Solana at SXSW:
Lessons from crypto’s fastest-growing ecosystem

At SXSW this year, Foundation Capital’s Rodolfo Gonzalez sat down with Solana’s Raj Gokal in a featured session to explore the human story behind Solana’s rise. As one of Solana’s earliest believers, Rodolfo guided a conversation that traced Raj’s journey from health-tech entrepreneur to the co-founder of what’s become crypto’s fastest-growing ecosystem, with over 400B transactions and nearly $1T in on-network transaction volume processed on its mainnet since its launch in 2020.

Here are some highlights from their talk, with quotes from Raj:

Bear markets create perfect conditions for building

Crypto is still in a sentiment slump right now. It’s not sexy to be building in crypto right now, and investors are skittish. But that’s actually the perfect time, because in that crucible moment, you end up selecting for exactly the right people. I wouldn’t go back and do it another way. I’m happy that we were cash-starved and had to fight for people to support us.

In Raj’s view, bear markets create the ideal conditions for building. When hype subsides, only the truly committed remain. The constraints imposed by tough markets force creative solutions and efficient resource allocation. Solana’s own launch during the pandemic market crash in 2020 shows this principle in action.

Go direct to users

If we think back to the consumerization of finance as part of the crypto mission, consumers matter. If you start building for enterprises that somewhere downstream have consumers, you’re slowing down your feedback loop. So if you’re going to really squeeze as much as you can out of this new primitive, why operate through more middlemen – more exchanges, more enterprises, more decision makers who are going to push this technology down people’s throats? Just go directly to [the users].

While competitors courted enterprise partnerships, Solana built directly for end users. This approach stemmed in part from Raj’s experience in health tech, where regulatory gatekeepers made innovation feel like “sprinting through quicksand.” By eliminating intermediaries, Solana received unfiltered market signals that revealed what users actually wanted – not what enterprises predicted they should want.

Learn from unexpected use cases – even “weird” ones

We were really surprised in 2021 that, after lots of founders had built tons of DeFi infrastructure, the first thing that went truly viral was this Ape photo NFT project. It basically broke the internet – 200,000 people all trying to get at this one asset at the same time. That was a stress test for the network we never would have imagined. The good news is it’s unstoppable. The bad and weird news is it’s like a rollercoaster and a circus and a clown show all combined.

While Solana was built for high-performance financial applications, their first major viral moment came from cartoon apes. Rather than dismissing these “weird” use cases, Solana embraced them as valuable real-world stress tests. This unexpected pressure point – 200,000 people competing for a single digital asset simultaneously – revealed technical bottlenecks that no theoretical testing would have uncovered.

Face existential questions head-on

Black Thursday happens, it’s the biggest stock market drop since the Depression. Every investor is calling us and every portfolio company saying, ‘This is it, it’s going to be years, you need to batten down the hatches, cancel anything that costs money, focus on survival.’ We asked ourselves: is this period going to prove crypto’s value more, or kill it? If it kills crypto, then crypto never had any value to begin with. Like it shouldn’t exist. And so we should just learn that and go get jobs. Like we should learn that quickly and go back to our old jobs.

When COVID threw everything into question in March 2020, Solana faced a decision: delay their mainnet launch or proceed despite the volatility. With just nine months of runway remaining, they chose to launch the network. Their willingness to discover their entire premise was flawed – and accept those consequences – reflects their deep intellectual honesty about their mission. By launching during a period of maximum uncertainty, they actively sought out the harshest possible validation of their core beliefs.

Impose constraints to force quality

We started with a hard cap of 25 people. As we got closer to whatever limit we had set – 25, 50, then 100 – I’d indicate that if we’re going to go over that, you’re going to have to get rid of some people to stay under the cap. With every hire, we had this looming question: if they’re the one that we add that later on turns out gets us to 101, are they going to be the last person that we let go to stay under that 100? It gives you this kind of insane bar for quality.

By establishing hard caps on headcount, Solana created an “insane bar for quality” that prevented the organizational bloat that often accompanies startup scaling. This discipline kept them relentlessly focused on the fundamentals: building the most performant network for their users.

Encourage team members to become founders

There’s more founders than I can count who have started billion-dollar companies that were in our first 100 people. When they leave, we don’t backfill those positions. We’re like, ‘You can go build a valuable part of this ecosystem, and now we don’t have to do that anymore.’ We invest in them. We help them raise their rounds. We help them build their founding teams. It’s a no brainer.

Solana actively encourages team members to launch their own ventures within its ecosystem. Instead of viewing these departures as talent losses, Solana sees them as powerful drivers of ecosystem growth. This approach creates a positive feedback loop, as alumni build applications that expand the Solana’s reach and utility.

Be genuinely willing to fail

We always genuinely were willing to fail. If you actually put up your hardest question and get an answer back that you don’t want, that kills your company – great, you can go do something else. That’s always been a freeing way that we’ve looked into the abyss and just jumped in.

The Solana team built their culture around truth seeking. This meant accepting that their hardest questions might yield company-killing answers. Their ability to “look into the abyss” freed them to take bigger risks, as they weren’t bound by identity or ego to continuing flawed approaches.

Building in secret can be powerful

Bitcoin and Ethereum wouldn’t have been as successful if they weren’t like a secret to begin with. You had to sift through technical understanding of complex concepts, and there was no marketing for those things. They attracted people who really cared about those technical concepts, who turned out to be long-term thinkers. … .What they were trying to do was prove a new technical concept. And that ends up being really foundational and a source of strength later, if those assets and networks hit a rough patch.

Solana avoided heavy marketing in their early days, focusing instead on technical development and transparent communication about their progress. This approach attracted community members who were truly interested in the core technology – and who stuck with Solana during the industry’s inevitable ups and downs.

View crisis as a crucible for innovation

At the time of the FTX collapse, I felt it was going to be great for those teams. Many went from having 36 months of runway to nine months, and I thought: ‘This is your moment. What can you prove in the next nine months that shows your product is valuable?’ Otherwise you were just going to have to wait 27 months to get to the same place and learn the same lesson. You’ve just accelerated your timeline and feedback. That hard, low-runway crisis moment is often where a company’s soul gets forged.

When FTX collapsed in late 2022, many projects in the Solana ecosystem lost significant runway overnight. Rather than viewing this as catastrophic, Raj stressed the silver lining: forced focus. Startups like Helius found their true value prop during this crucible moment – much as Solana had during their early, resource-constrained days.