2 Things Crytpocurrencies Can Learn From Crowdlending

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Researchers from CNRS and ESCP Europe have decoded for the first time the strategy crowdlending used for creating a new market space.

Answering the question on which strategies an entrepreneur could implement to create an innovative business model for the existing parties and for their future competitors, scientists discovered that:

Firstly, (the entrepreneur) created a niche (to be) the only market option and bypass the existing banking monopoly. Secondly, (the entrepreneur) helped to establish regulations (to) “protect” all crowdlending companies (boosting) the development of this market (…).

In particular, this strategy was implemented as follows:

1. Bypassing the banking monopoly, the entrepreneur allowed personal loans to be made without going through a bank.

2. Collaborating with future competitors, the public authorities and the sector’s regulators, the entrepreneur contributed to the development of long-term
crowdlending regulations.

3. The entrepreneur nevertheless continued to use the cash vouchers rather than this new status therefore remaining the only party to use this resource for three years until a new law put an end to this strategy.

Researchers argued:

This is the first time that researchers have observed the success of such a “coopetition” strategy, i.e. an approach based around simultaneous competition and cooperation, in a new sector with high barriers to entry, initially without its own regulations and bypassing a long-established, highly regulated industry. This collaboration strategy between market regulator and platforms via a meta-organization is also the avenue being explored by another, still ill-defined sector: cryptocurrencies.


Bibliography:

Stratégies de conquête d’un nouvel espace de marché : la structuration du crowdlending. Héloïse Berkowitz et Antoine Souchaud, Gérer et Comprendre, 1st March 2018

Find out more here.

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