The cryptocurrency landscape is dotted with ambitious projects claiming to forge the ‘money of the future.’ However, a staggering 99.9% of these initiatives are standing on a foundation of false assumptions, which is a recipe for their eventual downfall. The primary reason for their failure is a stark one: they never really bothered to talk to their potential customers.
The Lean Startup Wisdom Ignored by Crypto
Steve Blank, the godfather of the lean startup movement, has long championed the importance of customer feedback. His cornerstone advice for entrepreneurs is to “get out of the building and talk to customers.” This engagement is crucial for understanding the actual needs and pain points of those they aim to serve.
Blank observed a common pitfall among founders: the tendency to remain huddled around whiteboards, ideating and coding, without engaging with the outside world. The result is often a product meticulously developed in a vacuum and ultimately irrelevant to the market—a surefire path to startup oblivion.
Success Stories: Customer-Centric Startups
Success stories in this space are predominantly authored by entrepreneurs and teams who dedicate substantial time and effort to comprehensively grasp their customer’s needs, behaviours, and challenges.
These successful startups stand out because they don’t just rely on surface-level assumptions or fleeting market trends. Instead, they engage in a deep, ongoing dialogue with their target audience. This approach enables them to uncover genuine insights and understand the nuances of the problems their customers face. It’s not just about identifying a gap in the market; it’s about empathizing with the customer’s pain points and aspirations.
By building their products and services grounded in these real insights, these companies ensure that they are solving the right problems — the ones that matter most to their users. This strategy leads to the creation of solutions that resonate deeply with their customer base, fostering loyalty and advocacy.
Moreover, this customer-centric approach allows for more effective and efficient product development. When startups understand their customers’ needs deeply, they can prioritize features and improvements that deliver real value, rather than investing in unnecessary or misaligned functionalities. This focus not only saves time and resources but also significantly increases the chances of product-market fit.
Crypto’s False Assumptions & Inevitable Failure
Crypto projects, however, seem to have missed the memo from Steve Blank. They operate on several flawed premises regarding money and its social dynamics, which almost certainly seal their fate.
False Assumption #1: Medium of Exchange Precedence
The first of these is the belief that money must establish itself as a medium of exchange before it can be deemed useful. History and present reality contradict this; money has primarily been a store of value. The essence of money is to circumvent the double coincidence of wants in barter systems. It’s not about being the fastest or the lightest; it’s about reliably preserving purchasing power over time. Cryptocurrencies like BSV, BCH, and XNO have stumbled because they’ve tried to become a medium of exchange before being widely accepted as a store of value—a classic case of putting the cart before the horse.
False Assumption #2: Universal Desire for Self-Custody
The second false assumption is that everyone desires self-custody of their financial assets. While Satoshi’s creation of Bitcoin did empower individuals with the option for self-sovereignty, the truth is, that most people are not ready or willing to shoulder the responsibility of managing their own keys. The general populace finds the prospect daunting and unnecessary, a sentiment that crypto entrepreneurs have missed by not engaging with the mainstream audience.
The Blocksize Wars & Beyond
This fundamental disconnect has not only sparked contentious debates like the blocksize wars but has also led to the emergence of numerous crypto projects destined to fail. These projects have often compromised on security, decentralization, or both, in pursuit of scalable Layer-1 solutions with full self-custodial capabilities, only to realize that the market doesn’t share their enthusiasm.
Satoshi’s Prescient Creation: BTC as a Store of Value
Amidst this backdrop of misunderstanding, Satoshi‘s creation of Bitcoin (BTC) stands out. It was crafted as a store of value, a direct response to the issue of currency debasement and the financial crises of 2008. Satoshi understood the universal problem posed by central bank policies, a problem that altcoins failed to address, leading to Bitcoin’s unique product-market fit.
While the allure of creating the ultimate digital currency is strong, the path to success is not through isolated development but through customer interaction and understanding. It’s a lesson from the lean startup methodology that the crypto world would do well to heed.
Author Profile
- Writing about markets and decentralized finance since 2018.
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