Every once in a while, new technology emerges and completely transforms the way humans live. During the dot-com era, the buzzword “internet” had all of the spotlight. It was growing extremely fast and spreading globally. Millions of people has joined the movement and funded everything related to internet technologies, from marketplaces to internet content distributors, such as broadcast.com.
At that time, people had absolutely no doubt that this was a total-game changer and that the sector was floated with capital, and venture capitalists began fighting each other for investment opportunities. In economic terms, the supply of capital exceeded the supply of proper investment opportunities; too few companies shared too much capital, which led to a crash and market crystallization.
Below is a pattern that occurred during the dot-com era:
- Revolutionary technology arrives and becomes available to consumers (internet).
- People become aware of how impactful it is and direct their resources towards the new technology.
- Investors start funding every team which has at least minimum experience related to a new thing and an idea (white paper)
- Other people see how easy it is to raise a capital because it is something new. The supply of investment opportunities is still low, and more teams with their ideas (white papers/business plans) join the movement. However, they are competing with already existing teams for capital, so they add prototypes to their presentations. Now we have teams with white papers and teams with prototypes/MVPs joining the competition.
- News on a “revolutionary technology” is already a mainstream and capital is already in, therefore the supply of it is slowing down. Entrepreneurs still see it as an enormous opportunity, so they continue flooding in. Supply/demand equilibrium starts reversing: companies/investment opportunities are joining faster than capital. New teams are looking for investments and it is now not enough just to have a white-paper or prototype — they need to have a client base and validated idea/market.
And here we see an investment ladder of new emerging technologies:
- Teams with white papers
- Teams with white papers and prototypes.
- Teams with a validated idea and a client base, because the market is maturing
As we can see, most internet-related start-ups are in the last phase. In order to get funding, they must have a validated idea and a client base. Invalidated business ideas have an extremely high chance of failure due to lack of market relevance.
And what does all of this have to do with the blockchain sector?
It follows a similar pattern:
- Teams with white papers join the game: golem, firstblood, melon-port, iconomi, etc.
- Teams with white papers and prototypes come in, even if most of the prototypes are not really functioning: bancor, status, aragon, and pretty much almost every crypto project today.
- Finally, teams with a validated idea and a client base arrive: OmiseGo
Now, let’s check how similar the pattern is to the dot-com era:
- Blockchain will change the entire economy, just as the internet did: Check
- Blockchain is in the mainstream news: Check
- In the last 12 months, capital from investors flooded in faster than proper investment opportunities with validated ideas: Check
- More companies with a validated business model and a client base are joining the game: Check
It’s time to crowdfund actual start-ups with validated business ideas and a verified client base, not just white-papers.
And that’s exactly who we are. Check out our already-functioning business raising funds through the blockchain — Pressco.
What is Pressco? It is an e-commerce platform that allows communities and companies to start their own clothing and merchandise brand by reducing their initial costs to absolute zero.
Pressco already run 60+ online shops in markets such as Germany, France, Canada, Lithuania, Latvia, Estonia and now is looking for Series A investement (hard cap:7000ETH) through the blockchain.
Find out more, visit Pressco webpage http://www.pressco.io
This is a sponsored press release and does not necessarily reflect the opinions or views held by any employees of The Merkle. This is not investment, trading, or gambling advice. Always conduct your own independent research.