Blockchain Tutorial for Business Executives

Blockchain not cryptocurrency

Created by: Jerry Witkowicz – CEO 180FIND

I created this tutorial to help business executives understand what blockchain technology is and what it can do for businesses. And if I haven’t answered your questions,  you can reach me at jerry.witkowicz@180find.com. I will be happy to assist further.

1.   Blockchain Overview

In 2018, the word blockchain became a popular term which continues to be discussed today and the terms blockchain, bitcoin and cryptocurrency are often used synonymously. Everyone talks about them but very few people understand what blockchain is and what it can do for business.

The first use case for blockchain was bitcoin as a digital cryptocurrency. They essentially were born together but there is more to blockchain technology than just cryptocurrency. To understand what blockchain technology can do for businesses, we need to separate blockchain and cryptocurrency. The focus of this tutorial is to help business executives understand what blockchain technology and its future solutions can deliver to businesses.

Today there are 100’s of blockchain startups which are developing myriad of unique technology experiments/projects and some are actually developing targeted solutions. The scenarios described in this tutorial are visions of what blockchain based solutions could do and what is possible. We hope that business executives will gain the fundamental understanding of blockchain potential from business perspective and engage vendors to build specific solutions for their business.

2.   What is Blockchain?

Fundamentally there are two types of blockchains public and private. In a public blockchain, anyone can connect to the blockchain and with an appropriate computer and software and become a blockchain server node. No permission is needed. In a private blockchain which is typically owned and managed by a company or group of companies, permission is needed to join the private blockchain. This tutorial focuses on private blockchain.

Blockchain is a new technology intended to reduce costs and introduce new capabilities by streamlining and speeding up multi-party business transactions and processes. Today each participant in a multi-party transaction records transactions in their own ledger and reconciles it with information provided by the other parties. This requires significant manpower, is prone to errors and is time consuming. Transactions such as banking or stock trading where thousands of small transactions are involved this requires clearing houses Fig 1.0 to validate and process each transaction, assure security and prevent fraud.

Fig 1 and 2

Blockchain introduces a new way for parties which conduct business activities together to share the same transaction ledger thus reducing the duplication of effort and the cost of processing. As illustrated in Fig 2.0, in blockchain all transactions are recorded in a single ledger which is distributed over blockchain network and is shared with every business partner involved.

For each transaction to be recorded in the shared ledger, the transaction information is written into a transaction data block that is uniquely identified, sequenced, secured and validated by all parties involved. In blockchain, each business party involved in shared business activities is represented as a node on the blockchain network

3.   How it Works

To illustrate how blockchain could work in a business scenario, let’s illustrate functionally how a blockchain based solution would work in an order creation and processing scenario.

When a business partner issues an order, new transaction is created on the issuer’s node and is packaged into a data block that includes critical information about; identity of the partner, order information, identity of the block, and special sequence number of the block. This new data block is now shared with all nodes (partners) on the network and all nodes (partners) must agree (provide consensus as in Fig 3.0) that this transaction block is valid before it is recorded into the shared ledger on every node. In private blockchain it can be designed that each partner sees only the part of the ledger/block that they are allowed to view and/or alter. This and the fact that the entire block is encrypted keeps the whole process secured. Any subsequent transactions related to this order e.g. filling the order, shipping the order, payment, etc… that are created by other partners are also packaged into data blocks and distributed and validated by all nodes. Each data block is then connected with the one before and after it creating a chain of transaction blocks (the entire history of the transaction), hence the name blockchain.

Fig 3.png

Fig 3.0 Consensus Process

Once each transaction block is written into the shared and distributed ledger, it is permanently recorded becoming part of the history of the transactions and it cannot be altered or deleted by anyone. This feature prevents fraud by one of the parties. If there is a need to modify an issued and recorded transaction, the modified transaction becomes a new transaction that will be created and will follow the same validation and sharing process.

In this scenario, the key benefits that blockchain technology introduces include:

  • Reduced transaction complexity – The single shared transaction ledger simplifies the complexity of monitoring, reconciling and processing business transitions that would normally be generated and managed by individual business partners in multiple disparate ledgers
  • Increased accuracy – The unique consensus validation process creates almost an instant audit and validation of all transactions thereby increasing the accuracy of transactions between business partners
  • Reduced effort – Transactions are validated, correlated and approved automatically and in real time requiring little to no human effort to process them other than entering changes/updates.
  • More tamper proof – By distributing a shared ledger to all nodes on blockchain network, reduces the risk of transaction tampering and fraud. Tampering with recorded transactions will alert all business nodes and partners
  • Improved security – Reduces the risk of data breaches and theft. Hackers would need to break into all nodes on the network to breach and modify recorded data as a change/hack of one node or several nodes will be discovered by the rest of the nodes in the network during the validation step.

4.   Potential uses of blockchain technology

The distributed ledger based blockchain technology introduces the potential to conduct commerce in a uniquely different and more efficient way than today’s traditional centralized systems.  And although blockchain technology is still in its early stages of evolution and maturity, there are many visionaries who are creating very interesting out of the box thinking and new visions on how blockchain will revolutionize our commerce and our personal lives.

Today there are already number of companies which are experimenting with blockchain technology in areas such as; supply chain management, insurance, asset tracking, insurance,  auto industry, financial transaction processing to name a few.

Let’s explore at high level some examples of potential uses of blockchain technology in different business verticals. Let’s imagine how these businesses could operate differently using blockchain technology.

4.1. Construction Industry

Today commercial and residential construction industries face many logistical challenges that often impact the bottom line costs and timelines. In this industry where multiples of independent contractors and suppliers are involved in a single project which relies on timely and on budget deliverables, managing the sea of many moving parts is always a challenge. More often than not, many projects fail to be completed on time and on budget.

Imagine a future where every contractor and project owner can visualize their projects in what their projects will look like in days and weeks ahead and being able to predict with great accuracy what will happen to their projects. No matter how complex their projects are, they can ask why delays are coming, what is the problem and be able to take action to resolve problems before they impact the project.

4.2. Single Renovation Project with Multiple Contractors

Consider a house renovation project scenario illustrated in Fig 4.0 and how it might be managed today. If there is a general contractor assigned to this project, this individual has to manually coordinate all renovation activities with each independent contractor such as painters, carpenters, decorators, plumbers, electricians, long list of suppliers, cabinet makers, etc…. to determine the status of work activity, adjust for delays, modify schedules, track materials and costs, resolve unexpected problems, update each contractor on any changes and update the overall project plan to ensure that all renovation activities are completed on time and budget.

Contractors, trades and specialists work independently. They exhibit a wide range of organizational skills and often lack good information on the status of work activities performed by other parties in the same project. It’s not unusual to find a drywall installer show up at the job site to put up dry wall only to find out that the work inside the walls has not been completed. This is disruptive and costly to not only the overall renovation project; the drywall contractor now has to reschedule his/her work on other projects he/she is involved. This delay now creates a ripple effect that will cause delays for other subcontractors who are working on this renovation.

Fig 4.png

 Fig 4.0 Managing renovation project today

Let’s consider this drywall installer scenario that just discovered an unexpected delay. As illustrated in Fig 5.0 below, a single drywall installer will typically engage with many projects that run concurrently.  Completing work on time on each project is critical. When a dry wall installer shows up to complete his scheduled work on “Project #1” and finds out that the work inside the wall has been delayed because the electrician did not complete his work on time and he didn’t know this, the ripple effect of schedule changes begins. A delay  in “Project #1” will cause delays in commitments this subcontractor made in projects # 2-5. All clients involved are now affected.

Fig 5

Fig 5.0 Ripple effect of unexpected delay

When one factors in the number of subcontractors and suppliers involved in a renovation project, it is easy to see how quickly things can get out of control.  Most common problems that can be resolved include; other contractors didn’t complete their activities on time and didn’t report it, unexpected difficulties discovered and weren’t reported, contractors didn’t show up to complete their work because they were delayed on other jobs, and the list goes on. This is further complicated by change orders that are common. A small change may require bringing back a subcontractor on an unscheduled task causing yet another ripple effect for this and other projects. Change orders account for most project cost overruns which can easily add up to 10% or more of the project. Most of us at one time or another have experienced renovation or construction project delays and cost overruns and understand the frustrations well. There are always good explanations for why delays happened but it’s usually too late to prevent the ripple effect delays and recover lost time and costs. And inevitably, renovation projects are delayed and run over budget.

Consider the same renovation project scenario but one that is managed using a blockchain based solution as illustrated in Fig 6.0. Imagine that every contractor who is involved in the renovation project has the same status view of all renovation activities for that project on their Smartphone or Tablet application. Using blockchain distributed ledger, every contractor receives instant updates on scheduled work activity status and share the same project view. When a problem is discovered by one contractor, that contractor issues a new transaction/blockchain entry indicating what needs to be done to resolve the issue and if he is going to resolve it and finally, he states the date the work will be done. Now blockchain solution distributes this new transaction to all parties involved. Using consensus mechanism in this distributed ledger, all recipients validate the proposed change, accept it or suggest additional modifications. This collaborative process happens in minutes and when accepted by all parties, everyone now has an updated schedule to work with.

Fig 6

Fig 6.0 Managing renovation project with blockchain based solution

Unlike in today’s scenario where a drywall installer shows up to cover up the walls before the electrician or plumber has completed their work inside the wall, with blockchain solution every contractor would know instantly when the electrician and plumber have completed or delayed their work. Instead of showing up at the renovation site before preceding work has been completed, they can now effectively plan their work to be at the renovation site at the right time to complete their work.

Imagine that every contractor can now visualize what their project will look like in few days or weeks. Sharing the same ledger that shows real time status of changes, each contractor and project owners can predict with great accuracy the status of their project no matter how complex the project is and take actions to keep the projects on time and cost. In this scenario, there is no need for central function or a general contractor to follow up with each contractor and supplier to track deliveries or to discover status. The project owner which could be the home owner could have complete real-time status of all work activities, costs, problems and their resolutions and renovation progress.

4.3.  Single Contractor with Multiple Projects

Let’s expand the single project scenario to illustrate how blockchain based solution could help a single contractor like the roofer to manage multiple projects he is involved in. As illustrated in Fig 7.0, a single roofer has 4 roofing projects to work on during a month where schedule is tight with little spare time between projects. This contractor will make commitments to his clients based on the starting schedule and changes in one project will impact his work schedule in all remaining projects.

Imagine a blockchain solution that serves single contractor who works on many projects like the one in Fig. 7.0. A single contractor like the roofer installs a blockchain application on his smart device and that application enables him to manage (interact with) all other individual projects that he is involved with using a single dashboard. And each project that he is involved with is already managed by its own blockchain application like the one illustrated in Fig. 6.0. This single dashboard enables the roofer to connect and synchronize his entire work availability schedule with all of his other projects he is involved with. When this roofer assigns specific work days to Project # 1, the remaining available days are now visible to projects 2 – 4. When the schedules for projects 2-4 are created, this roofer can assign with certainty his availability to other projects as needed and be able to manage his time much more effectively.

Fig 7

Fig 7.0 Single contractor with multiple projects

If the roofer completes his work on Project #1 earlier than planned, he adjusts his availability and makes it known to projects 2-4 which can take advantage of the new availability and add that to their project. If the roofer is delayed on Project #1, this delay is communicated to other projects which are able to determine the impacts on their schedule and are now able to take action before it is too late. Some may chose to modify their schedule and others may seek to find alternative contractors.

Unlike today where the roofer does not show up in Project #2 on the expected day because he was delayed in Project #1, with blockchain solution in Fig 7.0, information about delays or even faster progress is available from the roofer in minutes. Project #2 can react to roofer’s delays and minimize the impacts on its schedule.

4.4. Large Construction Projects

Now imagine managing a much larger construction project like construction of a major high rise office towers, shopping malls, large residential subdivisions and the list can go on. Managing all individual activities performed by all parties involved is done today but it is not a simple or is always an effective process. The complexities of such projects are hundred fold greater than in a simple house renovation. The opportunities for delays and cost overruns are significantly higher and delays and cost overruns frequently happen.

Imagine if a blockchain solution described above was used to manage mega projects where there are hundreds of contractors, suppliers, specialists and trades involved. The opportunity to unite all of their activities under a single and shared ledger project view that is updated in real time by all parties involved and is shared with all parties involved, would revolutionize the way major construction projects are managed.

Being able to know in real time the status of project activities, managers of major projects would be able to react to problems, delays, and unexpected surprises in real time and resolve them before they impact the project cost and timeline. The parties involved would be able to help each other resolve problems so they can complete their work and avoid costly delays.

Mega projects that would use blockchain based solution would realize major benefits which would include:

  • Construction completes on time and budget
  • Improved quality of constructions
  • Tenants move in on schedule
  • Rental revenue starts on time
  • Reduction in staff needed to manage the project

The possibilities for uniting large disparate and complex work groups and activities are endless with blockchain based solutions. Uniting such complex operations under a single digital view is a goal of every large project. Blockchain technology framework enables small and large organizations to develop specific applications for such purposes.

Need more information?

If I haven’t answered your questions, please contact me and I’ll be happy to explain further. If you have any questions, I’ll be pleased to help you. I know that as a business executive, you may find yourself overwhelmed with online information and technical terms. Blockchain is very new and it does hold considerable value but perhaps not for everyone at least not yet.

 

About the author:

Jerry W

As a co-founder of 180FIND and BenchMrkPro, I leverage more than four decades of entrepreneurial experience in helping companies put the value of their solutions to work on behalf of their balance sheet.

Jerry.witkowicz@180find.com , jerry@bmpro.io

Twitter

linkedin.com/in/jerrywitkowicz

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Restart Your Blockchain Startup

Declining cryptocurrency valuations will drive more blockchain startups to failure unless these companies restart their startups.

As of November 28, 2018 and according to CoinMarketCap, there were 2074 cryptocurrencies and behind each crypto coin is a blockchain startup company. This number isn’t growing as fast as it did in first half of 2018 and there are good reasons for this.

Based on our earlier analysis of nearly 2000 blockchain startups, we found that nearly all startups focused on pure technology solution. They are building a piece of blockchain technology with no clear business focus.

As we shared in our earlier article in Irish Tech News, in our analysis we found that less than 25% of blockchain startups were developing some type of application that could potentially have a market fit if it was properly focused and executed. The balance of startups, see chart below, were developing new blockchain platforms and new type of coins that are usable only with their blockchain solutions.

Projects

These companies raised significant capital through their ICO process. They were well funded at least when the cryptocurrency valuations were high in the first half of 2018 and had the potential to develop practical blockchain based solutions for the market.

This situation significantly changed in the second part of 2018. Cryptocurrency valuations declined to all time lows and now over 900 blockchain startups coins are now worth zero. Many more startups will join this list if they continue on their present path.

Learning from successes – There is still time to make a difference. No one said that introducing a major change is easy. When  Steve Jobs former CEO of Apple responded to a interview question 20 years ago about challenges in introducing technology change, he stated, “I am sure that you can make some demos, maybe a small commercial app that demonstrates those things, the hardest thing is, how does this fit into a larger cohesive vision that’s going to allow you to sell $ 8 billion, $ 10 billion dollars of product a year”. He also said that “one of the things I always found is that you’ve got start with the customer experience and work backwards to the technology. You can’t start with a technology and try to figure out where you’re going to try to sell it”. History proves that this strategy worked well for Apple and it does work well today in every successful business.

Start with customer experience – Blockchain startups can still turn their declining efforts into success. Start with your target customer experience and work backwards to your blockchain solution. Think about what your solution needs to do to deliver the experience you want them to have.

We have analyzed whitepapers which described unique solutions that promised to enable consumers and businesses to conduct business in a way that has never been done before. Eliminating the middlemen, and creating Peer-to-Peer transactions that enable consumers and businesses to transfer funds in near-real time and anywhere in the world are just few examples of promises made. It would be disappointing if these innovative ideas didn’t reach their fruition stage.

There are many examples of why startups fail and history proves that 9 out of 10 startups actually do fail. In the chart below, CB Insights illustrates the top 20 reasons why startups fail. This report which examined 101 failed startup postmortems shows that the two top reasons are “NO MARKET NEED” and “RAN OUT OF CASH”. The same reasons are present today in majority of the blockchain startups that we analyzed. Clear customer focus is missing and the rapidly declining cryptocurrency prices are also rapidly eroding the company’s capital budgets. If allowed to continue, both of these same reasons will eventually drive more blockchain startups to fail.

Startup companies that are still passionate about their solution should not give up. There is still time. Revisit your solution vision. Decide what type of experience your company wants to deliver to your customers and work backwards to determine if the technology you are working on will achieve your vision. You may need to alter your technology development but this is necessary.

Here are few tips on how to start with customer experience first:

Understand your customer

  • Get out of the lab!
  • Don’t outsource … do it yourself
  • Talk to at least 50 people to gain insight into customer needs and if your solution meets their needs
  • Talk to people you don’t know
  • Don’t sell your idea, seek to understand their problem(s)
  • Ask why … a lot

Create Minimum Viable Product (MVP)

  • Create the smallest feature set that enables you
    • To learn and receive feedback
    • Follow incremental and iterative interactions with your target customers and not with a final product version
  • Don’t build a prototype
    • This is not a deployable version with the fewest features
    • It should enable testing a hypothesis
  • This may be a drawing, a slide, a wireframe, clickable workflow, etc.

Gather direct market knowledge

To create business success, knowledge is everything. Here are some proven guidelines from successful companies on how to gather knowledge.

  • You must know more than others know
    • Knowledge about customer needs will be your competitive advantage
    • If everyone already has this knowledge, than it’s likely too late because someone has already solved the problem you are solving or they will solve it soon
    • Knowledge must be firsthand knowledge and direct from target customers. There is no better substitute
    • Reading the internet should only influence your direction and it should not be the base for your decision

Top Reason why fail

Don’t wait until it’s too late. Act now and restart your startup with clear vision of your target customer experience. When you do this, your business will have a clear purpose and you will be part of the revolution that blockchain technology promises.

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When and how blockchain mass adoption will start?

Mass adoption 2

How will blockchain mass adoption start?

Many say that blockchain mass adoption has already started. And there is no shortage of articles which claim that blockchain will disrupt how commerce is conducted in the future and how blockchain will eliminate the middleman. Futurists also write that blockchain will reshape how business organizations are structured and even replace humans in organizational functions.

No question that blockchain is a new and exciting technology which holds the potential to revolutionize our future. Like all other major technologies that were introduced during the past few decades such as the internet, personal computers, mobile phones, they all introduced lasting and irreversible positive impacts on our personal and business lives.

What these technologies shared in common is that they all matured following the same adoption curve illustrated below. Blockchain has already started along the same curve and is experiencing the same emotional ride as previous major technologies did.

Mass adoption

The main trigger for blockchain technology was actually not the technology itself but the rise of cryptocurrency prices. The rise of Bitcoin price to an all time high in December 2017 caught the world’s attention. From that time, blockchain and cryptocurrency became synonymous and this is also where the mass adoption challenges begin.

Blockchain as a new technology holds great potential to significantly improve efficiencies in almost anything we do today. As a pure technology it has the potential to enable us to perform functions we cannot do today. As a technology, it can be adopted by businesses, individuals in any part of the world without needing to be regulated or approved.

Cryptocurrency on the other hand is different. It’s not so much about technology innovation and instead it’s more about global acceptance of different form of currency. Cryptocurrency challenges global regulations and forces the acceptance and approval by governing bodies around the world. Cryptocurrencies face a totally different set of challenges. Today there are over 2,000 unique crypto coins/tokens in the market and the number of new coins continues to rise.

Two Separate Adoption Paths Are Likely

According to Deloitte, as of October 2018, the total number of blockchain projects in GitHub was 6,500. In our own research, we found that at one time, the total number of crypto coins/tokens reached over 2,700. Our research also showed that the main motivation for the 2,700 blockchain projects was the easy access to capital through the ICO (Initial Coin Offering) process.  In less than a year, nearly 1,000 of these projects are dead and their coins became dead coins and list is growing.

Can blockchain reach mass adoption levels in its current relationship with cryptocurrency? Not likely. Blockchain technology can begin to deliver value independent of cryptocurrency. Not sure we can say the same about cyptocurrency.

For blockchain to start the mass adoption journey, it has to be able to do so independently of cryptocurrency to gain momentum. Businesses which are considering and testing blockchain technology have no need for cryptocurrency. They see value in using blockchain more efficient transactions in their supply chain process, legal process, audits and more.

Pure blockchain technology adoption should not be saddled by the separate challenges that cryptocurrencies face. Blockchain true potential can be realized without crypto coins. In fact number of companies including Amazon, IBM and Microsoft are working to create cloud based blockchain networks with focus on creating blockchain-as-service enabling developers to set up and run blockchain networks.

Examples of First Movers

In our analysis of over 1,700 blockchain projects, we looked for projects that focused on delivering business applications. We wanted to understand how these projects positioned their products to enable blockchain adoption. What we discovered was disappointing. Every single project we looked at was being built with almost total disregard of their target customer systems environments. There was an implied expectation that customers will simply switch over to their blockchain product.

This is not a realistic approach. Solution integration with existing environment is a critical requirement of all businesses. Any vendor whose solution does not integrate well will most likely lose the sale.  Blockchain based solutions also face the same expectation from their target customers.

There are emerging trends that illustrate how mass adoption of blockchain technology may start. Here are few examples of where blockchain adoption is either starting or enablers are being developed.

Gaming – According to Loom Network gaming applications hold the potential to be one of the catalysts where mass adoption of blockchain may happen. Gaming systems tend to be standalone environments requiring little integration. Such environments can grow independently into brand new gaming systems.

National Blockchain Network – Australia has undertaken an initiative to build the Australian National Bockchain digital backbone that when completed, will be Australia’s first enterprise grade blockchain network that will enable businesses to collaborate using IBM blockchain platform.

Next Generation Blockchain – Next generation blockchain protocol from Kratos Protocol holds promise of introducing an enterprise grade platform on which vendors and businesses can develop their own applications that integrate well with their existing systems. Today one of the biggest challenges that prevent blockchain adoption is the lack of interoperability between blockchain applications and blockchain and existing business systems. If Kratos is successful and we hope they are, their next generation protocol platform will help vendors build fully interoperable blockchain applications.

 

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Blockchain Revolution – Part 3 of 3 “How To”

1.    Opportunities for “How To”

In the first two of our three part articles we analyzed and shared the discovered landscape of “What Is” in today’s blockchain technology development and what the landscape “Should Be”. To understand what is taking place in blockchain technology 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.

In this article, we share our suggestions on “How To” create mass adoption of blockchain based solutions in the market.

Snap25

2.   Avoid repeating known mistakes

To solve any business problem it’s critical to understand the root cause/s of the problem and not just react to symptoms. There is a famous saying that history repeats itself and if we don’t learn from it, we will repeat it. We need to understand why so many startup companies fail. We want to avoid making the same mistakes they did. Yes it’s also critical to learn from companies that succeeded.

Recently CBInsights  compiled a list of 269 post-mortem essays from startup founders (non blockchain) to pinpoint the reasons they believed their company has failed. Their results clearly show that 42% of startups were working on solutions for which there was no market need. In the chart below, other key reasons stand out also. For example, 29% of startups ran out of cash and 17% of products had no business model. If the company is chasing a market that has no need for its solution, the company will burn cash at a high rate, not earn revenue and will quickly ran out of cash.

Drawing a parallel to today’s blockchain startups where in our analysis we found that 57% of startups are developing another blockchain platform and 25% of are developing specific applications without a clear target market, these startups are following the failed model. How do blockchain startups join the “How To” succeed strategy?

Top Reason why fail

3.   Adopting the “How To” succeed strategy

Today blockchain startups are repeating the same mistakes that failed nine out of ten startups of non blockchain businesses. In our analysis we found that blockchain startups are developing technology and applications without validating the market need. Almost all of the blockchain projects are pure technology and not business focused. Continuing with this strategy will certainly be a kiss of death for the startups.

So how does a startup shift its strategy towards success? Here are some proven tips used by successful companies on how to ensure that there is a market need for what your business is developing and plans to sell.

Validate the market need

  • Get out of the lab!
  • Don’t outsource … do it yourself
  • Talk to at least 50 people to gain insight into customer needs and if your solution meets their needs
  • Talk to people you don’t know
  • Don’t sell your idea, seek to understand the problem(s)
  • Ask why … a lot

Create Minimum Viable Product (MVP)

  • Create the smallest feature set that enables you
    • To learn and receive feedback
    • Follow incremental and iterative interactions and not with a final product version
  • Don’t build a prototype
    • This is not a deployable version with the fewest features
    • It should enable testing a hypothesis
  • This may be a drawing, a slide, a wireframe, clickable workflow, etc.

 

Gather direct market knowledge

To create business success, knowledge is everything. Here are some proven guidelines from successful companies on how to gather knowledge.

  • You must know more than others know
    • Knowledge about customer needs will be your competitive advantage
    • If everyone already has this knowledge, than it’s likely too late because someone has already solved the problem you are solving or they will solve it soon
    • Knowledge must be firsthand knowledge and direct from target customers. There is no better substitute
    • Reading the internet should only influence your direction and it should not be the base for your decision

If you are a blockchain startup and you are developing or plan to develop your blockchain solution, examine how your company gets firsthand knowledge from your target customers? It’s never too late to shift your business strategy to put your company onto a path for success. If you don’t have firsthand knowledge from your target customers, you likely don’t understand the real market needs

Create a go-to-market plan

Before you build you final product, create a business road-map that explains these four critical segments of every successful business.

  • Who your target customers are and be able to name specific businesses and geographic locations
  • State your value proposition that your target customers will understand and which will motivate them to invite you to their business
  • Define how you will sell and support your solution
  • Define your revenue plan clearly stating how you will earn revenue and how much

Don’t wait to complete your product, act now. If you need help, we will be happy to have a conversation with you. We want you to be the one in ten companies that succeeds. Why not become the company that helps create mass adoption of blockchain technology in the market and start the business transformation revolution.

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Blockcgain Revolution – Part 2 of 3 “Should Be”

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.

2 of 3

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.

Snap18

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.

Snap14                                   Modern Phone                                    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.

 

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