I asked 103 crypto investors, developers, and founders one question:
“What’s the number one mistake web3 builders make?”
Here is what they said.
Research Structure
Before we dive in, let's take a high-level view at the results. I started by categorizing the answers into three primary buckets.
People: Who is building the product
Process: How the product is built
Product: What the product is
People Mistakes
Here are the most common web3 mistakes made within the "People" category.
“Founders need to be less shy when they start, often times, they are either scared about asking questions as they think it might be stupid (which it never is) or thinking that VCs will steal ideas.
Both of the cases never happens as Web3 (especially Ethereum) community is amazing and will always come together to buidl your idea with you. TLDR; Be shameless in asking questions and buidl together!”
Source: @Riijo
“They think it’s going to be easy.”
Source: @andrarchy
“Unilaterally, everyone overpays when hiring.”
Source: @IamSuperMassive
“Underestimating the mammoth task at hand behind the digital curtain from design all the way through to development and eventually, delivery.”
Source: @SadafJadran
“Many founders seem to overlook the fundamentals and try to spend their way to success, which isn’t a viable long term blueprint. The ones that are on the trenches interacting with their community daily carry the most bullish outlook.”
Source: @alancarroII
“Not focusing on community first.”
Source: @ryancarson
“Focusing on competing versus collaborating”
Source: @jennifer_sutto
“Don’t get trapped in the hype of building a large community early on. The first focus, no different than web2, should always be to deploy code and build a product. Community is important, but without a core offering, it’s bound to fizzle out.”
Source: @yb_effect
“Overestimating their abilities and under-delivering, or not listening to the community/developing a product that doesn't have any demand.”
Source: @threadoor
“Letting the pendulum swing too far in either direction: assuming base principles - e.g. supply/demand - don’t apply to Web3 or being risk averse and overly dismissive/fearful of things like meme culture and CC0.”
Source: @RogerDickerman
“Hiring too easily. If you aren't saying no more than you're saying yes, then you'll be firing as much as you're hiring.”
Source: @ThePeoplesDegen
“Trying to find opportunities for quick money instead of thinking long term. A lot of people in this space get caught up in the money and then can ruin their platform Over a few eth. Also web3 founders I think over promising and under delivering.”
Source: @Helloimmorgan
“Your future contributors desperately want clear pathways to grow with you and expectations for what they will receive in return.”
Source: @brandoncnolte
“Founders who are building in Web3 are creating communities around themselves, their product, and their future roadmap.
If the community isn’t aligned on day 1 through participation mechanisms, then it will be hard to organically create community later on.
Long-term engagement is created at the start of a Web3 project by making sure everyone is on the same level with regards to: onboarding, education, communication, transparent task management, and token distribution to incentivize consistent contributions.”
Source: @JackLipstone
“Not choosing compatible cofounders and investors they know they’ll be able get along with in the long term. These two types of bonds (while very different) are difficult to break and it can be extremely burdensome when these relationships aren’t going well.”
Source: @lstephanian
“Taking a formulaic approach to community building. Every community is unique, and would benefit from a custom, emergent approach.”
Source: @alexzhang__
“Underestimating the value of deliberate & thoughtful comms. Twitter is the main cultural zeitgeist of Web3 & that comes with all the good & bad of Twitter. Perception can be reality so under promising, overdelivering is paramount but I see many founders feeding the hype machine.”
Source: @JaredRonis
“I think one of the most important pieces when it comes to building in crypto is education and communication. If you are seeking to onboard new segments of customers or a new consumer base, aside from creating products that are seamless and easy to use, you might also have to bear the burden of educating your users on how the product works, broadcast what your values are, and be communicative to your broader community. This should apply to both centralized products but also to any protocol that wants to build out a community that cares.”"
Source: @katherineykwu
“Get references on investors from successful and unsuccessful founders in their portfolio.”
Source: @0x_Osprey
“They did not watch more anime. Because there are many hints for the future in it.”
Source: @Cap039
“I think the worst mistake web3 builders make is that they take the 3-month tail-end of a bull market, extrapolate this out and act like it's going to last forever. This then leads them to fool themselves into thinking their project has product/market fit when in reality it only saw usage due to a speculative mania.”
Source: @sassal0x
“Underestimate the effort it takes to nurture a vibrant, strong, diverse and healthy community, and the impact that community can have on your product.”
Source: @thulynnn
“DYOR on who you work with and trust your friends but trust the chains the most.”
Source: @calchulus
“Community is the heartbeat of the space and anything that strays far from it is destined to fail.”
Source: @gannonbreslin
“Number one I would think is not taking full advantage of the #1 feedback loop they have that is their community. There’s no better troubleshooting mechanism than that.
Second, I think is wasting time solving problems that should not exist. Elon has a great quote about this that you can find, but I see it constantly in web3 as well.”
Source: @Bahgley69
“Cash in on their reputation too early.”
Source: @BoredElonMusk
“The biggest mistake web3 builders and founders make is they underestimate the work that goes into building a community around your product. Shipping an amazing product itself will get you moving but lot of work goes into gathering the folks that are passionate about what you are building.”
Source: @StaniKulechov
“Fire people quickly. If someone's not working out and feedback isn't helping, pull the trigger. It's good for you and them. The harder they are to fire, the more important it is to do so.”
Source: @ViktorBunin
“Don’t look back. There will be volatility and uncertainty in crypto markets for the next few years and then there won’t be and you will miss it. This is a once in a lifetime opportunity that we will never experience again – strap in.”
Source: @kieran_eth
“I'd prefer not to presumptuously declare the number one mistake, but taking money from the wrong partners has to be fairly high on the list. I'd advise that all money isn't created equal, you're giving away giant chunks of your project--so make sure they are mission-vision-values aligned. At Opolis we did a "communities funding communities" raise and our Employee-Members own the protocol because of it.”
Source: @0xJoshuaSL
“To underestimate the value of simplicity."
Source: @fcmartinelli
“I think the number one mistake web3 builders make is that they don’t think deeply or even care about the difference between crypto and web3. What exactly do we need the blockchain for? What difference does it really make?”
Source: @0xbobateas
“Building in your own corner. Meet builders, users, and industry insiders. Share and validate your ideas instead of hiding them.”
Source: @0xgaut
I asked 103 crypto investors, developers, and founders one question:
“What’s the number one mistake web3 builders make?”
Here is what they said.
Process Mistakes
Here are the most common web3 mistakes made within the "Process" category.
“Lack of focus. Build your team, recruit your allies, pick a lane and run as fast as you can in that directly. Be the best at one thing. Not two things, one. The best startups can build a business around a single, clear, and compelling feature that is most important single, clear, and compelling feature that they dominate in.”
Source: @TO
“Believing "if you build it, they will come." Don't expect adoption, chase it down.”
Source: @jonwu_
“Building a protocol before building a product. Crypto people love protocols, but real people use products.”
Source: @AlexMasmej
“Rigorously validating the market, need, users, and solution—that what you plan to build is something someone actually wants. Validating or invalidating this saves time, effort, and millions of dollars. In the end, web3 technologies need to solve a real need or problem.”
Source: @ianDAOs
“The number one mistake is guessing what users want instead of being iterative and building product and community around what they actually do.”
Source: @Cooopahtroopa
“Having focus pulled from long-term sustainable product development in exchange for attempts to capitalize on the "current trend" (metaverse, P2E, NFT, etc)”
Source: @JeffKirdeikis
“Believe DeFi staking will retain users long-term.”
Source: @amytongwu
“Trying to retrofit Web2 business models to Web3 doesn't work. You need to define your business model from scratch starting with ownership culture as the foundation and building up from there.”
Source: @techbubble
“#1 mistake is trying to do too many things too soon. Seek early validation of an MLP (minimum lovable product) and iterate from there.”
Source: @willyogo
“I've spoken to 200+ founders in my web3 career and advised to a few dozens of web3 startups - what I think many ignore is the power of market sentiment. If a startup idea originates in a bull market, founder(s) tend to forget that times may change and spend a lot, hire a lot, travel a lot, sponsor a lot - until the first signs of bear market enter and they're forced to do massive layoffs or simply run out of money. An excel spreadsheet and risk management fixes A LOT, guys!”
Source: @0xFintech
“Building for a vision rather than for a customer.”
Source: @dazuck
“New Web3 Builders need to spend 3-6 months trying current web3 products and identify building opportunities. The worst thing you can do as a builder is try to replicate a web3 version of existing web2 product.”
Source: @DheerajShah_
“The biggest mistake that I see made in repetition is expecting lightning to strike twice. Quit trying to be the next {insert blue chip here}, just build cool stuff that excites you.”
Source: @mr0chill
“Forgetting that business is just as important as tech.”
Source: @evan_van_ness
“Building for people who are not here yet. Many people lament that most of the products in web3 are only built for early adopter-types, and there's nothing yet for the mass market. But trying to jump straight to mass market appeal simply means that nobody who's actually using this stuff today will use your product.”
Source: @hosseeb
“Thinking about protocols like platforms, and platforms like protocols.”
Source: @js_horne
“The biggest mistake that Web3 builders are making is not focusing enough on providing value to end users. The majority of protocols put whales, VCs, and founders first with weak token models. The most successful products have been the ones that gave people a real reason to hold their token.”
Source: @TheCryptoLark
“~90%+ people have no exposure to Web3. Most are deterred by the space. Telling customers you’re building a blockchain business will limit your ability to build a commercially viable business at scale. Don’t build for blockchain purists. Build for the masses”
Source: @swartzcenter
“1) Trying to grow before having product-market fit. Make sure you’re sustainably solving a real problem before you scale. Not the other way around.
2) Decentralizing too much, too early. Democracy is inefficient. Teams should be centralized at first to move fast and only open up decision making to the community when they can afford to go slower.”
Source: @michaelxbloch
”Number one mistake Web3 builders and founders make is prioritizing raising money over searching for a product market fit and building a community.”
Source: @CryptoJude01
“My biggest mistake was not focusing. There is ultimately so much opportunity in this space and founders tend to discount the effort it took to do the first thing right. Plus, there is incentive to build an ecosystem around what you are doing, but Murphys Law and burnout exist so balancing focus, fomo and not being overly conservative is something founders should be acutely aware of.”
Source: @michaelxbloch
“Don’t build a product on chain because it’s buzz worthy. Build a product on chain because you’re wholeheartedly convinced the market you’re building in will never be the same without it.”
Source: @LordTylerWard
“Don’t build a product on chain because it’s buzz worthy. Build a product on chain because you’re wholeheartedly convinced the market you’re building in will never be the same without it.”
Source: @Laceykaelani
“The number one mistake is building technology in search of a solution. Many web3 founders start with technology and work back to the user, instead of starting from a user problem and using new technology to solve that problem.”
Source: @avichal
“Copying a competitor's go-to-market plan when most web3 startups are bad at GTM. Every startup needs to build their own playbook from scratch and do what works for them. Layer on tactics as you prove they work for your business, not because others startups do it.”
Source: @JasonHitchcock
“Forgetting that the iPhone needed a killer app to gain mainstream adoption.”
Source: @casey_lau
“Not thinking critically about who the customer or user is for their product.”
Source: @MikeZajko
“The biggest mistake web3 founders make is trying to find a reason for their project to exist rather than actually solving a problem with a solution that requires an NFT to solve.
Most of the problems that web3 founders want to tackle can find solutions that don't require an NFT or even their involvement, so they try to force a narrative instead just to justify their existence and their valuation.”
Source: @LilMoonLambo
“Few projects interview users to zero down on the problem and subsequently to achieve PMF. As a result they end up addressing niches or having a smaller addressable market. Web3 builders have to get in touch with users and understand their needs.”
Source: @shutterbugsid
“Underestimating leverage token brings to the project in comparison to web2 competitors. Resulting in spending both tokens and hard cash for short term marketing gains too early, often before product release.”
Source: @KRMA_0
“They neglect product-market fit and launch when there isn’t sufficient demand for their project, often shooting themselves in the foot. Patience is a virtue.”
Source: @Zeneca_33
“Not finding product-market fit before diving in. A lot of crypto projects are solutions without a clear problem.”
Source: @robsecord
“Worry less about the market. Founders and builders rush to deliver something to catch an upswing or bull run. This leaves us with subpar and incomplete products that will never actually be used. Think longer term, build something brilliant, and the customers will come -- this is the answer.”
Source: @knownasdollar
“Focusing on things other than solving actual problems that people are suffering.”
Source: @Jai_Bhavnani
“Founders sometimes forget that nothing ever exists without a product market fit and being human in what you are buidling connects more with community than portraying perfection. You don’t make a perfect product, the community makes it.
Also you can only have either a world class product or a world class ego but not both!”
Source: @harshrajat
“Trying to do too much all at once, instead of doing one thing extremely well.”
Source: @0xfoobar
“Web3 builders and founders can easily track the wrong vanity metrics and follow the hype cycle. Founders should focus instead on building the best possible product for users to get the job done. Nothing else matters over the long run.”
Source: @dgogel
“Their target market is large, but their product has no network effect. The product needs to get better for each new customer/supplier, or they’ll fail to take advantage of, and instead will suffer from, one of crypto’s most powerful qualities: seamless movement of users and value across protocols.”
Source: @cjliu49
“Underestimating how difficult it is to find sustainable pmf, overvaluing themselves too quickly during the bull market, and raising at an unreasonably high valuation.”
Source: @0xminion
“Promoting their projects without addressing the WHY question. Why should I care about the project? Why should I spend time researching it?
Make KOLs CURIOUS about your project.”
Source: @DefiIgnas
“Nerds forget it takes hard work to make sales look easy.”
Source: @ani_pai
Product Mistakes
Here are the most common web3 mistakes made within the "Product" category.
The number one mistake Web3 builders and founders make is not getting feedback early from their users. Confusing UX is unfortunately too common in Web3 and is also the biggest barrier to mass adoption.
Source: @akhilasraju
Not every web3 company will be 100% on-chain and there will often be a need to bridge to web2 (the real world). So think early on about what bridges are needed and invest in solving those problems or partnering with companies who can help you build those bridges.
Source: @arjunmahadevan
Web3 builders may often think of decentralization as "better" than or the successor of centralization, when in fact they are two different tools in the toolbox, and this leads them to try to cut out centralization, but maybe many of the biggest opportunities require strong elements of centralization AND decentralization.
Source: @ryanberckmans
Too many builders in the space spends too much time thinking about launching their own token pre-PMF. The #1 priority should be to build a product that solves a big enough problem and that users actually love you for it. Tokens serves as a GTM and user acquisition strategy and should only be considered post-PMF
Source: @shaunhengcj
They build stuff that they and their friends think is cool, but that that the wider population doesn't want or need. And in those rare cases when projects have latched on to a genuinely innovative idea, the end product is often not user-friendly enough for ordinary people to be able to access.
Source: @andrewfenton
The most common mistake I have is not being creative enough with their token utility or demand sinks paired with setting very high initial valuation results to poor or even negative goodwill from their core supporters.
Source: @ericzoo
Every leisurely activity ought to be monetised and retrofitted with Blockchain technology. In today's hyper-capitalist world, maintaining a healthy work/life/online/offline balance is crucial.
Source: @mypandashallfly
The obvious one is building tokens for the sake of tokens, rather than because the token enables or enhances some functionality.
A less obvious one is building applications with access control models that do not allow on-chain organisations to truly own their profile. For example, every DAO profile on Twitter or GitHub is ultimately controlled by some trusted individual. In web3 applications, the DAO should be able to own its profile, with the ability to delegate and revoke permissions to any other accounts.
Source: @auryn_macmillan
Deciding they want to launch a token first, then trying to create a product, business model and economic justification in order to support the issuance of said token.
Source: @mdudas
Issuing a token too early.
Source: @ASvanevik
DAOs aren't effective at running protocols.
Decentralize (i.e. automate) what you can, and have professional managers for when decisions need to be made.
Source: @mhonkasalo
Launching a token before reaching some level of product-market fit and/or not reflecting enough on whether a token is truly needed.
Source: @anjan_vinod
Launching a token too early, especially when the product is not there yet.
Source: @yuan_han_li
Biggest mistake is taking on platform risk on immature protocols and blockchains. Not all infra is created equal and this could really hurt long term success.
Source: @nir_III
IMO, the biggest mistake is to launch a token too soon, before they have figured out what the token is going to do exactly. The problem with this is that after their first investment round, it becomes harder and harder to raise money. Pivots are much harder when you have token. Unless you have a clear idea how the token is going to fit in your product, it’s better to wait with it
Source: @valentinmihov
adding token design from the start, instead of product market fit. I've seen so many bad token designs where founders are stressing on token due to ability to raise money on that, instead of trying first to nail product market fit for their project/startup/protocol.
Source: @ncerovac
Treat token sales as ends instead of means. A good project is not about selling tokens; it is about creating positive impacts to people's lives.
Source: @ciaobelindazhou
Web3 builders overlook the product and design choices that web2 pioneered to onboard billions to the internet. We don’t need to reinvent the wheel for beautiful and delightful user experience
Source: @menemazarakis
Web3 builders and founders tend to build their companies and products in a web2 way, having multiple centralised points of failure and by trying to capture value to create return of investment for their VCs.
Source: @LefterisJP
Launching a token that has no real utility
Source: @saltyfacu
Number one mistake web3 builders and founders make: Launch a token without a clear product market fit
Source: @NicoleBehnam
Launching a token to “bootstrap” growth. There are no shortcuts, you must build something people need if you want to be successful in Web3. Just like every Web before it
Source: @sathaxe
Trying to compete with Web2 incumbents directly. There's a reason why decentralized Uber never worked
Source: @Foobazzler
People do airdrops before they have a product. Find product-market fit THEN decentralize.
Do it wrong and you'll join all the other zombie projects quickly forgotten.
Source: @DawsonBotsford
Web3 devs have it worse due to complex financial concepts, but often feels like they don’t even try. Simply explain concepts and make your UI as “thoughtless” as possible.
Source: @b05crypto
Timing of decentralizing is one of the biggest decisions a founder has to make. If decentralization isn't improving the life of users or customers, it's usually too early.
Source: @Flynnjamm
They rush their product over security or user experience.
Source: @bneiluj
Raising money or minting a token before they've proved a business model! Not enough people consider trying to make a profitable business *before* raising money or issuing a token.
Source: @TrustlessState
The challenge is not to deliver product that maximizes web3’s capabilities, but to smoothly integrate its best features into the background—so it works frictionlessly, while retaining all the benefits of blockchain tech.
Source: @chriscantino
Waiting until after their network launch to start designing their token economy. The very best tokens are core to the product experience and don't add any unnecessary friction for users -- this is extremely hard to do if you aren't contemplating it from Day 1.
Source: @spencernoon
Closing
In total, this thread took over 8 months to compile and produce. It would not have been possible without the help of so many people.
Next Thursday, I will be hosting a Twitter Space to dive deeper into my favorite answers from this thread along with share a few of my personal mistakes.
Set reminder: https://twitter.com/i/spaces/1vAGRAzPbqvKl
If you appreciate any bit of this thread — following, sharing, and retweeting on Twitter really inspires me to do more 🙏