Yes, I attended many StartupWeekends and unoffically endedup being a critic. I write many long letters at odd times to many participants I meet and have an intereaction with. Ideas plenty and we keep refining thoughts with exchanges. Of the many letters I write, I am attaching 2 open letters to 2 different concepts provided byseperate teams I met at StartupWeekend. One is about “decentrailizedUber”, and 2nd one is “one-stop platform for [removed]”. These are 2 open letters as I thought its better to share and get feedback on the ideas, than have a 1-sided conversation. I might be wrong, and so leaving room open for comments. Some letters are critique and some I write to inspire kids to come up with new ideas. But, in all good faith I wanted most of the bad ones to FAIL FAST ; )
1/.. … Decentralized Uber
It was interesting to learn about blockchain from your team’s pitch at StartupWeekend XXX. Good work folks, and looking forward to learn about XXX’s progress. Here’s a a few questions I wanted to ask,
Compliance: Any startup even setup offshore, but operations onshore, has to respect the rule of the land. And, Indian laws don’t seem to accept double standards in currency trade. Do you think blockchain “credits” are legally accepted for commercial applications? Do you see any company that is operating with credit-model? Recently a Crypto ATM installed in India was sealed and banned even though they claimed to have used a currency of their own making. ICO/STO are not approved by SEBI so far. Raising funds apart, firms working on operations like credit-to-cash swap model need to be regulated under Payments Bank, which means you have to apply for a license like AirtelMoney, PayTM.
Servers: IMO, blockchain apps so far are well suited for AUDIT. For usecases that involves more than 3 layers — In your case applicaiton, protocol, and blockchain Esp. REALTIME, involves mining blocks of data that require private server farms. When it comes to storing data on devices, every transaction the networks accounts for, it adds more latency to your users and accounts for losses due to single point of failures. And, however easy it really sounds it is, do you think locally an infrastructure of this Magnum-Opus could be built in-house?
Ownership: Just a small use-case. Whoever owns 51% of the network owns the block, and can crash the entire system in one go. And, the chain could be rewritten by them. And, you have to add 75% more servers as your network grows. My question is who owns the block if it crosses the threshold? As per the block-chain concept, all it takes is a this small threshold of cab-owners, who CAN decide to jack-up the fares on their own discretion whenever they demand. Decentrailization = Greater democratization, peer-to-peer interactions. That’s TRUE decentrailization.
OpenSource: True decentrailization is all about giving the app for free — OPEN sourcing the code. Unless this application is Free-OpenSource Software, which is not possible, it is not truly decentrailized. Uber is already partly-decentrailized, giving more power to the users in every way, except they have a reign over booking, and payments. The commission is the only catch they end up charging from commuters and drivers for such a massive real-time infrastructure which sends/receives billions of inodes.
Onboarding — The few reasons why gig-economy forces payments in one to two weeks time is legal audit, and balanced credit. If people GAME the system to get more credits, how will you even know and deliver on your promise of crediting money by end of the day?
Accounting — In almost all cash-transaction models so far, petty cash should be credited via ATMs and accounted for by the end of the day. Your model offers to keep the cash, which opens possibilities for serious book-keeping schemes.
Gamification — Incentives help in GigEconomy, and has been one of the practical gamifications we have experienced so far. We get offers, drivers get incentives. In either way, we are lured to adopt a system of conviencnce, make believing we need to spend more to get more. The big challenge is making drivers & commuters, disband their convential operators, and buy from you ALONE.
Platform — Having worked with the protocols, I find lesser creative use-cases that solve real-world issues. Many decentralized apps in market focus more on pyramid schemes, betting, gambling, games, P2P lending, finances that fuel the usage of crypto currency, backed by the very developers who intend to promote the tokens. If the real-world applications were so lucrative, many companies would have already replicated the existing apps in countries where crypto-currency is accepted standards. I explored the market for pain-killers, but only found candies, and not even vitamin tablets.
Sometimes I wonder — Are we complicating simplicity? If decentrailization is the objective, why should cab owners pay even a fraction? Why can’t they use conventional meters at the cost of giving you even a small percentage?
Decentrailizaion is more about keeping the network open to changes. If you provide me a fully trustless protocol based on social-consensus that’s freedom. The concept demands and eliminates the necessity for a 3rd party entity to be part of those who control the rules framework.
That’s why I keep asking — “Why decentralized?” These are simply my collective thoughts. I might be wrong a bit here or there, and I am limited by my own imagination. I am no expert on blockchain, but still learning it. Let’s discuss more about your startup’s progress when we meet next time. I clearly wanted to discuss feasibility in person. All the best ahead for your startup success.
2/.. One stop platform for [removed].
Dear [removed]-2019 TEAM,
Hope you are doing well. It was wonderful to seeing your pitches at StartupWeekend Chennai CEG. Apologies, I might have missed adding the rest of your team in this mail. I just wanted to add a few thoughts.,
I could perceive [removed] idea as a… ̶S̶o̶c̶i̶a̶l̶N̶e̶t̶w̶o̶r̶k̶s̶ -> MarketNetwork.
You can refer all about concepts of what is “MarketNetworks” and “NetworkEffects”. Ref. https://www.nfx.com/post/10-years-about-market-networks The idea is to build multiple complementing startups, and not just one. And, building 3+ startups take massive time, investment and efforts, which is why you could partner with early stage founders in this space early-on and build as single entity. I will suggest you to start small. Build one block at at time. And, have the patience to accept how the market works, esp. for countries like India.
Many investors don’t consider funding a startup that takes too long to Go-to-Market. A good reason why you might find investors scared and shying away if you say it will take more than 3 years. Investors expect quicker return on investments like 3x-5x in 18 months for their investments.
You could work with micro-teams, and build small traction, and not just run behind the best investors for a while till you get market acceptance, brand maturity and revenue. Take your time to find like-minded co-founders, and build your network that complements each other.
There is a startup called Honeybooks which took approx 3 years to build itself as a “MarketNetwork” for Events Industry. In India, there are some hyper-funded startups in several genres/sectors aiming to capitalize your own words as “one-stop platforms” for respective trades.
Most MarketNetworks are built the below fashion.,
- #1: SaaS platform (B2B)
- #2: Marketplace (Inventory/E-commerce)
- #3: Market Niches (B2C)
Each entity acts as a seller/buyer network. The aim is to build a moat. And, it takes time and patience to build a strong interconnected seller/buyer network. Investors need validation that the idea works. Show them the numbers. Start early, and build your traction. Once we are able to build few ecosystems that “talk” to each other, trade is easy. Trust is a subject of choice. And, entirely works both ways. In short, “[The users] come for the tool [and] stay for the network.”. The aim is intended to create an ecosystem that complements each other, and cross-sell within networks. Going forward, I wish you folks all the best on your idea.
And, if any of you folks would like to connect w/these teams, try searching my previous posts on Startup Weekend CEG. Too lazy to click bait you to my own posts! Feel free to connect, and all comments are welcome. Keep exploring!
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