Today blockchain promises to become the 21 st century technology that will revolutionize how we do business in the future. Future thinkers like Dan Tapscott of Blockchain Research Institute share a very exciting vision on how blockchain will revolutionize our businesses landscape and even how organizations are structured in the future. BenchMrkPro business experts also agree that blockchain technology holds great potential to change the way business commerce is conducted in the next few decades.
Blockchain is not the first revolutionary technology that changed how we communicate and conduct business. Over the past three decades, PC’s (Personal Computers), internet, and cellular technologies are among the many disrupting technologies that have already changed our way of life and how we do business.
If we reflect on the past 30 years, history thought us critical lessons. When personal computers, internet, and cellular technologies were introduced at conceptual levels, they were met with skepticism and they were also embraced as a potential. Change did not happen overnight. It took time for the new paradigm of thinking about these technologies to set in. It wasn’t until useful value based applications were added to these technologies that we saw their mass adoptions take off. Today, no one needs to be convinced of the value internet, PC’s or mobile devices deliver to our personal life and business.
Blockchain technology today also faces similar skepticism and positive embraces. The potential that blockchain holds at its current level of maturity, still needs to evolve and be distilled to help create mass adoption. This will take time. History is full of examples of how to successfully introduce value and how to avoid mistakes. We should not dismiss skeptics and instead, we should strive to demonstrate true value of blockchain to them. As we experienced with previous revolutionary technologies, skepticism drove innovators to examine the grass roots of their innovation to help create balance thinking about practical uses of new technologies and value delivery.
Today, blockchain is still surrounded by considerable hype mainly fueled by the ICO (Initial Coin Offering) financial gains opportunities. There are many promises that may or may not be realistic, and many examples of new startups that are repeating mistakes of the failed past. During this phase of blockchain innovation, there are many investors who gain financnially and many who lose their investments. We are repeating mistakes of the past.
For blockchain to become the 21 st century technology that will revolutionize our commerce, blockchain startups need to be driven by business vision on how they will deliver value on blockchain. It’s more than just setting up a company and completing an ICO to raise capital. Blockchain companies have an opportunity to lead this innovation to help create the next revolution.
To understand the current landscape of blockchain technology developments, BenchMrkPro looked at over 1,900 existing blockchain companies. In this 3 part article, we examine the rapidly growing landscape of blockchain companies, their projects, investors, business adoption opportunities and challenges.
In our 1st article, we wanted to understand how blockchain technology is evolving today. We wanted to understand the “What Is” state about the current blockchain landscape in terms of; the companies’ business vision, company structure, their products and the direction their projects are heading to.
In the 2nd part, we examine the opportunities for blockchain solutions and what needs to happen for blockchain to achieve the “Should Be” state of revolution.
Finally in our 3d part of this article, we share our suggestions on how to create mass adoption of blockchain based solutions in the market.
To understand the true potential that blockchain technology represents to businesses and consumers, BenchMrkPro looked at over 1,900 active blockchain projects that have completed their ICO (Initial Coin Offering) and those that are pre-ICO. In total we found 1,683 blockchain companies that had a market cap of more than a dollar. The balance of companies is facing potential demise and closure.
In our analysis we made several key discoveries. Over 900 or 57% of blockchain companies are building new and better blockchain platform. For a new technology that is still in very early stages of maturity, this signals that the core blockchain platform is not ready for mainstream mass production of blockchain based applications. There are too many opposing views on; what is efficient and what needs to improve, implementation of proper security measures, system scalability challenges, use of utility tokens, protection of privacy, and even use of specific protocols. Understandably, every new core technology goes through a shakeout period before it finds its mainstream strength and stability.
In the total of 1,974 companies that we examined, we found a mix of initiatives. As illustrated in the chart below, the largest group of projects is focused on developing new blockchain platform. Over 900 companies are solving blockchain technology problems that include, slow transaction processing, poor scalability, questionable privacy, inefficient platforms, security improvements and the use of utility tokens.
Over 400 companies are developing specific applications. Some of these include applications to manage physical assets like automobiles, information management, real estate sales, sports specific use, gaming, casinos, adult content and more.
Nearly 250 companies are introducing unique new coins for specific uses. Some are even entertaining as shown below.
We also found that nearly all projects shared similar if not the same thinking patterns. This is probably not surprising as all of these companies were created using the same white paper template and followed the same ICO process. Their model is almost a carbon copy of each other and they all share these same patterns:
In each of the projects we looked at, we focused on the structure of each project to better understand the probability of each project reaching full potential. Again we found a repeating pattern that raised concerns about the likelihood of success for these projects. We discovered that projects shared the same structure which includes:
These patterns are similar to how the dot.com companies and their projects were structured. The pattern of build it and they will come is clearly present in today’s blockchain startups projects. If history teaches us anything, it should be to avoid repeating the same mistakes that failed majority of the dot.com companies in the early 2000.
For any startup to build a successful business, the company needs a well balanced and experienced core leadership team. In the companies we examined, we looked for a good balance of business, technology, operations and sales skills in the company leadership team. What we discovered was again a repeating pattern in the core team structure. The core leadership teams shared these attributes:
With companies that we spoke with, we also found a repeating pattern. The CEO’s of companies that have already completed their ICO’s and raised their capital; they displayed overconfidence that their technology will simply attract customers once completed and are less open to discussions on how they will monetize their solutions in the market.
In the pre ICO companies, CEO’s were more open to discussing their project as a business. They were more open to discussing and learning about developing their business plan and open to suggestions on how to monetize their solution. They were keen to attract investors to their upcoming ICO’s and were interested in developing business strategy that would bring their projects to a successful ICO and sustainable business.
The ICO process definitely creates excitement and considerable hype around blockchain. To understand the full landscape, we needed to understand the impact cryptocurrency investors have on today’s blockchain companies and their projects.
To understand investor’s behavior, we looked at many social media channels and chats where crypto investors shared their views. This is an excerpt from the Youtube channel that shows the investors reactions to recent major price changes in Bitcoin and other popular coins. This example illustrates the depth of many conversations between crypto investors.
What we found is that most investors rely on speculative hype that fuels volatility in trading and price manipulations. Here is a typical chat discussion chat about the crypto market:
Main investments decisions are made on here say information with not facts to justify investment decisions. What we found was:
For blockchain technology to create the next revolution vision shared by Don Tapscott and other future thinkers, the present landscape of the 1,900 blockchain companies’ initiatives has to change. The present landscape is not as encouraging as the visions when over 57% of the companies are still focusing on improving the fundamental building block of blockchain. This signals that the blockchain innovators believe that the blockchain platform needs to improve first.
Specific blockchain applications represent 25% of all projects worked on today. In these projects we see little emphasis on engaging potential target customers early in their project. This of course increases the risk that many of these projects may actually be out of synch with real business needs. Experience teaches us that successful technology companies engage their target customers early in their projects to learn about their needs and to validate their solution value.
Close to 15% of companies are introducing unique crypto currency tokens. These are planned for specific applications. Market acceptance of digital currency is already being challenged by the fact that there are over 1,900 different and unique crypto currencies. Introducing more unique crypto coins is not helping businesses to accept digital currency.
In summary, blockchain technology does represent a great potential to revolutionize how we conduct business commerce in the 21st century. However, today’s landscape of blockchain companies and their projects clearly demonstrate that blockchain companies need to create a more strategic roadmap that delivers on the promised potential. Blockchain companies need to start demonstrating value and create the needed pull from businesses to start the blockchain technology adoption and revolution. We will write more on this topic in our 2nd part of this article