Web3 Startup Success - the Crucial Early Stages

Applications for the Web3 Development Fund are complete, and we are currently in the phase of reviewing and evaluating the startups for future collaboration. This was a great opportunity to organize an online panel discussion with our team of judges and find more useful information about launching a successful business in the Web3 world. The panel’s moderator was Nebojša Veron, CEO of Blank, an entrepreneur and founder of several successful software companies. Other panellists were Luka Sučić, partner at Meta Change Capital, angel investor and experienced entrepreneur in Web3 space. Benja Begović, Bitcoin enthusiast with over decade of comprehensive experience in the IT landscape. And last but not least, Marko Marinović! CTO at the Blank with a strong engineering background, specialised in software development and assisting creators in navigating the world of Web3. In case you missed it, here’s a transcript of the panel.

Q1: Are there any differences between creating a startup in Web3 vs. in Web2 space and what would those be?

Marko: There are some differences between starting a business in the Web2 and Web3 space, but what they both have in common is the need to find their product-market fit, target audience, raise funds, and ensure cash flow. They also share similar challenges in the early stages like specific community, ever-advancing technology, regulatory issues, unstable market and problems with finding experienced employees.

Luka: I would say it's the same but equally challenging. Web3 is just a new technology, but every startup faces specific challenges like advanced technology and regulatory issues. In the beginning, the hardest part is understanding how to create a product that users want to use, rather than focusing on raising investments.

Nebojša: I agree with everything you said; it's essential to find a problem and its solution that will help users. In the Web2 world, this has become a constant, and afterward, you seek investors who will invest in your good idea. However, in the Web3 world, it's a bit different. There are many startups that only aim to satisfy the audience and investors, without considering the benefits of their product.

Benja: I completely agree with everything you have said! We are living in a time of disrupted technology, constantly changing economy, and increasingly complex market demands. Blockchain shouldn't be just a buzzword like AI today; it must have a specific meaning and help you in solving business ideas and problems.

Q2: What are the most important things to focus on in the early stage? Is it the technology, the team or raising the capital?

Luka: Most people, when they face a problem and have money, try to solve it with their resources. However, when you don't have money, creativity awakens! And that's when the best entrepreneurs are born. The most important things for a startup in its early development stage are the ability to solve problems, adaptability to the situation, and resourcefulness.

Marko: At the beginning, it is crucial to find a niche of people and a community that needs your product and connect with them. They will help you shape your product according to market needs and provide you with free marketing. It is important to find a strong team of individuals who share your passion and gather them around you! If you don't have the money, find people who share your passion and are willing to work for free to bring your business idea to life.

Q3: Is it hard to find talent in the Web3 space?

Luka: This is one of the significant challenges we face in the Web3 world, and onboarding people to a completely new technological realm with different principles can be difficult. Good developers may find it challenging to adapt to the crypto world and all that it entails, especially if they come from traditional corporate backgrounds.

Nebojša: I agree, there is a small pool of blockchain developers, and at Blanka, we find it challenging to locate quality and talented individuals. However, we constantly work on education! We identify interested and passionate individuals and provide them with additional education on blockchain basics, aiming to transfer our enthusiasm for the work to them.

Benja Begović: Everything revolves around education; it’s the most crucial aspect for us in the company. If you are not a Web3 developer, why not become one? We are not just presenting problem statements; we are issuing challenges. Disruptive doesn't mean that your business model will be destroyed; disruptive means that you will have a stable business model for the future!

Q4: Is it better to have an in-house team or outsource talents?

Marko: Both approaches have their pros and cons, and it all depends on how much money you can invest and what’s your ultimate goal. Building a team from scratch can be challenging; you have to fill all the roles necessary for the smooth functioning of the team. Hiring an agency is always a good move, as they are experienced in the Web3 world, have a skilled team that can assist you in business development, and help you with product design and technology choices. Of course, it depends on the founder themselves; if they are technically inclined, then building an in-house team might be a better option.

Benja: Agencies often view your project as just one among many, but when starting a business, a tailored approach is essential for success. Large agencies may have skilled developers, but they are dispersed globally and often suffer from ineffective communication, which can influence the project's outcome.

Nebojša: I agree with you! Sometimes, hiring an agency might not be the best choice because you need a personalized approach, and large agencies can’t provide that. That's precisely why we launched the Web3 Development Fund – to help startups choose a good and reliable development partner who can assist them in product development.

Luka: When your startup is in its early stages, you might not be concerned about who builds your product because you still don't have a concrete business plan (and you don't know if your product will succeed). One of the biggest mistakes startups make in the beginning is trying to build everything without knowing if there's a market demand for their services. If you don't know how to do it, hire someone who can help you – agencies are good for this (especially if you don't have a technical person in your team). The same goes for marketing; if you have the skillset, do it yourself, but if not, find someone externally who can assist you with marketing. However, don't forget to simultaneously build an internal team that collaborates with external help to achieve better results. Be open and transparent!

Q5: What is the first thing that you check in an application for Web3 Development Fund besides the team behind the project?

Luka: First, I look at the profile of the person who applied, check our mutual connections, and their previous work. Another crucial thing is the team of people behind the project!

Benja: The team is the key! I research the person who is the project leader, their previous experience, and always check the first few sentences on the Pitch Deck. Sometimes, people apply with projects that don't make any sense at all. And of course, I check whether the projects have been previously funded.

Marko: I don't solely focus on technology; it's not my primary concern! Like others, I first check the person who is applying, the project's website, and whether they have previously used funding. The ability to solve problems and having a strong team are the keys to success for every startup!

Q6: What are some key considerations for choosing the right type of funding for a Web3 startup?

Luka: I don't believe there is a unique approach; it all depends on what you want to do and the type of startup you have. Tailoring your investments to the stage you are in is essential; for example, in the early stages of development, it's best to seek investments from angel investors. In later stages, more significant and complex issues arise, and you need to find investors who have experience with multiple projects and can provide you with connections in the community, linking you to experts in marketing, legal matters, and more.

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