Stormproof: Building Through The Bear
In our previous article, “Stormproof: How Projects Weather Bear Markets”, we outlined the key aspects that form a bear-resistant team.
As a business building in these times, it would be shocking — and actually, a concerning — sign if everything was simply going well. If things weren’t breaking down… that itself should be cause for suspicion.
Indeed, fundamentally strong projects aren’t the ones that are performing fantastically during hard times. They’re the ones that have thought ahead and are able to withstand negative moves in the market. They’ve planned ahead and set money aside for hard times, because they know that hard times do inevitably come, just as good times inevitably come.
Thus, when times get rough, they have the reserves and resources to repair what breaks down when they see their weak spots and to hire the top talent — that many other companies can’t afford to keep anymore — to build, build, and build.
It’s not an easy task to weather bear markets, but it’s possible to do so if you get the fundamentals right. So what are the fundamentals?
A Quick Recap
Here at STEPN, we have decades of combined experience and expertise in the business world, riding through such ups and downs, and we’ve truly put in the time to understand what the fundamentals of a strong project should look like.
Picking out the most important and common themes, there are three core areas that are absolutely essential for a project to prevail.
2: Business model
We discussed the importance of a good team in our last article, noting the foundational qualities that a good team has. Experience, know-how, and the basic ability to run successful projects in similar industries are key. We covered our founders’ expertise in the gaming and crypto worlds - as well as the entrepreneurial spirit that permeates our executive group, not to mention their technical prowess and experience.
In addition, we noted that once you’ve gotten to the big leagues, these all become table stakes. Beyond the fundamentals, what sets elite teams apart from good teams are qualities that must be innate to the team’s culture and that you can’t put a number on — integrity, passion, and resilience.
Now today, we’re going to be talking about the importance of a sound business model.
Hear us out: we know that this can sound basic at first. Of course… any project that expects to get off the ground should have a plan to profit.
But beyond making money, we’re also going to dive into one of the most important long-term qualities of a winning business model — and that’s where the really transformative insights come in.
The Building Blocks
But first, the foundation. Now, how exactly do you define a business model? Joan Magretta from the Harvard Business Review calls it: “the story that explains how an enterprise works.”
Here at STEPN, we’ve successfully told a brand new story by pioneering an entirely new market, a move-and-earn model with a revenue strategy that rivals even those of Strava and NRC, the giants of the traditional Fit-tech world. As we discussed in “How We Created a Blue Ocean Market,” we married the power of P2E concepts with fitness incentives to birth something novel.
As with any crypto project, there’s always a risk that the economics will be difficult to sustain. But taking those concerns into consideration, we’ve gone above and beyond and added our external revenue sources example a multi-chain, decentralized exchange (DEX) called DOOAR.
We built DOOAR to provide a separate, sustainable revenue stream for our project.
This leads us to our next point — the most important quality of a winning business model. Beyond the efficacy of a project’s existing model for making money, what’s more, important is whether that model is grounded in agility.
As Ramon Casadesus-Masanell and Joan E. Ricart elaborate in “How to Design a Winning Business Model,” innovation is important in a business model, but what’s even more important in the long-term is how that business model can nimbly react to changes in the market.
Too often, companies have an “unwavering focus” on creating innovative models and “evaluating their efficacy in isolation” Casadesus-Masanell and Ricart write.
“However, the success or failure of a company’s business model depends largely on how it interacts with models of other players in the industry.”
Predicting these interactions can prove extremely difficult, as the authors mention. One model may appear superior to another until various market dynamics are introduced.
On the flip side, if your model has more levers for adjustment and allows for agility — the ability to adjust to changes in the competitive or general landscape — your business model has a far higher chance of succeeding.
It’s been a roller coaster of a ride here at STEPN. We’ve celebrated many wins and smashed through records we could never have dreamed of. At the same time, it’s also sobering to see many projects struggle during tough times.
We’re grateful for our team and our community for being solid as a rock to weather these storms.