Want to succeed in blockchain? Act now and trust your instincts.
Unlike other, more established industries, emerging technology cannot offer investors or entrepreneurs any proof points. It takes business know-how and the courage to be a first-mover to succeed.
Blockchain technology is steadily gaining recognition for its ability to overcome industry inefficiencies, from trade finance, to supply chain, to real estate tokenization. As this nascent technology matures into a force for good, providing a platform to achieve new levels of business and consumer collaboration by enabling more secure, controlled and trusted access, investors and entrepreneurs with an eye for opportunity are taking note. In my role as General Partner at Blockchain Valley Ventures (BVV), with a team of venture capitalists investing in blockchain-enabled businesses, every day is centred on working with the most innovative start-ups in the space and on tackling the question of how this industry will evolve.
My journey into the blockchain ecosystem has taught me about how powerful blockchain technology can be — a distributed, global technology that has the power to reshape the processes of doing business. This begs the question: how can we actually reach mass adoption? Blockchain has the potential to fundamentally change industries by increasing trust and transparency, and enabling value exchange across business ecosystems. In order for blockchain to reach its full potential, we need sector-wide participants to work alongside entrepreneur-driven initiatives.
Despite the obvious potential of blockchain, we are still at the beginning of the technology’s development, and so much remains unknown. As investors and company decision makers want proof points to base their decisions on, some may turn away from blockchain projects, citing early development and lack of precedent. These are the same investors and companies who will miss out on the unique opportunities that blockchain can unlock.
In such a young industry, proof points are never readily available. By the time these proof points do exist, the opportunity will have passed and innovations have to be acquired, which is costly. The blockchain industry will be defined by those who push themselves and their businesses to take a leap of faith; to step forward based on strong business and financial instinct.
In 2008, with no guarantees and only my own judgement to thank, I took a leap by leaving my position as Vice President at IBM to become a venture capitalist. In 2010, I moved into eSports — a space where no (traditional) entity saw the potential for commercial success. Now, with the benefit of hindsight, it seems obvious that the field of eSports would erupt into one of the biggest in the world, but back then, no book, no consultants, no guidelines existed on what this eSports industry would look like. On this basis, we founded ESL and built the industry from the ground up.
This mirrors the same cycle as any technology that was once small and is now worth a fortune — the world wide web began in homes and garages in California. Social media was born out of college dormitories. The earliest investors in these spaces had no tangible indications of how their bets would fare, but were generously rewarded for their courage to back such disruptors.
Blockchain, speaking in broader terms, is in a similar position now. The unyielding potential and innovation coming from projects in the market today promise so many radically new ecosystems and business models, yet we are totally unclear as to how the space will evolve. It is up to the various market forces to decide where blockchain will go.
For too long, leaders in traditional business and finance have sat on the sidelines, afraid to take the first swing at something new. But, to succeed in an emerging industry, you must be prepared to step in and take early, well-considered stakes. You have to build strategic and relevant partnerships, and thus create your own synergetic ecosystem, firmly rooted in the emerging business. As you play a part in creating this new market, you become a crucial component of the market yourself.
Based on my experience, I have no doubt that, this year, revenue-generating use cases will put blockchain centre stage. Blockchain will provide real-world solutions to business-critical issues such as the management of multi-participant, multi-jurisdictional supply and value chains beyond mere logistics.
The fundamental questions for investing in a blockchain business are the same for investing in any business — Where is the revenue now? Where will the revenue streams come from in the future? Who can capture this best between corporates, startups, and public initiatives? There are approximately 10,000+ blockchain startups in the world, of which only 3,000 are truly active and investible. On top of that, we are now seeing numerous corporate initiatives come to light, lending new prestige to the blockchain space.
Who will survive and win the race? This mostly depends on the sheer will of the leaders of blockchain startups and projects; the ability of these leaders to secure funding; the power of the business proposition in bringing together ecosystem participants; and the capacity for these startups to gain critical traction and to expand on early success. This is truly pioneering work, and right now we are being propelled forward by first-movers.
A fascination with emerging technology trends and opportunities, from Artificial Intelligence (AI) to blockchain; a strong will to be at the forefront of a dynamic and challenging industry; and my experience in leading multiple complex endeavours as consultant, corporate leader, turnaround manager and startup entrepreneur, has taught me that no new business venture is too daunting when you are determined to succeed.