Luis Iván Cuende must have been born an entrepreneur.
Having no access to capital, equipment, or collaborators in his native Oviedo, Spain, he gravitated toward the first thing he could get his three-year-old hands on: one of his software-engineer father’s old computers. By age 12, Cuende had released his own distribution of Linux. At 15, he won the HackNow award for technical talent. And he spent his 17th year as advisor to Neelie Kroes, then the European Commissioner for
Today the 20-year-old is CTO of Stampery, a San Mateo, California, based startup he co-founded in 2015, which leverages the Bitcoin blockchain—the shared public ledger that records and secures Bitcoin currency transactions—to provide instant data notarization and document certification.
“I’ve always wanted to create things; that’s what makes me happy,” says Cuende, who splits his time between Silicon Valley and Madrid. “I got started with software because it’s easy to launch a product without the need for a factory or millions of dollars.”
Cuende started to see how he could make a big impact when he was working with Kroes, whom he views as one of the most disruptive politicians he’s met.
“She has one of the freshest minds I have seen in the policy world full of suits,” he says.
After his time as one of her advisors was up, he attempted to launch several businesses, which ultimately led to Stampery.
Know Your Strengths— and Weaknesses
Four years ago, Cuende developed Cardwee, an application that enabled companies to provide customer loyalty points via Apple Passbook. “It was the very first one, and it was a very good product,” he says. “But I knew nothing about business or marketing.”
The lesson? You can build a solid product, but if you don’t know how to sell it, you will fail. “It’s the second most important thing in business,” Cuende says. “I’m good at giving talks to big groups, but I’m very bad at selling in person to big clients. My co-founders have much more experience in that, and I try to learn from them.”
Setbacks Aren’t Failures
Cuende met his Stampery collaborators, CMO Tommaso Prennushi, a former marketing executive, and CEO Daniele Levi, a former professional DJ and a cryptography enthusiast, in 2012 at the annual tech festival Campus Party, held that year in Berlin. “We were the only ones talking about Bitcoin in Spain at the time,” Cuende says.
The trio developed several Bitcoin-related products that went nowhere. At one point, they tried to get a banking license to create a Bitcoin exchange, but that required “millions of dollars we didn’t have,” Cuende says.
They tried a new tack, coming up with the idea for Stampery. Cuende calls it “the most obvious” noncurrency application for the Bitcoin blockchain—and one they could develop at low cost. Cuende and his team built Stampery and then secured US$600,000 in pre-seed funding, led by Draper & Associates, in November 2015.
An Upside to Risk
Most successful new business ideas are obvious, Cuende believes. “It’s not that you see something that other people don’t. It’s just that the idea involves risk. It’s something that people are afraid of today.”
A few years ago, most people associated Bitcoin only with nefarious activity, he says. But the blockchain technology underpinning Bitcoin fascinated Cuende and his partners. The blockchain maintains a verifiable chronological record of Bitcoin transactions, and it resists tampering by involving a network of thousands of independently managed computers in securing every update.
“Having an immutable ledger enables you to do a lot of stuff that couldn’t be done otherwise,” says Cuende. This includes transferring electronic money without needing a bank or other institution to guarantee it. “But why should we limit that ledger to storing only financial transactions? Anything that needs to be recorded in order to have a reliable proof of its existence, integrity, and even ownership can benefit from it. It’s the first time in the history of the computer that digital information isn’t necessarily modifiable and destroyable.”
Cuende saw only one downside: “The blockchain is very bad at transaction volume.” Cuende and his co-founders wanted to be able to certify millions of documents at a time; the Bitcoin network was capable of 2.5 per second. That’s where their technological innovation came in. Stampery is designed to stamp billions of data sets per second. In addition, the technology can work with any blockchain network, not just Bitcoin’s.
That makes using the Bitcoin blockchain low risk. “If it goes down tomorrow—which is highly improbable—we can migrate to another blockchain,” he says. In addition, the legally binding proofs that Stampery generates to certify the existence, integrity, and ownership of documents will remain valid and accessible even if Stampery disappears, because it leverages a decentralized technology.
Disrupting Decades of Paper Pushing
Stampery currently has 1,500 customers, who fall into three user groups: creators protecting their intellectual property, attorneys certifying documents, and software developers. Lawyers saw the value immediately.
“They need to create proofs from a lot of their digital documents on a daily basis. Then we have creators who use it to prove that they were the first creating a music track, art, even a process,” Cuende says. “What we’re seeing lately is a lot of enterprise interest for areas such as document management and systems security.”
Users can stamp up to 10 files monthly and access 1 gigabyte of encrypted storage for free, or pay $9.99 to stamp 1,000 files and access 50 gigabytes of storage. The product integrates with Dropbox cloud storage. Customers can also use Stampery to certify that e-mails were sent and received.
“You can make a deal via e-mail, click a button, and certify it with no one else involved but the two parties,” says Cuende.
Stampery is focusing on nonregulated use cases to establish the market and raise awareness. But the company is also actively lobbying regulators “to see the value of storing truth in a ledger that is mathematically secure,” says Cuende, particularly in Europe where notaries play a bigger role in the economy than they do in the United States.
Pen and paper have been the standard for hundreds of years. Human notaries are not “immutable, but they have these notebooks in which they establish truth, which is recognized by the state. Obtaining this type of trust involves cost and liability,” Cuende says. “Replacing it with math could save billions for whole industries.” Early in 2016, Stampery made a deal with the Estonian government to enable everyone with an e-Residency ID to use the system to certify and notarize personal and business documents.
Learn When to Step Up
Now that one of Cuende’s co-creations has become a full-blown business, he is adapting to 10-hour workdays and managing a growing team. “Being able to attract talent is super important to me. It’s great to work with very bright people that are better than me in many things,” says Cuende. “My days have gotten crazier. There’s pressure from everywhere,” he says. “It’s a challenge. But I love that feeling.” D!Comments