Validating a New Market for Blockchain Startup
Situation
An innovative technology startup sought to revolutionize supply chain transparency in the newly legalized cannabis industry, with an initial focus on New York City. A key element of state legalization was a requirement that authorized dispensaries could only distribute product that had been grown in-state. The intent was to spur economic development on the supply side. Gray/black market product was overwhelmingly sourced from out of state.
The market lacked a comprehensive, authoritative platform to provide end-to-end visibility and provenance certification of the cannabis value chain. The client saw an opportunity to capitalize on the legal requirements with an end-to-end blockchain-based supply chain visibility solution.
Project
The client engaged JCY Advisors to develop a detailed market overview for use in raising capital and an end-user study to shape its development roadmap.
The project was divided into two phases. The initial phase consisted of a comprehensive market analysis of the NYC cannabis ecosystem. The follow-on phase involved field research to test and validate business model attributes and features to inform the product roadmap and drive adoption.
Phase 1 Deliverable consisted of a market research report summarizing:
Market segmentation and 5-year growth projections
Competitive analysis, including potential market substitutes
In-depth customer needs assessment
PESTEL analysis examining political, economic, social, technological, environmental, and legal factors
Phase 2 involved setting up informal sessions using mockups and questionnaires with a diverse sampling of grey market distributors, and distilling the findings and strategic recommendations
Detailed report with platform interface mockups
Carefully designed distributor questionnaire
Anonymized interview summaries
Results
Upon completion of the project, the client was better equipped to persuade potential investors about the attractive and unserved market opportunity, and to articulate how their product and GTM roadmaps would lead to the establishment of a high value platform business model.
In addition to providing a compliance solution to in-state growers and distributors, there was an expectation that ancillary data service revenues could also generated by providing market intelligence to capital markets, regulators, and insurers.