't they hedged against it? Los numeros no son mentirosos.......