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Navigating the Bitcoin Startup Ecosystem: A Q&A with Dan Held

Trust Machines advisor Dan Held gives advice on how to run a successful Bitcoin startup.
Written by TM Team
Read Time 6 min
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NFT.NYC 2023 wasn't simply a time for crypto art experts and enthusiasts to come together. It was also a time for some of the biggest entrepreneurs in the wider web3 space to give their take on everything from the current digital asset landscape to the future of the blockchain technology business.

And you can bet that this year, the Bitcoin ecosystem was top of mind.

Thanks to the Ordinals protocol, developers have flocked to the Bitcoin blockchain ecosystem –  including from newer blockchains – to build products that could not only affect how we buy and sell cryptocurrencies, but how we engage with financial services and peer-to-peer systems. Individuals and venture capital firms alike are recognizing the value of investing in Bitcoin projects, and they are dedicated to finding the best Bitcoin companies and startups across the globe. They have recognized that Bitcoin isn't simply a digital currency to hold in one's crypto wallet and portfolio, but also a platform that can bring a wide selection of emergent blockchain technology poised to change the world.

However, this also means that the future founders of top Bitcoin startups need wellfound advice on how to navigate the crypto startup scene. It's not enough for entrepreneurs to attract the necessary investment for their companies and startups to work efficiently, they must also learn everything from how to provide a stable product to how to securely scale, no matter the business cycle.

Bitcoin educator Dan Held possesses extensive experience in the crypto startup space and has been involved with some of the industry's fastest growing companies for over a decade. He believes in ushering a new era of Bitcoin tech hubs made up of strong networks of Bitcoin entrepreneurs, and is focused on driving the next generation of startup founders. 

Trust Machines sat down with Held prior to his panel appearance at Wolf, a Lightning accelerator based in New York, during NFT.NYC week. The private event took place on April 14.

Dan Held on the Bitcoin Startup and Blockchain Space

Trust Machines: Could you take us through your career path?

Dan Held: I started in the crypto ecosystem back in 2012 and built one of the first popular mobile apps called ZeroBlock. ZeroBlock was a market data chart app that allowed you to see real-time market data, news feeds, charts, and more. We got bought by in December 2013 in the second all Bitcoin acquisition. 

From there, I was the first product manager of and worked at another crypto startup. I ended up at Uber headquarters where I worked on rider growth (led by Andrew Chen) and growth marketing. I left Uber, started another crypto startup that got bought by Kraken, and built out Kraken’s marketing org.

I’m currently advising companies like Trust Machines and others on their marketing strategy and execution. Personal brand-wise, I started to write a series of blog posts in 2018 that I felt covered some of the topics that had been, I think, poorly addressed or misconstrued about Bitcoin. I put those together into a series of articles that became popular, and that fed into my personal brand. 

Trust Machines: You’ll be speaking to a group of entrepreneurs who are starting their own projects at Wolf, an accelerator for projects on the Lightning Network. Can you give us an idea of what you’ll be covering?

Dan Held: Wolf really spoke to me because I've been in the startup world, and I've had a couple of my own startups. It's a tough slog, and there isn’t a lot of guidance out there. When folks go through accelerator programs, you have in-house teams that help you, but the wisdom of folks who have done it before helps a lot.

I used to be a mentor at Boost VC – Adam Draper's accelerator – for a few years. I love helping out entrepreneurs, [and I get to continue doing so] with the Wolf accelerator through NYDIG. NYDIG is really cool because they've definitely taken a prominent role in helping the Bitcoin ecosystem. I know Kelly Brewster (the CEO of Wolf), and Kelly mentioned that it'd be great to have me speak at Wolf to share my knowledge of building early stage crypto products and help out these Bitcoin companies building applications on top of Lightning

We're really excited that I could take my learnings and hopefully give them some wisdom that they can use and apply in their own startups. 

Trust Machines: What do you think entrepreneurs looking to start a business in the crypto industry should know?

Dan Held: Crypto is really unique because you have these bear and bull market cycles that very much dictate the outcome and success of your business, but these cycles aren't entirely predictable. I definitely recommend that folks try to fundraise during the bull run, that's a huge measure and a success metric of surviving is having enough runway. 

Fundraising at the right time is big because in bear markets, it's extremely difficult to fundraise. You also want to plan your operations, burn, and everything else around that. This means ensuring that you have a team to build and execute. The tricky part here is you have to have a slow burn in the bear, but then ramp up that burn into the bull run without overextending yourself. If you don't put on that afterburner, you might lose market share to competitors. 

It’s also about having a slow and steady approach to your product development. Don’t be distracted by whatever the latest hottest thing is; find where you deliver value and consistently deliver that value. Trends ebb and flow, so make sure you're moving towards solving a problem for your customer. If you get distracted by every new hot, shiny thing – which can be hard in crypto – you could easily misallocate resources and change direction too late to make a difference.

Trust Machines: Now, let’s turn to Bitcoin. What makes Bitcoin an ideal blockchain to build upon?

Dan Held: I've been saying for years that, eventually, we'd see developer interest come back to Bitcoin. Bitcoin is the oldest cryptocurrency out there and also the most dependable, reliable solid foundation you can build upon. It is also the highest crypto asset by market cap, and the most solid asset collateral you could use for smart contracts. All this, combined with proof-of-work (PoW), lead to it being a more solid foundation [for builders]. 

Trust Machines: And of course, we kicked off the year with Ordinals, which drew a lot of people to the Bitcoin space. Has the introduction of such a big development impacted the Bitcoin startup ecosystem?

Dan Held: [The Ordinals protocol was] a huge breakthrough in terms of interest in DeFi on top of Bitcoin. We've seen a surge in developer activity, hundreds of new startups created, tons of new money pouring in, and a lot more interest [from developers from other platforms]. It's really cool to see Bitcoin capture that mindshare. 

I do think Ordinals are a superior NFT product. You have the asset on chain, which means it's not pointing to an IPFS file or something off-chain. In addition to that, due to how Ordinal Bitcoin NFTs are constructed, there isn't a way to alter the ownership or the NFTs in a collection whereas on Ethereum and other smart contract platforms, due to how the NFT smart contract works, ownership and NFTs in the collection can be altered post-issuance. 

So I do think Bitcoin offers, I would say, a superior NFT platform, and we're starting to see a lot of that developer interest come over into Bitcoin. I think that's going to keep snowballing and will probably lead to more DeFi being built on top of Bitcoin, more developer interest, and more funding.

Trust Machines: Are there any other developments you’re eyeing that you think could really drive the Bitcoin startup ecosystem?

Dan: I think Taro would be the next big release coming out shortly. Taro is built on top of Lightning, and what it would enable is the transfer of other types of assets. That could be governance tokens, stable coins, etc., and so I think that's a really big critical shift to bring those tokens to Bitcoin. 

We've seen all that activity occur on Ethereum and Solana, and now it’ll be brought back to Bitcoin to a whole new level. And so, yeah, I think it's a big deal. A lot of people are looking forward to it. 

I think it might be delayed slightly because there's another company that has the name Taro, so there's a bit of a branding issue. But it’ll be interesting to see that launch once they’ve reconciled the naming issue, and I think that [the development will be] a really big deal.