Having gone down the Blockchain rabbit hole for several years, my mind is constantly searching for new use cases for this revolutionary technology. The possibilities are endless.
So why have more established companies not gotten in on the action, more specifically why have there not been a flood of applications for platforms like Steemit?
- These are some of the questions that have been occupying my mind for months, as I have been working on an app I keep asking myself, if the ideas seem so obvious and the potential is so great why has no one else done it?
Spread the Love Far & Wide
Last month I wrote a post in a similar vein that discussed delegation and the centralisation of “Proof of Brain” on Steemit. In my view delegators are taking a gamble on several projects (which may pay off or may not). You can read more about my thoughts on this here
Today I am going discuss the level of community (and Steemit Inc) support for developing applications for the Steem blockchain.
Inspiration
After Steemfest last November I was inspired to build a mobile application and business for the Steem Blockchain. It has been a rewarding journey and the support and encouragment I have gotten from the community has been immense. The app is ready to go but before I release it I would like to write a bit about the financial cost of developing an application for the Steem blockchain and lay out my experience for the community.
Without more support people/businesses will just not develop applications for Steem. There is little economic incentive to do so!
The following analysis is a breakdown of how much a handful of projects have made from the community by posting announcements and updates about their projects on Steem. This is effectively the community direct funding these projects have received.
Post Earnings (by Year)
x axis is Post Payout in Dollars
- This analysis looks at the total post value, I have not adjusted for the SBD FX impact. I don't want to focus here on precise figures or specific projects. The figures are ball park but they illustrate the order of magnitude of money that is specifically directed by the community for development of applications.
- Not all funds raised will be included here, some projects may have gotten extra donations or used other accounts to raise funds. A good example here is @furion who got a community donation earlier this year for the SteemData project from a post on @transisto’s account.
- This analysis also does not include all fees, beneficiary rewards, curation rewards and other monies that projects have raised. It is solely based on announcement and update posts. These other earnings depend largely on delegation and use and I would categorise them more as ongoing earnings rather than direct funding.
- It is worth nothing some witnesses have developed applications and part of their proposal as witnesses has been their work for developing applications so they will have been funded via their witness earnings.
Dedicated Funding
Dedicated funds provide assurance and incentives, they let people build business plans and also help them structure and focus their projects which increase the chances of success.
Other Projects
How are other Blockchain Projects incentivising Development?
- The Ethereum Foundation has funded 22 recipients for a total of $2.84M in May
- The worker proposal fund for EOS is expected to be $400m in the first year, at the current price.
- Both of these projects also organise regular hackathons and provide other incentives for developers to use their ecosystem.
Not all of the funds for these projects will be directed at apps however, it does put into perspective the resources other projects are directing towards direct funding
Why don’t we have funds and projects like EOS and Ethereum on Steem?
I can't think of a worse scenario than if people working on Steem become solely motivated by money but we need to enable the passionate advocates, visionaries and innovators to dedicate their time and energy to Steem.
Steem
We do have some projects on Steem @jerrybanfield provided a summary a few months back
There a few potential sources of funding on the list by Jerry which are attractive for raising significant money, let's examine a few of them:
The Crowdfunded Marketing Protocol.
The most raised here is around 10k according to the post by @steemitblog but considering the cost I experienced of developing an app that level it is quite low. Have a lot of applications used this funding method?
Looking through the tag #growth-ideas I don't see many proposals and to be fair to entrepreneurs they may not wish to publish their ideas to the public before they even get started.
Budget Proposals
This is is another option spearheaded by @jerrybanfield. I am not sure if this is still going but again people may be slow to use this for various reasons.
The Real Cost
The mobile application I have been developing is for Android and I got quotes for a fully functional app of anything between 3.5k euros to 35k euros. I know these figures are ridiculous but they do illustrate a point.
You get an idea of how much money some of the big companies will spend on developing applications and what we are up against. It probably explains why companies are slow to enter the development space for Steem. How can we support more development on Steem?
Project Supporters
This last graph gives an overview of the top 5 supporters of the projects listed above and how they have spread their votes for each of these projects.
- The natural group to take the lead on funding directly or via voting and or organising proposals would be Steemit Inc. and the witnesses. We can see some support from them in the above graph.
Sharing
Should Steem Applications with Large Delegations allocate a small portion of their voting to support other apps in Steem Land that may be beneficial to the community? After all a rising tide lifts all ships!
What do you think is the best way to get funding for your app?
What have you tried and what were the challenges you faced?
references
https://blog.ethereum.org/2018/05/02/announcing-may-2018-cohort-ef-grants/
https://cryptovest.com/news/breaking-blockone-ceo-brendan-blumer-announces-1-billion-in-capital-for-eos-projects/
Thank you for reading. I write on Steemit about Blockchain, Cryptocurrency and Travel.
Very interesting post. Thanks for sharing your insights eroche.
@knircky and me are facing the same situation. We are developing the steem-bounty project. That was funded 100% by ourself and took us about USD 20'000 out of pocket so far.
The motivation was purely to support the steemit community and to get some track record of doing projects around blockchains. But we are looking for a way to make this project a break-even project at least - not knowing yet a solution for that.
We also have several other ideas for the steemit blockchain which would be a great value for the community we believe. But I guess this is quite obvious that for those we need funding or earn models which will work and make us not lose money.
You mentioned ETH and EOS. I like to add another great example: DASH. Dash let Masternodes (here it could be steem-witnesses) vote on proposals of the community. Those who pass the vote get the requested funding from a superblock which comes around a few times a year. That superblock creates Dash and distributes it to the project proposal owners. So the funding is done by inflation. I feel that is a very well working governance model and heavily utilized by the community. But that is something changing the core steem blockchain - I guess we won't see that any time soon.
The only other option I see is a way where good business plans are proposed which includes an earn model which is attractive to investors. That might be something which could solve the problem.
But projects which bring value to the community but are unable to provide an earn model won't have a chance that way. I might have an idea for those projects as well - you could realize a bot and ask the community to set this bot on autovote. The money collected by the bot is distributed to steem projects with best proposals.
Writing that makes me want to implement those idea right away - and there we are back to the problem. Where to take the funding from ;-)
A grant or funding mechanism for part of the upfront costs like other platforms are trying is a quick and easy solution.
Without something more than what we currently have there is little economic incentive to take a chance on an app other than gambling that you will earn beneficiary rewards. Some of which are close to 25%. Which btw defeat the whole purpose of a free decentralised blockchain in my opinion.
If we expect professionals to invest time and energy in the technology of the platform we need to provide them with some sort of incentive. Otherwise we will not attract any development, no mater how big the Steem price gets. We will just see more people gaming the system to extract value.
This is a really good suggestion and it could be very transparent. People who wish to support projects could delegate Steem Power to it and even vote on which projects to support.
@oracle-d has an interesting business model focused on bringing in outside investment to fund projects. This project and the team are doing a great job it is a great proposition for investments. But it makes me think and I do question why so much money that is already invested in the platform is not being used to promote projects that will help the platform grow and expand. And of course increase the value of their investment!
This is a great suggestion and I believe a similar idea has been discussed on Steemit but I have not seen any momentum behind the proposals or proposals of alternative solutions that have gained traction.
It's actually 40 million EOS (4% inflation on 1 billion starting tokens). That's over $400m at the current price.
Thanks for the update. I will note that.
Why do you think that between 3.5k and 35k is a ridiculous price range? It's not clear the complexity of the app that you are proposing but it's really not such a crazy range. It's the lower end of the range.
I'm a professional mobile app developer working in a medium sized company, and it is not unheard of for the range to go up another order of magnitude, into the hundreds of thousands. If you work on several versions, you could even get to add another zero. When I was working freelance some years ago, the cheapest app I ever made was just over €2k. And I didn't make any money on it when you balance it out.
Put another way, do you value your time? And what price do you put on that? Are you an expert? Can you bring something to a project, the app in this case, that others cannot? Will you actually deliver? Can you be flexible with plans and designs as requirements change, even after release?
In my experience everyone has an app idea, and many of them are good. Some of them are brilliant, but you don't need a brilliant app idea to make money. People mythologise the process and think that it's all about the idea. Well, it's all about the execution.
You need solid execution and the business sense for it, i.e. knowing what to make, when to make it and how to sell it. That's actually something I lack, the business sense, but I know it when I see it, like great art, though I can't paint for example.
I was a bit surprised at how much an entry level native app was. I cannot imagine many businesses being able to afford that type of money starting out. It is a huge barrier to getting started and a huge barrier to getting started experimenting with apps for Steem. Don't get me wrong I understand how much time is put into developing an app and that is where the cost comes from, it was just an eye-opener.
Talking about ideas, I was at an event in Dog Patch Studios last week in Dublin and a speaker at the event made a great point.
When you are a startup you have lots of ideas but 90% of them are not what your customers will want. It is important to focus on the 10% that your customers will use early on and not spend your time working on the 90% that they dont.
I don't agree, I think that any business who feel they can't afford a few thousand Euro to invest into something as important as an app probably hasn't got their priorities in order.
That is of course only if you need an app. The app rush seems to be cooling off slightly so if your app is just a glorified website, stick to the website and make it adaptive at least, or perhaps even a progressive web app if you can.
If your business is actually centred around the app and you can't raise a few grand, there's a problem there much bigger than the capital. At that point you do it yourself probably, as you have done. But it could easily work out more expensive if you could be doing something more productive with your time.
Your comment on startups, I completely agree with that one. I fell into that trap myself once upon a time with my own fledgling company, now gone the way of the dodo. Lessons learned the hard way!
I like this discussion