3 Challenges of web3 (And how to fix them)

The web3 community likes to stay within their own bubble. But that creates some real challenges. How can we fix the most urgent challenges of web3?
web3 and metaverse challenges

This is a post where I shed light on issues and propose potential solutions based on my personal experiences working as an advisor and investor in web2 and the nascent web3 space. 

How the engineering mindset is holding back the web3 and what to do about it 

If there’s one thing the crypto industry loves more than tokens and airdrops, it’s engineers. 

This should not come as a surprise – the vast majority of companies in the web3 space focus on hiring engineers as their first, second, and third… (put your own number) hire. As these companies evolve, they still tend to be heavily skewed towards hiring engineers. Engineers love engineers.

This preference in part is perfectly reasonable as the ability to run blockchains, build dApps, write smart contracts, etc., are a prerequisite for building products with the potential to conquer new frontiers in the emerging world of web3.

The main problem with this dynamic is that the vast majority of markets are not entirely made of technical people as the main target group.

And while there are many technical challenges still to be solved in web3 – and yes, we need engineers for that – this “engineers first” approach is causing issues that have the potential to hamper mass adoption of web3. 

The good news: These challenges are avoidable if the team is focused on seeking out different perspectives and inputs early in its journey. Let’s explore the challenges that the “engineer-first” attitude introduces in web3.

The “engineer-first” attitude introduces serious issues in the web3 ecosystem.

Challenge 1:  Tech speak doesn’t reach the masses   

Technical teams love to think that a technically brilliant product will sell itself. This classic line of thought assumes that every user will appreciate brilliant functionalities, and will seek out the technically superior product among other competitors. 

And for early web3 technology, this was largely true as the products were built for technically-capable by technically-capable. However, the goal has shifted, and it’s all about onboarding new users into the space. 

And experience shows that no matter how technically brilliant your product is, you need to tell the world about it, and shout from the roofs about how it will make life or your target audiences fundamentally better.


In the web2 speak it’s called customer acquisition journey. It’s important to be aware of the journey your customers go on from introduction to purchase and ultimately promotion of your product to others. The journey consists of several layers that require a structured process, strong communication skills, understanding of your target group, just to name a few… So technical teams will benefit from consulting commercial people early.

Commercial backgrounds bring another dimension to the team and product. Defining the customer acquisition journey for web3 companies can be complex as the web3 products are pushing the boundaries of the known and familiar. Ultimately, the web3 projects need to be commercialised so it makes sense to think carefully about these topics early and ask for support from a diverse range of profiles.

Challenge 2: Target big, real-life problems 

Technical teams love building. They will iterate and improve and continue building sometimes without looking up to see the broader picture. 

The broader picture emerging these days is that we need use cases where blockchain is used to address the real-life challenges, and by doing so help to onboard the next 1 billion users into the ecosystem.

Therefore, web3 startups should focus on how to create value for a broader audience than just the crypto-native crowd that is already well into the weeds.

Even the web3 natives are tired of seeing the same applications being built on different chains and every layer 1 adopting the same approach to their ecosystem building to lure users from Ethereum to Solana to Cosmos to Celo to Avalanche to Near. These chains are competing between themselves more than focusing on how to bridge the gap between real-world problems and the metaverse. 

The web2.5 opportunity

Many companies have already seen an opportunity to engage existing businesses and introduce incremental innovation into the existing space thus facilitating the rise of web 2.5. Targeting established businesses and helping them onboard the web3 where it makes sense works. 

web3 native businesses should consider changing their approach: instead of thinking about what’s possible from a technological standpoint, they need to understand what the real-life market might need. For that, we need to get back to the roots of good old market analysis and understanding of customer problems, desires and fundamental drivers. 

Challenge 3: a DAO doesn’t fix your organisational challenges

In this time of DAOs, it’s very easy to think that web3 companies don’t need contracts, payrolls, budgets, tax, treasury management, governance, regulatory awareness, and other formalia so familiar to the web2 workers.

I’m saddened to inform you that even the most modern web3 structures require some if not most of these fundamentals. Furthermore, robust and effective operational processes will help you scale, compliant payroll will attract a stable contributor base, well-set-up governance will increase productivity and skillful people management will ensure continuity. 

Too many web3 companies struggle with corporate and people matters. It’s worth a look inside and outside of the ecosystem to locate the best tools and people who can help you navigate the patchy regulatory landscapes and choppy waters of people management to set your DAO / startup up for success.      

The web3 companies should pay attention and onboard resources to help them:

  • Set up governance
  • Automate operational processes 
  • Issuing and managing tokens 
  • Streamlining funding
  • Ensuring people and corporate compliance
  • Recruiting talent
  • Building efficient Bounty and Grants programs
  • Drafting policies and legal documents

In this post, I brought up some of the common issues I observed in the web3 space with the hope to inspire technical teams to adopt a holistic approach to business building early on in their journey. 

If you’re a technical team struggling with unique issues or recognise some of the above, reach out to have a conversation and get inspired on how to solve your challenges. 

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