By Ian Arden, Co-Founder and CEO of Applicature
Building an early-stage crypto project into a successful scale-up company can be very daunting. Piloting growth in a dynamic blockchain environment can often feel like you are drinking from a firehose. As a founder, it’s common to question if you’re doing the right things at the right time to optimize your company’s growth prospects. I’d like to help you improve your probability of success by sharing some hard-won secrets I’ve picked up along the way through the many ventures I’ve built over the past ten years.
Since establishing Applicature five years ago — our team has contributed to the building or launch of over 270 blockchain companies. We are a blockchain innovation agency, venture builder, and accelerator of company growth. This expertise has been cultivated by providing blockchain development and advisory services such as token economics, marketing, investor relations, funding, and audit for global innovators in almost every blockchain sector including DeFi, NFT, Web3, GameFi and the Metaverse sectors.
As a venture builder ideating, incubating and launching our own companies, I also founded companies including milestoneBased — a DAO and smart-contract tech platform for startup-VC funding management currently in Beta launch, Mempool Ventures — Crypto VC and Advisory firm, and a Blockchain Audit Security firm, Vidma. Co-founding venture builders for other chains (Supercolony.net for Polkadot and “Come As You Are” for ICP) has also helped me build a perspective on best practices acceleration in emerging environments.
4 Secrets to Building a Successful Crypto Company
Secret #1: Supercharged Team
The first and the most critical component of building a successful crypto company is the team. It is a significant leverage strategy I use to bring out the best of Applicature. If you are serious about building a successful crypto company, you only have to begin with having the right team to work with. It is your best bet to create a sustainable project and company over the long term as you can’t pull that off by yourself.
But most importantly, your team is a representation of who you are. So you need to lead by example. You do this by showing your team, and not telling them. If you want your team to do the right things, it is critical that you demonstrate this.. They will represent the kind of DNA you exhibit and reinforce the type of collaboration or work culture you create.
As a result, your starting point to building a supercharged team to help you achieve your vision is to understand your core values and know the team spirit you want to establish. Then, proceed to create that kind of environment for them.
Team building requires a considerable chunk of leadership investment. That’s why you have to pass it to capable individuals to do this if you think you can’t. Meanwhile, there is some training I will recommend you look into to enhance your leadership skills like the 16 Personalities. This methodology makes it easy for you and your team to profile each other. This will help to understand individual working style traits, personalities and communication styles. This will give the leverage to encourage each team member to build a convenient working environment for the job as they evolve in their job. Jobs are becoming a lifestyle for people; so it’s important to enjoy your workplace via creating a comfortable environment for them to achieve their personal goals. And these personal goals in turn must align with the team goals.
There is no proper team structure but founders need to be aware of how structure can impact company growth. There’s often no clear distinction between a Board, the CEO, and the execution team at the early stages. While it may be harmless first, lack of a governance framework as you grow may make the company inoperable. Problems can emerge due to team members engaged on a freelance basis without proper involvement in long-term planning. This can result in no long term thinking in knowledge management, culture creation, team building etc. that can impede your growth. Sometimes crypto projects are set up as JVs (joint ventures) with very loose governance. These structures are prone to fail quite often in my experience without more structure being introduced over time. So make sure your organization structure and leadership style supports a supercharged team and you are creating an environment for them to optimize company growth.
Secret #2: Innovative Software Development Process
The blockchain ecosystem is a very innovative space. At any point in time, there are new developments, and developers rolling out various new applications. They are constantly trying new product ideas to ensure that individuals, businesses, and enterprises take advantage of disruptive technology. This is why you need highly innovative approaches to building your blockchain products but you must also keep a strong eye on the budget.
Harnessing innovation fundamentally involves the software development process; we use Scrum and Agile project management approaches for our companies. These are excellent ways to start your product development. You want to shape your product quickly, test hypotheses and socialize your solutions with stakeholders before building the product.
While living in a world of the possibilities of innovation to solve problems, we should not forget about the #1 problem of IT development projects: 90% of them run out of budget. The complexity is underestimated in 100% of the projects I’ve seen and the only remedy is to heavily add to the contingency budget, allowing more time to reach a launched beta product. Knowing this reality means founders should plan for more time and more budget than you think you need from the beginning.
As part of developing the right blockchain products for the ecosystem, we adopt a simple process at Applicature for MVP (minimum viable product) initial validation. I will inform our talented designers to put together the clickable prototype of any idea. Then, jump on a call to present the prototype to a group of potential users and get their feedback.
With this, we have a glimpse into understanding how we can solve their pains. And we can decide what features to add to make it a better product for them. We use Scrum project management tools to shape the first versions of the product and then the product evolves from here.
Although this development style can be difficult to achieve in crypto because smart contracts are immutable, and you will deploy the entire suite for the project. As a result, you must go through a blockchain audit to review the code. And this is time-consuming as much as it is hectic because you have to wait for auditors to take care of analyzing your smart contracts judiciously as a necessary part of the process.
Ultimately, these techniques can help make your smart contracts or dApp project agile and shaped into small versions, for validation and iteration rounds leading to final products.
Secret #3: Token Economics Model and Funding
Token economics and funding are crucial components of a blockchain product and a company’s business model. You must have robust token mechanics and token economics as a crypto company. Every number in token economics models plays a vital role in the token’s behavior post launch. There is little to worry about if you work with Applicature because we have a diligent team with rich expertise developing tokenomics.
You must create a model that determines how unlocking the token will influence the market price and anticipates resulting potential buying and selling pressures in the markets. It is necessary to foresee an entire token lifecycle and create your economics around that.
Too often, teams play the short-sighted game. You see them planning for the token sale and treasury for only the short term because they want to make the most of the token in the first one to three years of the company’s life. This is an unsustainable plan and covers a time frame for perhaps only one or two Bitcoin cycles.
You must build your blockchain product around multiple bear or bull markets, make it decentralized, build its governance, and build a great community that will support your project for a long-term purpose. Do that, and you are creating a long-lasting blockchain product. This will help your project to advance more quickly to validated MVP and launch cycles.
Secret #4: Community! Community!! Community!!!
There is no successful blockchain product that does not have a long-standing supportive community that sees a future for the product. The community plays a vital role in determining if your project will live or die before its launch. That is why you need to build a great community of dedicated members that share the same future, and hopefully vision and values.
The best approach for community building is partnerships. For a pool of dedicated members, you have to partner with existing projects also with a strong community and loyal members. This gives you access to faithful voters who understand the core of crypto, care about crypto. and are willing to do more for Web 3.0. That’s because they understand the values behind blockchain.
Partnerships can help attract and onboard super-committed people that will become members of your community. However, there is a catch here. You might want to chase the numbers. But that is not always sustainable for the long-term- you want quality as well as quantity.
Having a large community in the tens of thousands or a hundred thousand of Twitter, Telegram or Discord followers for example, plays an important role when you launch the token. You might have a significant spike in price due to sheer numbers of subscribers, but that doesn’t play a significant role in the sustainability of the token. What’s more important for long-term commitment and progress is a dedicated community. That’s the only guarantee for a sustainable blockchain project.
Building a successful crypto company comes with lots of challenges as much as it comes with rewards. If there were only one piece of advice I could give, it would be to be ready to overcome the struggles because the crypto way is not easy. The uncertainty that comes with the crypto market including valuation swings and volatility, are determining factors that place you on edge of big challenges. You should acknowledge that it will take longer to build your company, because the crypto path is not as easy as it seems.
About 90% of successful blockchain projects we see today have invested years and years in building the products, team and community, and leveraging fundraising and tokenomics to reshape their business models in a bear market before the positive push of a bull market cycle.
With the exploding possibilities for blockchain innovation across the tech ecosystem, there is an increased demand for blockchain applications across use cases for individual, corporate, private and public areas. As such, there is a need for creating different applications and smart contracts for diverse blockchain projects and no end of possibilities for entrepreneurial founders that want to innovate and bring new solutions to market.
At Applicature, we’ve worked with many founding teams over the last five years to effectively launch their products by providing Blockchain Consulting, Blockchain Development, Business Development, Investor Relations for Startups and Marketing Services. We would be happy to work with you to turn your project into the optimized scale-up company you envisioned.