Crypto Startups Are Investing in Communities to Build Their Platform
Many companies in the tech scene have an interesting but familiar origin story. Although they boast a loyal customer base in the millions or even billions, their ethos and narrative frequently encapsulate the vision and efforts of a single individual.
For example, Apple, Microsoft, Facebook, and Amazon, four of the most influential companies in the world, all have origin stories focused on a prominent individual. Steve Jobs and Bill Gates formed their companies in their garages, while Mark Zuckerberg formed Facebook in his Harvard dorm room. Meanwhile, Jeff Bezos famously shed his financial sector origins and began building a website that would become the most robust online marketplace in the world.
Of course, these stories hide many of the nuanced details that make a company successful. Most notably, prosperous companies are the result of a community of professionals and a loyal customer base who propel a platform forward, helping it mature and adapt along the way.
While the previous generation of tech companies are promulgating their startup narratives, the burgeoning cryptocurrency movement and the accompanying blockchain-based platforms are changing this dynamic. Specifically, many are recognizing the value of community, and they are intentionally incentivizing participation in and proliferation of their platforms.
Companies Building Communities
The introduction of blockchain technology and the companies that build upon its capabilities is producing an opportunity to reorient the ways that companies further their mission and mature their platform. Most prominently, this involves using the structure of tokenomics to incentivize growth, development, and participation.
Fortunately, blockchain startups have the flexibility and the motive to pursue fresh solutions for building their platforms, and companies of all sizes are experimenting with foster community development.
For instance, DACSEE, a startup focused on the ride-hailing industry, is encouraging natural innovation and expansion of its network of thousands of drivers by returning rider fees directly to the community. In this way, DACSEE is dramatically reducing the amount of money spent on overhead, and instead, they are reinvesting in the drivers, riders, and government authorities that actually facilitate their growth. More specifically, the rider fees collected from each trip are converted to the company’s native currency and are returned back to the drivers, which functions as a veritable bonus that can incentivize community development.
Moreover, as an open-sourced platform, DACSEE encourages community involvement in their technical maturation as well. This open source mindset differs from the proprietary mentality that undergirds many tech companies. Instead, crypto startups and blockchain initiatives are fostering community involvement by equipping individuals to develop or adapt the platform for their own needs.
To be sure, this community-driven model is relevant beyond the ride-hailing industry. Thrive is applying using a community-centered approach to ad sales, creating a blockchain-based marketplace for buying and selling advertising. Their system rewards both publishers and consumers, using their native token to compensate users for participating in and creating for their ecosystem.
In many ways, this model differs from traditional startup narratives. Rather than centralizing influence among a single, prominent founder, blockchain startups are instead handing control over to their communities, which might inspire more organic growth while soliciting the ideas, skills, and commitment necessary for a platform to flourish in the long run.
Differentiating the Compensation Structure
At the same time, many companies in the crypto space continue to operate like traditional organizations, but they are harnessing the potential of cryptocurrencies to rethink their compensation methods to encourage community development.
As TechCrunch reported in September, tokenomics is disrupting traditional payment practices at many crypto startups. Several crypto-oriented companies including, Ontology, Huobi, and Binance pay their employees in their native token, incentivizing their involvement and providing the possibility of a big payout should the company succeed.
Of course, it’s not just exchanges that are encouraging community development through their token distribution. It’s common for crypto startups to compensate their employees in tokens, which creates an attractive payment structure akin to stock and cash combined into a single compensation model.
Ultimately, this structure facilitates more than just an easy payment structure. It incentivizes participants to build a quality platform, and it can help develop organic communities along the way.
The novelty of the crypto movement means that all options for building a successful company are on the table. While some organizations are choosing a traditional route, many are adopting a new playbook that empowers individuals to contribute to a growing community that together propels a platform to success.
It’s definitely a different story than the tech startups of the previous generation, but it’s one that is still being written, one community member at a time.
