Is there a business here?
There are droves of new ventures launching an ICO every day it seems.
But how many of these will be able to execute upon their theories and whitepapers? How many will survive? How many are going to break through and pioneer the blueprint for the distributed business models of tomorrow?
The first question that any would-be blockchain business founder needs to ask themselves before embarking on this path. Is there a business here?
*forewarning, there are a lot of rhetorical questions asked in this next section.
“The point is, take blockchain out of the equation and first work out if this is a business or just an interesting idea.”
It may sound obvious, but do people need your idea? Is it solving a significant enough problem that people are willing part with their money or time in exchange for your product or service? Can you change their existing habits and go-to product or service choices, in favour of your invention? Will people rally behind your creation and build communities around your banner? Brand zealots to rival the followers of Apple. How can all of this be achieved?
The point is, take blockchain out of the equation and first work out if this is a business or just an interesting idea.
“Do you really need a blockchain to solve this problem?”
Does the infrastructure and other fundamental building blocks that you will need, exist to enable you to bring your idea to life?
Do you really need a blockchain to solve this problem? Is this a distributed problem that requires a distributed solution? Is blockchain technology even the right toolset for the problem you have identified and the task at hand?
What is your strategy and how will you execute your game plan? Are you the person/team to do this? Who and what will you need to help you achieve this? How will you build your team? How are you going to fund this? Where do we start? Who else is trying to solve this problem? How do we differentiate? And much more.
Lots of questions that are essential to answer.
The Reid Hoffman analogy of a startup being akin to jumping of a cliff and building a plane on the way down is great, but without answering the fundamentals, the odds will be severely stacked against a safe voyage, irrespective of the figures that some ICO projects are raising. You need a clear strategy and proposition to execute with or without funds.
One more. How you will test and validate your hypothesis and assumptions? This is essential before you even think about raising funds – testing user behaviours and the appetite for your product or service. In addition to testing whether there is indeed a validated market for your creation. You could always be the first one over the hill, yes, but are you prepared for what’s over there?
Test your early machine. Run it lean, really lean and learn while the learning is still cheap. Raise money if you need to, but do it only when you need to – when you are ready. When your idea is battle tested, hardened and ultimately commercially viable. This doesn’t mean that you have to slow down.
This industry is maturing rapidly and the quality of emerging projects is increasing. But there are still too many examples of businesses who are pinning all their hopes and dreams on the premise that having a “blockchain solution” or a “we are going to ICO” approach, is enough. It’s not.
As I’ve said in a previous post, an ICO is not, or should not be viewed as a silver bullet. Those who have been through one will certainly say that it’s not! It is not the destination, it is just the start. The strength of your business model and your ability to execute will ultimately determine your success.