1. Opportunities for “Should Be”
In the first of our three part articles we analyzed and shared the discovered landscape of “What Is” in today’s blockchain technology development. To understand what is taking place in blockchain today, we looked at over 1,900 blockchain companies that are developing or plan to develop blockchain technology solutions. We examined the landscape of blockchain companies, their projects, investors, and the direction these companies were taking.
Our findings were not very encouraging. We found that; 57% of the companies are building new and better blockchain platform, 25% of companies are building specific applications and 15% of companies are introducing another unique crypto coin for their own solution use. We also discovered that all projects have a pure technology focus and place little to no emphasis on how the company will monetize their solution.
This lack of strong business focus coupled with the high percentage of companies building new blockchain platforms indicates that today’s blockchain technology is still at a very early experimental state. For blockchain to become the new mainstream technology that would revolutionize how we do business in the next decade, significant changes are needed.
In this article, we explore the opportunities for blockchain solutions and what needs to happen for blockchain to achieve the “Should Be” state of revolution.
2. Creating mass adoptions
There are many future thinkers who see great opportunities for blockchain and even digital currencies. In today’s blockchain concept, cryptocurrency is an integral part of the blockchain technology. In most cases they are designed to be inseparable. There are many opinions on the future of blockchain and cryptocurrency as one entity and as separate entities.
On July 2, 2018, Reason and The Soho Forum hosted a debate between Erik Voorhees, the CEO of ShapeShift, and Peter Schiff, CEO and chief global strategist of Euro Pacific Capital. Both featured guests presented strong views on the potential future of bitcoin, other cryptocurrencies and fiat. Although the audience voted in favor of cryptocurrency, this debate does not end here. The future of digital currency is tied to blcokchain technologies that are still experimenting. A quick acceptance of cryptocurrency without solid adoption of blockchain technology is probably an unlikely scenario today.
Future thinkers like Don Tapscott share their exciting and optimistic visions of the future with blockchain technology as the mainstream enabler that will revolutionize how we do business in the next 5 to 10 years.
Research companies like Gartner share a more cautionary perspective on the present landscape of blockchain technology.
“Blockchain is developing quickly, but significant business challenges and technology gaps remain before widespread use cases and ways to generate value emerge. CIOs are under pressure to guide decisions on if and how they should implement blockchain but struggle with how to apply this technology to meet new business challenges.”
What is encouraging is that there are debates and opinions on both sides (pro and con) of blockchain technology. These often opposing views are the catalysts that drive innovation. In the last three decades revolutionary technologies such as PC’s (Personal Computers), internet and cellular technologies all shared similar beginnings which faced skepticism and optimism. They all evolved from being completely discretionary to indispensable every day tools. Today, we can’t imagine how we could operate a business without these tools let alone doing without them in our personal life.
Crossing the chasm – Geoffrey Moore of Chasm Institute has been advocating for decades that for every new technology that is introduced it has to cross the chasm.
Before new technology reaches the mainstream market, it follows the same process. According to Geoffrey Moore, the early market is made up of “Early adopters who are a rare breed of visionaries who have the insight to match an emerging technology to a strategic opportunity driven by a dream”. Their core dream is a business goal and not a technology goal. Driven by these goals they will take a quantum leap forward to eventually revolutionize how they conduct business. Securing early adopters and proving the solution value helps businesses cross the chasm to engage the mainstream markets. There are no shortcuts to skip this chasm. Succeeding with visionary early adopters is the right start but the real revenue is with the prudent buyers, the pragmatists.
Today (2018) blockchain technology holds a promise to become the everyday business and personal tools that we will simply not be able to live without one day. The road to this future is no different than the path previous revolutionary technologies took. We need to learn from their experiences and apply the lessons to blockchain evolution as well.
3. Past mass adoptions models
In the late 1980’s when the first PC was introduced, it simply had no practical use in our business and personal life. These behemoth objects consumed large office desk space, took two people to lift, and had a very unattractive green characters displayed on a small but heavy screen. And yet they were intriguing when you turned them on. Personally I recall installing our first PC in our office, everyone asked, what can it do? The most common answer was it can do many things. Actually, the potential was that it could do many things but it wasn’t until 3d party companies developed business and personal applications that the true potential of the first PC’s begun to emerge.
Similarly, if we look back at the internet and the cellular technologies, the same patterns emerged. The first internet connection had very few if any practical uses. It was slow and not very useful. The first cellular phones were large and could only make phone calls. It was difficult to get excited about these technologies when they first entered the market. Consumers and businesses resisted accepting them as mainstream technologies.
This is what a cell phone looked like in 1984 and how it looks 44 years later in 2018. We all witnessed the evolution but likely forgot how it started.
Cellphone in 1984 Now in 2018
Today blockchain is in a similar state of early stage of evolution. It holds a promise of delivering great things but today it still delivers little to no practical value for business and personal use. Today blockchain faces the same skepticism and optimism that challenged the previous major technologies. The encouraging part is that there are critical lessons we should learn from past revolutionary technology introductions, lessons that should be applied to blockchain today.
4. Key lessons learned
The most important lesson learned from all new technology introductions is that pure technology focus alone leads to few successes. Every new technology solution must have a business focus. It must be delivering value to potential users who will eventually by the solution. It’s as simple as that.
Blockchain technology innovators need to add significant business focus to their projects. Our analysis clearly shows that almost all blockchain projects have pure technology focus only. It’s as if their solution is looking for a problem. This has to change if blockchain companies wish to transform their companies into revenue earning businesses.
History is full of examples of failed singularly technology focused companies. In fact today there are already over 900 blockchain companies whose token price is at zero. If this model continues, more blockchain companies will be added to this list. Fortunately, this does not have to be so.
5. Strategic targeting to “Should Be”
The most prudent strategy for all blockchain companies is to add a strong business focus to their plans. There are essentially two options blockchain startups can consider. One is to build a standalone business around the product they are developing and the second is to build a solution that buyers will buy to transform their businesses. In both options, engaging early adopters is critical.
In the standalone business and depending on the solution, the blockchain companies could consider creating a service type business SaaS (Software as a Service) whereby target customers buy services from the company. In the 2nd the product based model, the company would be selling their products to target customers for their internal deployment and use.
In both models, engaging early adopters (target customers) is critical. No successful company has ever built a successful solution without engaging early adopters during their development process. Working closely with a target customer enables the company to learn about the target customers business needs and helps fine tune the solution for best business fit. Regardless how exciting the new blockchain solution might sound to technology enthusiasts, it is the target customer who determines the value the new technology adds to their business.
Companies that don’t engage early adopter visionaries are at risk of failing. To cross the chasm, engage visionary customers early. If your solution promises to deliver high value, you should have no problem finding interested customers. And if they show little interest, revisit your business focus. This may be a sign that you need to adjust your solution vision. If your solution is not attracting early adopters, dedicate some effort to understand your target customers. Focus on understanding their business, their customers, and their business needs. Readjust your solution to help your target customers improve and grow their business. This is not rocket science and yet nearly all of today’s blockchain companies are skipping this step.
To create a “Should Be” state of technology revolution, blockchain companies must cross the chasm. There is no short cut to transitioning blockchain to mainstream markets.
If your company is interested in building strong revenue based business one that will help revolutionize how business is conducted in the next 5 to 10 years, and you need help, contact us. We will be happy to have a conversation with you.