Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product

20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product

BlockBeatsBlockBeats2024/10/21 09:04
By:BlockBeats

Recruit users one by one until you reach 50, constantly seek feedback and iterate the product, achieve stability of 50 to 100 daily active users, and dig deep into the data to find growth points.

Original title: 20 Lessons for Crypto Founders
Original author: Imran Khan, AllianceDao Support Founder
Original translation: 1912212.eth, Foresight News


20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product image 0


Start with a small problem


Don't aim for a huge market at the beginning, but focus on solving a small and specific problem. This practice is often contrary to the advice of VCs, as they often push to solve big market problems. Instead, you should focus on problems that affect smaller user groups - problems that you can experience firsthand by using crypto products every day. With thousands of new products constantly being launched, use as many of them as possible to understand the pain points faced by everyday users. In this way, you will identify real actionable problems that need to be solved.


Starting small allows you to deeply understand user needs and optimize products without the noise and complexity of the big market.


Avoid consensus


Avoid chasing ideas that everyone thinks are the next big thing. By the time an idea becomes generally accepted, the market is often already saturated. Take Polymarket for example: now that they have validated prediction markets, there are hundreds of teams building in this space. The time to innovate is when only Polymarket is active, not after validation. Competing with established players requires a product that is ten times better than the incumbents to stand out. Instead, focus on areas that are less explored and where there is less competition. This gives you more room to experiment and time to develop a unique value proposition.


20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product image 1


Build for a small group of users


Identify a core group of early adopters — about 25 to 50 passionate users who really care about the problem you solve. By focusing on their specific needs, you can build a solid foundation and cultivate real supporters. These early users will provide valuable feedback, helping you to iterate and improve your product quickly. This process will naturally expand your user base over time. If people like what you build, it will be natural for them to recommend it to their friends and family.


20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product image 2


Validate your assumptions with a minimum viable product (MVP)


Before investing significant resources, like money and time, validate your core assumptions with a minimum viable product. This simplified version of your product should focus on solving the main pain points you’ve identified. You need to release a product that is minimal in functionality but provides enough insights to help you decide whether to double down or move on to other ideas. It also allows you to collect user feedback faster and potentially learn something completely unexpected. Additionally, releasing a product quickly can put you ahead of your competitors—many people may be thinking about the same idea, and often the first launch attracts attention.


Release your idea in 30 days


Time to launch is critical. Aim to develop and release your minimum viable product in 30 days to capitalize on the momentum of the idea and start collecting user data as soon as possible. This rapid deployment process forces you to prioritize core features and avoid the trap of over-planning.


Do things that don’t scale


In the early stages, personalized touches are more important than building a full product. Interact directly with users, handle customer support in person, and manually perform trades that will be automated in the future. These efforts that don’t scale help you build strong relationships with early users and gain deep insights into their needs and behaviors. This approach not only allows you to build and release quickly, but more importantly, it gets the product into the hands of users early.


20 Lessons for Crypto Founders: Validate Your Hypothesis with a Minimum Viable Product image 3


Don’t overbuild, simulate with existing tools


Avoid creating everything from scratch. For crypto entrepreneurs, it’s best to avoid building core infrastructure and instead work with or leverage existing products to simulate the final solution. For example, use an off-the-shelf automated market maker (AMM) like Uniswap or Raydium instead of developing your own AMM for a specific product. This move saves resources and allows you to focus on perfecting your core product.


Recruit users one by one until you reach 50


Personalized contact is crucial when building your initial user base. Reach out to potential users one by one, either through email, social media platforms like Twitter direct messages, or community forums. This allows you to engage with users who are willing to use your product and get precise, candid feedback about it.


Continuously Ask for Feedback and Iterate on Your Product


Maintain an ongoing dialogue with your users. Regular feedback will reveal insights you might not have considered. Use this feedback to iterate on your product to ensure it continues to meet your users’ evolving needs. Creating this feedback loop is important because it keeps you focused on user needs and helps you build products that people truly love. Alon of Pump.fun privately messaged 3,000 Twitter users before Pump gained traction.


Don’t take feedback literally


While user feedback is important, interpret it with caution. Users may not accurately express their needs or make suggestions that are inconsistent with the product vision. You need to use judgment to identify potential problems and address them in a way that is consistent with the product direction.


Achieve stability of 50 to 100 daily active users


Aim to achieve steady growth in daily active users (DAU), with an initial goal of 50 to 100 DAU. This level of engagement shows that your product is gaining traction and becoming part of users’ daily activities. Monitor user retention and engagement metrics to ensure you are building sustainable growth.


Hone your business model


Once you have a stable user base, it’s time to focus on achieving profitability. Develop a clear business model that articulates how your startup will generate revenue. Whether it’s transaction fees, value-added features, or token sales, a clear business model is critical to attracting investors and ensuring long-term viability.


Dig Deep Into Data to Find Growth


Data is your ally. Dive into your data to understand what drives user acquisition, engagement, and retention. Identify key performance indicators (KPIs) that align with your business goals. Use this data to make informed decisions about marketing strategies, product features, and resource allocation.


Persistence: Reach Out via Email, Group Chat, Private Message, Social Platforms


Persistence pays off. Don’t hesitate to reach out to potential users, partners, or investors multiple times. Expand your reach through multiple channels such as email, private messages, group chats, and social media. Starting a business often requires relentless networking and promotion. Always have an Always Be Closing mindset.


Celebrate Small Wins and Take Breaks


No milestone is too small to celebrate. Whether it’s launching a new feature or hitting a user benchmark, acknowledging progress keeps your team motivated. Plus, taking short breaks prevents burnout and helps you and your team stay productive over the long term.


Work Hard


Nothing can replace the importance of hard work. Building a successful startup requires dedication, long hours, and a willingness to go above and beyond. Your input sets the tone for your team and can mean the difference between success and failure. Think of it this way: if your competitors are working 7-8 hours a day on their idea, how many hours are you willing to work to win? Of course, I’m not suggesting you win by simply working overtime, but use this thought to motivate yourself to work smarter and win.


Protect Your Equity


Especially in the early stages, be careful about how much equity you give away. It can be tempting to offer large equity stakes in order to secure funding or talent, but maintaining control is essential to shaping the future of the company. Consider alternative incentives and negotiate terms that align with your long-term vision. In the end, founders should retain enough interest to get a return on the significant time invested early on.


Small Funding Teaches You to Be Frugal


Getting modest funding forces you to prioritize core issues and learn to conserve resources. In the earliest stages, you should typically only raise $500,000 to $1 million. Operating on a lean budget pushes founders to find creative solutions. This self-discipline can lead you toward a more sustainable business model and make you more attractive to future investors. Amazon founder Bezos once used a door as his desk to remind himself to save time and money.


Frugality


Adopt a frugal mindset in all aspects of your startup. Review every expense, avoid unnecessary operating costs, and focus funds on areas that directly promote growth. Frugality will extend your capital use cycle and provide flexibility in the face of unexpected challenges or market changes.


Keep a lean team and hire as few people as possible


Expand your team carefully. Each new hire should fill a key role that directly affects the success of the company. A lean team is more flexible, easier to manage, and less susceptible to the complexity of a large-scale startup. Staying lean allows you to quickly adjust direction and maintain a strong company culture. If you hire too much, the corporate culture may deteriorate quickly.


Original link

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!