Orbs co-founder Tal Kol: Don't decentralize for the sake of it

Tal Kol is the co-founder of Orbs a blockchain infrastructure provider for enterprises. Prior to co-founding Orbs, Kol co-founded Appixia, a mobile app startup acquired by Wix.com, and was head of mobile engineering at Wix.com. Soon after that, Kol made the jump to blockchain, where he became the head of engineering at Kin by Kik Interactive. Below he explores that journey, and why founding a business in blockchain is like trying to build a colony on Mars. 

How did you first get into blockchain and the decentralized web?

I have a long history working in app development and with open source. For years I’ve worked with React Native, the open-source mobile application framework created by Facebook, which is used to develop apps for Android and iOS. As a huge open-source believer, during my time at Wix.com I led the effort to transform the company from being traditionally closed-source to one of the largest open-source contributors in the world–ranked 11th globally in 2017, Facebook was ranked 6th at the time.

While open-source changed software forever, when I first heard of blockchain it was clear to me that it was the next evolutionary step. Rather than sharing only the source code, public blockchains act as collaborative platforms for live and open-data. This is mind-blowing.

From the outset, I wanted Orbs to be something built by developers for developers.

When did you set up your company?

We founded the Orbs project in 2017 as a public blockchain infrastructure designed for enterprises. What we are building bridges the gap between the needs of enterprise businesses and the benefits of a public blockchain. By using blockchain as a neutral third-party to display data, businesses can prove indisputably that their data and algorithms are reliable. Trust must be earned. We call it “digitally verifiable trust.”

Before Orbs, I managed the entire technical side of Kin, the cryptocurrency created by the popular messaging app Kik. While there I learned a lot about the hurdles of developing a decentralized product that supports a massively networked community of users. The main obstacle there for the team was the realization that Ethereum can’t support a real business in a production environment.

Scalability was one issue, but useability was another. These infrastructures were built for token-based dApps, not regular “for-profit” businesses. They also lack certain “non-starters” such as isolation, customization, low and predictable fees, and existing knowledge - like using common languages, rather than creating new ones.

That’s where Orbs comes into play. We started Orbs because no existing public blockchain solutions were suited for real corporate or enterprise use. We found “disintermediating” or replacing enterprise apps like Uber with a purely decentralized smart contract version wasn’t only unlikely, it was unnecessary. Why not work together with these existing businesses, making Uber Inc better?

What need does it serve?

In today’s world, any company holding large amounts of user data needs to show consumers it can be trusted, whether it’s showing how it handles personal user data or how they run their algorithms. Companies and other entities are also pressured more and more to prove their trusted processes in a variable way, which is what public blockchain is all about.

Right now, the most interesting work in the space has to do with showing actual use cases for either solving a trust problem or adding real commercial value. For example, in the US and around the world there’s a certain distrust in the public procurement process. If service providers feel public tenders can be influenced by bribes, that destroys the legitimacy of the entire process. Blockchain could remedy this. Orbs expands the offerings of public blockchains by supporting permissioned apps developed by existing businesses.

Have you launched other companies before? What were they?

Before I entered the world of blockchain I co-founded three startups. Appixia was a platform for building mobile apps similar to what Wix.com is doing for websites. Wix liked it so much they bought it, making it their first acquisition post IPO. I also helped launch two smaller startups.

I also spent time at Hexa Labs which is a blockchain consultancy that helped real businesses spin up decentralized applications. Working here with large companies served to refocus my approach to addressing discrete needs with specific applications. 

What have been the biggest challenges you’ve faced in building a business in this space?

The ICO craze from 2016 to 2018 tried to rebuild the internet without middlemen. But, to put it plainly, cutting out the middleman has failed. You’ve got a blockchain landscape with 3,000 dApps failing to mature to successful products.

Real businesses are not building dApps and blockchain isn’t close to mainstream adoption. It’s not an infrastructure problem. The value-add of pure decentralization is unclear. The first hurdle is that existing infrastructure isn’t suited for blockchain.

In the beginning, Orbs was a part of the “decentralize everything” movement, helping big companies spin-off and create blockchain solutions but over time we found token-based models weren’t working. There weren’t users to support them. DApps are currently failing and the decentralized business model doesn’t support their growth for now. They’re meant for the future.

What’s the best piece of advice you were given when it comes to being an entrepreneur in this space?

Focus on making progress during every stage of development. That’s all that matters. This keeps you in touch with what your clients and the industry at large needs. One thing that I always keep in mind is “What can make a difference now?”

These blockchain projects (and many startups in general, really) get so much initial funding, everyone entertains grandiose ideas. Don't build a spaceship just because you can.

What advice would you give to someone setting up a business in the decentralized web?

My number one piece of advice is don’t just decentralize for decentralization’s sake. You must understand that true decentralization is a means, not an end. It’s the means to give partners and users better verifiable trust. Decentralization is inherently more expensive. Put simply, something that costs 10x more should bring 10x the cost in returns.

Additionally, startups and developers must drive education and accessibility to the benefits of blockchain. This is where innovation will originate, both at new startups and internally at large companies.

If you built your business all over again, what would you do differently?

Mistakes are a part of the startup world. It’s what you learn from your mistakes that sets apart companies.

Orbs’s initial focus on dApps was wrong. Distributed apps are technology built for the future. Taking real businesses and making them change their entire backend to something fully dApp-based that was token reliant was a fool’s errand. It doesn’t work with existing systems and existing business logic. Our initial mission there was misguided, but it let us refocus on what is important in blockchain and identifying the guarantees that are important to devs.

What project or projects are you most excited about (that aren’t yours!)

I think StarkWare, the company that developed ZK-STARKs, is a really great project. ZK-STARKs compress large amounts of data into small proofs (the “STARKs”) and use zero-knowledge proofs to keep the information private.

What is (or what will be) blockchain’s “killer app”? 

Fake news is a threat to world democracies and I think blockchain will be able to solve that issue, the technology isn’t there yet but I think it will be in a few years.

What’s the difference between setting up a company in the decentralized space versus regular business?

Building a blockchain company is like setting up a colony on Mars. The go to market strategy is different. Spinning up is different. Literally everything is different. 

One specific thing I’ve experienced is that it isn’t easy finding great marketing team members. Because blockchain is such a new space, it’s hard to find marketers that can navigate between enterprise, crypto communities and so on. Interestingly, we’ve found that people who have experience in politics quickly adapt to crypto. Building a business here is like running a campaign. You need to develop a passionate base that actively promotes evangelism and mobilizes their communities.

How would you describe blockchain to someone who has never heard of it before?

Think of it as open-source for data.