#StartupsEverywhere: Reno, Nev.

#StartupsEverywhere Profile: Allison Clift-Jennings, CEO, Filament

This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.


Blockchain Startups Drawn to Reno

“The Biggest Little City in the World” might be broadly known as Las Vegas’ smaller companion city in the northwestern corner of Nevada, but Reno is fast becoming a hub for blockchain companies eager to capitalize on the state’s growing acceptance of the emerging technology. Filament, an enterprise blockchain startup with a particular emphasis on the automotive industry, helped spearhead legislation in the Nevada Legislature in 2017 to begin a conversation around the technology. Allison Clift-Jennings, Filament’s CEO, explains the importance of that initial bill, as well as why startups like Filament are finding Reno to be the perfect city to locate their operations.

Can you tell us a little about yourself? What is your background?

I’ve been in the startup space-based industry for about 23 years now, working almost exclusively in startups. 

I started my engineering trajectory by earning a degree in computer science at the University of Nevada, Reno, and then I ended up working at a lot of other startups that were primarily focused on software and a little bit of hardware. That included everything from the development of satellite telemetry systems to apparel ecommerce sizing algorithms. It was pretty diverse work, but it was almost always in the context of software, and it was always in the context of another physical location. 

But those startups weren’t based in my hometown, and Filament is the first company I founded that’s in both hardware and software. It’s a little bit unusual for me, and it’s a little bit unusual that it’s based in Reno, considering that most startups end up in the Bay Area, or New York, or Los Angeles. So it’s kind of a unique trajectory for us, but I’m really pleased and happy that we’re making it work here in Reno.

Tell us about Filament. What is the work you’re doing?

Filament has a grand vision around essentially building a machine economy, which is pretty ambitious and perhaps somewhat ambiguous. 

What this means is that Filament’s aim is to build technology and capabilities into machines and into physical things that allows these physical things to be transactive in nature. That means they can be economic -- not just “pay or be paid,” which is what a lot of people think about when they think of payments -- but also a more fundamental aspect of being to exchange value. 

Filament has taken this focus specifically in the automotive industry, and that’s where we spend almost all of our time bringing that technology to a very disruptive and very kind of upside down industry. Right now, ride-sharing and autonomy and other disruptive technologies are causing automakers to reconsider how they actually provide services. They used to sell their vehicles as a product, but now they’re starting to think about the services built on top of their vehicles acting as a platform. It’s a little bit of a shift for them. 

What's the potential of blockchain technology?

It’s funny because when people typically think of blockchain tech, they go straight into cryptocurrencies. All of those aspects are interesting and definitely a part of the blockchain tree. But I would argue more fundamentally, at least today, there are other capabilities that blockchain tech brings that don’t have a lot of the philosophical overhead that comes with things like sovereign currencies and replacing fiat currencies. We’re a little bit more pragmatic than that at Filament. 

For us, blockchain tech is really quite simple. We store data coming from vehicles in a blockchain, which proves when that data was placed in there, and proves who or what vehicle placed that data in there. So rather than putting payment messages into a blockchain, we just put in simple data like “My engine light came on,” or “This vehicle is at this location right now.” So what blockchain provides for Filament and for our customers is simply proving when and who placed particular data points in this ledger-based database. 

When you prove who and when, you can start to build new services and products and capabilities on top of that technology. You can’t, to the best of our knowledge, prove ‘when’ today without blockchain. You can change the data later, but you can’t really do other things with it. 

What makes Nevada's startup ecosystem unique?   

What we have in Reno that’s unique to a secondary city like Boise or Kansas City or Minneapolis -- all nice cities in and of themselves, but perhaps not known as technology-based cities -- is that we’re a 30 minute plane ride to the heart of the Bay Area, but we’re not in California. In fact, we’re the closest non-California city to the Bay Area, which is very advantageous from a geographic standpoint. 

Right now, I still believe it’s necessary to be involved in the Bay Area to some degree if you’re a startup doing any sort of venture capital at all. That’s really where all the money is still, although it’s slowly changing. Our location lets people easily visit us, whether it’s half hour flights or quick day trips. Most of our board is located in the Bay area, so they can easily come up to Reno for board meetings. So geographically it checks out. 

There’s also an economic benefit to being in Reno. There’s no state income tax for residents here, so there’s some desire to move away from places like California to Nevada because it does have a more favorable tax climate. 

Lastly, we are 25 minutes from Lake Tahoe. It’s a really beautiful outdoor area, and if you’re into hiking or biking then it’s super close. In fact, I go up into the mountains every morning and ride a dirt bike from 6 to 8 am. The trailhead is about 10 minutes from my house, so I just ride over there and do my practice sessions and just ride back, clean up, and then I’m in the office by 9 am every day. That’s pretty awesome, and you can’t do that in other places. 

It really helps cultivate a work-life balance, especially if you’re working hard and still want to be close to the Bay Area, but also want reasonable traffic and fantastic outdoors. I’m a big fan, and I’ll likely stay here. 

Are there any policies at the federal, state, or local level in particular that have helped your business grow?

Nevada is unique in the sense that we have a Legislature that meets every two years for four months. It’s a very unusual cycle, but that means that we don’t really have career politicians. You have people who are elected officials who have day jobs basically, so that sometimes means that you can have a lot of turnover. It also informs how we deal with policy and how we push for policy within our own state. We just finished the recent legislative session in June, so we’ll have the next one in 2021. 

During the 2017 session, however, we basically spearheaded blockchain legislation (SB398) to at least start to get the term blockchain in writing in a bill. We didn’t try to define a lot of things with cryptocurrencies or what smart contracts are, and we took a very light regulatory touch, but we wanted to get it on the radar of legislators so they’d understand this was going to be a thing. I think it was a success because there was a unanimous vote for the bill across party lines, which was fantastic. 

We also moved to Reno after that, and blockchain is basically the focus of startups here. We’ve had some really big blockchain companies move to town since then. I wouldn’t really call Reno a blockchain capital or anything, but we are attracting these types of companies because of the legislative work that we did back in 2017. 

What issues should receive more attention from federal policymakers?

I’m interested in how we would approach blockchain on the federal level. There are a lot of groups working on that question, like the Chamber of Digital Commerce, and I think they’re going in the right direction. Wyoming, of course, is very outspoken about their state work. 

I don’t know the best way to approach the federal level. I suspect that it will follow the same path as legalized marijuana, which is that states make the decision, and then after a while the federal government will perhaps make a uniformed federal-level decision that encompasses most of what has been learned at the state level. I’m not an expert on policy, but that’s my best guess.  

What is your goal for the next year? The next five years?

Startups are notorious because they’re essentially force-fed and encouraged heavily to grow fast or die quickly. At Filament, we’re trying to be a little more mindful about building a sustainable, healthy company. That may mean growing a little more slowly than what you typically see with, for example, a scooter startup. 

We’re really trying to become sustainable. What that means is that we’re not just aiming to be profitable, but we’re also going after markets in which we believe we can make a real difference. 

We’re also concerned about building technologies that should exist, rather than could exist. That’s an important distinction that a lot of startups might not consider. We want to be a little more mindful about the technology that we build. That’s really what we see in the next year. 

In the next five years, our goal is to be a major player in the automotive ecosystem. 100 million vehicles are sold each year across the globe, and I think Filament should be in at least one to five percent of that output. And if we meet that goal, we would be a very large company because it’s a very large market. It’s a little ambitious. Of course, one to five percent would put us in the revenue world of $100 to $200 million a year, which would be really big. But it doesn’t take a lot in this market to make a big dent. So it’s ambitious, but it’s exciting. 

All of the information in this profile was accurate at the date and time of publication.

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