This article will look at some of the key to blockchain startup success and the lessons learned over the years with blockchain technology. Here are some traits that distinguish successful blockchain startups from the rest. These are based on our observations and experience as an early venture operator in the industry.
A clear and well-defined value proposition, business strategy, and market fit
A blockchain startup must have a clearly defined value proposition, a solid “go-to-market” strategy, and a demonstrable market fit as a prerequisite for success. Simply having a good idea and a well-designed tech solution is insufficient to attract clients, businesses, or individuals who have previously dealt with incumbents. Deep industry knowledge and a strong understanding of its key pain points are required to develop a solution that solves the problems and fits into an existing value chain.
The ability to articulate the problem and how their product or service would provide solutions
Does the problem need blockchain? is a frequent query in the world of blockchain startups. A straightforward response to this question is undoubtedly preferable. Still, the frequently employed justification that “this could be done faster with a central database” overlooks all the potential advantages that blockchain technology may present.
Most IT systems, core banking software, exchange engines, and so forth have functioned admirably without blockchain technologies up until now; therefore, the question is less about a replacement and more about how blockchain technology might be able to enhance certain aspects of this process.
Interoperability with other technologies in their business solutions
Due to their extensive integration into networks connected by the internet, artificial intelligence (AI) and the internet of things (IoT) are logical allies of blockchain technologies. These three fields may complement one another, and specific solutions may benefit from using IoT, AI, and blockchain technologies.
Applications for “smart crop insurance” could serve as an illustration of this, where sensors in the fields send raw data to servers, which then feed particular data (AI) to smart contracts (blockchain) via oracles to determine whether insurance payments need to be made to the farmers’ blockchain wallets (cryptocurrency payments).
A multifaceted team with expertise both in and outside of the blockchain industry
For most startups, especially blockchain startups, that want to completely disrupt markets or combine a team with a variety of skill sets and experiences is crucial. Without having a thorough understanding of these industries, to begin with, several blockchain ventures have set out to disrupt them. Unsurprisingly, this has led to numerous failures. Therefore, blockchain startups must use external team members or advisors to gather information about the markets in their particular verticals.
Having industry advisors on board also assists entrepreneurs in keeping their feet on the ground when developing theoretical models. While their vision is integral to their strategy and success, it must be achieved through a realistic step-by-step approach, which some blockchain visionaries find challenging.
A well-thought-out funding model and strategy
With open-source development, neither the company nor its shareholders have exclusive control over the code that is written and implemented, which is why many blockchain startups have made this decision. Open-source technology is now frequently used in large systems, but some investors might not recognize the benefits of such a model. Entrepreneurs should therefore focus on adding value and generating revenue as soon as possible to be much less reliant on outside funding for the survival of their ventures. They should also remember that their chosen funding model will affect future investment options.
The ability to anticipate change and adapt in a rapidly evolving industry
To be successful, a blockchain startup must learn to adapt to a rapidly changing environment. This entails keeping a finger on the pulse of the industry while remaining focused on what the founders believe to be the winning strategy.
By anticipating long-term competitive and regulatory dynamics, entrepreneurs can prepare for potential market trajectory shifts and avoid strategies that may lead to dead ends. Some of the most successful blockchain startups are those that correctly predicted changes in market direction or regulatory hurdles early on and built a structure that could accommodate these changes.
Conclusion
That’s all about the key to blockchain startup success. As the industry evolves and matures, the operations of a blockchain startup are bound to be influenced by new market trends, rising technological standards, rapidly shifting crypto sentiments, and changing regulatory conditions. If you need success in your blockchain startup, contact SmartOSC now!
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