The Two Spheres of Blockchain Marketing

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There are two kinds of blockchain founders. Founders from the cryptocurrency community and founders who are not.

Blockchain is a complex technology and it’s driven by the most tightly-knit tech community I’ve been a part of. If you’re a blockchain company founder, you won’t succeed if you don’t join this community — no matter how deeply you’ve mastered your own market.

The Two Audiences for Blockchain Marketing

Working with the cryptocurrency community and ecosystem is an essential first step. The community understands blockchain business models, and they have the cryptocurrency to invest in new blockchain ventures. The second focus should be your market and users, including enterprise clients, end-users, and the public.

Two phases of marketing match up with these two audiences. The first is fundraising. The second is go-to-market strategy and execution.

Fundraising as Marketing Campaign

VCs have been the backbone of the tech industry for three decades. This has mostly been a 1:1 process. To raise smart money, you needed a great idea, a strong team and clear path to product/market fit. It’s how innovative product ideas and business models have raised funds to make their way to market. Beyond some good PR aircover, startups didn’t need a robust pre-raise marketing strategy to close funding.

But there are downsides to “smart” VC money. They take significant equity ownership, their influence is concentrated and their goals may, in time, conflict with the company’s users.

This model has been turned on its head with ICOs.

In 2012, Obama signed the JOBS Act. Title III of the JOBS Act enabled crowdfunding for the first time in the US. Now, crowdfunding can be the best way to raise money for tokenized, blockchain-based companies and foundations. This is a new step — a different step — in startup creation and growth. Instead of soliciting attention from a handful of VCs, blockchain companies raise money from the “crowd.” In this case, the crowd is made up of everyone who owns cryptocurrency.

The Cryptocurrency Sphere.

The capitalization of cryptocurrencies now exceeds $350 billion. A productive way to think of the cryptocurrency sphere is as a huge bank. Cryptocurrency holders, mostly Bitcoin and Ethereum, have all their money sloshing around in the cryptocurrency sphere, searching for investments to diversify their portfolios. They don’t want to pull their funds out of crypto markets because they don’t want to pay taxes. Especially when they’d just to turn around and reinvest the funds as fiat currency.

So where will they invest?

ICOs, of course.

But here’s the challenge: Cryptocurrency holders are much more likely to invest and trust in blockchain startups that include people they’ve known from the crypto community. I’ve met scores of startup founders who don’t understand this dynamic and are confused why they’re having trouble raising funds via ICOs. The reason they’re having trouble is that they’re not well known within the cryptocurrency sphere.

The deep irony of this decentralized, crypto revolution is that, for now, success hinges on tight integration with this closely-knit community.

The “Traditional” Marketing Sphere

After engaging with the crypto community and raising money, blockchain companies need to execute a totally different playbook for go-to-market. Fortunately, this is familiar to most marketers. It’s the traditional integrated digital marketing approach.

But there is still a challenge explaining the value and benefits of blockchain solutions to these traditional enterprises, government and consumer audiences.

Traditional marketing audiences don’t care about blockchains, hash-rates or tokenized economies. They care about new services and capabilities that will improve their business. They care about lower transaction costs and new ways to trade.

Clearly translating how real-world users get these benefits from blockchain-based solutions will be the ongoing work of blockchain marketing.