back Back

Five things to know in order to run a successful blockchain startup

Crypto, Database, Distributed Ledger, ICO, Stocks, Token, Venezuela

March 14, 2019

  • Crypto
  • Database
  • Distributed Ledger

During the height of the crypto boom, everybody from Paris Hilton to the Venezuelan government seemed to be either setting up or promoting ICOs as token values skyrocketed. Even ICOs that were blatant jokes like the Useless Ethereum Token reportedly raised $200,000. Those days are over.

The crypto winter has given the blockchain sector the opportunity to step back, take stock, and mature. In this market, only blockchain firms with a solid business case and sound tokenomics will attract investment. Here are 5 things you need to know to run a successful blockchain start-up:

1. Think about whether you really need blockchain or whether your project could be implemented more efficiently with a conventional database. The most important consideration here is whether trust between users is a major concern. In a field where immutable, time-stamped records are important to all parties, like supply chain management or legal data storage — blockchain could be useful. If you plan to deploy the system internally within an organisation, a normal database would probably be better.


2. Develop a compelling value proposition. Remember that most people don’t care about blockchain technology as much as you do. Many blockchain startups fall into the trap of being too tech focussed and forgetting about the customer. A good value proposition should clearly state who your target market is and how your product will help them.


3. Create a roadmap that sets out how you will scale your project. It is great to dream big, but think about whether your user base will need to reach a critical mass before your platform is useful. If so, you will need to establish a compelling reason for early adopters to come onboard. This may involve altering your business model in the short term to create incentives for users to adopt your technology while the user base is smaller.


4. Think about whether you really need a utility token or whether a security token would be more appropriate. A utility token needs to play an integral role in the future operation of your platform. Don’t try to shoehorn a utility token into a preconceived business model: if you just want to raise capital, issue a security token instead.


5. Simplify your tokenomics. The speculative bubble is over. Investors will only invest in an ICO or STO if the token is clearly linked to a useful digital service or underlying asset. Less is more: your white paper needs to be simple, clear and explicit about the link between the token and its underlying value.

By Mattias Hjelmstedt, CEO and Co-founder of Utopia Music, blockchain-powered music tracking and attribution platform, which was recently ranked among the 15 new companies in the Crypto Valley Top 50.

Previous Article

March 08, 2019

Four unexpected areas where financial institutions could save money

Read More
Next Article

March 20, 2019

Banking Technology Investment Trends 2019 – Investing in a Digital Future

Read More

IBSi News


April 17, 2024


Optasia enables micro lending in liberia with MTN & UBA

Read More

  • Daily insightful Financial Technology news analysis
  • Weekly snapshots of industry deals, events & insights
  • Weekly global FinTech case study
  • Chart of the Week curated by IBSi’s Research Team
  • Monthly issues of the iconic IBSi FinTech Journal
  • Exclusive invitation to a flagship IBSi on-ground event of your choice

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related Blogs

September 30, 2022

The future of financial services in the metaverse

Read More

June 30, 2022

Shining a spotlight on the Latin America e-commerce opportunity for FinTech

Read More

May 06, 2022

How digitalisation is enabling transformation

Read More

Related Reports

Sales League Table Report 2023
Know More
Global Digital Banking Vendor & Landscape Report Q1 2024
Global Digital Banking Vendor & Landscape Report Q1 2024
Know More
Wealth Management & Private Banking Systems Report Q1 2024
Wealth Management & Private Banking Systems Report Q1 2024
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q4 2023
Know More