It’s not easy to build a technology company. Especially when that technology is blockchain.
Our team has been asked to speak and present at numerous events over the past year. We often talk about our vision, our team, the latest news on blockchain, and our successes thus far. But we’ve started to notice that the challenges of building a business, and in particular a blockchain business, are not often discussed. We feel that by sharing the challenges we’ve heard, seen, or experienced, we can continue the collaborative, productive discussions that started at last month’s Fintech Australia Collab/Collide conference. And, hopefully, begin to move toward solutions.
As we see it, there are three categories of challenges to building a blockchain business. First, there are challenges that anyone- big or small; new or old; Australian or not- will face. Second, there are challenges that startups in particular face. And finally, there are challenges that we at AgriDigital, with our hybrid agtech/fintech solution and goal to revolutionize the agri-supply chain, are up against.
Challenges for Everyone
As blockchain is new, there’s very little that’s clearly defined or well-established about building a successful business in this space. There’s technological, regulatory, and revenue uncertainty. For example, even just picking the right type of blockchain to use is not easy: blockchains of all types continue to face their own challenges, such as security concerns, meaning it’s hard to be confident in an underlying platform. Talk of new types of currencies and the need for regulatory changes and new standards creates additional uncertainty. And finally, unlike in SaaS or software generally, the blockchain space lacks tried and true go-to-market strategies and business models, creating revenue uncertainty.
Building a blockchain business right now also involves navigating the hype cycle. Blockchain is undoubtedly getting a lot of press these days, especially here in Australia. But some are wary that there’s more hype than real potential at this point. Riding the hype cycle can be advantageous for startups; however, it’s a challenge to find partners (and investors) who are able to distinguish substance from fluff.
Challenges for Startups
There are additional challenges for new businesses (i.e., startups) that incumbent firms do not face. In fact, incumbents themselves pose a challenge for startups in the blockchain world. The current financial system, based on hundreds of years of embedded mental models and paradigms, is one in which banks are the dominant players. As startups challenge the status quo, they will face pressure (at best) from incumbent firms and must figure out when, and with whom, to collaborate, compete, or outright disrupt.
Startups looking to revolutionize an industry or bring an entirely new technology to market have to balance being truly innovative with not recreating the wheel. Innovation is key to success in the blockchain world: one cannot just digitize existing transactions via a blockchain and expect to achieve success. Instead, true innovation involves looking at completely new ways of doing business. But beware: startups must remain based in tried and true entrepreneurial best practices. Solve real problems. Identify a beachhead market and find early adopters. Build a world-class team. Manage costs.
Here at AgriDigital we’ve faced all of these challenges, as well as a few we feel are unique to our industry and approach. For example:
- Blockchain or chains: what is the best approach for our global, cross-commodity use cases?
- Digital currency: how do we advance the industry status quo and regulatory environment without being dependent on others for our success?
- Changing asset forms: how do we build a robust model of an asset that encompasses its full lifecycle (e.g., from a delivery of wheat to cattle feed to steak on a plate)?
- IoT adoption: with whom do we collaborate to ensure our system interoperates with accurate, real-time data feeds?
Solving these challenges is not easy, but it’s a lot of fun. If you’re the kind of person who wants to help us solve these problems, please get in touch. We’re always on the lookout for good people.