Steemfest 3: Utopian.io - Building a sustainable business on Steem

One of the highlights of Steemfest 3 for me, and the one I prepared to most, was the Utopian presentation on the first day of the conference. Having worked a great deal on perfecting it with @elear, I believe the talk went well. Unfortunately, I had to edit out a lot of what I wanted to say as we had only 20 minutes to squeeze in the content @elear, Gregory (our CTO) and myself prepared. To make up for what you missed, I decided this should be the first post in my series of Steemfest summary posts (still processing it all).

Pinking on Stage

Building a Sustainable Business of The Steem Blockchain - The Story of Utopian

Many of the attendees at Steemfest 3 were either presenting in behalf of or representing a Steem-based initiative or dApp. Being one of the biggest and most familiar of these, Utopian came a long way from its day of inception. The lessons we've learned don't only make the perfect prelude for the unveiling of the new Utopian.io platform, but also a resource for all others trying to build and sustain a business on Steem.

The story of Utopian is not without challenges and hurdles. But we're still here, and not only that, but we're a top 20 witness and have been empowering open source projects for over a year by using our delegated stake on the blockchain to distribute rewards and incentives to contributors.

The Utopian story started as a burning idea in the mind of one passionate and brilliant developer - @elear. In a few nights without sleep, he forked the source code of busy.org to create a proof-of-concept. You might know it as Utopian.io v1.

This proof of concept was just that - the embodiment of a utopian idea to incentivize open source innovation. Despite its imperfection, it's attracted thousands of projects and contributors, and facilitated the distribution of quite a large sum of STU.

Challenges Faced

Utopian did not have many examples to learn from. In fact, we're pioneers in establishing a business on Steem, so we were the first to encounter the challenges and hurdles that are unique to Steem-based initiatives.

When you offer people something of monetary value, you immediately encounter two issues: abuse and security.

Security

It's easy for us to forget, but at the end of the day we're dealing with money here. STEEM or SBD or even the voting power - they are all worth real-world-rent-paying money. As soon as you have something of monetary value, someone will want to steal it from you. Such is the nature of the world, especially on the Internet when theft is digital and impersonal.

For Steem dApps, and any other crypto-related projects, this is a critical issue that is easy to ignore. This can be devastating to any brand, so it's important to consider the technical and procedural means to secure your tokens and those of your users.

Abuse

Utopian.io was abused. Hard. When I joined Utopian, we were upvoting complete trash by milkers exploiting the faith in the community upon which Utopian was built. The reason is simple. When you offer people incentives to do a cool thing, some people will do the cool thing for the sake of doing it, even if the incentive is a little badge next to their name. Some people will ask you "What is the minimum I need to do to get the maximal incentive?". Those people are the issue. No matter how much you adjust rules and guidelines, they will continue to find a way to exploit your service for monetary gain.

Fortunately, these users are usually the first to go when the value of STEEM drops, but are not the only ones. Which brings me to another major issue: retention.

Retention

Along with the milkers looking for easy money, you might find yourself losing users simply because the change in the value of the incentives they get drops. It's not as tempting to solve a task for $20 if you got $100 for the same work a month or two ago.

In addition, retention depends heavily on community (a topic I will discuss in length in a few slides), so engagement is another important aspect you should be considering when planning your Steem-based app.

It's also worth noting the low virality of Steem-based dApps due to the difficulty in obtaining a usable account (without investing extra time and money in the development of a sign-up module). Since I brought up money, this brings me to the hardest challenge of all: sustainability and funding.

Cost & Sustainability

This part is the toughest to crack. While servers, developers, advertisements and swag have costs, the reward pool is limited. In addition, it is not intended for that purpose - it's intended to be distributed to the users - a growing number of users the reward pool cannot support. As the reward pool is limited but we try to grow our user-base, we encountered a major scalability issue. What kind of incentives can we distribute if we have 1,000 contributions a day?

Another issue that makes sustaining the growing a business on Steem financially challenging is the same the plagues all crypto businesses today - coin instability. It doesn't only add difficulty to retention, but also makes it difficult to make long-term financial plans.

Last but not least is the issue of dependence of delegations - one that all new Steem initiatives deal with. Having a nice fat delegation to give your voting power some volume is great, but you can't build a business on it. Delegators come and go, and you simply cannot afford to build your business with a seven-day grace period to readjust processes if a major stakeholder pulls out.

So what have we learned?

The past year was a series of experiences and lessons that changed Utopian in many ways. We've learned a lot, but the most important fact is:

As mentioned above - money comes and goes. The token value and the freedom delegators have to influence the voting power of an initiative cause for a lot of uncertainty. But one this is constant: good people. Having a truly passionate and engaged community is truly everything in a Steem business. Or any business, really.

The awesome people in the slide above are only the core team - just a few of the great Steemians dedicated to the Utopian cause, contributing their talents and experience to the common goal. A truly global community, the growing group of Utopian reviewers speak close to 30 languages and specialize in various aspects of open source project development and growth. Their skills and knowledge are a constant source of learning for Utopian as an organization.

Another important source of knowledge and information in the past year are the projects Utopian has helped. From the EFTG to Rocket.chat - we continue to learn and understand the needs of independent OSS projects from different fields through our continued work with these organizations.

Steem is HOME

Utopian was born on Steem and continues to live on Steem. We cannot rely on the reward pool to sustain Utopian, but we can instead build Utopian to empower the Steem blockchain.

This is why we are committed to this blockchain - we run a witness server, actively encourage contributions to Steem-based projects, and have recently launched an anti-abuse initiative aimed at incentivizing anti-abuse activities on Steem in a way that compliments other anti-abuse and anti-spam initiatives on the blockchain.

So what's next?

With all these lessons learned, Utopian is ready to take the next leap - Utopian.io v2 - The Social Platform for Collaboration and Collective Funding of Open Source Innovation.

here.For @elear's part in the presentation - the unveiling of Utopian.io v2 - check out the post on the @utopian-io account

In addition, you can watch the video of the presentation on YouTube at about 01:08:00 in the video embedded here:

P.S. In my next Steemfest 3 summary post, I will be writing about some of the awesome people I met in Krakow and publishing way too many photos.