Lessons learned from the biggest blockchain accelerator in Germany
An interview with Benjamin Horvath, Managing Director of BLOCKROCKET
Would you like to give us a short introduction about BLOCKROCKET and yourself?
“Blockrocket is a dedicated accelerator for blockchain startups in the D/A/CH region. We mostly promote startups from Germany but are also open for startups outside Germany that want to be introduced to the local ecosystem including German investors, corporates, partners and technology providers.
About myself, I started my blockchain journey two years ago when I started working for the Frankfurt School Blockchain Center as a consultant. During this time, I got many insights about different blockchain applications and projects. Our cooperation with the Frankfurt School also helped us to receive this tremendous amount of traction in the last year. Right now we have more than 200 partners such as banks, corporates and law firms and this network is growing exponentially as many partners bring their own network. We also reviewed more than 100 applications of German blockchain startups in the last year, which shows a strong interest in our program — specifically given that the entire German blockchain startup market is around 400 to 500.”
That is great coverage for a young accelerator. How did you do that?
“Blockchain is still a hot topic and many people still do not understand it fully. A lot of corporates know that blockchain is important for their business but only very few actively use the technology. BLOCKROCKET now gives these corporates the opportunity to catch up to early adopters and make sure that they are not disrupted. That makes our services very compelling for corporates. In addition, I and my team already had a strong network in place when we started the accelerator. We are also backed by active shareholders who opened their network for us. This is also one advice which I would give to people who want to start an accelerator from scratch: It is not only about understanding startups and technology but also about the network which you can open for startups.”
What is the difference between selecting blockchain startups, and other startups? What factors are most important to BLOCKROCKET?
“The biggest difference between blockchain startups and “normal” startups lies in the development of the product. Specifically, traditional SaaS startups can be very agile in their development and test unfinished products with their customers. If something does not work or crashes, they can fix it and deploy an update. Blockchain startups have to be a bit more conservative in this aspect because it is more difficult to change their code once deployed. We also see that the entrepreneurs are older on average than in other startups. I and probably around 20% of my fellow students directly went into entrepreneurship after graduation when we were in our mid-twenties. In contrast, a lot of the founders we currently work with are between 30 and 40. We even have a team with founders over 50. They often come from the respective industry, experienced the problem themselves and formed a business idea around this. I take it as a good sign because it usually means that they know the industry and know the current processes and inefficiencies.
When it comes to selecting the startups, we — as any other leading accelerator — ask in-depth questions about the team, market and business model. It is not always easy to analyze the business model and the idea, especially when the startup is pre-revenue or has not reached the product-market fit yet. For early-stage startups, the most important criteria is the team. We look at their understanding of the market, their opportunity cost, their drive and their experience. On top of this, we add the blockchain components and question if blockchain is the best technology to solve this problem and if it makes sense to use blockchain. We want to see that the founders really understand their problem and the technology and are not just part of the hype. This is also important for the whole blockchain scene in order to regain its credibility which was harmed during the ICO hypes two years ago.”
How has the blockchain industry changed since the ICO hype? Do you see current trends?
“The industry has moved forward and more use cases are employed. However, we still need more working use cases and we are still far away from reaching adoption at scale. For that, we will need further 5 to 10 years also depending on how long the current crisis will last. However, this also represents a huge chance for entrepreneurs because many of the companies that will be successful in 5 to 10 years are formed now. In terms of new trends, the market is still largely dominated by B2B use cases in the financial service industry. Around 50% of the startups that we analyzed are fintech startups. We see however that a growing number of startups operate in other industries such as health care, digital identity and data audits.
I am personally interested in use cases around complete decentralization — as it was the original idea with Bitcoin — and in use cases for the public sector such as blockchain-based real estate, digital voting systems and digital identity.”
As part of your program, you host many events. Why do you host these events? What have you learned from these events?
“We always think about what value we should bring to startups and our partners. We do not invest cash initially when startups become part of our program. Other accelerators might invest between 25 to 50k in return for equity. We do not ask for equity in the beginning, and first focus on how we can help startups as much as possible. As part of the value for our startups, we host different events — from startup pitches at some of the largest blockchain conferences in Germany to private exclusive investor round tables. We have learned how hungry startups are for tractions and exposure specifically in the early stages where startups need to build their network and want to prove themselves. Being able to pitch your startup in front of hundreds of people at an important blockchain conference gives startups good training for pitches in front of investors and future employees. One of the most successful events we have had for startups was an exclusive investor round table, where 5 startups pitched in front of 30 VCs and angel investors. It also gave the investors a good opportunity to network with each other.”
How do you facilitate communication between startups and partners in your ecosystem outside of these events?
“We operate very digitally through tools like slack and zoom for our daily communication. Despite the fact that we are present in different cities, we still manage to have a vivid community where members support each other. We also have a newsletter and use social media to engage the community. It ensures that startups do not miss out on things that we planned for them. We also have monthly call sessions with the startups that are part of our more advanced program and important partners.”
How can partners benefit from working together with BLOCKROCKET?
“We offer different use cases for our partners. For VCs, it is super important to be aware of good teams and build good relationships with them as early as possible. We can provide VCs with this access and a steady deal flow as we have the largest radar of early-stage blockchain startups in Germany. For corporate partners, we can also identify interesting use cases and help them to make the right connections. For partners, who are new to the blockchain ecosystem we can act as a facilitator and make introductions to key players. We also provide workshops and market insights for companies that want to understand the impact of blockchain on their business and want to educate their employees. If needed, we can even bring startups from the respective industry to the workshop. It is often a big surprise for companies if they see how some startups approach their problems and how fast they build a solution.”
Thank you very much for the interview.
About CDF Technologies
CDF Technologies leverages the benefits of machine learning technology to help startup investors focus on the deal that matters. Their Startup Relationship Management Software provides a single source of truth for all team members, and therefore improves communication and collaboration. The smart collection and aggregation of startups’ data unlock the potentials of data-driven investments. You can contact them at firstname.lastname@example.org