Q&A: Clay Collins Wants to Make Cryptocurrencies Mainstream
Fifty-seven days. That’s how long it took Clay Collins to leave his first startup and announce his second.
Nomics, which Collins co-founded with Masschusetts-based developer Nick Gauthier, aims to fill an unmet need within the market of cryptocurrencies, or digital currency, such as Bitcoin. Investors, analysts and enthusiasts are all in the same boat, Collins said, each lacking a definitive, go-to source for information on all things cryptocurrency—from buying and selling activity to real-time price monitoring (similar to the stock market).
Collins, best known for co-founding Leadpages, the fast-growing Minneapolis startup that offers website landing pages, spoke to TCB over the phone about his personal ties to the cryptocurrency space, the intricacies of making a cryptocurrency database, and how he plans on running Nomics differently than Leadpages.
Note: This Q&A has been lightly edited for length and clarity.
TCB: What is Nomics? And how would you describe your business plan for it?
Collins: What we’re working on can be broken into two parts. The front end is really aspiring to be the home page for cryptocurrencies on the internet, much in the same way Google is the homepage for the internet. We’re describing ourselves as the “Yahoo Finance for cryptocurrencies.” You’re going to see a lot of the types of things that you’d see on Yahoo Finance, like portfolio tracking tools and in depth information about projects and the ability to sign up for specialized alerts on things like price drops. On the back end, which is going to power all of that, is an API that the front end is consuming that we'll be selling to hedge funds, family offices, day traders, institutional investors and that community. There isn’t really a go-to source for aggregating all of this [cyrotocurrency] data. We’re not only going to be logging prices on all the major cryptoexchanges but also logging every single order that happens in the cryptocurrency space. And in addition to every single order, we’re going to be logging the order books. That includes orders that aren’t even filled. So we’re going to have this firehose of data, and we’re getting a lot of interest from different types of traders for that back end. We are creating the back end and front end as two separate products—one just happens to consume the other.
How long have you had an interest in cryptocurrency?
I started getting involved in cryptocurrencies around early 2014. It became a meaningful and significant source of revenue for me. I’d spend about a half an hour a day acquiring it and participating in crowd sales and pre-sales. I think mining is great for people who have more time than money and I think purchasing it is better for people who have more money than time.
Which cyptocurrencies do you own?
Several, actually. I own Bitcoin, Ripple, Litecoin, Monero, Dash, Metal (MTL), and then you start to get into obscurity after a while. And I’ve been getting 10 to 20 times returns on my funds.
How much interest are you seeing from hedge funds and the like for information on Bitcoin and other cryptocurrencies?
In the last quarter, over 70 crypto hedge funds filed for registration, and they all need really good data and it doesn’t exist out there in a meaningful way. The modern institutional investor doesn’t just have one engineer—they have entire engineering teams. So they’re not looking to use a consumer site like Yahoo Finance or Google Finance or even a Bloomberg Terminal. They have their own algorithms and what they perceive to be their own unique edge. Really what they’re looking for is an API they can hand to their engineers who can do whatever proprietary magic they want on that data.
Given the constraints of buying and spending something like Bitcoin, will there be much cryptocurrency activity to monitor?
Bitcoin can sustain around six transactions a second. It’s not terrible but I’d say the gamble I’m taking here with Nomics is a much smaller than the gamble I’ve personally taken in the space. There’s a lot of price fluctuations in this space. Right now Bitcoin is up 551 percent for the year and, yeah, we get headlines any time it drops 30 percent, but anyone who has held Bitcoin for any three-year period has beaten the returns they’ve gotten anywhere else.
How did you meet your partner Nick Gauthier?
If you’re familiar with the Drip product that Leadpages acquired, one of the co-founders of Drip introduced us. We started spending a lot of time on the phone talking about things. At some point after I left Leadpages I had some free time on my hands and I started talking to Nick more about the need for a solid aggregator of cryptocurrency data. One thing led to another and I accidently started a startup.
Given the space between you and Nick, how have you been building Nomics?
Because we aren’t in the same town, I’ve gone up to visit him. We use a tool called Voxer for asynchronous voice communications. So we leave a lot of voice messages for each other and we use Basecamp. We’ve definitely started committing code, but job one for us is really the data set. There’s a lot of data to ingest and a lot of work to be done around how that data is stored, where it’s stored, the characteristics of a financial data set and everything that that entails.
When do you plan on launching Nomics officially?
We’ll probably have something available to hedge funds, institutional investors, et cetera by February or March. The front end itself, I don’t think we’ll ever monetize that. Our goal is to just own the largest amount of traffic in the space. All of the sites that people use to monitor data in the cryptocurrency space are almost entirely run by enthusiasts who are taking this up through a variety of side projects. It really hasn’t been professionalized. And that’s one of the things we’re bringing to the space—a sense of business. A major factor in the lack of professionalization in the space is you could take a half a million bucks and invest it in cryptocurrencies or you could invest it in a startup, but without a doubt the returns you’re going to have in cryptocurrencies are going to kick the ass of the returns you’re going to get from the startup. The returns are just insane. So when prices stabilize a bit, we’re probably going to see a lot more innovation in the space.
Without the experience you gained from Leadpages, do you think you’d be able to build a startup like Nomics?
There’s no question I got a world-class startup education through Leadpages. Leadpages was my first tech company, so to have that be your first experience I think provides a really nice foundation. It’s not just direct experience; it’s access to capital, talent, service providers and knowing what excellence looks like in a role like a technical cofounder. I’m in a very privileged position.
Looking at the Nomics homepage, it looks like you built it using Leadpages technology.
Yeah, we are doing our marketing automation with Drip and the landing page was made with Leadpages. I’m a big fan of the technology and I know it inside and out and I’m still chairman of the board at Leadpages.
Speaking of that, how much time are you dedicating to Nomics compared to Leadpages and your other interests?
I do not have an active day-to-day role at Leadpages. I’m speaking a few times in October on behalf of Leadpages and I was recently on a podcast for Leadpages. While I still am very present to the company and spend about five hours a week on Leadpages-related things, it’s not an overwhelming presence in my day. The majority of my time is being spent on Nomics.
Does Nomics have many competitors as of today?
This [cryptocurrency] space is really new. And so our goal is to build a real business—not a hobby side project—around watching analytics and to provide the data firehose. That’s going to get us in the game and we’re going to learn a lot more after this. We’re not coming in on a mad dash to acquisition or IPO. We believe that there’s an opportunity to be the biggest aggregator or provider of data in this space. We’re also not caught up in the frenetic sprint that most early startups are. We’re really focused on the fundamentals and I think I’m a little bit older and wiser than I was when I started Leadpages. Your first startup is about getting that initial set of experiences; your second startup is about not making the mistakes you made in the first startup; and I think the third startup is learning how to course correct on the fly.
Sounds a lot like raising kids.
[laughs] True. One of the reasons I hired John [Tedesco, the current CEO of Leadpages,] was because I felt like I had the skillset to not make some of the mistakes I made at Leadpages. But the skillset that’s needed to not make mistakes in the first place is not the same skillset that’s needed to fix those mistakes. So as a business leader, I’m just looking forward to doing things again with a clean slate.