There are many valid situations where the founder-led network can be valuable, and we will cover those shortly. A normal founder-led network will have the following architecture:

However, we will start with a warning: a founder-led network should not be a way to avoid hard business discussions with potential network participants.

From our time working in this field, we have come to interact with organizations that really believe in the value of blockchain networks, but are feeling overwhelmed at the idea of decentralizing control of the network. They end up creating a roadmap where their initial stage is to dive into the technology and postpone the business discussion until subsequent phases. The end result is typically a fabric network hosted within the founder infrastructure, exposing the network through an API gateway. In some cases, it goes as far as not providing a different identity (that is, a private key and certificate) to the participants. The risk here is that while the solution is technically viable, it fails to deliver value according to the tenets of blockchain networks.

This is not to say that organizations should not adopt a founder-led approach with a phased roadmap, but it is important to get buy-in from potential participants early in the establishment of the network to avoid either a lack of adoption or significant rework efforts.

The founder-led network is typically leveraged by the following types of organization:

• Startups: They tend to have a unique perspective on their industry and bring innovation and fresh ideas. Their business model is typically oriented toward providing an added value service to the industry. While innovation may propel them to industry recognition, their success hinges on credibility and funding.
• Industry leaders: From their industry perspective, they have enough influence to establish their network. They get the support of their suppliers and other organizations to define the agenda and use cases to support.
• Interdepartmental blockchain projects: This model may not initially qualify as a business model, given that it is meant to serve the purpose of internal coordination in an organization, but the reason for bringing it up here is that those projects are good candidates to evolve beyond the boundary of the organization.

As a founding member of the network, these organizations get the opportunity to define the policies and the focus of the network. Organizations that succeed with their network get a leadership position and can hope to capture the value of the network.

However, these advantages do come at the risk of the need to convince other organizations to join. They also bear the complete burden of investing capital to get the project started and to get the required expertise to deliver the solution. They are also exposed to the risk of significant rework if other industry leaders request changes before joining.