Zooming into Project Teams & Founders

Thought leaders and founders are crucial in tech industries, especially so in the young blockchain industry, where the team and founders are the backbone of any project. They bring the vision to life, drive innovation, and steer the organization through hard times. 

That’s why it’s so important to conduct due diligence on the project’s founders and team when doing your research. Knowing the team can reveal the project’s potential success, reliability, and alignment with your values.

But before we dive into what to look for in teams and founders, let’s discuss why it’s essential.

Why Understanding the Project Team is Crucial for Investment Decisions

It’s easy to think of blockchain ecosystem projects as decentralized networks that run on smart contracts and code, free from human error or mismanagement. However, just because a project runs on a decentralized network doesn’t mean it’s genuinely decentralized. In reality, blockchain projects are designed and shaped by the team developing them. And even if the project launches successfully, it does not mean that the team will yield control to their community.

A CB insights study revealed that 14% of startups fail because they have the wrong team. Another 7% failed due to team disharmony. These figures may be higher in blockchain, with many anonymous founders and little regulation. For that reason, it’s vital to evaluate the team’s capability before investing in a project.

The state of a project team can offer great information on a project’s prospects: a robust and transparent team might indicate a project’s credibility and viability, whereas questionable teams might raise red flags about the project’s legitimacy and ability to deliver on its promises. Remember – scams are prevalent in new crypto projects, and at worst, smart contract developers can write malicious functions designed to steal your funds if you interact with them.

Even if the project is an honest one, you can still lose your funds by interacting with projects from inexperienced or incompetent teams. Smart contracts from such teams can have major flaws: if a developer makes a simple mistake with a token contract, any funds sent to that contract could be irretrievable.

For those reasons, it’s essential to check that any project founder has both an ethical and authentic past, and the experience needed to build a blockchain project and community.

How to Research Projects and Founders

Research the Team’s Backgrounds and Experience

A strong team possesses a diverse range of backgrounds and experiences. Look for team members with expertise in relevant areas such as blockchain, business strategy, and marketing. And of course, this expertise should align with the project goals. For example, if you’re investing in a blockchain tech project to disrupt the hotel industry, the team must have members with relevant experience such as working for well-known hotel brands or hospitality organizations.

OSINT

Open Source Intelligence (OSINT) uses publicly available information to uncover information about a person. It has been used since World War II when intelligence operatives used information such as radio, broadsheets, and interviews to aid in war strategy. But today, it’s a great way to look deeper into project founders. These strategies usually leverage online tools and search methods such as Google Dorks to find more information about an individual or company.

For a more detailed list of OSINT resources, check out this free OSINT toolkit.

Social Media Profiles

You can also look at social media to check whether the team’s values align with yours. For instance, if the founder’s profile is filled with fancy material purchases and vacations, this can be a red flag for some investors.

By checking historical social media, you can also uncover multiple red flags, such as sharing questionable links, promoting suspicious coins, or making dubious statements. Of course, some founders will try to scrub their timelines by deleting old tweets and the like. This is where The Wayback Machine comes in handy. You can use it to search if there were any snapshots of that account taken in the past to see what they were saying or promoting.

LinkedIn

LinkedIn can be a gold mine. Check their past roles and companies. Ask yourself these questions:

1. Have they successfully launched other projects in the past?
2. Do they have experience in the blockchain or tech industry?
3. Have they engaged in any questionable behavior?

While not an exhaustive list, these questions go a long way.

Dig Into Their Past Projects and Track Record

The track records of individual team members provide valuable insights into their capabilities. 

Working in a global corporation differs from delivering results there. Ask yourself whether key team members worked on impactful projects or were more in administrative functions. Successful projects and achievements show a team’s ability to deliver. Conversely, a history of failed projects or a lack of relevant experience can signal potential risks. 

Take FTX – the once-second-largest cryptocurrency exchange that collapsed in 2022 – as a reminder when navigating the blockchain space. A CoinDesk investigation revealed that FTX’s core team mainly was close associates of Sam Bankman-Fried, the company’s founder. While hiring friends and referrals is not a problem on its own, the research showed that the core team was young, inexperienced, and highly unprofessional.

News Articles

Do quick online searches with search engines to verify information that a founder is claiming. If they claim to have launched a well-known startup, check the news for confirmation. A good trick for this is utilizing an OSINT strategy called Google Dorks. 

Google Dorks leverages Google’s robust index and cache capabilities to retrieve information.

Here are examples of specific search operators:

• “site:” to search for a keyword within a particular site
• “intitle:” to retrieve online pages that contain a specific word in the title
• “intext:” to search for pages that contain the keyword

Let’s pretend you’re researching a Web3 project called CryptoXYZ, whose founder uses the pseudonym “thecryptogoatxyz.”

You can retrieve more online information about the founder by inputting “intext:thecryptogoatxyz” on Google search. This will return any pages that contain this username in their content.

This is just a basic example. You can use Google Dorks for pen tests, competitor research, and more.

Forums

Utilize online forums like Reddit, Bitcointalk, and specialized blockchain forums to research team members’ track records.

Using the search function on these forums, you can find positive and negative feedback for a balanced perspective. Engaging with the community and asking questions will also allow you to gather valuable insights from past conversations. As always, make sure to evaluate the credibility of posters based on their reputation and history.

Verify Their Claims and Credentials

Verifying credentials is more challenging in the blockchain ecosystem, which began with anonymous and pseudonymous founders. As the most famous example, no one knows who created Bitcoin, the largest cryptocurrency by market capitalization.

This approach set the early context for web3 culture, although this practice has changed over time. Many of the largest blockchains today, from Ethereum and Solana to Binance, have recognizable founders. You can often find employee lists on company websites, and compare their bios to other sources you find online. Just using social media, you can cross-reference information across multiple sources. 

As an example, it’s common to find blockchain founders tagging and providing shoutouts to other founders they’ve spoken to and connected with on X. They may have also been tagged in promotional posts for blockchain conferences or other speaking events. Lastly, you can check who follows the team’s account to see if any trusted figures already follow them.

Red Flags in Team Dynamics

Some warning signs in team profiles should raise caution if you ever see them.

Frequent Leadership Changes

The project could be a startup that is a few months old, yet the core team could have changed several times. This could signal trouble and infighting at the top, as well as a lack of a shared vision. 

Censorship

On Discord, team members can delete messages from community members criticizing the project. This lack of transparency is a concern and could show that the team is unwilling to listen to community feedback or is attempting to hide fair critique.

Team Disagreements

Public team disputes are less common, but with the advent of social media, it’s easy to spot these red flags online. If team members are hashing private matters out on social media, you can assume a certain level of dysfunction within the team. As far as team disputes that might not be public, you can approach research just like you might for a job you’re looking to apply for – reaching out to current or past employees or team members can uncover a lot!

Conclusion

The strength and credibility of a project’s team and founders are critical to its blockchain success. Analyzing past projects and team dynamics helps you make informed investment decisions. Stay vigilant for red flags and research team members using resources like X.

As we continue our focus on doing your research in blockchain, our next article will guide you into the world of smart contracts, exploring how they function and how to find common security risks. Stay tuned!

This article was written by Jaime from Boring Security. Follow him on X here, and check out Boring Security’s X account, Discord server, and official website for more information.

Stay tuned for the next article in this series where Quit dives into common smart contract risks.