No industry, nor any business, is a fan of economic uncertainty, and many financial experts consider the current global market to be precarious. While all companies have to look for ways to shore up operations and reduce costs in a down economy, the effort can be particularly challenging for Web3 companies, which are relatively young, may have fewer resources available than their more established Web2 counterparts, and operate within an industry that many outsiders do not understand and grasp the value of.
If the macroeconomy takes the path that some predict, only those companies – regardless of their industry – that have taken steps to prepare for the storm will be able to weather it well (or not at all). Below, 14 members of the Cointelegraph Innovation Circle share their advice to help Web3 companies take proactive steps to prepare themselves and their communities for what could be a difficult road ahead.
Define your purpose
In an uncertain market, Web3 companies must have a defined purpose. Curious participants who want to expand their financial, social or cultural horizons through a novel service must first be convinced of its usefulness. Discussions about value aside, true innovation reshapes how users spend equally valuable goods: time and energy. To remain competitive, executing well is only half the battle. – Oleksandr Lutskevych, CEX.IO
Solve a real, high-value problem
Design value into your product, platform or protocol and solve a real, high-value problem. Customers pay for analgesic products (those that solve immediate problems) not for vitamins (“nice to have” products). Web3 companies must gravitate toward considering the magnitude of a given problem and the value they can add, not simply be “me too” players who live off the hype. –Nitin Kumar, z blocks
Build a brand with a clear story and value proposition.
What do Apple, Microsoft, Instagram and Slack have in common? They are all big-name global brands that started during times of economic downturn. The lesson here is: don’t just create a company or a product; Build a brand with a clear story and a value proposition that justifies its existence even in difficult times. That’s what will help you get ahead. – Germán Ramírez, THE HOUSE OF RELEVANCE AG
Prioritize increasing daily active users
Web3 companies should prioritize increasing their daily active users as a genuine engagement metric. At the same time, they must expand their financial runway to ensure sustainability over the next six months, even in a volatile economy. Attracting a broad customer base will be key, but retaining them with trust and value will be paramount. – Erki Koldits, OÜ Popspot
Target less essential areas to reduce costs
Reduce costs without reducing your benefits. When adapting to difficult market conditions, Web3 companies should ask themselves which expenses are most vital to the company’s core value proposition. Then, target less essential areas to reduce costs while preserving the elements that are critical to your product quality and sustainable growth. – Wolfgang Rückerl, ORL Technologies AG
Find a way to add value to Web2 companies
Address a basic customer need to eliminate risk in your business. I don’t think Web3 technology should be segregated from the rest of the economy; There is no reason to rebuild the entire market economy for Web3. Find a way to add value to Web2 businesses and plan now to scale when it makes sense. I think we have gone through times of easy money and fleeting successes. Play the long game. – Stephanie So, Addicted
Focus on interoperability
Web3 companies should focus on interoperability. As the economic landscape changes, the ability to seamlessly integrate with various blockchains and traditional financial systems could be a lifesaver. Not only does it diversify risk, but it also opens up new avenues for user acquisition and revenue. Being too siled in your technology stack can be a hidden vulnerability when the market contracts. – Tiago Serôdio, Partisia Blockchain
Build your product and your community of core followers
Now is a good time for a Web3 company to reevaluate and focus on developing its product and its community of core supporters. As the market calms down, many of the high-profile, low-substance companies will go into hibernation. Conversely, those who are in it for the long haul have the opportunity to grow their user bases and feature lists away from the cacophony that has come to characterize bull markets. – Jason Fernandez, AdMoon Inc.
Prioritize strong security and risk management
Prioritize robust security measures and robust risk management strategies to protect digital assets and user data against potential vulnerabilities and uncertainties. In the volatile Web3 space, data leaks can be devastating. Implementing decentralized storage, advanced encryption, and continuous security audits is critical to safeguarding both user trust and your company’s reputation. –Antonio Georgiades, Red Pastel
Avoid spending on social influencers
Web3 companies should refrain from spending on social media influencers. After 2022, many influencers on YouTube, TikTok, and similar platforms fell from glory due to their paid endorsements of Luna and FTX before their unprecedented falls. These social influencers lost respect in the industry and there is still distrust among the public. Definitely not worth the potential hit to reputation. –Ayelet Noff, SlicedBrand
Look for more efficient marketing methods and stay in touch with regulators
There will be economic uncertainties forever. To cope with precarious and invisible financial times, Web3 companies should focus on more efficient forms of marketing, such as replacing ads with SEO. Additionally, they should remain in constant contact with regulators to seek their support wherever possible. This also helps address some of the misunderstandings regulators have about cryptocurrencies. –Abhishek Singh, Acknowledgment of receipt
Allocate resources to on-demand innovations and emphasize quality over quantity.
The most important step when resources are limited is to identify the areas that have the greatest demand and allocate resources to those technological innovations. Second, deliver quality over quantity to your community and distinguish your brand by building with purpose – the Web3 space is often “built in public,” which is beneficial and can be leveraged to reinforce both points. –Megan Nyvold, BingX
Show the power of Web3 governance models
Times of economic uncertainty provide an opportunity to showcase the power of Web3 governance models. It is time for Web3 companies, particularly DAOs, to tidy up their ships and mitigate their financial risks in a rapidly evolving economic landscape. Accountability and transparency will allow them to prioritize resilient revenue streams and collectively ensure long-term viability. –Sheraz Ahmed, STORM Partners
Keep your developers and community excited
As low levels of global liquidity drive down crypto token prices, keeping both its developers and community excited will become a challenge in this bear market. Stay ahead in terms of technology; Don’t rely on previous bull market victories. If you need to release some NFTs or tokens to developers and active community members, go ahead. –Zain Jaffer, Zain Ventures
This article was published through the Cointelegraph Innovation Circle, a vetted organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. The opinions expressed do not necessarily reflect those of Cointelegraph.
