The web3 space is an exciting frontier, but like any new territory, it's filled with challenges. Here's a deeper dive into the common oversights of web3 startups and how to navigate them:
Business Modeling in the Web3 Ecosystem:
Many startups are so tech-driven that they overlook a fundamental question: "How will we monetize our blockchain solution?" A revolutionary crypto product needs a clear monetization strategy for sustainability.
Recalling a brilliant team developing a decentralized wallet, that came to InnMind and managed to secure significant funding in their initial round. However, as they progressed, they realized their sole reliance on token sales for revenue was unsustainable. Their revolutionary product was at risk of becoming a white elephant because they hadn't considered multiple revenue streams or adapted their business model to market feedback.
Typical Mistakes: Sole reliance on token sales for revenue, not exploring multiple revenue streams, or not adapting the business model to market feedback.
Advice: Diversify your revenue streams. Consider subscription models, partnerships, or complementary products/services.
Go-to-Market Strategy for Crypto Startups:
Another oversight we typically observe is launching a product without a clear plan for reaching and engaging the web3 audience.
From the recent examples from the InnMind network, a blockchain-based supply chain solution had developed a robust product but stumbled when it came to market penetration. They launched without a clear plan, failing to identify a niche audience and spreading their resources too thin across multiple markets, which resulted in a failed product launch with not much budget left for further marketing experiments.
Typical Mistakes: Not identifying a target audience, not setting clear milestones, or spreading resources too thin across multiple markets.
Advice: Focus on a niche audience initially. Understand their pain points and tailor your marketing message to address those specifically. Do not spend significant budget and resources trying to reach maximum but irrelevant audience.
Tokenomics in the Decentralized World:
Tokenomics is the core of startup's financials and future scaling which at the end of the day pictures the long-term success and potential of the project. At the same time what we continue observing is startups treating tokens merely as a fundraising tool, without considering their long-term utility and value in the ecosystem.
One of the DApps that joined InnMind this summer with a promising platform faced backlash due to unclear token distribution. Their community felt left out, leading to a decline in platform engagement. They had treated tokens merely as a fundraising tool, without considering their long-term utility and value in the ecosystem, which resulted in a fractured community and dwindling user engagement.
Typical Mistakes: Not setting aside tokens for community incentives, having an unclear token distribution plan, or not considering token burn mechanisms to control inflation.
Advice: Ensure your token has a clear utility in your ecosystem. Whether it's for governance, accessing certain features, or incentivizing behaviors, its purpose should be clear.
Crypto Regulatory Compliance:
As we move into decentralization this does not mean decentralization equals freedom from legalities. We observed quite a number of cases, especially when it comes to decentralized exchanges overlooking the importance of regulatory compliance. Such teams faced challenges in multiple jurisdictions, leading to service interruptions and a loss of user trust, a mistake that costed them dearly in the long run.
Typical Mistakes: Not seeking crypto legal experts, launching in jurisdictions without understanding their regulatory stance, or not being transparent with token sales.
Advice: Stay updated with global crypto regulatory trends. Consider working with legal consultants who specialize in crypto regulations.
Community Building in the Crypto World:
The power of a strong, engaged community in the decentralized world is another area that many startups fail to acknowledge fully. Founders always believe in the power of their product, but the majority forgets about the most important question: "What is my product without people using and supporting it?".
The same happened to one of the startups duilding a web3 wallet and turning to InnMind for support. Despite having a solid technical foundation, their product launch saw a lukewarm reception due to low user adoption and engagement, a clear case of not fostering a sense of ownership within the community.
Typical Mistakes: Not engaging with the community regularly, not taking their feedback seriously, or viewing them merely as token holders rather than integral stakeholders.
Advice: Foster a sense of ownership within your community. Regular AMAs, feedback sessions, and even community-driven initiatives can be transformative.
How InnMind Web3 Accelerator Addresses These:
Tailored Mentorship for Blockchain Startups:
We believe in guidance from those who've walked the path, not just talked the talk. At InnMind, startups receive personalized advice from actual business owners, not just consultants.
Our mentors are successful web3 founders who've scaled businesses to hundreds of millions. They've faced the challenges, made the mistakes, and learned the lessons, so you don't have to.
Brian Lavery, Co-Founder of Qualoo, shares his experience:
"We can't thank InnMind enough for the incredible experience we had in their accelerator program. The support and resources we received were exceptional. The weekly calls dedicated to refining our tokenomics and fundraising strategies were invaluable."
We also facilitate mastermind groups where founders can share, learn, and grow together, leveraging collective wisdom.
Access to Web3 Resources:
It's not just about having the right tools; it's about having the right connections. With InnMind, startups get more than just business modeling tools and market research resources.
We provide warm introductions to crypto partners, support in business development, and personal presentations for corporate stakeholders.
Our network extends to exchanges, launchpads, KOLs, protocols, and grant providers. We ensure startups have everything they need to succeed.
Andrei Kovalevskyi, Co-Founder of Binaryx Platform, couldn't agree more:
"We chose Innmind based on feedback from partners and peers in the market. The professional team, the mentors, their lectures, the services, benefits, and pitch sessions were all exceptional. Separately, I want to highlight the mastermind sessions. For me, InnMind is the most productive and valuable accelerator!"
A Holistic Approach:
Fundraising is just a part of the journey, and with us, it starts right from the first week. We don't believe in waiting till a demo day.
Our focus is on the long-term success and sustainability of your business. We ensure that while you're aiming for the stars, your feet are firmly grounded in solid business principles.
The decentralized world is vast and full of potential. But to truly succeed, you need more than just a great idea. You need the right guidance, resources, and focus. That's where InnMind's web3 accelerator steps in.
If you're a web3 founder looking to dodge the pitfalls and skyrocket to success, let's chat. We're here to help.