April 3 — new cyber-economy spring for the powerful and proven ‘old economy’ concepts
April 3rd is marked as the day D for investors as the music streaming service Spotify makes its public debut on New York Stock Exchange. But April 3 is the day in the history when the other promising cyber-economy venture will go live.
Spotify is currently valued at $ 20 billion, potentially making the streaming service company the fifth largest IPO in IT history, after Alibaba, Facebook, Snapchat, and Google.
Investors feel positive about the upcoming IPO despite the fact that Spotify faces significant challenges, having posted the $1.5 billion loss as of 2017. But these challenges are of financial nature, while there is no doubt about the uniqueness of Spotify role as the marketplace in the growing e-music segment, with the global significance.
“Marketplace” may sound rather traditional after the world has seen so many self-proclaimed “disruptive” technologies. But nowadays, as the Spotify valuations clearly indicate, investors’ focus shifts from ‘disruptive’ to “mirror” technologies. Mirror technologies take a market segment that have existed for decades, if not for ages and address it in the innovative way. By doing so they make a safe bet on the proven market’s propensity to pay and augment it with the most cost-effective operating model the new technologies can provide.
Secure and predictable revenue streams combined with low-cost and scalable delivery model result in hefty profits and, hence, high valuations. That is what we will see on April 3.
But April 3rd is the big day not for the music marketplace alone. Another promising company — a European fintech infrastructure startup Fund Platform — also goes for an unconventional public sale on April 3, through an ICO.
Just like Spotify, this startup is a marketplace, i.e. two-sided platform. As the music streaming service brings together musicians and their fans, and the assets that change hands (or ears) here are the songs and money, Fund Platform creates an ecosystem for investors and projects operating with the digital assets.
The appetites of the startup aren’t a patch on Spotify — they plan to raise $30 million, but the goals are truly ambitious. This company follows the pattern of Spotify — take a proven business concept from the old economy and implement it flawlessly in the cyber-world. For Fund Platform the prototype is eBay, that was valued at $47.12 billion as of March 2018.
The rise of the digital
The concept of a digital marketplace appeared in the 90s when the world was all over Internet and dotcom boom. The web became a part of everyday lives of millions, radically changing their consumer behavior. Suddenly all goods and services, from Tetris to capital goods, became available online.
The year of 1995 marked the new dawn. It was then that the giants of the new retail industry — AuctionWeb (future eBay) and Amazon — were founded. Just in a couple of years, it became clear: it is not just that this business model works good, but it grows at a phenomenal pace. In 1997 Benchmark Capital, a venture whale from Silicon Valley invested $ 6.7 million in eBay. When the company went public in 1998, its stock price jumped from $1.87 to $ 53.50 on the first day of trading.
Why did it happen? Was it a miracle or a balanced and timely move? The macro-economic data give the answer.
eBay was at the right time in the right place, addressing the demand for an efficient marketplace by the potential users the number of which grew exponentially, as internet access became a norm in almost each and every household.
It is strikingly a similar picture today, cyber (or crypto) assets rapidly gain in importance in the global economy. In 2012, cumulative capitalization of the cyber-assets was only 0.002% of the global GDP, while in 2017 this figure skyrocketed to 1.053% — more than by 52 times! Looks pretty familiar to what many of us saw in mid-90s in what was then called ‘e-commerce’. Every day dozens of blockchain projects enter the market attracting funds via ICO and issuing their coins. According to the statistics, 382 tokensales were successfully completed in 2017, raising in total more than $6 billion.
Today ICOs raising millions of dollars are no longer a talk of the town. But only few of them tell how much money the founders have invested to raise such funds. In some cases, it is like “money for money” situation — you need big money to attract much more money. That’s why today we face not the competitions of ideas, but the competition of the founders’ and VC capitalists’ purses.
On the other hand, by analysing in-depth and honesty the so-called “under-performed ICOs” one would arrive to a surprising conclusion how many innovative ideas haven’t been implemented, because the founders didn’t have money to promote them, and often lacked in skills. Those cyber-economy entrepreneurs would be much better off, should an affordable and efficient marketplace, like eBay, existed for them.
Fund Platform solves literally the same problem that eBay has effectively solved 20 years ago — provide a reliable, secure, affordable platform where the new cyber-economy supply (both retails supply and wholesale supply) will be meeting the demand (investors). The assortment of goods that change hands on Fund Platform are cyber-assets, that will keep on growing, same as the by then unmet demand for the virtual marketplace that eBay has met 20 years ago.
How to build a bridge that links both sides together the same way eBay has connected thousands of vendors and private individual with the buyers worldwide?
Demand breeds supply
According to Reuters report, there are 110 hedge funds that invest digital currencies. In total, they manage about $2 billion. Besides, dozens of new ICO projects come to the market every day. To make it almost complete, let’s not forget about 500 thousand funds that exist in the ‘real’ economy today and many of them think seriously about ‘going cyber’. And — to make it fully complete, at least for the couple of next years till the new use cases will surface — there are millions of retail sellers that have cyber-assets to sell and wait for the marketplace to make it happen. Some of such vendors/sellers do have the assets that can be made ‘cyber’, without even knowing it — the new Fund Platform marketplace will quickly unleash this immense potential.
People come to marketplaces to find whatever they want: a book, a cab or a job. Today goods for sale are free disk space, minutes of watching the TV, Mflops of a CPU chip, let alone ubiquitous tokens. Depending on the marketplace the assets and payment methods may change, but the mechanism and behavior stay the same. Simply put, if the model has already been proved perfect for B2C (Amazon), B2B (Alibaba), C2C (eBay) businesses, why not use it for crypto-assets trade?
As Fund Platform founder, an 18-year old entrepreneur Nikita Shevchenko says “There is no need to reinvent the wheel when it’s possible to play safe by identifying the proven demand zone and fencing it with the new technology — to the benefit of the users and investors. We are uniquely innovative technology-wise but aren’t doing anything futuristic from the ‘old economy’ perspective. We just bring together investors and cyber-assets at one place and give them all opportunities to grow, invest and get profits. We do not ‘grab land’ in Wild West style, we build roads in cyber-economy’s Great Plains that open the opportunities for many. Our roads are the infrastructure that will serve the ‘gold rush’ of today but will be in place — and importantly — in use long after the gold rush is over.”
Having adapted the eBay lessons to the new cyber-economy realities, Fund platform represents a C2C service whereby two parties can communicate directly and conveniently with each other, share information and transact without any intermediaries.Fortune favors the brave
eBay started the new era in e-retail. Then Uber followed its example in e-commuting and transformed taxi services globally. They were the pioneers opening new opportunities to both providers and customers. When the demand is real and historically proven, then the business model that addresses it first is likely to gain the laurels, no matter how small the company is. That’s statistically proven and fundamental.
So, April 3rd is a date to mark in the calendars with 2 tick-marks: Spotify will steal the show, no doubt. Mind the newcomer Fund Platform, an eBay-like startup for cyber-economy. Pretty soon we will see if the two newcomers will become a good evidence of the success of the ‘mirror’ business modelling approach.
About Fund Platform
Fund Platform (fundplatform.io) is a European IT company that has provided infrastructure services to Internet investment funds since 2015. Fund Platform’s main product is ‘Deep Green’, a comprehensive suite of inter-connected applications that form an innovative marketplace for the cyber-economy, helping clients buy and sell funds in a secure, high load resistant and affordable way. The Fund Platform engine is based on NEM, a technology that is inherently scalable and free from the issues and concerns typical of other blockchains. Fund Platform provides trustworthy and responsible scoring for all investment vehicles listed. Currently, Fund Platform has its key business locations in Latvia and Russia, where it serves clients from the EU and Eastern Europe. A client office for Asia is to be opened soon.
Nick Shevchenko
Nick Shevchenko is a trend-setting IT entrepreneur and a seasoned young CEO, at the helm of Fund Platform, a company he launched in 2015. Prior to Fund Platform, Nick personally invested in then-nascent cyber-economy and provided IT support for crypto-funds and ICOs. From his own practical experience and research, Nick obtained an in-depth understanding of all the major blockchain technologies available and their best use cases. Nick’s latest project is the ICO for Fund Platform, which features a MVP with existing clients, first round of seed investments successfully closed, senior expertise from top-tier international strategy consultants and a strong and motivated team.
