Getting Ahead of the Cryptocurrency Wave and Generating Early Revenue

Hello! What's your background, and what are you working on?

My name is Auston Bunsen. I'm the co-founder of CBlocks — along with PK Banks, and Mario Aguayo. I'm a self-taught web developer with about 12 years of experience. Currently, I'm a teacher at a coding boot camp called Wyncode. In the past, I've been a Ruby developer at a startup called LifeWallet, and before that, the CTO at a $160m/yr company called 1Sale.com. I've been learning about and dabbling in cryptocurrency since I first learned about it in 2011 from my friend Mike Greenberg at a local meetup called Hack & Tell.

CBlocks is a product that introduces people to 5 random cryptocurrencies from the top 100 and helps them learn about what it means to manage cryptocurrency.

We make a USB with custom software that customers can use to track the value of their crypto holdings. Our customers are people that typically work outside of tech. They are looking to learn more about crypto and want to see, feel and hold their cryptocurrency in their hands.

We launched near the end of January and have done $30k+ in sales in our first month.

What motivated you to get started with CBlocks?

It was basically a social experiment. We were hanging out together one day, and Mario mentioned how he wanted to dive into crypto. I had recently seen this awesome website called cryptoroulette.info, which is a site that tells you how much money you'd have if you invested $1,000 into 6 random cryptocurrencies on a random day in 2017.

I suggested “You should just put down like $1,000 and learn from there. You will almost definitely make money and more than definitely learn a lot about cryptocurrency in the process”. Right then, PK said “I recently helped a friend by preloading a ledger with bitcoin and shipping it to him. What if we just made a site where anyone can get 5 random cryptos on a USB?”

At that moment we all thought for about two seconds and said, "OK, yeah, let's do that".

Now, if you know anything about cryptocurrency, you know that you should never trust people to hold or generate your private keys. You should know what cryptocurrency you are buying, and you probably even care about the exchange rate to USD. We threw that all out the window.

We thought it would be interesting to try this experiment out: Would people trust us to buy crypto for them, generate their private keys and ship it to them?

What went into building the initial product?

We're all very cost-conscious people, so we decided we'd be as lean as possible in terms of time and money. We ended up using the free plan from Landing Lion and a Stripe account. Those tools made it easy to validate if the idea actually had legs!

Mario and I spiked out a simple version of the site in about 10 hours over the weekend and launched it Monday morning. It was most definitely an MVP; we wrote like 20 lines of Ruby for crude payment processing. Truthfully, though, the majority of the time was spent by Mario writing the copy and tweaking the design. When we launched, we did about $300 in sales just from friends and family. At that point, we didn't even really have a product. It wasn't until we had complete strangers buying from us that we started creating the actual CBlock USBs. We really took the lean startup principles to heart.

We spent a lot of weeknights juggling the build out of order fulfillment automation tools, getting custom USBs printed, coding the actual user interface that users see when they plug in their CBlock USB, getting the encryption to keep their private keys safe and actually shipping customer orders. I think those first 2 weeks we might have each slept about 3-5 hours a night, max. We were up for regular work from 9 a.m.-5 p.m. and then we would come to my place and work from 8 p.m. until 4 or 5 a.m., then Mario, and PK drove home, only to wake up at 8 a.m. to go to work again!

All in all, we went from idea to first sale in 3 days. We went from first sale to delivery in another 7 days. We actually made the first 10 or so wallets by hand!

How have you attracted users and grown CBlocks?

The day before we launched, we sent a few emails to journalists at websites that we thought might be interested in writing about CBlocks: TechCrunch and TheNextWeb to be exact. TheNextWeb ended up responding the day after we launched, and that ended up snowballing into its own thing because Forbes wrote about us, then The Outline and LifeHacker.

Here is a copy of the email that got us in TheNextWeb:

Hello Dearest Editors,

Me and some friends have created CBLOCKS — A mystery box for cryptos. We were inspired by the fantastic site: https://cryptoroulette.info/.

We created this art project where you pay us $75, $150, $200 or $500 and we pick 5 random cryptocurrencies from the top 300, load up paper wallets onto a USB, mount it in a memorabilia case and ship it to you via FedEx. I know what you're thinking: "This is a million dollar idea." Nope — WRONG! This is a BILLION DOLLAR idea.

This also lowers the bar for people interested in getting into crypto,
without understanding for the sole purpose of owning a piece of art
that could fluctuate in value.

Hahahaha JK we know this is silly but so is this crypto-craze.

The people behind it are me (Auston Bunsen), Mario Aguayo, and PK Banks.

You can check out the site here — we are doing our launch push today (Monday): https://www.cblocks.io/

p.s. I'm sending this to you exclusively, but on Tuesday, I'll try to send it to other media outlets.

Here is our weekly revenue breakdown — the surge in week two corresponds with new press coverage:

The other interesting thing we did was submit to the usual sites like Product Hunt and Hacker News. Our attempts to get in front of the tech community fell flat on their face. Here is the product hunt post with a 1 star review from someone who hasn't even purchased a CBlock from us, and here is the Show HN post that one person commented on. I actually love that we didn't get any attention from HN or Product Hunt; my guess is they don't think our project is cool or that it is just flat out stupid.

Other than that, we just told a few friends and some family. They ended up buying a few CBlocks.

What's your business model, and how have you grown your revenue?

Our business model is actually fairly simple. We charge a $50 service fee for providing your CBlock with our custom software and loading those 5 random cryptocurrencies on it. That's the only way we currently make money. We've been charging since day one. Out of that $50, after we take care of cost of goods and shipping, we're left with about $30.

Our payment system is literally 20 lines of Ruby code to integrate with Stripe that deals with successful payments and failed payment attempts.

Every single time we're featured in a major press outlet, we get new customers. We're a month and a week old — so we don't have any monthly numbers except for month one, which I've listed above!

What are your goals for the future?

We are very excited for the future. We've spent a lot of time on the phone or video chat talking to our customers to understand what they love about CBlocks. They're awesome people who have given us tremendous insight into why crypto can't go mainstream yet!

We want to eventually build out an all-encompassing solution that lets non-technical people acquire and manage cryptocurrency as well as tokens. Our customers are telling us the current situation is too difficult. They don't want to have to store mnemonic phrases, worry about securing private keys, scan QR codes to send payments, understand the difference between hot/cold wallets or send long sequences of letters/numbers to a friend to collect a payment!

We're going to get these things by working on CBlocks full time; Mario and PK already work on it full time, and the way things are looking, I just put in my resignation at Wyncode to help them realize the vision even faster.

We're hoping we can do $500k-750k in sales this year.

What are the biggest challenges you've faced and obstacles you've overcome? If you had to start over, what would you do differently?

One of the biggest obstacles we had to face was definitely how to handle the large influx of orders and the complexity of fulfilling orders. We actually have stopped accepting new orders and opened up a wait list so we can throttle the amount of new orders we get per day.

Another thing we didn't realize is how much variation in quality of technology and blockchain there is in the top 300. There are coins that literally don't have multi-platform support in the top 300. There are coins that require you to sync their entire blockchain before actually transacting or generating a wallet (which can take hours).

Other coins require you to only send whole numbers (for example, 1 NEO is allowed but 0.5 NEO is not allowed). There were just so many little hurdles to hop over that it eventually felt like an obstacle course.

We ended up reducing it from 5 random in the top 300 to just the top 100. There has still been a whole lot of learning with the top 100, but automating the top 300 would have taken us months. By focusing on the top 100, we're able to get automated coverage for about 80% of them and do the other 20% by hand until that gets automated.

If we were to do this over, I think we'd have opted for 3 random cryptos from the top 50.

Have you found anything particularly helpful or advantageous?

The obvious resource to give a huge shout-out to is The Lean Startup methodology. In the past, each of us has spent considerable time building a product that very few people want. This time, it seems we've really made something people want.

Other things we are grateful for are Stripe, Landing Lion, and Google Sheets. Those free pieces of software have really helped us get CBlocks up and running quickly.

We have definitely been fortunate to be at what we think is the beginning of a cryptocurrency wave. We think in America alone, there are probably close to 200 million more cryptocurrency owners waiting to buy their first coin. The excitement around cryptocurrency is awesome!

Also, we really love the How I Built This podcast!

What's your advice for indie hackers who are just starting out?

At the risk of sounding like a broken record: Use lean startup principles and eliminate market risk before eliminating product or technical risk. It always seems so counterintuitive to developers! We think the question is not "Can this product be built?" Instead, the question is "Should this product be built?" and the only way to answer that question is with customer interest.

Where can we go to learn more?

Definitely go sign up for the wait list: https://www.cblocks.io/. We've got some really awesome incentives for people that are signing up on the wait list!

You can also follow us on Twitter and Facebook.

I'm very happy to have been able to do this interview with Indie Hackers after being a fan for so long. Thanks a bunch, Courtland and Channing! PK, Mario, and I will be reading the comments and answering every single question, no matter how difficult, so ask away!