How are Successful startups formed?
They identify a perennial problem and create a business model to solve that problem. The challenging part is how do you find the perennial problem. The closest answer to this question was beautifully carved by Paul Graham (co-founder of Y Combinator) in his lectures. He said that if we consider technology as a spreading fractal stain, every moving point on the edge represents an interesting problem. Successful startups are getting created to solve these problems.
Christen Clayton the renowned harvard professor on his lectures on innovator’s dilemma describes how startups get killed. Most startups try to do what is called a sustaining innovation, which is improving the existing product that’s being done and trying to compete with the Giants already in the business. And the theory is: most convincingly these startups will be crushed by the sheer strength of the competition. But disruptive innovation is different, the way Toyota entered the US market they started competing by creating cars in the low end of the market where the margins were low and went on to create cars that were cheaper, efficient and good quality. Never did the Big companies like ford believe that Toyota would stand where is it today in the US market. Big companies believed in Businesses with high margins and ignored competing with Toyota on low Margin Business. But with a Robust production model, Toyota slowly climbed up the Ladder and almost moved the big market players like Ford out of existence. Now, who is Killing Toyota – the Chinese and the Koreans!!
Bitcoin started with a similar introduction when the anonymous Satoshi Nakamoto created the Bitcoin white paper and made the first-ever cryptocurrency transaction to Hal Finney. Governments and Regulators dismissed bitcoin as Nerd money at first, then a year later bitcoin was deemed as money used by terrorists, Gamblers, and Hackers. And then slowly moving to People, Companies, Gift Cards. Now, bitcoin is on the verge of creating a next disruption to the Financial domain. It almost depicts a similar pattern how Toyota disrupted the Auto industry in the US.
It’s true that Bitcoin today is in a state similar to what was internet in 1991. Before the internet there were systems in place for each thing, a system to send mail, a system to send pictures, a system to send urgent messages, a system to send videos and systems to send voice. All these were unified by a single disruptive innovation called the internet. And 100% of the Fortune 100 corporations today cannot sustain operation even for a couple of days without using the internet.
Today we have a system of payment for Shares, a system of payment to buy groceries, a system of payment to transfer money worldwide. And we see Bitcoin is the force similar to the internet in 1991 that will unify all these and much more. What Satoshi Nakamoto gave as a Bitcoin, is a platform of trust and its first application is bitcoin currency. When more people get into this platform, the opportunities are unlimited. The money we have today, by way of its construct will require a person or a conglomerate of a person(s) called a Company to have control over it. Bitcoin by its sheer nature can be owned by persons, by self-driving cars, by refrigerators and will be opening up opportunities to build applications around this technology. Bitcoin will steer all internet of things in the future.
There have been serious questions about the security of the Bitcoin. Bitcoin in its nature is more secure not because its isolated from attacks but by the sheer reasons thousands of the best hacker programmers in the world are trying to hack it each day and never succeed, and each day Bitcoin is becoming more secure. And Yes, there were instances where people tried to regulate the Bitcoin by building exchanges and failed like in the classic case of Mt Gox. Bitcoin by its sheer technology has never failed, but when people try to use Bitcoin as a platform to herd money like the exchanges, they become a “honeypot” to the hackers which is in direct conflict to the very philosophy of Bitcoin’s distributed consensus.
Bitcoin is unstoppable. We are certain; world will be revolutionized by the next biggest Gift to Mankind after Internet – The Bitcoin (That’s with a capital “B”)