Five Mistakes That Can Ruin Your Blockchain Startup Before It Launches

3 Jun 2024

If you watch a market hibernate long enough, eventually, you will witness its awakening, followed by the emergence of new projects. Something similar has been happening to the blockchain market for the past few months. This situation is typical for any market entering its bullish phase: Market capitalization goes up, and updated multipliers attract the interest of investors and developers alike. Startup owners flood the market with new ideas and products. A new era begins.

Poetic statements aside, creating a fresh startup might leave its owner with nothing but a shirt on their back. There are five mistakes that can ruin your product before it launches.

For a detailed study of this topic, I recommend the book INSPIRED: How to Create Tech Products Customers Love by Marty Cagan.

Five Fatal Mistakes In Bullish Development

1. Failure Of Leadership

A team is only as good as its leader. Still, you can always benefit from someone else’s expertise, and you will absolutely have tasks to delegate. Your right-hand person in this quest is your blockchain product manager, so choose wisely. Your PM needs to have a solid understanding of blockchain technology, markets, and the regulatory landscape. But the most valuable asset is the ability to identify opportunities that offer real value to a customer. A value that transcends mere hype: Every market still has hundreds, if not more, unsolved issues. Knowing how to locate them and offer a solution is what we all look for in a PM.

2. I Can Sell Anything

Just because you want to innovate something doesn’t mean you should. We have two words for you: New Coke. This is, hands down, the most disastrous example of a product failure, when something nobody asked for made its way to the market. Believe that you don’t want your product to become the New Coke of the blockchain market.

Choosing the right product to build is arguably the most important call you will ever have to make. Product discovery is a whole discipline that combines elements of marketing, development, and sociology. Before rolling out a product or even an idea, you must spend time researching.

Any book would suggest figuring out the pain points and needs of users. When it comes to the blockchain space, it’s the knowledge and user experience that can play a crucial part. How well do you and your PM know what a regular person from your target audience experiences when they interact with it?

Use surveys, interviews, and prototype testing with potential users active in trading and investing—or use blockchain for other tasks. The issues may include security, wallet usability, transaction fees, trading strategies, and so on. Make sure your product truly answers the requests of the community.

3. What Works For Me Works For Everyone

User-centric design is more of an issue than more of us realize. It’s crucial to remember who you are building the product for. It’s not just your team.

Back in the day, Myspace was a huge platform that catered to the needs of the tech-savvy community. It offered personalization and complex UX design with many features. Yet, it couldn’t survive the competition when far less complicated Facebook and Twitter came around. Indeed, when it comes to products, the comfort of many will prevail over the individuality of a few.

A user-friendly interface will go a long way, and it’s even more valid when we talk blockchain. This space is intimidating enough for newcomers. If you don’t believe it, just consider how many advantages it offers, yet it’s still not commonly adopted. Yes, we might revel in our technical knowledge, but if we create the product for ourselves, we would be the only ones using it. That is a UI/UX/design failure.

Make sure to test the product with your target audience. If you want an average person to be comfortable with it, let them try it, let them explore it, and listen to the feedback.

4. Let’s Spend It All in One Place

While the leadership team behind ScaleFactor attributes its problems to Covid-19, many former employees have said that the company focused on costly marketing strategies instead of responding to the customers’ expectations.

To avoid the need to blame a global pandemic, concentrate on lean product development. Your minimum viable product has to address the core functionality. It can be a secure wallet or a user-friendly trading platform. When that’s done, continue improving the product gradually, according to the feedback.

Prototype and test rapidly, mostly paying attention to the features and seeing what works best. All the improvements have to align with your key value proposition.

When you have a core group of users, you will be able to provide agile and continuous delivery. Because the tech market and blockchain, in particular, develop rapidly, you will have to regularly update your product and add new features. But always start small.

5. Develop Now, Promote Later

Here’s the pièce de résistance: marketing. It’s last but not least. Quite the contrary, marketing channels and potential should be studied prior to developing the product. You have to go into development knowing how, when, and where you are planning to market your product. Only then you will be free to focus on MVPs and roadmaps.

It’s a simple case of “Who am I doing this for?” This is a question that every startup in blockchain or any other market has to face eventually. And it’s best to answer it right away.

If you don’t find your audience and marketing channels now, you certainly won’t find them later. Applying this framework to the development of a blockchain product allows you to create a solution that not only takes advantage of the unique capabilities of the technology but also addresses user needs, fosters innovation, and adapts to the ever-changing landscape of the market. At the same time, it’s these five simple facts that help manage your initial funds and even save some for a pivot in case the original product falls short of your expectations.

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