Research Summary
The report delves into the attributes that distinguish successful crypto founders, focusing on the importance of unique insights, the value of contrarian thinking, and the significance of perseverance. It questions the relevance of elite backgrounds in the crypto industry and suggests that success is not necessarily correlated with attending prestigious institutions. The report also highlights the importance of integrity, intelligence, and energy in founders, and suggests that these intrinsic qualities can compensate for other areas of weakness in a startup.
Key Takeaways
Insight as a Differentiator
- Unique User Insights: Successful crypto founders often have unique insights about users, such as identifying underserved segments or challenging conventional thinking.
- Contrarian Thinking: The ability to think independently and have a contrarian take is highly valued, as it demonstrates deep understanding and passion for the domain.
Perseverance in Crypto
- Time to Develop Insights: It typically takes 1 to 2 years for newcomers to crypto to develop real insights, and many give up before reaching this critical juncture.
- Staircase Growth Trajectory: Crypto products often experience a staircase pattern of growth, with many founders from elite backgrounds quitting during bear markets when growth stalls.
Elite Backgrounds and Crypto Success
- Correlation with Success: There is a correlation between elite backgrounds and success in crypto, but it is not a strong indicator among the top 1% of founders.
- Wrong Reasons for Entry: Founders from elite backgrounds sometimes enter crypto influenced by bull market hype without a deep understanding of the industry.
Equality of Opportunity
- Equalizing Force: Crypto should offer equal chances of success to founders regardless of background, especially those who understand their unprivileged user base.
- Selection at AllianceDAO: Elite credentials are not heavily weighted; many admitted applicants are from the internet and demonstrate thoughtful engagement.
Integrity, Intelligence, and Energy
- Importance of Integrity: Integrity is crucial in founders, as it can make up for deficiencies in intelligence and energy.
- Supporting First-Time Founders: Founders with insight, perseverance, and honesty can be nurtured, as these qualities are essential and non-negotiable.
Actionable Insights
- Focus on Founder Insights: When evaluating potential crypto projects, prioritize founders with unique insights and a deep understanding of their user base.
- Assess Perseverance: Consider the founder’s track record and ability to persevere through the volatile cycles of the crypto market.
- Value Intrinsic Qualities: Look beyond elite backgrounds and focus on intrinsic qualities such as integrity, intelligence, and energy in founders.
- Support Unprivileged Founders: Recognize the potential in founders from unprivileged backgrounds who may have a closer connection to their target users.
- Encourage First-Time Founders: Provide support and resources to first-time founders who exhibit the non-negotiable qualities of insight, perseverance, and honesty.
