Today venture capital (VC) firm Bloccelerate released the results of its web3 startup survey. With all the talk of funding drying up for blockchain and web3, one of the surprises is that startups don’t consider funding to be the biggest threat. Instead, the most significant challenge is product market fit (PMF).
At first that seemed natural because 46% of survey respondents are at the seed stage. However, when analyzing the responses based on startup maturity, it revealed a surprising result. Series B and later companies were the ones that ranked product market fit as the biggest challenge (29%). That’s counterintuitive because usually the Series A phase is about product market fit (PMF). Series B is meant to be for growth.
One possible explanation is the frothy crypto boom allowed a few companies that hadn’t yet achieved PMF to land a Series B round. It’s also an unfortunate finding because it reinforces the narrative that blockchain and crypto are solutions in search of a problem. Reinforcing this view were survey responses citing a lack of real world use cases outside of DeFi.
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