Starting Up in The Web3 Space.

The start-up world is a challenging one — small teams must fill a number of roles for any chance of success, while also trying to be innovative and find a competitive advantage. Ultimately, however, many start-ups are not successful; about 90% of all start-ups fail, with 10% failing in their first year (Source: Failory).

While it will not apply to everyone, many projects in the Web3 space are indeed start-ups. By definition (at least from Investopedia):

“Start-ups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand.”

Whether you’re building games, marketplaces, social media platforms, or simply NFTs — you’re providing a product or service you believe will be in demand. Web3 founders also have to fill multiple roles — sales, development, PR, marketing, legal & finance, and more.

As such, it’s important for Web3 founders to understand the expectations within the space, and what some of the key causes of failure are for start-ups.

“90% of start-ups will fail”

You’ve probably heard this (or similar) before. Considering this seems to be fairly consistent across all industries, it’s feasible that these statistics will remain the same for the crypto/NFT industries.

However, you may not have heard about the main causes of failure (Source: CBInsights):

• 42% of cases did not not find demand in the market (being unable to achieve ‘product-market fit’)
• 29% of cases ran out of funding (whether that’s investor funding or personal finances)
• 23% of cases are lead by weak founding teams
• 19% of cases fail due to being beat by competition

Other causes of failure include pricing issues, user-unfriendly products, poor marketing and poor timing of their product launch (Source: CBInsights).

An important thing to note is that many of these issues will occur late into development or years down the road — 70% of start-ups fail within the 2–5 years stage, and failure because of competition is most likely within the 3–5 year stage (Source: Failory).

The Web3 ecosystem

It’s also possible that some of these statistics will vary in the Web3 ecosystem — with so many projects in the space, with similar benefit statements (“utility”) or even similar designs (including derivatives of other projects), competition for a currently demotivated user base is mostly continuing to rise (on OpenSea alone, there are currently over 700 project; Source: EarthWeb).

An important point to note, particularly in the Web3 space, is that not every project/product is a start-up. This may be because their intention is not to create a product that is in demand, but rather experiment from an artistic view or explore a new technology as a learning experience. Additionally, many projects have come into the space which never had any intention of creating a product after receiving crowd-funding (often referred to as a “rug pull”). Many of these instances may not technically be competition, but they are removing funds (“liquidity”) from the already-limited ecosystem.

Additionally, many Web3 projects are operating in silos, struggling to learn or co-market with other projects to increase their reach. Don’t assume you’re solely competing against projects within your community — there are numerous chains and projects building on them that you’ve likely never heard of.

Legal Considerations

One of the most unique impacts in the Web3 space may be the upcoming changes in rules and legislation.

Governments have been cracking down on illegal activities in the Web3 space, such as market manipulation (including “insider trading”) and projects performing rug pulls.

As laws surrounding intellectual property (IP) are defined for Web3, it is possible to assume this could also affect the positioning of derivative projects (this is purely speculation). Many projects may also not be aware of any tax procedures or implications, which can negatively impact the projects further down the line.

Final thoughts (for now)

The Web3 space is still relatively early, and after personally hitting our 1 year mark in the space today, many of the projects who were earlier than us (or started when we did) are no longer here. We can speculate about what the reasons for that are, but the largest impact right now is the ongoing bear market, which could last anywhere from months to years (I don’t think anyone knows the true answer to “how long” it will last).

In saying that, there are many who are continuing to build. Generally, they will have prepared for (or at least considered) some of the following:

• Take time to find your niche, vision and where you can add value to your customers/ community.
• Don’t expect to “get rich quick” in this space, especially right now — take time to build a quality product, community and experience for users.
• Have a plan for scale-up. Should you find success, what are the next actions to take relating to your product, vision or roadmap?
• Don’t compare your success to the BAYC’s of the world. Many of the largest projects have 10–150+ person teams and incredibly large marketing budgets, but ultimately make up a small percentage of the existing ecosystem. Define your own success criteria and aim to achieve those.
• Finally, consider any legal implications that could arise going forward following any successes you may achieve.

How to Join our Ecosystem

By holding our NFTs and playing their respective P2E games (Flappy Pigeon or Eggsplorer), or by being active in our Discord, you will be able to earn our utility token $VIVE. $VIVE can currently be used to purchase NFT Booster Packs, but will also have additional utilities both within and outside our metaverse experiences.

To be involved in our upcoming Solana mint and Beta Metaverse experience, keep an eye out on our Twitter or Discord for updates and giveaways!

Pick up an Egg for 24 $MATIC and support us today @ https://projectpigeon.io/landing

Pigeons: https://opensea.io/collection/projectpigeon

Booster Packs: https://projectpigeon.io/landing

That’s all from us for this week, if you have any questions, you know where to find us:

Website: http://projectpigeon.io/

Twitter: https://twitter.com/ProjectPigeons

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Discord: discord.gg/YGx3sVFWa9