Prysm Group Cofounders Hurder (left) and Barrera: bringing an industry-agnostic approach to helping business leverage emerging technologies
(Photo by Jeffery Salter)

Prysm Group cofounders Hurder (left) and Barrera: bringing an industry-agnostic approach to helping business leverage emerging technologies
(Photo by Jeffery Salter)

Five years ago, Cathy Barrera (PHDBE 2014), cofounder of the economic consulting firm Prysm Group, was looking for something new to do. She had just left a tenure-track position at Cornell, where her research focused on the intersection of economics and emerging technology. She couldn’t help but notice that blockchain was booming: The price of bitcoin had surged to nearly $20,000; governments were beginning to recognize the cryptocurrency as legal tender; and industries from fintech to pharma were launching blockchain-related projects. (Though best known as the distributed digital ledger system underlying cryptocurrencies like bitcoin and ether, blockchain can also be useful in a range of other applications, from preventing identity theft to enhancing logistics systems.)

Barrera also couldn’t help but notice that something was missing from most blockchain initiatives: economists. That oversight seemed like a missed opportunity. “Blockchain platforms are mini-economies written in code,” she explains. These digital systems are intended to help people carry out transactions and create value. And who better to help guide the implementation of a new digital currency or decentralized marketplace than people who make their living studying things like monetary policy and market design?

So she called her old friend and colleague, Stephanie Hurder (PHDBE 2013), who was ready for a change after spending three years at Boston Consulting Group. Barrera asked if Hurder wanted to do “something crazy.” The answer was yes, and the idea of an economic consultancy focused on helping businesses come to grips with blockchain, the metaverse, and other emerging tech, turned out not to be so crazy after all.

Founded in 2018, Prysm employs 15 people with a diverse range of skills and backgrounds (PhDs and MBAs, former consultants and ex-investment bankers). The company handles projects for startups and enterprise clients alike. It also offers online certificate courses through the Wharton School on the economics of blockchain and business in the metaverse. The firm recently announced a new partnership with Bain, which will use Prysm’s online courses to bring its own clients up to speed on the economics of emerging technologies.

Unlike some consultancies, Prysm is industry-agnostic. Rather than working in siloed practice areas like transportation or financial services, Barrera and Hurder use their understanding of fundamental economic principles—and their technical expertise in disciplines like game theory and incentive design—to help clients no matter what their business happens to be. As a result, they have become highly skilled at explaining the finer points of contract theory and incentive design to executives who want to mint their own cryptocurrency tokens or build blockchain technology into their operations.

Similarly, Prysm’s online courses are designed to help working professionals grasp the business implications of emerging technologies, regardless of sector. If you want to trade in digital assets, for instance, it doesn’t matter whether you deal in music, crypto, or NFTs; you still need a basic understanding of network effects, revenue models, and ecosystem development.

Given its founders’ academic pedigrees—Barrera studied with Nobel laureate Oliver Hart; Hurder with Nobel laureate and HBS professor emeritus Al Roth—Prysm also is more mathematically disposed than a typical strategic consulting firm. “We are engaged regularly to do simulations, mathematical modeling—stuff that wouldn’t look out of place in a dissertation chapter,” Hurder says.

For example, EY hired Prysm to model whether blockchain could add value to public financial management, by streamlining government payments and tracking public funds. The firm’s findings, which were published in September by EY and the Official Monetary and Financial Institutes Forum, indicate that a blockchain-based public finance management system could save hundreds of billions of dollars over time, benefiting both social welfare and the broader economy.

Prysm was retained recently by a large conglomerate to help design a crypto token, in a highly regulated jurisdiction. “They came to us and said, we need a token economic model that does the things we want to achieve and satisfies all the constraints of the regulator. Go!” recalls Hurder, who then headed to a coffee shop and began scribbling equations on a pad of paper. (The team has worked remotely from the outset, with Hurder based in Pasadena, California, and Barrera in Jersey City, New Jersey.) In the end, Prysm designed a bespoke economic model that won regulatory approval by describing, in exquisite and formal detail, how the new token would be managed and how it would evolve over time.

As blockchain and the metaverse converge—so-called Web3 platforms such as Decentraland and the Sandbox, for example, already integrate blockchain-based digital assets within immersive virtual environments—Barrera and Hurder find themselves fielding more and more questions from clients about the costs and benefits of doing business in virtual worlds. As they point out, the economic principles they use to understand how people interact with new technologies—and what that means for the platforms and products that incorporate them—could be profitably applied to everything from artificial intelligence to smart devices. “There’s a whole host of technologies that we could bring these frameworks to bear on,” Barrera concludes.

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