Ten Years of Advice from A16z Partners to Web3 Founders: In the New Cycle, Just Focus on Three Things

In the Web3 world, cycles are not an accident, but the norm. The alternation of bulls and bears resembles the tides of capital as well as the four seasons of nature. For founders, the greatest challenge has never been to predict the next reversal, but rather how to survive amidst the ups and downs and even build long-term value against the trend.

Recently, a16z crypto partner Arianna Simpson shared her experience of over a decade investing in the crypto industry on a podcast. From the shock of the Bitcoin white paper to the product-market fit of stablecoins, to the intersection of Crypto and AI, and advice for founders.

These observations and experiences are not only applicable to Silicon Valley. In the view of Portal Labs, they also provide valuable references and insights for Web3 founders and high-net-worth investors in China.

The essence of the cycle

Arianna entered the world of cryptocurrency with the shock she felt over a decade ago when she first read the Bitcoin white paper. However, what truly kept her in the space was not the fleeting excitement of that moment, but the ups and downs she experienced over the next ten years. She witnessed the birth of Bitcoin, the boom of DeFi, the frenzy of NFTs, and also experienced the subsequent bubbles and cool-downs. It was through this long-term observation that she gradually formed a clear understanding: the cryptocurrency industry has never grown linearly, but rather moves forward with dramatic waves, with emotions and capital ebbing and flowing alternately.

Therefore, she shifted her focus from "predicting the next wave of opportunities" to "identifying who is building against the wind." Her investment approach is more like following: following what the best founders are doing. When the strongest founders flock to stablecoins, capital should converge there; when top teams continue to invest in Crypto × AI or DePIN, new value gaps often take shape as well. It's not about making grand assertions first and then finding projects to validate them; rather, it's about calibrating one's worldview and capital allocation based on the direction of frontline builders.

For Web3 founders and high-net-worth investors in China, this methodology is more actionable than "cycle prediction." For founders, the cooling-off period is not an excuse, but a screening process: being able to push the product and stack forward in years without applause indicates that both the direction and the team are correct; for allocators, what truly needs to be evaluated is not the popularity of the theme, but whether the team can maintain speed, discipline, and mission density in difficult years. This order of "identifying people – looking at long-term execution – then discussing valuation" can traverse bull and bear markets better than any short-term narrative.

stablecoin

Narrowing the lens to stablecoins. Arianna's judgment is quite simple: the reason it has become the focus of attention is not because of new speculative stories, but because both ends are really using it—consumers use it for cross-border transfers and to hedge against currency fluctuations; businesses use it for settlements, allocations, and as a bridge for receivables and payables. More importantly, in the past year and a half, the two infrastructure "valves" of speed and cost have finally been opened, allowing stablecoins to transform from an imagined payment network into a real settlement layer.

This point directly hits the Web3 founders and high-net-worth individuals in China. For overseas teams, what often really constrains them is not the product, but the cash flow: how to send money to Southeast Asia’s labeling teams, Africa’s node maintainers, and Latin America’s channel partners in a stable, low-cost, and traceable manner; how to allow overseas clients to complete payments without complex corporate processes; how to manage periodic receivables in a dollar environment and control exchange rate risks in a local currency environment. The value of stablecoins lies not in the “coin,” but in the “track.” When you standardize the entry and exit of funds, identity verification, reconciliation receipts, and tax records onto a single auditable track, the complexity of cross-border business will significantly decrease.

Of course, there will be more and more issuers, but users will not pay for every new token. Arianna's intuition is that in the short term, there will be a flourishing variety, but in the long term, it will certainly converge to a few stablecoins that are "scalable, reputable, and have an ecological niche"; furthermore, the front-end experience will become abstracted, and users will hardly perceive specific tokens, while the back end will automatically complete clearing and settlement through "track interconnectivity."

This means that in the future, when it comes to the development of stablecoins, the team should not expend energy on the impulse of "I want to issue one too," but should focus on more pragmatic designs, such as how to thoroughly "native-stabilize" your business processes, risk control, and financial systems. When your product can naturally operate on a path priced in USD, settled in stablecoins, and reconciled on-chain, your cross-border efficiency and credibility will directly stand out among peers.

For high-net-worth individuals, stablecoins are a new cash management tool and a "low-friction channel" for global liquidity. However, this does not mean there is no risk. At the portfolio level, reserving an on-chain track for "liquidity turnover" and "hedging against currency fluctuations" is a more future-oriented portfolio hygiene. In simple terms, two principles: carefully choose counterparties and diversify custody and wallets; make "compliance and interpretability" the first constraint, rather than a last-minute fix.

Crypto × AI × DePIN

Arianna emphasized that supercycles are often not driven by a single technology, but rather by several curves resonating together within the same time window. The clearest combination today is the decentralized incentives of crypto, the centralized computing power and data hunger of AI, layered with the orchestration of real-world resources by DePIN.

Translate it into the "deployable" language of the Chinese founders: We have rare long-term accumulation in hardware supply chain, manufacturing and deployment, and engineering organization of edge nodes. If you can use stablecoins to connect the "contribution-measurement-payment" chain to incentivize real-world data and resources on-chain, and then package these resources into standardized products (datasets, annotations, bandwidth, storage, inference time slices) that can be consumed by AI, you have the opportunity to create a "supply-side platform". This is not PPT-style token economics, but serious operations study: defining metrics, anti-cheating, settlement frequency, dispute resolution, reputation systems—all need to be engineered.

Another important thread is "authenticity." The existence of deepfake content is not frightening; what is frightening is the unverifiable environment. Verifiable timestamps, generation paths, device signatures, and traceability of the operating entities are the "new water, electricity, and coal" for the future content and commodity internet. This is an imminent increment for Chinese teams engaged in brand overseas expansion, second-hand trading, and luxury goods circulation. Doing the difficult yet right thing: making "verifiable authenticity" the default rather than a paid option.

Looking at AI Agents again. It is irresponsible to hand a credit card to a semi-mature agent for "self-service online shopping"; however, giving it a wallet with limits, revocability, and auditability, allows it to complete a set of tasks (subscriptions, purchasing APIs, paying commissions) within a clear strategy, which is practical. In other words, "wallet is a permission system." The real application is not the inflated "universal agent," but the vertically deep "bounded rationality agent"—binding permissions, budgets, logs, and counterparties together using an on-chain wallet within a strongly constrained business domain.

Financing and Governance

The financing environment from 2020 to 2021 may have given many in Web3 the illusion that no deck is needed, no model is needed, and investors will offer outrageous terms via private messages on Twitter.

Arianna said it bluntly: that is a "twilight mirage," not the norm, and today we should return to the basics. Prepare workable materials, honestly present the indicators, set the financing target at a conservative but achievable position; it’s better to first close a reasonable amount of money and then roll the snowball, rather than starting with 50 million and ending up with nothing.

For Chinese founders, a more realistic order is: first establish the foundation, then talk about money. First, the engineering resilience of technology and products, performance, risk control, observability, and operability; second, compliance and policy paths, KYC/AML, cross-border data segmentation, auditable fund and data flows, tax and invoice closure; third, verifiable business closure, real payments, positive unit economics, and stable cash flow rhythms. In publicly available narratives, it's better to talk less about "coins" and focus more on supply-side infrastructure: for example, using DePIN to standardize computing power / bandwidth / sensing data into billable APIs, or using RWA to digitize existing assets and embed them into compliant issuance and settlement processes. Once there is an evidence chain for these three matters, then use milestones to segment capital supplementation, instead of allowing financing to lead the business.

Governance also needs to return to common sense. A 50-50 split is not fair; it is inaction. Equity, board of directors, retention matters, vesting period, cliff period, founder departure clauses, intellectual property ownership—none of these are sexy, but each one determines whether you can weather the first major storm. Arianna even does not shy away from the merits of 'single-founder'—at least you won't fall out with yourself. Portal Labs suggests that instead of getting entangled in the 'number of partners,' it is better to clearly outline the 'list of rights and responsibilities' and the 'conflict resolution mechanism'; by clearly envisioning the worst-case scenario, you can run faster when the best time comes.

Competition and Expansion

Being plagiarized is not news; being obsessed with confrontation is. Arianna's method is to take back the narrative: defining topics with product rhythm, key metrics, and customer stories, rather than directing traffic to competitors. For Chinese Web3 teams, it is especially important to fill in the "infrastructure" of PR and communication: professional branding teams, media whitelists, KOL advocates, product education for user communities, and transparency of technical documentation. The narrative is not a PR script; it is the evidence of what you continuously deliver.

At the same time, uncontrolled growth is both a good thing and a crisis. When the service water level line is breached, it should be handled in a hierarchical manner like firefighting: first protect the safety of funds and user assets, then ensure availability, and finally optimize the experience. If necessary, throttling, opening temporary whitelists, outsourcing customer service and risk control, and even quickly bridging to supplement computing power are all acceptable trade-offs. Write the "disaster recovery plan" during calm times, not learned on hot searches.

Mergers and acquisitions are another signal. Traditional giants are starting to become buyers in the crypto space, and "puzzle-like mergers" are also emerging within the industry. Ideally, you would be the acquirer, but an excellent target for acquisition may also be the best solution for the team, users, and early shareholders. The evaluation criteria are simple: strategic fit, user value, team continuity, and respect for the technological roadmap. Leave emotions to your circle of friends and the terms to the lawyers.

Do the difficult yet right things for a little longer.

The market will not provide standard answers for founders, and the cycles will not either. Therefore, don’t rush to predict the wave; focus on those who can still push the system forward even in headwinds, and allocate time and resources to them. In the context of China, the answers are more straightforward yet more challenging: slogans should not just be shouted, but the accounts, systems, and compliance documents should be solidified; growth is not trending, but rather a stable and reusable supply and return; competition is not about confrontation, but about holding the narrative power and reclaiming the topic through continuous delivery.

If there is one thing to say to China's Web3, Portal Labs believes it should be this: first, stick to doing the difficult yet correct things for a little longer, chase less after trends, and pay attention to who is still present and whose system is still running ten years from now. Cycles will continue to rise and fall, but what truly determines victory or defeat has never been the weather; it is the foundation on which you build your house.