In the world of crypto, success does not only come from "being early" but also requires a deep understanding of the thesis and the fit between product and market. To truly succeed, you need to identify big stories, capture potential trends, and choose the right projects. Here are important lessons to help you build effective investment strategies and avoid unnecessary risks.
1. Being Early Is Not Enough – Lessons from WebVan
Entering the market early does not guarantee success. A great idea that appears at the wrong time can still fail miserably. WebVan, the first grocery delivery company founded in 1996, is a prime example:
Customers are not ready for this service.
The infrastructure did not meet the demand.
Operating costs are too high.
As a result, WebVan went bankrupt. But by 2012, when Instacart emerged with a similar model in a more mature market context, the company achieved great success.
Lesson: The right timing and suitable conditions are crucial. Sometimes, an idea must wait until the market matures to succeed.
2. The Thesis in DeFi – From DYDX to GMX
When DeFi started to explode in 2020, many leveraged trading protocols and DEX exchanges emerged. But not everyone achieved success:
DYDX and MUX pioneered in DeFi but faced difficulties due to suboptimal tokenomics design.
GMX and GNS then learned from the failures of previous projects, improved the tokenomics model, and deployed on Ethereum Layer 2 (L2) platforms, thus attracting users and achieving success.
Lesson: Arriving too early can cause a project to fail. Projects that come later, if they learn from the experiences and optimize from the mistakes of the previous generation, will have a higher chance of success.
3. The Story Cycle – Three Waves
Every success story in crypto typically occurs through three waves:
Wave 1: Pioneers with new ideas, but products are not yet complete or do not meet market demands.
Wave 2: Product improvement projects to meet market demands. This is the stage with the highest profit potential.
Wave 3: Those who enter after the market has saturated; profits at this point are usually significantly lower.
For example: SOLIDLY was a pioneering liquidity project in 2022 but failed due to a lack of market fit. Later, Velodrome improved SOLIDLY's model and achieved better success in the Optimism ecosystem.
Conclusion: Wave 2 is the ideal time for investment, when projects have optimized from previous lessons.
4. Stories with Lasting Appeal
Some areas in crypto have the potential to explode in the future and may become big "stories":
GameFi: The combination of gaming and finance, opening up opportunities to earn money from gaming.
AI and DeFi: The application of artificial intelligence in decentralized financial protocols.
Real World Assets (RWA): Tokenizing real-world assets on the blockchain, increasing transparency and efficiency.
ZK-Rollups: Technology that enhances security and scalability for blockchain.
Omnichain: Multi-chain interaction that connects different blockchains.
Key takeaway: These trends promise to create a new wave, but require time and technological development to truly explode.
5. Build Your Own Investment Thesis
To succeed in crypto, don’t just chase trends and crowds. Instead, build your own investment thesis:
Building a personal thesis helps you avoid being swept away by short-term fluctuations.
Focus on projects that have product-market fit.
Waiting for projects to develop and optimize based on the lessons of previous projects.
Key takeaway: Investing in crypto requires patience and long-term vision. Don’t just look at short-term profits; think about the value the project can bring in the future.
In Summary
Crypto is a volatile market full of opportunities, but to succeed, you need to avoid chasing the crowd and focus on stories with real value. Big stories often need time to develop, technology to mature, and alignment with market needs. Remember, pioneers often face high risks, while those who come later can reap success if they choose the right timing.
Final lesson: Never stop learning and observing. The crypto market is always changing rapidly, and only those with long-term vision, patience, and the ability to build investment strategies based on their own thesis can maximize opportunities for success.
