Entrepreneur's Guide: 7 Common Pitfalls in Building an AI Agent

Original Article Title: What Investors Want Beyond an AI Agent

Original Article Author: 0xJeff, Crypto KOL

Original Article Translation: Felix, PANews

Driven by the global AI wave, the Crypto AI Agent has sparked a trend, with many AI Agent projects emerging like mushrooms after the rain. How to successfully build an Agent project? What are some common misconceptions? Crypto KOL 0xJeff summarized the common pitfalls in a post.

Over the past few months, I have spoken with hundreds of AI agent teams. Many teams have fallen into the same common traps. Here are the 7 major mistakes discovered in the conversations, along with suggestions on how to avoid them.

1. Copying the Innovator

Virtuals Protocol pioneered the tokenization narrative of AI agents. By continuing to collaborate with top-tier teams, they continue to develop innovative agents. Virtuals Protocol, with its superb storytelling and narrative construction, holds over 50% of the AI Agent market share.

Many teams believe that they can replicate Virtuals Protocol's success by tokenizing their agents, pairing them with their own tokens, and launching on a new L1/L2 (expecting immediate PMF). (Note: PMF refers to achieving Product-Market Fit)

In practice, this approach does not work for two main reasons:

· There are already too many agent tokens in the market, simply launching another agent token is not enough.

· The VIRTUAL/Agent LP structure is very tricky, especially for early projects with low liquidity. Shitcoins: Shitcoins' LP pairs are inherently fragile, leading to high volatility and impermanent loss. Liquidity providers (LPs) avoid them, resulting in even lower liquidity and extreme slippage.

What to Do Instead:

· Find a unique niche market, solving a real-world problem in a specific domain.

· Choose LP pairs of Shitcoin: Blue-chip or Shitcoin: Stablecoin. They are more robust in structure, especially in a volatile market.

2. Founder/Co-Founder Doesn't Understand How to Sell

Many teams are built by developers who don't understand sales. As the top salesperson, if a founder is not interested in their own product, why would they expect anyone else to be interested?

Conducting marketing efforts led by the founder and driven by the team (active participation in communities, continuously talking about their product) is organic marketing. People see it, get curious, try it out, and provide feedback. No need to burn money or tokens to acquire users.

3. Build a Narrative-Fit Product

Forking Compound, AAVE, OHM, or Solidly back then—just because they were hot back then.

Launching an AI agent—also just because it was hot.

Building without understanding the problem to solve or the target audience is one of the fastest ways to fail.

Ask yourself before building:

· Who is the real customer?

· Are you building for hype or to address a real need?

· Are you pushing the product into a non-existent market?

· Is your token the actual product?

4. Launching a Token Before Product Launch

Launching a token before the product goes live will make the token the primary focus. Even worse: teams start dumping the token, rushing to list on exchanges, and neglecting product development.

This will never end well, with no product, revenue, or value proposition, let alone a reason for people to hold the token.

What should be done:

· Find some form of PMF before launching a token.

· Only issue a token if there is clear network effects and actual value accrual.

5. Skipping the "V" in MVP

MVP = Minimum Viable Product. However, many teams skip the "viable" part and release a minimal product that no one cares about.

The MVP should be a basic but fully functional product for early users to try out—so you can gather feedback and iterate on the product.

What Should Be Done:

· Engage in real conversations with users.

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

· Don't get stuck on your own assumptions before proving real value.

6. Lack of Clear KPIs, Goals, or Vision

Some teams meander aimlessly: chasing trends, blaming the market, passively reacting instead of executing on a clear plan.

What Should Be Done:

· Set clear, measurable KPIs from day one.

· Define what success looks like—what problem you're solving, what key milestones matter.

· If something isn't working, pivot; no one gets it right the first time.

7. User vs Investor Expectations

Web3 projects have two products:

· Tokens

· Actual product

This means they attract two types of supporters:

· Speculators: who speculate on the token

· Actual users: people who care about the product

Many projects fall into the KOL (Key Opinion Leader) trap: paying unreliable KOLs to promote their token. The result is attracting a large group of Degens (degenerates) who don't care about the product. When the price drops or the airdrop disappoints, they follow the crowd, sell off, and label the project as a scam.

How to Do It Right:

· Have a targeted marketing strategy

· Don't promote the token. Instead, clearly outline the tokenomics and value accrual—why the token exists and how it benefits users.

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

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

Summary

Avoid these common mistakes, focus on real user needs, and build something truly impactful. The market rewards those who create real value, not those chasing trends, hype, or short-term speculation.

A good project is not built overnight, nor is it ever built by simply copying another project. Take the time to understand your users, iterate on the product, and develop a sustainable strategy. The success of a Web3 project comes from innovation, execution, and resilience, not just launching a token or following a narrative.

If you aim to be involved for the long term, strive for long-term sustainability.

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