The Problem of Product Market Fit in Crypto


This post is by Jeff Carter from Points and Figures


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Over the past several weeks, I have had a lot of conversations with various people in various disciplines about the crypto markets.  They all were shaking their heads.  It’s easy to look at the price of some cryptocurrencies and the amount of money invested and shake your head.

However, a thought occurred to me the other day.  One of the things VCs always look for when they invest is product/market fit.  Of course, that means different things at different stages.  Seed product market fit doesn’t look like Series C product market fit.

Do any of the companies doing ICO’s meet the standards of venture capital product market fit at any stage?  If I was listening to a pitch, I’d ask a lot of questions around product market fit.  I’d also ask about governance but that is a different issue.

It occurs to me if I was a crypto investor the fit question would be the one that I would ponder to decide if one crypto had legs over another crypto.

A lot of companies are avoiding the VC market and going straight to ICO.  I think that market is cooling for a lot of reasons.  However, a good VC can add value to a company.   Going it alone in the ICO space might not be the best idea.  This is similar to taking a lower valuation from one VC versus another if that VC can help the company get to where it needs to go.