Cygnetise was featured as Startup of the Month in the July edition of IBS Journal. In the interview below, our CEO Steve Pomfret talks about the company, our technology and what the future holds.
Please note this interview was originally published on IBS Journal July issue.
Tell us about your company. How was it founded?
Mike Ashkuri and I (Director at Cygnetise) started a business called Covolution in 2016. The concept of Covolution was to identify Blockchain use cases and set businesses up accordingly. Blockchain based use cases were compiled and assessed for their technical suitability and whether there was in fact a viable business case for them. The assessments looked at use cases and marked them on barriers such as cost of delivery, speed to market, dependency on mass adoption, comparison with any existing technology used, regulatory restrictions, client data restrictions and competing applications.
I spent time mentoring and educating people on how Blockchain worked, welcoming ideas of use cases, specifically in the processes they deal with on a day to day basis. The thought process here was to collate applications that offered a real beneficial use at a process level . These ideas would then be fed into the thought process.
One of these use cases was over a discussion with Shaun Blake, who was at the time setting up the operations of a hedge fund. Shaun explained that he had experienced frustrations with the processes of maintaining and distributing authorised signatories and whether this could be suitably remediated by the use of Blockchain. Immediately I agreed and that it was in fact a genius idea, so carried out some further analysis.
With minimal barriers, this appeared to be a perfect entry level use for Blockchain and consequently the company Cygnetise was founded.
What is your business model?
Cygnetise is a digital decentralized Blockchain platform for maintaining and distributing Authorised Signatory Lists. It significantly simplifies the current process that is carried out by nearly all organisations, alleviating internal operational inefficiencies, reducing risk and mitigating opportunities for fraud. The application provides massive benefits to clients and counterparts by removing the existing administrative burden and improving the overall customer experience.
Almost all organisations are required to maintain an authorised signatory list in some guise and can therefore use the Cygnetise application to do this. The application is web based Saas (Software as a Service) and can be accessed online. No implementation is required. Sign up is quick and simple, and involves a minimal validation from the Cygnetise team.
Following this, administrators for each organization can set up as many lists as required, usually at least one for each entity they need to maintain. In many companies, this administrative effort is done by company secretaries (or corporate secretariat).
There is a yearly subscription charge for each of these entities depending on how many signatories are included. For those companies who only have access to view the list via the application, or who receive a tokenized URL (of the lists), there is no charge. We have also included simple functionality that enables sharing of lists to be done in the existing way. This allows for inflexible counterparts who aren’t so quickly responsive to technology or process changes. This means that there are no restrictions nor dependencies on other parties. Another facet that makes the application really easy to adopt and immediately useful.
For large organisations who aren’t too keen on adopting further applications that they need to maintain, APIs into their existing system infrastructure are offered.
What’s the technology under the hood?
We have partnered with Applied Blockchain to build the technology. Gartner listed them as a Global Top 20 Blockchain Development and Consulting Firm in 2017, leading the way in delivering proof of concepts and enterprise applications. Shell have a stake in them as do one of our own investors, Calibrate, which is obviously quite handy for us.
We have our own private blockchain built on Parity, an Ethereum client, with nodes hosted in the AWS cloud services. Users of the application are not required to host a node, but any party can, should they want. Our consensus protocol is proof of authority.
What sets you apart from the competition?
As far as we are aware, we do not have any competitors of the application (of managing authorized signatory lists) within the Blockchain space. However, if you compare what we are doing verses those who are doing it on a traditional centralised database, the customers have complete control and own their own data, they can offer peer to peer sharing of their signatory lists (and not via a third party), there are no dependencies on their counterparts to ‘join’ the database (or contractually sign up), there is a full immutable audit trail of all amendments to the signatory lists and significantly enhanced security. These are basically general benefits that a decentralised blockchain database can provide over a centralised one.
What was your smartest move?
Right from the very start, Cygnetise has been extremely fortunate. Sometimes this was due to some smart decisions and sometimes it’s been down to pure luck. One of the strokes of luck was bumping into Damian Bell (Business Development Director at Cygnetise) on an evening where I spoke about blockchain to a small audience of about 20 people. A year and a half on, he has single handedly led our salesforce covering more ground and landing more sales than a small team would.
A smart move was engaging a very credible and thorough cyber security company. We have an ongoing relationship with Zerodaylab, who ensure that our product is watertight. Initially we were looking at spending far less money on companies with less of a name. Sometimes when your gut tells you, you need to listen and we busted our budget on this. It’s definitely one of the most sound investments we have made though.
I think that also the overriding smartest move was keeping the product as simple as possible so we could get to market early, secure the product market fit, and now continuously improve the application following feedback from our customers. I believe the adoption of customers is the most important thing. Too many people in this space seem to be ambitiously building a product that does more than enough, and then later find out that they have made it really difficult for customers to adopt.
Once you have customers, you can then start getting fancy with functionality.
Where did things get tough – what was your biggest setback?
As per the previous question, I think we have been really lucky with everything and have not had any major setbacks. There were times when the product development has been hampered (a problem with having a first to market blockchain application), and new customer on boarding has not been as quick as we’d like, but we continually learn and adjust the way we do things.
Finding and hiring an in-house CTO has also been extremely difficult as there is so much demand for them here in London. Again, this took longer than expected but we have recently got there and are very happy.
Where do you want to be in five years’ time?
In 5 years, we would have hundreds of thousands of corporate customers adopted and an exit. Major partnerships, spin-off applications would also be good too, but I do need to provide the shareholders with a decent return.
Our mission is to have more corporate customers on our private blockchain than any other in existence. If we have that, I think we’ll have many options of what we want to do.
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