Or why consumer products in crypto are so powerful.
I’ve been fortunate lately to have a series of very interesting conversations with investors and builders in the consumer crypto space. A consumer crypto product is... a consumer product, but with crypto at its core. Think Twitter but with a wallet (Lens, Farcaster) or Soundcloud but on the blockchain (Sound.xyz).
Consumer crypto products, just like any consumer product, seek to be adopted and used as frequently as possible by as many people as possible. I’m not pretending to have the magic recipe here, but for a consumer crypto product to be successful, you need the 4 following ingredients at a minimum:
Easy onboarding of users.
Product design on par with non-crypto equivalents.
Virality or strong adoption/retention loops.
A use case uniquely enabled by web3/crypto (said differently: a very compelling answer to “Why use crypto?”).
Point #1 is solved: there’s a plethora of products and technological solutions to hide crypto wallets, gas fees, and all the blockchain complexity from a user experience while maintaining a decentralized experience. As a user, you can interact with a consumer crypto product and not realize that there’s crypto behind.
Point #2 is being solved: in the past few months, many super talented product builders and designers have joined or created projects in the space. People understand the importance of a neatly designed and clean UX that competes with a non-crypto equivalent.
Point #3 is difficult! But it’s the case for any consumer product, crypto or not.
Which leads us to point #4. I think there are two types of answers here: either your use case can only be achieved using a blockchain (e.g., peer-to-peer disintermediated payments) or it can be achieved 10x faster/easier/cheaper with a blockchain (e.g., anything that has to do with accounting, bookkeeping, back office reconciliations, etc.).
Whatever the answer is, all consumer crypto products share a massive advantage over web2 equivalents: interoperability.
If distribution is king, then interoperability is the maker of kings. The massive advantage that crypto consumer apps have over normal consumer apps is that they’re interoperable, i.e., they technically “work together” and can be integrated into one another without permission needed and with very low development work. Imagine a world where your TikTok videos get automatically posted natively on your IG reels, or where if someone follows you on Instagram, they automatically follow you on all the other platforms you use. Each product becomes better as other compelling products emerge and start being used. Social graphs become exponential and not siloed anymore. Platforms can collaborate to build a better experience for creators and consumers alike, versus competing for who gets the most hours of attention from their users.
This is a whole new paradigm for consumer apps, and that’s what’s technically feasible today with web3. It comes with important advantages for users, such as ownership of your data and sovereignty over your social graph. It is also more “efficient” as you technically only need to interact with one platform to interact with them all.
In such a world, builders are encouraged to collaborate versus compete with each other. If each company focuses on one problem and does it super well, they can compose their product with all the others in the ecosystem. For users and creators alike, they don’t choose to use a specific platform over another; they automatically use a single ecosystem - which becomes the end product. The ecosystem is the product :)