In today's post we want to highlist one of our articles which becomes incredibly prophetic in current blockchain industry situation.

This article is inspired by “The For Steps To The Epiphany” by Steve Blank.
According to bitcon.com, 46% of ICOs started in 2017 are effectively dead already, despite raising over $104 million during their token sales. This means that out of 902 projects, more than 400 disappeared either by taking money and running right after ICO or slowly reducing their activity and presence to zero. If we take into consideration that some of the 2017’s projects did not have enough time to fail yet but they will in 2018, the picture becomes truly terrifying.

What’s going on?

Some reasons may seem obvious:

• Some ICOs were intended to be a rip off by their founders, no development were done or even were planned to be done.
• Some projects with good intensions were just unable to deliver what they promised because of unproved concepts and / or bad execution.
• Others released their testnet or mainnet product but it turned out that there is no market for them.
  The last reason is in bold for a cause of what IT industry has already seen couple decades ago in dotcom bubble times. Let's recall a vivid historical example.

Webvan

In 1996 Webvan stood out as one of the most promising new startups, with an idea that would potentially revolutionize grocery industry (hello INS ecosystem :P) with online ordering and same day delivery. They easily raised astonishing 800 million bucks. They hired outstanding CEO and other seasoned executives.
During next months the strong team ensured product development on a top professional level. Brilliant website was up, modern storehouses were built and shining trucks were ready to perform logistics. Sometimes later first groceries were delivered to happy customers. To sum it up, company delivered extraordinary product according to their roadmap.
Nevertheless, in about 24 months the company went bankrupt. What was wrong? Short answer is: the product was developed for non-existent market. There were just not enough people in the whole country willing to purchase groceries online to build positive cash flow for Webvan.
Sounds similar for most blockchain startups, isn’t it? Probably, classical product development approach is not suited for emerging IT industries.

Customer development

According to Steven Blank, in order for the product development model to be useful, it needs to be run alongside or after the Customer Development model.
The Customer Development model is a process for finding customers and locating markets. It is also figuring out whether companies are right about what they assume about these customers. Ultimately the customer development model helps businesses grow in a meaningful and measurable way.
Customer development assumes that hypotheses about the product and its customers need to be tested and adjusted. This approach allows:

• Validate the hypothesis and go on with the startup.
• Invalidate the hypothesis and terminate the startup on early stage saving tons of cash from burning.
• Modify the hypothesis and adjust the startup accordingly. Then go to testing again.
  This approach may take longer times to deliver the product but it’s much more flexible. Customer interactions and constant feedback allow to better understand the market and scale the startup accordingly.

Where customer development model wins

• Customer development model adds flexibility to traditional product development. This is crucial for emerging industries where markets are constantly morphing and oftentimes can’t be clearly defined or measured.
• Customer development is focused on customers’ feedback. As opposed to buying leads and trying to make customers use new product, startup focuses on satisfying real customer needs by adjusting the product according to feedback, growing organically.
• Customer development sets meaningful goals. Instead sticking to must-to-follow roadmaps, customer development approach sets meaningful and impactful goals which should be achieved by natural startup growth.

Summary

Token sales open up a great possibilities for new startups in blockchain industry. Customer development supports those possibilities even more allowing true potential of the technology to flourish. Let’s hope that entrepreneurs will learn from mistakes of the past and lead society to an amazing future!

About BCShop.io

BCShop.io project aims to reinvent the way digital commerce and payments work today. Focusing on digital goods and services area project’s goal is to enhance it with fast-growing opportunities blockchain technologies and cryptocurrencies have to offer. In January 2018 BCShop.io hit hard cap of 2000 ETH at its token sale.
Website: https://bcshop.io/
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