You won’t find a more forward-thinking idea than a digital replacement for the monetary system, but Bitcoin has gained surprising traction with the right people. The strategy used by the crypto-currency’s advocates could be an effective template for pitching your own industry innovations.
If nothing else, the emergence of the Bitcoin probably helped ease some hard feelings around the rise of Facebook.
That’s because the two biggest sore losers out of that saga—twin brothers Cameron and Tyler Winklevoss, who spent years claiming that Mark Zuckerberg stole their idea for a social network—invested early in the rather mysterious crypto-currency, and now it is doing really well, according to a key Bitcoin currency exchange. (The value of a Bitcoin in U.S. dollars at the time this was written: $1,085. A month ago, one was worth just over $200.)
But behind the technology itself, you’ll find something old school—trade groups and industry players that are helping to drive the idea.
It sounds a bit like a financial bubble, but the reason for Bitcoin’s surge in value is nonetheless worth noting: It came on the wings of a set of hearings in Washington about the technology that could have gone really badly but instead featured a welcome-if-cautious letter blessing the technology from Federal Reserve Chairman Ben Bernanke—a guy you want in your corner when you’re talking money.
Now, that’s not to say that Bitcoin advocates don’t have their work cut out for them in selling the future of digital currency and online commerce, but in recent months, industry players have done a lot to improve Bitcoin’s reputation. Let’s analyze.
From the process used to create the monetary units, to the inherent improvements in security, to the disruptive nature of the currency itself (which claims lower transaction fees than credit cards), Bitcoin technology promises a lot.
But behind the technology itself, you’ll find something old school—trade groups and industry players who are helping to drive the idea, lobbying for its future, and explaining its value to wary political players and a public that also has an arched eyebrow. These groups, including the Bitcoin Foundation and commercial firms like the Mt. Gox exchange, are working hard to control the narrative around the currency, and as a result, we’re seeing a lot fewer stories about shady dealings and a lot more mainstream success stories.
In a recent Washington Post article, Timothy B. Lee makes the case that the Bitcoin Foundation did a brilliant job of selling the technology to lawmakers and regulators as something more than just a niche product, that any questions about its illicit uses shouldn’t get in the way of its potential, and that the trade group’s months of work paid off by drawing legislator interest.
Another crypto-currency group, the Digital Asset Transfer Authority (DATA), is also working to prove that the industry can self-regulate.
Sound like your own goals?
Why Should You Care?
The lessons here for associations might be obscured by all the tech talk and hype, but I can spot three things that translate:
1. Work on your marketing. No matter the value of a Bitcoin, it had something that could have prevented bigger growth: a pretty sizable image problem. The technology’s creator is basically anonymous, and one of the most noted Bitcoin figures is currently sitting in jail. That’s a lot to get past. Rather than dwell on those negatives, the Bitcoin Foundation has focused its energy on the mainstream potential of the currency while distancing itself from criminal activity. And though Mt. Gox has faced its share of troubles, it’s also going to great lengths to burnish the currency’s image: Last week, it launched Bitcoins.com, a consumer-focused site that actually explains what the technology does.
2. Build alliances. Enlisting an advocate who might be expected to oppose an idea definitely helps. The Bitcoin Foundation is part of the Digital Economy Task Force, which includes the International Centre for Missing and Exploited Children. At a time when questions about unsavory Bitcoin uses linger, the alliance has won the association an important ally: ICMEC President Ernie Allen. This approach also works internally for associations: If you have an initiative that needs to be sold to higher-ups, you need to build advocates for your innovation to turn it from idea into action.
3. Don’t discount the value of offline action. You might think an analog approach would seem old hat to Bitcoin’s players, who are so deeply embedded in the tech sphere. But good old shoe leather shouldn’t be discounted. The Bitcoin Foundation actually got in front of people to make its case. One particularly effective argument: Users will just go overseas if regulations in this country aren’t favorable. And the Post‘s Lee suggests that it might have done the trick. “Regulators are busy people,” he writes. “They’re more likely to pay attention to flesh-and-blood advocates than to anonymous internet commenters.” And, hey, if you do it right, maybe the regulators you’re engaging with will follow up online, as Sen. Jerry Moran (R-KS) did by reaching out on a Bitcoin Subreddit forum just before a subcommittee hearing began.
While innovation is a hallmark of the digital currency industry, the most important lesson of the Bitcoin push may be that the best ways to sell innovation and build legislative support aren’t quite so new after all.
Sometimes the innovation doesn’t speak for itself. That’s where the hard work comes in.