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ConsenSys can be a seemingly difficult company to understand. Unlike EOS's block.one which focuses on VC, ConsenSys focuses on building the Ethereum network. The more than 50 projects it has incubated are all well-known and famous. And ConsenSys has built a slew of corporate relationships and the soft power it can now leverage to try to educate the wider world on what decentralization is.
What is ConsenSys?
Most people know that ConsenSys is a business incubator for key Ethereum projects. The company uses a "hub and spoke" model, looking at more than 50 projects currently affiliated with ConsenSys. This “mesh” consists of DApps such as Airswap and Gnosis, as well as infrastructure projects like MetaMask and Infura.
The benefits of this model to the project team are obvious, as it gives the team access to other developers while providing them with autonomy. As founder Joseph Lubin puts it, ConsenSys is “building a decentralized ecosystem that requires a lot of communication, collaborative interaction between different projects.” Not only do projects benefit from the knowledge of developers; Varying levels of financial support. ConsenSys started out as a venture capital studio to incubate companies around MVPs, which they then leveraged for outside investment. An early example is BlockApps. Projects in the "mesh" receive equity in all other ConsenSys projects, providing an advantage even if their own projects fail. Although mesh is important, it is only part of ConsenSys now. Its business scope has expanded to include:
· Academy: "The educational core of the Ethereum movement"
· Capital: Venture capital and token sale consulting
· Catalyst: Full-service marketing and branding agency
· Design: Product designers, design thinking facilitators, design researchers and strategists
· Diligence: Smart contract audits and Ethereum Security
· Labs: incubate projects and provide them with funding, guidance, and access (this is where mesh projects are located)
· Social Impact: those with social impact Project
· Solution: Enterprise Ethereum and Blockchain Innovation Partnership
All in all, ConsenSys does a lot. Having grown from 80 employees to over 1,000 in two years, this growth shows few signs of abating. This growth makes it difficult for employees to assign responsibilities to different parts of the company, so the company often reorganizes its staff. Furthermore, it's even hard to find a company like ConsenSys that touches everything. While many corporate websites strive to showcase a wide range of activities to their viewers, ConsenSys was expanding so quickly that the site represented only a small portion of the company's operations.
Not just for the money
What’s confusing is why ConsenSys was so actively involved with Civil (investing $5 million in the project’s seed round, and then later on to the project that ultimately failed ICO donated another US$1.1 million). So ConsenSys, spearheaded by Lubin, may have greater ambitions than just profit. While there is certainly a financial motivation, the company has quickly grown to become the most connected and influential company in the entire ecosystem. Just as funding Civil can be interpreted as increasing media influence, ConsenSys is also seen as a leader in shaping and influencing blockchain. ConsenSys is incubating dozens of interesting projects, some of which are critical to Ethereum's success, but it's also helping to cultivate how other industries and governments view blockchain.
Below is a diagram outlining some of these relationships.
As mentioned above, ConsenSys is more representative than any agency and any other company in the industry. It has a very large number of partners and joint ventures. It has close relationships with government organizations. This picture is far from being shown; there is much more that has not been shown.
These connections can be divided into two categories:
1. Industry connections
2. Soft power
1. Industry connections
ConsenSys serves many leading industry players through its enterprise-focused solutions segment. Additionally, it sits on a number of industry-focused committees (often as a board member) and is a leading member of more crypto-industry committees such as the Enterprise Ethereum Alliance (EEA). ConsenSys personnel have played a leading role in the EEA since its inception, including co-founding and leading two of the eight original working groups.
Through its mesh projects, the company has also formed multiple joint ventures with leading financial services and technology companies. The company has also signed direct joint ventures, including Komgo SA and Ethereum Blockchain-as-a-Service, a joint venture with Microsoft. Many of ConsenSys' employees, including many of its most senior employees, have backgrounds in the financial services industry, including Bank of America Merrill Lynch. These types of employees also bring their own connections to these companies. Lubin himself comes from a financial services industry background. The way he is involved in Ethereum, coupled with his friendly attitude towards promoting the Ethereum industry, will also have a huge impact on ConsenSys attracting large companies. ConsenSys is important to Ethereum beyond just providing infrastructure tools. It also increases the chances of Ethereum adoption among companies, as competing protocol rivals lack similar organizations and good institutions. As Lubin said at the launch of the European Economic Area, "Businesses represent the sharing of ideas, they represent resources." 2. Soft Power
The company's influence is reflected in its strong ties to global and national nonprofit institutions. These can be divided into three main categories:
1. Governmental and NGO
2. Crypto Association
3. Education
1. Government and non-governmental organizations
The most obvious way of influence comes from close relationships with government agencies. ConsenSys works with a number of government agencies, including the European Commission, the South African Reserve Bank and the Inter-American Development Bank, among others. It also works with institutions in India, the United States and the Middle East. It also has social impact and grant programs that enable it to work with NGOs in developing countries, as well as fund projects in educational institutions. More than 1,000 employees spread across six continents. Although the Dublin office only added 12 employees in June, the company is already looking for new office space as they look to increase their headcount to over a hundred. The government loves technical talents, especially those in new fields; they usually provide high salaries to enable the formation of new technology clusters. That alone provides leverage.
Secondly, ConsenSys founded the Enterprise Ethereum Alliance, which runs Ethereal Summit and the newly launched TruffleCon, and ConsenSys is a member of Crypto Valley and Global Digital Finance. Additionally, ConsenSys is building a regulatory framework with Coinbase, Coin Center, and Union Square Ventures. Most importantly, it is tightly intertwined with Ethereum, likely due to Lubin's early involvement and subsequent work by ConsenSys in developing the network.
3. The power of education
ConsenSys collaborated with Coursera to design a course on blockchain decentralization. and launched its academy arm to teach people what blockchain is.
Given the lack of understanding of blockchain within government and other industries, coupled with the immaturity of blockchain-focused education, being able to set standards is important, and potentially adapting to what Ethereum can achieve would be a powerful assets. Of course, this is something the company can achieve with its current limited interactions with other industries and government agencies.
Why is all this important? Because it enables ConsenSys to convey to regulators, governments, and the wider world what blockchain actually is, or rather, what they want the crypto industry to be perceived as.
ConsenSys: A model for future networks?
Some people say that ConsenSys is Ethereum. While this is a metaphor too far, ConsenSys’ importance to Ethereum is undeniable as it serves as a lobby group, incubator, and technology driver all at the same time. However, ConsenSys is not just about Ethereum, but is important to the entire crypto industry through its connections through government, regulation, and industry. This is likely to continue to increase in the coming years as it expands its Enterprise and Ventures offerings while taking a larger role in crypto and industry.
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