Alliance DAO: Essential Traits of an Exceptional Crypto Founder
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Alliance DAO: Essential Traits of an Exceptional Crypto Founder
Integrity, intelligence, and energy—if you lack the first, the other two will destroy you.
Navigating Web3 tides with focused insightsWritten by: Qiao Wang
Compiled by: TechFlow
I often hear this question from founders and venture capitalists alike: "What criteria do you use when screening teams for AllianceDAO?" So I decided to put my thoughts down.
But in writing this piece, I realized it's not just about what we look for when evaluating applicants—it’s also about what it takes to be a great crypto founder. The difference between "what we look for" and "what is needed" is that the former is merely an assumption, while the latter is based on empirical evidence.
I don’t pretend to have the perfect answer, but after nearly three years of involvement with around 200 startups, certain patterns have begun to emerge.
Insight
Let me start with something actionable—an alpha—for potential applicants. One of the most important questions on our application form is: “What unique insights do you have about your users?” From my experience, having deep insight is one of the key differentiators between excellent and poor crypto founders. Yet very few applicants give thoughtful answers to this question.
A profound user insight is often an idea substantial enough to build an entire business around. For example, Tensor (ALL7) started with the insight that despite the dominance of OpenSea and Magic Eden, there was still a significant underserved user segment—professional NFT traders. These professionals needed different tools, such as floor sweeping or advanced analytics. This isn't so different from the fungible token world, where professional traders require tools like Perps or new ERC20 sniping bots. Tensor’s entire product vision was built around serving these expert traders.
But great insights aren't always limited to market gaps. They can also be surprising observations that make us (the interviewers) think, “Wow, I’ve never thought of that before—but it actually makes a lot of sense.” For instance, when StepN’s (ALL7) founder told us during their interview: “Many people go to the gym not because they need a coach or equipment, but because they need real accountability to stay committed.” The truth is, we screen thousands of applications every year, and very few offer fresh perspectives. When someone teaches us something new, it signals that the founder can think independently—not just jumped into crypto after reading a few VC-backed “Why Web3 Matters” blog posts.
Sometimes, great insights are outright contrarian. When Ostium (ALL9) first met us, they pitched “commodity RWAs.” At the time, “RWAs” as a category barely registered—no tokenized Treasury projects had achieved real traction, let alone “commodity RWAs.” So I pushed back: “In crypto, nobody cares about gold and oil—they’re old people’s asset classes.” Kaledora replied: “r/wallstreetbets is obsessed with lean hogs and orange juice because they’re highly memeable, and retail has no easy way to leveraged trade them.” I don’t know if putting commodities on-chain will become big, but I loved the contrarian thinking.
Now, you might argue these insights seem trivial—or could even turn out to be flat-out wrong. True. But insightfulness itself isn’t what makes a founder successful. Rather, being insightful reveals two crucial qualities.
First, I’ll quote Ilja from Tensor: “If you’re not contrarian, you don’t have a startup.” It’s not just investors who must make contrarian bets—founders must too. In fact, when was the last time a crypto startup that ultimately succeeded wasn’t controversial at the start? Remember how many dismissed Solana? Remember the CLOB vs. AMM debate around Uniswap? Entrepreneurship is almost by definition about discovering a secret that others don’t know or few believe in. Otherwise, the company would already exist.
The second quality revealed by insightfulness is that the founder has spent considerable time immersed in their domain—and deep immersion suggests perseverance, genuine passion, or both. I’ve written about this before, but I’ve found that new entrants to crypto typically need at least 1–2 years before forming meaningful insights. Why does it take so long? I suspect it’s because crypto is fundamentally different—and often counterintuitive—compared to Web2 or traditional finance (where most founders come from). Many give up on crypto within 1–2 years, right before that critical inflection point. Which brings me to my next point.
Elite Schools or Elite Companies?
Let me use a small statistical trick here. If you consider the entire population of crypto founders, there’s definitely a correlation between attending elite schools or working at top Silicon Valley firms and future success. But if you zoom into the top 1% of founders—the kind who qualify for AllianceDAO—this correlation becomes nearly zero at first glance. Looking at the most successful companies we’ve incubated, and the most successful across crypto overall, very few come from elite backgrounds.
To be clear, zero correlation doesn’t mean elite background predicts failure. Not at all. It simply means that at the highest level, it’s no longer an independent predictor of success. But why?
Some of these founders were taught from a young age that you must grow 5% weekly or you’re failing. In reality, crypto product growth is rarely linear. Instead, most products—whether centralized ones like Coinbase or protocols like Ethereum—grow in steps. This is largely due to the cyclical nature of broader markets. As a result, these founders give up too early—almost always during bear markets when growth stalls.
Another reason is that many elite-background founders enter crypto for the wrong reasons. They came because during the peak of the bull market, influencers on Twitter made extreme claims about Web3 being the future of the internet, and they fell into the trap of believing rising prices empirically validated those claims. If you’re an underbanked immigrant trying to make life-changing money with HarryPotterObamaSonic10Inu or send remittances home, those narratives sound absurd. Now, I do believe Web3 will become a major part of the internet—but before starting a company, you must be able to reason from first principles why that’s true, and immerse yourself in existing crypto products to truly feel their power.
A direct consequence of elite Web2 or TradFi veterans entering crypto for flawed reasons is their obsession with skeuomorphic ideas like decentralized Uber. I know the term is now overused and annoying, but clearly, things that work in Web2 or traditional finance don’t automatically translate to blockchains. When I interview applicants, I often ask myself or them: “What novel, weird, or even controversial consumer behaviors does your product enable?” Even a novice realizes decentralization usually worsens UX—but if the product enables entirely new behaviors users couldn’t experience before, that trade-off may be acceptable. If it doesn’t, then it’s just offering worse UX than Web2 or TradFi alternatives. For example, in DeFi, you can access hundreds of financial products within a single account without creating new accounts or going through KYC for each.
There’s one question on our application I pay close attention to: “Why did you choose to work on this idea?” Solving your own problem or a friend’s problem is often a good answer. Interestingly, this answer frequently comes from founders in emerging markets or DeFi—both of which are the opposite of what I call “elite.” For example, Felipe built Kravata (ALL12) because he personally needed offshore fiat exchange services in Latin America. Jackson built Thunder (ALL12) because he hated how hard it was to mimic new ERC20s and FriendTech keys.
The point is, if crypto is truly a long-term equalizing force for 8 billion people on Earth, then logically it must also be an equalizer for entrepreneurs in crypto. Founders from underprivileged backgrounds should have the same chance of success as elites—because they inherently understand similarly underserved users.
Therefore, we care almost nothing about elite credentials. We really don’t. About two-thirds of our admitted applicants didn’t come through warm intros or referrals. They were complete strangers online who put serious thought into their applications and interviews. Many VCs believe warm intros are essential—that gaining access to VC circles via networks is your first test: if you can’t get a warm intro, you won’t get users. I sympathize with this view, but I also believe that for entrepreneurs from less privileged parts of the world, their distance from elite VCs isn’t 1 or 2 degrees—it’s much farther. Their time is better spent building relationships with users, not VCs.
Perseverance
While elite credentials aren’t necessarily a good proxy for first-principles thinking, they *are* a decent proxy for perseverance. And many of us—including me—believe persistence is the single biggest common trait among successful founders in any industry.
On our application, we ask applicants to describe a particularly persistent experience. But honestly, judging perseverance from just this question or the interview is extremely difficult. Still, sometimes they share surprising things. One of our alumni (anonymous for privacy) told me: “All my peers from [a top university] have achieved great things in AI. If they can do it, so can I.” I felt their drive.
Now, many will argue that money and fame aren’t good motivations for starting a company. I’m actually not sure that’s correct. Setting aside that debate, the most persistent people I know all carry a deep chip on their shoulder. No matter how much success they achieve, they always seem to have something to prove. Many experienced early trauma. Both Musk and Jobs were raised by abusive fathers.
But perhaps perseverance matters even more in crypto than in other industries. Name another industry that goes through full boom-and-bust cycles every four years. Or another where the SEC chair has made its destruction a personal mission. Or another where all major figures were imprisoned within a year. I always laugh when I see tweets like: “I aged three years in the past 24 hours” or “I survived the bear market of November 20, 2022.” This is not an industry for the faint-hearted.
One simple but difficult way to artificially increase perseverance is to find a co-founder you know well—ideally someone you’ve worked with before. We also ask applicants how they met their co-founders. Having a co-founder isn’t just about skill complementarity—it’s also about providing psychological support during tough times. Working with someone you just met at a conference rarely works; it needs to be someone with whom you’ve already built trust. That’s why many founding teams break apart during bear markets. They claim it’s due to misaligned visions, but upon closer inspection, the real issue is lack of trust. If you can’t find someone you trust, it’s better to go solo (and possibly leverage founder communities like AllianceDAO for peer support).
Integrity
As Buffett put it best: “I look for three things: integrity, intelligence, and energy. If you don’t have the first, the other two will kill you.” Indeed, all the major figures who ended up in prison over the past year had the latter two—but lacked the first. I think the word “integrity” needs no further explanation.
Interestingly, the triad of “integrity, intelligence, and energy” aligns perfectly with all the traits I’ve discussed above. Insight relates to intelligence, perseverance to energy, and underprivileged backgrounds may embody both.
Beyond these, we certainly care about distribution, market size, engineering capability, defensibility, regulatory risk, and more. But weakness in any one area doesn’t necessarily kill the deal. We often partner with insightful, non-elite, persistent, and honest first-time founders, helping them grow. These qualities take years to develop—or may even be innate—which is why they’re non-negotiable. All other elements can be learned or acquired. All common mistakes can be avoided.
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