Building a Company an Add-on or an Ecosystem

Funding, Investing

In the startup world, an entrepreneur could be building a platform, a point application or an add-on tool to other systems. So in the blockchain world, one could be building an entire digital ecosystem, a standalone application, or an add-on to another system.

I see ICO candidates daily who want to mint their own coin and run their own ICO campaign.  In looking at their application I find some are building a digital ecosystem but many are building add-on tools or point applications. For those building a digital ecosystem it makes sense to run an ICO and launch a new token. For the others it makes more sense to work with an existing digital ecosystem or application platform and join their network.

The Dot Com era imploded for many reasons but one was the fact that major infrastructure components were not yet built.  Those who raised funding in the 1990s often had to raise $5M or more to build a website because they were building their own server farms, coding user interfaces in HTML, and had to pay exorbitant rates for labor because the programmers were few and far between.

One of the key issues to consider in your business proposal is the amount of infrastructure available and what resources your application needs. In the early days of the internet many applications were not easily built because the infrastructure was not yet available.

If you want to build your own digital ecosystem and launch your own token then realize the challenge ahead of you with regards to the amount of infrastructure and support systems needed to make your system usable. I look at some ICOs that raised $50M and think they will need $500M to accomplish it because of the many layers of infrastructure that need to be built.

In looking at your ICO ask yourself, do I need my own token? Can I use other digital ecosystems and their token?  Is the blockchain infrastructure available for my application?  How much will it cost to build the missing pieces?

The Dot Com era came to a screeching close twenty years ago but the lessons still remain.

 

Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.

 

 


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