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Coalitions Consulting, 2020

Tricks and Traps in Enterprise Blockchain Stakeholder Engagement

The Top Three Coalition Patterns (And What You Must Know About Them)

What’s the best way to unite stakeholders around your enterprise blockchain project?

Coalition Pattern 1: Solo Solution

In this pattern, a single company that sells a blockchain-based solution directly to clients. Whether through a SaaS, a white-label, or another model, the company provides blockchain-based tech in a manner consistent with other traditional “enterprise software”.

  • Due to a solution provider hosting nodes and maintaining the blockchain-based system, there is a very low barrier to entry for client businesses to integrate with the technology.
  • As multi-stakeholder distributed ledger networks become the norm, Solo Solution blockchain software is likely to become obsolete.

Coalition Pattern 2: Founder Comes First

In “Founder Comes First” projects, the tech often comes before the coalition. A single company builds a blockchain solution, then later founds a consortium or association and works to involve other stakeholders in the solution.

  • “Founder Comes First” projects can offer an innate “baked in” advantage to the tech’s creator (which can be a good and bad thing!)
  • Due to having one clear leader, “Founder Comes First” projects are able to make decisions and launch solutions with more agility (in comparison with pattern 3 projects)
  • Without sufficient transparency, trust between the project creator and other stakeholders often breaks down or is never sufficiently established.
  • Governance design and maturity can become complex as new stakeholders are onboarded to the solution.
  • If other stakeholders are not invited to participate in all decision-making for the project’s future, they’re unlikely to buy into the coalition.

Coalition Pattern 3: Teamwork Makes the Tech Work

In “Teamwork Makes the Tech Work” projects, multiple companies form a consortium (contractual or entity based) to fund, develop, and jointly maintain a blockchain solution from the get-go. This often happens organically amongst organizations that are already involved in industry groups together. They’re friendly competitors, each other’s vendors, or partners on some other project. When they hear about the possibilities of blockchain tech for their industry, conversations result in a concept.

  • Trust and stakeholder buy-in are generally high in founding companies.
  • Multiple stakeholders means each must invest less time and fewer resources than pattern one and two projects.
  • Member companies are able to see the full benefits of blockchain technology through the joint maintenance of a shared ledger.
  • Because no one company has a majority interest, these projects can get deprioritized or postponed.
  • Consortia with no clear leader move slowly, sometimes taking as many as five years to progress from a focus group to a workable blockchain platform.

Blockchain Tech Is Inherently Multi-Stakeholder (So Yours Should Be, Too)

2020 marked a transition from a surplus of pattern one projects to a growing number of pattern two and three projects. The value of active, multi-stakeholder collaboration in blockchain systems is impossible to deny. This is because only blockchain platforms that are built and used by multiple companies can realize the full potential of blockchain tech: a jointly verified single source of truth. Without multiple stakeholders to jointly use and maintain an immutable ledger by mutually verifying transactions, a blockchain project offers no more benefit than a traditional database.

Managing Director, | SaaS & Blockchain Wonk | Strategic Coalitions & DLT Governance

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