When the value of the crypto-currency Bitcoin went up 1000 percent last year—peaking last November at $20,000—a lot of people kicked themselves for not buying in sooner. The following month, some of those same people were kicking themselves again… when their $20,000 Bitcoin lost half its value within days.
The volatility of virtual currencies like Bitcoin doesn’t look to be ending anytime soon; in fact, as CNBC reports, some analysts still predict Bitcoin will soar as high as $100,000 in 2018. Regardless, by anyone’s standards, it’s a high-stakes game—anything but a safe bet.
Whether or not you personally play the odds, let’s look at three takeaways from the Bitcoin gold rush that you could apply to your law firm.
LESSON 1: Beware the “Herd Mentality”
In my experience, by the time enough people jump on a bandwagon for it to be categorized as a “trend” or “fad,” that trend already on the downturn. The first few waves of adopters may do well, but, after that, there’s a diminishing return. Late adopters spend more time and money to implement the trend, while they get less return on their investment.
Just because a lot of law firms adopt a certain practice or marketing strategy, that doesn’t make it right for you. By the time you reluctantly “buy-in,” it may not work like it once did.
Look for creative solutions that haven’t been tried yet. Become a trendsetter, not a trend follower.
LESSON 2: Look Before You Leap
I know it’s a cliché. But the reason it’s a cliché is that it holds up. A lot of people bought Bitcoin without having the slightest understanding of what they were buying. By the same token, a lot of people jump into starting a business without knowing the first thing about how to run one. There’s nothing wrong with investing in Bitcoin, and starting your own firm could likewise make you wealthy. Just do your homework first.
LESSON 3: Hedge Your Bets
The recent Bitcoin plunge hurt plenty of people, but the ones who kept their shirts were those who had diversified portfolios, with solid investments in addition to their Bitcoin holdings. There is an inherent amount of risk involved with any venture, whether you’re playing the market or starting a business. But you can always hedge your bets in such a way that one piece of bad luck won’t wipe you out.
To discover more tools and ideas on building a solid law firm, give us a call at (888) 207-2869 to learn more.