Out of more than 80,000 blockchain projects, only 8% to 10% survived, and this survival rate of the projects paints a bad picture for those interested in setting up their own individual startups using distributed ledger technology or blockchain. We bring you what an investor should do to have a successful blockchain business.
The entrepreneurs must understand that there is no specific equation available to help them open up startups flawlessly, particularly in this nascent sector, where very few people only know the benefits of Bitcoin but not the entire “technology underlying cryptocurrency” – blockchain. Some governments are even fighting/banning Bitcoin activities, others are lazy or don’t want to create rules and regulations, thinking that if they allow it, it will contribute to the collapse of traditional currencies and even be used to support unlawful activities. Because of that bad reputation digital currencies have, a number multitude of potential investors and other business-minded people are fearing to making big investments in creating startups related to blockchain technology.
Considering all those negative and positive factors in the cryptocurrency and blockchain industry, we have gathered some of the useful steps that will guide all of you to create a fruitful blockchain-related business that will last for ages, such that you can also be part of the exclusive 10%.
First ask yourself and your team different questions concerning the startup, for instance, how it will be run”, what it will deal in, source of funds, location, what will DLT actually bring to your initiative? Is it the right time to use blockchain for this particular product or service? And many others, before taking further steps. Don’t just wake up one morning and apply blockchain on any product or service you see around, first make a thorough feasibility study before anything else.
Blockchain and DLT projects carried out by organizations have a high chance of surviving (5 times higher) compared to those created and run by individuals. The reason behind this is that, in an organization, the workload is equally spread to different workforce according to the qualifications, which is not the case with user-generated projects – teamwork is very important in pushing the project to reach fruition.
There is no single big and successful company that doesn’t advertise its goods or services that it offers. So who are you not to reveal your project to the public. Because if you advertise your business, people get to know about it, and this helps them to decide on whether to support you or not. Make sure you make proper advertisements through social media such as Facebook, LinkedIn, Twitter, blogging, popular websites like Coinidol, Medium, Telegram, etc.
Make sure you look for a proper funding model that your new blockchain startup can use, for instance, there are startups that use APIs to facilitate or fund themselves, and there are those using initial coin offerings (ICOs) as a funding model for their businesses. There are governments that have or prompting to prohibit ICOs, by putting strong regulations and limitations on them, therefore, find out if your government is pro or anti ICO, cryptocurrency or blockchain. Note that there are a wide range of startups that have been closed due to new regulatory practices, so make sure yours to doesn’t fall victim.
Make everything possible to generate more revenues from the previous adopters and acceptors of your service offerings. Any startup that begins with the plan to make revenue from the inception survive longer, any startup not getting weighty equity funding from the onset, finds it hard to prosper, but this does not mean that it won’t continue living. When people contribute towards your project, it shows that they have faith in it, they will even bring in fresh and clean ideas, suggestions, and different sorts of contributions not necessary money. Having many customers on the onset guarantee business long-endurance than having a weighty initial revenue that might not be easily sustained.
As the Bitcoin price increases, its popularity and the community also grow significantly, but most countries are looking for effective and tangible methods of incorporating blockchain tech. After Bitcoin hit and traded above $20k in 2017, more than 30,000 fresh startups were created in addition to the 26,000 startups that were set up in 2016. So, any strategic entrepreneur should make a good timing if he/she doesn’t want to lag far too behind.
Using an MTBE model, where both traditional (fiat) and digital currency are used, customers will easily access your goods of services more opportunely and this means that your startup will get higher revenues. Always use the commonly adopted cryptocurrencies such as Bitcoin, Ether and Ripple in addition to the native currency of your business platform and if at all you want to completely eliminate foreign currencies, then start reducing slowly on the use of non-native currency in your business, with time you will no longer see the foreign currencies but you will keep most of your customers – avoid making abrupt (embargos) decisions. Put a lot of efforts on making your customers satisfied and let them have faith that as the business gets more stable and popular, the demand for platform native token (PNT) will also continue growing.