Within the crypto community, we seem to have readily accepted the idea that crypto projects shouldn’t be treated like traditional software companies. But that isn’t entirely true. From a founder’s perspective, there remain universal company-building fundamentals that apply whether or not your project comes with a token. In this post, we’ll be comparing and contrasting building a company in the crypto space vs. building one in traditional software.
When building a traditional software company, the path is relatively straightforward. Find a problem, talk to potential customers, build an MVP, validate demand, create a strategic plan, raise capital or bootstrap, and grow until you're acquired or go public.
Now let’s add token sales. Pandemonium ensues.
What at first appears to be an elegant way to drive distribution and "bootstrap the network" actually creates perverse incentives. Instead of practicing lean software development, many companies are taking their time, since they've already realized years of compensation early on and in one lump sum. Worse, some companies aren't launching an MVP, as their token price could go down upon releasing a product - see: The Idea Execution Paradox.
And we're just getting started.
A traditional software company struggles to find talent that matches its specific needs, whereas a crypto company has candidates pouring in. Traditional companies have hiring plans, refine their compensation offers over time, and often look to promote from within. Crypto companies have talent migrating from Facebook and Google in droves, with a higher likelihood of candidates making professional decisions that are opportunistic rather than strategic. Ultimately, generous screening methods, coupled with token hiring bonuses, have culminated into large disjointed teams (with misaligned values) around the world.
A traditional software company hires CFOs and Controllers to make disciplined resource allocation decisions whereas crypto companies have limited treasury management strategies and their balance sheet swings with their token price.
A traditional software company practices segmentation and customer intimacy, which means their target customer's name is in a CRM, and their current customer is probably getting a Christmas card. A crypto company has a global, often anonymous, user base that likely avoids being tracked.
Point is, there are clear differences. But the fundamentals of company building remain the same - yet many companies in the crypto space operate as though these fundamentals no longer apply. A staggering number of projects haven't solicited feedback from users, found a problem to solve, launched a product, mapped demand, or built a strategic plan.
If you're working with a crypto company that sounds like the ones I just described, the good news is it's never too late to get your company on the right path. Hire that ex-McKinsey guy who keeps emailing you and have him implement OKRs. Find a CFO or someone with background in treasury management. Get a scrum master spun up and have her manage the weekly sprints.
If you're not working in the space, we need you. Actually, we needed you yesterday. Doesn't matter if you're technical or if community-building is your calling, find a company and lean in. Contrary to what you may think, your expertise and skills in traditional companies are applicable and necessary if our space ever hopes to mature.