The old saying that the chain is as strong as its weakest link applies to blockchain technology projects today. After analyzing over 2,700 blockchain projects, we found their weakest link. Majority of projects we looked at have no practical business focus and have made no contacts with target users. They are simply engaged in another experimental blockchain project.
Blockchain vertical analysis – Many blockchain experts promote blockchain as the disruptive technology that will revolutionize how commerce is conducted in the future. Financial systems are targeted as the first to be impacted by blockchain solutions. With this in mind, BenchMrkPro chose to focus on finding blockchain projects that are actually developing a solution that will revolutionize the financial sector. We selected payment systems technology vertical as our target.
In our analysis we looked at 2,790 blockcain companies made up of a mix of companies that have completed their ICO’s (Initial Coin Offering), companies that had an active ICO and companies that had an upcoming ICO. This mix represented today’s blockchain technology landscape.
For our selected vertical, our objective was to find which and how many blockchain projects were developing blockchain based payment solutions that promised to modernize or replace today’s fiat based payment systems.
Critical weaknesses – Out of 2,790 active blockchain projects, we found 50 projects that were developing something or promised to deliver a blockchain solution that will enable merchants and consumers to make payments using digital currency. Of the 50 projects that came close to doing something in this business vertical, only few (Bitcoinus and Stellar) shared a vision and plan to engage today’s fiat based companies and systems to create an adoption path for blockchain technology solutions by classic businesses.
The balance of blockchain projects operate in a silo mode. Most lack clear business focus, have no engagements or contacts with classic businesses and lack a go to market plan for introducing their solutions to today’s classic businesses. It almost felt like they were following an old and filed strategy, “build it and they will come”. This is a major weakness that will likely derail many of the blockchain companies and their projects. Unless these projects embrace the fundamental need to engage target customers and users early in their projects, blockchain adoption will be long and difficult.
What needs to change – If blockchain technology is to revolutionize how commerce is conducted, today’s classic businesses will need to adopt blockchain through mass adoption. However, this is not going to happen if blockchain companies work in silos. Blockchain companies must engage their target customers early in their projects. No successful company has ever developed a practical solution without first understanding their customers business and their needs. To understand target customers needs, it has to start with a conversation that follows with active engaments. Threatening the classic businesses like banks and others that blockchain will somehow replace them is not the answer.
In our analysis we find that majority of the core leadership teams of the blockchain startups hold strong experience and passion in developing new technology. These young technology developers are driven to develop the next generation platform or system. What is missing in most of the core teams is strong business experience. This is like having a great soccer team without strong forwards or football team without a strong quarterback. It’s this critical balance that must be present to drive these companies to create a mass adoption of blockchain technologies in today’s classic business. It won’t happen by just developing new blockchain technology. You can build but they won’t come.
Recommendations – For blockchain companies to become successful businesses, they will need to sell and earn revenue. To sell blockchain solutions to classis businesses, these solutions must enable target customers to transition from where they are today to blockchain. And they will need help.
With over 2,700 blockchain projects in the works today, finding practical business solutions is impossible. Almost all of the published white papers focus on two main areas. They describe in often great detail the technology being built and the justification for the company’s ICO. Very little to no mention is made about target customers, businesses, users and how the company will generate revenue. What this means is that each of these companies have no plan on what to do when they complete their project. Even in live conversations with many CEO’s the idea of addressing this critical segment is brushed off as insignificant. We will leave this point here for your own conclusion. To help classic businesses mass adopt blockchain technology, blockchain companies must expand their focus to include:
Does it sound overwhelming? If it does, this means you have not completed your company’s plan to create a successful and sustainable business. You need to take action now to position your company and your business for success. If you need help, let’s have a conversation.