Web3 Entrepreneurial Thoughts: On Feedback and Decision-Making

TL;DR:

The cyclical misguidance of Web3 may lead to distorted judgments for entrepreneurs, and the positive feedback during a bull market may simply be a short-term market reaction.
I recommend entrepreneurs to step out of the Web3 echo chamber, adhere to core beliefs, and continue market education.
In a bear market, focus on: financial management, core product optimization, community interaction, and team training.
Ensure physical health and balance work with rest.

Feedback and Decision-Making: The Illusion of Bull Markets and the Tests of Bear Markets

Web3 entrepreneurs can easily be influenced by market signals, especially in this rapidly evolving and unpredictable field.

The illusion of bull markets:

Easy financing, high valuations: Many projects quickly secure funding during bull markets, which may lead to a disconnect between valuations and their true value, laying the groundwork for issues when the market turns bearish.
Rapid user growth: A large influx of users into Web3 projects, many of whom may only chase short-term gains, along with a significant number of bots.
Rapid price increases of tokens/NFTs: During bull markets, due to market liquidity overflow, token and NFT prices can easily rise, but this increase may not be sustainable and can quickly drop when the market turns bearish.
Technical and product decisions may be distorted: Due to the "positive feedback" from the bull market, entrepreneurs may have an overly optimistic assessment of their technology and product direction, overlooking issues with products, decisions, and teams, and may even summarize this into a methodology that is ineffective in a bear market.

The tests of bear markets:

Difficult financing, low valuations: With tightened funds, investors become cautious, and project valuations become more realistic.
Slowed user growth: The growth rate of users declines, and a significant portion of retained users may be looking for quick cash-outs and rewards.
Continuous decline in token/NFT prices, liquidity exhaustion: In bear markets, increased selling and hesitant buyers lead to prolonged declines in token and NFT prices, with liquidity significantly reduced.
Erroneous methodologies derived from bull markets: The positive feedback from bull markets does not necessarily indicate correctness; it may simply mask project issues due to rising prices.

How to make wise decisions?

Step out of the Web3 information echo chamber: Entrepreneurs should not limit themselves to the narrow scope of Web3 but should broaden their horizons, learn methodologies from other fields, and seek new users and market opportunities.
Continuous market education: Ensure that investors and users understand the true value and long-term goals of the project.
Stay calm and adhere to core beliefs: In all market environments, the team needs to maintain calm judgment and a long-term strategic vision.

Strategic Adjustments: Facing the Market Transition from Bull to Bear

I wanted to highlight this section because, after recent discussions with some friends, I found that some are still using decisions made during bull markets for their current company strategies, which makes me quite anxious for them.

When the market transitions from a bull to a bear, entrepreneurs face a series of new challenges. Tightened funds, weakened investor confidence, and overall market pessimism will directly impact projects.

In this situation, most events that occurred during the bull market may not hold reference value. Therefore, how to respond steadily is a question every entrepreneur must consider.

1. Financial Management and Cost Control

Entrepreneurs need to learn to review and optimize budgets; cash flow during bear markets is a lifeline. All expenses should be scrutinized, and cost reductions should be made in non-core areas. This reduction should not only refer to financial input but also consider time and personnel costs. Notably, our industry often has conferences worldwide, and travel costs can be significant, so whether to attend these events should be carefully considered before making a decision.

2. Internal Product Optimization

Strengthen the development and deepening of core products: Focus on improving core products to enhance their competitiveness and user experience. This includes DApps, media articles, GameFi, NFT IPs, etc., depending on the business you are engaged in. For example, in our case, the core product is the Ghost IP itself. We need to reflect on past shortcomings, tell the brand story well during the bear market, and enhance the content to establish and expand its influence and monetization ability in Web2.
Delay the launch of non-critical projects: Consider postponing some non-core projects or features to concentrate resources on addressing primary business challenges. Of course, the prerequisite is that entrepreneurs must clearly understand what constitutes their core business. If an entrepreneur believes that issuing NFTs generation after generation is their business model, they have been heading in the wrong direction from the start.

3. Market Strategy and Community Building

Increase interaction with the community: Founders and teams should remain engaged in the community and sincerely listen to feedback and suggestions.
Break boundaries to expand influence: Strive to reach markets beyond Web3, such as collaborating with traditional industries, seeking new partners and user groups, or providing entry-level tutorials for users unfamiliar with Web3.
Reposition brand and information delivery: Convey clearer and more authentic brand messages to make it easier for outsiders to understand the core value of the project.

4. Team and Partnership Relations

Internal team training: Utilize this downturn to conduct internal skills training, preparing the team to tackle current market challenges and potential future upturns. For instance, many members of our team now possess the ability to independently BD Web2 brands, rather than being confined to the Web3 circle, which is a new and applicable skill for our current business stage.
Strengthen connections with core partners: Maintain frequent communication with key suppliers and partners to ensure both parties understand each other's needs and challenges.

Conclusion

Market fluctuations and uncertainties put immense pressure and tests on every entrepreneur. From the joy of bull markets to this unprecedented bear market, the depth and duration have exceeded many people's expectations. Every market signal profoundly influences our decisions. However, history and experience tell us that truly valuable things can withstand the test of time. Projects that uphold principles, continuously learn, deepen products, and communicate sincerely with the community during bear markets often thrive and grow stronger in the next market cycle.

In this high-pressure environment, I also want to remind every entrepreneur that while business is important, physical health is fundamental to sustaining your entrepreneurial journey. Do not sacrifice long-term health for short-term success. Balance work and rest, exercise regularly, and maintain healthy habits to better prepare for future challenges.

Don't be like me, anxious and sleepless, writing this article late at night. GN.

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