Web3 or Not, Business Basics Are Non-Negotiable

Yoav Tchelet
4 min readMay 9, 2024

With the new token launch, new DeFi platform, and new web3 project, the bulls and bears are irrelevant to the builders. The builders will continue building, and the funding will always move in cycles.

Underneath the surface of Web3 startups, the challenges faced by these startups and their founders are not unique. They mirror the same hurdles that any startup must overcome.

If you want to scale your Web3 startup and become profitable, continue reading. If you think you are a startup founder just looking for a hype-and-dump scheme, please move on.

The Immutable Law of Business and their Relevance in Web3

Web3 is still a nascent ecosystem industry; it’s exciting and new, with plenty of ideas and projects.

However, there is a need for more support for founders and startups to scale and succeed.

I’ve outlined some of the core principles to scale these startups and that should be included in the strategic equation.

The first is where your strategy meets execution.

An idea is not a strategy and a strategy is not execution.

You have an excellent idea for a web3 startup; you assemble a core team of contributors to scrappily build something that can be pitched for seed funding.

You fall into the trap of the VC funding roller coaster, trying to split your time between taking your MVP to full-scale launch and managing shareholders’ expectations.

This is where you need to pause. The ability to execute your original vision is critical. The Roman Empire did not sprawl across continents merely through ambition; it was the result of meticulous planning, efficient resource allocation, and the relentless pursuit of its objectives.

You don’t need fancy frameworks to do this; with a simple bullet point plan, you can outline what success will look like. You can execute your vision as a SMART plan: Specific, Measurable, Achievable, Relevant, and Time-bound.

List a few bullet points to start under each of these. They can be operational, technical, etc., but it doesn’t matter. What matters is that you begin to visualise the HOW of executing. This needs to be the single focus of the business’s founders: How do we successfully execute the vision?

Forget distractions and temptations — execute, execute.

The second principle is financial prudence. Apart from failed execution, this is often one of the biggest causes of startup failure.

Cash is your oxygen. A colleague pitched it to me quite nicely the other day.

Imagine your startup as a small room. You raise seed funding, which is the oxygen to fill that room.

You now start to draw down on that oxygen without pumping in any more. Once you have depleted that oxygen, it’s game over.

You cannot think of the what if — what if we raise more funding, what if we raise a Series A?

Each round of funding needs to be considered as finite as possible. Additional funding rounds need to be both independent and related to further execution (I will leave that for another day).

You need to spend as little as possible to execute your vision successfully. It’s not about the vision in 5 years — you don’t have enough funding for that — it’s the vision to get to the next level of scale that can help you get more funding, more users, more revenue, etc.

Your cash is your lifeline — manage it with your life.

The following fundamental principle is sustainable growth.

What is sustainable growth?

Sustainable growth requires that you scale your startup with minimal red tape and simple operating structures and ensure you have the correct legal, financial, administrative and technical tools to scale up or down without needing to massively move around headcount.

You don’t want to hire 10 people only to have to lay off 50% of them in 6 months because you got excited about telling people how quickly your startup is growing.

Keep your headcount as small as possible and use contractors and freelancers wherever possible and for as long as possible.

Having a core team of 20 vs 5 can be the difference between having another 18 months of cash runway versus having to fold your startup in 6 months.

The same goes for operational expenditure. Keep it as low as possible, be scrappy, and go simple. Your users don’t care, trust me.

Web3 startups are part of a thrilling, innovative frontier in technology and finance. However, the fundamentals of business management, customer understanding, value creation, and strategic growth remain as relevant as ever. In the rush to innovate, paying attention to these basics is crucial. After all, no matter how advanced the technology, business basics build a solid foundation to support sustainable growth and profitability.

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Yoav Tchelet

Yoav Tchelet has over 25 years experience working with some of the world's largest brands, helping them scale and grow their businesses.