Web3 is a Tactic

How founders should evaluate web3

Nov 28

Startups are founded on top of secrets. The startup’s founding team builds a technological advantage around an earned secret, enters the market, and aims to grow faster than any of its competitors to become the market leader. The primary benefits that a startup has over incumbents is speed, quick decision making ability, and consistent execution. It has been told that to get to product market fit, it takes a team of 5-10 hard working + properly incentivized people, all rowing towards the same goal. Once product market fit has been reached, the team then scales up.

This seems like the opposite of web3 culture. Web3 is powered by community. The more stakeholders, the better. Decisions by consensus are the standard model of governance. No single decision maker, but a network of nodes making decisions for the whole. I think this model will do the world a lot of good, but I do not see how startups solving hard problems for the world can adopt the web3 stack and still find product market fit.

With startups, you are sparing with who you let on you cap table in an effort to control governance. In web3, anyone can get ownership & control in your project.

With startups, one person sets and keeps the vision. In web3, the community determines the direction.
With startups, being in stealth often benefits the owners. In web3, evangelizing to everyone & anyone helps the owners

Where I see web3 and startups overlapping is in distribution tactics. I see a small group of people resembling a startup leveraging a web3 powered community to create and incentivize evangelists for their brand once it’s ready to grow. I see web3 as a way that startups can further build distribution & their moat. I see web3 as an easier way to give out equity of a company vs. Reg CF crowdfunding. But all of this comes after product market fit. In other words, web3 is a distribution tactic for founders, not a core product strategy.

Is web3 going to take over the startup universe? Not as long as there are hard problems in the world and non obvious solutions to solve them. A team will always need a bold leader, a secret will need to be discovered, and an idea maze will need to be walked down…Not by a large group of people, but by a small one. But once the small group builds what the world needs, web3 will always be there as a tactic to evangelize and spread adoption.