Company Name: River
Founders: Alexander Leishman
Date Founded: February 2019
Location of Headquarters: Columbus, OH
Amount of Bitcoin Held in Treasury: Proof of reserves launching soon
Number of Employees: 50
Website: https://river.com/
Public or Private? Private
How do you make a bitcoin-only brokerage profitable? The answer isnโt complicated.
You offer the highest quality services to as many people as possible for a good price.
This is the strategy Alexander Leishman and the team at River employ.
And Riverโs high-quality services largely hinge on staying true to what Leishman calls โthe Bitcoin ethos,โ at the core of which is the โnot your keys, not your coinsโ philosophy.
โAt River, we decided to take the slow, hard way, which allowed us to build our own custody systems and actually custody our clients’ Bitcoin and operate as a financial institution,โ Leishman told Bitcoin Magazine.
Building on a strong foundation is clearly important to Leishman, someone who operates from his own notable educational and professional base.
The Engineer
Leishman completed an undergraduate degree in aerospace engineering and holds a masterโs degree in computer science from Stanford.
His rรฉsumรฉ boasts of experience ranging from a robotics engineering intern to a cryptography researcher at Stanford to a software security engineer for Airbnb.
In so many words, he has notable technical abilities โ the type youโd want someone who secures millions of dollars in bitcoin on behalf of clients to have.
And even with all of his knowledge and experience, heโs still humble enough to be mindful of the risk involved in what he does.
โOur number one focus above all else is always don’t fuck up,โ said Leishman.
โPeople really underestimate that that doesn’t happen by default. You have to actively spend 50 plus percent of your resources to contain entropy and make sure you’re always improving systems and procedures, building the automation and building everything you need to contain those risks and preempt new risks,โ he added.
โThat’s actually what the majority of the work goes into.โ
These are sobering words in an industry that has a reputation for exchanges going bust and/or losing client funds. And Leishman is aware of this.
โIt turns out in this industry there aren’t a whole lot of trustworthy people,โ said Leishman.
โWe’ve seen even the most regulated trust companies go bust. They’ll tell you, we have this certification and this license and this, this and this. Then, when it all comes out, you find out this guy was having people deposit coins to a Ledger that they lost the key to three years ago,โ he added.
โThat’s why we do things ourselves.โ
Why Bitcoin?
Given how difficult it is to safely run a Bitcoin company and the fact that, with his credentials and experience, Leishman could make a good living in a number of fields, why did he gravitate toward Bitcoin?
โThe reason that I got into Bitcoin was because I went down the economics rabbit hole on the side in college,โ recalled Leishman. โI started reading about Austrian economics and eventually read The Denationalization of Money by Friedrich Hayek.โ
He was drawn to the idea of challenging central banking as he became more aware of the dangers of centralized power structures of all types โ from The Fed to supranational entities like the EU.
Before finding bitcoin, Leishman wanted to create his own form of money that the government couldnโt control.
โI wanted to create a commodity-backed money, but it would have been centralized,โ he said.
โI couldn’t really figure out how to do it without going to jail, and I didnโt know how to make a business out of it,โ he added.
โWhen I came across Bitcoin I was like โMy gosh this fulfills the prophecy โ this is going to change everything.โ I just knew I had to work on it.โ
And work on it he did. After college, he completed a coding bootcamp and then headed west to San Francisco to find work in what was then ground zero for the Bitcoin industry in the US.
Bitcoin And The Bay Area
โI didnโt have a job before I moved to the Bay Area,โ recalled Leishman. โI moved there because back then that’s where all the Bitcoin stuff was happening, and I wanted to be in the center of it.โ
It didnโt take him long to find work, though. In March 2014, Leishman landed his first job in the Bitcoin space with a Taiwanese Bitcoin exchange called MaiCoin, which specialized in bitcoin trading and payments.
At MaiCoin, Leishman identified and fixed security vulnerabilities and built APIs used for merchant services.
Beyond his experience at MaiCoin, Leishman remembers his time in the Bay Area fondly.
โThe culture was very different back then,โ he said.
โThere wasn’t really this concept of Bitcoin maximalism. No one was offended by new coins because people would basically use these things to experiment with new ideas,โ he added.
โIt was much more free, more academic, like people could try ideas without the economic component and without creating this dichotomy between scammers and legit people as much.โ
From one angle, these might sound like strange words from someone who runs a bitcoin-only business. From another, one might imagine that Leishman learned more than a handful of lessons firsthand about why Bitcoin is different from all other crypto networks and assets during his time in San Francisco.
Plus, he said that โeveryone knew Bitcoin was king โ no one was trying to come at it.โ
After MaiCoin, Leishman completed his graduate studies at Stanford, where he worked as a teaching assistant for a course on Bitcoin and other cryptocurrencies taught by Dan Boneh, co-founder of Stanfordโs Computer Security Lab, and then built secure infrastructure for asset management for Polychain Capital, a crypto hedge fund.
By early 2019, he was ready to start his own endeavor.
Building River
Harnessing what heโd learned about crypto security and payments, Leishman set out to build a Bitcoin platform that not only featured a top-notch multisig security model for client funds at its core but also helped users more readily utilize bitcoin as a medium of exchange via the Lightning Network, as River provides users with custodial Lightning wallets.
Leishman explained building out all of the infrastructure for River is what distinguishes it from other companies like it. When brokerages use third-party custodians they give up control over what they can offer their clients.
โThey can only use whatever their third-party decides to build,โ said Leishman of exchanges that donโt build their own custodial infrastructure. โAnd the third parties are all multi-coin custodians that rarely prioritize Bitcoin stuff.โ
With Leishman at the helm wearing the hats of CEO and CTO, River has a distinct advantage in forging its own path.
โThinking like a good engineer leads to a good business,โ said Leishman.
โI’m the person leading the company. I know how to build what we need to build. I know how to ship what we need to ship to serve our customers,โ he added.
โFor a company like ours, I think it is the right archetype.โ
More Of The Same โ For Now
While Bitcoin is becoming more popular as a store of value, Leishman thinks we still have a ways to go before it becomes a more widely accepted medium of exchange.
Plus, Riverโs bread and butter is its brokerage service.
โWe make most of our money on our bitcoin brokerage,โ Leishman said.
He also noted that River makes money off of its other services, like running two major Lightning nodes, but that the revenue produced from this pales in comparison to what the company earns from its brokerage service, which River continues to work to improve.
โThereโs always more that we can be doing to make the process simpler and higher quality to sign up, buy โ and custody feels like you have all your security needs covered,โ Leishman said.
โAlso, really where the hard work is, is the interface with the fiat system. And so the big trend that we’re leaning into in the next three to five years, in my opinion, is that Bitcoin is going to become, still growing as a store of value,โ he added.
โWe’re entering an era where people are going to be saving in dollars and Bitcoin, and the seamless back and forth between Bitcoin and fiat is where we’re focused.โ
ย Alexander Leishman โ founder, CEO and CTO of River โ believes in designing every facet of River so as to prioritize the security of customer funds and to create a more dynamic financial platform.ย
Amazonโs journey from a modest online bookstore to the worldโs largest online retailer is a narrative of innovation, disruption, and relentless ambition. Today, Amazon dominates the e-commerce landscape, setting the standard for online shopping with its vast product selection, lightning-fast delivery, and customer-centric approach. This article explores the evolution of Amazon’s leadership in online shopping, examining the key strategies, innovations, and challenges that have shaped its rise to the top.
The Early Days: From Bookstore to Everything Store
Amazon was founded by Jeff Bezos in 1994 as an online bookstore, capitalizing on the internetโs potential to reach a global audience. The decision to start with books was strategic; books were easy to ship, did not require much storage space, and had a universal appeal. From the beginning, Bezos envisioned Amazon as more than just a bookstore. His long-term goal was to create the โeverything store,โ a one-stop-shop where customers could find and purchase anything they needed online.
The initial success of Amazon was driven by its innovative approach to e-commerce. While traditional bookstores were limited by physical space, Amazon offered an extensive catalog of books that was virtually limitless. The companyโs early focus on customer satisfaction, with features like customer reviews, personalized recommendations, and a user-friendly interface, set it apart from competitors.
By 1997, Amazon had gone public, and its rapid growth continued. The company began to expand its product offerings beyond books, gradually adding categories like music, electronics, and toys. This diversification was essential to Amazonโs strategy of becoming the go-to online retailer for all consumer needs. The companyโs ability to offer a wide range of products, combined with its commitment to customer service, established it as a leader in online shopping.
Innovation and Expansion: The Prime Revolution
One of the most significant milestones in Amazonโs evolution was the launch of Amazon Prime in 2005. For an annual fee, Prime members received free two-day shipping on eligible purchases, a proposition that was revolutionary at the time. The introduction of Prime was a game-changer, transforming customer expectations and further solidifying Amazonโs leadership in online shopping.
Prime was more than just a shipping service; it was a strategic move to create customer loyalty. The subscription model incentivized customers to make Amazon their default shopping destination, as the more they used Prime, the more value they received. Over time, Amazon expanded the benefits of Prime to include streaming video and music, exclusive deals, and other perks, making it an indispensable service for millions of customers.
The success of Prime can be measured by its membership numbers, which have grown exponentially over the years. As of 2024, Amazon Prime has over 200 million members worldwide, a testament to the value it offers. The Prime membership model has been so successful that it has influenced the broader retail industry, with many competitors launching their own subscription services in response.
The Technology Edge: Fulfillment and Logistics
Amazonโs dominance in online shopping is not just a result of its vast product selection and customer-centric approach; it is also rooted in its technological prowess. The company has invested heavily in building a state-of-the-art fulfillment and logistics network, which has been a critical factor in its ability to offer fast, reliable delivery to customers.
Amazonโs fulfillment centers, which are strategically located around the world, are marvels of automation and efficiency. These facilities use advanced robotics, artificial intelligence, and data analytics to manage inventory, process orders, and ship products with unparalleled speed. The companyโs ability to deliver products quickly and accurately is a key reason why customers choose Amazon over other online retailers.
In addition to its fulfillment centers, Amazon has developed a vast logistics network that includes its own fleet of planes, trucks, and delivery vehicles. The companyโs investment in logistics has allowed it to reduce its reliance on third-party carriers like UPS and FedEx, giving it greater control over the delivery process. This vertical integration has enabled Amazon to offer services like same-day and next-day delivery, further enhancing its competitive advantage.
Moreover, Amazonโs logistics innovations extend beyond its own operations. The companyโs delivery service partner (DSP) program has created opportunities for small businesses to operate delivery routes for Amazon, while its crowd-sourced delivery platform, Amazon Flex, allows individuals to deliver packages using their own vehicles. These initiatives have expanded Amazonโs delivery capacity and ensured that it can meet the growing demand for fast shipping.
Expanding the Ecosystem: Marketplace and AWS
Another key component of Amazonโs success in online shopping is its ability to create a comprehensive ecosystem that extends beyond retail. The Amazon Marketplace, launched in 2000, has been instrumental in expanding the companyโs product selection and driving revenue growth. The Marketplace allows third-party sellers to list their products on Amazonโs platform, giving customers access to a wider range of goods and enabling Amazon to earn a commission on each sale.
The success of the Marketplace has been staggering. Today, over half of the products sold on Amazon are from third-party sellers, many of whom are small and medium-sized businesses. The Marketplace has also been a critical factor in Amazonโs global expansion, as it allows sellers from around the world to reach customers in different markets without the need for a physical presence.
In addition to the Marketplace, Amazon Web Services (AWS) has played a crucial role in the companyโs growth and profitability. Launched in 2006, AWS offers cloud computing services to businesses, allowing them to store data, run applications, and scale their operations with ease. AWS has become the backbone of the internet, powering everything from startups to large enterprises. The revenue generated by AWS has given Amazon the financial flexibility to invest heavily in its retail operations, including its logistics network, Prime, and original content for Prime Video.
Challenges and Criticisms
While Amazonโs leadership in online shopping is undeniable, it has not been without challenges and criticisms. The companyโs dominance has raised concerns about its impact on competition, with critics arguing that Amazonโs scale and market power give it an unfair advantage over smaller retailers. There have also been concerns about the treatment of workers in Amazonโs fulfillment centers, with reports of grueling conditions and low wages sparking public outcry and calls for better labor practices.
Amazon has also faced scrutiny over its impact on the environment. The companyโs rapid delivery services, which require a vast logistics network, contribute to carbon emissions and environmental degradation. In response, Amazon has pledged to achieve net-zero carbon emissions by 2040 and has invested in renewable energy and electric vehicles to reduce its environmental footprint.
Despite these challenges, Amazon continues to grow and innovate, constantly pushing the boundaries of what is possible in online shopping. The companyโs ability to adapt to changing consumer preferences, invest in technology, and create a seamless shopping experience has ensured its position as the leader in e-commerce.
The Future of Amazon in Online Shopping
As Amazon looks to the future, it faces both opportunities and challenges. The rise of new technologies like artificial intelligence, machine learning, and automation will continue to shape the e-commerce landscape, and Amazon is well-positioned to leverage these innovations to enhance its operations and customer experience.
The company is also likely to continue expanding its ecosystem, integrating its retail operations with other services like AWS, Prime Video, and Alexa. This integration will further entrench Amazon in the daily lives of consumers, making it even more difficult for competitors to challenge its dominance.
In conclusion, Amazonโs leadership in online shopping is the result of a relentless focus on customer satisfaction, innovation, and scale. From its early days as an online bookstore to its current status as a global e-commerce giant, Amazon has consistently pushed the boundaries of what is possible in retail. As the company continues to evolve, it will undoubtedly remain a dominant force in the world of online shopping, shaping the future of commerce for years to come.
