Blockchain Revolution

Hacking Your Future: Boundary Decisions
When making boundary choices, firms should start using the blockchain to marshal a
360-degree view and reach consensus on what is unique and what is mission critical
in their business. Let’s return to Joe Lubin and ConsenSys, as they foreshadow the
modus operandi of the blockchain-based enterprise. Remember that ConsenSys is in
its infancy, and much can go wrong to undermine its business. We can still learn from
this company’s example.
1. Are there possible partners who could do the work better? In particular,
could we benefit from harnessing new peer production communities,
ideagoras, open platforms, and other blockchain business models? The
company ConsenSys is able to orchestrate extraordinary expertise to do its
work, even though many are outside its boundaries.
2. Given blockchain technology, what are the new economics of corporate
boundaries—the transaction costs of partnering, versus keeping/developing
in-house? Can you develop a suite of smart contracts whose core elements are
modular and reusable? ConsenSys uses smart contracts to reduce coordination
costs.
3. What is the extent of technological interdependence versus modularity? If
you can define business components that are modular, then you can easily
reconfigure them outside corporate boundaries. ConsenSys sets standards for
software development and provides access to various software modules that
its partners can build upon.
4. What are your firm’s competencies with regard to the managing of
outsourced work? Can smart contracts enhance those competencies and lower
costs? From the get-go, ConsenSys was a blockchain business. CEO Joe
Lubin embraces the technology and a modified holacracy, and we can see the
seven design principles at work.
5. What are the risks of opportunism where a partner might encroach on
fundamental parts of your business, as some have suggested Foxconn may do
to smart phone companies? ConsenSys tries to mitigate this challenge by

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building loyalty through incentive structures whereby its talent shares in the
wealth they create.