Collaborative venture building is a fast-emerging critical component of a Web3 startup’s success. Due to their decentralized nature and global reach, Web3 startups want to accelerate rapidly to establish network effects and secure market share. With the unique challenges and opportunities found in the Asian market, a new approach of collaborative venture building is becoming increasingly critical in the region for startups looking to grow quickly and succeed.
What is collaborative venture building?
Collaborative venture building refers to a collaborative effort among multiple organizations, typically startups, to create new ventures or projects. Unlike traditional venture building, where a single company creates and owns the venture, collaborative venture building involves pooling together resources, expertise and ideas from multiple entities to build a new venture. This approach leverages the strengths and capabilities of each partner to achieve a common goal.
In the Web3 space, where decentralized technologies and networks are prevalent, collaborative venture building can be particularly effective in building new protocols, platforms and applications that can be adopted by the broader Web3 ecosystem. By leveraging the expertise and resources of established companies, startups can develop innovative products and reach new markets more quickly. Moreover, collaborative venture building fosters a culture of innovation and collaboration between startups which is critical to driving growth and disrupting established industries.
Accelerating start-up incubation
In the process of collaborative venture building, incubation plays a crucial role in helping selected startups turn their innovative ideas into successful businesses. Incubator programs provide resources, mentorship and access to networks, setting up projects for success beyond just funding. Web3 incubator programs are no exception and should offer tailored mentorship, pitching clinics, masterclasses and go-to-market strategies to help startups succeed.
We are beginning to see more incubators develop thorough programs to equip startups with niche Web3 knowledge needed to navigate this relatively new ecosystem. WEconomy and Impossible Finance are just two examples of a growing ecosystem of Asian incubators. We see a growing trend in Web3 incubators incorporating strategic workshops in their programs, covering niche themes like Web3 and blockchain market intelligence, product development, blockchain infrastructure, smart contracts, and compliance and regulation.
This level of support is especially important in the fast-paced and rapidly evolving Web3 space. With product-market fit cycles happening simultaneously with the creation of new markets and active crypto ecosystems, startups need to iterate and adapt quickly to keep up. New competitors can emerge quickly, and market sentiment can change overnight, making it crucial for startups to have guidance and resources to navigate fluid markets. A CB study on startup post-mortems reveals that 42% of unsuccessful startups failed due to a lack of product-market fit. Moreover, data shows that only 30% of startup founders survive beyond the five-year mark without mentorship. This highlights the importance of expert guidance and support during the crucial early stages of a startup’s journey.
In addition to providing mentorship, incubator programs foster collaboration and synergy between startups and established companies. This collaboration helps startups navigate regulatory barriers, enter new markets, and leverage established companies’ networks, opening up opportunities for growth and success.
Co-creation and partnerships
Co-creation is a unique structure in collaborative venture building that promotes knowledge sharing and networking, allowing brilliant minds to collaborate and potentially create something greater than the sum of their parts while facilitating innovation and growth in the industry as a whole.
Symbiotic partnerships are a positive aspect of co-creation. They allow startups to leverage each other’s strengths and solve problems together. During their incubation program, Acxyn, a plug-n-play platform that seamlessly connects games to Web3, and Quurk, a regenerative finance game-based learning company, formed a symbiotic relationship that will allow Quurk to launch their first game, Pastopia, on Acxyn’s platform in Q3 2023.
The partnership benefits both companies in several ways. Acxyn’s plug-and-play platform handles complex Web3 integration and automates monetization, meaning Quurk can fully focus on the game development aspect, channeling resources and creative energy into actual gameplay mechanics and educational curriculum. Acxyn equally benefits from this partnership. Amazing games bring a community of loyal players. With Quurk’s global outreach and partnerships, they can potentially contribute significantly to populating the Acxyn ecosystem.
Once a startup’s product or service is ready, the focus shifts to go-to-market strategies. Collaborative venture building can help startups leverage established companies’ networks and expertise to reach new markets and customers quickly. Established companies can provide startups with access to their networks, allowing them to tap into new markets and build relationships with potential customers. Furthermore, established companies’ brand recognition can help build customer trust, giving startups a head start in a competitive landscape.
According to Harvard Business Review, only 10% of investment deals are secured through cold email pitches. If a startup can utilize an incubator’s network, such as AllianceDAO and Alpha Venture DAO whose network includes Delphi Digital, DeFiance Capital and The Spartan Group, they will increase their chances of raising from tier-one investors. By leveraging these networks and partnering with established investors, startups can accelerate their go-to-market strategies and establish a foothold in the industry.
Deal transparency is also crucial for startups to secure funding and grow their businesses quickly. Incubator programs prioritizing deal transparency can build trust with investors, increasing startups’ chances of attracting investment. According to a survey of venture capitalists, 92% agree that deal transparency is crucial to them, and two in three venture capitalists believe that incubator programs provide higher deal transparency.
Web3 startups need collaborative venture building to thrive
The Web3 market is growing at a rapid rate with high demand for Web3 systems from sectors like finance, e-commerce, and healthcare. Emergen Research estimates that this market will expand at a compound annual rate of 43.7% from 2021-2030, reaching a total of US$81.5 billion in 2030. Given that six out of the top 10 countries showing the highest crypto adoption come from Asia, paired with the region’s youthful and digitally-savvy population, it’s no surprise that Asia is expected to lead the development of Web3 and experience the fastest revenue growth.
The region is already experiencing expansion with interesting collaborative ventures, such as Sony’s recent partnership with Singapore-based Startale Labs to launch a Web3 incubation program for NFT and DAO entrepreneurs. Likewise, Bitget’s recent launch of a US$100 million Web3 Fund further attests to this trend.
Following the U.S. crackdown, we are seeing a wave of blockchain talent and investment move from the West to the East. Asia regulators have a more receptive view of Web3. We have recently seen Hong Kong releasing its crypto trading rules, Circle Singapore winning an MPI license in Singapore, and the Beijing government releasing its Web3 innovation whitepaper. These proof points are helping to drive talent from West to East.
A regulatory environment supportive of collaborative venture building helps enable strategic partnerships and support across various ecosystem stakeholders from regulators, media, incubators, and investors, creating a network of integrated talent and expertise that is truly unique and innovative.
By embracing collaborative venture building, Asia’s startups and Web3 businesses have the potential to dominate the crypto investment space and redefine the future of the industry.