How To Launch Your Startup In Blockchain Space?
Co-founder of Hewlett-Packard, David Packard, had rightfully said that, “More businesses die from indigestion than starvation.”Even though this applies to most businesses, start-ups should reconsider. This advice is an appropriate warning to over-enthusiastic entrepreneurs who go overboard while launching a product, service or company, and maybe it is an understandable thing to do when it comes to start-ups in the blockchain space.
The blockchain technology has almost turned the world upside down in the last decade. And it has become obvious to most industries how much potential the blockchain technology has over the last few years. From online shopping to grocery supply chain technology, a lot of well-known companies have launched their own start-up projects to implement blockchain technology in everything.
500 companies are entering the fray.
Facebook revealed that it will be bringing to life a cryptocurrency called Libra in July, which is backed by many traditional currencies. it will be managed on its own blockchain network and Facebook plans to use it as a tool for cross-border payment transactions, for its worldwide user base. Rumour has it that Samsung too is now building on top of Ethereum.
Unlike Facebook, they are going to implement the Ethereum codebase to power its own blockchain strategy, which might also include crypto which is controlled by the mobile phone company itself, called Samsung Coin. It was reported that they will incorporate the cryptocurrency wallets into the mobile devices. JPMorgan has decided to experiment with the blockchain technology by creating its cryptocurrency called the JPM Coin, on the Ethereum blockchain.
Should you start your blockchain or build on an existing one?
Start-ups creating software and tools built on blockchain technology seem to have become an important factor in launching one’s own blockchain. This decision should not be made heedlessly as it takes a lot of effort to initiate and operate the codebase that powers a blockchain network, also the customers adopt it to ensure security of data. In case there are lack of nodes being run to verify transactions on your blockchain, the security of the data may be compromised.
The distinct approaches
Moreover, the company is also charging a hefty amount of $10 million for every license to those who wish to run a node for verifying transactions. Samsung’s approach requires comparatively less effort, as they are adopting the Ethereum code and so, they can directly begin on an already proven blockchain and improvise on it further if they wish to.
JPMorgan, on the other hand, can focus mostly on building utility and on the use-cases of its cryptocurrency, instead of having to focus solely on maintaining a blockchain.
It takes years of development hours to create a blockchain platform like Ethereum, and also would require as big of an investment for a company to get the same results by its own. It may be easy for companies like Facebook to make such an investment, but it is almost impossible for start-ups to achieve this while building a usable service or product to operate on a blockchain at the same time.
A Lesson from SpaceX
Space Tech industry would be a great example to elaborate on the benefits of improvising the existing technology. A large number of start-ups are now trying to innovate in outer-space. These firms are revolutionizing everything from tourism, to communications and even mining and confidently entering where no one has thought to before.
If one is planning to start a satellite internet company, they’d have a huge workload on themselves. They’d need to code a software for the satellites, build one, bring together a customer base and do a lot of other things before the company starts gaining profits. After achieving all those goals, they’d further need to launch a vehicle to send their satellites to outer space to start providing data for their customers.
They’d have two options: use someone who is an expert in launching vehicles or build their own launch vehicle to send the satellites to space. It becomes obvious that creating one’s own launch vehicle will cost too much investment and man power after calculating the cost analytics. Instead, you can focus 100% of your attention into the area of your business by contracting with a firm like RocketLabor SpaceX, which will also help you in serving the consumers.
Outsource your blockchain
Creating your own blockchain network has been made apparent to have a lot of work-load and require even more capital, which will ultimately become your biggest development drain. Instead, if you utilize an already existing blockchain, it will allow you to focus on things that really actually matter. Budgets for blockchain start-ups are very tight, just as the traditional start-up world.
It makes more sense to build on an existing blockchain, regardless of what your start-up wants to build. This enables you to concentrate more on your competition, instead of putting the focus on other things. Peter Drucker had once advised in regards to initiating blockchain start-ups, “Do what you do best and outsource the rest! “To figure out which is the best blockchain technology for your needs, you need to first determine what you should prioritize. Different blockchains are operated for different purposes.
Some process transactions quickly, while others create programmatic transactions. Once you have determined what’s most important, you can figure out which existing blockchain is worth all your efforts and get started.