When your company is planning to launch a blockchain product, it’s important to ensure that you’re doing it for the right reasons. How will the tokens interact with the core business model underneath?

As William Mougayar said so succinctly:

“If the token usage is obscure, not well explained, or not defensible, there is weakness in that model.”

The idea here is to answer the question “Why blockchain?”. If it doesn’t add obvious benefits to your product then investors will assume that you’re just jumping on the crypto bandwagon and will be reluctant to get involved.

A blockchain should add value over and above just being a new way to record transactions. If Facebook has been running a social network for years without blockchain tech, what additional benefit does your new decentralized social site have over the status quo? And is that due to blockchain technology or other benefits?

For me the magic question is “Why should I hold this token?” If everyone is only buying your token because they hope it will go up in value, then it’s probably not a good investment. If people also actively want to use the token because the product is amazing, then you’re in the sweet spot.

The answer to “Why should I hold this token?” can form the basis for your whole blockchain strategy.

As a thought experiment, here are some questions to ask yourself about the token you are building. The more of these you can say “yes” to the better:

Flexibility: Does the token give access to a product that could not be provided easily otherwise? Premium Content: Does the token provide exclusive access to certain products/services? Efficiency: Does decentralizing the company’s ledger streamline the product/business model? Loyalty Points: Does the product provide monetized rewards for certain actions (smart contracts)? Profit Sharing: Does holding the token entitle users to a share of profits/fees? Altruism: Does owning or buying the token provide users with a positive social effect? Influence: Does holding the token give users certain voting rights?

Use these questions to help kick-start your creative mind. If you can think of more ways to make the token desirable then you are winning.

Your blockchain strategy will depend on how you answer the above questions. This will provide clarity as to why you are launching an ICO, why users will want to buy your token, and what the voice of your project will be.

Often explaining the idea to someone who has no idea about crypto currencies can help. Saying it out loud and in terms anyone can understand is the best way to ensure your idea is solid and clear.

I’m always happy to spitball ideas with people. If you want to discuss your ideas with a neutral party, then get in touch here: james@whalefish.io