What is Blockchain Technology? A Comprehensive Guide For Beginners

When Satoshi Nakamoto first created the cryptocurrency Bitcoin in 2008, it was viewed with immense distrust, still is to a considerable extent, with Central Banks and Regulatory Agencies remaining sceptical and refusing to adopt it. However, the underlying technology, blockchain has become one of the most talked about topics Worldwide. Nearly every major player in every industry is exploring the use of blockchain technology. It is finding use cases in several areas including financial services, retail, trading, legal, healthcare, and pretty much any business that involves record keeping and is also expected to unleash a new wave of financial products and services generating new avenues for greater revenue for banks.

Blockchain, also known as “distributed ledger technology” was originally created as a tracking database for Bitcoin transactions. It was designed to process transactions without the need for a central bank or intermediary, using complex algorithms and consensus among its peer-to-peer network to verify transactions. In the past couple of years, banks and financial institutions have been betting on blockchain to provide a reliable alternative to systems that depend on intermediaries and third-party validation of transactions. Their goal is to leverage blockchain distributed ledger approach to create a system that decentralizes trust to significantly reduce all types of transaction fees along with shorter processing timelines. The disruptive potential of this technology is widely claimed to equal that of the early commercial Internet. A crucial difference, however, is that while the Internet enables the exchange of data, this technology could enable the exchange of value; that is, it could enable users to carry out trade and commerce across the globe without the need for payment processors, custodians and settlement and reconciliation entities.

According to Forbes, blockchain technology is being viewed as a platform which could bring about stupendous changes in financial transactions, due to:

  1. As a public ledger system, blockchain records and validate each transaction made, which makes it secure and reliable.
  2. All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
  3. Blockchain technology discards the need for any third-party or central authority for peer-to-peer transactions.
  4. Decentralization of the technology.

Governments, world’s largest financial institutions, global banks and other financial organizations are investing in proof-of-concept projects internally, using trial and error deployments within limited parameters to create efficiencies. The full potential of blockchain can only unravel when institutions partner together to set industry standards and protocols that enable interoperability. The underlying principles of blockchain i.e. decentralization, consensus based system and use of unique digital signature will reinforce the financial system which was recently found to be increasingly vulnerable to online frauds. Startups, established financial institutions and fin-tech companies have found the below applications of blockchain technology and are investing in the development of application and products based on the same:

  1. Payments: Blockchain can transform the world of digital payments to near real-time transactions with real time settlements, without intermediaries. Development of new payments products, based on blockchain technology such as self-executing smart contracts are the next step.
  2. KYC/AML and Records Management: A decentralized, network-defined registry makes KYC processes streamlined and helps in AML checks and controls during client onboarding.
  3. Capital Markets: A distributed and consolidated data repository built on blockchain technology gives users a unified and real-time view of all trade-related information, thus reducing the scope for error or disagreement and accelerating the settlement process.
  4. Trade Finance: The complex network of players with manual processes and paper work is transformed into efficient and innovative trade finance services
  5. Syndicated Lending: Blockchain in syndicated lending envisages to reduce the settlement process on the sell-side and buy-side, thus saving time and cost worth millions.
  6. Regulatory reporting: Easy access to transaction reporting data for regulators will reduce cost of regulatory reporting of market participants.
Image Source: Mermelab

The use of blockchain, when applied to legacy processes of the banking and financial services firms, has potentially transformative effects in the space. However, it is essential to bolster the technology infrastructure even before banks start testing the waters. Blockchain has exceptionally high impact and it leads to:

  • Lower operational costs
  • Seamless global trade
  • Reduced risk in clearing
  • Increased trust
  • Distributed Identity

Spark10 has evolved

Startup accelerators, in their traditional avatar, are no longer relevant as the startups themselves have changed. When mainstream accelerators started in 2005, the startups of the day needed an intense mentorship program to build their business. Accordingly, programs were designed wherein the startups would co-locate with the accelerator for the entire duration. As the startups and startup ecosystem evolved with time, scaling up became a bigger challenge than building a business. That’s when the accelerators themselves transformed and built programs to scale up early stage companies. In 2017, especially in India, where accelerators are still following the conventional model, Spark10 has identified that the next generation of startups needs a program, that aligns to their needs and that causes minimal disruption to their normal operations. Our new accelerator program has been designed with the focus on business requirements of the next generation of startups.

Spark10’s accelerator program started in 2016 with a vision to be the “first investor” for idea stage or early stage startups. Since then we have had 2 cohorts with nine and four startups respectively. Both were fixed cohorts of 3 months each, and startups were required to co-locate with us for 3 months. We realized, that startups and the startup ecosystem are changing, as it rightly should. We concluded that 13 weeks weren’t quite enough to provide meaningful support. Startups based out of locations, far from our program location had trouble running their business remotely, while they were part of the program. Lastly, our team of mentors and investors felt the need to spend more time with founders to be able to guide them better.

Our new program is a rolling cohort, spanning over 6 months, where startups will be required to co-locate with us for only one week every month. To keep startups focused on their goal, there will be weekly reviews (remote and in-person) and ongoing mentorship sessions, workshops and talks along with the opportunity to network and connect with experts from your industry as well as investors will ensure you come up the curve faster. This unique program also allows us to work with the best founders, companies, and brains in the country. In a market where existing and new accelerator are still trying to make the traditional model work, our accelerator offers flexibility and extended support so we are with you at every step in the crucial stages of growth.

For entrepreneurs to be, who have just come up with their business idea, we offer mentorship, capital as well as exposure so you can translate it into a sustainable business. If you are a company with a Minimum Viable Product (MVP) or a prototype, funded already, our in-house mentors along with our community of industry experts will offer you mentorship so you can scale your business. For startups that do not require financing, we offer mentorship and guidance. All this for a small stake in their business – we take a small equity capped at 6% for up to a maximum investment amount of Rs. 20 lakhs.

Keep watching this space for an announcement of our next cohort. If you have any questions, please post them on our website, LinkedIn, Twitter handle or Facebook page and our team will respond asap.  If you or any of your contacts are working on building a business that can benefit from Spark10 or have any queries, please feel free to drop a line at hello@spark10.com

Founder’s Huddle – Funding challenges

The world of startups is powered by creative ideas. The only other factor as compelling, is the capital. Almost 90% of startups fail in the initial stages or just do not grow beyond an idea for lack of funding. A business  must be fuelled by funding at various stages of growth along with reaching targeted milestones.

And when it comes to funding your ideas, one size does not fit all. Therefore, raising funds can be confusing, often overwhelming. You may take years to come up with an idea, make a prototype and perfect your pitch to investors at the end all it takes is nod in the right direction to make a business out of it.

           How much to raise and how to utilize the funds are the next most crucial questions an entrepreneur faces. For most start-ups, Seed funding and Series A are the most difficult phases since their pitch does not factor-in financial planning.

A Harvard Study attributes raising too much funds too soon as one of the Top 10 reasons why most startups fail. In addition to this, every business has its own cash-burn rate and entrepreneurs need to be wary of accelerating too fast and too soon. Judicious utilization of funds not only ensures you don’t run out of cash but also that your venture has robust fundamentals to be able to seek the next round of funding.

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Understand Startup Finance and Fund-Raising

Spark10’s Founders’ Huddle aims to address all such problems that founders face. Our cases driven program is  conceptualized and designed to help entrepreneurs solve their problems based on similar issues that other startups and businesses faced in the past.

FOUNDERS' HUDDLE is a program that brings some key experiences of past startups (alive or dead) in form of cases that you will analyze and discuss during the session. By the end of the session, our aim is to give you the tools and method to determine for yourself the right way to approach your problems in your startup.

To begin with, we have created a program to help you understand startup finance and funding.

 

Fund-Raising Hacks (2-day case-based workshop)

Here are the few things we cover during these two days:

* Determining the viability of your idea/startup (Should I really start or continue this business?)

* Determining your operation strategy using financial statements (What should I do next - expand or stabilize?)

* Determining how to value your idea or startup (How much is my company worth?)

* Deciding what terms and which investors are good for you

* Understanding the fundamentals of investor pitches (What numbers should I show?)



A Startup for Startups – Helping Others Manage Their Businesses Better

 

In this cohort, we have a startup that wants to address a market segment that most others ignore – the startups. While everyone lauds startups and entrepreneurs these days, none of their products or pricing really help the entrepreneurs get the best of tools and systems. Well, there are exceptions. Sales Neuron (www.salesneuron.com) is one of those exceptions.

 

Sales Neuron is a business management SAAS solution that is developed especially for startups to manage their growing businesses with flair and efficiency. Founded by Arvind Uttam Chand, Sales Neuron wants to help other startups get the best of management tools that have so long been ignored by entrepreneurs for the lack of a similar solution in the market.

 

Imagine that you are a startup (if you already are, then you would relate to the problem below), and you have recently got some funding to take your business to the next stage of its growth. You hire a sales person or team with stellar attitude and credentials. Months pass by, but you realize that there seems to be no steady output in terms of productivity or efficiency. Your sales team puts in more hours and yet doesn’t yield the accounts you want. Moreover, you see that your competitor signing up the same guys you wanted to on-board. What the *beep* is going on?

 

Well, chances are that you are leaking potential customers because of mismanagement. Customers like it when you know who they are and love it when you pick up the conversation from where they left it. They appreciate that you know their details and don’t ask them, “Can I have your official email address to send you our e-brochure?” And they are relieved to be approached and handled by one person rather than being shunted between various sales team members.

 

Got you worried, didn’t we? Well, don’t be! Cause, Sales Neuron (SN) promises to have your back. With SN, you and the entire organization can now keep track of customers, their conversations, needs and irks. SN also helps you manage and track other stakeholders like investors, vendors, partners and service providers. Curious to know what else SN’s CRM+ can do for you?

Here’s just a partial list that Arvind managed to get out before he ran out of breath:

  • Manage the smallest of details for every person or organization you deal with,
  • Run targeted marketing campaigns directly from the product,
  • Create, send and manage quotations, invoices, and payments,
  • Manage your assets or inventory,
  • Customize or create modules that you use
  • Integrate with third-party applications and processes

 

Arvind has developed Sales Neuron into an intuitive, integrated & an industry focussed business software. Application Studio, its built-in customization platform enables end-users to customize the complete software to adapt to their specific business processes and changing requirements at no additional cost. Its drag-and-drop feature makes customization so simple, it requires no technical support to personalize the software to the business.

 

Spark10 is giving away 10 early bird offers to Sales Neuron with a 40% discount in pricing for the next 6 months. Go ahead and sign up your startup here – www.salesneuron.com/signup 

 

 

What we learned from our first Investor Lunch? Spark10 Cohort 2017-A

 

Yesterday, we had our first ever Investor Lunch. First of many, hopefully.

Angels Amitabh Srivastav and Naveen Gupta, and Vinod Shankar and Manu Sahay of KStart joined the four startups of cohort 2017-A over lunch at the mouth-watering Italian restaurant Toscano.
 
It was an amazing three hours, spent in casual conversations and serious introductions. The founders were excited and looking forward to making an impression on the guests.
 
As the Program Director, I was pretty proud of the teams and the way they presented, considering this was the first interaction with angels.
The founders learned a lot, as did we. Here are some lessons from the day, I'd like to share with all you budding entrepreneurs.
 
 
1. Be clear of your pitch - the value proposition, your target markets, your go-to-market strategy and your predictions, yet realistic rate of returns.
 
2. It doesn't matter, how old or young your startup is, you will need to practice your pitches.
 
3. Work on building a connect and a relationship with potential investors instead of trying to sell them your idea of your business. Investors invest in people, and if they don't like you or don't connect with you, your awesome product will NOT matter.
 
4. Listen to questions carefully. Ask them to repeat or rephrase, but never assume the question and answer in the tangent.
 
5. Every conversation you have with a founder about your business is a sales pitch. Doesn't matter if you are selling a product or equity. Perfect your sales pitch!
 
6. If you have co-founders, make sure everyone sings the same tune.
 
7. Listen more than you speak. 
 
8. Work on piquing curiosity and not interest. 
 
9. Don't be over-confident. Most of the times, the investors are way smarter than you.
 
 
 
It was a good start to something that I see adding tremendous value to the startups. More practice, refinements, and clarity and I have no doubts each of my startups will touch the sky.
 
 
More updates later.
 
 
 
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