Startup Tips: 7 Common Pitfalls of Building an AI Agent

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Driven by the global AI wave, the crypto AI Agent has started a boom, and many AI Agent projects have sprung up. How to build a successful agent project? What are the common misconceptions? Crypto KOL 0xJeff summarizes the common pitfalls in this article.

Talked to hundreds of AI Agent teams over the past few months. Many teams fall into the same common pitfalls. Here are the top 7 mistakes identified in the conversations, and based on that, proposed ways to avoid them.

1. Imitating the first mover

Virtuals Protocol pioneered the AI agent tokenization narrative. Continuing to build innovative agents by partnering with top teams, Virtuals Protocol has captured over 50% of the AI agent market share through masterful storytelling and narrative building.

Many teams believe they can replicate Virtuals Protocol’s success by tokenizing agents, pairing them with their own tokens, and launching on a new L1/L2 (with the expectation of immediate PMF). (Note: PMF is Product-Market-Fit-For-Fit).

In practice, this doesn’t work for two main reasons:

There are already too many agent tokens in the market, and it is not enough to just launch another agent token.

VIRTUAL/Agent LP is tricky to structure, especially for early stage projects with low liquidity. Torrents: LP pairs for torrents are inherently fragile and can lead to higher volatility and impermanent losses. Liquidity providers (LPs) will avoid them, which in turn leads to lower liquidity and extreme slippage.

What to do:

Find a unique niche that solves a real problem in a specific area.

Choose an LP pair of Torrent:Mainstream or Torrent:Stablecoin. They are structurally more robust, especially in volatile markets.

2. Founders/co-founders don’t know how to sell

Many teams are formed by developers who don’t know how to sell. If the founder, as the number one salesperson, is not interested in their product, why should they expect others to be interested?

Conducting founder-led, team-driven marketing effort after marketing effort (when the team is actively involved in CT and constantly talking about their product) is organic marketing. People see it, get curious, try it, and then give feedback. No need to burn money or tokens to acquire users.

3. Create a product that fits the narrative

Fork Compound, AAVE, OHM or Solidly at the time – just because there was heat.

Launching an AI agent – also just because there was heat.

Building without understanding the problem to be solved or the audience to be served is one of the fastest ways to fail.

Ask yourself before you build:

Who are the real customers?

Is the build because of hype or because it solves a real need?

Is the product being forced into a market that doesn't exist?

Are your own tokens the actual product?

4. Launch tokens before the product goes live

Launching tokens before the product goes live, then the tokens will become the main focus. Even worse: the team starts dumping tokens, racing to list them on exchanges, and ignoring product development.

This move will never end well; there is no product, revenue or appeal, much less a reason for people to hold the tokens.

What should be done:

Find some form of PMF before launching the tokens.

Only issue tokens if there is a clear network effect and real value accruing.

5. Skip the “V” in MVP

MVP = Minimum Viable Product. But many teams skip the “viable” part and launch a useless, minimal product that no one cares about.

The MVP should be a very basic but fully functional product that early users can try – so you can gather feedback and iterate.

What it should do:

Have a real conversation with your users.

Understand their needs and then build a product that users will actually use.

Don't get stuck on your assumptions until you prove real value.

6. No clear KPIs, goals or vision

Some teams aimlessly go with the flow: chasing trends, blaming the market, and reacting rather than executing a clear plan.

What to do:

Set clear, measurable KPIs from day one.

Define what constitutes success - what problems you're solving and what milestones are important

Shift direction if something isn't working - no one gets it right all at once.

7. Users vs Investor Expectations

The Web3 project has two products:

Tokens

The actual product

This means that it will attract two types of backers:

Speculators: people who speculate on the tokens

Real users: people who care about the product

Many projects fall into the KOL trap: paying unreliable KOLs to market their tokens. The result is attracting a large group of Degens who don’t care about the product, and when the price drops or the airdrop is disappointing, they blindly follow, sell, and call the project a scam.

How it should be done:

Be strategic about who you market to

Don't market the tokens. Instead, clearly outline token economics and value accumulation - why tokens exist and how they benefit users.

Instead of wasting stablecoins and tokens on KOLs, make real partners stakeholders.

Speculators and real users have different needs. One wants to use the product, the other wants to buy low and sell high. Both supporters will show up, but make sure you attract and incentivize the right people.