Moreno has been hatching business schemes since he was 14 years old.
In 1982, he penned a letter to Roger Smith, the chairman and CEO of General Motors. As a young car fanatic, he dreamed of moving from his home in sunny South Florida to Michigan. He wanted to be nearer to Detroit, where cars were made and where Smith was attempting to drag GM out of what would be a decadelong slump.
In a teenager’s version of a hostile takeover, Moreno’s letter to Smith outlined nine ways GM could improve.
“He actually responded, and went point by point,” Moreno recalls. “It’s funny because a lot of those things” — such as improving the quality of GM cars and combining Chevy and Pontiac, Automotive News reported — “he actually did,” Moreno says. “It’s kind of crazy.”
Moreno’s ambitions led him to the University of Michigan, then a three-year stint at Saturn before managing dealerships for Boston dealer Herb Chambers. In 2005, he arrived in Cleveland to kick the tires on a struggling Mercedes-Benz dealership in North Olmsted. The 38-year-old Moreno mortgaged almost everything he had to buy it.
“I came to Cleveland as a millionaire with a negative sign,” he jokes.
The dealership had sold 24 cars in five months. A representative of the previous owner came in on the day Moreno closed the deal. “Get used to doing nothing all day,” Moreno recalls him saying.
“The idea that he looked at me and said, ‘You just bought the world’s biggest turd, you’re going to fail so badly,’ that motivated me,” Moreno says. In the next 21 days, the dealership sold 80 cars.
From that one North Olmsted dealership, Moreno launched roughly a decade of expansion, eventually building a 21-dealership chain in Northeast Ohio, Florida, Massachusetts and Kentucky. He bought into other interests too: He acquired printing company Hotcards in 2015, a hotel booking website and an airplane charter company.
Chris Sanner worked with Moreno in Boston and followed him to Cleveland in January 2006. He spent almost a decade with Moreno’s company (which advertises in Cleveland Magazine) before returning to Boston in 2015.
Sanner says part of the company’s success was its ability to make buying a high-end luxury car approachable for Midwest-minded Clevelanders by sticking to advertised prices and running a fair service department. It led to good word-of-mouth.
“Their experience dispels any hesitation about doing business with a Mercedes-Benz dealership,” says Sanner, “[with] snobby, uppity salespeople that just don’t have the time of day, can’t be bothered, unless you’re buying an S-Class.”
Despite topping $1 billion in revenue in 2016, Moreno came to believe owning a large chain of car dealerships might be an unwise long-term investment. “What does this business look like in 25 years?” Moreno says. “I was firmly convinced that it just won’t exist. It’s not a 25-year business.”
His youngest son, Kevin, had expressed an interest in joining the company. But Moreno worried about passing on a dud. “It’d be like if you inherited a newspaper,” he says.
As Automotive News put it, this was an unexpected U-turn. Moreno sold 13 of his dealerships. The eight he kept included luxury brands such as Mercedes-Benz, Porsche, Maserati and Bentley.
Yet Moreno’s entrepreneurial engine isn’t one to sit idle. He and his son were continually searching for the next big thing.
“What we call billion dollar ideas,” Moreno says.
In 2016, the 20-year-old threw out, “Dad, one word: bitcoin,” Moreno recalls. “I was like, ‘What the hell is bitcoin?’ ”
Moreno found out bitcoin was a new kind of digital money — a volatile cryptocurrency. Although his financial adviser warned him against investing in bitcoin, he pointed Moreno at the technology underneath bitcoin, the system of data storage and encryption that made it work, called blockchain.
The more Moreno learned, the more he liked it. Blockchain, he thought, could open up a huge market in all kinds of database technologies, authenticators and the like. It also fit with one of his core beliefs as a business owner, one of the 10 commandments printed on cards handed out to his employees on their first day: “Thou shall embrace technology.”
Blockchain felt exactly right.
In March, Moreno made his first blockchain investment. He bought a minority stake in Votem, a Cleveland startup using blockchain to securely digitize voting. He also founded Ownum, an idea accelerator for other blockchain startups, such as a company to put car titles on the blockchain.
But as Moreno started running his investments past his financial advisers, he heard a common refrain: If he was serious about blockchain, he should skip town. Cleveland simply wasn’t equipped to nurture high-tech startups like these.
“The question became, ‘OK, I can accept that and just move back to Boston,’ ” says Moreno. “Or I can say, ‘I came to Cleveland as nothing. My wealth was made here. I’ve got to give back to Cleveland. So how do I change the conditions on the ground?’ ”
Two days before the Middle Market Forum, Moreno sits in the front row of a classroom at DriveIT, his crossed feet squirming with energy.
He’s presenting his Blockland idea to an overbooked crowd of tech types who are rapidly filling the 30 available chairs. But first Eric Ward, co-founder of the digital skills training firm, gets up for a lesson.
“I’m just going to talk about three things. I’m going to talk about keeping track of stuff, trust and about pickup basketball. OK?” says Ward, sporting a goatee, glasses and a DriveIT shirt. “And they’ll all relate to blockchain at some point. I promise.”
A former high school teacher, Ward flips to his first slide: “What is blockchain?” The technology is often associated with bitcoin, Ward says, a digital currency created by a pseudonymous person or group named Satoshi Nakamoto in 2009. That money made of bits and bytes can be transferred among a network of computers, all of which record the transfers on chained blocks of data (thus blockchain), which are secured cryptographically.
Tech types fell in love with bitcoin because it mirrored the democratic, almost anarchic, original promise of the internet: No one government, person or organization controls the network. The U.S. Treasury might issue dollar bills, but nobody issues bitcoin. Coins are created through an energy-intensive process called mining that involves putting your computer to work solving math problems that verify the chain’s integrity and “unearth” coins. (One engineer I met claimed to heat his house by having his computers mine the stuff.)
But why businesses are interested, Ward tells the group, isn’t the electronic currency, but the checkbook on which all those transfers are recorded.
Blockchain acts as a shared ledger that any computer on the network can view (with permission), but no one computer owns. It’s as if the whole entire family carries around identically balanced checkbooks for their joint account. There are public checkbooks, such as the one used by bitcoin, that anyone with a computer can access, or private ones, that only a select few computers can access.
Both types benefit from referring to the same, constantly updated checkbook, which lives on every computer on the network, rather than on one, and is secured by a cryptography scheme.
You can check, for example, that your payment actually went through. So can the person you’re paying and your mom, even your accountant, if you give them permission.
Trust is also central to the blockchain protocol. Generally, we use an intermediary to do that: Governments issue identifications, titles and deeds, or Visa guarantees the money gets from your bank to the grocery store’s when you swipe your debit card at the supermarket.
Blockchain has the potential to cut out some of those middlemen. Independent verification makes the network trustworthy on its own.
Now, to basketball. While it’s an imperfect analogy for blockchain, says Ward, there’s a big difference between a pickup game and an organized one.
In an organized game, the coaches control the rosters, so it’s open only to select players. Trusted third parties — the referees and scorekeepers — regulate the game. But they have to be trained and paid. All of it slows down the game. Worse yet, it’s tough luck if you disagree with the ref’s call. That, Ward says, is the game we’re living in.
A pickup game is more democratic. Anyone can walk up to play, and the game is self-policing. After a basket, you shout the score when checking in the ball. If there’s a disagreement, a foul or a question, then majority rules. That’s the game, post-blockchain.
“With that,” Ward continues, “I’m going to hand it off to Mr. Moreno.” Moreno gets up in front, to applause.
Blockchain, Moreno thinks, is teetering between being a Wild West technology and being widely adopted. Tech giants Microsoft and IBM are investing massively in blockchain research, according to Bloomberg, with IBM tasking 1,500 staffers with investigating the technology alone.
Corporate America, though interested, has yet to glom onto blockchain more broadly, however. A July Forrester Research report estimated that in 90 percent of cases, blockchain experiments won’t become part of company operations.
Still, the International Data Corporation estimated in July that worldwide blockchain spending is expected to reach $1.5 billion this year, twice the amount spent in 2017, and is forecasted to reach $11.7 billion by 2022.
In the blockchain world, only one thing is certain: No one knows for sure what potential the technology holds. To Moreno, that uncertainty spells opportunity for Cleveland. If the city steps in quickly as a magnet for developers and businesses, and the technology begins to make inroads — both big ifs — Moreno believes Cleveland could become Blockland.
“We’re here at this stage just before [blockchain] hits major mainstream adoption,” Moreno says as many in the audience scribble in notebooks or type on phones. “Which means we have a shot.”
Moreno flips to a slide with 10 circles, all of them shooting out from a center, larger circle with the Blockland logo.
This is the organization Moreno is building. Already, more than 1,200 volunteers have signed on to one or more of the 10 offshoots, called nodes. Each node handles a different part of the plan: organizing a conference, pushing blockchain-friendly legislation, building a physical tech hub, reaching out to young professionals, recruiting companies and so on.
The Blockland organization eventually plans to be registered as something akin to a nonprofit. But like a blockchain itself, it’s not built around a single person. In fact, Moreno’s name appears nowhere on the chart.
“This isn’t a Bernie effort,” Moreno says. “If Blockland’s about me, it’s over, the presentation’s done. This has got to be a full, regionwide movement with incredible urgency to get it done.”
There’s no denying that without Moreno behind the wheel, however, Blockland would likely be seen as a quixotic lark.
“I really like his risk-taking, entrepreneurial spirit,” says Destination Cleveland president and CEO David Gilbert, who also co-chairs Blockland’s Thought Leadership node. “Certainly that’s what his career has been about in building these car dealerships.”
Pete Martin, founder and CEO of Votem, has seen those qualities firsthand. In March, Moreno read a news story about Votem, set up a meeting with Martin and asked to invest after just an hour and a half. Two weeks later, he bought a sizable minority stake in the company.
“The guy is just a force of will,” Martin says. “I think comparing it to a lot of other big initiatives in the city — I’ve been here for almost 30 years now — a lot of them didn’t have a guy like Bernie driving it.”
While Moreno was building his business, he was also banking influence. For the last two years, he was chairman of the board of Cleveland State University. He sits on the boards of the Cleveland Foundation, Destination Cleveland and the Greater Cleveland Partnership. He is also a member of the 50 Club of Cleveland, a secretive gathering of Northeast Ohio’s top executives which has counted KeyBank CEO Beth Mooney, attorney Fred Nance and Case Western Reserve University president Barbara Snyder on its board of directors in recent years.
“He is in that unique position of having that respect, having that past success that has given people more of the desire and maybe the comfortability to jump on board and see where this goes,” says Gilbert.
Moreno’s connections, and the excitement he has instilled in business community leaders, are why Blockland has started so quickly.
“It’s not about making a committee and discussing. It’s about, ‘Let’s get it done,’ ” says Steven Santamaria, CEO of Folio Photonics and a Blockland node co-chair. “This is a startup mentality. This is a Google-ish mentality. Fail fast. Start up. Try it. Throw it against the wall. If it sticks, great. If it doesn’t? Move on to the next thing.”