Sustained Crypto Winter Causes Hosho Smart Contract Auditor to Let Go of 80% of Staff
A company called Hosho had cut 80% of its staff in order to survive the harsh crypto winter that we are currently living in. Companies like ConsenSys and Steemit are also making huge cuts and it looks like the situation will not get any better while the bear market is not over.
Hosho was founded under a very simple premise: the idea was to safely sell “smart contract shovels in a tokenized gold rush”, according to its co-founder Hartej Sawhney. He affirmed that the company was ready to audit a lot of Initial Coin Offerings (ICOs) and that, for quite some time, the company was actually able to surf on this wave.
Hosho, which means “security” in Japanese, was founded in July 2017 and based in Las Vegas, despite the Japanese name. The company arose when ICOs were at their best and expanded very quickly while building its brand.
At some point, however, things took a turn for the worse and they were never the same as before. Some cryptos lost more than 90% of the value they had in 2017 and people started to think that ICOs were a bust.
The CEO of the company claimed to Coindesk that, during its 17-month run so far, the company audited more smart contracts than any other company in the whole industry. However, the business slowed down a lot in the middle of 2018. After that, the company had to turn its 37 employees into seven in order to survive.
Sawhney described the experience as very painful and affirms that he had never fired so many people at once before. However, the only way for the business to survive was to do it until the industry could be back on its feet.
According to the CEO, the most important thing was to stay alive during the crypto winter. The sentiment is shared by many other companies. Some people believe that the next phase of the market may be just down the corner and that the bull run will definitely come back at some point, so now is the time to survive the bad phases.
Real Problems Started At the Half of 2018
Sawhney believes that the main problems started during June or July 2018. There were a lot less smart contracts to audit and the change in the market was very sudden. In fact, the industry was heavily inflated with hype and it was very immature at the beginning, which explains why the market crashed.
Some of the smart contracts, he affirmed, did not even had the most very basic things and they were very bad, just like many projects. He believes that this happened more due to negligence than out of maliciousness, though, as some teams were simply pretty bad and cut and pasted smart contracts from other teams (which can be a common problem in open source projects).
However, some of the companies were clearly bad cookies. They offered a lot of money to the company in order to approve bad contracts, something that they clearly did not accept.
Despite all the problems, though, the CEO of Hosho is very set on the idea that the company will not make the same mistakes. He believes that they will have another shot at success in the future and that they are going to be more successful.
How would they do it? By doing different things during the bear market, mostly. Sawhney says that they would hire the personnel slower instead of getting excited and hiring too many people, which caused the company to fire these people later.
He would also hire people from all over the world instead of only hiring in the U. S. This, he believes, would considerably cut the costs of the work and he knows a lot of people in Ukraine which are very good.
Another way to be more protected against a shift in the market is to accept more payments in fiat. Cryptos lost a lot of their value during the year, which obviously caused some problems for the company. While he does not regret to accept payments in crypto, taking more in fiat would have been a better idea.
Hosho will take these ideas into account before setting out to expand again when the bull market is finally here. According to the CEO of the company, people are faster in the company now and they are more productive than ever. All of this could help the team in the future.
He does understand that some losses cannot be avoided when your whole market turns sour but that you can simply do your best in order to educate your team on how to survive, basically.
A lot of companies are way worse than Hosho is now, so the company is set to focus on its best markets, especially the ones with less competition, and to dominate the market while it waits for the good times to come back and secures some talent.
According to him, it’s a game to stay alive, basically, which is what matters the most.