The potential of Web3 to revolutionize finance, healthcare, retail, sustainability, philanthropy and many other domains is immense. But despite the energy and resources poured into this space by entrepreneurs, builders, investors, and public sector leaders, success is elusive. Web3 venture investment shows only a 2–3% success rate, far lower than the 20%+ typical in traditional venture investing. Even worse are grant programs, where success is scarcer still.
After evaluating over 100 Web3-funded projects across multiple chains and ecosystems, the conclusion is clear: Most fail to achieve meaningful traction or basic viability. While many worthy ideas are being funded, only a fraction reach adoption levels aligned with their stage of maturity. My experience in ecosystem building and open source strategy consulting leads me to identify two critical factors for this failure:
- Lack of Post-Investment Support: Crypto investors and grant organizations often provide minimal post-funding support compared to traditional investors. A16z Crypto, for example, offers extensive post-investment resources because it understands how crucial such support is based on its many years as a leading traditional venture investor. Many crypto investors lack this experience and overlook or underestimate the need for ongoing help.
- Weak Business Model Evolution: Startups rarely succeed with their first business model and must evolve or fully pivot multiple times to align with customer needs (the average is 5–7 times). Success also depends on building a developer, partner, and user community — an area where Web3 startups struggle mightily. One common mistake is confusing initial community excitement with long-term commitment.
While many blockchains and their ecosystems offer technical training, few focus on business models and commercialization strategies, leaving founders to navigate these challenges alone. Surprisingly, only three programs identified offer such business education, and all require payment or in-person participation, making them inaccessible to many entrepreneurs.
The Solution
For Web3 to thrive, blockchains, investors, and grant providers must invest in business support programs that help startups and entrepreneurs develop viable models and ecosystems. The offerings should be tailored to how they can be most effectively consumed and utilized by those entrepreneurs — short, impactful, one-to-one training and mentoring, web-based tools, ongoing lite touch, and menu-based offerings. Government involvement in building centralized resources that support multiple ecosystems regionally or by domain is also essential.
Ultimately, the value of any innovation lies in its sustainability. Web3’s vast potential will only be realized if entrepreneurs receive the right tools and support to build lasting businesses.