Crypto Isn’t Dead. But Most Web3 Startups Will Be. Unless…
Sabrina Schaffer3 min read·Just now--
For the past mont(years?), the easiest way to sound informed about crypto has been to… declare it dead.
Prices crashed. Funding dried up. Projects got hacked. Teams disappeared.
Yeah I get it. From the outside, it does look like a graveyard.
But if you spend time actually talking to the builders out there, a different picture emerges.
There are still people here (the serious ones) working on solving real problems. In many ways, the noise has cleared, and what’s left is far more interesting than what we saw during the last cycle.
The issue is not that Web3 is dead.
The issue is that most Web3 startups are.
But they’re not dying for the reasons people think.
The uncomfortable reality
In the last few months, I’ve spoken to more than 100 founders across the space. Smart people. Capable teams. Technically strong.
But most of them are stuck.
Not because their code doesn’t work.
Not because the idea is inherently bad.
But because no one is using what they’re building.
It’s a much quieter failure mode than a public collapse. But it’s far more common.
Project focus drifts in different directions. The momentum they once had, fades. Founders keep “building” more and more features without getting real traction.
And eventually, things just… stop.
The 2021 hangover
A lot of this comes down to habits that were rewarded in the last cycle.
If you remember the old days, good on ya. Back then, you could:
- Build fast and ship something complex
- Talk in abstractions
- Target “everyone in crypto”
- Raise before proving anything
That was fun. But unsustainable. And… that playbook doesn’t work anymore.
Today, the market is less forgiving and far more practical.
People realized that “roadmaps” won’t get them anywhere. The only thing they truly care now is whether your product solves something real for them.
And most web3 “products” just… don’t.
Traction is the new currency
If there’s one shift that defines the current phase of Web3, it’s this:
Ideas are cheap. Traction is everything.
Traction doesn’t mean millions of users or a token launch.
It means something much simpler:
- ONE clearly defined user
- ONE problem they actually feel
- ONE product that makes their life noticeably better
That’s it.
And yet, that’s exactly where most teams struggle.
Where things actually break
When a Web3 startup has no users, the instinct is to assume it’s a marketing problem.
“We just need more exposure.”
“We need to grow our community.”
“We need better distribution.”
Sometimes that’s true. But most of the time, it isn’t.
What’s usually missing is clarity:
- Who is this for, exactly?
- What painful problem does it solve?
- Why would someone switch to this product?
If those answers are vague, no amount of marketing (or expensive KOL rounds) will fix it.
A quieter, healthier phase
Don’t get me wrong… None of this is a bad thing.
In fact, it’s probably the healthiest reset the space could ask for. I know it’s painful. But it’s necessary.
The speculative layer has thinned out. The easy wins are gone. What’s left is a more grounded environment where actual value matters again.
That’s uncomfortable for those used to the easy wins.
But it’s a huge opportunity. It’s huge for the founders who figure this out now.
They will be operating from a completely different level when the next wave of attention comes in.
So what now?
If you’re building in this environment, the question isn’t:
“Is Web3 alive?”
It clearly is. But it’s evolving.
The better question is:
Are you building something people actually need?
Because that’s the only thing that determines whether you’ll still be here in 12 months.
I spend a lot of time analyzing where Web3 startups get stuck especially around traction and product market fit. If you’re in that phase, it’s usually more fixable than it looks.
