High-level competition on the market by leading technology companies - despite the fact that there are no MARK.SPACE analogues yet, the market players have all the resources for replicating such business model, if its market acceptance will be fully confirmed. Certain elements of the product offer, such as residential districts, may have problems with market acceptance due to the presence on the market of such solutions as Instagram that satisfy the same user need in a more natural way.
Although the project provides an opportunity to use the services of the platform via PC and other standard devices, nevertheless, in the absence of VR-glasses, an expensive prerequisite and a poorly distributed device, the originally conceived customer experience concept is lost. The concept of the product is rather unintuitive, there is a need to work on integrating the service into the existing Internet space in order to make the transition to the platform as "seamless" and even logical for the user.
There is no mechanism for returning funds to investors. The company does not provide any forecasts of its financial activities. The system of discounts to the base token price creates a risk of premature exit from the investment of a significant part of the investors (especially those who entered the project at the stage of open preliminary sales) and, as a result, the risk of token price collapse. Judging by the hard cap, the potential size of this ICO round seems to be too high relative to the size of comparable venture capital transactions in the early stages of project development: according to the Pitchbook report, the median size of the early-stage rounds in the US venture market in the end of 2017 promises to be 6 million USD. Apparently, the project had no experience of attracting the funds of "qualified" venture investors - only business angels like hockey player Evgeni Malkin.
According to Goldman Sachs' "Virtual & Augmented Reality" report, the aggregate volume of the target VR / AR market (TAM, total addressable market) by 2025 will be about 80 billion USD in the forecast basic scenario 45 billion USD of which will be spend on hardware- solutions like virtual and augmented reality glasses and 35 billion - for software in this segment. This indirectly points to the potentially high demand for the MARK.SPACE platform from users in the future, but there are also more point estimates for specific industry segments the platform is being created for. Thus, the VR / AR technology prospects in retail are estimated through the prism of e-commerce at the level of 1.6 billion USD by 2025, in education - at the level of 700 million USD, in real estate - about 2.6 billion USD. At the same time, high level of interest in technology from the side of the largest technology companies is underlined - thus, their products in the realm of virtual reality according to 2016 already attended by such companies as Facebook, Samsung, Google, HTC, Sony, etc., in the same scope of augmented reality - from Microsoft and, again, Google. All this indicates signs of a high level of competition in the industry, but the market is partly protected by entry market barriers by resource-intensive development process in this segment.
The product offer MARK.SPACE boils down to the open-source platform for developing, consuming and trading products of virtual and augmented reality - the opportunities provided at the initial stage will be reduced to the organization of a kind of personal virtual interactive space, a link to which can be shared with other users. t.ch. and non-current users of the project - a kind of Instagram in 3D - this feature in the terminology of the project has received the Residential status of the district (or district), as this and other services are organized into something like a single virtual city-ecosystem, other services / districts. Other basic services include the possibility of creating groups of interests (Community district), VR-Shopping (Shopping district) and CRM in the form of virtual front-offices (Business District). It is noteworthy that the immersion in the MARK.SPACE ecosystem is realized as purely through standard PCs, laptops and smartphones without the use of additional devices (although there will be a 3D technology here), and through more advanced devices like VR glasses (virtual reality glasses ), which will provide a user experience in its originally conceived form. In addition, there are broad monetization opportunities for all groups of platform users - so, members of different communities can organize their own events and charge for it.
MARK.SPACE implements a business model that is in a dependent position with respect to the computing power providers for the project, which is the main source of risk here, since rendering of VR and AR products requires really powerful providers, which initially narrows the circle of candidates, because developers are planning to screen out "low-power" miners. In addition, it is not clear whether the miners will be interested in this alternative, since the payback in the mining process is of a medium-term nature, which, together with the cost of reorienting the farms' capacities, requires the selection of the most stable projects to which MARK.SPACE by definition cannot. Another thing is that the same ether mining in the near future may lose not only economic expediency but also existence, therefore this circumstance can serve as a positive factor from the point of view of influence on the demand of miners for the desired project. In addition, it is unclear whether the primary sales of ecosystem units (sites) are the only source of revenue for the project - most likely, the commission model will also be implemented, given that the project provides monetization opportunities for participants in all districts: it is obvious that this will be used. So, the success of the project will largely depend on establishing partnerships with major retail brands, as well as with corporate clients in principle. As for the token, it acts as a means of payment within the platform, and there are alternatives in the face of fiat currencies.
MARK.SPACE organizes this ICO mainly to receive funds for the further development and marketing of its project: according to the developers, the project has already made investments from its own sources in the amount of about 5 million USD - thus, the team has not been able to interest external venture investors, which is a negative point. The objectives of the tokens crowdsale are well reflected in the structure of spending of future attracted funds disclosed by the company: 4% will to the salary of the project team, 6% will go to encourage future project participants, 7% will go to research objectives, 33% and 36% respectively will go for the development and marketing, 10% will be attributed to indirect costs, and the remaining 4% will go to the MARK.SPACE technological infrastructure. The company also implements a deep scenario approach to investor-driven development, depending on the amount collected. It is noteworthy that only the top cap of the ICO's hard cap is set at the level of $ 77.3 million, while the soft cap is not available, which means that the company does not provide scenarios related to the funds return to investors. A positive aspect is the publication on the ICO website of a draft document fixing the rights and obligations of the parties involved in the investment transaction, as well as disclosing the potential legal and financial risks and, in general, the uncertainty that tokens investors of the company might face.
The project team is characterized by two positive features: firstly, the management core of the project has significant expertise in the areas relevant to the project: for example, the CEO & Founder of the project has 10 years of experience in e-commerce, managing partners Oleg Ershov and Denis Polyakov have 12-year-old experience in marketing (4 years in event marketing and 8 years in Internet marketing) and 12 years of IT expertise (including block projects), respectively, CTO and the main developer have 25 and 27 years experience in IT , respectively, (have experience joint launch of the Site Makers project). Besides, the head of VR and 3D unit has a 12-year expertise in 3D visualization and 5 years of experience in product design. Secondly, further analysis of the team composition indicates the certain emphasis on specialists in the marketing, communications and community management areas, which demonstrates the team's understanding of the need to build relationships with partners. Regarding the risks associated with the project team, we can identify the inability to verify the most "loud" competencies among members of the management core like CTO and the main developer because of lack of their profiles in social networks like LinkedIn. In addition, at first glance, the statement of only one blockchain specialist seems insufficient taken into account the importance of technology for the project business model.