The soul torture of new cryptocurrency products: whether alternative products are “particularly bad” or “non-existent” (www.blockcast.cc)

“Extremely bad” or “non-existent” is already an effective way for the cryptocurrency field to evaluate whether an idea is reasonable.

Written by: Dan Romero, former Coinbase vice president, angel investor Compiler: Leo Young

Evaluating a new product or technology requires answering an important question: “Will anyone or company accept this product?”

I found that the best way to answer this question is to answer another question: “Are other alternatives particularly bad or non-existent?” If you answer “Yes”, this product has a high probability of being accepted; if you answer “No”, It will most likely not be accepted. This inference method is particularly useful for guiding the ” idea maze “.

According to Clayton Christensen’s ” jobs to be done “, individuals or companies need products or technologies to solve problems, that is, tool uses (jobs). Individuals use Google to search for information and use Amazon for shopping, but when Google and Amazon are not available, everyone will search for information and shop. So why did everyone accept Google and Amazon?

In these two cases, the other best alternatives were either “extraordinarily poor” or did not exist.

When Google Chrome did not appear, the available browsers were very slow, the search content was low (particularly poor), and in many cases, the information had not yet been classified (non-existent); when Amazon did not appear, you need to browse for some items Different stores may be more expensive (especially poor), and local stores do not have niche products (do not exist).

Compared to difficult to use, more difficult to use is just a subjective feeling, and there are often subtle differences. Few people will change the product just because it is a little difficult to use. Whether it is because of inertia, ignorance, or habit, there are insurmountable essential cognitive biases to replace existing imperfect products. The product is replaced because it is “extraordinarily bad”, usually because of pain and dissatisfaction.

So how do you determine that the other best alternatives are also “particularly poor”? You can apply Peter Thiel’s ” ten times better framework “: new technologies or products are ten times better, and it is possible that other best alternatives are “extraordinarily poor”; if one thing is only one-tenth, it is unlikely that users will give up Existing options or overcome inertia, choose alternatives. Another sign of “extraordinarily bad” is to ask others what they think about this alternative product. For example, they will complain about “too expensive” or “too slow.”

Take cryptocurrency as an example

“Extremely bad” or “non-existent” is already an effective way for the cryptocurrency field to evaluate whether an idea is reasonable.

Bitcoin and open blockchain are real technological breakthroughs: before Bitcoin, trustless, decentralized, and digital value transfer methods did not exist. But it does not mean that new technologies will be popularized when they appear.

For example, in 2010, many people believed that Bitcoin would be accepted by e-commerce websites because of its advantages such as low transaction costs, globalization, instant settlement, and no refund risk. Although from the perspective of e-commerce, Bitcoin satisfies the principle of “extraordinarily poor” or “non-existent” alternatives, but it does not solve the consumer’s problem: they already have credit/debit cards, and almost every e-commerce website accepts payment Card transactions, points, and refunds are also popular features of payment cards. In addition, Bitcoin is relatively difficult to receive, and it is necessary to calculate the tax profit and loss of each transaction. (But for dark web Silk Road and online gambling site SatoshiDice, e-commerce sites that do not have online payment services, Bitcoin is a good choice.)

DeFi is the same. Previously, cryptocurrencies were traded on centralized exchanges, and providing users with liquidity, functionality, and utility on the blockchain did not exist. For example, it is impossible to trade in U.S. dollars on the chain. But centralized trading has all the disadvantages: easy to steal, subject to regulatory restrictions, developers find it too slow or too difficult to get new coins. With the increasing popularity of Ethereum, 0x has developed a decentralized exchange protocol to solve the problem of centralized exchanges. However, the usage is limited and 0x suffers from low liquidity. A few years later, Uniswap solved the liquidity problem (automatic market makers that rewarded liquidity providers natively), and the transaction volume also increased rapidly, surpassing centralized exchanges.

The examples of Bitcoin e-commerce and centralized exchanges illustrate the important point of “particularly poor” or “non-existent”: if it brings new problems or more basic problems, it is not enough to solve existing problems.

For Bitcoin e-commerce, although Bitcoin solves the problem of e-commerce, it creates new problems for consumers. For the early decentralized exchange protocol, although the problem of security and difficulty in listing is solved, liquidity is a more important issue, and centralized exchanges have already solved this aspect.

In short, entrepreneurs and investors need to spend more time thinking about what problems the new product or technology will solve, whether the alternative product is “particularly poor” or “non-existent”, and whether the new product brings new problems that the alternative product has solved. .

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