Launching a startup can be difficult — but scaling it can be even harder. Pre-launch startups typically struggle to capture the initial capital necessary to enter the marketplace, with less than one percent of all startups that seek venture capital funding successfully executing a seed round.
Some startup founders choose to bootstrap their startup concept with personal funds. Regardless of whether your startup is self-funded or is backed by venture capital, it will eventually face a common obstacle: how can the scaling process be optimised?
A statistical analysis performed by Startup Genome of over 3,000 startups identified premature scaling as the leading cause of startup failure. 70 percent of all startups fail in the first year from launch by attempting to grow their business to a scale that it is not yet ready to support.
There are, however, a number of tools, technologies, and processes you can use to accelerate the process of scaling up your startup without driving it into the ground. Blockchain technology is a powerful resource that offers startups a diverse range of applications that can be used to boost startup growth at minimal cost.
Capture Funding with Blockchain-Based Crowdfunding
Many of the most successful blockchain platforms and enterprises at work today weren’t backed by institutional or venture capitalists. Blockchain-based crowdfunding is one of the most successful business models to emerge from the blockchain industry, and provides startups with the ability to generate significant amounts of startup capital without losing ownership of equity.
The most common form of blockchain based crowdfunding is the initial coin offering, or ICO. An initial coin offering is a crowdsale in which a pre-launch blockchain-based platform offers cryptocurrency tokens for sale before the network they will be used on exists.
In most cases, an ICO will offer a utility token — a blockchain-based token that can be used to purchase goods or services once the platform itself is live. Regulatory crackdowns on initial coin offerings have altered the ICO marketplace, however. Newer token crowdsale models such as “security token offerings,” or STOs, provide startups with the same crowdfunding benefits as ICOs, but are fully regulatory compliant.
The ICO is far from over, however. Initial coin offerings have generated over $7.5 billion USD in 2019 alone, making it a highly attractive business model for startups seeking startup capital outside of the venture capital ecosystem.
Consider Accepting Cryptocurrency as a Payment Method
The fees associated will receiving debit or credit card payments can cut into the cash flow of brand new startups. For a new startup, the 2 percent to 10 percent charged by card payment processors can represent a significant amount of capital that could otherwise be reinvested into the growth of the business itself.
Accepting cryptocurrencies such as Bitcoin, Ethereum, Litecoin, or Dash as a payment method at your startup can minimize the fees associated with card payment processors, as well as deliver a range of additional benefits.
Timely cash flow is essential to the operation of any new startup attempting to scale. Cryptocurrency payments are typically completed within 30-45 minutes — some cryptocurrencies, such as Dash, execute transactions instantly.
As soon as a cryptocurrency payment is received, a startup is able to use a decentralised, highly secure cryptocurrency trading platform such as Rubix.io to exchange crypto for fiat currency, making it cryptocurrency payments the ideal rapid remittance solution for scaling startups.
If you choose to accept cryptocurrency at your startup, it’s important to understand the tax obligations you will incur when you dispose of it. If you’re not sure how to get started with accepting crypto currency payments it’s best to reach out to professional small business accountants for guidance.
Decentralize Your Marketing
A new startup needs to capture the attention of prospective customers in order to scale. Marketing, however, can be prohibitively expensive for many bootstrapped and small-scale startups. The digital marketing ecosystem is home to enormous, highly centralized marketing firms that control the majority of the market, making digital marketing a costly process.
Blockchain-based digital marketing platforms such as the Brave browser project and Basic Attention Token, however, make it possible to engage publishers to distribute advertising campaigns that can be tracked in a highly accurate manner, ensuring that your startup captures maximum value in return for its marketing budget.
The core features of blockchain technology — decentralization, transparency, and immutability — are ideal when applied to scaling a startup, whether your business is focused on capturing startup funds, increasing cash flow, or executing cost-effective marketing campaigns.