Raised $5M+ for web3 startup, shut it down. Notes on conviction vs hype 🧵

Alright folks, time for some real talk. I fucked up. Big time. And I'm here to share my story so you don't make the same mistakes I did.

Back in 2021, I co-founded a web3 startup. Yeah, you know where this is going. I was caught up in the hype, the FOMO, the promise of changing the world through DAOs. Spoiler alert: We raised more than $5M in seed funding, burned through half of it, never hit product-market fit, and ended up shutting down and returning the remaining capital to our investors.

Here's how it went down:

It all started when I fell down the web3 rabbit hole. I read a few whitepapers, watched some YouTube videos, and suddenly thought I was the next Vitalik Buterin. I had this "revolutionary" idea for a DAO that would democratize venture capital. Sounds cool, right? I thought so too.

Now, here's the thing - I'm a great pitcher. Give me a deck and 30 minutes, and I can make almost anything sound like the next unicorn. So, armed with buzzwords and a slick presentation, I hit the VC circuit.

And holy shit, did it work. We were a great team, stellar credentials so were able to close the fundraise pretty quick. I still remember the day we closed the round. Popping champagne, dreaming of TechCrunch headlines once we did our Series A, all the jazz.

But here's what I didn't realize at the time: I had zero conviction in what we were building. I was so caught up in the excitement of raising money and being part of the "next big thing" that I never stopped to ask myself if I truly believed in what we were doing.

Reality hit hard and fast. As we started building, I realized I didn't really understand the problem we were solving. Our target users weren't as excited about the product as we were. We pivoted, then pivoted again. But nothing stuck.

Eighteen months in, we had burned through $3M, had no clear path to revenue, and my co-founder and I were at each other's throats. That's when it hit me - we needed to shut this down before we wasted any more of our investors' money.

Making that call was the hardest thing I've ever done. Telling our team, our investors, our families - it sucked. But it was the right thing to do.

Here's what I learned from this expensive and humbling experience:

1.⁠ ⁠Hype is not a business model: Just because something is trending doesn't mean it's a good business opportunity. Do your own research, understand the market deeply. 2.⁠ ⁠Raising money ≠ Success: It's easy to get caught up in the vanity of a big round. But money just buys you runway, not success. 3.⁠ ⁠If you can't explain it to your grandma, you don't understand it well enough: I couldn't clearly explain our value proposition without resorting to buzzwords. Red flag. 4.⁠ ⁠Team alignment is everything: Make sure you and your co-founders are on the same page about the vision, not just the potential payout. 5.⁠ ⁠Listen to the market, not your ego: We ignored early signs that users weren't as excited about our product as we were.

But the biggest lesson?

You need 100% conviction to run a startup. Not 90%, not 99%. 100%.

Building a company is hard. Really fucking hard. There will be days when everything seems to be falling apart. If you don't have absolute conviction in what you're building, you won't have the resilience to push through those times.

Looking back, I realize I was more in love with the idea of being a founder than with the problem we were solving. I was chasing clout, not impact.

To anyone out there thinking of starting a company: Please, please, please make sure you have unwavering conviction in your idea. Make sure you're solving a real problem that you deeply understand and care about. Don't do it for the hype, the money, or the status. Do it because you can't imagine doing anything else.

As for me? I'm taking some time off to reflect. Next time (if there is a next time), I'll make damn sure I believe in what I'm building with every fiber of my being.

I sort of see this happening now with AI, please take a pause. Let's learn from each other. Because trust me, learning this lesson the hard way? It ain't fun.

Keep building!