2022 Annual Review • CEO Letter #78

Last week we celebrated almost-Christmas, so today I'm wishing you a happy almost-New Year! I hope you've enjoyed the winter holiday season, and that you were able to spend time with your loved ones.

My first flight home to Pittsburgh got canceled due to the extreme weather that swept across North America, but I made it in the end, after a long layover in Las Vegas. Did you know they have slot machines at the airport? Yeah, very weird.

Anyyyway, this is Taylor, CEO of Hedgehog, introducing myself for the 52nd time in 2022. Not to pat my own back, but I'm pleased that we didn't miss a single weekly newsletter all year! I say "we" because Hedgehog is a team and I couldn't do it without my awesome colleagues. For example, they stepped in while I was busy getting married! (Letter #38 in March.) More on the team momentarily.

About 2022:

Geez, what a year. I feel that way every year, but dang, 2022 was eventful. It's fitting that the first January newsletter was titled "All the FUD don't matter to me, we got community," because there was abundant FUD. Should I even call it FUD when the fear, uncertainty, and doubt were warranted by alarming events?

As The Defiant put it: "CeFi Rekt Was the Main Event in Crypto's Annus Horribilis," and it happened like six different times at different big institutions. That's the industry tldr: Everything exploded.

I can't deny that it was a tough year for crypto, but I remain optimistic. I still believe that we're still early. I said as much last week while revisiting bitcoin's innovation beyond the status quo, and how the follow-on effects have barely begun to ripple through finance writ large, let alone the entire economy. So yeah, everything exploded, but once we clear away the rubble and rebuild, crypto will be stronger than ever.

How 'bout the little startup that could, AKA Hedgehog?

Our Progress in 2022

This is my fourth yearly review for Hedgehog. (Previously: 2019, 2020, 2021.) I bet you didn't know we've been around that long!

From the start, Hedgehog's mission has been making it simple to maintain a sane assortment of crypto investments. (The insane approach is already easy; no help needed from us!) Applying the best practices of modern portfolio theory to digital assets should not be so cumbersome.

Hedgehog builds tools based on the wisdom of legends like John C. Bogle, inventor of the index fund, for the crypto world. You should be able to proportionally "buy the market" without manually updating a massive spreadsheet and tearing out your hair. By contrast, the Hedgehog way is one-swipe rebalancing.

In November I shared a preview of the upcoming big upgrade to the product:

Hedgehog 2.0 includes custody, meaning Hedgehog will hold funds on behalf of customers. It will be our responsibility to keep your assets safe. One big piece of the puzzle is already in place — Hedgehog is registered with the SEC* to offer personalized crypto investing advice, which means we are legally obligated to act in our customers' best financial interest.

Our upcoming custody system has been architected to prioritize the security of your funds:

• Individual bank accounts are created for each user to handle deposits and withdrawals.
• Individual custody accounts are created for each user to store assets (which are never lent out).
• Any assets that are deposited, purchased, or managed on Hedgehog belong to you (not to the company).
• Your assets are never commingled, loaned, or borrowed against.

A month ago, you could have argued that Hedgehog was being overly cautious, and that as a startup we should optimize for speed without worrying quite so much about safety. Now, post-FTX, that argument should be laughed out of the room. I'm proud that this team decided to do things the difficult, rigorous way. Today, we are one of maybe two registered investment advisers that have taken this approach.

*Being registered as an investment adviser does not imply a certain level of skill or training.

These features will form the core of Hedgehog's first mobile app. Creating the new experience has been our big focus throughout 2022.

Currently we are rigorously testing the new product to make sure:

1) Everything works correctly with no surprises,
2) the interface is intuitive to navigate,
3) Hedgehog 1.0 users are able to migrate over without problems.

We're looking at launch at the beginning of Q1 2023. If you haven't signed up for early beta access yet, now is the time!

The Team

The whole year has been a challenge, but also a total blast, because of the 12 awesome people who work at Hedgehog 💗

On the backend, co-founders Colton Dillion and Jason Dillion (they happen to be brothers), database wizard Jacek Trocinski, security sorcerer Nick Smith, and jack-of-all-trades Richard Catlin, have done a killer job writing a ton of code that powers Hedgehog, plus building the infrastructure to keep everybody's information safe. On the frontend, developer Pete Schreyer and designer-engineer Mohamed Abdrabou created the parts of the product that customers interact with directly.

While I do my best to assist all these powerhouse coders, it’s really product manager Colin Poppell who organizes our collaboration. He makes sure that we're moving forward in concert, so the engineers' collective efforts can accomplish Hedgehog's goals in a timely fashion. In other words, Colin keeps track of what the heck is going on with development, and nudges everybody to stay pointed in the same direction.

Growth marketer Matt George, content writer Sonya Mann, and customer success lead Jon Hope coordinate to tell the world about Hedgehog and why our product matters. They do outreach including advertising, run our blog and social media, handle customer support, and lately even pitch in to test the mobile app.

Honorable mention: My brother Morgan Culbertson, head of our sister company Hopscotch. Morgan and the Hopscotch team are not technically part of Hedgehog, but they consistently manage to sprinkle their own magic into the potion.

I appreciate all of these people more than I can say in a few short paragraphs! Their trust means the world to me. Their talent and dedication make Hedgehog possible.