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6 Tips for Starting a Blockchain Startup • TechCrunch|

6 Tips for Starting a Blockchain Startup • TechCrunch|

These days, blockchain a founding founder should expect to navigate challenging waters. Even in the best of times, founders must both prepare for a bull market and be prepared for potential bear territory.

Having a solid roadmap, real-life cases and a war chest are only a small part of a blockchain startup’s survival strategy. Founders also need to be aware that while non-crypto startups can offer useful and transferable startup strategies, the road to success in the blockchain industry is paved in other ways.

Here are some tips that all blockchain founders should consider before starting a business.

Keep market conditions in mind

Bear markets seem more attractive to startup blockchain companies. But before they prepare for winter, founders must assess whether it is worth waiting to launch until market conditions are better.

In the web3 world of horizontal technology, you’ll be running against the wind if you wait to build relationships until you’ve built technology.

Evaluate your startup using the same criteria investors use in a bear market. Investors want to see a strong roadmap with timeframes and benchmarks that don’t simply come and go without activity, as this is a signal to investors that the floor can be pulled.

Evidence of a diverse war chest that you can draw from is key, especially when returns on locked-in assets are the primary driver for achieving liquidity. Additionally, analyze market conditions from a technical perspective: the bear market is an attractive time to launch, but it is also a time to go down and focus on building your product.

Regardless of market conditions, use your reward systems for loyal community members by offering winning prizes, airdrops and giveaways without having to raise additional capital, similar to the traditional business world.

Choose a longer vesting plan

In the non-crypto startup scene, it is common to have compensation packages as an incentive for employees to perform well. Blockchain startups do this during the pre-sale period of an initial coin offering using a method called staking, where they lock and release assets (usually in the form of tokens) over a period of time. By doing so, they entitle their team, investors and advisors to certain assets such as pensions and stock options.

If you choose this route, set up token metrics and the gain period for the gradual release of those tokens in a way that doesn’t put too much pressure on the token itself. Many crypto projects unlock and distribute their tokens every three months and they find private investors who dump them on the market, which is bad for the team and the community. Conversely, retail investors also start selling in advance because they know a dump is coming.

Choose a longer payback period – between three and five years – to show that you have the financial incentive to continue the development of the project. Split the release of the tokens: Release Private Investor tokens one month, Consultant tokens the next month, and Team tokens a month later. If it’s all in one month, the risk for retail investors will be too high.

Don’t underestimate cryptographic principles

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