Recently I’ve found myself discussing what impact blockchain will have on both tech companies and large corporations. It seems like everyone is trying to understand how it fits into their strategy. I often abstain from making predictions about technology because they are frequently off and frankly, I’m no expert.
However, this one is different.
I find myself reading what’s going on with blockchain and how it will impact digital products enough that I can offer a few perspectives that intrapreneurs and tech-minded CEO’s will find useful.
My journey to understand bitcoin and other crypto-currencies, and more importantly, the blockchain technology underpinning it, all started eight months ago. In general, intrapreneurs are wondering whether blockchain threatens their established business models and processes, what opportunities it provides, and how it should factor into strategy. In this article, I’ll share a few of my thoughts on where blockchain stands today in helping intrapreneurs better understand the landscape without having to learn what hashes, nodes, and cryptocurrency all mean.
Blockchain is still young and unproven
There is no shortage of interesting blockchain projects. From technical projects like Lightning Network, to consumer-facing efforts like the digital rights management platform in Po.et, and all the new takes on existing technology (such as Sia cloud storage, which is simply a decentralized version of Dropbox/Drive/Box); blockchain projects abound. While these examples are making amazing progress, the reality is that most others haven’t even made it to proofs-of-concept. Many are simply theoretical and the technology hasn’t quite proven it can follow through on its promise.
Contrast that with startups you see on Crunchbase. In these cases, their success isn’t technological but rather hinges on market adoption, design and sales. In blockchain projects, most are in early stages of research and testing; their success is intrinsically tied the technology itself. As a result, it’s important not to overreact to perceived threats. In most cases, simply being patient and tracking how these proofs-of-concept materialize is more effective than pouring money into copycat technology that may or may not work.
Blockchain is about where the Internet was in the early 90’s
I’m going to dramatically over-simplify a few massive technological movements, so bear with me here. The Internet, not as a technology, but as a consumer-facing utility came onto the scene in the early 90’s, but most people simply didn’t know what to do with it. Outside hacker and tech-savvy online communities, the broader public couldn’t completely grasp what it was for. It took ISP’s like Prodigy, Compuserve and AOL to make it accessible through UI design and marketing. AOL was the most successful by effectively creating a “UI to the Internet” that even your grandmother could understand.
Blockchain, while over a decade old, has barely begun to inflitrate the public sphere. This means that the general market opportunity for consumers and B2B products will take a while longer to grasp it. Now, this does mean there is a lot of opportunity—much like AOL saw in the 90’s—but for most businesses, you might be better off waiting for others to chart this path before jumping in.
The blockchain revolution really needs more designers and marketers
Following my last point, the general wisdom follows that firms wanting to invest in this area need to retrain developers in blockchain technology or find developers well-versed in it already. While this is true, the reality is that for any projects to make a leap, they will need designers and marketers that know how to translate the obscure into something that 1) consumers can understand, and 2) people want to buy. If you take a look at the websites of many of the top ICO’s (initial coin offerings), you’ll see a lot of references to whitepapers, some pretty rough branding, and overall incomprehensible websites.
If you are truly considering a blockchain project, it’s important to understand that the need for market positioning and design are even higher than for traditional tech projects.
The impact of design is evident on projects like status.im, and pigzbe. Their projects are clear, and their brand is strong. If you are truly considering a blockchain project, it’s important to understand that the need for market positioning and design are even higher than for traditional tech projects.
There are more short-term opportunities in operations than in the consumer space
There is a vocal counter-culture of bitcoin true-believers who think crypto-currency will take over the world one day. Myself, I’m on the fence. But what I tend to believe—at least for the moment—is that the opportunities in blockchain lie in creating operational efficiencies for large firms. In the above example of Sia cloud storage, the value prop of decentralization won’t resonate with consumers for a while. Whereas current cloud storage has hinged market adoption on convenience, maybe Sia can compete on security. Until new value props are discovered, companies like Sia will have to compete with other cloud storage competitors on the same value props—blockchain won’t matter much to consumers for a while.
Eventually blockchain will overtake the landscape and those built on the technology will have a distinct advantage, but I think that’s a ways off. In the meantime, it’s important for firms looking for blockchain opportunities to first think how the security, decentralization, and trust innate to blockchain could increase operational efficiencies.
This article is by no means exhaustive and I certainly do not mean to imply there aren’t opportunities in blockchain. Instead, I think it’s simply a reality check about where the technology is at. I believe it is here to stay, and its future dominance is inevitable. As a result, when thinking about this strategically, I’d advise keeping close tabs on the technology, and the projects to be aware of new opportunities or disruptors as they emerge. As you become more versed in the domain, strongly consider how blockchain could open up new opportunities or augment new digital products you’re bringing to market.