The following is a guest post by Nischal Shetty, Co-Founder and President of Shardeum.
The bull market is showing signs of coming as the ecosystem looks forward to the market’s return after two years of waiting. At Web3, bear markets are generally considered to be the best time to build your product so that it can withstand all adverse conditions and learn to grow and scale. However, sentiment plays an important role in cryptocurrencies. In other words, when the market is rising, builders and consumers are much more optimistic about the product.
New builders will be further encouraged to build something from the ground up, as there is growing optimism that they will reach many similarly engaged consumers. Therefore, those who have spent the past two years understanding market dynamics and closely studying token movements may have an even harder time creating anything as the funding environment has become less generous over the past year. yeah. Some projects have collapsed, others have failed to live up to their initial hype, and investors are tightening their pockets.
Funding in the first two quarters of 2023 was down 78% and 76%, respectively, compared to the same period in 2022, according to Crunchbase data. The Block further reported that VCs injected $10.7 billion into crypto startups in 2023. In 2022 he was down % from $33.3 billion.
Web3 Funding for startups is scarce and venture capitalists are becoming increasingly cautious. New girlfriend BUIDLers need to build a startup with minimal seed funding and adapt their strategies to scale.
Leverage open source tools and communities
Leveraging open source tools and building a community is at the heart of building a Web3 startup with limited funding. Platforms like Ethereum, Polkadot, and Cosmos offer decentralized infrastructure and protocols, but they come with a bit of a gas fee and aren’t very beginner-friendly. Participating in open source communities fosters collaboration, learning, and contribution.
If you’re really passionate about bringing together people with different expertise and building something from scratch, reach into your pockets and pool your funds to start the effort before any income comes in. I can. start provides more autonomy to the community, allowing each individual to claim a set number of token stakes in exchange for contributing to the project. They can reap the benefits of their staked tokens later when they increase in value.
This can be a great start to developing a minimum viable product (MVP) and avoiding unnecessary expenses. By identifying key features that address the immediate needs of their target users, startups can prioritize development efforts and gain valuable feedback from users. This iterative approach allows for continuous improvement without investing large sums of money.
Building a sustainable growth strategy
Scaling your Web3 startup on a limited budget requires a shift to a sustainable growth strategy. Rather than relying on expensive marketing campaigns, startups should focus on organic growth through community building and word-of-mouth referrals. By engaging with potential users on social media platforms and attending industry events, you can get noticed without investing a lot of money.
Holding meet-ups in different cities with interested communities that can also grow the ecosystem can help raise awareness and allow different members to contribute to the expansion of new projects . Considering grant programs and hackathons tailored to Web3 startups could provide a much-needed lifeline. While many organizations offer funding opportunities for innovative projects, hackathons provide exposure and potential funding for outstanding ideas. =
These initiatives allow startups to showcase their skills and ideas to potential investors while reducing financial constraints. Forming strategic alliances with existing, established startups can expand your resources and overcome limitations. By collaborating with complementary ventures, startups can share costs, pool resources, and leverage each other’s expertise. This collective approach fosters innovation and problem-solving and increases market reach without large financial investments.
Additionally, seeking guidance from industry leaders who have developed homegrown products can be a great way to leverage practical experience and real-time feedback on industry trends.
Embracing the spirit of bootstrapping and iteration is critical for Web3 startups with minimal funding. Rather than relying solely on external funding, startups can self-fund or use revenue from early adopters to fuel growth. Continuously iterating your product based on user feedback ensures you’re making steady progress toward your vision while saving money.
In conclusion, securing large amounts of funding may be a challenge for Web3 startups, but it is not an insurmountable barrier. By leveraging open source tools, developing lean MVPs, prioritizing sustainable growth, leveraging grant programs and hackathons, fostering collaboration, and embracing bootstrapping and iteration, entrepreneurs can You can survive his Web3 environment with limited funds. With resilience, adaptability, and strategic planning, success in the Web3 space is within reach, even with fewer resources.
