Re-published with permission from TechCrunch
The crypto bear market shows no signs of letting up, and it has already taken its pound of flesh from more than a few emerging web3 and crypto projects, not counting the ones it has killed altogether.
With no clear indication of a meaningful rebound on the horizon just yet, web3 companies that have managed to make it this far need to prioritize not only their survival but also how to convince their communities and investors that they will survive, particularly if their projects are struggling to stay afloat.
Maintaining the user base is critical for securing the expansion many web3 companies need to pull through this bear market. Potential investors and new users need to see from the outside that the community is choosing to stay put or, better yet, increase their engagement.
Startups that can demonstrate strong metrics and a responsive consumer base naturally have greater chances of survival, but that’s not where every startup is right now. For those in a tough spot, excellent communication is non-negotiable. There’s little benefit in declaring that the sky is falling and begging your community for investment, but an overly rosy outlook won’t fool anyone either.
Here are some strategies for finding the balance:
Lead with the positive and broadcast your roadmap It’s imperative to convey that your startup understands the reality of the market and isn’t blind to its cold, hard truths. But part of understanding the market is knowing that downturns aren’t permanent. This isn’t the end of crypto or web3 by any stretch. Adoption trends remain promising as far out as 2030.
The downturn already has some upsides when compared to the previous crash in 2018 and 2019. NFTs have more pull than they did then, and they’re surviving. Luxury and legacy brands are continuing to explore their options therein, and metaverse development has not ground to a halt.
This is all good news, and it’s an opportunity to position your startup within the big picture of both market realities, which includes the inevitable upturn. If your startup is NFT-centric, align it with ongoing developments in the space. Lean into existing and potential collaborations and communicate to your community not only that you are in this together, but you’re working with the industry at large too. We need a collaborative mentality rather than a cutthroat approach.
On an individual level, the silence of a bear market allows for long-term rethinking and reshaping of roadmaps, goals and projects. A downturn is an excellent opportunity to tie up loose ends, discard old plans and think bigger.
Being extremely forthcoming with your community throughout this process can shore up goodwill and trust. Keep your community abreast of adjustments to the project and how you intend to execute them. Sinking value is a bad look, but stasis is worse. Share whatever you can. Investors will want to see that you can grind when the chips are down.
No backpedaling, downplaying or overstating
If you do happen to be in dire straits, trying to hide it will only backfire and undermine any remaining faith and trust among your community. Resist the urge to downplay. If you need to make a direct appeal to your community, avoid sounding desperate, but be upfront if it’s relatively urgent. Emphasize how they’ve trusted you this far. Explain how and what you’re going to do with their investment, why it matters and what they stand to gain on the other end.
Don’t operate from a self-serving mentality — position the benefit to your community front and center in your messaging. Balance short-term defeats with a comprehensive view of the long game.
Crashes are not only financially taxing; they can be emotionally draining too. People are invested in more ways than one when it comes to this space. Respect that. No one wants to hear false positivity, so don’t dish it out. Avoid kitschy phrases and empty clichés.
Be empathetic. Don’t behave as though your community members haven’t lost their hard-earned money in the crash. It’s important to remain transparent. Your community doesn’t want to see you acting like there hasn’t been a market change and everything is hunky dory. Don’t descend into glib meme speak.
Better yet, engage not only your community but also your critics. Critics are an unsparing mirror, and they strengthen your argument far more than preaching to the choir ever will. Invite them to engage with you and speak to you directly. Respond to their criticisms in front of your community.
Max Chafkin made a trenchant point in his Bloomsberg piece titled “You can give people what they want. Or you can give them web3,” in which he claimed that web3 companies are besotted with the tropes of financialization.” Disprove this and prove that web3 is what the people want, and you’ll boost your credibility. Explain and defend your claims in a way that shows user needs are at the forefront of your roadmap and that what you’re making is actually useful. If you can make an effective case to your detractors in front of your community, you’ll do wonders for your legitimacy.
Consider the channel
Where does your community congregate to talk about your project? Telegram and Discord are popular choices, as is Reddit. Make yourself a constant presence on any and all channels involved. If you’re not tweeting, start doing so. But don’t over-depend on these platforms. The era of everyone congregating on a few monolith platforms that will stick around forever is over. Look for your audience and new adopters on all of them. Tailor your messaging to the platform — the classic Reddit AMA gives you a chance to be straight forward and honest; a planned Twitter Spaces session is better for presenting your case and discussing specifics of your project as they relate to industrywide trends. In every case, don’t be a humorless scold. You can be engaging and funny without downplaying anything.
To underscore your commitment to visibility and honesty with your community, look beyond direct social media communication. Project management software like Notion has grown increasingly popular among web3 companies as of late. It provides a transparency layer so everyone can see pipelines and progress. The most successful strategies are proactive ones in which leadership discloses real numbers, replies to every message, seeks out and responds to serious critique and holds regular digital and in-person gatherings and AMAs.
Depending on your project and community, it might be worth exploring the possibility of physical meetups. It can be as simple as a coffee shop in a city where a significant portion of your base is located. Give your community the chance to see you’re not hiding behind a screen, and livestream it, if possible, to underscore this point.
These strategies lead to communities feeling engaged and heard, and that they are valued. This feeling helps them stay with projects, and it can turn them into advocates. Beyond that, conferences are happening again, both physical and virtual. Apply to as many as you can. Tout your expertise and your resilience by doing the opposite of hiding behind your computer.
Communication is key
Investors, community members and potential adopters alike will take stock of companies’ reactions to the crypto winter. Hard times naturally invite additional scrutiny, and startups can’t falter on the communication front. Entrepreneurs should use a number of strategies — gearing their business toward revenue generation, growing their war chest through DeFi tools or cutting unnecessary expenses — but communication needs to be a key part of every single decision.
There’s no substitute for it, even when the prognosis isn’t great. Investors, communities and potential adopters like good numbers, but they also like the look of truly invested and honest leadership. It could just save you in the end.