Nat Emodi: What I Wish Someone Had Told Me (As a Crypto Founder)

Happy New Year, DDD fam! We are kicking off the year with a fantastic guest post by one of Double Down founders, Nat Emodi of Highlight.

In Nat’s words,

P.S. Interested in publishing a guest post in a future edition of Double Down Dispatch? Message us to discuss!

Onto Nat’s learnings 👇

On Building

1. The speculative casino side of crypto isn’t everything, but it's still the core paradigm for the current global user base. Interpret all the new “metas”—hype around new projects, innovations, the latest craze on crypto Twitter—accordingly.

2. At times, the casino horde will muddy your metrics with random spikes and create the appearance of intense product-market fit. This can unravel just as fast. If you find yourself in the middle of an actual or expectant casino game, be sober with yourself, your team, your non-degen users, and your investors about who this horde of users is and how you expect them to engage with your product long term.

3. Humans are complex. Many crypto people believe everything is motivated by financial self-interest; many others think humans can be motivated by higher-order thinking or more nuanced self-interest (status, romance, entertainment, etc). To varying degrees, both are correct. Know who you want to build for, how your product relates to a model of human nature, and what your end game is. To borrow from Sam Altman: don't fight the laws of physics.

4. Have a very sharp understanding of how to comply with the laws and regulations that apply to you. If you’re ever unclear, seek answers from experts. When in doubt, do the right thing.

5. Relentlessly examine reality and seek ground truth—data, of course, and qualitatively from real users. Don’t settle for second-hand proxies or answers that win arguments. Get very close to your users via DMs, Discords, and cold emails and understand their needs and behavior.

6. There are many crypto people who believe technological innovation is everything; there are far fewer crypto people good at understanding how to build products consumers will want. Focus on building a product people want instead of just building interesting technology. Even if you’re building infrastructure, understand the end users that will be served by what you’re enabling. Novelty alone is not a selling point.

On Learning

7. Pay close attention to organic user behavior and figure out what drives it. Tease out what is speculative versus other factors and which are uniquely enabled by the blockchain. Even if something is uniquely enabled by the blockchain, it may not be better or easier than existing off-chain solutions. Remember that the bar to change consumer behavior isn’t a 10% or even 100% improvement over existing options, but 10x.

8. Like data models, all startup advice is wrong, but some is useful. This lossiness with pattern-matching is much more extreme in crypto. There are few successful patterns to match, and most advice on core topics (growth, product strategy, etc.) is theoretical or has very limited shelf-life or replicability. Beware of investors, advisors, or hires that purport to have playbooks.

9. Notwithstanding the above, the test/iterate loop for building early-stage startups is the best starting point. As the GOAT Brian Armstrong says, action produces information. Speed of execution, learning, and iteration are critical. Keep shipping.

10. Building consumer-grade applications on top of blockchains is getting easier every week, but this is still an overly technical field. As with most technical fields, filter for experts who can explain complicated things simply and answer specific and detailed questions clearly, without hand-waving or unnecessary technical jargon. The Sicilian proverb applies: Latin hides the stupidity of the priest.

On People

11. Strong talent is often built differently in crypto. Given how ambiguous, technical, and early the industry is, high performers are usually younger or from non-obvious backgrounds. Many of the gold-plated hires that rallied into web3 in 2021 have since churned for AI or other pastures, while those able to deal with the turbulence and dissonance are still here, shipping faster than ever. And despite the outsized crypto funding rounds, it's the small, focused teams that are gaining the most traction over time.

12. Operate with a high degree of ambition and integrity, and surround yourself with people who are uncompromising along both of these dimensions. Treat people with respect and assume positive intent. The industry is small, and memories are long.

13. Given all the advice so far, do everything possible to find people who think from first principles rather than from what’s reasonable, what appears on the surface, or what someone else thinks.

14. Trust the veterans who have built through multiple cycles, but pay close attention to the emergent use cases and communities.

15. Take good care of yourself and those around you. Embrace the challenge of building in a space that can sometimes be brutal. It’s an arena to build critical thinking and character and master your ego and impulses. Stay focused, and don’t chase the current hot trend.

16. Overall, learn to see through the fog created by influencers, hype, and FUD. Beneath it, entirely new financial, cultural, and social rails are being built. Be one of the builders.