SUCCESS STORY: Side Hustle Just Hit $1 Billion in Sales

Inspired by the concept of decentralized money, Neil Bergquist and Michael Smyers came up with a lucrative idea they believed “would nearly run” itself.

Neil Bergquist, co-founder with Michael Smyers of Coinme, a cryptocurrency exchange headquartered in Seattle. Earlier this month, Coinme announced that, after a decade in business, it reached $1 billion in sales through a consistent 164% yearly growth rate.

What was your day job when you started your side hustle?
I was the managing director at SURF Incubator, a community-supported space for digital entrepreneurs. In this role, I was one of two executives responsible for managing the organization. Day-to-day operations included supporting hundreds of startups, managing our staff, securing corporate partners, overseeing the 15,000-square-foot downtown office space, coordinating events and doing everything possible to help our entrepreneurs succeed.

When did you start your side hustle, and where did you find the inspiration for it?
I was inspired to launch bitcoin ATMs when I was at SURF Incubator. I knew the technology, specifically bitcoin and the concept of decentralized money, had great possibilities for the future. My co-founder Michael Smyers and I believed we could place bitcoin ATMs around town, including at the incubator, and they would nearly run themselves.

Our inspiration accelerated after the world’s first bitcoin ATM launched in Vancouver, Canada. It processed over $1 million in transactions in its first few weeks of operation. This success validated the customer demand for bitcoin and bitcoin ATMs as an essential channel for this new “magic internet money.” This early validation and my long-term belief in the promise of bitcoin led my co-founder Michael and I to establish Coinme in early 2014 and launch the first licensed bitcoin ATM in the U.S., one of the first 10 deployed worldwide.

What were some of the first steps you took to get your side hustle off the ground?
At the time, the entrepreneurial mantra was “build fast and break things.” Unfortunately, we wanted to operate a money services business in the U.S. If you “break things,” you risk going to jail. We found the most competent fintech lawyers, who fortunately agreed to a deferred payment plan and subsequently went to the state regulators with a business plan, funds flow and presentation on bitcoin.

I tried to learn about the Bank Secrecy Act and the U.S. Patriot Act, which provide the general framework for anti-money laundering laws in the U.S. I also educated myself about state-level money transmission laws. After investing what little money I had, my co-founder and I established Coinme as an LLC, and we applied for a first-of-its-kind virtual currency money transmitter license from the state of Washington. We aimed to protect consumers by helping them buy bitcoin from a regulated and trusted exchange.

We needed to secure a bank account as part of the licensing process. Hundreds of banks that wanted nothing to do with bitcoin turned us down. At one point, it seemed like this would be the thing that would kill the idea. Fortunately, Michael’s girlfriend at the time randomly opened a bank account with a local credit union. We decided to see if they would bank with us. Sure enough, they accepted our business plan and provided us with a Money Services Business (MSB) bank account, which was required for licensure.

It took us several months to meet the state’s licensing requirements, but a week after we were approved, we deployed the first federally registered and state-licensed bitcoin ATM in the U.S.

Source: Entrepreneur.com

Visit https://coinme.com