The story of one failure: how I launched the cryptocurrency project, why it failed and what lessons I learned. Parts 2 and 3.

My ten-month experience in creating and developing a startup. I tell you what worked well and what didn’t.I show my own mistakes and hope to save readers from repeating them.

In the first part I told the backstory. Here I will tell you how the idea was formed and how it was modernized.

 

Part 2. How the idea was born

The cryptocurrency market was a new market, which is nottalk about the problem of fraud. The main disease of the ICO world has already happened to the investment community before. This happened in the 17th century: it was then that the first joint-stock companies appeared that raised money for the colonization of America. Private investors pooled capital and invested it in risky enterprises. There was no government regulation. But there was profitability. Therefore, it all ended the same way - with an inflated bubble on the left and a total scam on the right.

After that, two things happened: states wrote laws, and business created financial institutions. Banks, investment funds, brokerage companies - this is all about it. The idea of ​​financial institutions is one: to collect a lot of capital in a heap and get a lot of cash flow. Take a small commission from this turnover and at the expense of it ensure the evaluation of projects and protection from fraud.

Simply put, when a bank has a billion dollars onaccounts, he will hire analysts, financiers, lawyers and a security service. Yes, even the hell. And this gop company will distinguish good projects from bad ones and give good money. And current expenses will be covered by future profit. Investors are in the black, projects are in the black, the bank is in black. Details are variable, but the essence is.

I thought: why not transfer the idea of ​​a financial institution from the classic cryptocurrency market? The business model is proven and working. But it is absent in the cryptocurrency market simply because the market is new.

 

I wanted to transfer the idea of ​​financial institutions from the classic cryptocurrency market. Protect investors from fraud and earn commissions.

 

It sounded ambitious, I liked it. But that was the basic idea of ​​the project. In addition to the obvious difficulties with the implementation, it had another serious problem - complete vulnerability to competitors. In fact, I created an analogue of Goldman Sachs (this is a well-known investment bank with a century of history) for the cryptocurrency market. But I understood: when a real Goldman Sachs or other large investment banks comes to the party, my business will be covered. And sooner or later they will drop by. And they will have to compete.

 

Part 3. How the idea has changed

I'm crazy enough to take a swing attitans. But I'm not an idiot to fight them head-on. So I modified the original idea. I turned it not into a classic investment bank, but into a superstructure on top of it.

The modified version was as follows: create a social network that will bring together investors, asset managers and ICO projects. That is, in the modified idea, I added a new category of users and tied everything with an IT product.

Asset managers are market professionals. They have skills and expertise that ordinary investors do not have. They are looking for promising projects and bring them to a social network. This is cool for them, because they gain access to investors and earn commissions. This is cool for me, because I get scoring projects with the wrong hands. For investors, this is cool, because they do not need to search for projects on their own - just find the manager and rely on his expertise. And for projects it's cool, because they get money.

 

In fact, I integrated the financial institution into a social network. And he turned the social network into Uber for the world of ICO investments.

 

Investors carry asset management moneyevaluate projects, projects do business. The social network allows them to communicate with each other and enter into investment transactions within the platform. That is, my project is a unifying platform. At the same time, the administration of the social network has its own lawyers and a security service, which are an independent Cerberus. Cerberus checks transactions, provides protection against fraudsters and allows participants to trust each other.

Globally, I understood that to promote socialthe network is complicated. But I also understood that if successful, I would defend myself against competitors and monopolize a niche. Pulling users out of a social network is too expensive even for Goldman Sachs. But you can attract new ones on a budget thanks to the network effect: Facebook demonstrated it at one time.

In addition, there was a hype market on my side. I was going to overcome the most difficult starting point due to the rising wave and reach a critical mass of users. Further it would be easier. Therefore, there was a risk, but the game was worth the candle.

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Let me remind you that the full text of the story is available immediatelyread here. Or wait until I publish it on smartlab. I also remind you about my telegram channel, in which I publish my own articles about investments and project management. I wait to visit!