Author | Imran Khan, Co-founder of AllianceDao

Compiled by | Foresight News

Further reading

Wu's exclusive interview with Qiao Wang: How to invest in PUMPFUN for 1000x returns? Alliance's ultra-early investment perspective

Start with small problems

Do not aim for a massive market right from the start; instead, focus on solving a small and specific problem. This approach often contradicts the advice of VCs, who tend to push for addressing large market issues. Instead, you should concentrate on problems that impact a smaller user group — by using crypto products daily, you can personally experience these issues. As thousands of new products are launched, use as many of them as possible to understand the pain points faced by everyday users. In this way, you will identify actionable problems that truly need solving.

Starting small allows you to gain deep insights into user needs and optimize the product without the noise and complexity of a large market.

Avoid consensus

Avoid chasing ideas that everyone thinks are the next big trend. When an idea is widely accepted, the market often becomes saturated. Competing with established players requires a product that is ten times better than existing ones to stand out. Instead, focus on areas that have not been fully explored, where competition is less. This will give you more room to experiment and time to develop a unique value proposition.

Build products for small user segments

Identify a core group of early adopters — about 25 to 50 passionate users who genuinely care about the problem you are solving. By focusing on their specific needs, you can build a solid foundation and cultivate real supporters. These early users will provide valuable feedback, helping you iterate and improve the product quickly. Over time, this process will naturally expand your user base. If people like what you've built, they will naturally recommend it to friends and family.

Validate your assumptions with a minimum viable product (MVP)

Before investing significant resources (such as funds and time), validate your core assumptions with a minimum viable product (MVP). This simplified version of the product should focus on addressing the main pain points you have identified. You need to launch a product with minimal features but enough insights to help you decide whether to double down or pivot to other ideas. It also allows you to collect user feedback faster and possibly learn something completely unexpected. Furthermore, quickly releasing a product can put you ahead of competitors — many others may be considering the same idea, and typically the first to launch garners attention.

Launch your idea within 30 days

Timing is crucial. The goal is to develop and launch your minimum viable product within 30 days to capitalize on the momentum of your idea and start collecting user data as soon as possible. This rapid deployment process forces you to prioritize core functionalities and avoid the trap of over-planning.

Do things that cannot be scaled

In the early stages, personalized contact is more important than building a complete product. Engage directly with users, handle customer support personally, and manually execute transactions that will eventually be automated. These unscalable efforts help you build strong relationships with early users and gain deep insights into their needs and behaviors. This approach not only allows you to build and launch quickly but, more importantly, it ensures the product reaches users as soon as possible.

Don't overbuild; leverage existing tools to simulate

Avoid creating everything from scratch. For crypto entrepreneurs, it is best to avoid building core infrastructure and instead collaborate with existing products or leverage them to simulate the final solution. For example, use ready-made automated market makers (AMMs) like Uniswap or Raydium instead of developing your own AMM for a specific product. This can save resources and allow you to focus on refining your core product.

Recruit users one by one until you reach 50

When building your initial user base, personalized outreach is essential. Contact potential users one by one through email, social media platforms (like Twitter DMs), or community forums. This approach allows you to engage with users willing to try your product and obtain precise, candid feedback about it.

Continuously seek feedback and iterate on the product

Maintain ongoing conversations with users. Regular feedback will reveal insights you may not have considered. Use this feedback to iterate and improve the product, ensuring it continues to meet users' evolving needs. Establishing this feedback loop is crucial, as it keeps you closely attuned to user needs and helps you build products that people truly love. Alon from Pump.fun reached out to 3,000 Twitter users to gain attention for Pump.

Do not take feedback literally

While user feedback is important, interpret it cautiously. Users may not accurately express their needs or may suggest ideas that are inconsistent with the product vision. You need to exercise judgment, uncover potential issues, and address them in a way that aligns with the product direction.

Achieve stability with 50 to 100 daily active users

The goal is to achieve stable growth in daily active users (DAU), with an initial target of 50 to 100 daily active users. This level of engagement indicates that your product is gaining traction and becoming part of users' daily activities. Monitor user retention and engagement metrics to ensure you are building sustainable growth.

Refine your business model

Once you have a stable user base, it's time to focus on profitability. Develop a clear business model that outlines how your startup will generate revenue. Whether through transaction fees, premium features, or token sales, a clear business model is essential for attracting investors and ensuring long-term viability.

Deep dive into data to find growth opportunities

Data is your ally. Dive deep into your data to understand what drives user acquisition, engagement, and retention. Identify key performance indicators (KPIs) that align with your business objectives. Use this data to make informed decisions regarding marketing strategies, product features, and resource allocation.

Persevere: Reach out via email, direct messages in group chats, and social media

Persistence pays off. Don't hesitate to reach out multiple times to potential users, partners, or investors. Use various channels such as email, direct messages, group chats, and social media to broaden your outreach. Entrepreneurship often requires relentless networking and promotion. Always maintain the mindset of Always Be Closing.

Celebrate small victories and take breaks when needed

Every milestone, no matter how small, is worth celebrating. Whether it's launching a new feature or reaching a user benchmark, recognizing progress helps maintain team morale. Additionally, taking brief breaks can prevent burnout and help you and your team stay productive in the long run.

Work hard

Nothing can replace the importance of hard work. Building a successful startup requires dedication, long hours, and a willingness to put in extraordinary effort. Your commitment sets the tone for the team and can be the difference between success and failure. Think of it this way: If your competitors are working 7 to 8 hours a day on their ideas, how many hours are you willing to work to win? Of course, I am not suggesting you win simply by working overtime, but rather using this mindset to motivate yourself to work smarter and achieve victory.

Protect your equity

Especially in the early stages, be cautious about the equity you give away. While it may be tempting to offer a large equity stake in exchange for funding or talent, maintaining control is critical for shaping the company's future. Consider alternative incentives and negotiate terms that align with your long-term vision. Ultimately, founders should retain enough equity to reap the rewards of the considerable time invested in early-stage investments.

Small-scale financing will teach you how to budget effectively

Securing moderate funding will force you to prioritize core issues and learn to save resources. At the earliest stages, you should typically raise only $500,000 to $1 million. Running on a lean budget will prompt founders to find creative solutions. This discipline can guide you toward a more sustainable business model and make you more attractive to future investors. Amazon founder Bezos once used a door as his desk to remind himself to save time and money.

Frugality

Adopt a frugal mindset in all aspects of your startup. Review every expense, avoid unnecessary operational costs, and focus funds on areas that directly drive growth. Frugality will extend your runway and provide flexibility in the face of unforeseen challenges or market changes.

Keep the team lean and hire as few people as possible

Expand your team cautiously. Each new hire should fill a key role that directly impacts the company's success. A lean team is more agile, easier to manage, and less likely to be burdened by the complexities of a large startup. Keeping it lean enables you to pivot quickly and maintain a strong company culture. If you hire too many people, the culture can deteriorate rapidly.