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The importance of external communications for blockchain startups specifying it’s role in fundraising

Communication is always an important part in establishing businesses; information needs to be accessed by the receiver in an appropriate way, and put across in a clear, impacting and engaging way so that it will have an effect on the user. This article gives a brief review of external communication in blockchain industry and how startups use communication to build the reputation.

Blockchain businesses can be quite capable for building communication internally because they already knew about it (however it does not guarantee a success), but how to approach those people who are not aware of this technology and it might be challenging to manage queries asked by the external entities.

External communication strategy comes into play when a business needs to transmit information to its stakeholders and persons involved in its external environment, e.g., its customers, potential investors and shareholders, etc. 

Nowhere is such a strategy more relevant than in the context of a blockchain startup and its fundraising endeavours where the investors need to be convinced that all threats to investment “may be addressed and resolved through cooperation rather than collaboration.

It can happen in various ways and through totally different channels, e.g., letters, notices, brochures, demonstrations, phone calls, etc. business conferences, press releases and press conferences, audio-visual displays, substance films, product launch events and advertisements are all samples of external communication. It’s vital to notice that the external agency or person targeted through such communication, very often forms a picture or impression supported such communication and it’s, therefore, terribly necessary that adequate care is taken in creating it clear, intelligible and appealing.

With so many tools and channels available to essentially build an effective communication strategy for blockchain projects and startups, there seems to be one barrier that slightly hinders the propagation of information – the intrinsic lack of information available to investors about blockchain fundraising in general and the blockchain industry as a whole. 

Communication holds a crucial meaning when it comes to fundraising endeavors in the blockchain industry. Very few investors completely comprehend the risks involved in such processes. The prominence of blockchain investment and crowdsale efforts by blockchain startups raking in millions of dollars are looked upon as get-rich-easy investments.

There are naysayers that tell people to be wary of investing in blockchain technology, not because of the risks involved but because blockchain startups are notoriously unwilling to share information about their products, or show a minimum viable product (MVP) before the start of their fundraising campaigns. This is where an effective external communication strategy may come into play. In communicating the various aspects of business with customers, investors and other stakeholders, a blockchain startup can effectively ensure the success of their fundraising campaigns.

Nowadays, blockchain technology is becoming the preferred choice for businesses to securely conduct transactions within the confines of their various projects. For business projects using blockchain technology, a unique blockchain platform is needed. Once they have a viable blockchain platform, they move their focus towards raising funds for this new cryptocurrency venture using an unregulated means of fundraising in order to bypass the rigorous processes of accumulating capital as required by venture capitalists.

Blockchain is a relatively new technology that facilities almost limitless transactions of all kinds of digital blocks, e.g., currencies, files, etc., encrypted with hash-based cryptography and powered by a decentralized system foregoing the need for intermediaries, financial oversight or regulatory authorities. Blockchains came into prominence with the emergence of a new digital cryptocurrency called Bitcoin. In fact, blockchains are deemed to be the most “intriguing and promising” new technology to come out of the cryptocurrency revolution.

Given the nature of the blockchain technology and the industry being in its infancy, there isn’t enough information on what constitutes an effective external communication strategy for such businesses. It therefore becomes rather pertinent to devise a new external communication strategy for such endeavors that can consolidate the various aspects of blockchain startups and marketing communication in the marketing mix. There is a plethora of tools available for external communication that can be used to reach any target audience. Using them in an appropriate manner may help any business reach their intended audience at a global level.

One Comment

  1. Rupert Riley

    I find this an interesting insight, particularly when it comes to communication strategies for blockchain startups. Minimum viable products (MVPs) are just one way, if any, that these startups are even remotely able to showcases their strengths and weaknesses. This seems like a one-shot way of promoting your product – if it succeeds, it’s A-okay; if it fails, there goes your investment. But, you are right in understanding the true problems blockchain startups have in trying to secure funding.

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