How blockchain startups can stay competitive in today’s landscape
Bitcoin was born in 2008; Ethereum in 2013; and cryptocurrency was first mentioned on the hit television show, Billions, in 2018. After more than ten years, the technology is finally part of our cultural discussion, but those in the industry are still exploring its applications and working hard to keep up with the pace of its rapid progress.
Is no rule the new rule?
While blockchain has become the startup world’s favorite child, it’s also the cause of much debate for government regulators.
China banned initial coin offerings (ICOs) in September 2017 as a protective measure for its economy. But the government still has its eye on the technology, not wanting to fall behind the rest of the world, and is creating funds to support innovative solutions built on the blockchain, including Hangzhou’s Xiongan Global Blockchain Innovation Fund and Shanghai Yangpu District’s Blockchain Industry Guidance Fund.
Industry insiders are consistently dealing with undefined guidelines, which means we’re always learning and adapting, whether it’s from the perspective of an investor, founder, cryptocurrency exchange, consulting firm, or journalist. The most challenging part is the constant need to be flexible and customized.
Chairing a consulting firm, I’ve always preached to my team and my clients that the key to surviving in such an environment is to be flexible, while keeping the same goal and core team. Unlike a traditional startup that focuses on one market to start, blockchain startups need to be more distributed.
For instance, almost all blockchain startups have to roll out in the most influential markets–China, Korea, and the U.S.–at the same time to make an impact, as each plays an important role and serves different purposes.
China is home to many world-class public blockchains; the environment is friendly for building ecosystems, decentralized applications with full support, and go-to-market attempts because local blockchain startups are more willing to collaborate without long, drawn-out negotiations.
Korea boasts many active retail traders, and the U.S. is best for branding and endorsement. Each market also evolves at a different pace. Not being flexible might lead to difficulties and failure if a market has already changed its demands or regulations.
On top of being flexible, having a customized approach is also crucial. Founders need to assess their assets: What are the problems to be solved? What talent is required? Who are the stakeholders and investors? Who matters the most? There are a series of questions they need to ask themselves to make a strategy their own.
A solid strategy can be advised, but never duplicated. I’ve seen startups pursue the recent initial exchange offering hype on account of others’ success. The fundraising scheme’s failure, both in terms of the exchanges and projects, could have been avoided if either party carried out proper due diligence.
Secure talent now
As with every other new technology, securing the right talent is a challenge. I’ve learned that this problem is a shared pain point for founders of top-notch blockchain startups. Leading investors and BAT (Baidu, Alibaba, Tencent) alumni agree that blockchain is in such an early stage that it is almost impossible to find suitable candidates.
Larger startups end up paying a premium, and smaller startups resort to spending a significant amount of time cultivating talent. As of right now, it’s still a bearish market, so it’s an excellent time to secure talent. Also, many token funds and blockchain projects shut down due to unproven concepts, poor execution, and overspending when money came so quickly during the bullish market, enabling others to recruit more easily now.
Consensus,’ ‘staking,’ and ‘De-Fi’ are terms that reflect how blockchain is reshaping the world. As a technology and tool, it has provided entrepreneurs with the means to revolutionize business models. China, among other countries, was engaged in ‘Internet thinking’ for the past few decades. Now, it is in the era of ‘blockchain thinking.’
Every industry and realm can be integrated with blockchain. It optimizes supply chains, tokens are replacing loyalty points and being circulated worldwide, and cryptocurrency as a payment medium is lowering costs and friction for international transactions. ‘Blockchain+’ is an inevitable future.
Just as we learned from the dot-com bubble, blockchain is not a cash cow, and should be viewed as a new system that deserves tactful growth. The technology is extremely demanding, and its leaders should be, too.
About the Author
Alyssa is the founder and CEO of Panony, one of Asia’s earliest blockchain consulting firms dedicated to providing localized knowledge and expedient access to global market resources. She’s currently based in Shanghai and Seoul. Alyssa received an LL.B. degree from National Taiwan University and previously held roles in a high-tech law firm, Ogilvy, Isentia, and Vogue.