Dragonlabz Ventures Update
Building a startup is never easy. But with the right strategy and process, it can be quite manageable. Sounds intriguing? We will show you how!
We all know the key factors investors look for when analyzing an opportunity
- Business Model
Some of these factors are hard to control. Some are easy to plan for.
But for now, let us take a look at relite.finance, a Dragonlabz project.
WORK IN STEALTH
OCT 2020 || The First Idea
Before you start a business, you need to have a concrete idea that hopefully matches market trends and current user expectations. The idea must not be too futuristic, but it must be innovative enough to attract the attention of potential customers and, of course, investors.
In our case, we identified the trend around DeFi in the fall of 2020 and focused our creativity on being innovative in this emerging market. Now that we agreed on the trend and therefore the direction of the new company to be created, we had to agree on a problem to solve.
In our understanding, it is still not attractive for non-technical people to enter the world of cryptocurrencies. Therefore, we focused our plans on building a product that would decisively simplify the user experience without losing the benefits of decentralization.
The idea was born: We want to build an application that allows users to borrow crypto collateral with just a few clicks through an easy-to-understand user interface.Delzar Khalaf, Managing Partner @dragonlabz
Let us take a quick look at the main pillars to see what we have already covered:
1. The idea
Yes, we have an idea that solves an existing problem. But is it tangible enough to attract attention? We instinctively knew that just focusing on UI /UX was not enough, so we had to work hard on the solution.
To create a unique value proposition, we broke our idea down to actual user flows and found that there was an interesting gap between what our competitors were offering and what we, as crypto enthusiasts, were looking for as customers.
The most important aspect we discovered is the risk associated with decentralized lending, in terms of market volatility and instant liquidation of an end user’s collateral. We need more time to react to such incidents as a real person.
With this in mind, we have further structured the business model and developed a reserve fund to address this critical gap from an end-user perspective. The reserve fund was intended to buy time for the end user to respond to market declines and other unexpected activity so that they do not lose the valuable collateral they have provided to the platform.
2. Business model
As we continue to flesh out the idea, we define a business model – not validated and high level – but it is a working model. Sure it needs more attention and it’s too early to check it off the list. But it looks like we have found something interesting.
One of those pillars that you can not control and can only predict with a bit of luck. However, in this particular case, we were sure that the timing was right and we were on a good track in terms of market acceptance.
Since we are looking at a decentralized business model, we all agreed that raising funds through a token sale is inevitable. But first, we need a team.
One of the most important aspects of building a new business and making it work is the founding team. Fortunately, Dragonlabz has strong individuals in its network that we can approach with new ideas. But as of now, we do not have a team.
NOV 2020 – FEB 2021 || Building a team
Leadership teams are expensive and hard to build. The people we are looking for are independent, experienced, and willing to forgo a monthly salary in exchange for the opportunity to build wealth through stock (or tokens).
The most important aspect of a venture starts with introducing the basic idea to potential candidates. But not only do candidates need to be sold on the idea and believe in its future, they also need to fit the company culture and, of course, be able to work together in the best possible way. For this reason, our team traveled all over Europe to talk to the best people in our network and identify the necessary personas for a DeFi Lending protocol. Soon, we agreed with a team from Estonia to share our efforts and build the project together. Hooray! We now have a CEO (with marketing experience) and a co-founder who takes care of regulations and legal aspects.
But that is certainly not enough! We definitely need someone with technical experience and not to forget, we want to build an easy to use product. The complexity around the token is also not to be neglected.
Again, we need to recruit and talk to people in our network to find the right chracters to fill in the gaps.
Again, after a while we got lucky and were able to bring on board a CTO from Tel Aviv, an expert in the product and UI /UX and a much needed specialist in developing our tokenomics and risk modeling.
In addition to the core team, we have pre-qualified a list of vendors who can assist with the implementation of the project and recruited a business development and community management team.
FEB 2021 – MAR 2021 || Refining Business Model and Tokenomics
Once we had all the resources together to work on the project, we focused on refining the business model, structuring a concise whitepaper, and token metrics for token sales. The whitepaper was drafted by the experts and team on board, evaluated by the entrepreneur network, and executed by key partners. This allowed us to quickly establish the key strategic points and the required simulations. In addition to the documentation, the team also delivered a clickable prototype to visualize our plans and set up the landing page, smart contracts and community channels to set all the prerequisites to move to the next phase.
It’s time to finalize the 5 pillars before we move on to funding.
The idea, business model and other prerequisites are finalized. The team is on board and ready to go. The timing should be right. So the only thing missing is the funding. We have come as far as we can. Now it’s time for the second validation point: investors.
MAR 2021 || Onboarding Investors & Advisors
Before we present the project to the public, we need to create momentum in the crypto community and present the idea in a well-structured way (whitepaper and pitch deck) to a consortium of investors and advisors.
We are all excited and eager to get valuable feedback.
We started approaching a few key investors and with the other four pillars looking solid, no one hesitated to support us on our journey. We quickly got a lead investor on board and spread the word of our private sale to the broader crypto community, leveraging the network of our lead investor and the investors and advisors following our shoutout.
After a few weeks, we noticed more and more people coming forward to participate in our new venture. We knew the timing was “en pointe”.
APR 2021 – MAY 2021 || Grab attention and build momentum.
Of course, this is not the case with all ideas and the strategy needs to be tailored to the situation. In the case of Relite, we were able to shift marketing to an influencer-based campaign. We spent zero dollars on campaigns and only used investment tickets for the private sale to connect with interested influencers who promoted our project in their communities in exchange for a ticket. In short, the strategy worked and we achieved 100x oversubscription in the private sale in just three weeks, with tremendous momentum for retail investors at IDO. The private sale has received over 6000 applications from around the world, of which over 200 are institutional investors. Among the well-known funds eligible for a portion of the tokens, we have succeeded in attracting the Stanford Dorm Fund to our plans.
Shortly after the private sale closed, all eyes turned to the public IDO. Within minutes, over 20,000 people signed up for the whitelist, crashing our landing page’s web servers multiple times. More than 50 influencers with millions of followers promoted Relite through their community channels and brought our Twitter account to 10,000 organic followers.
The coin launched at over 10x on UniSwap, resulting in a fully diluted market cap of $90 million and daily volume of $20 million on the first day after IDO.
JUN 2021 || Maintaining Focus
After this first successful step, we had the confidence to continue with our journey.
Now the team needs to perform and continue the much needed R&D to enable a working product in the fast changing industry. As always, R&D takes time and the strategic moves need to be thought through in detail so as not to run in the wrong direction or pay the ever-intrusive service providers with overpriced products (standard for the crypto industry during a bull market).
Part 2 (execution of Product Development, Token Price Actions and Go Live!) will follow soon!
If you wish to get even more inspired by our story and mission get in touch with us at email@example.com.
- Dragonlabz Venture Capital (https://dragonlabz.com/)
Venture builder based in Hergiswil, Switzerland
- Venturedibs Angels Club (http://venturedibs.com/)
Income generating angels club based in Hergiswil, Switzerland