According to global research firm Gartner, blockchain's business value-add is set to exceed US$3.1 trillion by 2030.
Now that you are planning to start a blockchain business, it's important to know where to begin by understanding how the blockchain technology has grown from a mere idea to the most sought after technology.
According to Diar, the net worth of the blockchain sector rose to US$3.9 billion in 2018, which is a massive 280% rise as compared to the whole of 2017. Blockchain is not about just cryptocurrency; it's a lot more because of the wide range of applications in various industries. This promising future has inspired several entrepreneurs to start their blockchain businesses.
The basic rules of blockchain business are going to be the same - a strong founding team, a sound product, excellent marketing, and of course, investors. The competition is growing every day; new businesses and prospects in this domain are cropping up as we speak. And, given the pace at which the blockchain sphere is growing, there might be a blockchain boom very shortly.
As per a 2019 Deloitte survey, the relevance of this technology is increasing, with many companies seeing it more and more from a strategic point of view.
Even though there's much optimism among companies about this technology, as evidenced by this survey, you need to start your blockchain business with the utmost care and caution. Below are a few points you must know before starting your blockchain business.
The founding team must have excellent technical skills.
To establish a successful blockchain business, you must bring together a team of specialists who know the nitty-gritty of this field. The founders will have to wear several hats to drive the business to success. You will have to gain in-depth knowledge of the various blockchain platforms (Hyperledger Fabric, Hyperledger Sawtooth, Ethereum, Enigma, EOSIO, Corda, Cardano, Dragonchain, Ardor, etc.) and languages used in blockchain (Simplicity, Solidity, Rust, Rholang, CX, Java, C++, C#, Python, Go, etc.). There's no denying the fact that entrepreneurial success depends on the synchronicity of the initial founding team.
You must be a versatile multi-tasker. You are not only bringing the capital as you need to understand the volatility of the blockchain market, but also how it works. Research on the technology as much as you can, try to have a lot of open conversations, share ideas, and humbly resolve conflicts.
Attracting investors to the volatile crypto market takes work.
The health and volatility of the crypto market are going to determine the ease of raising capital for blockchain business. Always have a great idea in hand and a working prototype to demonstrate before approaching investors.
You may be a team of co-founders, but it is advised to contact investors with a talented team. Make sure to be ready with all business questions and answers before approaching investors.
With blockchain business, we have the concept of Initial Coin Offering (ICO). It is similar to Initial Public Offering (IPO), but it is going to be in the form of cryptocurrency instead of company shares. This method can be much more lucrative to the investors as compared to the usual company shares method. If the business succeeds, these cryptocurrency token will grow in value. Investors can then trade them on a cryptocurrency exchange platform to earn huge profits.
Get more out of your investors, not just money.
Seek investors who are not only silent partners for your blockchain startup, but also who can and are willing to give you expert advice, guidance, and help throughout the journey. It might be challenging to find such people, but it's worth it. Initial investors are the people who help shape up the company.
Be clear and concise when talking to third-parties and vendors.
Due to the newness of the technology, most people don't have a clear understanding of blockchain. Most people confuse blockchain with bitcoin. You need to be extremely careful when talking to third-parties and vendors about your company and product. Make sure to give all minute details and make sure to bring all onto the same page.
Deloitte Consulting LLP Principal Linda Pawczuk, Deloitte's consulting leader for blockchain and cryptocurrency, says:
“We believe executives should no longer ask a simple question about blockchain but, rather, a broad set of questions reflecting the role of blockchain can play within their organizations.”
This clearly reflects how clear and precise you must be while putting forth your business's significance before your clients and vendors. You must be able to demonstrate and explain blockchain's significance as an emerging technology to foster innovation and also showcase actionable ways in which it can simplify and strengthen the business in the real-world scenario.
Find trustworthy advisors
You will have several business questions to ask your advisors. As stated earlier, your initial investors need to come in as your best advisors. Apart from them, finding trustworthy advisors for this cutting edge technology is highly recommended. However challenging it might be, it is not impossible to find trustworthy advisors if you can evaluate them as per the following aspects:
- Blockchain experience-Experience handling blockchain startups will be great, but you may even choose advisors from your industry.
- International exposure-Advisors having knowledge about global regulations would be a plus.
- Published content-If they have contributed to a white paper or any content online, which is of significance, evaluate that and the reactions to it.
- Intellectual and social network-It's great to have an advisor on board who has access to the right people for financial, marketing, recruitment, or other needs.
Apart from this, you'll have to reach out to your network to find advisors with a track record of handling successful projects and hire one based on the recommendations.
Of course, it is better not to have an advisor than to have an untrustworthy person who may even leak your confidential blockchain business ideas to third-party. The best way to earn trust from an advisor is to get him on as an investor.
The best time to start a blockchain business was yesterday.
This might sound a bit motivational and cliche to many, but it's a fact. The best time was yesterday, and the second-best time to start a blockchain business is now. The blockchain industry, with the potential of transforming the entire planet, is now in its premature stage. Even big players like Google, Amazon, and Microsoft have not yet established themselves in this space. As such, startups coming up now stand a high chance of becoming extremely successful in this niche.
The road ahead
After creating a lasting impact on the finance industry, Blockchain is all set to transform other sectors of the industry as well. Today, Blockchain is finding applications across diverse sectors, including governance, cybersecurity, IoT, supply chain management, digital advertising, and forecasting. While the US is currently the industry leader in this arena, China is projected to emerge as the next leader in this domain, by taking up more advanced blockchain projects by the year 2030, according to PwC's forecast.
But no matter which country you are in, this list of important factors will determine the success of your blockchain company.