Upon sitting down at the Malta Blockchain Summit’s ICO pitch today, I realized something. The uncertain regulatory space is not the only factor hurting Blockchain firms trying to convince private investors to buy into their solutions. The biggest issue in the space now is: some firms are not really proposing true solutions.
Yes, it has come to that.
One particular pitch, which involved an app trying to incentivize people to work out regularly in connection with the Blockchain and the Internet of Things faced considerable scrutiny from the panel of Shark Tank like judges. Central to this scrutiny was the idea that it just was not clear how people would be incentivized by this particular platform? In the words of one judge, “your idea is all well and good, but it will not go beyond people that already count working out as a big part of their lives.” Another added to this by saying that the company representative had skipped over any clear explanation of why their platform would cause more people to work out.
What was perhaps even more telling was the fact that the speaker had glossed over exactly why the Blockchain was even needed for their product. It might surprise you to hear this but, companies skipping over why they are using the Blockchain has become a sort of matter of course in this space, especially over the last year. Failing to do so means failing what is perhaps the foundational concept of a successful startup.
It has to solve a problem that a certain group of customers need to be solved. In connection with this, it has to be clear why you needed to use what you used if you included any technological frameworks like the Blockchain in your offering. As we all know, if these sort of tenets are not followed, then judging by Porter’s theory of Competitive Advantage, no competitive advantage truly exists. Even judging by more relevant frameworks to today’s business world like the theory of “Transient Advantage,” the same may be said to be true. If this does not become a habit in the Blockchain space, it is safe to say that somewhere close to the majority of ICOs and even security token offerings will continue to fail until it does.
No matter what the technology is, there has to be a compelling reason for using it. Otherwise, there is little hope for the average person to be able to understand the business if specialized investors and business insiders cannot.
By: BGN Editorial Staff