Building an encryption BD team from 0 to 1: a16z's practical experience sharing

Authors: Christian Crowley, Pyrs Carvolth, Maggie Hsu & Mehdi Hasan, a16zcrypto

Compiled by: Deep Tide TechFlow

Building an effective business development (BD) and growth team in the crypto industry is no easy task. The unique dynamics of the crypto space make it challenging to directly replicate the organizational structures or hiring models of Web2. As fintech and financial services continue to delve into the crypto space, the landscape of this field is also constantly evolving. The correct configuration of business development roles entirely depends on the product your company is building and the desired outcomes.

For example, are you building products on a public chain, focusing on increasing total value locked (TVL) and user numbers? Or, as an infrastructure provider, is your goal to help fintech companies and neobanks embed crypto functionality into their core products? Depending on the different answers to these questions, your business expansion and growth strategies will also need to be adjusted accordingly.

Before recruiting, clarify what your company is building, how success will be measured, and how the new BD or growth role will help achieve these goals.

This article is not a step-by-step guide for all types of cryptocurrency companies; rather, it aims to share some guidance and practical lessons drawn from real experiences in the cryptocurrency ecosystem to share with teams that are building and closely collaborating with founders.

But first, how does encryption change BD?

The business development (BD) and growth of the crypto industry are fundamentally different from traditional Web2, and the following key factors have completely changed the game:

• Token Design: When and how to use tokens in partnership or joint incentive structures requires a deep understanding of the target ecosystem, as well as a solid grasp of one's own tokenomics. Proper use of tokens can drive user growth through partner products, while abuse can lead to high costs with minimal returns.
• Distribution Model: In the crypto space, distribution typically occurs on-chain, which means you need to design strategies around wallets, airdrops, and tasks, rather than relying on traditional mailing lists or paid advertising.
• Decentralized Governance: In certain cases, collaborative transactions need to be approved through decentralized governance, which means obtaining support from a Decentralized Autonomous Organization (DAO) rather than a traditional executive team. This often involves managing a broader and more complex group of stakeholders.
• Open-source ecosystem: The cryptocurrency industry typically operates in an open, permissionless ecosystem, where most of the code is open source. This makes competition more transparent and successful strategies easier to replicate quickly.

These points do not apply to all projects, and depending on your product, some points may be more important than others. However, they represent a hierarchy that does not fundamentally exist in traditional Web2 strategies. If any of these points are central to your product's growth, they will directly determine what kind of talent you need, which experiences to prioritize, and how quickly that talent can start working in practice.

Understand which of the above dynamics are critical to your product and can affect everything from how you enter the market to how you build partnerships and measure success.

Step 1: Clarify role requirements

First, understand the requirements and the goals you want to achieve through this recruitment.

Before starting the recruitment process, the team needs to clearly understand why this new role can drive business success and what specific functions need to be recruited. Here are several common professional directions and their distinctions in the field of business development and growth:

• Business Development (BD): Focus on strategic transactions, such as corporate partnerships, exchange listings, or wallet integrations, which can help expand distribution channels and user access.
• Growth: Focus on product-driven loops (e.g., self-reinforcing referral programs or network effects driven by user behavior) and funnel optimization (enhancing each stage of the customer's journey from awareness to conversion, retention to monetization).
• Partnership: Focus on product integration (for example, embedding your product into other platforms or enabling partners to build on your platform), joint marketing campaigns, collaborative marketing to enhance brand awareness, or other strategic collaborations that can exponentially increase distribution.
• Revenue: Focus on expanding customer sales scale after aligning products with the market.
• Ecosystem: Broader in scope, often includes developer relations (DevRel), foundation or community-driven reward programs to incentivize third-party applications, tools, and infrastructure, as well as grassroots community growth to expand the overall network.

These roles are not interchangeable. While they all fall under the broad categories of "business development" or "marketing," each role requires completely different skills and success metrics. Attempting to have one person take on all responsibilities can lead to role misalignment or poor performance. A common mistake is to expect a "strong BD talent" to simultaneously handle growth loops, revenue operations, and ecosystem building, when in reality, spreading oneself too thin often means that none of these tasks can be done well. Therefore, before defining roles, clarify the impact you want it to have, and use precise job titles to avoid confusion. We have emphasized in other recruitment articles that this step is crucial for any role. This fundamental step is often overlooked at the beginning of the recruitment process, and neglect can snowball. If you are unclear about what you truly need, it will affect all subsequent processes, from searching for talent, screening candidates, setting candidate expectations, to compensation structures.

Key considerations: The significance of the first recruitment

In the early stages of entrepreneurship, execution is crucial. Rapidly growing startups need people who can make the most of limited time, budget, and team resources; those who can not only develop strategies but also actively participate in the work. This often includes proactive outreach, identifying and screening potential clients, leading exploratory calls, understanding client issues in depth, and how your product addresses those issues.

It is also important to set clear indicators and goals for the first recruitment, which should be directly related to the product. For example: the number of pilot agreements signed or integrations with relevant agreements, the number of potential customers in prioritized verticals, or the establishment of significant partnerships in key categories.

Before achieving product-market fit, the correct BD goals can become complex. At this point, the temptation to pursue significant partnerships is high, but this may backfire. Securing the wrong "big client" too early can cause the team to focus excessively on a single functional requirement or customized integration, neglecting other more critical aspects of the product that may be key to broader market adoption. While strategic deals can bring distribution, credibility, or early revenue, they can also distract the team from the iterative learning necessary to find product-market fit.

As the product matures, BD objectives will continually evolve, but without clear metrics and milestones, it is difficult to measure the progress of new roles. Linking these metrics to compensation and setting challenging yet achievable goals (if token compensation is involved, please refer to our article on token compensation).

After defining the role expectations, the team can also consider the timing, qualifications, and experience for recruitment, which will be discussed in detail in the next section.

Step 2: Determine when and who to hire

Hiring a Business Development (BD) or Growth Lead can significantly enhance a company's growth, but it requires the right conditions and timing. Before achieving product-market fit, the team needs a flexible "hands-on" talent to explore use cases, test effective strategies, and assist in product feature development when necessary. After achieving PMF, the focus shifts to scaling: establishing replicable systems, clear metrics, and concentrating on executing effective strategies.

So how can the founders make the first hiring effective?

• PMF Before: Recruit flexible and adaptable talents, explore use cases and validate effective strategies.
• After PMF: Hire experts skilled in scaling, well-versed in sales processes, replicable systems, and team management.

Here are some common questions we are often asked about recruiters, from qualifications to experience in the crypto industry. Every company has different answers to these questions, but there are some patterns worth understanding that can help us avoid costly mistakes.

When is it necessary to hire a Chief Revenue Officer (CRO) or a Chief Growth Officer (CGO)?

When hiring senior leadership, the most important factor in the early stages is execution capability. Startups need resources that can personally get the job done, rather than just formulating strategies. Therefore, hiring a CRO or CGO too early may result in high costs and inefficient outcomes.

A true CRO/CGO requires a mature go-to-market (GTM) engine, including replicable sales processes, customer success support, marketing resources, and a stable lead pipeline, to function effectively. However, most projects that are before product-market fit (PMF) do not need these complex systems. If you are unsure whether you need a CRO or CGO, you may not need these roles for the time being. Early-stage ventures are better suited for "hands-on" talent who can both lead and execute, negotiating deals personally while beginning to build sales or growth teams. Maintain discipline and consider hiring executives only after the business or GTM engine is ready.

Do GTM (Go-To-Market) talents need to have a technical background?

It depends on the nature of the product and the target user group. If your product is aimed at a developer user group or belongs to an infrastructure protocol, then technical experience is often necessary and valuable, even at the CRO/CGO level.

If your product is at the application layer, it is certainly important to be familiar with technical concepts, but a technical background is not necessary.

How important is experience in the cryptocurrency industry?

It depends on your product category. If you are building products like Layer 1 or infrastructure protocols, experience in the crypto industry is often essential, as the underlying technology is complex and closely related to other foundational components of the ecosystem. Additionally, for certain projects, cultural fluency (such as understanding the native norms, popular memes, incentive mechanisms, and community dynamics of the crypto industry) may be the key to success.

However, do not overlook the excellent talent from outside the crypto industry. For many roles, crypto experience is not a strict requirement—candidates can learn the basics of wallets, protocols, and on-chain activities. However, some skills cannot be acquired through training, such as customer empathy and strong communication skills.

The cryptocurrency industry is still maturing, and experience may be relatively scarce. Suitable talent from fintech, open source, gaming, or other cutting-edge technology fields may bring new strategies, precisely because they are not constrained by traditional crypto thinking. Some of the strongest strategies often come from those who do not adhere to established rules.

More early recruitment considerations:

• Is this person responsible for finding new trades (external) or managing existing trades (internal)? This distinction is important because both require different skills.
• Are you building from scratch or expanding an existing successful strategy? You may need people who can handle ambiguity or those who excel at optimizing existing strategies.
• What is your partner strategy? Is this person responsible for a small amount of deep integration, or for a large amount of light-touch collaboration? Clarifying the needs (patience and depth vs. speed and breadth) can significantly affect the role definition.
• Do they have a record of success and practical experience in similar roles? Successful individuals in different types of companies (stages, products, etc.) may not necessarily succeed in your company.

Common Errors:

• Overly senior recruitment (loss of execution ability): Very senior candidates usually expect to lead teams and formulate strategies, while the real need in the early stages is execution.
• Recruitment is too generalized (lacking GTM capabilities): Generalized talents without marketing experience may struggle to prioritize the most effective early strategies. Early GTM recruitment typically requires sharp and hands-on skills.
• Unclear definition of goals (e.g., "doing BD" without knowing what the success criteria are): Vague task settings can lead candidates into a failed situation. Clearly defining success is crucial.

Team Structure Design: Marketing Strategies in the Cryptocurrency Industry

As startups grow in scale, founders often ask how to build a go-to-market (GTM) team. While there is no one-size-fits-all answer, there are some successful models and pitfalls to avoid that are worth referencing.

The following are common questions and best practices regarding the team structures of L1 and L2 protocols, applications, and infrastructure projects.

Should BD, growth, and marketing be managed by the same person?

In the early stages, it may be feasible for a strong marketing manager to oversee everything, but as the team grows, it makes more sense to separate these functions.

• BD (Business Development): Focused on trading and partnerships.
• Growth: Focus on funnel optimization and product-driven strategies.
• Marketing: Focus on brand building and communication.

Each function has different rhythms and metrics, so long-term bundling may lead to poor performance in certain areas.

Do you need early customer success or integration support functions?

For clarity, customer success is primarily responsible for managing existing customer relationships, including helping to resolve product issues, ensuring that customers continue to receive value and remain active (and even purchase more products). This function is particularly important for complex, highly customized, or SaaS products.

In the early stages, flexible products and development teams are often able to handle customer success efforts. However, if your product requires extensive implementation support (such as infrastructure, development tools, or protocol integration), it may be worthwhile to invest early in a dedicated customer success function, even if it is not directly referred to as 'customer success'.

When should founders divide BD functions by market segmentation or verticals?

Some teams are categorized by industry, such as DeFi, NFT, gaming, banking, and financial institutions. This approach is applicable after finding market traction in the core use case, rather than before. Otherwise, there may be an excessive focus on a yet-to-be-validated area.

If your product is not yet mature or your user base has not yet been established, keep the team flat. An experienced BD leader can cover multiple areas at the same time.

What are the best practices for Layer 1/Layer 2 protocol teams?

The business development of the protocol team faces unique challenges because they are not just building a product, but establishing a network. This often means that BD is not just a single function, but multiple complementary roles working together to drive network growth.

The following are common team divisions:

• Core BD Team: Focused on attracting developers and projects to build on L1/L2.
• Ecosystem Team: Responsible for funding, community building, and governance.
• Technical Integration Team: Supports the deployment of partner projects on the network.
• Regional Team: Handles local language and regional promotion, addressing area-specific needs.

How does the team plan geographic expansion?

Unlike traditional product launches, crypto projects are often global from day one. Therefore, it is crucial to prioritize regions that already have user adoption. It is not advisable to forcefully establish full-time regional marketing positions before significant market traction or interest is evident in a particular area.

However, based on product demand, hiring a junior community manager in countries with early high interest may enhance local user engagement. The specific timing depends on the actual product adoption situation and future growth potential in the region.

How to handle governance / community marketing?

Governance is the process of coordinating decisions through a decentralized community, which is a unique characteristic of the crypto space and is only relevant to certain projects. Traditional BD relies on hierarchical decision-making and direct negotiation, while governance-driven BD emphasizes community participation and blockchain transparency.

For example, when scaling protocols across blockchain networks, community governance plays an important role through decentralized autonomous organizations (DAOs) or protocol governance mechanisms. DeFi protocols like Uniswap and Aave decide on multi-chain deployments, protocol upgrades, fund management, and token issuance parameters through DAOs and token holder voting.

Successful BD leaders need to be responsible for proposals, activating representatives, and driving governance votes—this is part of BD as well as community outreach, including communication and campaigning.

The following are some nuances regarding BD and governance that candidates should be aware of.

• Not just sales, but also product capability: The governance forum is filled with proposals at different stages, which may involve years of building and iteration. Each vote requires candidates to understand the historical context of the proposals and how they fit into the evolution of the theme. Merely having sales experience is not enough; candidates also need to have product capability to tell compelling stories and handle post-vote activities (such as explaining the voting results and their impact on the protocol).
• Governance and the Influence of "Whales": Candidates must be skilled in relationship and community building, while also being able to clearly explain value to stakeholders. This often requires directly reaching out to secure the support of large holders ("whales") while winning the recognition of smaller holders through governance discussion boards and community channels such as X and Discord.
• On-chain and off-chain dynamics: Many successful community forums rely not only on online interactions but also require offline feedback. Proposals often begin discussions off-chain but ultimately undergo binding votes on-chain. This hybrid approach can both foster deep relationships and trust, while also being scrutinized by the broader crypto community.
• The key is transparency, ensuring that even if most conversations occur off-chain, all potential voters can clearly understand where the discussions are taking place and how certain decisions are made. In many cases, engaging with the community during the discussion phase is crucial. Candidates must be able to formulate clear, data-driven proposals to present or respond to specific governance proposals, while also possessing the skills to handle and address public rebuttals.
• Coordination challenges: Compared to traditional negotiations, crypto governance involves multiple different types of stakeholders and cross-timezone coordination, which can lead to decision fatigue or stalled progress. Candidates need patience, organizational skills, and a high level of attention to detail.

Common Mistakes:

• Long-term integration of business expansion, growth, and marketing, rather than allowing them to focus individually. Failure to timely separate functions may lead to performance degradation in certain areas, as each function requires deeper skills and focus after gaining market traction.
• Before the product-market fit is clearly defined, it is premature to segment by vertical industries or regions. Early specialization before clearly understanding product-market fit may lead to resource waste, that is, chasing the wrong market before understanding where the demand is strongest.
• Lack of technical support: For products that require extensive integration support, the failure to provide technical support will limit the effectiveness of market promotion.

Interview Process: Best Practices

Recruiting business development (BD), growth, or marketing talent is not just about looking at resumes, but also about assessing candidates' thinking, communication, and practical skills through real-life scenarios. An excellent interview process should be structured enough to fairly compare candidates, but also flexible enough to adapt to particularly outstanding candidates. When encountering candidates with highly relevant experience or unique perspectives, it is worthwhile to appropriately adjust the process to deeply explore their potential.

Key steps in the interview process: ###

Case Analysis

Have candidates analyze based on cases related to your product, preferably based on real or anonymized transaction scenarios.

• Prioritize real cases over theoretical assumptions.
• Let candidates share specific trades they led, marketing strategies they executed, or community activities they drove.
• Observe how they demonstrate responsibility and adaptability, and clearly communicate work results.

Simulation Demonstration

Ask the candidate to develop an outreach strategy or handle a complex inbound request. For example, provide a vague inbound message (such as a certain protocol wanting to "explore cooperation opportunities") and ask the candidate to explain how to assess the opportunity, build a proposal, and advance the collaboration.

Cross-functional interview

Arrange cross-functional interviews with marketing, product, legal, and other teams that need to collaborate with BD according to the company's stage. While certain collaborations may look great in the initial stages, they may fail without product support or legal compliance assurance.

Meet the Founder

For early BD recruitment, especially for the first BD talent, meeting with the founder is crucial to ensure that the candidate aligns with the company's goals and values. As the team expands, the founder does not need to meet every candidate, but the recruitment process still needs to ensure that new members can integrate into the team and work efficiently.

Why are these methods effective?

• Test strategic thinking and execution ability simultaneously.
• Demonstrate the candidate's communication skills under pressure.
• Reach consensus among key stakeholders in advance.

The core of business development lies in quick learning, focusing on important matters, and digging deeper when necessary. In interviews, you should not expect candidates to have a complete understanding of your products, but instead look for qualities that enable them to adapt, solve problems, and cope with a rapidly changing environment.

Take enough time to carefully assess candidates while maintaining timely feedback. The recruitment process reflects the company's image, and even small details can accumulate over time to affect the reputation of your founders and team.

The key theme here is timing: hiring the right people at the right time can quickly drive the company's growth, while wrong hires may lead to setbacks.

Before achieving Product-Market Fit (PMF), teams need candidates with strong hands-on skills to test, learn, and complete early trades; after PMF, the focus shifts to scaling replicable systems and teams. At the same time, clarity is crucial: BD, growth, and marketing require different skills, and long-term bundling of these functions is a common trap. Additionally, the complexity of the crypto industry (such as tokens, governance, and open-source dynamics) makes targeted recruitment based on product and stage even more important.