I’m coming off a long week on the road where I met so many interesting folks at both Summit Series and Future Wave. Hello, new friends! I’m glad to be back home in Miami for a bit.
From my travels, one thing is clear: the sentiment is shifting in the overall business landscape and even more so in Web3.
We’re watching one of the biggest scandals in the history of modern finance unfold like a docuseries live on Twitter. This is a domino that will lead to absolute carnage in the space. Beyond the branding problems the FTX ordeal presents for blockchain as a whole, consumer trust in crypto is now predictably plummeting.
Valuations were too high. Exposure to the market and crypto is drying up cash reserves. Raising on a down round will kill companies. This is going to be a cold winter.
Cash is still king in this economy and companies are low on it. They’re overexposed. Founders are leaving; platform trading volume is way down; and fans and collectors are losing interest. That’s why strategies are shifting.
We’ve been through crypto bear cycles before. When the market crashes, the industry gets a lot of stink on it and – first slowly, then pretty quickly – the world tunes the market out. I was there in 2018. I tuned out and sold off my stakes, and you know what? I regret it. A lot of people do, and we’ve pledged not to make the same mistake again. This is the time to build. Innovators will be rewarded and the great companies of the future will come out of this low.
The next few months will bring consolidation, legislation, and regulation. That will be important for righting the wrongs of the past and making this next chapter safer, more expansive, and more inclusive.
New projects will need to be more innovative and widespread. Being big in Web3 won’t make you big in the real world, it’s too small a pool. What we need now are crossover use cases from companies and projects that bridge the gap between the new and the old. We need experiences that bring general consumers into Web3 with limited technological barriers. We need examples of these platforms making our actual lives better, not just enhancing our artist and fan experiences. Music is always on the forefront, but it can’t remain the be-all-end-all.
This breakthrough moment will not come without hurdles. We’re bracing for a potential recession and thinking about survival. Can we stop marketing and risk market share? No. We still have to take chances and maximize opportunity. Partnerships and events will need to be crafty. Strategies and investments will need to be diversified. If your 2023 play isn’t already in motion, you’re way behind. There are six weeks left this year with two holidays in between. Let’s make the most of them!
Also published on Medium.