The cryptocurrency industry, the blockchain space is in need of growing up. Maturing.
We've seen the wave of ICOs come and almost go. Yes, they’re still around, and will likely be for a long time. Now we're starting to see the growing wave of Security Token Offerings (STOs) and other ‘hot trends’ that may or may not be around in 12 to 18 months.
The challenge it seems, is that as it relates to raising capital, we're still in the early days of the startup ecosystem. The early days where, the coolest, newest, hottest feature is what raises all the capital. Yes, this is even applicable to STO marketing.
As many in the industry know, the reality of the situation is, it's not the next feature that's going to make the difference. It's the core problem or the underlying need that a startup is solving that makes the difference.
Talking about the core problems, sharing that narrative to gain support - yes, capital, but also community, developers and industry partners - is where thought leadership comes into play. This is how the blockchain industry starts to evolve.
Raising more capital is not the answer
Let's talk about raising capital for a minute. As with any startup, having capital is extremely important. You've got to raise it, or have enough of it to launch your business forward. Whether that's bootstrapping your business, getting angel investors, bringing a venture capitalist on board, or any other number of capital raising activities, it's something that every startup needs to do.
But raising capital is not going to solve all problems - although it seems many think this is the case.
The focus thus becomes “how can we raise as much money as possible” by talking about features and benefits, without necessarily addressing the core idea, or determining if it’s actually a problem worth solving.
Naturally the massive hype of ICOs has led to a race. “Quick! Raise as much capital as possible for the latest coolest idea” has encouraged many players in the industry to focus on hype, and get caught up in the cycle of ads, promotions, air drops, features, benefits, and other ‘surface level’ ICO and STO cryptocurrency marketing components.
The hype, has led to more and more startups trying to rise above the noise of what's going on the market, creating an ‘arms race’ of sorts. By claiming bigger, better, faster, richer, more potential... without really discussing what it is they're trying to solve has fueled the fire.
Now of course, there are companies in the space that are not doing this. There are some very good, well thought-out, structured teams that have raised just enough capital to actually accomplish their goals.
But the hype has pushed most companies in a certain direction. Vanity metrics about community. Vanity metrics about features and benefits.
It's also pushed many media outlets in that same direction. Aggressive pay-to-play scenarios that have helped encourage many companies to just try and “make a quick investment buck” by talking about frivolous aspects of their business that they think will help them raise more money.
Rather than addressing the core problems that will help evolve the industry.
The value of thought leadership
And this is where thought leadership comes into play. It does a number of things to improve the industry.
For the startups themselves it actually forces focus. It gets them to really think about the core of what they're trying to solve. And, to Simon Senik’s point of view - forces focus on the ‘why’ of what they’re trying to solve.
As an example it requires much more clarity of thought to teach someone about something - ie. thought leadership - than to just talk features and benefits.
It also allows those who are interested in getting involved in the industry - other developers, bankers, investors, potential industry partners etc. - to see the direction of where your startup is going. It helps them understand why it's so important for them to pay attention, invest money, or consider leveraging these solutions for their own industries.
And lastly, it cuts through the noise.
Sure, it may not ride the hype wave. It may not have the viral aspect of the “8 Hottest Things you Should Watch Out For in 2019”. But it does showcase your clarity of thought. It can and will connect with the right audience. And it shows that your team is actually doing something worthwhile. Something that others can stand behind and believe in.
This is how the new wave of blockchain based startups will help evolve the blockchain industry. At the end of the day, your content last forever. Why not share great insight? Why not make it good.
About the author: Cahill Puil is an author, founder of Byte Media Group. For more information see his author page.