Some lessons from Courtyard

One of the best parts of being a VC is working with teams before they’ve developed a product that takes off, and then being there when it does. That’s exactly what's happening right now with one of our portfolio companies, Courtyard.

Courtyard is a collectibles platform built onchain. Every asset on Courtyard is an NFT that users can hold, trade or redeem for the underlying physical asset at any time. The beauty of Courtyard is that users don’t need to know that the assets are NFTs or what else is under the hood. It’s all abstracted away. The focus is on the experience itself, which is what attracts users.

Zooming out, what's exciting to me about Courtyard is that it demonstrates the potential for consumer applications built on blockchains more broadly. And while it’s still early in their journey, there are some lessons that perhaps can serve other founders building onchain consumer products.

The tech is ready

After years of investment and development, blockchain infrastructure is now ready to support many types of applications. Courtyard is built on Polygon for fast and cheap transactions. It uses Privy’s embedded wallets for users to hold their NFTs without needing to use MetaMask or other non-custodial wallets. Both credit card and crypto payments are supported. Users do not realize that crypto is powering the experience. Not every consumer app can be built on blockchains yet, but a lot can already.

Keep it simple

There’s many interesting features Courtyard can introduce by building onchain: NFT-backed loans, fractionalization of collectibles, yield vaults etc., but it prioritized getting a core mechanic right first. I often see teams overcomplicate things by designing elaborate experiences before nailing the foundation. While crypto offers a wide design space, locking in a core mechanic that works comes first. For Courtyard, that was the vending machine.

Branch out

As an initial go to market it can make sense to go after crypto native users first, but branch out quickly.

Courtyard was not a hot topic on crypto twitter for a long time because it didn’t try to be. It did not market itself as a crypto company to crypto users but as a product for collectors of all stripes. That was important not just because it allowed Courtyard to tap into a bigger market, but it enabled them to focus on the types of users that were more likely to stay longer term.

Worth pointing out as well is that Courtyard avoided engaging in any sort of crypto tribalism. Teams shouldn’t waste time engaging in twitter wars on why Ethereum is better than Solana or vice versa. Users generally don’t care and if anything that sort of marketing scares them away.

Make long term decisions

Building a consumer product is not easy. It can take a lot of iterations and failed attempts to build something that sticks. It took Courtyard almost 2 years after we invested to find something that worked.

Sometimes in crypto, if teams struggle with finding product market fit, or growth stalls, the temptation can be to launch a token. A lot of the time that’s the wrong move because it just papers over cracks and comes at the expense of a company’s longer term potential.

Courtyard focused on building a unique and compelling experience. User behavior wasn’t skewed by the promise of a token, but was driven by genuine affinity for the product.

I don’t think there’s been a better time to build consumer products in crypto. The infrastructure is mature, the regulatory landscape is becoming more favorable and some breakouts are starting to show what’s possible.