Wall Street and the world market look at leaders of companies daily to inform their algorithm of success. The SEC now requires human capital expenditures to be disclosed on public filings. As the crypto market becomes more mainstream, so too will the public and Wall Street be looking to the leadership of coins and if they are fit to scale the coin to massive volumes and users worldwide.
Analysts know some leaders are fit to scale and lead businesses to great heights while others may not have the right stuff. Successful leaders take great care in maintaining a strong reputation of high performance, values, and integrity. They exhibit consistent alignment of positive values and performance for their company. Leaders who live what others wish for their own highest best selves, and are committed to personal and behavioral change, despite challenges before them, are more likely to have effective leadership and success for themselves and their companies.
In this series of articles called Leaders Fit to Scale, I will look at expertise, experience, track records, and displays of positive and negative leads of CEOs, founders, and owners as a means to predict the future success of their coins.
In this article, I use the available literature and sources to make informed decisions about TEZOS’s President’s Arthur and Kathleen Breitman. The leadership style of these coin leaders, while controversial, is charismatic and transformational leadership style.
Arthur and Kathleen Breitman – TEZOS
Skills to Scale Score 9 Out of 10
Arthur and Kathleen Breitman have led the crypto news for several years because there is a third party in their business marriage. Arthur Breitman is heavily invested in StarkWars Industries, a platform to confirm cryptocurrency exchanges and ensure privacy. Kathleen Breitman holds a degree from Cornell University and is CEO at Dynamic Ledger Solutions (DLS). At DLS, Kathleen and Arthur co-created the original version of Tezos, “a blockchain-based smart contract platform with an on-chain governance mechanism to coordinate and push upgrades to its network.” Johann Gevers is a Chartered Financial Analyst and Certified Accountant who founded Crypto Valley, what he calls “a global network of crypto ecosystems.”
The attractive and charismatic young couple pioneered the formation of Tezos in 2014 and raised USD 232 million in 2017, the biggest ICO to that date. However, their troubles began about the same time. There are two aspects to Tezos. Dynamic Ledger Solutions (a Delaware corporation) is its Founding Company, and the Tezos Foundation (TF) manages all its funds following Swiss law. The Breitmans ran DLS, and Johann Gevers controlled the TF. Gevers refused to disburse funds to Arthur and Kathleen. Once their bitter disagreement reached the public, Tezos’ exchange rate fell sharply.
Reuters quoted a 40-page critique calling Gevers “self-dealing, self-promotion and conflicts of interest.” Arthur Breitman was a central figure in an “Anarcho-Capitalist Meetup in New York, which describes its philosophy as a type of radical libertarianism that favors the abundant wealth production, rapid technological development, and high standards of living produced by capitalism.’” His philosophical interests collided with Gevers’ best practices.
Georg von Schnurbein, an expert on Swiss foundation governance, considered the Breitmans naïve regarding Swiss oversight. He found it difficult to accept a non-profit foundation formed to allow inventors to profit from sales. The concept did not appear to serve the public’s benefit. According to von Schnurbein, “The issue that there is some kind of for-profit entity and there are transfers right at the beginning is something that is working at the moment, but won’t be sustainable”
Observers and participants in the Tezos community targeted Johann Gever’s track record; “The number of failures that Mr. Gevers has launched is both impressive and shocking for someone allegedly qualified in matters of accounting, law, and business” (Sedgwick, 2018). One of them went as far as saying, “This Gevers character came across as a sociopath dictator extraordinaire.”
The strategy had once been for the Tezos Foundation to purchase the Founding Company, a concept that troubles regulatory agencies. Because cryptocurrencies promote privacy and independence, they are set up for internal conflict. In the Tezos case, the personal and systemic strains within Tezos led to Gevers’ resignation and $400,000 severance while “The Tezos imbroglio has cost them [original purchasers] at least 8x their investment.”
With assets frozen and four class-action suits at work, the foundation restructured its governance, reduced its board’s role, and placed qualified administrative officers. Subsequently, the Tezos Foundation has moved forward to support its Proof-of-Stake consensus model. Following a USD 25 million lawsuit settlement, Tezos continues to perform and attract investors. Wallet Investor, Forecast System, and other cryptocurrency monitors predicted bullish growth for Tezos. That is, things appeared settled and smooth until rumors spread that Arthur and Kathleen Breitman would step back or away from Tezos.
Arthur and Kathleen Breitman and the Skills to Scale
The whole concept of cryptocurrency and blockchain technology has remained elusive for the masses. Understanding relies on subtle and nuanced linguistic codes. The organizational community has yet to nail it down – however, Arthur and Kathleen Breitman shed more light on the crypto market which will help the masses understand it in a more easy-to-understand manner.
In many ways, this world lives deep in ill-defined clouds where it evolves on its own terms. It is not easy to hold their performance to generally accepted standards, best practices, and legacy ethics. Arthur and Kathleen Breitman are models of behavior that find themselves somehow above these traditions. And, they have proven themselves to be strong leaders despite the rumors and obstacles in their way.
The Breitmans created an idea, a twist, and improvement on established cryptosystems. They sought to illuminate a bi-furcated organizational structure that would optimize market interest and personal wealth. They have created a self-correcting system to attract a closed crypto community’s investment commitment. This charismatic and transformational leadership style has and will serve them well as they and their community continue to scale Tezos.
After very real and costly infighting and subsequent litigation, they have paid no personal penalty, and the Tezos coin continues to increase in value. The claims against them have been largely dismissed in courts of law and have set legal precedence for the crypto community. Their leadership philosophy is one of leading with solutions and optimism for a better future.
Tezos has continued because of its design. The device is designed to work independently of its ownership. This is the beauty of Arthur and Kathleen’s leadership – they place the needs of the coin and its community first to scale and create a larger empire.
The Breitmans have mastered promotion, public relations, and staying calm, and regulated despite attempts to discredit their work. They launched an idea in a language meaningful to its market of investors who responded fully to its Independent Coin Offering. And, this is why I give Arthur and Kathleen a 9 out of 10 for having the skills to scale Tezos. They have the skills required not only to weather the storm but to provide a better day for the Tezos community and indeed the larger crypto community.
We Return to the Start.
Organizations should contain genes for scalability. In addition, they need leaders able to imagine and execute to scale, and that takes manifest skills to scale. The cases explored here hold their founders accountable for their organization’s potential, and the study finds some of them wanting.The fact that some organizations grow despite their leaders’ self-interest and self-promotion does not diminish the value of skills to scale. The fact that some organizations grow despite a climate and culture of tension does not outweigh the importance of skills to scale. We work, as always, on proven assumptions that great companies build on trust, respect, and emotional connectedness. And these select cases confirm that position. My leadership effectiveness program builds a leader’s core competencies around these three areas – trust, respect, and emotional connectedness. If you would like to take part in the process, watch my video on the CEO Success Equation.