Fintech, a hypercompetitive space with many peers funded by VCs. How can you still succeed as a small bootstrapped startup? Arthur Hayes, the founder and CEO of BitMEX spoke to GrowthKungFu co-founders Wai Hoi Tsang and Pritish Sanyal about their growth strategy.

You guys are one of the top bitcoin exchanges in the world. What was your growth strategy and how did you get to this point?

Arthur: [We found a specific position in the market.] We want to basically allow anyone anywhere to trade anything by using bitcoin and financial derivatives. Unlike the majority of bitcoin exchanges that many people might be familiar with, you basically send them some US dollars or HK dollars and they allow you to buy and sell bitcoin on an immediate delivery basis. We're purely a financial products or contracts exchange.

That allows us to apply leverage to the products that we offer. Which makes them a lot more attractive to retail traders. Instead of trading something where you have to fully pay for every purchase or sale, we allow you to trade with up to 100x leverage.

Now, if you look at the traditional financial services industry, leveraged trading products trade in much greater quantity than the underlying asset and that's the trend we're counting on and that's what's helped propel us to the top of the league tables.

How do you get the message out there? Some would say in the startup world: “you build it and people will come.” Was that the same case with BitMEX or was there another outreach strategy in acquiring those users?

Arthur: We looked at traditional forms of online advertising, Google Adwords, banner ads and it's quite expensive to target bitcoin holders with your particular product. You're competing with very cash-rich VC-funded exchanges, you're competing with gambling operations, who have a lot of cash to basically acquire customers.

The strategy that we used was to provide original and relevant content to our users. We provide probably one of the most well-read blogs on trading of bitcoin and other digital assets. We're quoted almost weekly on one of the most-read bitcoin news sites, CoinDesk and we do a lot of outreach through conferences, speak appearances, podcasts like this one and syndicated articles in other media publications. That's how we build a name for ourselves as experts in derivatives-trading for the digital currency industry. When you think of bitcoin derivatives or digital currency derivatives, BitMEX is definitely going be at the top of the list.

Very cool. When you speak to other people about their inbound strategy, a lot of people feel, is that, even a month in they're still not seeing traction. [And that's when the doubt sinks in.] Should I stick to my guns? Should I look for other opportunities. How long did it take for you guys to get some traction and see the return from this investment?

Arthur: Initially our thesis was that traditional Wall Street banks, hedge funds and money managers would all come flooding into bitcoin and would want products they were familiar with. The product offering that we had in early 2015, is much different than the one we have today.

Our thesis on large financial institutions coming into bitcoin proved incorrect. What we were left with was a very active participation from retail traders. Because we have various channels where we listen to customer feedback, we were able to see that what our customers, who were on our platform, really wanted was highly leveraged trading products across a variety of digital currency trading assets.

That's how we pivoted to offering those kinds of products and see our growth take off.

In a nutshell, it was listening to the few customers that we did have at the time who were very committed to helping us succeed.

That's fantastic. So how did you find out what it was that drove your customers? Did you look at data? Did you set up surveys? Did you have one-to-one conversations?

Arthur: We operate what we call a 'troll box', which is basically a real-time chat room. Anyone who has signed up for an account with BitMEX can basically talk to us and other users on a real-time basis 24/7. So you have people who are very passionate about this industry and if they feel that an organization is willing to listen to them and is committed to safeguarding their funds, they're very free with advice.

The overwhelming advice we got from our customers was, high leverage and a different variety of products. At the end of the day, we listened to them and that's where we are today.

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