The blockchain and web3 revolution are in full swing. From NFTs (non-fungible tokens) that have since taken over mainstream consciousness to innovative DeFi protocols and now the metaverse, it seems like there’s no end to the possibilities of what blockchain can do.
However, with the influx of new projects comes an unfortunate side effect: an increase in blockchain startups that fail. In fact, an official report commissioned by the Chinese government found that a whopping 92% of blockchain projects will fail within 1.22 years.
Marek Bardonski, a tech-investment expert recognized by Harvard and NASA, collaborates with Luke Dawson, Chief Business Officer at Axiom Sys, to share what Investors often overlook when screening Blockchain startups. Axiom Sys is a company that helps organizations enter the Web3 space with their blockchain consulting and development services.
According to Bardonski, there are three primary reasons why most blockchain startups fail:
The first reason is a lack of understanding of the technology. Understanding the complexity that comes with picking the most efficient consensus protocols, building a scalable network from the start, and designing a tokenomics strategy that will actually work can be quite daunting for first-time entrepreneurs. Many projects are doomed from the start because their team simply doesn’t have the necessary skills to bring their vision to life.
The second reason is a lack of understanding of the market. Many blockchain startups make the mistake of assuming that their project is the first and only of its kind when in reality there are often already established players in the space. As a result, these projects often fail to gain any traction because they’re simply not able to compete with the already existing competition.
The third and final reason is a lack of understanding of the regulatory environment. The truth is that the regulatory landscape for blockchain is still very much in flux, and as a result, many projects find themselves in hot water because they didn’t take the time to ensure that their project was compliant with all applicable laws and regulations.
So, what can blockchain startups do to avoid these pitfalls? Well, Bardonski believes that the key is to ensure that you have a team that is not only technically proficient but also has a deep understanding of the market and the regulatory environment. Without this, your project is likely to fail before it even gets off.
Bardonski who is also the CTO at Axiom Sys and brings a wealth of experience to the team thanks to his 13 years of experience in machine learning not to mention 9 years of commercial experience working with institutions such as NASA, DARPA, and NVIDIA. Axiom Sys helps Venture Capital & Private Equity firms investing in the blockchain space with technical due diligence and value creation for their portfolio companies.
If you’re a VC partner who wants to reduce portfolio risks by having expert help on the due diligence process, get in touch with Axiom Sys via https://www.axiomsys.com/
Media Contact
Company Name: Axiom Sys
Contact Person: Marek Bardonski
Email: Send Email
Phone: +1 646-213-7667
Country: United States
Website: https://www.axiomsys.com/