As you open the car door and step outside, you feel the rays of the warm, gentle sun run through your face. You inhale a deep breath of the cold, fresh morning air as you gaze at the pretty blue sky. Grabbing all of your equipment, your heart pounds at the excitement of conquering the mountains through your obsession with rock climbing.
But there's a problem with the equipment you're using—it's harming the environment. As someone deeply connected to the outdoors, this doesn’t sit well with you.
So, you decide to take matters into your own hands, crafting your own gear that’s not only environmentally friendly but also of superior quality. Before long, you're selling it straight out of the trunk of your car; and to your surprise, fellow climbers love it. They're choosing your gear over what they’ve been using.
Before you know it, you’re on a new path—one that turns you into an entrepreneur and transforms your life completely.
This is the story of Yvon Chouinard, the Founder of Patagonia. Driven by purpose and innovation, Yvon’s story is just one of many where entrepreneurs encountered a problem they knew they could solve.
But we're not here to discuss just any company; our focus is on the dynamic world of crypto startups.
While traditional and crypto startups share many similarities, the economic conditions within the blockchain industry are undeniably more challenging and unforgiving.
In this article, we’ll explore the visionary potential within various crypto niches, examine the key factors involved in launching new crypto ventures, navigate the challenges faced by early-stage enterprises, and share inspiring success stories from some of the most accomplished Founders in the field.
Let's get down to business.
Capturing the Vision
It all starts with a dream.
The emergence of a new industry with vast, uncharted waters creates limitless opportunities for fresh ideas and experimentation.
Before starting the first phase, you must be a visionary—someone who not only sees the bigger picture but also envisions the full potential of what could be achieved.
A true visionary possesses rare qualities that distinguish them from the ordinary, empowering them to lead in ways that others cannot.
Being a visionary means fully embracing and harnessing your creative spirit.
Being a visionary means understanding how to convert your vision into reality.
Being a visionary means being light on your feet, quick to adapt, and unafraid to tackle challenges head-on.
Being a visionary means being aware of your surroundings and keeping a close eye on the latest tech and cultural trends in your industry.
Being a visionary means embracing a unique perspective that not only sets you apart but also inspires you to forge new paths and rise above the ordinary.
Being a visionary means possessing the unique ability to help others see the world through your eyes, inspiring them to envision possibilities they may not have considered before.
The first phase in building a crypto startup is to develop a compelling idea—one that you're so passionate about, that you're willing to take the risks and invest your time, effort, network, and finances to bring it to life.
The crypto industry is divided into various categories, each designed to find the right product-market fit and deliver a more seamless user experience for blockchain technology. Let's quickly review some of them.
Types of Crypto Startups:
Wallets: Digital wallets that store crypto and NFTs, offering users a secure way to manage their assets (e.g. Rainbow).
Crypto VCs: Investment funds that focus on investing in companies and projects within the crypto space (e.g. a16z Crypto).
Payment Solutions: Startups that help businesses and individuals make and accept payments in crypto (e.g. MoonPay).
NFT Marketplaces: Platforms where users can buy, sell, and trade NFTs like digital art, music, memberships, or gaming (e.g. OpenSea).
Gaming: Projects that combine gaming with blockchain, where players can earn and trade in-game assets that are tokenized (e.g. Axie Infinity).
Real-World Assets (RWA): The digitization and tokenization of tangible goods such as real estate, collectibles, or intellectual property (e.g. Fabrica).
Blockchain Infrastructure: Companies that provide the underlying technology for building blockchain apps, like developer tools, nodes, or security (e.g. Consensys).
DeFi (Decentralized Finance): Startups building decentralized alternatives to traditional financial services like lending, borrowing, and trading without banks (e.g. Aave).
Crypto Portfolio Trackers: Tools that help users track and manage their cryptocurrency investments by showing real-time prices, profits, and losses across multiple exchanges and wallets (e.g. Rally).
Layer 1 and 2 Protocols: Blockchains that form the foundation for decentralized applications (dApps) and smart contracts, or solutions built on top of them to scale them faster and make them cheaper to use (e.g. Ethereum and Solana for L1, Polygon and Optimism for L2).
Cryptocurrency Exchanges: Platforms where users can buy, sell, and trade crypto. These can be centralized exchanges like Coinbase, where assets are held in a custodial wallet, or decentralized exchanges like Uniswap, which enable non-custodial, peer-to-peer transactions without intermediaries.
Part of this first phase is understanding your visionary potential. Remember, you'll be dedicating a substantial part of your life to this endeavor, so it's essential to invest time in research upfront to ensure you're heading down the right path. While numerous factors contribute to this, here are the ones that resonated with me the most:
The first variable to consider is the potential for revolutionary use cases.
As a visionary, you want to build a industry-shattering product that can solve problems impacting both the digital and physical worlds. What legacy systems do you plan on disrupting? In what ways will it improve transparency and security to ensure accountability and deter bad actors?
The second variable to consider is evaluating the societal/environmental impact.
It's of utter importance to understand exactly how your product will transform the world as we know it. How will your product enhance accessibility in different sectors? How will your product influence environmental sustainability?
The third variable to consider is understanding upcoming trends.
You'll want to grasp upcoming technological concepts, positioning your product to capitalize on a first-mover advantage. How will this benefit early adopters and investors? By monitoring these trends, do you think your innovation is likely to have a lasting impact?
The fourth and last variable to consider is growth of ecosystem development.
Crypto startups must prioritize community engagement in a way that traditional startups often do not. It's all about fostering trust, loyalty, and long-term success. What new opportunities will your innovation unlock for communities? How can you support community-driven initiatives?
Brick by Brick
It's time to move onto phase 2: converting from talking the talk to walking the walk.
Now that your vision is clear, it's time to chalk up your blueprint and roadmap. By doing so, this ensures that you are building your company on a sturdy foundation, not a shaky one.
Let me stress this: it’s absolutely critical. If you don't meticulously prepare your business plan at this stage, you might as well be playing Russian roulette with your company’s future.
From personal experience, I've seen firsthand how companies without a well-defined plan can quickly spiral into chaos. The long-term consequences can be devastating—ranging from mismanaged departments and poorly allocated resources to communication breakdowns, all of which can ultimately lead to the company's downfall. Why does this happen?
It’s because the shared vision never fully translates into an actionable roadmap.
Let’s dive into the roadmap itself—what exactly should go on this damn thing?
Vision & Mission: A vision outlines your startup’s long-term aspirations and the impact you aim to achieve, while a mission defines what you do, who you serve, and how you’ll fulfill that vision. Together, they set the direction and strategy for realizing your goals.
Timelines: Organization is vital for efficiency. Use calendars and charts from various tools to set clear deadlines on a weekly, quarterly, and annual basis, ensuring smooth and effective operations.
Milestones: Take baby steps as you progress toward your most ambitious goals. Which brands are you aiming to collaborate with? How many daily active users do you envision? What targets do you have in mind for social media followers? When do you plan to conduct a contract audit, launch your testnet, or deploy the mainnet?
Community and Marketing: Your community is the product. What platforms do you intend to leverage for your outreach efforts? What types of content do you want to create? Are there any exciting in-person activations planned to bring your community together?
Legal: In the crypto world, staying compliant with government regulations is absolutely essential. Key examples include implementing KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols to ensure transparency and prevent illicit activities.
Feedback: Discovering the most effective methods to gather valuable user insights is key to continuously enhancing your product. Users also often have a desire to express their thoughts and feelings. This can be achieved through email surveys, in-app customer support options, or by allowing users to submit tickets via platforms such as Discord.
The Next Generation: There’s no better time than now to start planning for the future. What features do you envision adding to your product as you grow? Are there new products you’re excited to develop? How do you plan to scale your offering to reach new audiences?
It doesn’t matter whether you’re jotting it down on a piece of paper, typing it into Apple Notes, or using any other tool. The objective is to have a dedicated place to capture all the important details, so nothing slips through the cracks.
Keep in mind to design your roadmap with flexibility. As your startup evolves, you'll need to be responsive to shifts in both the traditional and crypto economies.
This may involve adjusting your product offerings, modifying features, or revising your goals based on emerging opportunities and challenges. Maintaining an adaptable roadmap ensures that your startup can pivot and thrive in an ever-changing landscape.
Squad Out!
To ensure your company's success in the third phase, it's essential to build a strong team of like-minded individuals who excel in their respective fields and bring significant value to the table. You'll be spending your days with these people, working late nights, jumping into endless Slack calls, constantly exchanging ideas, insights, and so much more.
In the early stages of a crypto startup, it's crucial to hire people who are already have relevant experience. The crypto ecosystem operates very differently from traditional industries, and the learning curve can be significantly steeper for those unfamiliar with its unique dynamics. Bringing on crypto-native talent helps your team hit the ground running, saving valuable time and avoiding potential missteps.
You also need people you can trust. I've seen firsthand how some individuals join startups, contribute little, siphon resources, and then disappear. You want teammates who are truly committed — ride-or-die type beat. People who aren’t there to manipulate or exploit, but to be a solid support system, helping to lighten the load and drive the vision forward.
That said, let's explore the ideal people you'll need to build a robust team.
Co-Founder: You might have come up with the vision, but you'll most likely need someone to build it with you. Co-Founders are invaluable in early-stage startups, bringing skills to the table that fill gaps in the Founder’s expertise. They share the risk, bring fresh perspectives, and help drive the company toward its goals with diverse strengths.
Onchain Devs: The hires you'll need the most, as they are the core builders of your product. These key team members will define your success, so it’s crucial to bring in the best of the best.
Designer: Having a strong background in User Experience (UX) and User Interface (UI) design, especially in the crypto industry, is invaluable for product development. However, many Founders and marketers come with design experience, making a dedicated designer less urgent initially. For instance, I worked for a company where the Founder previously owned a design studio that served Fortune 500 clients.
Community Manager: To build a thriving community, you'll need someone who can nurture, curate, and serve as the bridge between your team and its members. In the early stages, this role can often overlap with that of a Social Media Manager (SMM), Growth Marketer, or Business Development & Partnerships Lead, as these functions are closely aligned. A single individual can efficiently wear multiple hats, harnessing the synergy between roles to propel growth within the company’s ecosystem until additional hires are brought on board.
I won't talk any more about this part as I wrote an entire article about it, found in the link below.
Legal Counsel: You'll need someone well-versed not only in traditional law but also in blockchain-specific regulations to expertly navigate the complex legal landscape of crypto, securities, and compliance. Ideally, they should have strong connections within the legal community, allowing them to tap into reputable parties for second opinions and additional guidance when necessary.
Onchain Auditor: It's crucial to have a reliable and reputable third-party reviewing over the work of your developers. Quality and security are of the utmost priority. This would be a contract basis, not a full-time hire.
Securing the Bag
Phase 2 lays the essential groundwork for Phase 4, the last phase, which focuses on fundraising.
Let’s be honest—fundraising is no small feat, and in the crypto space, it can often feel like an uphill battle. This is particularly true in the early stages, where all you might have is a proof of concept and ambitious goals. It's a significant risk for potential investors to get involved, especially given that most startups don’t make it to profitability. For angels and VCs, investing in startups is basically gambling with a bit more research.
Keep in mind that investors are human too. During periods of extreme economic hype—like the bull run of 2021-22—they can be quick to invest millions into various projects and companies. This rush often stems from witnessing the success of other products, coupled with the influx of substantial liquidity into the markets.
So, who are the types of people that would potentially invest in your company?
Bootstrapping: Use your own damn money. Get some skin in the game.
Friends & Family: The people who trust you the most are those willing to invest in you early, stand by your side, and embark on the journey with you.
Angel Investors: Whether publicly known or anonymous, seasoned entrepreneurs and crypto whales are eager to invest early capital.
Venture Capitalists: Most VCs have exclusive branches specifically for investing in crypto-startups. These are the big guns that you need to talk to. These guys are sharks though, so be careful or you might get bitten.
Grants: Collaborating with select projects, protocols, government agencies, or philanthropic organizations can unlock doors to grants that provide vital funding for your company. A list of grants programs can be found here.
Crowdfunding: While this approach is not applicable for everyone, launching an NFT project and generating sales from the mint can provide a significant financial boost. However, involving numerous random individuals financially can lead to unexpected challenges down the road. Proceed with caution and be mindful of the responsibilities that come with this kind of engagement.
Token Sales: A popular fundraising strategy in the crypto space involves startups issuing tokens representing utility or equity. This includes formats like Initial Coin Offerings (ICOs), Initial DEX Offerings (IDOs), and Initial Exchange Offerings (IEOs), each differing in the platforms and mechanisms used for token distribution.
Let's turn our focus onto the actual pitch.
To really convince a potential investor that you're all in on your vision, you need to put together a strong visual and auditory presentation that shows them what that future looks like. I won’t dive into every little detail, but I’ll share the key information you need to know; this isn't in chronological order.
Sharing your Story: Hook, line, and sinker—introduce your startup with a compelling narrative that encapsulates its essence. Clearly articulate what your company is all about, highlighting your vision, mission, and goals. Describe the problem, show the solution (your unique selling proposition aka USP). This section should captivate your audience, drawing them into your innovative journey and showcasing the transformative impact you aim to achieve in the crypto space.
Goated Team: It’s always important for investors to understand the backgrounds of your employees and how their skills align with the company's needs. Your full stack developer worked at Meta and you're debating about putting him on the deck? Your VP of Product worked at Nintendo? You better add them!!!
Show the Data: Dig into the core problem and clarify how your crypto startup is uniquely positioned to solve it. Start by identifying the limitations or gaps in existing solutions—whether they fall short in addressing the issue or don’t exist at all—and emphasize how your approach fills these gaps.
Rather than solely highlighting why you're superior to competitors, emphasize the innovative strategies you're implementing to drive massive customer growth.
Use clear, digestible visuals like pie or bar charts to back up your approach, and make sure to address key market metrics: Total Addressable Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market (SOM). This will create a well-rounded, compelling case for your startup’s potential.
Tokenomics: If your company plans to integrate a token model off the jump, be sure to explain the strategy around the token, the supply & distribution, and the increase in value as the product continues to gain traction. Be sure to show any previous mints, airdrops, staking, volume, and any form of statistics that are related to this section.
Innovation: Showcase the cutting-edge technology you're building or the minimum viable product (MVP) you've already developed, highlighting its functionality and unique features. Having a demo on-hand is a plus.
Financials: The big question: so how do you make MONEY? Provide a clear breakdown of how funds raised will be allocated towards such as marketing, hiring, partnerships, and product development, emphasizing how each will drive growth and value for the project.
Go-To-Market (GTM): Curating a strategy to scale your company and attract users to your ecosystem through strategic partnerships, financial incentives, compelling content creation, and active community engagement.
Trial by Fire
In the life of a crypto startup, there is never an easy day.
As a Founder, you're navigating a true trial by fire, constantly pushed to perform at your highest level while managing intense pressure from all directions. This is the end all be all—if you're not giving it 110%, you're cooked.
So, what challenges are most common in a crypto startup?
Founder Mode: Being a Founder, you have to be the head of customer service, active within the community, and being a visible, vocal leader, no matter the level of online engagement. Sure, you can delegate these tasks to other employees, but people want to listen to the one in CHARGE; your voice carries the most weight.
Reputation: The last thing you want is to damage something you’ve dedicated years to building. A solid reputation is invaluable and plays a crucial role in your success. Associating with the wrong crowd or making a misstep can tarnish your credibility, ultimately jeopardizing your startup's future. So hey, don't have any skeletons in the closet.
Legal Instability: While regulations are crucial, navigating them can be a major headache. It often feels like you're constantly looking over your shoulder, worrying that the government could hit you with lawsuits, fines, or even force you to shut down. On top of that, you’re stuck in an endless cycle of keeping up with evolving compliance standards and securing the necessary AML and KYC licenses.
Market Volatility: If your company holds a substantial amount in crypto instead of stablecoins, it can create significant challenges for the stability of your business model and daily operations. This situation also complicates discussions with investors during fundraising efforts. In a bear market, liquidity often diminishes, causing delays in securing capital that can stretch far beyond your initial expectations.
Adoption & Education Barriers: We are still extremely early, yet only a select few crypto companies have successfully achieved mainstream adoption. The majority of the world is still unfamiliar with this emerging industry. While this may not be an immediate challenge, it will be a bridge you will eventually have to cross.
Competitive Landscape: Depending on how early you are in the game, you may not need to worry about this as much—especially since many companies struggle to stay afloat. However, the crypto space evolves rapidly, and staying ahead of the competition is not something to underestimate; if another player discovers the right formula, they could easily surpass you.
Even as someone who isn’t a Founder, I feel exhausted just looking at this list. That's a ton of struggles to go through. As if traditional startups don't already have enough problems, crypto startups experience the same things but on steroids.
The emotional toll for Founders feels like swimming upstream against a relentless current. No matter how hard or fast you push, the water keeps flooding your nose, ears, and mouth, leaving your body aching and desperate for a breath of fresh air. At times, it feels like you're drowning, and the question, will I ever reach the surface again? lingers in your mind.
Let's switch perspectives and enter the grappling mind of an entrepreneur.
In a space of unknown territory, I have this constant feeling of uncertainty, as if I'm walking on eggshells. I can't sleep at night. Will my startup still be standing tomorrow? Damn it, this anxiety feels all-consuming.
Everyone wants to succeed, and entrepreneurs like me hate the idea of failing; in fact, I fear it. All those countless hours I spent building, and all for what? For everything to go belly-up, leaving me to pick up the pieces? And if I fail, what does that make me? I don't want to be a loser, another Founder who couldn't make it.
I know burnout is normal. I've worked 80 hours this week and my brain is fried. But I've hardly spent any time with my family, neglected my health, and found myself without a moment to recharge. I'm exhausted.
Fundraising is hard as hell. I've polished this deck five times over by now and conversed with many investors, but none of them want to take a chance on me. This market is brutal and I'm not sure when we will get out of this bear. I feel demotivated.
My journey as a crypto Founder often feels lonely. Many of my family and friends don't understand the vision behind what I'm building, and their skepticism can be disheartening. Occasionally, they make light-hearted jokes about my work, but those comments hurts more than they realize.
I don't want to be crucified on social media. What if I post the wrong thing and it hurts my reputation? I saw all the FUD that hit other Founders, what if it happens to me too?
Who am I kidding, I can't even get 10 likes on a single tweet. No one even cares about what I'm building. I can't expect to keep building if there won't be any users to engage with my product.
I'm worried about the security of my product. What if there's a vulnerability? I've been compromised before and I felt sick to my stomach when it happened. I don't want to get hacked or scammed again.
My employees haven't been communicative enough, and they're complaining about the smallest things. I'm frustrated with the way they're acting, but I'm struggling to be the glue that holds everything together. Maybe I'm not cut out to be a leader after all.
I NEED TO KEEP INNOVATING. I CAN'T STOP. BECAUSE IF I PAUSE, EVEN FOR A MOMENT, I WILL FALL BEHIND.
Escaped Velocity
There’s only so much I can say, so it’s best to hear directly from the trailblazers who have not only navigated the challenges but also achieved success in the process.
It's always inspiring to hear the stories of innovators who made it out of the trenches.
Learn more by clicking on each arrow.
I graduated from Brown in 2013 with a bachelor's in Computer Science and Mathematics. But during my junior year of college, I worked with Dylan Field (future founder of Figma) to launch CourseKick, a socially-oriented search engine for university course registration.
After graduating, I worked as a software engineer at Pinterest and then went on to co-found Claimdog, a personal finance app that was acquired by Credit Karma shortly after.
After Claimdog’s acquisition, I was exploring emerging technologies and stumbled across the Ethereum whitepaper. I read it, and started thinking about the potential of blockchain technology and cryptocurrencies beyond purely financial applications.
My first venture in this new direction WifiCoin, a startup trying to find a way to offer tokens in exchange for sharing access to a wireless router. I pitched this alongside Alex Atallah to Y Combinator and we got accepted. But once we saw CryptoKitties, we immediately pivoted to the NFT space, co-founding OpenSea together in December 2017.
One of my biggest struggles was navigating the infamous bear market that followed the NFT mania of 2021. Crypto prices and NFT volumes dropped dramatically, and I had to lead the company through that really rough period. It forced me to think deeply about the next phase of the company. And with OS2 in private beta right now, I am really excited for the next few months.
I entered the crypto space full time in late 2017 after being a curious owner of Bitcoin since 2013. Prior to entering crypto full time, I had a 15+ year career, first in media starting at Disney and YouTube, then in tech, starting with Google and moving to Venmo, PayPal and my own startup Button. It was a good mix of traditional tech, fintech and media. I first learned about crypto while at Venmo, as we were thinking about adding it as a payment method more than a decade ago. That ultimately didn't happen, but it piqued my curiosity, as I viewed Fintech as "putting lipstick on a pig", while I saw permissionless crypto networks as a 10x improvement on legacy financial rails.
I ended up building a media & research company when I entered crypto full time, mainly because I'm not an engineer, and so much of what was happening in 2017 was at the protocol level. I wasn't clear on what I could contribute there. I was also not a professional investor or someone who had worked in financial markets, so the VC path didn't yet make sense for me. Instead, I started The Block to solve my own problem - it was very hard to keep up with the tsunami of crypto information at the time, and there was often significantly conflicting information.
Founding a media & research company in crypto was brutally hard. It's a high profile role, and there is so much money at stake in all of the things that we covered. We would write factually accurate articles and be accused of FUD, manipulation and worse. We weathered threats of lawsuits and worse. It is a very difficult business as well, as the companies and protocols we covered were also our main sources of revenue. Anything we wrote would make as many people angry as it made happy. It was difficult only being in the information flow rather than the money flow in a money industry.
Over time, I realized that media & research as a business wasn't for me. Rather than report on and research the most important things in crypto, I wanted to invest in helping to build them. I sold The Block in 2021 and never looked back. I founded 6th Man Ventures that year, and we've had great success making more than 100 early stage investments, primarily in the crypto application layer. Our goal is to get 1 billion - plus people using financial and non-financial crypto apps. We have a very long way to go!
I’m a computer scientist by background and life-long tinkerer. When I moved to the US, I got obsessed with how far behind the US was compared to the England (where I was from) in financial systems – everything was slow, expensive, silo’d and corporately controlled.
I went looking for products looking to change that to work on & found Venmo. That was an amazing journey to be part of. After Venmo was acquired by PayPal, Mike Dudas & I set out to make something ourselves before teaming up with another group to make Button wich we spent almost a decade building into a backbone for mobile marketing tech.
I’ve been in-and-out of crypto throughout that time – like many of us.
In 2010 I was mining Bitcoin, but then I largely forgot about the industry until 2015, and followed the standard ‘15 -> ‘18 -> ‘21 cycle interest that I think so many of us did. I wish I’d had the conviction that some of the early pioneers had (including MIke who left Button to found the Block).
In the 2021 cycle, I got fully pulled in by the promise of programmability of the EVM, NFTs as a new composable form of ownership and started out on a side project that just became explosively popular. It made the decision to leave and found the business with my co-founder, Christine (formerly of Robinhood crypto) easy!
I’ve been extremely fortunate. We found some degree of early product adoption; I have an incredible co-founding partner & we had the track-record to raise money.
I’m also intrinsically an optimist, and love building. So while building a web3 product through the bear market of ‘22/23 was not “easy”... we fundamentally had it easier than most, and it’s given us the product, reps and capabilities that we need to thrive in the great bull of 2024-25(6??)
I cannot thank our team, investors and community enough for making Rally possible!
Believe in Something
You might be hesitant to embark on this journey, or perhaps you feel like you've hit a plateau in growing your startup.
SO I'M HERE TO TELL YOU TO GET A GRIP.
I WANT YOU TO REACH FOR THE STARS.
WHO CARES IF YOU'RE SCARED TO START?
WHO CARES IF YOU FEEL LIKE YOU FAILED?
FAILURE DOESN'T EXIST, IT'S JUST A FIGMENT OF YOUR IMAGINATION.
THE ONLY PERSON STOPPING YOU FROM TRYING IS YOU.
Just remember. Larry Page and Sergey Brin started Google out of Susan Wojcicki's garage. Mark Zuckerberg started Facebook out of his dorm room. Reid Hoffman started LinkedIn in his living room.
If they can bootstrap their companies out of small places, then you can too.
Welcome to the real world, where challenges are inevitable. That’s why you can’t afford to be the prey—you must become the predator.
Like a tiger poised to strike, always ready to seize every opportunity and conquer whatever stands in your way.
To conclude, I'll end with this quote by the Founder of Apple, Mr. Steve Jobs himself:
I'm convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.
Godspeed.
