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

Original Title: Preparing for the Pitch with Arianna Simpson

Source: a16z crypto

Compiled and Translated by: Portal Labs

In the Web3 world, cycles are not an accident, but the norm. The alternation of bull and bear markets is like the tides of capital, as well as the changing of natural seasons. For founders, the biggest challenge has never been predicting the next reversal, but rather how to survive the ups and downs, and even build long-term value against the trend.

Recently, Arianna Simpson, a partner at a16z crypto, shared her experience of investing in the crypto industry for over a decade 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 ideas 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 ten years ago when she first read the Bitcoin whitepaper. But what truly made her stay 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 also the subsequent bubbles and cool-downs. It was through this long-term observation that she gradually formed a clear understanding: the crypto industry has never grown linearly, but rather 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. It’s not about making grand assertions first and then finding projects to prove them; rather, it’s about calibrating one’s 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 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 assessed is not the popularity of a theme, but whether the team can maintain speed, discipline, and mission density during tough years. This sequence of “identifying people—observing long-term execution—then discussing valuation” is more likely to weather bull and bear markets than any short-term narrative.

Stablecoins

Narrowing the lens to stablecoins. Arianna’s judgment is simple: the reason stablecoins have become the current focus is not because of a new speculative story, but because both ends are truly using them—consumers use them for cross-border transfers and hedging 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 fundamental infrastructure “valves” of speed and cost have finally been opened, allowing stablecoins to transform from an imagined payment network into a real settlement layer.

This point is even more directly relevant to Chinese Web3 founders and high-net-worth individuals. For teams going global, the real bottleneck is often not the product, but the flow of funds: how to stably, cost-effectively, and traceably send money to annotation teams in Southeast Asia, node maintainers in Africa, and channel partners in Latin America; how to enable overseas clients to make payments without complex corporate processes; 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, there will be more and more issuers, but users will not 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 definitely converge to a few stablecoins with “scale, credibility, and an ecological niche”; further down the road, the front-end experience will become abstracted, users will barely perceive specific tokens, and the back-end will automatically complete clearing and settlement through “rail interoperability.”

This means that for teams building in the stablecoin direction, don’t waste energy on the impulse of “I want to issue one too,” but focus on more pragmatic designs, such as how to thoroughly “native-ize” your business processes, risk control, and financial systems for stablecoins. When your product can naturally operate on the path of dollar 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 risk-free; at the portfolio level, reserving an on-chain track 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; make “compliance and explainability” the first constraint, not the last remedial action.

Crypto × AI × DePIN

Arianna emphasizes that super cycles are often not driven by a single technology, but by several curves overlapping and resonating within the same time window. The clearest combination today 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 then 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 operators are the “new utilities” of future content and goods internet. For Chinese teams doing brand globalization, second-hand trading, and luxury goods circulation, this is an immediate incremental opportunity. Do the hard but right thing: make “verifiable authenticity” the default, not a paid add-on.

Now, let’s look at AI Agents. Handing your credit card to a half-mature agent for “self-service online shopping” is irresponsible; but giving it a wallet with a limit, revocable, and auditable, and letting it complete a set of transactions (subscriptions, purchasing APIs, paying commissions) within a clear strategy is realistically feasible. In other words, “wallet as a permission system.” The real applications are not hyped-up “universal agents,” but “bounded rationality agents” that go deep in verticals—binding permissions, budgets, logs, and counterparties together with on-chain wallets in a tightly constrained business domain.

Fundraising and Governance

The fundraising environment of 2020–2021 may have left many Web3 people with the illusion—you didn’t need a deck, didn’t need a model, and investors would 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 conservatively but with room for overachievement; 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 order is: get the foundation running first, then talk about money. First, engineering resilience of technology and product—performance, risk control, observability, and maintainability; second, compliance and policy pathways—KYC/AML, cross-border data segmentation, auditable flows of funds and data, closed-loop tax and invoicing; third, verifiable business closed loops—real payments, positive unit economics, stable payment collection rhythm. In public narratives, talk less about “tokens,” and do more on 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 there is a chain of evidence for these three things, then supplement capital in milestones, rather than letting fundraising drive the 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 big storm. Arianna even does not shy away from the merits of “solo founders”—at least you won’t fall out with yourself. Portal Labs suggests that instead of worrying about the “number of partners,” it’s better to write a clear “list of rights and responsibilities” and “conflict resolution mechanisms”; only by rehearsing the worst-case scenarios can you run faster in the best times.

Competition and Expansion

Being copied is not news; being obsessed with 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 is especially important to strengthen the “infrastructure” of PR and communication: professional branding teams, media whitelists, KOL advocates, user community product education, and transparency of technical documentation. Narrative is not PR rhetoric, but the evidence you deliver continuously.

At the same time, uncontrolled growth is both a good thing and a crisis. When your service level is overwhelmed, you need to respond in tiers like firefighting: first protect fund security and user assets, then availability, then optimize experience. If necessary, rate-limit, open temporary whitelists, outsource customer service and risk control, or even quickly bridge to supplement computing power—these are all acceptable trade-offs. Write your “disaster recovery plan” during calm times, don’t learn it on the trending list.

M&A is another kind of signal. Traditional giants are starting to act as buyers in crypto, and “jigsaw puzzle” M&A within the industry is also emerging. Ideally, you are the acquirer, but being acquired as an excellent team 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 to your Moments, and terms to your lawyer.

Do the Hard but Right Thing for a Little Longer

The market will not give founders standard answers, and cycles even less so. Therefore, don’t rush to predict the next wave; focus on those who can still push the system forward against the wind, and allocate your time and resources to them. In the Chinese context, the answer is even more straightforward yet harder: slogans are not just for shouting, but for making the ledger, systems, and compliance groundwork solid; growth is not about trending topics, but about stable, reusable supply and payment collection; competition is not about confrontation, but about holding the narrative and reclaiming the topic through continuous delivery.

If there is one thing to leave for Chinese Web3, Portal Labs believes it should be: do the hard but right thing for a little longer, chase fewer themes, and see who is still around and whose systems are still running ten years from now. The cycle will continue to rise and fall, but what truly determines the outcome has never been the weather, but what foundation you build your house on.