What investing and losing 50k told me about building open-source software

Picture of Mariano Goren

Mariano Goren

Principal Goren.Design & Ventures Studio

With this title, you’re probably getting the bottom line of this letter: by now, I’m 99.9% sure I’ve lost Goren.Design & Ventures Studio investment in Tree.Market—and if you are a LEAF holder, I’m afraid that’s what will happen with your investments too.

As the only member of the founders’ team using my real name and seal to introduce it to my network, I felt compelled to make a public statement in order to apologize, share my learnings, and offer a small token of appreciation to the ones who placed their trust and funds with me.

Let’s start with the most important thing:

 

Apologies for messing it up

I want to start by apologizing for funneling traffic and donations to what I now consider a dishonest project. In particular, for not doing what I’m doing now a bit before in time.

I also want to apologize to my former co-founders, since I feel I needed to have been more assertive in the leadership. This was my first time filling out as Chairperson, and I did a pretty terrible job:

I engaged in suggesting instead of directing, even when I was sure of negative end results.

This character flaw ended up having severe consequences. When I decided to leave the organization because this situation kept repeating, it was under the frustration of never being able to do the work that I should have done.

The price tag of this series of mistakes has helped me to reframe it as a very important opportunity to show my true character, come forward, and face the consequences. And to understand that even after 25 years in the industry, I still have a long way to go.

 

Lesson 1: Accept reality for what it is, regroup, and move on (is better than hitting your head against a wall repeatedly while screaming “I’m doing my best”.)

This is the critical point that condenses all of the learnings of this project–this is, the capacity for realizing the losses and regrouping when it’s the right time to do it.

The hardest miss for me as a Chairperson was not recognizing that the team was not qualified to achieve the proposed goals pretty much from the get-go. This was proven true later, in the results that I list below:

  • Unrealistic planning & failed delivery: Tree.Market missed all the deadlines that it set for the team. And more worrying, it changed the roadmap drastically (the original is still published on the website at the time of this note being written) without any foreword.

  • Non-existent communication strategy: No videos explaining the potential of the tool were ever produced. No time or resources were spent on promotion. Weeks went by without any communication. No developer showing up to tell how the work is going, how the roadmap will be completed, how much it’ll cost. Just Discord dabbling.

  • Inability to manage crisis’ in a mature way: per example, we failed in our co-founder’s selection, and we had to let go of an unproductive member just a few weeks into the project–a situation that was mismanaged and turned into a “Discord PR shitstorm” immediately, creating bad vibes in the very community that we were supposed to work with. From what I’ve read lately, it seems that those bad vibes remain until this very day.

  • Zero transparency policy: The Project failed to be upfront with what was happening within the team. For example, do you know that only one of the original founders remains?

  • Defaulted on the “quality” promise for “launch fast” half-cooked products, that no one was interested in (like the DERO wallet TM launched after investing 3 weeks of 24/7 work in for no increase in donations or promotion).

  • Damaging repeatedly the ship, with no regard for the passengers, before reconsidering the course: By now, the reality of the mismanagement is overwhelming, but the leadership is still moving forward, accepting donations, with no monetization plan and no clear vision of the future.

  • De-facto bankruptcy: At this point, the organization is in the red numbers well north of the 150k we originally disclosed. These are the outstanding debts with the people who have put in the work to take Tree.Market to where it got.

 

Learnings

I think that I was compelled to move forward even if I saw (and warned about) these and other problems, because of the aforementioned “world-changing idea”… I wanted it to work.

When bad decisions were kept being made, I decided to step out. I was already 50k in, so at that point, I was praying for it to work. Just wanted to see if they can pull it off without me interfering because I believe in miracles.

Now that I’m sure it’ll not work, came the acceptance of the loss, apologizing, regrouping, and continuing working towards the end goal, which hasn’t changed: helping create the new civilization.

 

Lesson 2: Quality software is rarely done in “democratic” open-source environments.

I’ve seen this problem repeating like a fractal in almost all of the Open Source projects I worked with. They end up becoming a democracy first, and then a communist regime with a superior class (the core team) and plebs (collaborators) below.

TM’s competitive advantage was that we were bringing hierarchical, structured software development to private crypto.

See, the hierarchy in a successful software organization has been tested over thousands of years because it comes directly from the evolution of military project strategy. There’s one way to do it well, and it’s called hierarchy. Well-defined boundaries and responsibilities.

I even created my own framework to show how this works to my Studio’s clients, but never published until now:

The GDVS Hierarchical Framework helps understand the current responsibilities of each team member and evaluate changes regarding hiring and moving chesspieces around.


In my resigning presentation, I shared why hierarchy is needed for responsibilities to exist, and how this created a situation in which I can’t vouch for the organization anymore:

 
 

 

Learnings:

  • I decided not to ever invest/work again with an open-source team that never went through the meat grinder of the corporate software production industry. Veterans of the industry talk the same language and understand the value of hierarchy, and almost always have a basic understanding of productivity systems (like Scrum)
  • I now believe that most people in crypto who define themselves as anarchists are in fact communists, they just are unable to accept it. Be aware of the subtleties.

 

Lesson 3: Building quality software is not an art but a science: there’s one time-tested way to make it right.

Building software is very similar to the construction of a building. In software, we use code instead of bricks and mortar.

The Product Designers are the equivalent to Architects. So they develop the blueprints and the renders, and once the result is approved by the client, it moves to the Developers (equivalent to Engineers) who will actually make it real.

When we started Tree.Market, I spent a few months creating the strategy and the designs, long before coding. And that’s why the end result was pretty good.

 

 

When the team decided to push through even though they didn’t have the human capacity available, the processes went missing. And so Tree.Market defaulted on the promise of bringing high-level techniques and systems for developing software to the private crypto space. It eventually became “just another dapp by a bunch of crypto dudes”.

 

Learnings:

  • In summary: building quality software has a formula behind it. It is not fail-proof or linear, but it will take you through structured steps toward success. This comes out of the Design Thinking Method. If the project is derailing from those standard practices, it’s a red light.

  • The process, above all, takes a lot of time from very talented (expensive) people.

  • If you aim to compete with Etsy or Amazon, the priority should be to focus on getting the resources, to then invest it in people, that will do their best work and execute on a well-defined vision.

  • (Note: I think this is why hackatons always fail to create something actually useful, and why most of the startup incubator programs have problems scoring profitable exits).

 

The bottom line: Tree.Market has already failed, it just kept it a secret

With this letter, I’m just trying to warn people of throwing away their funds into a black hole of hope.

I know that if it brings Tree.Market to an end, I’ll be the one pointed out as responsible for killing the agonizing animal.

Have no problems with that: it’d mean I was responsible enough to finally conclude a dark and rough adventure, that already defrauded its donors with a bunch of unfulfilled promises, put some of the founders in dire financial stress, and broke too many friendships in the middle.

And if the project moves forward in spite of that… well, I honestly don’t have any problem with people gambling either. Maybe I’ll even recover some of my investments, who knows?

 

Finishing on a positive note, and a token of my appreciation

Even though the original contingency for this unfortunate case is in place already (and the designs and code are already available for anyone to use or fork them) I wanted to add something more:


Get a complimentary copy of “Become a Senior User Experience (UX) Design Strategist”

Once upon a time, I was producing educational content, and my flagship course was about tools to become a consultant–a strategist in the digital industry.

I think this is right on topic with what I pointed out as problems in private crypto, so I thought it was a good idea to give some free coupons to collaborate in mitigating the possibility of a failure like this happening again.

https://www.udemy.com/course/how-to-become-an-user-experience-ux-consultant-and-strategist/?couponCode=TREEMARKET1000

Note: It’s a bit outdated and thus some of the resources don’t exist anymore, but the core knowledge is evergreen. I promise you’ll learn a thing or two, even if you’re an advanced professional.

Additionally, I’ll be offering assistance to people who want to carry the torch of a Private POS–if that’s you, just complete the Project Evaluation form at https://goren.design/.

I truly apologize if this has caused any inconvenience to you or your family. I’m taking steps to improve myself to evolve and make better decisions moving forward.


Mariano Goren

Goren.Design & Ventures Studio

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