Guest post by Jack Tatar, co-author with Chris Burniske of Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond.
For many existing businesses, crafting a competitive customer experience can depend upon evaluating current models and improving on them. For years, grocery stores competed among themselves by trying to offer their customers what their competitors weren’t – fresher produce, better store layouts and unique products. Having a clear understanding of the history of the grocery industry allowed companies to create improved customer experiences.
But what about when the consumer product doesn’t have the history and familiarity of a business like the daily grocer?
Amazon, which is making its own launch into the grocery industry, faced the challenge of creating a compelling customer experience with internet technology when it launched its foray into selling books. The company had to create an experience for consumers unfamiliar with ordering books online with few examples from which to work from. As a result, Amazon created an experience that defined the internet era and is now disrupting many industries beyond just bookselling and grocery-shopping.
Adapting to Rapid Change
We’re now seeing a similar example going on in the investing and financial markets with digital currencies and cryptoassets. The creation of Bitcoin has not only provided a new currency which consumers can use for purchasing goods and services, but it has also introduced blockchain technology that is changing how contracts get finalized, supply chains are organized, and financial systems operate. The rapid pace of these changes has challenged those companies involved with this technology to implement platforms for consumers with little to no background in existing best practices or tried and true methods.
As bitcoin has become a currency, it has also become an investment instrument. As the dollar is traded on 24-hour, seven day a week exchanges, so must Bitcoin and many of the other 800 cryptoassets. This has led to the growth in exchanges trading cryptoassets over the last few years. One of the first exchanges involved with bitcoin was the infamous Mt. Gox exchange which is detailed in Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond. That exchange was infamous for its inability to safeguard customer’s holdings in bitcoin, resulting in the loss of many of these assets.
Learning from Mistakes
Rather than leading to a total loss of confidence in cryptoasset exchanges, companies like Coinbase appeared and thrived by learning from the mistakes of Mt. Gox by providing security of assets along with a comfortable user interface. Currently, Coinbase has nearly 10 million customers and provides a platform that has exchanged over 20 billion dollars in digital currency.
A company like Coinbase had few examples on which to build their current customer experience. But the time-tested foundational needs for an easy interface, protection of assets, providing support capabilities and focusing on consumer piece of mind when it comes to their assets are still requirements. Coinbase knows that they are not the only exchange in town and have to continually monitor what the consumer desires and what the competition is doing.
Responding to Changing Needs
The fundamentals of business haven’t really changed, but the technologies that consumers use are changing rapidly. With bleeding edge technologies like cryptoassets, businesses have to create their own consumer experience using those fundamentals, while recognizing that competitors can appear seemingly out of nowhere.
The grocers of the past may have had location on their side, but the impact of new technology companies like Amazon and Coinbase are changing that paradigm as well. Physical locations mean little in today’s economy but one fundamental rule remains – businesses will succeed based on how well they respond to the changing needs of the consumer.
Jack Tatar is an angel investor and advisor to startups in the cryptoasset community, and speaks and writes frequently on the topic. With over two decades of experience in financial services, he was one of the first financial professionals to receive certification from the Digital Currency Council. He is the coauthor of one of the earliest books on Bitcoin, What’s the Deal with Bitcoins?.