Although hackathons are a potential motivation for individual developers to build something on Sia, the prize money is normally quite small and not enough to sustain the application or project for longer periods of time. This is especially true for teams with multiple people. Although some developers stick around, many of them leave to the next thing. This results in many applications that come out of hackathons to either be abandoned over time or turn into hobby apps that are maintained on the weekends. Even if developers stick around, it takes significantly more effort and time to build a full product or service from a simple prototype.
Fundamentally i think a distinction should be made between applications developed in a hackathon and fully fledged companies already building on Sia with multiple full-time team members. Examples of these are StoreWise, Filebase and Arzen. It is these companies that are doing most of the work, taking the most risk and building the best products on Sia that will eventually drive adoption of the entire network.
The motivation of this proposal is to increase the probability that these embryonic companies are able to grow and become successful. For that to happen we have to fill the gap between hackathons and eventual profitability or a later VC round.
Unfortunately bridging this gap is one of the main hurdles startups face today, that includes startups building on Sia. As VC’s move towards already companies with significant traction, startups struggle to get their project off the ground and drive initial adoption. The road from an idea to a product and eventually customers is very long and hard, especially for those working with complex technologies like blockchain.
The European Horizon 2020 program is a good example of a program that addresses this by driving innovation without forcing startups to rely on traditional venture capital financing. Many blockchain incubators have received funding from Horizon 2020 to give out as equity free grants to viable small scale startups to drive product development to prototyping and later piloting their product.
I hereby propose that the foundation dedicates a portion of their yearly budget to setting up and running a Sia incubator that in the form of equity free grants and dedicated development time supports ecosystem startups and helps introduce their solutions to market. This is not a unique idea, many incubators exist within other blockchain related foundations.
- Budget Amount: 200,000,000 SC per year, from block subsidy ($500,000).
- 5-10 Individual checks on a yearly basis between 25,000 – 100,000$.
Some additional thoughts:
i. Projects must be legal entities, demonstrate a track record, propose a solid plan and go through a selection process.
ii. Each startup can only receive one check and the funds are intended to take the projects over the initial product development and pilot phases.
As an example this also makes it possible for Skynet app developers that have built out apps in the past, either through hackathons or otherwise (and are actively looking to continue working on their project full-time) to be able to expand on their initial prototype and build a healthy company.