The Misfits Journey: From Web3 Experiments to Building a Community of Startup Investors

Every successful product has a story of iteration, pivots, and unexpected discoveries. At Misfits, our journey from initial concept to our current platform was filled with false starts, surprising user insights, and counterintuitive decisions that ultimately shaped what we've built.

The Web3 Beginning

When we first started exploring the investment space, it was during the height of Web3 enthusiasm. Our initial concept, called Metal, attempted to create synthetic derivatives on startups—essentially allowing people to speculate on startup outcomes without directly investing in them.

Our insight was that people want to speculate on startups, and Web3 provided that infrastructure. If you can just marry the two, something interesting can emerge.

However, we quickly found ourselves in a product no-man's-land. For gaming enthusiasts, it wasn't engaging enough as a game. For investors, it wasn't substantial enough as an investment product. We had created something that didn't fully satisfy either audience.

Listening to Users

When we started talking to our early users about why they weren't engaging with our platform, we heard a consistent message: "We want to invest in real startups."

Our immediate reaction was dismissive. Investing in startups was already a solved problem with platforms like LetsVenture and AngelList. Why build another solution for something that already existed?

But the feedback persisted. Users rejected our Web3 experiment, yet they also weren't satisfied with existing investment platforms. This contradiction intrigued us.

To better understand the problem, we tried using these platforms ourselves. Despite our background in private equity, startups, and fundraising, we found it challenging to wire money based solely on a pitch deck and perhaps a recorded founder call.

How do you wire a few lakh rupees just by looking at some deck? We needed something more.

The only investment we made was in a company whose founder had previously built a product we admired. We had context and could leverage our network to speak with people who knew the founder.

This experience helped us understand the gap: existing platforms were designed for experienced angel investors who had context, networks, and the ability to conduct due diligence. They weren't built for mainstream investors who lacked these advantages.

Testing the Waters

With this insight, we decided to run a few experimental syndicates. We created simple Notion docs, WhatsApp groups, and Typeforms to gauge interest. The response was immediate and positive.

Our first deal was with a YC company where the founder of Instagram was investing. We thought people would invest because of these impressive credentials, but we discovered something surprising:

The answer we got was that because we were investing, that's why others were investing.

It wasn't about famous investors or prestigious accelerators—it was about trust transfer. People invested because they trusted someone who trusted the deal. Gaurav invested because he knew us, Sagar invested because he knew Gaurav, and so on.

Validating the Concept

Before fully committing to this new direction, we wanted to validate that there was sufficient demand. We created a novel test:

We decided that we would try to give membership of a product that didn't exist at $100. We'd talk to many people, do one-on-one conversations, and try to understand and sell them this membership.

After a year of unsuccessful iterations with our Web3 product, we were cautious. This time, we wouldn't build until we had strong signals of demand.

We managed to get about 100 people to pay $100 each for a product that didn't yet exist, for deals they hadn't seen. This gave us confidence that we were onto something meaningful.

The False Positive That Helped Us

Once we had validated interest, we reduced the membership fee to $20 to grow our user base. After running several deals, we analyzed who was actually investing and discovered something unexpected:

The folks who had paid $100, the first-degree contacts, were the ones who were not investing. In the first couple of deals they invested, but as a larger cohort, they were not investing.

Our initial validation had been a false positive. People had paid $100 because they knew us personally and wanted to support us, not because they were serious about investing in startups.

It was all false positives. But thankfully, the second set of people who came had a natural inclination. There was a self-selection there. People who were coming were genuinely interested.

This realization was crucial—our business wasn't going to be built on our personal networks but on serving people who had a genuine interest in startup investing.

Building a Product, Not Just a Syndicate

With several successful deals completed, we knew we had a viable business. The question became: what kind of product should we build?

Many syndicates operate with minimal technology—WhatsApp groups, Notion docs, and Typeforms stitched together. But we wanted to create something more substantial:

We wanted to build a mainstream product. We wanted to bring this asset class to people who may not be angels, but who have the network and the capability and the intent to invest.

This required making startup investing more accessible, simpler, more interesting, more social, and more educational.

One of our counterintuitive decisions was to build a feed as the central feature of our app, rather than focusing exclusively on deals:

There was this question that if the main reason why we exist is a deal, why should that not be the starting point when you open the app? Why aren't you seeing the deal? Why are you seeing this feed?

We chose the feed because it gave us flexibility to share various types of content—startup news, insights, articles—without being intrusive like WhatsApp notifications. Users could engage with this content on their own terms.

Lessons for Founders

Our journey offers several valuable lessons for founders:

1. User insights are crucial, but validation can be misleading. Even our false positive gave us the confidence to move forward, which was ultimately valuable.
2. The starting point matters less than the journey. Your starting point could be anything. It could be a false start, but as long as it's a fertile land and you are keeping your eyes and ears open and trying to see what could work, what could not work, you can back yourself and build something.
3. The final product often emerges from the process, not from initial plans. If we start today and say, "Okay, this is what we'll build," it's very difficult to imagine what we have built because those signals came during that journey.

For aspiring founders who say, "I don't have an idea, but I want to start," or those who have started but are figuring out their next steps, our experience suggests that having perfect clarity at the beginning isn't necessary.

What matters is choosing a fertile problem space, listening intently to users, and being willing to evolve your thinking as you learn. The path to building something valuable is rarely straight, but with persistence and openness to feedback, it's possible to discover opportunities that weren't visible at the start.