Winding Down a Web3 Company: An introspective guide for future founders

Diving into the dynamic and ever-evolving web3 space has been nothing short of a roller-coaster ride. Here I am, almost four years in, and I realized that this journey has been about adapting constantly and drawing rich learnings from every twist and turn. As I pause to share some of my learnings, I want to emphasize that in this arena, every experience counts, and every insight has the potential to pave a vibrant path for future web3 founders.

Lessons Learned

Product Lessons

1. Building with a Decentralized Mindset

In my time building in the web3 space, a pivotal realization was the fundamental necessity to imbibe a decentralized mindset right from the onset. In early 2021 you saw a lot of protocols & companies pushing to move fast to capture market share but neglecting this. When some of these companies closed their doors, the unfortunate reality was that the NFTs were worthless.

This means venturing beyond traditional frameworks and fostering an ecosystem where assets and metadata are resiliently managed, whether that be onchain or through IPFS storage solutions. If you must ship fast, at least add onlyOwner functions that can update metadata over time. That way, if you did hack it to point to an AWS server, you can still undo this mess before closing doors.

I recognized the critical role of non-custodial NFT protocols and designs. It's a landscape where users' sovereignty over their assets isn't just a privilege, but a right. Reflecting on our Polygon marketplace protocol, I admit there were hurdles, yet these became vital lessons that shaped my understanding and approach towards creating platforms that resonate with user expectations and industry standards. When we launched, there was no Polygon marketplace protocol standard (ie. Zora, or Seaport) so we had to create our own. This was challenging for when we shut down, as users then had to relist any NFTs against Seaport (best option at time of writing for Polygon marketplace protocol). You can't time the market, but in web3, it seems like timing is so essential.

2. Future-Proofing Your Product

As I navigated the intricate avenues of web3, I came face-to-face with the challenges of keeping pace with technological advancements. It became clear that ensuring scalability and compatibility wasn't just a technical requisite, but a pledge to our user base. In hindsight, avoiding over-customization could have facilitated a smoother user transition, safeguarding the product’s vitality amidst evolving market dynamics. These insights now stand as golden lessons, fueling a visionary approach to product development that is adaptable, resilient, and attuned to the potential shifts in the technological landscape.

Customer Lessons

3. Communication and Engagement

Looking back, I see the myriad ways in which communication shaped our journey. Transparent and empathetic engagement wasn't just a strategy, but a philosophy that nurtured trust and built strong connections with our user base. Open channels for guidance and support became the arteries of our ecosystem, fostering a space where feedback was not just welcomed but actively sought. Handling customer feedback and concerns effectively morphed into an art form, where every interaction was a chance to enhance, to understand better, and to forge stronger bonds with the community we served.

In the end, when you close your doors, don't shut this out. Lean in harder. Many won't understand the why, and that's okay, but be transparent throughout the process. Additionally try to understand what questions are going to come up with ahead of time, and address those clearly. Try to leave a sustainable amount of time. I think we closed our doors too quickly and in hindsight would've left things open for a month or two.

4. Staying Focused Amidst the Noise

In an ecosystem brimming with opportunities, maintaining a clear focus amidst numerous distractions proved to be a much harder task than originally though. I had my moments of being swayed, yet I realized the vital importance of maintaining our core objectives. Avoiding the pitfalls of the 'shiny object syndrome' will be a learning curve, where founders must learn to sift through the noise, anchoring on the principles that defined their original vision. This journey has been a testament to the power of staying true to one’s roots, nurturing a venture that stands resilient, authentic, and grounded.

Tips for Future Web3 Entrepreneurs

5. Navigating the Uncharted Waters

As future pioneers step into the web3 domain, I find it imperative to share that this space is akin to navigating uncharted waters. It’s a vibrant yet unpredictable space, where advice needs to be absorbed with a discerning mind. My journey has been marked by continuous learning and adaptation, a voyage where every encounter brought new insights, shaping a pathway that was uniquely carved and rich with experiences.

6. Lean into What You're Building

To those gearing up to carve their niche in the web3 space, I can't emphasize enough the significance of immersing oneself into what you're building. It's a venture that demands resilience and unwavering commitment. I found strength in going deep on understanding the business and technical sides of our project, an anchor that let us survive for how long we did. The readiness to pivot, when necessary, became a valuable strategy, steering us through challenges with agility and foresight.

Business Insights

7. Financial Planning and Strategy

In the process of winding down, we encountered the multifaceted dimensions of financial planning for a company that is closing its doors. Setting aside funds for unknown expenses became a necessity, an anticipation of obligations and liabilities that lay ahead.

8. Developing a Sustainable Business Model

In retrospect, building a sustainable business model in the web3 environment was a larger challenge than I imagined. I ventured into exploring the potential of token and fee-based models, the only two models I've seen work thus far. It's essential to stay flexible, ready to adapt to market dynamics, and pioneering innovative revenue streams.