When 50 million users were affected by a hack last year, Facebook cemented its status as the face of big tech’s privacy problems. But the social media giant isn’t alone. Tech companies like Google, Amazon, and Uber are under similar scrutiny for their handling of user data, and the topic of information security is more relevant than ever.
That means entrepreneurs interested in breaking into the data security market may never have a better opportunity. With the creation of blockchain, the potential now exists to provide both security and transparency in a new way.
Startups have an excellent opportunity to give power and control back to consumers through blockchain. A single sign-on blockchain solution, for instance, could change how users manage — and even sell — their own data. The startup that gives consumers the power to control who accesses their data could very well become the next giant of Silicon Valley.
Just as with any emergent technology, entrepreneurs who want to take advantage of blockchain will face risks and skeptics. However, those willing to put in the work can overcome these challenges and use blockchain to reach new heights.
The Challenge of Selling Blockchain
Blockchain has both the privilege and the curse of being a trendy new technology, thanks in large part to its role in the cryptocurrency craze. Countless investors have sunk millions of dollars into companies that touted their blockchain innovation, but most of that technology never grew beyond the whiteboards.
Those failed investments have made some people apprehensive about fully embracing blockchain. Despite its rocky reputation, however, blockchain has serious potential — the remaining hurdle relates to building the technology necessary to take advantage of it.
Consumers are already on board with blockchain’s unmatched ability to trace, verify, and validate data. Businesses are the only ones pushing back, citing concerns of allowing customers access to their business processes — or lack thereof.
As blockchain becomes more prevalent in the enterprise market, however, investor confidence will grow, giving startups the resources they need to capitalize on the technology’s true potential. Blockchain will stop being a buzzword and become a common business term — like SQL or CRM — maturing past its emergent status.
How to Bolster Your Chances of Blockchain Success
Creating a business around emerging technology is more complicated than, say, building a better mousetrap. While there’s no way to eliminate every uncertainty, there are steps you can take to ensure that your blockchain venture is built on solid ground. Here are three suggestions to get you started:
- Find a purpose.
While blockchain is an exciting and useful technology, don’t jump on the bandwagon if you don’t know where you want to go. Startups and established companies alike want to add blockchain to their operations to get in on the hype. Unfortunately, that kind of motivation is misguided. Instead, focus on how this technology can serve your overall business processes and the needs of clients.
Here’s a simple way to figure out your blockchain use cases: Define what asset data will be captured and stored, deciding whether this data affects your business processes in a way that requires real-time visibility via notifications and dashboards. From there, figure out who outside your company needs to access this data and how it might benefit them. Only then can you determine whether blockchain is the right path forward. - Get the help you need.
Don’t try to tackle blockchain by yourself. Find the right technology partner by identifying one that builds blockchain in-house. By working with a partner, you can see an existing blockchain framework and gain insight into its use cases.
Be careful not to get snowed. There are plenty of companies that know the right words to acquire customers but can’t deliver on the actual product. Make sure your potential partners have the specific coding skills you’ll need — such as proficiency in C++, the most commonly used code in the blockchain. Don’t take anyone’s word as gospel, and make sure you see candidates in action before taking them on. - Don’t make blockchain a marketing gimmick.
A blockchain is a valuable tool, but it shouldn’t be confused for a product in and of itself. While it can be useful to create a software stack that showcases the benefits of blockchain, that shouldn’t be the only thing you sell to clients.
Instead, it should serve as the backbone of a larger story you tell your customers. Otherwise, it will seem like you’re just another company pushing a trendy technology without a compelling reason.
Blockchain is an exciting and potentially game-changing technology. Startups need to avoid getting distracted by blockchain’s buzzy nature and instead approach it on purely practical terms. By doing so, businesses can create products that will resonate with customers and stand the test of time.
Written by Sean Caputo.
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