*This article is an excerpt from the report of “HashHub Research”.
Based on the experience of HashHub Co., Ltd., which has a track record of working with more than 90 companies, this report introduces the points to be aware of when promoting the crypto business within a corporation and the points necessary for success.
The buzzword “Web3” has attracted attention, and various companies are considering entering businesses that apply blockchain technology. We also receive consultations from companies in categories such as finance, games, IP content, and consulting, and we are accumulating knowledge on common issues and how they were resolved. From that experience, I will explain the points of failure and success when dealing with blockchain as a new business within a company.
- When starting a blockchain business in a corporation, it is classified into a top-down type in which management instructs the Web3 business, a bottom-up type in which enthusiastic staff start, and a pattern that mixes them.
- The former tends to fall into a superficial business, such as ending with the issuance of NFTs, while the latter spends most of its resources on understanding the management and does not make progress. Companies with both elements are starting to make meaningful business.
- The size of the team is also important. Keeping the number of core members to about 2 to 3 people, and then gathering volunteers who are involved in various granularity will make it easier for the size and speed of the organization to work. There are aspects similar to normal new businesses.
Difference in interest between management and players
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In addition, through several years of corporate support, we are aware of changes in corporate categories and fashion trends. From the end of 2021, when the popularity of NFTs in the crypto area has settled down, domestic companies will begin to enter the market in earnest. It is an impression that various domestic companies have entered without choosing consultants or industries.
Most companies enter the market in the form of a mixture of the following two patterns.
- The management sees the popularity of Web3, and the new business department investigates Web3 from the top down. NFT or DAO is often the theme.
- Enthusiastic staff who are interested in crypto will start a new blockchain-based business from the bottom up. There are many things that are not limited to NFTs and DAOs.
The impression is that the ratio is higher than 1. The problem with 1. is that management recognizes Web3 as NFT and DAO, and it often becomes a business without any particular novelty. Also, since the staff are not familiar with blockchain technology, it is necessary to understand the history and circumstances, and it is difficult to deeply understand the philosophy and advantages. The advantage is that it is easy to proceed with the business because it is an instruction from the management, but there is no novelty because it is often an existing NFT type business because the understanding is not deep.
In NFT-related businesses, most of the market is the circulation of funds in crypto natives, but because they cannot target them, returns tend to be low for the resources invested.
In 2., the staff are individually investigating crypto and blockchain, so it is possible to propose a deeper business than in 1. However, the problem is that it is difficult to gain the understanding of management because it is a bottom-up approach, and in particular, it takes time to input the prerequisite knowledge because it is necessary to explain from the past background in order to explain the philosophy and benefits. Most of the resources will be used to persuade the management, and although the business content is novel, progress will be slow.
Successful companies often have both 1. and 2. The staff understands crypto and blockchain, and the management is not satisfied with everything, but there are a few companies that go GO, and they are embarking on new businesses.
Specific challenges in companies
Specific issues that arise when playing GO include the management of private keys and the legal aspects of NFT and BCG (blockchain games).
When issuing NFT etc. in a company, it is necessary to manage the private key, and instead of managing it alone to prevent theft, multisig (signature by multiple people) is required. Tools include:
From the legal point of view of NFT and BCG, AMT’s mail magazine and JCBA’s guidelines are helpful. When starting a business, you should consult with an expert, but I think it is good to refer to these information first.
Another challenge is team size. Not limited to this matter, it is necessary to involve in-house volunteers when starting a new business from the bottom up. Since there are not many resources allocated to new businesses, it is necessary to enlist the help of in-house experts to develop a business model.
The problem with the blockchain business that comes out here is that the knowledge you have varies depending on the timing and enthusiasm of volunteers. Leaders are knowledgeable, new volunteers are not. In addition, knowledge varies depending on when volunteers entered the field and their enthusiasm, so the cost of cooperating with new volunteers is high, and the team is divided between those who have knowledge and those who do not.
In order to avoid this, it is recommended to limit the number of core members to 2 or 3, and to divide the range of participation among collaborators according to their enthusiasm. It’s a bit like a DAO. There is no compensation within the company, but I think that their compensation will be the experience of agreeing with the vision and mission of the business and creating the future within the company.
I have also started new businesses from the bottom up several times, and being able to endorse technology that creates the future that will change the world, rather than my main business, is a motivating factor. By allocating tasks according to their enthusiasm, it will be easier to create a business plan that covers areas outside their own expertise. This experience will also be a good experience when taking a DAO approach.
However, in order to gather volunteers, it is necessary to explain the mission and vision of the new business and why we are betting on the technology in an easy-to-understand manner. However, many companies are struggling because it takes resources to explain blockchains and NFTs to people who do not know them well.
Also, since the philosophical point is difficult, it is necessary to start with NFT and STEPN, etc., which the general public has heard about as an entrance, and gradually increase the difficulty. HashHub Research’s corporate plan also explains the common misconceptions of buzzwords such as NFT and Web3.
In this report, we have summarized the points for starting a blockchain-related business as a corporation based on our experience in consulting with various companies. Successful companies need management understanding and staff with deep knowledge of blockchain, but not both. In addition, it is necessary to limit the number of core members to 2 to 3 people, and gather volunteers who participate in various granularity, which is similar to a normal bottom-up new business.
Such rules of thumb and management of private keys can be shortened by having experts cooperate. There are various consulting companies, but HashHub Research also supports it with an enterprise plan. Please refer to the following page for detailed explanations and free reports and consultations from the inquiry form.
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HashHub Research: A subscription-type media service that provides high-quality and highly specialized research reports on Web3. In addition to report subscriptions for corporations, we also provide services such as Q&A and spot consulting using chat tools, and about 70 companies, mainly major domestic companies, have contracted for corporate plans. Learn more about corporate plans here.
｜Text: HashHub Research
｜Editing: Coindesk JAPAN Editorial Department
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