Hard Questions for Your Next Start-Up to Answer 🤔

Zach Herring
5 min readSep 16, 2019

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Obligatory Call to Action: I co-run a program for pre-idea crypto entrepreneurs, h ackers, developers, and designers called Relays. We’re committed to making Relays the best way to kick-off your next startup. We have open office hours, a rotating list of amazing experts and judges, an amazing community, and up to $5k in ETH grants for the teams that go from 0-to-company in 15 days.

So most of my day is spent advising and co-creating with extremely talented product and technical people on how to build compelling Web3 companies. I love it. Best part of my job, because those people are my people. My tribe, y’know? I make things to learn, to share a part of myself, and to make people’s lives better in some kind of way.

There’s been a counter-intuitive perspective I’ve had to learn as a design strategist though. Because the act of creation itself is joy, we tend to fixate on the product and spend less time thinking about the business, especially as it relates to the rest of the market. That’ that’s fine, if you’re making for the hell of it. But if you’re making with a company as the intended end-result, there’s a different mentality you need to adopt in order to determine if the idea you’re building on has the potential to be a funded company.

I’ve been asked how Accelerators and other Venture Capital funds assess new opportunities in the crypto-space by a lot of teams from all different sorts, but primarily from people from my tribe. The answer I give is, “pretty similarly to how we assess teams during a Relay. “

Enable.credit started with a user, Ines Widya Imanesti, and let that research shape both the product and the pitch.

When looking for funding, teams should be answering these questions below. The how those questions are answered is up to the people answering them; the more compelling the answers, the higher the chance of likelihood of getting funding, either at a Relay or somewhere else, is demonstrably higher.

The Questions

Entries on Relays (and start-ups in general) are assessed across Technology, Product, Market, and Team.

1. Technology

Dev heavy teams tend to over-index on the technology piece, and most blockchain projects tend to be dev-heavy. It’s important to understand from a funder’s POV, that technology is assessed not on technical merit (i.e. craft) as much as on impact to the end-user’s experience.

Some questions your techinical founder should be able to answer include:

  • Why was this impossible before your product existed?
  • What’s the difficult problems your team is going to solve that no one else has done before?
  • What’s to stop well-funded competitors dropping a big bag of money on one of their teams to build this out? How are you protecting yourself from the competition?

The biggest weakness I’ve seen in crypto projects is enthusiasm for the theoretical decentralized future as opposed to the product they’re building. It’s not enough to

2. The Product

Changing behavior is the single hardest problem to solve as a product designer — inertia is a helluva thing to overcome, especially with technology with as steep a learning curve as blockchain. These are some points to consider when approaching the product-side solution…

  • Have you built/designed it with the end-user in mind?
  • Do they find it easier to use than current solutions?
  • Does it solve big enough problems in their lives to change their behavior?
  • How have you conducted customer validation?
  • What are some metrics that demonstrate customer validation?
  • What are some metrics that demonstrate growth?

3. Market

The strongest single signal that there is a workable product there is that you have found someone who is willing to write a check today. Your goal, while building a company, is to get from 0 customers, to 1 paying customer, and build from there. We’ve had teams finish a 15 day Hackathon with Customers in hand — start building your customer base on day 1.

Other questions to consider…

  • What is the market the company is playing in?
  • What is the market size (i.e. TAM) of the product and solution?
  • How have you conducted market validation?
  • Why is this problem critical to solve now?
  • What is your business model and how does it scale?
  • How will this company acquire their first 100 customers?
  • Do they already have customers?

4. The Team Building It

Hands down the most underrated factor when it comes to assessing the team. It boils down to this:

If there are 5 other teams working on the project, why is your team the team that they bet on?

So many times I’ve found the same idea being worked on by other people. That’s fine. The fact that there are others looking at the market in the same way implies that you may be on to something, and The First Mover advantage is largely a myth.

So if it isn’t that you are the only team working on this, what is it? It’s not that you’re the only team working on this project, it ends up being that you need to prove that you’re the right team to work on it.

This is expressed in a lot of ways.

  • Why does your team have unique insights into the market that nobody else does?
  • Why are your team especially efficient compared to other people working on it?
  • What advantages does this team have that no-one else can replicate?
  • Has the team previously worked together in the past?
  • Does the team composition have a balanced skillset?
  • What is the competitive advantage that this team brings to the table — both in terms of team and product?

Some Examples

Check out the winners of the previous Relays below for some good examples of teams that answered the above questions in really compelling, interesting ways.

I miss anything? Got questions or feedback? Feel free to reach out and/or schedule some time on my calendar to chat.

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