Finding a use for blockchain technology has seemingly turned into an overnight sensation for tech entrepreneurs, with the development of cryptocurrencies unlocking a new revenue source for some.
Take Saadiq Luqman, a D.C.-based entrepreneur seeking funding so he can build out his pet health monitoring app, goodKira.
Luqman has the minimum viable product for the app up and running, which was named after his own dog, but, of course, he wants to turn it into something more. Right now, goodKira provides reminders for doctors visits for your dog, scheduling tech for your “doggie play dates” and other events, and a place to store your dog’s medical information, such as vaccination records.
But one day, Luqman sees goodKira as a one-stop shop for all of your dog or other pet’s needs. Maybe you need a dog walker or you need a tele-health service for your pup. Perhaps pet owners just want to share all of their pet’s medical information with vets using the blockchain seamlessly. If all goes as planned, goodKira will do all of that.
To get there, Luqman needs funding and to land that, he’s taking an unconventional approach.
“I’m launching an ICO in the next few weeks, and I’m just going to see where it goes,” Luqman said. “Building it up [without the ICO] to be able to get it out into the hands of a real user with the full set of functionality, it will take funding, and at the current pace, it would take years to build and, by then, our idea would fall on deaf ears.”
Initial coin offerings provide entrepreneurs with an accessible way of landing capital fast. Entrepreneurs and startups create their own currency — sometimes with a monetary value, but often times without one — and investors can buy coins from that new currency.
In Luqman’s case, he will debut a new coin in the U.S. that can be used to access services on Kira’s platform. People can buy a Kira coin using the blockchain-enabled Ethereum (ETH) currency. One Ethereum coin equals 25,000 Kira coins, according to the Kira coin sale site. Based on today’s currency exchange rates, Luqman hopes to raise between $2.5 million and $9 million dollars.
The coin has no monetary value, for simplicity’s sake, Luqman said, but it would give the user access to the platform down the line. Think of it like coin tokens at an arcade. The Kira coin simply gives you access to the Kira product.
“I’ve been doing a lot of research on ICOs,” Luqman said. “I was really reluctant. I was going back and forth on it, and I sorted landed on a point.”
“A pet is a part of our family, and the market is there.”
See, proponents of the ICO argue that it’s an accessible and quick way to gain capital. Everything is run through the blockchain, and fundraising mostly comes down to online marketing. Cryptocurrencies also typically appreciate in value fairly quickly. Meanwhile, opponents note there isn’t much consumer protection about purchases or regulation around the technology, in general. And while a coin can appreciate fairly quickly, it can also depreciate in the same amount of time.
At first, Luqman was conflicted. A lot of friends outside of tech just suggested he stick to a Kickstarter or more traditional crowdfunding site. But his friends in tech all urged him to go for an ICO. For Luqman, who works full-time at PwC in advisory practice and is a General Assembly alum, this was his first time at the helm of a startup, nonetheless at the forefront of a startup that was searching for capital.
But as he dug more into what an ICO would mean and what his app building would entail, the cryptocurrency route seemed more and more attractive. In the next 18 months, Luqman wants to hire a developer to get his platform on the blockchain to make sharing pet medical information simpler and add a few other new features — and an ICO gets him there faster.
“The whole point of the ICO is to build funding. If I had funding, I would just build the whole platform on the blockchain,” he said. “So a lot is predicated on what happens in the next few months to build what I envisioned.”
Say they get enough funding, goodKira could be up and running with full capabilities and in testing by summer’s end, Luqman said.
“As a dog owner myself, I know how much I’ve spent on a pet,” he said. “A pet is a part of our family, and the market is there. Hopefully it gets funded, and we can deliver to the demand of the market.”