Warren Wednesday 6/14
In the 1988 Berkshire Hathaway shareholder letter, Warren Buffett wrote:
“At too many companies, the boss shoots the arrow of managerial performance and then hastily paints the bullseye around the spot where it lands.”
Buffett’s metaphor has profound implications for how performance is measured. He often mused that he didn’t invest in companies but instead in stellar management. It is critical that investors look for management teams who first paint a target by setting clear goals and then gauging how close the arrows land to the bullseye.
The same goes for the rapidly evolving world of web3. Investors must carefully evaluate the people behind the projects they support. The proliferation of new projects, especially in the NFT realm, are predicated on roadmaps of new functionality and embedded utility. A misstep here can put your capital into a project with poor leaders – or worse yet – a scam artist.
Don’t be a statistic! Use these methods to identify winning teams to maximize your chances of investment success.
Track Record, Expertise and Complementary Skills:
Assessing the track record and expertise of the founding team is crucial.
Look for individuals who have a proven history of success in the industry or possess relevant skills and experience. Check their LinkedIn (which they absolutely should have!) to evaluate their previous projects, contributions, and achievements.
Strong teams are often composed of individuals who possess complementary skills, domain knowledge, and a deep understanding of the technology they are working with. A team with diverse backgrounds and a shared vision is more likely to navigate challenges and drive project success.
Transparency and Communication:
Transparency and effective communication are essential traits of strong founding teams.
Look for teams that are open about their project’s goals, roadmap, and progress. Transparent teams provide regular updates, engage with the community, and address concerns promptly.
Be wary of teams who miss milestone deadlines and don’t feel the need to keep their community informed.
A willingness to listen to feedback and adapt the project accordingly is also a positive sign.
Evaluate the team’s ability to articulate their vision, demonstrate effective leadership, and foster a collaborative environment. Strong teams value community engagement and prioritize building trust with their stakeholders.
Commitment and Resilience:
Building successful projects in the web3 space requires dedication and resilience. Just look at the last few years we’ve had!
Look for teams that demonstrate a long-term commitment to their project’s success. The longer the project has been around, the more likely it is to endure long enough to produce promised results.
Assess their ability to adapt to changing market conditions and overcome obstacles. A strong founding team will exhibit a passion for their project, a clear roadmap for growth, and the ability to pivot when necessary. Consider the team’s ability to attract talent, establish strategic partnerships, and execute their vision with discipline and determination.
Remember, the strength of the founding team can significantly impact the trajectory of a project in the dynamic world of blockchain, cryptocurrencies, NFTs, securities, bonds, and derivatives.
Be cautious of founders who miss milestones and ask for patience as the team works to catch up on expected goals. Are they legitimately buying time to fix a critical problem, or are they chasing the latest shiny object without a clear or sustainable plan?
If you found this post interesting give us a follow and stay tuned for more Warren Wednesdays featuring excerpts from our book, Warren Buffett in a Web3 World.
We took over 1,000 pages of wisdom from the Oracle of Omaha and condensed it into a snackable, easy-to-read investment guide to help you on your journey to grow wealth in the web3 space!