As the founder of a strategic content agency and a mentor on the Google Acceleration Program, I have been lucky enough to help many startups communicate their brand stories and value propositions for the best part of a decade. It’s how I came to produce the first-ever explainer video for the Ethereum blockchain; an experience that left me with deep insight on the single biggest marketing mistake blockchain-powered companies make.
The main problem lies in the fact that blockchain technology has a vast array of potential applications. So it’s all too easy to have an overly broad value proposition. But this creates a lack of clarity and precision, which can, in turn, drive customers away. A generic ‘go-to’ marketing strategy for a tech company often fails to take into account how the adoption of new technology works. This is especially the case with blockchain-powered companies because they usually involve complex partnerships with financial institutions.
When marketing a technology company, the focus on technology potential often distracts from a solid Minimum Viable Product (MVP), and so results in a generic go-to-market strategy. It’s a case of what I call ‘CTO-led startup’, a scenario where the founder may have incredibly deep technological skill and knowledge, but forgets that they need to wear two hats: that of a tech builder, and that of a visionary CEO.
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As an ‘enabling technology’, the CEO of a blockchain-dependant business can potentially have a near unlimited vision for the company. So it can feel counterintuitive to zero in on a singular laser focus when building the brand, because it superficially seems like a reductive strategy when compared to the broader vision. But between the tech’s potential and its realisation, there are plenty of small steps that need to be clearly visible to both customers and investors.
Limitless possibilities make it hard to identify a solid market fit. If a blockchain product doesn’t solve a clearly identifiable need for a well-defined customer segment, it will fail to gain enough traction. ‘Anybody working in business administration’ is not a customer segment; ‘anyone managing supply chains internationally’ is not a customer segment; ‘banks’ are not a customer segment. The only way to identify the true audience is to drill down further.
By way of an analogy, imagine if Mark Zuckerberg pitched his startup as a platform where people from the age of 13 to 99 could share video, text and emoticons, buy real-life products, watch digital shows, join interests groups and play casual games. This is what Facebook is today. And although it may reflect the broader ambition and dream that Zuckerberg had from the very start, it was not the starting point.
Instead, Zuckerberg started with a niche: Ivy League American university students. This niche then expanded gradually to all American universities until it became a public platform that boasted a worldwide youth audience. Today, grandmothers share the platform with their grandchildren, but this wasn’t how the Facebook vision began. No, it all started with a precise angle, albeit an angle that had room to grow into a full circle.
One of my favourite definitions of innovation is from Austrian political economist Joseph Schumpeter and his 1932 theory of ‘Invention and Adoption’ that explains how true innovation requires widespread adoption of an invention to turn it into a reality, rather than unexpressed potential. Too often, CTO-led startups are guilty of underestimating and misunderstanding the all-too-crucial adoption part of the process.
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I have witnessed a startup that was incubated by a big retail bank accelerator go bust far too quickly, and all because the startup did not understand how its own investors rolled-out and implemented a new service in their organisation. This is just one example of the CTO-led startup folly. Sadly, there are many other similar stories out there.
To secure longevity, blockchain-powered companies need to find an application that is specific enough to generate traction, and expand it from there. So they should first and foremost think about what problem can they solve in the here and now for a very clear customer base. Only then, can they think about taking over the world.