I had the opportunity to sit down with blockchain expert and entrepreneur Justin Wu. Wu is also a strategic advisor to some of the industry’s top ICOs, and explained the importance of putting together an advisory board and utilizing these advisors when entering the crypto space.
If there’s one thing you need to know, it’s that most of these ventures are based on a promise to deliver. “A whitepaper, in its most [simple] form, is a concept and idea, nothing more,” says Wu. Most of these guys haven’t built the utility yet, but they are able to make their deck look nice with multiple pages. You still have to wait for the execution and utility to the space.
Entering Industry 4.0
As we are at the beginning stages of Industry 4.0, we still have a long way to go before we can truly argue that our world has been ‘digitized’. Wu believes that the industry is still limited by the blockchain platforms themselves, which need to be sorted out. “Before we see the transformation into Industry 4.0, or attempt to tokenize everything out in the real world, we need to make sure these blockchain platforms are solid,” says Wu.
The world can be tokenized in some sense, which opens up doors, allowing for ownership of multiple aspects of different spaces and the ability to democratize content in ways we never thought possible.
Acceleration Through Advisory Boards
When it comes to blockchain technology and the crypto space, Wu believes that having a tight advisory board can make all the difference.
Operating in an industry with people who don’t have the experience or level of expertise necessary to help grow the business is problematic and troubling. “Advisors can accelerate through the whole process of building a crypto venture,” Wu emphasizes. Why? Because running a token sale requires covering a lot of bases. For example, you’re looking at token economics, crowdsales, legal knowledge, and even utilizing smart contracts. This is all new stuff.
As an entrepreneur, bringing in a board allows you to unlock doors and put the necessary connections in place, all while having the proper advisors by your side, guiding you.
The background of your advisor(s) determines the speed at which mentorship can happen. The more an entrepreneur inundates themselves in the space and understands it more than the average Joe, the more credibility you will acquire.
You Are The Weakest Link, Goodbye!
“The industry is really lacking maturity still,” says Wu. Since the explosion in early 2017, most players are legal experts, business executives, developers, and marketing/growth. It’s still a young industry.
Wu believes that everyone is in the same boat, in that “everyone is still green.” and that there are very few true experts in the space. With any new industry, there are always bad actors who enter into the space and prey on new players’ vulnerabilities and inexperience.
The space needs more mature players from different industries and fields to come in, collaborate, and unite the marketplace. Otherwise, the space is just comprised of inexperienced, young investors who are promising to change things, with no real understanding or experience in how to execute.
Inability To Provide Real-World Context
The problem with many token sales and even post-ICOs is that there is still a lack of real-world context. Most of the time, the company or token doesn’t have the experience, contacts, or any real ability to connect the dots in whatever industry it promises to enhance. “Take e-commerce, for example. Does the team behind the venture or token even have e-commerce experience to connect those dots in the real world?” asks Wu. They can build whatever tools they need, but if they don’t have the experience in the industry, then those tools are ultimately worthless.
Another question Wu presents is whether these companies have the necessary ‘buy-in’ from major players in the space. Wu has encountered many such opportunities since he’s entered the space, most notably CoinCircle’s partnership with Unikrn Gold, the world’s top regulated e-sports betting platform, and Shark Tank investor Mark Cuban.
Lack of User Acquisition Leads To A Failure To Execute
At the end of the day, the goal is to have user acquisition. But that’s not what we are seeing today. Instead, we have early investors monitoring their tokens, with no real utility as promised. Thus, there is no execution, and everyone who invested is out money that they will probably never see again.
Wu and I agreed that when entering the space, one must analyze a venture the same as they would any other investment or startup. You can build a great application, but if you can’t provide real-world experience, context, and utility, then you can’t break through, regardless of how much money you’ve raised. That’s the big issue with the majority of the tokens that have been launched.
Playing Ball With Regulatory Agencies
“It’s important[,] if you’re in this space, to be compliant with agencies like the SEC,” emphasizes Wu. If you’re going down the security token path, it changes a lot of things in terms of how you go about building the applications. Not every token is a security. They just don’t have utility when they go out and sell, which is the biggest issue faced by the SEC right now.
Wu Launches ‘BlockNauts’ To Help Post-ICOs Down The Right Path
Wu is a strategic advisor to many ICOs. With his latest venture, Blocknauts, which is short for “blockchain astronauts,” he felt the need to search the industry for those post-ICO companies that are actually going out and building applications.
“We see these companies going out and raising $40-50 million, but their team size hasn’t changed,” says Wu. What these tokens are missing is that overall community building brand. Wu’s vision entails building such a community for the blockchain sector, hosting conferences and events that provide utility and knowledge to those in the space, which will ultimately allow for the creation of new content.
Uniting The Global Marketplace
We are now seeing disruption and a potential flip in a lot of different industries, with individuals starting to focus on owning their data, giving and trading value, and, of course, the creation of that value.
Blockchain technology has incentivized people to be more collaborative across industries and in other aspects of the world. The intersection of blockchain with cryptocurrency has started to unite global markets, despite differences in operations (e.g., fintech, regtech, and so on).
Connecting With The Space
“The best way to know if a promise is real is to go and find those people working on meaningful blockchain projects,” says Wu. This past year alone, Wu has targeted protocol and core developers, allowing him to be closer to reality and farther from the hype.
“I’ve been making that effort to go to these events, like hackathons, and meeting people developing at the top of the protocol, finding out what projects are going on and who is involved,” says Wu.
It’s the only way to separate hype from reality.
Any and all images used are credited to and/or attributed to Justin Wu and his management team