A message to founders and builders in Crypto & Web3

This is an excerpt from a message I wrote to a few portfolio companies, partners, and friends in the ecosystem.

Firstly, this is the best time to go in and start building in Crypto / Web3. For the next two to three years we are all in churn territory.

All the naysayers will rise up from their imagination-less caves and retweet their 2015/2018 #bitcoin predictions, crypto is dead, down 99% from ATH, Ethereum is a scam, ‘why you don’t need a blockchain’ etc.

The new challenges of startups

Very few startups will achieve any sort of traction during this time, because no one new is entering.

98% of current crypto startups will actually close shop and cease to exist in this bear market.

Sustainable attacks from all sides, twitter, media, and your mom will cause many to break and return to fry cooks in @macdonalds

The startups that stay and continue to build will have new and unexpected challenges

Decisions on who to work and associate with, who has conviction, who shares your values and principals, what value and utility is relevant and sustainable, what is too big to fail (and will), what problems and models of the future will need support.

Startups need to choose alignment, associations, and shared visions of the future. A unique skill to create a shared, composable projection and imagination of the future and where the train (spaceship) will end up going.

Boom’s and Busts — Fertile soil for innovation

An additional variable is that we are entering into uncharted (generational) territory with uncertainty in macro and legacy markets.

Unlike the last major bust in 2008, there is no option to print money and BRRR everything out of the crisis.

Each one of these boom / bust cycles brought in a fundamental change to the way the world works, and this upcoming bust carries the weight of previous ones that were not allowed to bust correctly due to government intervention.

Building the future of these changes — e.g. the future spaceships — is what crypto has always been for with new business, value capture, ownership, and distribution models.

In 2001, the dot.com bubble implosion brought with it the internet’s value capture model for advertisements, big data analysis, and user targeting, harvest user data and sell it for Ads.

In 2008, after the housing market bubble in the US spread around the world, many lost their jobs and income. Uber and Airbnb created a means to make a living in these times by working in a completely new way. Imagine pitching ‘let strangers sleep in your house for money’ in 2006.

Timing is everything

Timing is the most critical element to the success of startups, products, and technological innovations, and it is largely an uncontrollable externality.

My opinion has always been that the adoption and Eternal September moment of Crypto will come from external factors, not internal happenings.

Perhaps the time is now, in this multi-year-bust.

The bear market is the perfect time to prepare and design where the spaceship is going. Research, explore, experiment, and ideate the future of the ecosystem and the world with different variables and scenarios to project where it could go.

These past two years have been insane in terms of capital raised, startups, repetitive ideas and general bullish sentiment. It was impossible to tune in to the signal from all the noise. The bear market shakes that up, those who entered the market to create a quick buck won’t last long.

Now it's time for the real builders to shine, knowledge and expertise will crown leaders that can imagine and implement change.

He who has a why to live for can bear almost any how.” ― Friedrich Nietzsche

The fundamental basis of my investment thesis, which I communicated many times in the past:

1. Passionate founders that can ideate, create, and build out of their imagination in a bear market with no traction, feedback, or validation.

2. Once back in a bull market stay laser focused on their mission and reason for being here, un-phased and un-distracted by get rich quick endeavors and 100x opportunities.

Finally -- my Twitter DMs are always open

If you want to ideate, get feedback, or some advice I'm more than happy to chat about whatever is going right now and where it could possibly go to.