2021 shows a promising start for new crypto and blockchain projects due to the cutting-edge source of liquidity. New tokens have become an incentive which in turn has lead to significant activity. Every day, the influence of decentralized finance (DeFi) in the sector grows. This has been associated with the recent popularity of the alternative to IEO and ICO fundraising, Initial DEX, which offers (IDO), that connects projects directly with its community. DEX and NFT are also trending. Once you have found your niche, it’s time to plan for successful development and a seamless launch.
Minimum Viable Product
We recommend beginning with the adoption of an MVP that your team can develop and test on short notice. The ability to test and record findings quickly is crucial in order to proceed to the predefined iteration stages. Such an approach allows you to improve and develop your MVP at every stage along the way. It is vital to avoid overcomplication of the MVP in order to proceed with easy-to-launch features.
Challenges to look out for
- Be prepared for uncertainty. You never know what the market will look like tomorrow. It’s always a question of whether Bitcoin will continue and whether the altcoins will follow. 2020 was a turbulent year that taught founders to always be prepared for any type of market chaos — and to always have a Plan B.
- Make sure your project can’t be hacked. In 2020, hackers made off with $154 million USD from 17 DeFi projects alone. Celebrities have had their identities used to ‘endorse’ crypto scams, and European supercomputers came under attack. If your project is token-based, then you need to ensure the tokens cannot be exploited. Any type of breach or cyberattack can undermine a project’s credibility and the trust of its users. If you need additional cybersecurity support, be sure to reach out to specialized teams.
- Convince users you are in for the long haul. In 2020, only 34% of crypto projects were introduced to the market successfully. For this reason, new startup founders need to come up with community-based incentives and activities that build a loyal user base.
Seek the right investors
Look for those early-stage investors that are ready to not only help with funding but are also willing to offer advice and support along the way. More often than not, these types of investors easily convert into an initial customer-base, providing you with networking and additional investment along the way. If you’re launching your first blockchain startup, then you’ll want some additional guidance and resources to maximize the valuation in the long term.
Pick the right team members
So, you’re done with all the legal paperwork and it’s time to start hiring a team to lead your project. At this stage, be sure to interview and seek assistance from colleagues who understand your vision and the long-term nature of your goals. If you are a newly-established blockchain startup founder looking for an experienced remote team of experts, then you’ll want to look over some diverse project portfolios. Contact the professionals that stand out and ask them questions designed to test their communication and problem-solving skills. Consider contacting the blockchain and crypto experts that make up the INC4 team. Their specialists work closely with you, helping develop custom decentralized solutions of any complexity.
If you’re looking for an in-house team, it is essential to understand the ins and outs of the required blockchain technology stack and determine whether your prospective candidates are up-to-date with the latest tool-testing methods and emerging trends. I don’t like the idea of using an automated interviewing process to select a core team. It’s much more effective to set up mini-hackathon contests and see how the contestants fair against one another — especially relating to problem-solving. You should also consider using ‘on-demand’ experts, as the team’s composition depends on your startup’s complexity and budgeting. Typically, the most experienced candidates are experts in creating complex blockchain platforms, including wallets, dApps, decentralized exchanges, and tokenization.
Start with your marketing
Throughout past ICO madness, the marketing sector was often exploited by means of unchecked paid promotions and dodgy activities on social media. Although those days are long over, still, your marketing team must think beyond the void in order to win the hearts and minds of users.
Define the value proposition. Identify and explain how and why your blockchain solution is unique, better than the ones your prospective users may already be using. Present them with a fully-functional solution, complete with incredible benefits and unique features. This is easier to pull off if your blockchain startup is planning to operate in an innovative field with little competition. You need to stand out as a brand that occupies a specific position in the minds of your target audience.
Bonus: Although marketing blockchain solutions can be a tough game due to the diversity of the market, the following blockchain and cryptocurrency businesses have nailed it. Bitcoin was the first to utilize a ‘digital money’ model and still goes by it. Vitalik Buterin’s Ethereum analyzed the gaps in Bitcoin and offered a whole new application for cryptocurrencies. Coinbase is now highly associated with safety and security in cryptocurrency exchanges.
Watch your language. Tell your story using non-technical terms that are not difficult for the public to understand. Unnecessary use of crypto jargon can scare people off.
Embrace the community. It is vital to uphold stable community relations with the insiders of a project. This strengthens the support from both partners and investors. Conversely, it is even more critical to engage with external community members who will support and drive a project forward.
Get noticed. The best-case scenario is as follows: Bitcoin hits its all-time high as Tesla buys BTC worth $1.5 billion.
Five trending blockchain startups to watch in 2021
Let’s take a closer look at which startups are doing their best to reshape the industry this year.
The guys at Coinfirm know a thing or two about accountability and cybersecurity. The platform was designed to put a dent in the money laundering industry and hold those responsible accountable without revealing the user’s actual identity. Their AML/KYC-based platform runs over 270 checks relating to user activity in order to assess their reputation and spot any potential risks — if a deviation in buying, spending, or the holding of crypto is detected, the system is alerted.
OriginStamp provides a unique solution that allows users to upload files downloaded from the web, get them timestamped, and track their origin. All the files are then stored in the public blockchain ledger which is accessible to everyone.
This Estonian startup acts as an infrastructure operator for PoS public blockchains. Stakin utilizes reliable, efficient and secure nodes on PoS protocols employing cloud and tier 3 colocation providers. Stakin also exploits sentry nodes, live monitoring tools, and hardware security modules to guarantee its validation operations run with over ‘99% uptime’.
Artificial intelligence combined with decentralization. Fetch.AI positions itself as a ‘world-changing project’. It is built on a shared ledger and links IoT devices and algorithms to enable collective learning. Fetch.AI uses AI to detect the attributes of unauthorized transactions and stores the trace in order to prevent future intrusions.
Bizzlet is a German startup whose goal is to create a blockchain platform to ‘seamlessly store, manage, integrate, and distribute a company’s cryptocurrency portfolio across multiple wallets with different integration depending on a business’s needs. Bizzlet runs tests in order to find innovative ways to bridge the gaps in Web3 interactions between computers and humans.
The coming years look promising for the founders of crypto and blockchain startups. Many initiatives did not survive the crisis of 2020 which has cleared the way for upcoming projects and healthy competition among thriving projects. It is my belief that a project’s success will be determined by its community, user trust, and its ability to integrate new features and gamification.
The INC4 team and I have prepared a fundraising report for a greater overview of the blockchain market. Claim your free copy now.