Ten-Year Advice from a16z Partner: In the New Cycle, Just Focus on These Three Things

Original author: a16z crypto

Original compilation and translation: Portal Labs

Original title: Preparing for the Pitch with Arianna Simpson

In the world of Web3, cycles are not an accident, but the norm. The alternation of bull and bear markets is like the tides of capital, or the changing of the seasons. For founders, the greatest challenge is never predicting the next reversal, but rather surviving the highs and lows—and even building 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 reading the Bitcoin whitepaper, to the product-market fit of stablecoins, to the intersection of crypto and AI, and her advice for founders.

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

The Nature of Cycles

Arianna’s entry point into crypto was the shock she felt more than a decade ago when she first read the Bitcoin whitepaper. But what truly kept her in the space was not that moment of excitement, but the ups and downs she experienced over the following decade. She witnessed the birth of Bitcoin, the prosperity of DeFi, the frenzy of NFTs, and the subsequent bubbles and cooling-off periods. Through these long-term observations, she gradually formed a clear understanding: the crypto industry has never grown linearly, but advances in dramatic waves, with emotions and capital ebbing and flowing in turn.

Therefore, she shifted her focus from “predicting the next trend” 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 follow; when top teams continue to invest in Crypto × AI or DePIN, new value opportunities often emerge there as well. It’s not about making grand assertions and then finding projects to validate them; rather, it’s about calibrating your worldview and capital allocation based on where frontline builders are heading.

For Chinese Web3 founders and high-net-worth investors, this methodology is more actionable than “cycle prediction.” For founders, the cooling-off period is not an excuse but a filter: if you can still push your product and stack forward in years without applause, it means both your direction and your team are right; for allocators, what truly needs to be evaluated is not the popularity of a theme, but whether the team can maintain speed, discipline, and mission density during tough years. This “identify people—observe long-term execution—then discuss valuation” sequence is more likely to transcend bull and bear markets than any short-term narrative.

Stablecoins

Narrowing the focus to stablecoins. Arianna’s judgment is simple: the reason stablecoins are now a focal point is not because of a new speculative story, but because both ends are truly using them—consumers use them for cross-border transfers and to hedge local currency volatility; enterprises use them for settlement, allocation, and as a bridge for accounts receivable and payable. More importantly, over the past year and a half, the two basic infrastructure “valves” of speed and cost have finally been opened, turning stablecoins from an imagined payment network into a real settlement layer.

This point directly hits home for Chinese Web3 founders and high-net-worth individuals. For overseas teams, the real bottleneck is often not the product, but the flow of funds: how to send money to annotation teams in Southeast Asia, node maintainers in Africa, and channel partners in Latin America in a stable, low-cost, and traceable way; how to enable overseas clients to pay without complex corporate procedures; how to manage cyclical receivables in a dollar environment and control exchange rate risk in a local currency environment. The value of stablecoins lies not in the “coin,” but in the “rail.” When you standardize fund inflows and outflows, identity verification, reconciliation receipts, and tax traces onto an auditable track, the complexity of cross-border business drops significantly.

Of course, issuers will become more numerous, but users won’t pay for every new symbol. Arianna’s intuition is: in the short term, there will be a hundred flowers blooming, but in the long run, it will converge to a few stablecoins with “scale, credibility, and an ecosystem niche”; later, the front-end experience will be abstracted, users will hardly perceive specific tokens, and the back-end will automatically complete clearing and settlement through “rail interoperability.”

This means that for future stablecoin development, teams should not waste energy on the impulse of “I want to issue one too,” but should focus on more pragmatic designs, such as how to thoroughly “make your business processes, risk control, and financial systems native to stablecoins.” When your product can naturally operate in USD pricing, stablecoin settlement, and on-chain reconciliation, your cross-border efficiency and credibility will stand out among peers.

For high-net-worth individuals, stablecoins are a new cash management tool and a “low-friction channel” for global liquidity. But this does not mean zero risk. At the portfolio level, reserving an on-chain rail for “liquidity turnover” and “hedging local currency volatility” is a more future-oriented portfolio hygiene. Simply put, two principles: carefully choose counterparties, diversify custody and wallets; treat “compliance and explainability” as the first constraint, not the last-minute fix.

Crypto × AI × DePIN

Arianna emphasizes that supercycles are often not driven by a single technology, but by several curves resonating in the same time window. Today’s clearest combination is the decentralized incentives of crypto, the centralized computing power and data hunger of AI, and an additional layer of real-world resource orchestration from DePIN.

Translating this into actionable language for Chinese founders: we have rare long-term accumulation in hardware supply chains, manufacturing and deployment, and engineering organization of edge nodes. If you can use stablecoins to connect the chain of “contribution—measurement—payment,” incentivize real-world data and resources to go on-chain, and package these resources into standardized products consumable by AI (datasets, annotation, bandwidth, storage, inference time slices), you have the opportunity to build a “supply-side platform.” This is not a PPT-style tokenomics, but serious operations: metric definition, anti-cheating, settlement frequency, dispute resolution, reputation systems—all need to be engineered.

Another important thread is “authenticity.” The existence of deepfakes is not scary; what’s scary is an unverifiable environment. Verifiable timestamps, generation paths, device signatures, and traceability of operating entities are the “new utilities” of future content and goods internet. For Chinese teams doing brand globalization, second-hand trading, or luxury goods circulation, this is an immediate incremental opportunity. Do the hard but right thing: make “verifiability of authenticity” the default, not a paid add-on.

Now, let’s look at AI Agents. Giving your credit card to a half-mature agent for “self-service online shopping” is irresponsible; but giving it a wallet with a limit, revocability, and auditability, and letting it complete a set of transactions (subscriptions, API purchases, commission payments) within a clear strategy is realistic and feasible. In other words, “the wallet is the permission system.” The real application is not the hyped “universal agent,” but the deeply vertical “bounded rationality agent”—in a tightly constrained business domain, use on-chain wallets to bind permissions, budgets, logs, and counterparties together.

Fundraising and Governance

The fundraising environment of 2020–2021 may have left many Web3 people with the illusion that you don’t need a deck, don’t need a model, and investors will DM you on Twitter with outrageous terms.

Arianna puts it bluntly: that was a “twilight illusion,” not the norm, and today we need to return to basics. Prepare solid materials, honestly present metrics, set fundraising targets at conservative but overachievable levels; it’s better to close a reasonable round first and then snowball, rather than ask for 50 millions upfront and end up with nothing.

For Chinese founders, the more realistic sequence is: get the foundation running first, then talk money. First, the engineering resilience of technology and product—performance, risk control, observability, and maintainability; second, compliance and policy pathways—KYC/AML, cross-border data segmentation, auditable fund and data flows, tax and invoice closed loops; third, a verifiable business closed loop—real payments, positive unit economics, stable payment collection rhythm. In public narratives, talk less about “tokens,” and do more supply-side infrastructure: for example, use DePIN to standardize computing power/bandwidth/sensor data into billable APIs, or use RWA to digitize existing assets and embed them into compliant issuance and clearing processes. Once you have evidence chains for these three things, supplement capital in milestones, rather than letting fundraising dictate your business.

Governance also needs to return to common sense. A 50-50 split is not fairness, it’s inaction. Equity, board seats, reserved matters, vesting periods, cliffs, founder departure clauses, intellectual property ownership—these are not sexy, but each one determines whether you can survive your first major storm. Arianna even acknowledges the merits of “solo founders”—at least you won’t fall out with yourself. Portal Labs suggests that instead of obsessing over “number of partners,” it’s better to clearly write out “responsibility lists” and “conflict resolution mechanisms”; only by rehearsing the worst-case scenarios can you run faster when things are going well.

Competition and Expansion

Being copied is not news; obsessing over confrontation is. Arianna’s approach is to reclaim the narrative: define topics with product cadence, key metrics, and customer stories, rather than directing traffic to competitors. For Chinese Web3 teams, it’s especially important to shore up the “infrastructure” of PR and communications: professional branding teams, media whitelists, KOL advocates, user community product education, and transparency of technical documentation. Narrative is not PR spin, but the evidence of your continuous delivery.

At the same time, uncontrolled growth is both a good thing and a crisis. When service capacity is overwhelmed, you need to respond in tiers like firefighting: first protect fund security and user assets, then maintain availability, then optimize experience. If necessary, throttle traffic, open temporary whitelists, outsource customer service and risk control, or even quickly bridge extra computing power—these are all acceptable trade-offs. Write your “disaster recovery plan” when the seas are calm, not when you’re trending on social media.

M&A is another signal. Traditional giants are starting to act as buyers in crypto, and “puzzle-piece M&A” is emerging within the industry. Ideally, you’re the acquirer, but being an excellent acquisition target can also be optimal for the team, users, and early shareholders. The evaluation criteria are simple: strategic fit, user value, team continuity, and respect for the technical roadmap. Leave emotions for your friends’ circle, and terms for the lawyers.

Do the Hard but Right Thing for a Little Longer

The market won’t give founders standard answers, and neither will cycles. Therefore, don’t rush to predict the next wave—focus on those who can still push systems forward against the wind, and allocate your time and resources to them. In the Chinese context, the answer is even more straightforward yet difficult: don’t just shout slogans, but solidify your ledgers, systems, and compliance groundwork; growth isn’t about trending topics, but about stable, reusable supply and payment collection; competition isn’t about confrontation, but about holding the narrative and reclaiming the topic through continuous delivery.

If there’s one thing to leave with Chinese Web3, Portal Labs believes it should be: do the hard but right thing for a little longer, chase fewer hot topics, and look at who’s still around and whose systems are still running ten years from now. Cycles will continue to rise and fall, but what truly determines success or failure has never been the weather, but the foundation on which you build your house.