Author: sleepy.mid (Twitter: @sleepy0x13)

This article is from Sleepy, the founder of Weirdo Ghost Gang, on Twitter. It summarizes ten insights into entrepreneurship based on personal entrepreneurial experiences, including entrepreneurial mindset, direction, and personal growth. In such a rapidly changing market, how can Web3 entrepreneurs survive by understanding the market sentiment? Odaily has summarized these insights as follows:

I have been thinking and making adjustments during this period. The Web3 entrepreneurial environment has changed dramatically since we started. After multiple iterations, our understanding may be completely different from the beginning. In this article, I share 10 tips based on my entrepreneurial experience, hoping to help those who are in entrepreneurship or interested in Web3 entrepreneurship.

TL; DR

1. Being a hacker or trading cryptocurrency is more profitable than entrepreneurship if you want to make quick money.

2. The heyday of bottom-up projects is over.

3. Don't chase hot topics; be forward-looking.

4. Industry genes determine that you cannot succeed if you only focus on the "consumption" within the circle.

5. Don't blindly trust any KOL, project party, or capital.

6. Don't consider Web3 Native as a sufficient and necessary condition; oftentimes, it's not even a necessary condition.

7. Market marketing is more important.

8. Choose to break out of the "Web3 self-enthusiasm circle" or follow the Web3 sentiment based on the industry.

9. Reduce ineffective socializing.

10. Take time every day/week to break out of the information cocoon.

1. Being a Hacker or Trading Cryptocurrency is More Profitable than Entrepreneurship

If your goal is to make quick money, then don't start a business. From my perspective, this industry has too many negative connotations. From your perspective, there are many other ways to make money faster than through entrepreneurship.

When hacking or speculating on coins, it is the fastest way to make money, but the difficulty lies in the fact that you must learn. As for hacking, you need to understand technology; speculating on coins is a job with a low entry threshold and a high profit threshold. If you don't know anything and can make money just by operating randomly, it can only be said that you are lucky. But if you want to take it seriously as a means of financial investment and making money, you need to learn some financial knowledge, secondary trading knowledge, and conduct in-depth analysis of some projects. Both value investment and sentiment investment need to be based on certain foundations.

Entrepreneurship is a much more complicated matter. You need to consider compliance, team building, development planning, and capital investment, etc. Moreover, you must know that the probability of entrepreneurial success is less than 1%, which is already an extremely small probability event.

Of course, if your goal is not to have a successful project but to perform a quick rug-pull, I think this article cannot convince you. I can only say that everyone in the circle is now out of money and there is nothing to cut.

2. The era of bottom-up project growth is over

In the early stages, there was a saying in the industry that Web3 projects should grow from the bottom up, first establishing a community and then deciding how to develop together with the community.

Here, I can tell you clearly that if you are still using this saying now, it is probably because the team itself has not thought through the follow-up development plan.

In fact, I think the reason why such a saying was circulated at the beginning is because people confused Web3 startups with DAOs. There has always been a lot of controversy in the industry about whether Web3 startups should choose corporate operations or DAO operations. If not operating as a corporation, it will severely affect efficiency, but if DAO mode is not adopted, there will be concerns about not getting support from the community. In fact, I have always felt that many of the highly discussed topics in the industry have already been concluded and verified in Web2, such as this issue, which can be fully referenced with early Xiaomi as an example.

3. Don't count on catching the hype, be forward-thinking

Here, what is meant is the choice of entrepreneurial direction, not the direction of marketing.

The speed of iteration in the Web3 hype is far ahead of other industries. In a bull market, there may be a new story every day, while in a bear market, it may be quite miserable with no story to tell. Completely virtual industries are most suitable for storytelling. Unless you have a highly capable technical team and can discover it at the very beginning of each hype cycle, it is impossible for you to seize the hype and launch a product. Moreover, you also need to consider that it may quickly become outdated and your investment cost-effectiveness will be very poor.

Therefore, you need to have your own understanding and comprehension of the industry and the macro situation. Don't be a trend entrepreneur, but always stick to the direction you believe in and wait for hotspots to come to you. 

4. Industry genes determine that "consumption" cannot be done in the circle. 

Let's encourage each other in this regard. If you want to enter the consumer market, don't define yourself as a Web3 project or spend too much energy in this circle. 

In fact, this conclusion is closely related to what we are doing. It is also what we are doing that pushes us to think in this direction and come to this conclusion. 

Some time ago, I found out that a project in the consumer market had ceased operations. Therefore, I sent the team members to learn from it, and the feedback I received was "low willingness to pay." This actually refutes the story that many people in the industry have told before. 

Why is it difficult to enter the consumer market in this industry? When I was interning at a new consumer brand, I worked there for a while. Let me briefly share something with you. The description may not be completely accurate, but as long as you understand the point I want to make, it's enough.

 The general process of selling a product is as follows: users see it, become interested, click on the product details, and place an order. Most users will not progress to the next step at each stage. If the conversion rate from "seeing" to "placing an order" can reach 0.05%, it means that the product is very popular. From the perspective of quality, design, and price, this product is excellent. 

Web3 people are also people and cannot escape this objective law. However, Web2's large funnel has hundreds of millions of people, while the real active user base of Web3 is much smaller. So instead of saying that people in this circle have "low willingness to pay," I prefer to understand it as "too few active users." 

You may be puzzled by this question: "Isn't it easier for Web3 to turn users into loyal fans?" Let's see how this viewpoint came about. 

In fact, the original meaning of this viewpoint was that you can quickly gather a community through the sale of NFTs. In the ideal state, community members would actively contribute to community development, promotion, and CX in order to make the price of NFTs rise. Therefore, some people believe that these are "loyal fans." But in fact, this is the misuse of Web2 terms in the context of Web3. 

"Consumption" is about selling the products that fans like and need. The underlying logic is "liking" and "needing." Once Web3 incorporates the attributes of financial products, it is easy for entrepreneurial teams to make wrong judgments. You may think that he truly likes it, but he just wants someone to take over. And if you can't understand the true attitude of your users, it will become a fatal problem. 

So in terms of Web3, it is better to fully utilize its attributes as a financial product. After you achieve profitability, give back to your community through legitimate "dividends" or repurchasing tokens. 

So reading this, I think we have reached a consensus, which is to make money from Web2 after the capitalization of Web3. After that, it becomes very clear that we need to target the market where the money is coming from, and make localized changes accordingly. Just like you can't use the same strategies to target the Japanese market as you would for the European and American markets. If you want to make money from Web2, then participating in Crypto Twitter Spaces and attending Web3 offline summits every day doesn't make much sense.

5. Don't blindly trust any KOLs, project teams, or capital.

I personally am a project team member, also a small KOL, and have also worked for capital, so I sincerely advise based on my own experience.

There are too many cases where people call others to take over their positions for their own benefit, and this article won't go into too much detail about that.

And don't blindly trust some of the more "positive" views of KOLs, project teams, and capital. As an entrepreneur, you need to have your own clear judgment of the current and future market. You can consider their views as supplements, but you must internalize this content as your own viewpoint and constantly improve your understanding. You are starting a business for yourself, not working for KOLs, project teams, or capital.

6. Don't treat Web3 Native as a sufficient necessary condition; often it's not even necessary at all.

I wrote in an article before: "Are we Web3 people putting too much importance on Web3?"

Is Web3 Native still important now? From a startup and work perspective, I believe it's not important at all.

In the past, we emphasized Web3 Native (Crypto Native) more like labeling ourselves, showing that we are different, that we have been in this industry for a long time. But the main purpose is to showcase our uniqueness.

This artificial barrier we set often blocks people who want to enter the circle and gradually isolates people within the circle from the outside world.

In the past, I have seen many teams claim that their biggest advantage is being Web3 Native, but they can't explain what advantages it actually brings them. I have also seen many communities claiming to have hundreds of active users, while there are just a dozen customers dining at a hot pot restaurant downstairs from my house. Recently, our team conducted interviews for hiring, and it was obvious that candidates with Web2 backgrounds had higher average abilities.

Previously, people in the industry looked down on "graduates from big companies", but those who can withstand the polishing of Web2 probably have their own work methodology. Which is more important, a mature methodology or familiarity with Web3? I hope to have both, but if I can only choose one, I will definitely choose the former. To be honest, I don't think there is anything in Web3 today that can only be learned by Native.

7. Marketing is more important

Previously, I saw people comparing this industry to an entertainment circle, and I think that's accurate.

In fact, marketing is a very important job in any industry. However, due to the particularity of our industry, marketing becomes more difficult – 24-hour continuous trading markets, ever-changing hot events, cross-cultural memes... Startup teams need to put more effort into marketing to continuously attract attention. And don't equate data with marketing.

8. Choose to break free from the "Web3 self-indulgence circle" or follow the Web3 sentiment based on the industry format

Web3 often indulges in itself, and I think that's something that doesn't need to be argued.

So how should we make a choice regarding this issue? It actually depends on where you want to make money. This doesn't necessarily mean that choosing A disrespects B, after all, doing business is not charity. You have to choose a more suitable track as a starting point. The unique charm of Web3 is that it often bursts with emotions contradictory to the macro trends. This sentence actually means the same as "self-indulgence". Entrepreneurs need to choose based on what exactly their company does – whether to break free from the self-indulgence circle or make money by following the market sentiment.

Both paths will face significant challenges. The former means entering a more competitive environment, where you need to choose suitable weapons from the Web3 arsenal to differentiate yourself. The latter means constantly discovering and accurately capturing market sentiments, guiding emotions rather than being led by market sentiment.

9. Reduce ineffective social interactions

This is something I have been doing recently. As an entrepreneur, the problems that need to be solved in work every day are burdensome and trivial. It's not like an employee who can focus on a specific detail, nor like a freelancer (KOL, full-time coin traders, etc.) who has a large amount of free time.

You need to ensure that the work progresses smoothly, the company operates normally, and your knowledge keeps improving, ensuring that you stay at the forefront of the industry. The various tasks combined leave you with little time for socializing. So, before the company grows, remember that every move you make should be for a purpose. Although I advocate for a balanced work-rest lifestyle for sustainable development, if you are starting a business, you need to be prepared to work hard.

10. Take time every day/week to step out of the information cocoon 

I used to immerse myself in Web3 information all the time, constantly checking Twitter, listening to Spaces... afraid of missing out on any news.

But after a while, I didn't feel any extra gains. Instead, I found myself trapped in the Web3 information cocoon, often only learning about Web2 matters after a week, far behind my friends. I realized that this was a dangerous sign. As an entrepreneur, you cannot afford to miss out on memes, news, economic situations, trends, and business models. It's okay to indulge in self-amusement, but it's terrifying to indulge in falling behind. I have had similar experiences, where during team discussions, we would come up with what we believed to be clever ideas, only to discover in further research that some Web2 companies had already implemented them or that many things we found interesting were not of interest to the general public from a data perspective.

The above are some personal viewpoints based on personal experiences, for reference only.

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