Pareto Principle v Price's Law in Blockchain
While many know the Pareto 80/20 rule i.e. 80% of sales come from 20% of clients, the more important for blockchain may be Price's Law, applied to creative and coding work, asserting that 50% of the results come from the square root of the participants i.e. 33 from 1000 coders will create platforms that will yield over 50% of the revenue that all 1000 are seeking.
At Altcoin Accelerator, I carefully consider decks sent in, but also meaningfully track progress of all blockchain start-ups with a public-facing presence, those who separate themselves spectacularly from their peers and those who fold up shop under the comfort, often, of anonymity.
The true leaders recognize that they are fundamentally knowledge workers and set aside time for intellectual exercises, in the form of questions, that can have real world applicability. They also invest in R&D to build out comprehensive answers to what-if questions, positioning them best to traverse the uncertain and ever-changing world of blockchain's many en vogue movements.
- What are my competitors doing better than I am and what processes are they implementing to yield their successes?
- How do the taste makers, influencing those whom I wish to target, feel about their platform versus mine?
- How much would it cost in time and resources to replicate the platform of my competitors?
- What is the step-by-step processes would compel a client to jump ship from my competitor to me?
- What mistakes have platforms in my space made and what takeaways can be gleaned?
Many think that they're smart enough to figure it out as they go, without a set of battle tested processes and insights from breaking down the complex progressions that their competitors have invested in, integral to their success. No, you're not.
The immediate pressures of putting out fires and delivering solutions to problems that one may mistakenly believe are the best use of one's time will rob you of your ability to have self-awareness and proactively position your platform best for success.
Double trouble are the positive feedback loops which help market leaders, or those with sharpened processes allowing them to gain visibility, allowing them to ratchet up prominence and influence far faster than those left behind would be able to reasonably hope to. Unless you're incredibly well capitalized, this lead becomes often so wide that trying to sink a leader far in front represents a fool's errand. For that reason, you'll see so many large platforms simply buy ones that are seeing enormous growth, to stop what could be a material threat before it grows into a foreboding presence.
For all of the brilliant #blockchain brains, the vast majority are focused on the code and often fail to take a step back to see the perspective of looking across the entirety of the forest. Those platforms that get it are continually investing in R&D, not just for the ample tax credits, but because reverse engineering your competitors is imperative to survive.
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