Weekly: Market Lessons From A "Failed" Web3 Startup (Part 5/5)

Happy Sunday fellow wayfinder!

Last week, we discussed management lessons from my "failed" Web3 startup, Honā.

• Investment (Part 1)

• Product (Part 2)

• Marketing (Part 3)

• Management (Part 4)

This week, we look at market lessons:

1. Timing

2. Ideas vs. reality

3. PMF (Product-Market Fit)

Let's dive in.

☕️ Reading time: 4 minutes

1 - Timing matters

What we wanted to do with Honā (long-term) included smart contracts to improve an issue we saw in other similar apps.

Based on preliminary research, some apps holding money for commitments ended up mismanaging that money without users knowing.

We wanted to make it so that we didn’t need to be the custodians but could have a user create something like an on-chain escrow of their funds. We’d then be the 2 of (2+x) signatories in a multi-sig threshold setup.

In layman’s terms, this is like locking valuables in a safe and requiring two or more keys to open it - with one being Honā (in the case of a dispute).

Because we could never get the traction we needed, we couldn’t test this out the way we wanted. The above description is a simplistic take on what we were trying to build.

While fundraising, the most common feedback we received from investors was, “we think you might be too early.” Ultimately, I think they were right.

This is why I’ve maintained a timeline horizon of ~30 years for the blockchain/crypto ecosystem (starting from 2008, when Bitcoin was birthed).

I knew the risk I was taking, but I tried the idea out anyway.

2 - Ideas vs. Reality

People like the idea of accountability, but only sometimes in practice. This is something I learned while observing users on the Honā platform.

Going back to intrinsic vs. extrinsic motivation, many’d often like the sound of an app like Honā.

But ultimately, when they got to it, the desire to commit and/or stay consistent waned over time.

We were improving the product to help people return, but we should’ve focused more on addressing that intrinsic factor.

There’s definitely ways of tackling it, but I think that’s where we may have fell short in terms of product design.

3 - Product-Market Fit (PMF)

If you’re unfamiliar with this term, product-market fit (or PMF) is when a:

According to Marc Andreesen, it’s “finding a good market with a product capable of satisfying that market.”

In practice, it may feel like a lot more. Like when you notice a “flywheel effect” (between buying, usage, and referrals) take off.

This is what most startups are aiming for in their early journey. Honā never quite hit it, although we got close a few times.

I later discovered a few good resources for helping with PMF:

• Nick Kozmin's The Scientific Method to Solving Product Market Fit & Pocketing Your First Few Millions in 3 Years or Less

• Case Study: ClickUp's path to $2b Product-Market Fit

• The Real Product Market Fit by Y Combinator

So if you’re starting out, learn from those before you. Know what to target and/or look out for.

And there you have it! The final post of my 5-part series around lessons from my "failed" web3 startup. Next week, I'll cover what I plan to do differently in the future.

Until next week, remember: through patience & persistence, it will come.

GeorgeTwitter | LinkedIn | Blog | Tools

Last week's premium newsletters:

• Daily #156: My Business Updates (Dec 5)

• Daily #157: The Rosetta Stone, Bitcoin Script & scryptTS

• Daily #158: One-Person Businesses in Web3 

• Daily #159: Dancers, NFTs & Earning Power 

• Daily #160: The Twitter Files 

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