18 industry vets share tips for launching a crypto startup in a bear market

A bear market may not be the best of times for a crypto startup, but it’s not an insurmountable barrier, either.

Launching a startup in any industry is hard. Launching during a bear market is even harder. Launching a startup in a bear market in a relatively new industry like crypto — which many investors don’t fully understand and which has had its share of recent negative headlines — brings a whole additional slate of challenges. But as many industry pioneers have proven, it’s not impossible, as long as founders follow a few smart strategies.

Many of the members of Cointelegraph Innovation Circle are startup founders themselves, and all are longtime industry veterans and market watchers. Here, 18 of them share their tested tips for crypto companies starting out during these volatile times.

Pitch to the community and investors first

When I look over the history of influencers and people who are dominating the market now, I see that many of them started in the previous bear market. New crypto companies should not build anything until they pitch it to the community on Twitter and to investors. Once they have refined their ideas and know that their offering is truly valuable, then it’s time to build a community around it. – Arvin Khamseh, SOLDOUT NFTs

Overestimate the time and number of people you’ll need

In this environment, capital is much harder to come by. Assess the complexity of your product, and make sure you overestimate how long it will take to build and the people you will need to build it. When times are good in crypto, it is easy to overpay contractors for quick results, but this is a bad strategy for long-term survival. – Simon Harman, Chainflip Labs

Don’t waste precious resources chasing funds

This is a difficult time for fundraising. Companies should focus on growing their communities and partnerships to ensure they are perfectly placed when the market improves. Chasing funds right now will drain precious resources. Depending on how new a company is, spending excess early funds on development can doom projects to solving problems the markets don’t care about or are reluctant to fund. – Jason Fernandes, AdLunam Inc.

Ensure you have a team of qualified, experienced advisers

If your company is starting out in the crypto space, make sure you have a good business plan and a team of qualified and experienced advisers, including attorneys and CPAs, helping you. Pay close attention to things like entity structuring, funding, licensing, and tax and accounting compliance requirements early on. As the saying goes, failing to plan is planning to fail, especially in this volatile market. – Sharon Yip, Polygon Advisory Group, LLC

Understand what’s behind the volatility in crypto

Crypto capital raising allows liquidity and price discovery right from the start. An important part of the crypto capital-raising process is understanding what is behind the volatility in crypto markets. These price swing signals and changes can communicate information to entrepreneurs, giving a level of transparency that is not possible in the traditional finance capital-raising space. – Tammy Paola, Zerocap

Start out lean

Crypto markets have proven to be volatile since their inception, so new companies entering the field should learn from the mistakes of some of their predecessors. Start small and lean, and focus on organic growth. Attempts to start high growth too early can be a recipe for failure, especially in the current market. – Hugo Lee, Haru Invest

Rally around a shared purpose

Celo launched during a bear market with an early focus on real-world projects and use cases driving positive impact for communities and the climate. Rallying around a shared purpose or mission helps projects prioritize goals and tasks critically. – Rene Reinsberg, Celo Foundation

Don’t tout decentralization for its own sake

Be transparent, stick to your roadmap and timeline and don’t tout decentralization for decentralization’s sake. Sometimes decentralization hinders progress, particularly early in the life of a project. Crypto investors have become savvier, so you really need legitimate, creative ways to drive value into the token for any degree of success. – Timothy Enneking, Digital Capital Management

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Seek out a few first true fans

People say that a bear market is the best time to build. But that’s not easy for companies just starting out. Find your first few true fans who really believe in your vision and can help you grow. Expand it to the next dozen by further validating your idea. Blockchain and Web3 are here to stay; use this time to find your path to real adoption use cases. – Cindy Jin, Mintology

Solve the proven UX challenges for your category

Focus 99% of your energy on solving the user experience challenges for the category you’re building in. Deliver value for users and give them a reason to become advocates. By solving a problem that users say is their top priority, your solution becomes universal, and your product won’t be limited just to the U.S. or certain geographies. With regulations coming, if your product fills human needs, you’ll survive. – Chris Ghent, Parkhaus Holdings

Focus on building utility into your products

Give people a reason to come to your platform regardless of market conditions. Web3 is here to stay, and it will only become more widely adopted, so by focusing on building a tool or platform with genuine utility that’s easy to use and access, you will attract users during the bear market and will be ready when the market recovers. – Sandy Carter, Unstoppable Domains

Be ready to wait for an ROI

Be 100% mission-focused, be incredibly cost-conscious when analyzing expenses and understand that you might not see an immediate ROI on most activities. Crypto companies see insane booms, and most people building in the space now are doing so under the impression they are setting themselves up for success when the market turns more positive. It pays to be resilient and determined in down markets. – Ty Smith, Coinbound

Connect market needs to real-world use cases

Understand the real needs and gaps in the market and connect them to real-world use cases. Be cognizant of the core drivers of adoption, and solve real-world problems. Don’t launch a token for the sake of it, and don’t be a “me too” player. – Nitin Kumar, zblocks

Build a strong, adaptable business model

One piece of advice for new crypto companies starting during volatile times is to prioritize building a strong, adaptable business model. Focus on creating real-world value, addressing market needs and establishing a solid product or service foundation. This resilience can help your company navigate market fluctuations and foster long-term success in the rapidly evolving crypto landscape. – Tomer Warschauer Nuni, Kryptomon

Understand that volatility comes with the industry

Focus on your product and on bringing value to the ecosystem. Do not pay attention to the volatility of the times. This is crypto, and volatility will always play a part — at least for now. As long as you focus on actually benefiting the community, people will appreciate you and adapt your technology. Stay focused, and don’t let others deter you. – Ayelet Noff, SlicedBrand

Keep overhead expenses low

Resist the urge to increase your overhead expenses by renting out a fancy corporate space. Hire and train locally. Consider basing operations outside of one of the overpriced “tech hubs.” Be generous to your employees to encourage commitment, hard work and ingenuity. – Jae Yang, Tacen

Prioritize communication and transparency

First, build a thoughtful, technologically sound project, and give the public a strong understanding of its purpose. Second, keep motivation high for teams through tangible, attainable goals and a clear vision. Third, make long-term decisions rather than impulsive ones that are based on the current state of the market. Always prioritize communication and transparency with users and teams. – Anthony Georgiades, Pastel Network

Turn your competitors’ weaknesses into your strengths 

Find three to five of your top competitors and analyze their messaging. List what they’re doing well and what they’re communicating poorly. Focus on this, and home in on where your competitors are weak to gain an edge. If they use too much jargon, ensure your messaging is clear and straightforward. – Sheraz Ahmed, STORM Partners

This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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