Launching a startup in any industry is hard. Launching during a bear market is even harder. Launching a startup in a bear market in a relatively new i
Launching a startup in any industry is hard. Launching during a bear market is even harder. 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 — brings a whole additional slate of challenges. But as many industry pioneers have proven, it’s not impossible, as long as founders follow a few smart strategies.
Many of the members of Cointelegraph Innovation Circle are startup founders themselves, and all are longtime industry veterans and market watchers. Here, 18 of them share their tested tips for crypto companies starting out during these volatile times.
Pitch to the community and investors first
When I look over the history of influencers and people who are 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 pitch it to the community on Twitter and to investors. Once they have refined their ideas and know that their offering is truly valuable, then it’s time to build a community around it. – Arvin Khamseh, SOLDOUT NFTs
Overestimate the time and number of people you’ll need
In this environment, capital is much harder to come by. Assess 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 is easy to overpay contractors for quick results, but this is a bad strategy for long-term survival. – Simon Harman, Chainflip Labs
Don’t waste precious resources chasing funds
This is a difficult time for fundraising. Companies should focus on growing their communities and partnerships to ensure they are perfectly placed when the market improves. Chasing funds right now will drain precious resources. Depending on how new a company is, spending excess early funds on development can doom projects to solving problems the markets don’t care about or are reluctant to fund. – Jason Fernandes, AdLunam Inc.
Ensure you have a team of qualified, experienced advisers
If your company is starting out in the crypto space, make sure you have a good business plan and a team of qualified and experienced advisers, including attorneys and CPAs, helping you. Pay close attention to things like entity structuring, funding, licensing, and tax and accounting compliance requirements early on. As the saying goes, failing to plan is planning to fail, especially in this volatile market. – Sharon Yip, Polygon Advisory Group, LLC
Understand what’s behind the volatility in crypto
Crypto capital raising allows liquidity and price discovery right from the start. An important part of the crypto capital-raising process is understanding what is behind the volatility in crypto markets. These price swing signals and changes can communicate information to entrepreneurs, giving a level of transparency that is not possible in the traditional finance capital-raising space. – Tammy Paola, Zerocap
Start out lean
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. Attempts to start high growth too early can be a recipe for failure, especially in the current market. – Hugo Lee, Haru Invest
Rally around a shared purpose
Celo launched during a bear market with an early focus on real-world projects and use cases driving positive impact for communities and the climate. Rallying around a shared purpose or mission helps projects prioritize goals and tasks critically. – Rene Reinsberg, Celo Foundation
Don’t tout decentralization for its own sake
Be transparent, stick to your roadmap and timeline and don’t tout decentralization for decentralization’s sake. Sometimes decentralization hinders progress, particularly early in the life of a project. Crypto investors have become savvier, 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 a few first true fans
People say that a bear market is the best time to build. But that’s not easy for companies just starting out. Find your first few true 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 your path to real adoption use cases. – Cindy Jin, Mintology
Solve the proven UX challenges for your category
Focus 99% of your energy on solving the user experience challenges for the category you’re building in. Deliver value for users and give them a reason to become advocates. By…
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