As crypto is one of hottest sectors in tech right now, it’s no wonder that everyone is trying to hop on the blockchain revolution. Yes, with a tremendous amount of innovation and new, exciting technologies going on, this is the second coming of a tech gold rush. And if you’ve been looking to possibly venture into starting your own project, there are a few key points you should consider. Check them out below:
Where Your Passion Lies
First and foremost, if you’re going to be working in crypto, then you need to have a passion for whatever it is that you’re after. Make no mistake; crypto isn’t just a get rich quick scheme or a means to fundraise an idea that you may or may not pursue. Because while as noted by CNBC, with crypto surpassing venture capital last year with $1.2 billion in early-stage funding by August, that rate is guaranteed to stay. And as such, you need to make your idea one you genuinely feel is going to change the world.
Begin by making a list of where you think blockchain tech could be useful and why. It’d be wise to start with an industry that you either currently work in or have previously, giving you a knowledge base and connections that could be valuable to push this thing further. Additionally, try looking at what practical usage the blockchain has in this industry, as well as why that’s useful to others. Because while it’s great to say that you’re disrupting a field by implementing a decentralized protocol, not everyone necessarily needs blockchain to thrive.
What Your Model Will Be
Once you’ve established where your passion lies with crypto, it’s time to start thinking about how you’re going to apply a model to it. This is perhaps the most crucial part of your success because while blockchain technologies can be pretty adaptable for a developer, they’re also something that can only be executed once. And although crypto is still relatively new, this is something the industry has seen some early failures on already. In fact, according to MarketWatch, approximately 46 percent of ICOs from 2017 have failed already, which is a pretty staggering statistic considering; and one you should definitely avoid.
I’ll note that if you aren’t the development type or don’t feel confident in your abilities to create a decentralized application on your own, then I’d highly suggest you stop what you’re doing and get yourself a technical co-founder. Not only will they give you a sense of security, but you’ll additionally have someone there to bounce ideas off of before making critical decisions. Furthermore, try looking at models of other projects and how they structured their tokens. For example, if you were looking to create loans collateralized on the blockchain, then looking at something like the stablecoin model of asset-backed crypto might be advantageous to ensure your success.
How You’re Going To Finance This
Although everyone loves talking about how huge ICOs have been, financing these projects isn’t as easy as it seems. Not only do you have to find a way to give yourself the runway to live through your token sale, but pay any costs associated, including legal fees, rent, contractors, and any other necessities to getting this thing off the ground. Even though the average for ICOs was around $8.55 million last year (accord to Hacked), it still takes a lot of progress to get to that point, which is something you should prepare for.
To get started, take a look at whether you can get any pre-ICO private token sale funding. Although this will require you to go through the traditional VC routes, it also gives you some safety and security through the process. If that doesn’t work out, then possibly looking into some business credit might be a good route to go as well, especially if you’re able to get moving quickly. All-in-all, the ultimate goal is to give yourself enough headroom to truly focus on your business, giving you the best chance to become sustainable.
Where Your Competitors Lie
Finally, as it’s smart to consider with any business before you go diving in, make sure that you understand where your competition lies and how that affects your gameplan. For example, as noted by CNN, with 34 percent of the US workforce involved in the gig economy, it might be a good product to create automated payments for mass services. The competition here would most likely be things like echecks, as well as other electronic payment systems. Take a look at what might be in your arena, as this will be what could make or break your blockchain company’s success.
What are you most excited about in starting a crypto project? Comment with your answers below!