18 industry vets share tips for launching a crypto startup in a bear market
Starting a startup in any industry is difficult. Launching during a bear market is even more difficult. Launching a startup in a bear market in a relatively new industry like crypto – which many investors don’t fully understand and which has had its share of recent negative headlines – presents a whole lot more challenges. But as many industry pioneers have proven, it’s not impossible, as long as the founders follow some smart strategies.
Many of the members of the Cointelegraph Innovation Circle are startup founders themselves, and all are long-time industry veterans and market watchers. Here, 18 of them share their time-tested tips for crypto companies starting up in these volatile times.
Pitch to society and investors first
When I look over the history of influencers and people dominating the market now, I see that many of them started in the previous bear market. New crypto companies should not build anything until they present it to the community on Twitter and to investors. Once they’ve refined their ideas and know their offering is truly valuable, it’s time to build a community around it. – Arvin Khamseh, SOLD OUT NFTs
Overestimate the time and number of people you need
In this environment, capital is much harder to come by. Consider the complexity of your product and make sure you overestimate how long it will take to build and the people you will need to build it. When times are good in crypto, it’s easy to overpay entrepreneurs for quick results, but this is a poor strategy for long-term survival. -Simon Harman, Chainflip Labs
Don’t waste precious resources chasing money
This is a difficult time for fundraising. Companies should focus on growing their communities and partnerships to ensure they are perfectly positioned as the market improves. Chasing funds right now will drain precious resources. Depending on how new a company is, spending excess early-stage funds on development can doom projects to solve problems that markets don’t care about or are reluctant to fund. – Jason Fernandes, AdLunam Inc.
Make sure you have a team of qualified, experienced advisers
If your business is starting in the crypto space, make sure you have a good business plan and a team of qualified and experienced advisors, including lawyers and CPAs, to help you. Pay early attention to things like entity structuring, financing, licensing, and tax and accounting compliance requirements. As the saying goes, to fail to plan is to plan to fail, especially in this volatile market. – Sharon Yip, Polygon Advisory Group, LLC
Understand what is behind the volatility of crypto
Crypto capital raising enables liquidity and price discovery right from the start. An important part of the process of raising crypto capital is understanding what is behind the volatility of the crypto markets. These price fluctuation signals and changes can communicate information to entrepreneurs, providing a level of transparency not possible in the traditional crowdfunding space. – Tammy Paola, Zerocap
Start slim
Crypto markets have proven to be volatile since their inception, so new companies entering the field should learn from the mistakes of some of their predecessors. Start small and lean, and focus on organic growth. Trying to start high growth too soon can be a recipe for failure, especially in today’s market. – Hugo Lee, Haru Invest
Gather around a common purpose
Celo was launched during a bear market with an early focus on real projects and use cases that drive positive impact on local communities and the climate. Gathering around a common purpose or mission helps projects critically prioritize goals and tasks. – Rene Reinsberg, Celo Foundation
Don’t tout decentralization for its own sake
Be transparent, stick to your roadmap and timeline, and don’t promote decentralization for decentralization’s sake. Sometimes decentralization hinders progress, especially early in a project’s life. Crypto investors have gotten smarter, so you really need legitimate, creative ways to drive value into the token for any degree of success. – Timothy Enneking, Digital Capital Management
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Seek out the first few real fans
People say a bear market is the best time to build. But it is not easy for companies that have just started up. Find your first real fans who really believe in your vision and can help you grow. Expand it to the next dozen by further validating your idea. Blockchain and Web3 are here to stay; use this time to find the path to real use cases for adoption. – Cindy Jin, Mintology
Solve the proven UX challenges for your category
Focus 99% of your energy on solving the user experience challenges of the category you’re building in. Deliver value to users and give them a reason to become advocates. By solving a problem that users say is their top priority, your solution becomes universal and your product won’t be limited only to the US or certain geographies. With regulations comes, if your product meets human needs, you will survive. – Chris Ghent, Parkhaus Holdings
Focus on building utility into your products
Give people a reason to come to your platform regardless of market conditions. Web3 is here to stay and will only become more prevalent, so by focusing on building a tool or platform with real utility that is easy to use and access, you will attract users during the bear market and will be ready when the market recovers. – Sandy Carter, Unstoppable Domains
Be prepared to wait for a return
Be 100% mission focused, be incredibly cost conscious when analyzing expenses and understand that you may not see an immediate return on most activities. Crypto companies are seeing crazy booms, and most people building in the space now are doing so under the impression that they are setting themselves up for success when the market turns more positive. It pays to be robust and determined in down markets. – Ty Smith, Coinbound
Connect market needs to real-world use cases
Understand the real needs and gaps in the market and connect them to real-world use cases. Be aware of the core drivers of adoption and solve real-world problems. Don’t launch a token for the sake of it, and don’t be a “me too” player. – Nitin Kumar, zblocker
Build a strong, adaptable business model
One piece of advice for new crypto companies starting out in volatile times is to prioritize building a strong, adaptable business model. Focus on creating real value, meeting market needs and establishing a solid product or service foundation. This robustness can help your business navigate market fluctuations and foster long-term success in the rapidly evolving crypto landscape. – Tomer Warschauer Nuni, Kryptomon
Understand that volatility comes with the industry
Focus on your product and on bringing value to the ecosystem. Do not take into account the volatility of the times. This is crypto, and volatility will always play a role – at least for now. As long as you focus on actually benefiting the community, people will appreciate you and adapt your technology. Stay focused and don’t let others deter you. – Ayelet Noff, SlicedBrand
Keep fixed expenses low
Resist the urge to increase your fixed expenses by renting out fancy business space. Hire and train locally. Consider basing operations outside one of the overpriced “tech hubs”. Be generous with your employees to encourage commitment, hard work and ingenuity. – Jae Yang, Tacen
Prioritize communication and transparency
First, build a well-thought-out, technologically sound project, and give the audience a strong understanding of its purpose. Second, keep team motivation high through tangible, achievable goals and a clear vision. Third, make long-term decisions instead of impulsive ones based on the current market situation. Always prioritize communication and transparency with users and teams. -Anthony Georgiades, Pastel Network
Turn your competitors’ weaknesses into your strengths
Find three to five of your top competitors and analyze their messages. List what they do well and what they communicate poorly. Focus on this and see where your competitors are weak to gain an advantage. If they use too much jargon, make sure your messages are clear and to the point. – Sheraz Ahmed, STORM Partners
This article was published through the Cointelegraph Innovation Circle, a researched organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.
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