As the big bubble of cryptocurrencies is rapidly deflating in from of our eyes, I can’t stop wondering about the level of naivete and recklessness that is uncovered. My friends and colleagues know the doubts I raised when discussing the alleged omnipotent benefits that the crypto industry could bring to our world. It was even supposed to solve the problems of poverty, whereas by now, it erased the lifetime savings and pensions of many.
It is scary, but there is a pattern that shocks us regularly. In the dot.com bubble, we assumed that page clicks are the new currency. Pets.com, WebVan, and GeoCities were the hot stocks, making investors believe that the “new economy” rewrites economic laws. On came the housing boom, Ninja (no income, job, or assets) loans were granted to finance mansions based on the simple idea that housing prices will always climb. And when it could not get any sillier, cryptocurrencies started to spoil the uninitiated with equally simple but flawed ideas. Only because you call it as such, a blockchain token is no currency. It lacks all essential features. At the same time, our search for heroes in each of those crisis waves elevated individuals like Kenneth Lay, Bernie Madoff, Elizabeth Holmes, and Sam Bankman Fried to fame.
In each of these crises, investors gave up on their basic assessment principles. FOMO replaced logic. We can see that at those prominent levels. We also see it on a much smaller scale in impact finance, a world that is dear to my heart. So often it seemed that business initiatives in the impact space had to copy business models from Silicon Valley, financed by VCs or Investment Bankers. Their commitment to delivering true impact is just an insult to the intelligence of the people on the ground who were hoping for much simpler, straightforward solutions to basic needs, not a brave new world.
Then, there is the often-belittled traditional entrepreneurial approach, start a small business, dedicate your work life to it, learn, grow, adjust, build experience and relationships with business partners and local financial institutions, and provide employment, repeat. The Long Game” as beautifully promoted by Simon Sinek. This is what long-established providers in the impact space promote, this is what caught my interest over 20 years ago, made me change the direction of my career, and defined my personal impact goals. It seems boring and does not make it to the headlines of business papers, Ted Talks, or conference keynotes, but it has one major benefit: it works, and it works long term.
The key here is to stay focused, keep your eyes on the ball, and don’t be distracted by crazy trends or free-riders. Do not become defensive if the high impact only becomes visible after many years of work. Solid work pays off, experience has value. It does not always require a revolutionary idea to change the world. Patience, persistence, and an open mind to corrective measures can achieve more lasting changes.