What’s your web3 strategy?
I doubt it’s the first time you’ve been asked that question. It’s been on the lips of a growing number of investors on the hunt for the disruptive opportunities and significant growth trajectories blockchain-based technologies can offer.
And for founders looking to begin a foray into the world of decentralization, it’s all too easy to become distracted from core business objectives by shiny new buzzwords emanating from the space. Should we be thinking about the metaverse? What about NFTs? Should I take the plunge into blockchain gaming?
FOMO is real. If everyone else is doing x, y or z, you wonder, then shouldn’t we?
I understand that pressure. And as the founder of an infrastructure project that has been around since the rise of web3-driven protocols catalyzed by Ethereum in 2016, I want to remind those of you who are preparing to join me that web3 isn’t just a drop-down menu of features to be bolted on to your project. It’s a transformational ethos that should be the cornerstone of what you’re looking to build.
My message here is simple: Focus on the basics and don’t allow yourself to get distracted by the hype.
Given its stranglehold on markets in recent weeks, it’s also worth pointing out here that this advice applies equally to the flipside of FOMO: FUD (fear, uncertainty and doubt). Don’t let a chorus of worried investor voices turn you away from building in this fast-moving, innovative, and energizing space.
Now that we’ve got that out of the way, I’d like to offer some other insights into how to build a strong project that can tap into the enormous power and potential of web3.
A successful web3 company, project or DAO starts with a clear-eyed view of the use case (or cases) blockchain equips them to serve in a way not possible before. And how they can change the game for a particular problem or set of problems.
And, yes, it’s worth emphasizing right up front that until you’re satisfied you really have identified both a well-defined pain point and a compelling solution, you’re unlikely to convince users to beat a path to your door.
Now you’ve identified the problem or need you plan to address, let’s drill a little deeper. What specific functionality can web3 bring to the party here? blockchain is at its most powerfully disruptive when it supplies the missing link.
Does a global, permissionless, digital money layer change the game?Will access to a shared, open, data layer make your offering more attractive than if you hoard the data in a proprietary database?Does the ability to make users collective owners in the platform’s success give you an advantage over web2 incumbents?Can you bootstrap one side (or both sides) of a marketplace through in-protocol incentives?Can web3 primitives such as NFTs, on-chain credentialing, crowdfunding, wallet-based-identity, etc. enable some new exciting experimental experience for users?
If the problem you’re solving can benefit from one of these uniquely web3 value propositions, then you’re a prime candidate to take advantage of this new innovation to apply a never-before-possible solution to a problem — and you are onto something interesting!
In a space that’s evolving at lightning speed, you might be tempted to jump right in and start spreading the word about your great idea. But time spent on product development is never time wasted. The journey to attracting investment, users and a top-flight support team will be faster — and infinitely smoother — if you’ve put serious work into shaping your product before shopping it around.
The specific product development choices you make will, of course, depend on the scope of the work, the type of blockchain solution you’re developing and your budget. But asking these foundational questions can give you a solid start:
How are you going to shape a product that’s suited for web3?Is there a way to build web3 features and functionality into a new, or existing, web2 product? (Big fashion brands Gucci and Ralph Lauren and the National Basketball Association are all experimenting with NFTs, distributive ownership platforms and other blockchain-based customer experiences).Or would it be better to start fresh and build a version of your product/s based solely on web3 technologies and philosophies?
In the web2 paradigm, we’ve been taught that “communicating”, “persuading” and “influencing” are the tools required to get audiences on-side and customers buying. Web3 is about action and incentives. It’s a totally different mindset.
We still need to communicate with our stakeholders and communities, of course. But only when we really have something interesting or useful to say! Which generally means when we’re getting stuff done. Passing key milestones, launching new services or features, upgrading the protocol, running events and so on. Not talking for the sake of hearing our own voices.
We are also very different from web2 in how we reward those who use our products.
We don’t onboard users with likes and love hearts. Nor do we promise audiences they will feel younger, better-looking, more popular or cooler so long as they hand us control of their data and online identities.
We offer something more powerful: ownership and self-determination.
blockchain offers creators control over what they produce and the chance to be fairly remunerated for their work. All stakeholders in your network — from liquidity miners and stakers, to node operators, developers and users — will be vital to its success and will need to be appropriately rewarded.
Let’s sum up:
Incentives are central to the web3 ethos.Incentivization should be part of your infrastructure plan from the start.Your planning and budget proposal should factor in everything and everyone in your product’s ecosystem, from content creators to bug hunters.
This is a big one. If the people who form the backbone of your community — the content creators, NFT artists, software developers, liquidity providers and so on — do not feel good about your project or their participation, you’re in big trouble.
In web3, loyalty is often a product of transparency — another clear differentiator from centralized web2 monopolies and suffocating business models. This means the inner workings of your protocol and the work it carries out must be open and accessible to all.
You’ll also want to provide regular opportunities for designers, software engineers and interested enthusiasts to contribute to your project’s ecosystem. Successful web3 companies operationalize the imperative to build alongside their communities.
Here are some of Livepeer’s rules of transparency:
Show your work. In addition to open-source code, developers using web3 platforms require straightforward, no-nonsense product information and support. That’s why Livepeer’s documentation includes clear video guides, tutorials and sample code to ensure both network operators and developers have everything they need to get started quickly.Ditch the concept of ownership. There is a note on the Livepeer.org website that makes clear it’s not an “official” site. Nobody owns or controls the technology behind Livepeer. Anyone is welcome — indeed encouraged — to help improve the platform. However strong you believe your product to be, its true utility — and potential — will only become evident as others build on it, co-creating around your platform and making your ecosystem even more powerful.Build your community. In web3, it’s all about community. It’s the community that drives growth and builds brands. Here are a couple of Livepeer-specific examples:In 2019, we launched the Livepeer Community Grants Program to support our goal of building a fully decentralized video stack. Since then, Livepeer Grants has committed more than USD $410,000 in funding to community members creating value for the ecosystem. Check out our grants tracker for examples of the community projects, ideas and events we believe provide value to the ecosystem.In April, we hosted our first-ever Community Summit in Amsterdam — fulfilling one of my long-time ambitions. I’ve described entrepreneurship in the past as an ultramarathon with a lot of grinding and few moments of celebration along the way. That summit, which brought together stakeholders from across the Livepeer ecosystem as well as those of partner projects, was one of those moments. Bringing your community together generates energy as well as great ideas. You’ll be needing some of that on your own marathon run.
In a word: Hackathons.
These hands-on sessions are resource-intensive but are a fantastic way to accelerate experimentation and innovation, and build a lasting foundation for your product. They also foster community. Which, as we’ve covered, is core to web3.
Virtual hackathons became the norm during the pandemic and we are only just seeing a return to in-person events. But whether live or online, though, hackathon support can:
Demonstrate your support for the developer communityGet the name of your product out thereConnect you with actual or potential users of your productFacilitate networkingSurface new use cases.
Here are some of the ways you can take part:
Host a boothApply to be part of a panel, or be a guest speakerSponsor social eventsProvide bounties (prizes) for the best innovations using your technology.Join a team and build with the hackers
If a full-blown hackathon is too big an ask in your project’s early stages, consider smaller community events instead. Ethereum meetups, for example, are get-togethers of enthusiasts. These more intimate settings can provide a great opportunity to talk to innovators and learn about new developments in the space.
Ongoing education offers its own rewards. It nourishes your community, builds trust, expands the developer/user ecosystem, and deepens skill sets within the talent pool.
We’ve already covered some of the ways you can nurture ideas, knowledge and skills within web3: sharing your code and investing in hackathons, bounties and grants certainly all come under this umbrella.
Here are some issues to consider around education:
Take nothing for granted: There’s no need to patronize your audience, but beware of making assumptions. When you eat, sleep and breathe blockchain it’s easy to think everyone’s up to speed on DAOs, dapps and difficulty bombs. In fact many of your potential customers may be dipping a toe into web3 waters for the very first time.Teach, don’t preach: On the other hand, it will prove counterproductive in the long run to over-simplify what is, in fact, genuinely complex and important information that your community needs to grasp.Quality pays: For these reasons, it’s worth investing time and resources into high-quality educational materials. The Livepeer Primer, for example, is a ten-minute read that uses simple text and fun illustrations to convey complex information in an accessible way. To lessen the risk of confusion on key questions, we made sure we defined all terms, even those that seemed obvious to us (e.g. the difference between an “orchestrator” and a “delegator”).Choose your channels: The web2 model often prioritizes volume over quality, with businesses feeling they have no choice but maintain a constant stream of communications via every available channel. In web3, we can be more selective, prioritizing the media we know best serve our platform and our community. At Livepeer, we find that posting regularly on Twitter and Medium, hosting developer and user discussions on Discord, and using Twitter Spaces for live conversations helps keep our community up-to-date and operational in a fast-moving space.
Web3’s portable digital assets and data are just that. Portable. Users who feel they’re not getting what they need are entirely free to ditch and switch. This means our old web2 friends CX, UX and market research remain as critical as ever. Perhaps more so now that creators and developers are no longer locked into restrictive copyright and ownership contracts.
A recent article in the Harvard Business Review suggested the web3 value proposition makes user experience a particularly crucial consideration for platform design and that shared infrastructure means “apps can focus on building great experiences, driving towards a greater emphasis on platform design as a source of competitive advantage.”
What founders know about their market should be evident in the UX and UI of their product(s). User insight, then, remains the key to retaining a competitive edge.
Projects that consciously align with the web3 ethos have a far greater chance of success. That doesn’t mean web2 companies can’t participate, or that repurposing web2 insights for new use cases is pointless. It’s just that a web3 product will work better if it is built from the ground up as a web3 product — and one that doesn’t compromise web3 values.
The blockchain revolution has unlocked technologies with such vast scope for transforming almost every aspect of our lives that it’s easy to get carried away with its potential and forget why we needed it in the first place. Transparency, accountability, ownership of personal data, fairer rewards for our work, freedom from monopolies: web3 values are not passing fads. They’re why we’re here.
Every new challenger with a well-conceived web3 strategy has the potential to wrest users — and dollars — away from dominant gatekeepers who’ve held the keys for far too long. But simply reframing old web2 ways, or “web3 washing”, won’t cut it.
So, build from the ground up. Go back to what really matters: the difference you and your project can make in the world.
Then go share it!
Originally published on TechCrunch