Surviving the Bear Market: A Guide for Crypto Startups
In the last bear market, crypto was still in the discovery phase as users were wondering whether blockchain assets are a legitimate long-term trend or just a fad that should’ve been sold at the top. This time, the top industry players, including Microsoft, Google and Reddit, are moving into Web3 products, and top banks such as JP Morgan and Franklin Templeton are testing the waters by settling transactions on-chain.
Get a clear understanding of your runway
Check your treasury balance and extrapolate your costs for the next 12 months. Token treasury balances are volatile, so you may want to have enough dollar-denominated treasury to cover at least 12 months of cost. Make sure you understand your unit economics clearly and evaluate if your product can acquire new users profitably. Try to keep your burn rate low — review your current expenses and see what areas you can cut costs if it’s not already been done. This will help increase your runway and give you more time to execute your vision. Review your team and make sure you have the right mix of people to execute your vision.
Talk to your community
Communities are critical as they are the ones that will help you weather the storm. Your community is willing to test your v1 product and give you honest feedback so that you can iterate to PMF. Your community can also help you with business development by introducing you to potential partners and helping you find the right talent.
Focus on your product’s value proposition
Figure out your product’s core action and get it in front of users. Bear markets are a good time to release early versions of your product to a small group of beta testers and gather feedback.
Get your business model right
In a bear market, it’s best to focus on profitability, reviewing expenses and considering prioritizing investments that can drive profitable growth. Consider introducing premium offerings or testing new pricing strategies to maximize revenue.
Revisit your go-to-market strategy
Be very conscious and targeted on how you spend money on marketing. Leverage organic and low-cost marketing strategies as much as possible. This will help you focus resources on the right partnerships and user adoption initiatives.
Hot Take: Navigating Crypto Bear Markets
Bear markets may diminish spirits momentarily, but they are where the underlying foundations for revolutionary apps and innovative use cases are forged.
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