If you’re hovering on the threshold of investing in cryptocurrency or blockchain technology, or considering an entrepreneurial foray into the space, now could be your time.
About three years ago, the sole topic of conversation among entrepreneurs and venture capitalists was cryptocurrency. At the time the market was reaching its apex, with a meteoric rise in value since Bitcoin burst onto the scene in 2009.
In the years following Bitcoin’s launch, the digital asset industry has exploded, with the corresponding appearance of the crypto-trading sector. This still new trading domain is worth roughly $277.9 billion right now, and in 2017/2018 it was worth even more.
Blockchain technology has untapped potential
Everyone wanted to get in on cryptocurrency, despite the erratic movements of the cryptocurrency prices this year. But while there were signs that a decline was coming for cryptocurrency, there was still the huge untapped potential of the blockchain technology it is built on.
Just as the naysayers (or experts if you prefer) predicted, crypto slumped hard. Bitcoin plummeted in value by more than 80% and regulators stamped hard on possible initial coin offering (ICO) scams.
However, these peaks and troughs are to be expected in a brand-new trading space. History and experience tell us that. We are now seeing a resurgence for crypto companies and blockchain start-ups, making it the ideal time for keen entrepreneurs to get on board.
Resurgence of energy in the blockchain space
I’m seeing a lot of focus and energy in entrepreneurs in the blockchain and cryptocurrency space, and it appears that the sector is growing in opportunities and optimism once again. I’ve noticed a change in discipline, with start-ups coming out of the blocks with a fully realised product under their belt, rather than a white paper and an ICO based on the theory of what might be achieved. This is a welcome development in a maturing space.
Fundraising is more traditional, with venture capitalists, angel investors and skilled funding experts increasingly joining these start-ups. It’s less about crowdfunding, and more about taking blockchain seriously.
All of which convinces me that now is a good time for investors to seek out an opportunity, and for entrepreneurs to launch their blockchain start-ups. If it is something you’re considering, here are a few factors you should take into account.
Grasp the investment and start-up opportunities
As blockchain continues to mature, there are opportunities to be grasped. Savvy entrepreneurs and investors should look for those that offer an immediate application in the real world, and solid customer traction. You should be prepared to give more than financial backing to the project, and take a long-term view of the potential of this tech.
I can’t stress enough the value of a start-up that can show you realistic, tangible customer interest. It could be a brand already signed up to test out the new platform, or a marketplace that can already show results. Blockchain is becoming familiar to consumers, and therefore you should expect to see how the start-up intends to use it in their world.
And if you’re looking for funding as a start-up owner or entrepreneur, then be prepared to demonstrate exactly what real-life problem your platform solves for customers. The investor already knows that the workings of the platform or service will be built using blockchain tech, so that can’t be the hook. You have to wow the investor with the applicable use of your product – blockchain is just the tech that makes it happen.
Seek investors who bring more to the table
Start-ups in this space should also look for investors who bring much more to the table than funds. Advice from investors cannot be underestimated as part of the process that will lead to success. It’s arguably more important than money at key stages of the venture.
The right kind of early-stage investors can give you so much more than funding, including previously out of reach connections, more investors and possible customers.
The final factor to slot in place is the people you work with. Many newcomers to the crypto and blockchain space are still stuck in short-term thinking patterns. Rather than focusing on the real-life value of a product, they get swept up in the idea of releasing a new currency. While buzz is always good, and this kind of enthusiasm important, this market is maturing. And that means colleagues, partners and investors need to fully appreciate the long-term transformative potential of the technology.
Cryptocurrency could potentially totally alter the global economy, how countries trade and the financial systems around the world. It’s a long-term potential. Founders of blockchain start-ups should get people on board who are thinking in this way, and understand that they need to invest time, money and patience to reap the rewards.
Right now is always the best time to start something, and in the blockchain space this is doubly so., The technology offers us almost unlimited potential, and with the right planning, forethought and long-term planning, blockchain could be the investment opportunity of a lifetime.