Challenges of Developing Web3 Projects Without Formal Guidance

𝙎𝙘𝙖𝙡𝙞𝙣𝙜 𝘾𝙝𝙖𝙡𝙡𝙚𝙣𝙜𝙚𝙨 𝙛𝙤𝙧 𝙒𝙚𝙗3 𝙎𝙩𝙖𝙧𝙩𝙪𝙥𝙨 – 𝙖𝙣𝙙 𝙃𝙤𝙬 𝙩𝙤 𝙊𝙫𝙚𝙧𝙘𝙤𝙢𝙚 𝙏𝙝𝙚𝙢 Web3 startups have massive potential, but many struggle to scale beyond the early adopter phase. Unlike traditional startups, they face unique challenges around infrastructure, user experience, regulation, and token models. Here are some biggest hurdles – and how to overcome them: 🔹 User Adoption: Web3 is still too complex for mainstream users. Setting up wallets, managing private keys, and dealing with gas fees create friction. ✅ Solution: Improve UX with embedded wallets, gasless transactions, and intuitive onboarding. Web3 should feel as seamless as Web2. 🔹 Blockchain Scalability: Many networks struggle with high fees and slow speeds, making it hard for dApps to scale. ✅ Solution: Leverage Layer-2 solutions, explore alternative blockchains, and optimize on-chain/off-chain interactions for efficiency. 🔹 Tokenomics & Sustainability: Many projects launch with unsustainable token incentives, leading to price crashes once rewards dry up. ✅ Solution: Design token models with real utility beyond speculation and create long-term incentives for both users and investors. 🔹 Regulatory Uncertainty: Constantly changing rules make compliance a moving target, creating risks for startups. ✅ Solution: Work with legal experts early, choose jurisdictions wisely, and build a compliance-first approach to avoid future roadblocks. 🔹 Go-To-Market Strategy: Many Web3 projects rely solely on community hype, but a strong community doesn’t always mean sustainable revenue. ✅ Solution: Combine Web3-native growth (DAOs, token incentives) with proven Web2 marketing strategies (SEO, performance ads, partnerships). 🚀 The future belongs to startups that seamlessly integrate Web3 technologies into everyday life—without users having to think about wallets, gas fees, or blockchain protocols. What did I miss?

Building a crypto foundation? Here's what I wish I knew 4 years ago. 🚀 After 4 years leading the Stacks Foundation, I've been reflecting on what I'd do differently if I were to start over. It's not easy to admit, but I've made my share of mistakes. Most could be resolved but spent valuable time or resources that I wish we could get back. Thoughts ranged from personal "how did I not understand this from day one" to communal "how did my lawyers/advisors miss it too?" But here's the thing: my story isn't unique. I've heard countless similar experiences behind closed doors. Sharing these stories in private helps people feel less isolated, but it doesn't stop the next foundation from stumbling into the same pitfalls. The Challenge: Optimizing Foundation Structure for Long-term Success We all know that building in Web3 isn't just about innovative tech or a strong whitepaper. It's about creating an organizational structure that can navigate the unique challenges of the crypto landscape while driving meaningful progress. Even for seasoned professionals, getting this right from the start can be tricky. For those of you leading or considering launching a web3 foundation, here are some key insights that could save you significant time and resources. Common Pitfalls from my experience and peers: • Defaulting to offshore incorporation without fully considering the implications • Underestimating the importance of structured community involvement • Lack of transparency in goal-setting and progress reporting • Inadequate preparation for the inevitable disruptions in our space • Failure to create long term and diversified treasury plans These aren't just beginner's mistakes - they're traps that even experienced teams can fall into when scaling quickly or navigating new regulatory landscapes. Key Strategies for Improvement Based on my experience, here are five strategies I'd implement from day one if I were to restart: • 🏛️ Incorporate as a 501c3 in the US (or offshore if all team is offshore) • 👥 Implement structured community working groups • 📊 Adopt public tertile reporting • 🛡️ Integrate disruption planning into OKRs • 💰 Build a strong financial position I'm curious to hear your thoughts. Have you implemented similar strategies? What other approaches have you found effective in structuring and scaling your foundations? Want to learn more? Follow me on Substack, link in the comments to learn more. Also, look out for Chainmakers podcast launching soon. We’ll take a look at world class web3 operators in the fastest growing companies.

I’ve been talking to tons of Web2 founders jumping into Web3 lately. They’re seriously underestimating the massive gap between the two. Here’s the truth: If you think Web3 is just Web2 with a blockchain twist, you’re about to fail hard. Here’s where they’re messing up (with real data and how to fix it): 🔹 1. Assuming users = customers In Web2, you build for users. In Web3, your users are also stakeholders — token holders, DAO voters, liquidity providers. If you treat them like passive customers, they’ll leave. Build with them, not just for them. 🔹 2. Using Web2 monetization models Ad-based and SaaS revenue doesn’t translate 1:1. Web3 thrives on alignment, not extraction. Tokenomics, staking, revenue share, NFTs, DeFi mechanisms — these are tools to incentivize contribution, not just transactions. 🔹 3. Launching before product-market fit I’ve seen teams raise and launch tokens with zero validated usage. The result? Price crashes, loss of trust, and users who never come back. Focus first on solving something real. PMF in Web3 = usage, retention, community loops. 🔹 4. Over-indexing on follower count 10K Discord members doesn’t mean you have a community. Look at engagement rates, wallet activity, and on-chain retention. → A study from Mirror showed that only 4–6% of followers in early-stage DAOs actively participate in governance or proposals. 🔹 5. Misunderstanding decentralization Trying to “own the user” or “control the ecosystem” is a fast track to irrelevance. Web3 is built around openness — protocols, standards, collaboration. The best founders let go of control and lean into composability. 🔹 6. Marketing like it’s Web2 Web3 doesn’t respond to paid ads the same way. It responds to memes, builders, vibes, and community value. Start with genuine contributions. Then layer storytelling, collabs, and ambassadors. 🔹 Web2 taught us how to build fast. Web3 teaches us how to build with people. Don’t just copy-paste your startup into crypto. Take time to learn what makes this space different — and build like you belong here. Curious what mistakes others are seeing or lessons you’ve picked up from watching founders transition. Drop them below 👇 #Web3 #Crypto #Startups #Tokenomics #CryptoInvesting

If your dev team feels behind in Web3... They probably are. But not for the reasons you think. Here’s what’s really going on: 1/ They’re building like it’s Web2 ↳ Smart contracts aren’t APIs ↳ Decentralization isn’t a plugin ↳ You need a new playbook 2/ No clear product ownership ↳ Everyone has input ↳ No one owns direction ↳ DAO chaos kills momentum 3/ The tech stack is half-baked ↳ Feels like beta software ↳ More bugs, more custom code ↳ No safety net 4/ Security isn’t optional ↳ Web2 = patch it later ↳ Web3 = lose millions instantly ↳ Slows down every launch 5/ They’re not “on-chain fluent” ↳ Gas fees, wallets, bridges ↳ If they don’t speak Web3, ↳ They’ll keep building the wrong thing 6/ Slow feedback loops ↳ No support tickets here ↳ Users vote, post, vanish ↳ Teams can’t read the signals 7/ They’re burned out from the hype ↳ Every sprint feels like a moonshot ↳ Noise, pivots, pressure ↳ Velocity crashes The fix? It’s not “hire more engineers.” It’s: • Train for Web3 fluency • Redesign your process for clarity • Build for the world you’re in - not the one you came from If your team’s struggling to catch up, you don’t need more hands. You need a better system. 🔔 Follow David Robinson for more tech insights and dev team strategies

Over the years I’ve seen many Web3 and FinTech startups struggle not because of bad ideas or lack of funding, but because of how their MVP was built. Too often MVP is treated as something temporary. Something you can “quickly replace later”. In reality, most MVPs become production systems much faster than founders expect. They start handling real users, real money and real risk almost immediately. The problems usually look the same: – unclear scope boundaries – architecture designed only for demo day – no observability – security postponed until “after launch” Six months later the team faces an uncomfortable choice: patch endlessly or rebuild from scratch. My experience is simple. An MVP is not a prototype. It’s the first version of a real system. That’s why when I work with Web3 and FinTech startups, MVPs are treated as production systems from day one: – clear scope and delivery boundaries – architecture and threat modeling early – security as part of delivery, not a separate phase – basic observability before scaling becomes painful This approach doesn’t slow teams down. It actually reduces risk, avoids rewrites and makes conversations with investors much easier. I’m curious how others here think about it. What is the one thing you most often regret not doing early enough when building an MVP?

"You don't build a house and then say, 'I'm going to worry about building a bathroom later.'" David Schwed's security hot take: the "I'll fix it later" mentality is killing Web3 projects. And he's not wrong. I see this constantly. Seed-funded teams with brilliant engineers who get told "you're technical, so build out security too." But here's the reality David lays out: Engineers are not security people. Security people are not engineers. Ask a security engineer to build production-quality applications and you'll get subpar code. Ask a software engineer to build comprehensive security and they won't think through the contingencies that security professionals live and breathe. It's not a skill issue. It's a perspective issue. Security engineers have seen things break in ways developers never consider. They've lived through incidents that shape how they evaluate risk. You have to install the pipes before you put up the drywall. You can't build a house, finish construction, then decide you want a bathroom and start ripping open walls. Security is foundational infrastructure. Not a feature you bolt on post-launch. Most Web3 projects start bootstrapped or seed-funded. Hiring a CISO or security engineers feels premature when you're trying to hit product-market fit with 3 developers. So security gets delegated to whoever is "technical enough." And by the time the project has traction and budget for proper security, the foundation is already built. Now you're retrofitting, not architecting. Build security into your development process from day one. Even if you can't hire security specialists, you can integrate automated tools into CICD. You can adopt secure development frameworks. You can make security reviews mandatory before deployment. Because tearing down walls to install plumbing later is exponentially harder than doing it right the first time. Watch the full episode: https://lnkd.in/em44RV6G