We are utilizing our own toolset which combines many frameworks and has certain upgrades and adjustments to existing, well-established frameworks including Porter’s 5 Forces. At the core of our model is the business model canvas which is great to formulate a value proposition and to show the combination of key building blocks in an organization or project. The following approach of utilizing various frameworks can lead to a clear value proposition - defined in the business model canvas - and action plan.
Due to the business model canvas lacking market and competition analysis, and doesn’t include specific strategy frameworks, we’ve added to it in our “Strategic Assessment and Strategy Map for Business”. We must highlight that this is about strategy formulation, finding good positioning in the market, and creating a unique value proposition - it doesn’t include similarly important aspects such as strategy execution and tracking nor specific blockchain frameworks. We’ll share insights into these in a future article.
Below, we’ll dive deeper and share insights into specific frameworks which are “building blocks” to help any company with unique positioning and a good value proposition. We are using FullBlock Solutions as an example in some of the frameworks.
Before entering a market, you need to screen it, read about it, talk to experts and understand how it works. The “McKinsey approach” of assessing a market is talking about a 3-week assessment and includes:
The devil is in the detail, and the full value of a market assessment will be unlocked through targeting the right market, building the right consortium, and understanding the most important players. We’ll dedicate one of the next articles specifically to the topic of market and project assessment - tailored for blockchain projects.
Whether you want to spend three weeks on market assessment, or complete it faster, an analysis of favorable and unfavorable forces in the competitive environment will be very helpful to specify your offering and decide on good strategic partners.
For FullBlock Solutions, this analysis showed that there are already many development companies and blockchain consultancies in the market. Many of them have a broad offering, they target companies with workshops or do any development required. While it may seem like direct competition initially, FullBlock Solutions decided on a different offering and prefer working together with these companies rather than competing.
FullBlock Solutions differentiates from others through having the inside knowledge into running a blockchain project, growing a blockchain project to a global scale, and engaging in marketing and tech support for projects. Through this experience (including the bad!), working with other protocols and projects, building up connections with important ecosystem members in blockchain and screening the market, FullBlock Solutions has collected best practices in growing a developer community, and onboarding projects, corporates, and investors. A couple of simple examples: Do you know which tooling makes it easy to get started with a new technology or the ability to use it? When would you talk to a liquidity provider?
Additionally, it’s obvious FullBlock Solutions is a great fit for accelerators, incubators and investors because the services perfectly complement each other. Investors need to assess projects and want companies they’ve invested in to perform well. FullBlock is able to support startups as well as larger projects, engaging in project assessment and supporting projects throughout the lifecycle. In this regard FullBlock can be seen as “added insurance” since it gives a project a better chance at a long and healthy life.
The analysis of Strengths, Weaknesses, Opportunities and Threats is well known among people in business. We recommend using a SWOT analysis in multiple iterations to see how it changes over time. Communication of strengths and weaknesses may vary externally from internally, but it’s essential to be 100% honest when assessing capabilities of your company and team, otherwise, the value proposition may be less valuable than you imagined, and ultimately harm your business. At the end of the day, “If you provide real value to others, it will pay off in the long-term.”
Mapping the ecosystem will help you understand the important industry players, strategic partners, and potential customers. Many businesses arrive at a general value proposition which largely fits all target customer segments, but there’s no “one size fits all” model in blockchain - there are many completely different target audiences.
In order to find the various customer profiles, you must break down each identified target segment into different categories such as; geography, demography, psychography, behavior, and available finances - depending on your business needs and capabilities. For some businesses, geography may not be an issue while others may want to position themselves specifically in one region as market leaders.
A hypothesis about the ideal target customer can be made by utilizing the value proposition canvas and analyzing the value of gain-creators and pain-relievers through your offering.
Eventually you’ll be able to create target personas, and you’ll need to go out and test your assumptions with real potential customers to see if your perceived value proposition is as positive as imagined. Most likely, the market will respond differently and you need to adjust your offering, communication, or the target audience accordingly.
FullBlock Solutions initially targeted corporates because we’ve seen first hand the huge gap between blockchain technology and industry. We figured we can close this gap through educational workshops and consulting. While we are still convinced that a lot of education is necessary for the majority of this target segment, we’ve seen that there are quite a few blockchain consultancies offering introductory workshops and that our expert blockchain knowledge doesn’t make a big difference (though, it should!) for most of the targeted businesses. As we have the knowledge and materials, we still provide workshops to large and medium-sized companies (See Services).
In contrast, our primary focus shifted towards blockchain projects and crypto investors which we can support with project assessment, strategy, and hands-on implementation. We can uniquely analyze projects which helps them become highly accessible, inclusive, and therefore more attractive by providing feedback and input on tech and tooling, tokenomics and governance, and the “onboarding funnel” among other things. Also, based on an initial assessment, we support projects with strategy on the go-to market or positioning in DLT, and the onboarding of different target segments. (See article about Blockchain Strategies)
The 4 P’s of marketing are a classic in marketing theory. As you can see in the graphic below, it focuses largely on products, and must be adjusted for blockchain.
Although there’s a lot of marketing engagement in blockchain, professionalism often seems to be lacking. One great aspect of ICO projects and token offerings in general is the incentivization of all token holders to engage in marketing and recruiting of new investors. Many projects started out as community projects and did a fantastic job in attracting hundreds of early contributors, marketers and investors to their projects.
Depending on the vision of a project, the targeting of amateur investors and guerilla marketing can be very effective. Besides amateur investors, many blockchain projects need to target users, corporates or startups to build on top of their project, or at least to use it. Most often there’s no clear value proposition communicated to these target segments, and there is no real onboarding funnel for this either!
Having worked on the NEM Blockchain project directly, we can use it as an example:
While we won’t specifically go into detail about price etc., this can be applied for blockchain and you may want to show or communicate your transaction fee model which should incentivize nodes to run the network while being cheap and stable for businesses and users alike. You should also be able to explain the long-term cost (savings) for hosting and working with your tech rather than other DLT services or databases.
Besides an “unknown”, and therefore unclear communication when the second version of the product (NEM core blockchain) would be released, the product offering of NEM 2.0 is relatively unique with a set of advanced templated smart contracts through which you can easily connect your off-chain business logic through APIs and SDKs. The existing smart contracts - or a combination of those - and the availability of a public and private chain allows your company to build or utilize blockchain in a very efficient and cost-effective way while keeping your business logic behind “closed doors”. Instead of explaining random key features, you should be able to explain specific problems, solutions and use case examples which you can solve with your product. In this document, the FullBlock Solutions team explained the importance of a “Catapult framework” - an onboarding funnel for the diverse problems owners/potential users of NEM.
The NEM Foundation has people on all continents, though largely only in Japan we’re seeing some adoption. It makes sense to utilize these paid people and share one concise message tailored to each market online and offline. NEM can be seen as a blockchain for business, so it makes sense to skip ICO events and blockchain conferences, rather, focus on the channels that fit their target segment the best. You could attend industry events with specifically prepared use cases, or create use cases yourself and target governments, corporates, or startups all over the world. While working for NEM Europe, our team created another great approach: a service partner network with development companies and consultancies. Through service partners you get access to their large network of companies - of course only if you manage it properly, have standardized, recurring training, updates, and quality checks.
Promotion was very fragmented through the variety of regional strategies, different channels, multitude of stakeholders, and good initial concepts lacked execution power and mixed messaging. Early on, NEM built on a network of meetup organizers (ambassadors) but gave them only a NEM101 presentation. Simple applications to use the cryptocurrency during a meetup, among friends or for getting a freebie can have a great effect on building up a large user (small investor) base. At the same time, more technical workshops for developer onboarding or follow-up workshop modules such as NEM201 and NEM301 and quality workshops such as “NEM for Insurance” and “NEM for finance” were given by our team in Europe, and showed immediate results. Aside of this sort of community building, there are good ways to onboard target segments through online education, specifically targeted online marketing campaigns, and a scalable, actively managed grant and incubation program. The latter helps build important tooling and use cases to enable NEM ecosystem growth. Polkadot and Waves are doing a great job with onboarding knowledgeable (tech) people, incentivizing them to contribute long-term to the project, and promoting the projects.
You should differentiate yourself from other projects and communicate clearly your unique offering. Usually, you analyze the existing market and look for the competing factors, then you can decide which factors to Eliminate, Reduce, Raise or Create (ERRC Framework).
The DLT space is quite crowded - many platforms target a broad spectrum of users and companies, so it’s essential to find the specific niche where your project can differentiate and/or add real value to existing projects in order not to be overlooked as a technology choice.
This value can be created directly through the core technology - inventions on privacy (Elixxir), consensus algorithms (ThunderCore), the blockchain ledger size (CODA), a different data structure (IOTA) - or compete on completely different factors such as Hyperledger on “Service” or by targeting one specific vertical (Ripple) or region (Tomochain).
As FullBlock Solutions, we also utilized this framework in order to position ourselves clearly and differentiate our offer from “competitors”. When you look at the following table, you’ll see that it’s tough to both explain and showcase how you can provide value to clients in a crowded market when you look at it from a high-level.
All of the mentioned "competitors"are strong in their specific fields: legal, financing, marketing and BD or development and strategy consulting. However, they are not yet knowledgeable in blockchain an if you support blockchain projects most often you also need deep blockchain-specific knowledge, marketing and strategy consulting. Therefore, we focus on very specific offerings towards blockchain projects such as project assessment, blockchain strategy creation and implementation of it. The strategy canvas looks completely different and by outlining it internally and externally, we’re able to communicate clearly how FullBlock Solutions can make a difference for most blockchain projects. In fact, we can break things down even further to make the value we can bring to your project even more obvious in areas others just can’t.
Please note: the Strategy Canvas above focuses specifically on the unique value proposition of FullBlock Solutions, and is far more detailed on project assessment, strategy creation and execution than on other factors. We included the factors development, legal and finance to show that we prefer to work with trusted expert partners in these areas - despite having a solid understanding of these ourselves. We’re building a collaborative ecosystem rather than claiming to be experts in all fields. Check out our partner section and jump on board with us!
If you utilize these frameworks to define your optimal positioning in the blockchain industry, you’ll be able to create a unique value proposition and communicate it properly to your various target segments. Depending on your preferred strategy - whether you use the strategy of “Focus”, “Differentiation” or “Cost leadership” - you’ll be able to avoid being stuck in the middle without any recognizable advantage over your competition.
Be sure to break down your analysis specifically for your company and industry. The research process can be accelerated by utilizing a lean approach, coming up with a hypothesis, and testing and adjusting your value proposition - it’s an iterative process. Obviously, you should keep track of the value proposition you aim to deliver and how the market is developing. It also helps knowing many protocols in-depth, and the industry as a long-term market insider to do market research effectively.
Please subscribe for a more specific analysis, and let us know your questions in the comment section - feel free to reach out directly to email@example.com.