As you probably come from poker, I don’t need to start by explaining “what is a cryptocurrency”. As a large percentage of poker sharks have some crypto in their portfolios or at least heard of bitcoin (BTC) and altcoins. So why not start a business in crypto?
A business that is, not an ICO! I know that crossed your mind.
Blockchain technology has huge growth potential. There are already over 50 million Ethereum addresses, but that’s just a snowflake in the potential snow blizzard coming over the next 5-10 years.
We’re a few steps away from mass adoption, you can start a business who helps the infrastructure to bring new users into cryptocurrency, or you create a business that capitalizes when mass adoption comes.
Start a brainstorm session to get your first crypto business idea. If you struggle with inspiration, find a shaman and do some ayahuasca sessions and the idea’s for new cryptocurrency startups will start flowing 😉 Trying out some psychedelics to get the creative brain cells flowing isn’t a bad thought, but it’s not the route most people are willing to take.
A good way to start a cryptocurrency business is to follow these steps;
Inspiration for ideas
You want to start a cryptocurrency business, but what should you do? Most poker players have struggled with this when they want to start something new.
One of the first ideas people get is “How to start a crypto exchange to buy/sell bitcoin”. Trust me, if you get that idea, so have thousands of others. Over the past two years, I’ve attended numerous blockchain conferences, and the crypto exchanges grow faster than weeds, so I’d advise against that idea. Unless you have unlimited resources to spend on marketing, development and salaries of course. I even started a platform like that back in 2014, and I was already behind the curve. So anno 2020, I strongly suggest putting a stop to this thought channel.
Most of the time ideas come from necessity. You run into a problem and you find a solution. Or you foresee a potential future problem and know how to prevent or cure it. Those are the best ingredients to find your crypto business idea.
Business concepts start from conversations with your peers. Talk about your plan with people around you, they can often find leaks in your thought process or see angles you haven’t thought about.
Don’t be afraid that someone will steal your idea and run with it. If someone can easily copy your plan, it wasn’t a great plan, to begin with. In business there is a common saying, that a great idea is < 10 % of a success story, the rest is execution.
Proof of Concept
How do you know your freshly baked cryptocurrency business idea will work? You test it! Proof of Concept (PoC) is a term widely used in the startup scene. What it means is you test your idea on a smallish sample to see if the assumptions you made during your idea phase, are actually correct.
We all had that assumption a fish will fold high frequency if we use a certain bet size, but we all recognize the frustration when they snap call us. Was our assumption wrong or were we at the wrong end of variance? Or even worse, was the fish just randomly clicking buttons?
With PoC you test your assumptions out. An easy way to do it is just asking your network what they think. You can do this face to face or a small online survey. Whatever you can do to get your hands on some data! If you already have a bit of traffic on your website, you can use tools like Hotjar or Crazyegg to track user behavior. This is a great way to test out some of your assumptions.
Minimal Viable Product
Over 70% of startups fail. In cryptocurrency businesses, this percentage is even higher. Many factors come into play when you start a Bitcoin company or any startup, so when you start building your product or platform start with a Minimal Viable Product (MVP).
In 2011, The Lean Startup by Eric Ries changed the history of startups by introducing several new concepts. The MVP was one of them. The idea is to get user feedback before developing a final product. This feedback helps you avoid failure and makes sure you follow what the users want. Not what you believe is a good product. Because in the end, the majority of users will show you based on data, what they like and don’t like.
This concept can be tied to PIO threes. If we solve a three and PIO suggest betting flop with a 30% frequency, but the general population is betting is 70%, the whole strategy on Turn & River is different. You want to see how the general population reacts to your product and build on top of that.
Save that money!
In today’s IT & cryptocurrency industry, developing an MVP is common practice. Development is a high cost in startups and you don’t want to spend 6 figures on a product people don’t end up using. Avoid making unnecessary big bets, built an MVP, test it out with PoC and go from there. Play it street by street with a general idea of where you want to go. But don’t stick to one strategy, be willing to change if the data is showing you. Adapt or die!
When I started Airdrop Alert, it cost me less than €2k to get a Minimal Viable Product going and before we knew it we were hitting 1k daily active users. Starting a bitcoin business does not have to cost mountains of money, to begin with. Even if you have that money to spend, you can only place your bets once so make sure to place them wisely. You can start a cryptocurrency business on a small budget too!
Early traction refers to your first wave of users. Those early adopters are crucial when starting a cryptocurrency business, and you should cherish them.
The reason is that although they haven’t heard anything about you, they still give you some of their precious time. That means that they saw value in your product; a solution to their problem.
Moreover, those people are the ones who will most likely be your first ambassadors, bringing their friends along to try out your product or service. Which you can use to test out your MVP, assumptions, and PoC.
5 things you must know before launching your crypto company
There are several things you need to have ready to boost your traction. I won’t dive deep into them in this blog, but here are a few things you need to consider:
- Build a pre-launch landing page
Have a landing page ready with the right message for your target audience.
- Run a pre-launch campaign get more leads with a viral boost
In that pre-launch stage, you want to focus on getting emails, as many as you can. Get people to love you. Get them on the hook, and reel them in later. It’s something I see happening a lot with starting cryptocurrency businesses.
- Boost traffic with ads
This is the most scalable and easiest way to test different campaigns and get immediate results. It’s necessary to run campaigns on paid channels because they’re highly customizable and you can easily target and test specific groups of people.
- Build/engage with a community at the start of your cryptocurrency business
In cryptocurrency, a strong community is the biggest growth hack possible. Start building one with Airdrops & bounties and support that marketing campaign with video and blog content. Engage with your community in all channels possible, the more you nurture them the stronger it grows.
- Submit your startup
Make sure your business is visible on platforms that aggregate startups. In cryptocurrency, you can think of sites like ICObench, Coingecko, and AirdropAlert. But also have a look at traditional startup sites like ProductHunt, HackerNews, Angel.co, and Crunchbase. These sources bring additional traffic, awareness, and supports building your reputation as a legitimate project.
Growth mode to the moon
You’ve successfully shown signs of early traction and are ready for the next step. As a poker player, you have an edge over most entrepreneurs. You are sitting on a bankroll. As a result you can self fund your idea to take it a few steps further before you start fundraising. The later you start raising external cash, the more equity you hold in your company.
For example, another strategy is to bootstrap your revenue. It basically means you Invest every penny that comes in, back into your company. You want to maximize your growth while you see signs of traction whether that is with your revenue of investments.
If you don’t have any revenue or personal cash you can put into your company, it’s time to start raising funds. I’ll cover more on fundraising in a next blog.
Are you ready to start your crypto company?
Now that you’ve come all the way to the end of my blog, are you eager to start an endeavor?
I personally believe blockchain and cryptocurrency have huge growth potential. But like everything that has growth potential, it’s also a big risk. You have to deal with technology, regulations and a public opinion that isn’t already for what blockchain has to offer.
I’m ready for the challenge. Are you? Share your thoughts in the comments below!
If you’d like to discuss your idea or cryptocurrency business plan on a call with me, just book one here in my calendar. I’d be excited to hear your thoughts and help you take the next steps!