Research: Product Development in the Era of Blockchain — What to Look For?
With its growing popularity, Blockchain has shown to be an attention-worthy advancement in data security and management. The interest in Blockchain technology has spread through different industries like wildfire, bringing in huge investments. According to Researchgate, nearly 10 billion dollars will be spent on blockchain programming in the year 2021.
Image 1: Blockchain spending worldwide / Source
As you can see, the graph indicates that spending doubled each year so far. This might paint an optimistic picture, but the reality is not that bright for everyone, and things usually do not go so smoothly as it seems. There are many small as well as large scale projects that have failed to bring their Blockchain solutions to life.
According to the report published by the China Academy of Information and Communication Technology (CAICT), almost 92% of blockchain projects have failed. It also reported that the average lifespan of blockchain projects is just 1.22 years.
Although there is a wide variety of reasons why some of these projects have failed, one of them stands out — they often simply do not deliver. The development team starts breaching deadlines, and the company eventually launches a product that hardly matches the description of the one widely talked about during the funding stage.
In this article, we will go deeper into the world of Blockchain development and find out which are the key elements for choosing the right development company. To explore this topic well and obtain valuable data for all of us, we have spent over 20 hours talking to ten leading Blockchain development companies about their scope of services, work process, rates, development methodology, and many other topics.
It may be easy to find a blockchain developer nowadays, but finding a skilled blockchain engineer that can get things done is often a tricky task.
So, what qualities should a good blockchain development company have? Good reputation? It goes without saying. Affordable rates? Cheap doesn’t always mean good. This time we will go beyond these simple pieces of advice. Here is how the market currently looks and what to look for in a blockchain development company:
First, we would like to list all the companies we have talked to so that you can easily keep track of the data that follows. Here’s a list:
- Ideas By Nature
- Leeway Hertz
- MVP Workshop
Why did we choose precisely these companies? Well, we wanted to talk to the best. After checking countless lists of the best Blockchain development companies and many (and we mean MANY) reviews online, we selected these ten. Actually, we selected 15 companies, but five never replied to our emails (we resent the emails after a couple of days). So, no special criteria were applied, and we left enough space for each of these companies to get creative and suggest a solution for the development of MVP (Minimum Viable Product) for our project. This enabled us to get a better perspective of their capabilities and see are they really the best in the market.
Before reaching out to these companies, we spoke to both developers and sales people from the industry to prepare for the talks and ask as many right questions as we can. This has proven to be a good move, since we appeared more knowledgeable and it made the talks go smoother.
The initial contact was either through the contact form or email. Only ETHWorks had an extensive Google form that had to be filled in order to schedule a call. On one hand, this could mean they want to know more about the potential client before the talk; on the other — you may not even get the chance to speak to them if you do not have all the details figured out and are looking for some R&D work. This would be an additional step to make too, making it harder for potential clients to get desired information.
The response speed of all ten companies was pretty good, with 10Clouds and MVP Workshop taking the lead (they took only 20 minutes or so). All of them answered within 24h. Efficiency is an appreciated quality in the IT industry, and the response speed does tell you a few things about the dev company. If they are having a long response time to the first and all subsequent messages, they are either reckless, understaffed, or too busy. And these are the traits that can have an impact on your product.
Image 2: Average response time of the interviewed companies
When it comes to the details, there is a funny correlation — the companies that made the video call left a better overall impression. They were generally more transparent and friendly.
Typically, in the first call, there were only sales managers and occasionally business analysts. This wasn’t the case with the Ideas By Nature, as their staff concluded that our email was too detailed and directly connected us with the COO. The result was a great talk, as usually people that are higher in the company hierarchy show more care, understanding, and handle the talks smoothly — and that’s totally understandable, considering their positions and experience that goes with it.
In the second call, Leeway Hertz, MVP Workshop and ETHWorks both had co-founders/executives in the call, while the rest of the companies typically stayed with the same crew — sales + analysts/devs.
This act of care really makes an impact and helps get all the right answers. And some business tips too along the way.
Image 3: Staff present in the first call
Image 4: Staff present in the second call
Another thing that differentiated the companies was a number of questions asked and solutions offered. For example, all C-level officers asked a ton of questions and provided solutions on the spot, while sales managers were more focused on — surprise surprise — selling the services and showcasing everything their company can do. This indicates that the persons that asked more questions are usually looking to fully familiarize themselves with your objectives and provide better customer experience.
To summarize — the more people and questions in the call — you are more likely to get a good quality of service.
The essential step in building a quality product is the discovery stage. The discovery stage is there to help you define all the details of your product — everything from visual identity and technical requirements, to defining the MVP (Minimum Viable Product) and the entire Blockchain-based business model. And in case you have it all figured out — maybe it wouldn’t be bad to get your idea validated by a team of experts that can challenge you and help you spot any flaws in your plan. The experts working for these companies are typically persons that have collaborated with a large number of blockchain projects.
The levels of involvement of the blockchain development firms in the discovery stage varied drastically, as you can see in the chart below.
Image 5: What do the development firms cover in the discovery stage?
So one of the things to pay attention to is how deep are they willing to go when it comes to the discovery stage. Getting past the early stages of the project is usually the toughest part, and getting help from people with experience in the industry can go a long way.
Blockchain Architecture And Product Design
The next thing to look after is your blockchain architecture and product design. If you are not sure which architecture would be the best fit, ask the developers to suggest it. The key here is to select a company that is not focused on only one protocol and keeps suggesting it for basically all use cases, but to find one that is willing to do research and development (R&D) and discover the best problem/solution fit.
For example, ETHWorks suggested using parts of the code they developed earlier and some third party solutions to make the development process faster and cost-effective. The potential problem with this approach could be scalability. Two other companies — Vironit and MVP Workshop, suggested using open-source code for certain features of the product, which reduced the price and development time but didn’t pose an obstacle to scalability down the road.
When it comes to architecture, make sure to double-check everything. In some cases, building a product with the Blockchain technology can be pricey, and the customers still wouldn’t feel the value of decentralization. If that is the case — go back to product definition and do additional research before moving forward.
Another crucial thing to pay attention to is product design. Providing users with functionality, security, and overall great experience while using your product is a vital component of every successful project. Having an experienced product designer in the team can make a difference between an average and top-tier product, and Ideas By Nature and MVP Workshop are absolute winners here. Product design is especially important when it comes to new technologies, so make sure that the development firm has one in the team. Look for someone experienced with DApps, UX, UI, and, of course, Blockchain.
There are several development methodologies which are popular among the blockchain dev firms:
- Scrum (a subset of Agile)
Scrum and Agile do provide the highest level of control over the process, as you can follow the progress from sprint to sprint (two week development period with a predefined focus). That is the most popular option, but all of the companies have shown flexibility to follow any client-preferred development methodology.
Image 6: Preferred development methodology of the interviewed companies
Man-per-hour or Fixed Price?
Well, both options have their pros and cons. Still, in an industry as new as blockchain, which still has many dead-ends, the man-per-hour model can turn to be quite pricey. The hourly model does not motivate the developers to work efficiently, and that can result in longer development times and higher costs. What it does offer is flexibility, as you can make changes as you go.
If staying within budget is more important to you than the flexibility to make adjustments during project development, the fixed price model could be the right choice for you. Since the development company agree to work for a specific price, clients are typically limited by the number of changes they can make once development has started.
There is a third option, which seems to be the most popular — a dedicated team. This is often included in the man-per-hour model, where the company simply selects people that will work on your project full time, and you pay for their hours.
There are some exceptions, such as MVP Workshop which offers a dedicated team with a fixed monthly fee, but typically this is how it goes. Also, the rule is that the majority of these companies charge only per hour for the projects that do not have all the details well defined.
Image 7: Pricing model of the blockchain development companies
The first thing that pops up is the fact that many of the Blockchain development firms are not accepting cryptocurrencies as payment. For some companies, it is understandable, as in their countries using cryptocurrencies is illegal. However, why so many others are not accepting them, not even in stablecoin form — it remains a mystery.
The second and more important thing is a wide variety of prices given for the development of the same project. The costs did follow the quality to some extent, but still — the price range was very wide.
Image 8: Different offers we received for the same project
The advice here is to take your time and explore the market. Finding the best quality/price ratio can take a while, and you can get superb quality of service and save thousands of dollars by choosing the right development partner for your blockchain project.
Number of Employees
Last but not least — the number of employees. we have decided to include this part since there is a substantial difference between the sizes of these companies. And the interesting thing is — the smallest companies by team size — Ideas By Nature (15+), ETHWorks (22+), OpenGeeksLab (25+), and MVP Workshop (40+) — are the companies that rank the highest when we check the reviews from former clients as well as those posted online. Coincidence or not, I’ll let you decide.
The key takeaway here could be that smaller firms care more about their clients. Also, it is easier to keep a smaller team well-organized than a large one, which directly affects the performance and communication with the client. The advantage of the bigger companies could be in the number of specialists they have. Having a specialized smart contract developer, blockchain architect, or research analyst working on your project could make an impact on the quality, speed, and costs of the project. Having more specialists in-house also enables companies to cover more niches and technologies, to start projects faster, and to work on more projects at the same time.
Although smaller firms tend to pay more attention to the details, they may have problems when it comes to scaling. Larger firms can scale the projects efficiently since they typically have a workforce in reserve for scaling or starting new projects promptly. When choosing the blockchain development firm think about the quality, price, scaling, and other vital points. If the ability to scale quickly is not that important to you, maybe going with a smaller development firm could help you save funds, since they often offer better prices than the large companies.
When it comes to the blockchain industry the trust is still an issue, and those that deliver are on a good path to earn the trust of the community. So keep that in mind when choosing the development company for your blockchain project. To summarize, look for a company that:
- replies promptly
- asks questions
- has more people in the call
- offers an in-depth discovery stage
- is willing to do R&D to find the best solution
- has a dedicated team just for you
- clearly defines the costs
- fits your project with their in-house resources
- Is passionate about the product you’re building
We hope that now you know what to look for in a Blockchain development firm. Thanks for reading, and feel free to join the discussion in the comments. Good luck with your blockchain-based business!