Is it Time to Upgrade Our Business Models?

You might be wondering why the managers of a digital assets hedge fund are talking about business models.

The answer is more relevant than you might think.

Digital assets are already transforming how businesses operate. From greater transparency and faster, more secure transactions, to decentralizing structures for increased efficiency, digital assets and the blockchain they’re built upon have fueled a tremendous wave of innovation in a short period of time.

So, why shouldn’t the managers of a digital assets hedge fund be part of this conversation?

Every decade, companies across various industries grow into giants. In the 2000s, social media platforms like Twitter, Facebook, and LinkedIn took the spotlight. The 2010s saw the rise of streaming, led by Netflix. Beyond tech, industries like healthcare, energy, and media also experienced significant growth. As we enter the 2020s, the question is: What new titans will emerge?

Despite the rapid success of these industries, there is often hesitation to embrace new business models—a "wait and see" approach that lingers in both public and private markets. This reluctance is understandable for many business owners. Decisions like upgrading technology often come with anxiety and uncertainty.

“Should we spend now on new technology, or wait until next year when it’s better? Will it be too late by then? Can we do without it?”

The reality is that many companies hold off until they are forced to make a change. “The printer is fine, just give it a whack. It may sound broken, but it still works... I think.”

The Trade-Offs of Upgrading

Whether it’s upgrading technology or evolving a business model, it's always a balancing act. On one hand, there’s an urgency to keep up with the latest advancements, especially when outdated tech can cause disruptions. On the other hand, financial limitations make constant upgrades challenging—budgets are limited, and assets depreciate quickly.

Every business has a "fiscal upgrade sweet spot"—a point where the company’s size and revenue streams make adopting the latest technology a true competitive advantage. For some companies, like Apple, staying on the cutting edge is essential. For others, like Macy's, the cost of staying current may outweigh the benefits, resulting in inefficiencies that drag down operations.

Startups and smaller businesses feel this challenge acutely. While they might not always be strapped for cash, their ambition often leads them to expand quickly and reinvest continuously, making expensive upgrades difficult. The key is to ensure that upgrades—whether in technology or strategy—yield tangible advantages without jeopardizing stability.

Rethinking the Business Model

Just as companies need to assess when to upgrade their technology, they must also evaluate when to evolve their business models. Smaller companies often have an advantage here: they are more agile, able to pivot quickly and implement changes with less friction. For a large company like Macy's, transforming the core business model would be a massive undertaking, creating ripples that impact every aspect of operations. For smaller, nimbler companies, these pivots can be executed more efficiently.

Many businesses, however, fall into the trap of applying the same level of scrutiny to every part of their operations, whether it’s technology or the business model itself. The traditional MBA playbook, once synonymous with business acumen, has become a symbol of conformity rather than innovation. Today, executives need to assess when to stick to current strategies and when to take bold steps toward something new.

Overcoming Resistance

Transforming a business model almost always meets resistance. Those entrenched in traditional ways of operating often find it difficult to accept that there could be a better way and react with criticism. It’s important not to take these objections personally. In many cases, such resistance reveals a lack of creativity or unwillingness to innovate.

Surprisingly, many startup founders also believe that a specific business model is a guaranteed path to success. They assume that the right product or service, paired with a tried-and-true model, will automatically yield results. The high failure rate among startups suggests otherwise. As Web3 continues to develop, business leaders need to rethink their approaches and create new models that align with the innovative products shaping the future.

A New Approach for Hedge Funds

When we launched Bursera LLC, we introduced an original business model for our hedge fund. This allowed us to charge less, spend less, and maintain a fair and equitable structure—a clear alternative to the traditional, often rigid, 2-and-20 model that dominates the hedge fund space. By challenging the status quo, we demonstrate that innovation in business models can lead to sustainable, balanced growth.

In a world rapidly transforming through blockchain and digital assets, the question isn’t why we’re talking about new business models—the question is why wouldn’t we?