The Six Things That Will Fucking Kill Your NFT Startup

There comes a time in every NFT and Web3 startup when things get complicated. Typically, that time is 3.2 weeks after you start…

It could be because you’ve hit a roadblock with your tokenomics, you’re burnt out from working on it for so long, or just about any other reason imaginable. The point is that things aren’t going as smoothly as you had hoped, and now you’re forced to ask yourself: Does this venture have a future? That moment of clarity separates successful entrepreneurs from those who give up too soon. Founders who can see the forest for the trees and keep their heads above water when times get tough often end up much further down the road than those who don’t. Unfortunately, over 90% of Web3 projects fail before they even get off the ground due to avoidable reasons — many of which can be fixed with some self-reflection.

You didn’t validate your idea before building.

Whether you’re in Web2 or Web3, whether you’re trying to build a new feature, product, or company from scratch, the best way to figure out if it’s going to be a success is to validate the idea. Validation can be achieved in a few different ways, but the most common is conducting customer interviews and/or surveys. This can be as simple as asking a few people what they would want in a product like yours and jotting down their feedback. If you don’t validate your product idea before building it, there’s a high chance that you’re making the wrong thing. This is especially true if you’re building a dApp. It usually takes months to create any form of software, let alone something as complex as blockchain-based software, so if you don’t validate your idea before you start development, you could burn through your savings with nothing to show for it.

Your growth strategy is based on a hunch.

There are a lot of different ways to grow in Web3. Some are more successful than others, but each requires significant effort and resources. You need to measure your progress and be confident that what you’re doing is working. You’re just hoping for the best if you don’t know how to grow your community. For example, let’s say you’re launching an eCommerce store. You’re confident that your product will succeed and generate a lot of sales, but you don’t have a strategy for driving customers to your store. You might be successful for a few months, but eventually, your sales will drop off, and you will likely fail.

You don’t have a moat.

Thousands of new crypto startups pop up yearly, and only a small percentage survive. If you don’t have a competitive advantage, you’re in trouble. Your startup needs to be different in some way. Every company needs a competitive advantage, whether through your product, how you do business, or something else. You’ll have difficulty carving out a niche in an overcrowded market. For example, if you want to start a PFP project, thousands are just like it, with the same promises, utility, and features. The space is already oversaturated, so you need to have some kind of competitive advantage if you want to succeed. Many of these drops are a zero-sum game by definition. If a buyer holds one PFP, they don’t hold another. Why the hell are they going to make that decision in your favor?

You don’t know who your ideal customer is.

Many factors go into starting and growing a successful Web3 project, but one of the most important is understanding your ideal customer. You need to know your target audience, their pain points, and how you can solve their problems. If you don’t know who you’re building products for, there’s a good chance your business won’t last very long. Finding your ideal customer is something that you should constantly be iterating on. You won’t be able to get it right the first time (or the second, third, or fourth time). There is always room for improvement, so don’t be afraid to change your focus as you learn more about your audience.

Nobody on your team knows how to get customers.

When you start a new business, one of your first orders of business will be figuring out how to get customers. Unfortunately, many entrepreneurs in the crypto ecosystem spend so much time building their products that they forget to focus on the most important part — getting people to use them. If you don’t have a system in place for acquiring customers and actively acquiring new ones, you won’t be able to grow your business. It doesn’t matter how fantastic your product is if no one knows about it. If you’re still figuring out how to get customers, don’t stress. Take some time to brainstorm ideas, build your marketing plan, and start putting the pieces together.

Conclusion

Web3 startups fail and flame out at a truly alarming rate, but it doesn’t have to be that way. The best way to avoid these issues is to take some time to reflect on your idea and make sure it has a future. If you don’t have a product that people want, find out why and correct your course. Find out why and update your method if you’re having trouble growing your community. Take time to understand your ideal holder and how you can help them, and you’ll be well on your way to building a successful business.

Joan is a Web3 / NFT writer, angel investor, communicator, and creative director. She is the founder of the web3 marketing, PR, branding, and creative firm Studio Self, where she helps blockchain companies, founders and creatives communicate with humans. She is raising Metapunk Ventures, a Web3 venture studio, and building MODA DAO and Emanate.

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Joan Westenberg

Joan Westenberg

Chaotic good. Award winning creative director & writer, ft. in Wired, Inc, SF Chronicle, TNW. Founder thisisstudioself.com