Co-written with Brett Bivens and Matt Preuss at, with support from the DCG Family of Companies and the Visible team.

Building a successful business in an existing market with well understood technology and a defined customer-base is very difficult. Building something in a nascent market, like bitcoin or blockchain technology, that has a history of poor public perception, technology that challenges long-held, deeply entrenched beliefs, and attracts competitors of all sizes — from nimble startups to financial industry insiders to the banks themselves – is even harder.

Deploying Capital Effectively: The DCG Story

Digital Currency Group is a company that builds and supports bitcoin and blockchain companies using our insights, our network, and our access to capital. To date, we have built two companies, acquired one, and invested in another 65, many at the seed stage when our investment thesis is based on our confidence in a team, their vision, and their ability to built technology. Nine months ago, I joined DCG as our Director of Community (more on that coming in a later post), to build the insights and network at the core of our value proposition. My priority is to create connective tissue and organizational insights to help our portfolio grow and scale more quickly, more effectively, all while optimizing potential outcomes.

One of the most challenging aspects of managing a diverse, global portfolio is tracking how each company is performing and allocating our limited time (human capital), money (financial capital), and our network (social capital) to fuel portfolio growth. Often, the best insights we have into a company is our conversations with founders, and more importantly, the data and insights a founder shares with us on a regular basis.

“In this new and emerging space, we constantly ask ourselves how we should be measuring traction, how we can leverage data to understand what indicators we should be looking for, how we identify which companies are successful, and more importantly, what definition of success we should be using.”

Barry Silbert, Founder & CEO of Digital Currency Group

At DCG, as investors and company builders, our skill is our ability to recognize patterns. Without clear data and insight, it’s very difficult for us to guide and support our companies. More importantly, the old adage, “top of mind, tip of tongue” certainly holds true. The more companies share with us, the more we are able to support them, and the more we can tell everyone in our network about the great things they’re building. After 3 years of investing and analyzing the outcomes, here’s what we’ve learned about why companies go sideways and how we can keep it from happening.

Issue: Not Validating Product Market Fit

What we Do: Help companies develop better metrics and investor reporting, monitor operations more closely to ensure teams are effectively testing demand before spending financial and / or human capital building product or chasing a specific market

Issue: Dependent on Other Bitcoin Companies for Revenue

What we Do: Financial modeling not sustainable – push to diversify short to medium term revenue instead of relying on large “consulting” or “advisory” projects. Keep a closer eye on burn and capital planning.

Issue: Lack of Focus, Opportunitistic Pivots

What we Do: Closely track pivots and ask for quantitative rationale and customer feedback to support decision making. Ensure pivots are based on data-driven evidence rather than regulatory arbitrage or market sentiment.

This is why Digital Currency Group turned to Visible when we started thinking about how to manage performance reporting across our portfolio.

The Importance of Reporting: Lessons from Visible

Over the last couple of years at Visible, we have had the opportunity to work with hundreds of businesses and investors across all sectors to build effective “data distribution” processes. As a result, we have seen first hand that the way a company tracks, organizes, and disseminates its key performance data is often a window into what it cares about most.

For public companies, frequent financial disclosures and the reporting of certain well-defined metrics are a requirement. This gives employees and investors ongoing insight into the health of a business and makes it easy for all stakeholders to benchmark companies against their competition.

In the private market, this isn’t the case. While – as we have seen in our survey – companies are beginning to take their reporting responsibilities more seriously, the consistency with which key business metrics are defined, tracked, and displayed is still lacking. This lack of standardization often leads to misunderstandings – during fundraising, in internal communication, and in hiring – and as CB Insights recently pointed out in their comprehensive post-mortem on over 150 failed startups – a widespread misunderstanding of how to effectively manage burn.

Burn is that tricky thing that isn’t discussed much in the Silicon Valley community because access to capital, in good times, seems so easy. Burn is the amount of money that goes out the door, over and above what comes in, so if you earn $100 in a month but pay out $150, your burn is $50.

CB Insights on Why Zirtual Failed

The early life of a venture-backed (read: unprofitable) company is a race against the clock.

How much time until you need to hit the fundraising trail? 
How much time until the bank account hits zero? 
How long until we can reach profitability?

Bitcoin and blockchain companies have another, possibly even greater, existential question that they need to try to answer when raising money and planning their futures. When will bitcoin and blockchain “arrive”?

Daily Transaction Volume on Bitcoin Network


Source: CoinDesk Daily Bitcoin Transaction Data

An unwilling market will undoubtedly outlast the solvency of even the best ideas and technologies.

As we alluded to earlier, one of the best ways for early-stage companies to win this race against the clock is by capturing and retaining the attention of the people already on your cap table. In the startup world, investors play the role of super-connectors and as a startup desperately looking to attract and retain talent and capital, your investors (and their connections) can be one of your greatest assets.

“If you aren’t getting attention from a VC, you aren’t going to get money from that VC either. When a VC writes off an investment, either emotionally or literally on their schedule of investments, they are closing their wallet to it too.”

Fred Wilson, Orphaned Investments

This quote is backed up by data, as a recent survey we conducted among VCs showed that companies who report regularly are 2x more likely to receive follow-on funding. Regular business updates are the sign of an engaged, professional entrepreneur and show, as Marc Andreessen recently noted, “that you take seriously the fact that you are deploying the capital of other people.”

What We’ve Learned

Digital Currency Group and Visible worked together to get a better sense of how companies think about reporting, and what metrics they’re tracking both internally and sharing externally to help them better manage their operations, their strategy, and their relationship with investors.

We were specifically interested in understanding how companies in a nascent space process and analyze their operational and financial data. How are companies in the bitcoin and blockchain space focusing on building for the long term?

Who we talked to:

20 bitcoin and blockchain technology companies 
All Seed and Series A companies (we found later stage companies tend to only share metrics with their board, not their entire investor group) 
Companies from the US, Latin America, Europe, and Asia 
Nearly 75% of the companies who replied classified themselves as “revenue” generating

Drumroll please…


Only a small portion of companies – 25% of those surveyed – actually use a dashboard or tool to help them with reporting, and only 35% share performance metrics with their teams. We think we can do better as an industry. So we turned to two companies who have been leveraging data as their lifeblood to understand their approach to data.


Key Lessons: Track both gross numbers and MoM growth, be very clear about your goals and how the metrics you’re tracking serve those goals.

Our most valuable metric is monthly transaction count. We are now over 102,000 transactions per month, which means that every 25 seconds, someone in the world spends bitcoin at a BitPay merchant. That’s powerful.

BitPay has seen transaction volume increase by 50% just in the last two months and by 110% over 12 months. While gross numbers are still small compared to those of traditional payment processors, it’s a marked month over month increase in one of the key measurements for bitcoin adoption – consumer spending.

BitPay Transactions Mapped to the price of Bitcoin


Context is critical. This chart illustrates that bitcoin spending (blue bars) has grown even against what was largely a downtrending year for the bitcoin price (yellow line).


Key Lessons: Segment your user base and track user behavior to pinpoint where value creation is happening.

Annualized revenue per user (ARPU) is a metric we track pretty closely, especially in relation to the churn rate and the user acquisition cost. We also find it helpful to track usage rates on specific services within our site (e.g. remittances, payments for services).

We want to make sure that we are targeting potential customers that will continuously get value out of our service, not users that will make one transaction, lose interest, and never engage again (which can happen often with users of bitcoin brokers/ exchanges). Though it takes a few months of data to get a clear holistic picture, tracking the ARPU helps us better gauge what strategies have allowed us to reach and engage the people that end up getting the most value out of our service over time.

As a Bitcoin company, you’re often operating in the blind when it comes to deciphering exactly what the bitcoins are being used for and why the transaction is taking place. It’s invaluable for us to be able to pinpoint what use cases are driving the growth in adoption in our local market so that we can direct our efforts to where we can deliver the most value.

So what does this all mean? Digital Currency Group and Visible are going to spend some time digging into the data and figuring out what growth metrics really matter.

So Get Involved!

We are working on developing a series of templates for bitcoin and blockchain companies, right in Visible, that are easy to use and ready to go. Keep an eye out for those, and please share your thoughts with us.

We’re hosting a series of workshops to help bitcoin and blockchain companies figure out how to get better at tracking metrics that matter most to their business. The first one will be in San Francisco this Tuesday, 3/1, from 10 am to 12 pm PST. If you’re in the Bay area, please shoot us a note at to get your invite! (if you’re a DCG company, check your inbox for details. if you’re not a DCG company, send your pitch deck to

And lastly, we’re starting a much longer, broader dialogue about how the industry should think about growth and metrics. We would love to hear your thoughts.