Building and Scaling a Web3 Services Company

Starting a software services company can be challenging. Starting a Web3 software services company can be even more challenging. Here’s how our US-based Web3 agency has overcome obstacles in the fast-paced blockchain industry.

Introduction

The term “Web3” wasn’t coined until 2014, however, its rising popularity has been and will continue to be astronomical. In theory, the industry’s rapid growth may make building a Web3 company seem like an easy path to take — but more realistically, there are multiple hurdles to jump over in a fast-moving industry.

For Upstate Interactive, while we’ve achieved significant growth as a Web3 agency, success hasn’t come without challenges. Here’s how we’ve overcome the difficulties associated with global competition and talent shortages through shared passions, goals, systems, and culture.

Industry Growth

Before diving into the challenges, we should recognize the blockchain industry’s anticipated growth across the globe. According to market research publisher Global Industry Analysts, the global blockchain technology market is expected to reach $19.9 billion by 2026 from the current $3.4 billion value, growing at a CAGR of 43%.

Consequential to these high growth projections (along with new and exciting innovations across the industry), it’s clear why the competitive market continues to expand — bringing us to our first challenge, competition.

Competition

In an industry driven by innovation, there are plenty of opportunities for companies to enter the market, beyond Bitcoin and Ethereum. The list of emerging ecosystems — such as Polkadot, Solana, Avalanche, and Polygon — continues to grow, providing innumerable opportunities for companies to lay their foundation in the blockchain space. Broadly, it’s exciting to see such growth, but from a business standpoint, it makes the competition even greater (on a global scale, too).

It’s nearly impossible to get the exact number of Web3 development companies across the globe, but we can at least show a glimpse into the competitive market with a quick search on one of the most popular B2B directories, Clutch.

• As of March 2022, there are 1,711 blockchain development companies registered on Clutch. This number only represents a small portion of the competitive market since not every firm registers on B2B directories. It will only continue to rise as more traditional software development companies add blockchain development to their core capabilities.

To supplement that number alone, we can assume there are at least a handful of active blockchain projects within each firm, each likely calling for a mix of junior and senior blockchain architects to staff each project (depending on the scope of the project). Understandably, this would call for more blockchain developers than the talent pool has — bringing us to our next challenge, the talent shortage.

Talent Shortage

While the graph pulled from Electric Capital’s report might not hint at a talent shortage, we want to recognize that an increasing number of software engineers are pivoting from traditional software development to Web3. We love to see it!

However, even with the number of active Web3 developers at a constant incline, the overall number of developers can’t outpace the skills demand.

• For example, LinkedIn reported job postings with terms such as “bitcoin,” “blockchain,” “Ethereum,” and “cryptocurrency” surged 395% between 2020 and 2021. For comparison, during that same time period, the broader tech industry witnessed a 98% increase in job postings.

The torrid growth in demand for blockchain development skills poses significant threats to Web3 agencies like ourselves trying to recruit talent.

Poaching

A recurring threat that we’ve faced is poaching. Blockchain developers have options, and competitors are poaching to acquire the talent they need. Thankfully, Upstate Interactive’s vision, mission, and culture — discussed in the next section — set us apart from the rest.

How to Scale (Using EOS)

To keep everyone working towards the same goals, we operate under the Entrepreneurial Operating System (EOS). This is a proven set of simple, practical tools that synchronize how we plan, prioritize, follow processes, communicate, lead, and manage. Implementing EOS helps us maintain our vision, traction, and health.

Vision Alignment

A key part of scaling our company is grounded in a shared vision. To get everyone 100% on the same page with where we’re going and how we plan to get there, we define our company vision and core focus:

• Passion: To build a better world with decentralized technology
• Our Niche: Web3 software development and consulting
• 10-year Target: Empowering millions of people with decentralized software

Getting everyone on the same page with our core focus also contributes to our culture, instilling a sense of belonging and identity across the company.

Processes

The three founding partners focus on different parts of the business with some overlap, ensuring that we’re working towards our 10-year target with systems in place. We’ve built out and documented processes that let us hire the right people and have consistency across the company — helping us stay focused on what we’re passionate about and create the most value for our clients.

Some of our tools, systems and processes include:

• Accountability Charts: The entire structure of Upstate Interactive is outlined, clearly identifying who is accountable for what.
• Rocks (Quarterly Goals): Each department sets the 3 to 7 most important things to accomplish in the next 90 days.
• Level 10 Meetings: Smaller teams within each department hold weekly meetings to stay focused on what’s prioritized tasks and solve issues effectively.
• Scorecards: We track a handful of objective numbers that give us an idea of how each department is operating.
• Team Standups: Full-time employees hold a weekly virtual meeting where each employee covers something good that happened outside of work, what they’ve accomplished, and what they will be working on that week.
• Agile Scrum Methodology: We focus on delivering several iterations of a product to maximize value for stakeholders, accomplishing goals within each sprint and keeping the project on track.
• Development Process: Our documented smart contract development process ensures the backbones of every dApp that we build are modular, intuitive, and easy for other developers to build on top of.

Talent and Culture

Knowing what qualities and values we’re looking for in new talent has helped us get the right people into the right seats and grow our team from 4 full-time employees in 2016 to 20 in 2022.

When interviewing new talent, we look for people who share our passion for decentralization and are truly excited about the blockchain industry. We strive to hire motivated individuals who feel inspired by our core values and whose personal and career goals align with our guiding principles.

At the core of Upstate Interactive are five guiding principles that have helped us succeed as a Web3 agency. These five principles are the driving force behind our culture, priorities, and mission:

These core values contribute to a balanced and healthy culture — and in turn, help us deliver more innovative blockchain applications for our clients. After all, company cultures that foster inclusion and innovation breed the most impactful solutions.

Other ways we create a healthy culture and contribute to our talent’s personal and professional growth are through defined paths to promotion, an internal DAO, and a little something we call “blockchain convos.”

• Paths to Promotion: Even though we’re decentralizing elements of Upstate Interactive’s operational decision-making, every individual who joins our team can be assured there is room for growth. All job opportunities have clear, defined paths to promotion, yet we’re all on the same team.
• Internal DAO: Our mission is to build a better world with decentralized technology. That involves not only building dApps but contributing to the ecosystem by using and promoting applications built by our fellow Web3 peers. We’re decentralizing elements of Upstate Interactive’s business strategy and operational decision-making, sharing responsibilities with all employees across the organization using DAO software (in this case, DAOhaus.)
• Blockchain Education (“Blockchain Convos”): Creating open-ended conversations, we hold biweekly meetings that anyone from the company can join to discuss various Web3 topics — such as what’s new and exciting in the industry, up-and-coming projects, etc. These educational meetings empower our talent to keep learning and developing professionally, sparking passion and knowledge along the way.

Conclusion

Competing in a fast-paced global market can be difficult. By hiring the right people, systemizing our business, and fostering a healthy culture, we are able to scale our Web3 agency and build a better world with decentralized technology.