Jed McCaleb – Co-Founder of

It doesn’t matter how “productive” you are if you are building toward the wrong goal. Differences in direction that result from planning absolutely swamp any kind of productivity gains.

Jed believes in consciously leveraging technology to reduce inefficiency and improve the human condition. He created eDonkey, one of the largest file-sharing networks of its time, as well as Mt. Gox, the first bitcoin exchange. In 2011, Jed founded Ripple. Recognizing that the world’s financial infrastructure is broken and that too many people are left without resources, he co-founded in 2014.

Jed leads technical development of Stellar, a universal financial network that aims to increase economic participation for all individuals. The Stellar network is supported by, a nonprofit that couples technology with digital financial literacy and contributes to open-source software. Jed is also an advisor to MIRI, which researches artificial intelligence for positive impact.

Where did the idea for Stellar come from?

My evolving interest in Bitcoin eventually lead me to the idea for Stellar. Once I saw what Bitcoin was—a distributed database—and understood what could be solved using Bitcoin’s underlying idea, beyond creating a new currency, such as connecting financial institutions, I knew the technology could potentially be transformational for the world. Stellar was inspired by Bitcoin’s potential, but we are focused on using our open source financial network to connect siloed financial institutions. However, Bitcoin is essentially a way to move value from one person to another, Stellar links all these different institutions to each other, including Bitcoin.

This is important because 2.5 billion people who make up about half of the world’s adult population are unbanked, according to the World Bank. That means they don’t have access to a bank account and can’t save money, and if they need to send money to family (known as remittances), they incur astronomical fees. Banks around the world generally can’t afford the maintenance costs to serve low-income people, and transferring money is expensive because there are limited connections between financial institutions and systems. With Stellar, our aim is to use an open source financial network to tie the disparate, siloed institutions together and move money cheaply and seamlessly.

Already, nonprofits and businesses are implementing Stellar as financial infrastructure, particularly in the developing world. One such example is Praekelt Foundation, which is integrating Stellar into Vumi, it’s open-source messaging app, to let young girls in South Africa save money in airtime credits (which is used as mobile money in developing countries).

What does your typical day look like and how do you make it productive?

I’ve always ran small teams so there is a balance between management and leading technical development. I typically have two modes of work — focused and reactive. When I’m in my “focus mode,” I code and build. When I’m in my “reactive mode,” I respond to requests, emails, and all of the micro things that are involved with running a business. It’s important for me to have those two separate modes, as it helps me be much more efficient.

What’s one trend that really excites you?

Artificial intelligence is both super exciting and terrifying. We’re only seeing the beginning of what artificial intelligence can do, it’s immensely powerful technology. In the next 20 years, AI will be able to solve a ton of problems and make people’s lives a lot easier. We haven’t seen that degree of change from technological advancement, since the agricultural revolution. This is why I’ve donated to Machine Intelligence Research Institute (MIRI), a non-profit organization dedicated to developing new formal tools in order to ensure the safe operation of future generations of AI software and became an advisor.

What is one habit of yours that makes you more productive as an entrepreneur?

I spend a lot of time thinking about the best strategy and overall plan. It doesn’t matter how “productive” you are if you are building toward the wrong goal. Differences in direction that result from planning absolutely swamp any kind of productivity gains.

When I’m in the middle of building something, I tend to focus on what is necessary to get things done, and do not go beyond what is essential. I’m very diligent about not letting the unessential creep in.

If you were to start again, what would you do differently?

Oh jeez, the list is long. In most cases, I generally do a post-mortem of situations and events, so I can reflect on what things went wrong and what things went right. I consider questions such as, “given the amount of information that I had at the time, did I make the right decision and would I do it again, or did something randomly go wrong?” Often times, you can make the right decision, but it doesn’t have the anticipated result because of external noise and complications.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Make sure you don’t focus on niche things. It is only marginally harder to do something that has the potential of global impact as it is to do something with much more narrow focus. And when you are successful at the big ideas, the reward is much, much greater than for the niche product.

What is one strategy that has helped you grow your business? Please explain how.

I’ve purely focused on building great products, rather than on marketing those products. Thanks to the internet, it’s much easier for great products to become known than previously. The key is make a great product that actually fills a need.

What is one failure you had as an entrepreneur, and how did you overcome it?

I’ve had so many failures as an entrepreneur. It isn’t so much that I’ve overcome them as that I just don’t let them stop me. You have to realize that as an entrepreneur you are looking for positive Black Swans (see book below). You will have to suffer through endless setbacks and failures, but as long as you can keep taking swings at the pinata, it will eventually break. It is a matter of being tenacious and able to withstand a large degree of punishment, while waiting for success.

What software and web services do you use? What do you love about them?

I love Google Docs and StackOverflow, both for their functionality. Google Docs is very accessible and makes collaboration easy. StackOverflow makes it magnitudes easier to find answers when programming than previously before.

What is the one book that you recommend our community should read and why?

I highly recommend the book Black Swan. In a nutshell, the book discusses the theory of the Black Swan, and the observation that there are certain activities that lend them to random events, such as the stock market crash in 2008, or when a few VC-backed startups exit for hundreds of millions of dollars and the majority of them die. This type of activity doesn’t fit into the typical bell curve. Economics and statistics are based off of the Bell Curve, but that’s not how the world works in most cases. Long story short — some things do fall within the Bell Curve. For example, traditional businesses like restaurants and beauty salons fall into the bell curve. They are not as risky, but also don’t have ginormous upside potential. When you’re starting a businesses, you need should be aware of your risk tolerance and understand what category your business falls into, and if possible structure your business so that you can capture the upside potential.

What people have influenced your thinking and might be of interest to others?

Daniel Kahneman – Psychologist and Author of Thinking Fast and Slow

CFAR (Center For Applied Rationality)

Both of these resources relate to rationality. They explore why people fail in the world, and discuss a long list of reasoning biases that people have that are related to their failures, and how being aware of those biases can be advantageous when making your own decisions and reacting to others.


Jed Mc’Caleb on LinkedIn:
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Jed Mc’Caleb on GitHub:
Jed Mc’Caleb on Twitter: @jedmccaleb