What Makes A Bitcoin Company Successful?
One of the more intriguing topics in the Bitcoin ecosystem these days is how there seems to be less VC funds to go around. It remains unclear as to whether this has to do with the stagnant Bitcoin price during Q3 2015, or if startups and other companies are not producing expected results. But what […]
One of the more intriguing topics in the Bitcoin ecosystem these days is how there seems to be less VC funds to go around. It remains unclear as to whether this has to do with the stagnant Bitcoin price during Q3 2015, or if startups and other companies are not producing expected results. But what makes a Bitcoin company successful at this early stage of the digital currency revolution?
Gauging Bitcoin Company Success Is Difficult
Despite Bitcoin being all about transparency and accountability, not all companies active in this space seem to adhere to these guidelines. In fact, other than the news these companies want to provide, hardly anyone in the Bitcoin community has an idea what is going on behind the scenes. This makes it rather difficult to guesstimate how companies are doing.
It is no secret there has been plenty of money flowing from VC’s and angel investors to the Bitcoin ecosystem in recent months. Just because money is coming in, doesn’t mean companies will be a success overnight. Developing a new platform on top of the blockchain, or improving an existing Bitcoin business, takes time and effort.
BitPay, the world’s leading Bitcoin payment processor, is a fine example of how an influx of funds is no guarantee for instant success. In recent weeks, BitPay had to lay off part of their staff, and even revamp their Bitcoin payment processing plans completely. However, none of that news has affected BitPay’s position as market leader for Bitcoin payment processing so far.
Other projects, such as Ethereum for example, have seen tremendous amounts of money invested in their idea. Due to Bitcoin price volatility, funds have dried up fairly quickly, forcing the team to release a tool that is still in early stages of development. That being said, the future of Ethereum will be discussed in their upcoming Devcon event in London.
Last but not least, which factor plays media coverage in terms of gauging a Bitcoin company’s success? Spending part of the new investment funds on marketing is essential, but that doesn’t mean the odds of success are increasing. While it is important to advertise a Bitcoin company to digital currency enthusiasts, there is a bigger market to tackle as well.
Unfortunately, mainstream media is not too keen on reporting about Bitcoin companies, unless it’s negative news. Or that is how it looks to the outside world anyway. Sending a company press release to services like PRWeb is a way to get noticed outside of the digital currency ecosystem, but so many press releases get sent to these services, making it hard to cull the weed from the chaff.
More Transparency Could Help Companies Gain Traction
Transparency in the business world is a double-edged blade, as it can be both positive and negative; On the positive side, it would show that specific company has nothing to hide, and wants to be honest towards potential customers and investors. But on the other hand, it could also scare off potential investors who value their privacy more than anything.
Blockchain technology, which powers the entire Bitcoin ecosystem, can be used to make certain aspects of a business transparent. For example, company Bitcoin wallets can be made public to give everyone a view of funds flowing in and going out. At the same time, this would keep investor data confidential, as Bitcoin works in pseudonymous manner, without displaying any personal information.
Additionally, more transparency could make it easier for [potential] investors to estimate what the revenue forecast would look like for the company in question. Not every Bitcoin company will be turning a profit in the first few years, and numbers only tell part of the story.
Details regarding how many users are active on the platform, and what type of feedback they have provided so far, would be another step in the right direction. Direct communication between companies and customers is a key element to improve services offered, and that feedback should be shared with the Bitcoin community.
How would you improve the chances of success for Bitcoin companies? Does transparency play a role in your opinion? Let us know in the comments below!
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