Introspections on all things Web3.
Introspections on all things Web3.
Share Dialog
Share Dialog
Subscribe to jutszey
Subscribe to jutszey
<100 subscribers
<100 subscribers
I just spent 200 hours studying various theories and strategies for startups and entrepreneurs to create and grow their business. Here are 10 essential frameworks that all Web3 founders should know.
You might be thinking: why do I even need a strategy or framework? Some founders may see it as a bore, or even something to avoid. They rely purely on gut instincts and passion to make decisions. Yet when things fail, hindsight hurts.
Some first-time founders jump into Web3, without first learning how the game works. There are also those who went against all odds and saw short-term success. Yet, they failed to grow or sustain because they never learned the fundamentals of the industry they are in. There are also founders who get too comfortable with all the tools in their hands. They tend to stop thinking about how to link these tools to a bigger strategy. They fail to experiment with new ways to play the game.
The dreamy ideal of the “Founder” sells well as a marketing piece. However, it is not the whole story. Behind all forms of successful entrepreneurship is a ton of hard work and grit, complemented by proven strategies that can save a lot of pain.
The following 10 frameworks are interrelated yet distinct. You might start down one path and realise that there is more to what you want or can do.
One of the biggest misconceptions around growth hacking is that it is a trick or a technique that suddenly spurs unimaginable growth for a company overnight. If you are lucky, this may be true. If you are not, growth hacking becomes more of a process that requires continuous analysis, ideation, prioritisation, and experimentation.
Another misconception - growth hacking solely relies on the mythical legend called the growth hacker. This is far from the truth. Growth hacking is not a one-person endeavour. Instead, there should be an actual growth team led by a growth lead who is in charge of coordinating the work of several specialists.
A growth hacking team searches for untapped opportunities. It looks for marketing channels that can impact the business. The process is simple yet powerful. From data analysis to testing and back to analysis, the loop must be followed consistently.
How it works
Start with data analysis and customer insights to generate as many ideas as possible. There is not a single team or person in charge of this step. The “all hands on deck” approach could bring out good ideas coming from seemingly disconnected departments.
Evaluate each idea’s impact and how difficult it might be to experiment or execute.
Designs experiments around your top ideas. Weight against potential outcomes and the difficulty of implementation. For instance, some experiments might require more resources than others.
Start testing experiments with higher priority.
Go back and measure what experiments had the most impact.
Proceed with a full rollout of experiments that work.
Rinse and repeat from Step 1 to generate more ideas. Growth hacking starts with the mindset. Your mentality should not be about judging and being judged. It should be about learning and helping to learn. What this means is that your growth hacking team is dedicated to experimenting and finding new ways of doing and seeing things. It is the kind of growth takes plenty of time, effort, and mutual support. When done right, it would turn you into an industry mainstay rather than a one-hit wonder.
Web3-specific business models are still in their infancy so there will probably be more content on this in the future. For now, we can break the basic framework down into four key components:
Value - core philosophy, values, and value propositions for key stakeholders
Economy - dynamics and incentives through which protocol players generate profit
Distribution - key channels amplifying the protocol and its communities
Technology - protocol rules, network shape, applications layer, ecosystem
How it works The above elements serve as the basis to build and analyse a solid blockchain-based business model. The following are key questions for each element that should be answered:
Value: What is the long-term hard problem your product/service is solving? What key values drive your platform? What set of values do each key stakeholder get from your product/service?
Economy: How does your product/service monetise? When does the underlying crypto asset gain value? How are the key players in your ecosystem monetising from your product/service?
Distribution: How do you keep your community engaged? What are the main distribution and communication channels that amplify your ecosystem? Is the underlying crypto asset valuable for investors? What agreements are in place to integrate your platform with other protocols?
Technology: What rules govern your product/service? What is the network shape that result from these rules? What kinds of applications can be integrated with or built on top of your platform?
As a founder, it is easy to get trapped in a state where you are focusing more on what you want to do rather than how truly useful your product or service is to the average person. This framework turns things around, placing the customer’s problem at the forefront rather than the founder’s solutions.
Innovation starts with ideas, but ideas alone are not enough. Starting right away with a big product roadmap and launching lots of features no longer works. The challenge today is not building more solutions, but uncovering what really needs to be built; and when things do not work, uncovering why they did not work. To do this, you focus on problems, generate ideas, and test them in a continuous loop.
How it works
Identify: what problem are you solving? For whom?
Research: understand what problems are worth solving. What are the alternatives that your target audience are already using?
Brainstorm: why and what can you do way better than existing competitors?
Experiment: start designing and validating your solution. Note: this is not the stage where you should go into building mode. You are still in research mode. So do not assume the problems you have identified are worth solving. Revise as needed.
Build: produce prototypes of your idea or solution.
Test: launch your prototype to your targeted users.
Feedback: gather survey and opinions from the community.
Evaluate: did your idea work well? Have you targeted the right people? Do you need better execution or resources?
Iterate: go back to the drawing board but first, make sure that you have gathered enough people who will be committed to your potential product or service. They serve as the evidence that you really are getting at something valuable.
Improve: do you have areas that need to be tweaked?
Once you have established consistent demand and traction, you can finally answer this much-anticipated question: “Should I build it?” Hopefully, the answer is “yes”. These are the right questions to ask. Yet, many founders still dive straight away into how to build a feature, product, or service without validating or understanding the value of the problem they are solving in the first place. If your idea did work, now you have to scale it. Do more of it, apply it on different channels, get people to buy into it. It is never going to be a clear-cut process; but since you are taking an experimental approach, at least you are not trying to sell an assumption. You are pitching data-driven results instead, which is more worthwhile. As you start to scale, you will have many new ideas about what will work and what won’t. Put them through this process too.
The Web3 industry remains at the testing stage, trying to build more breakthrough innovations that can pave the way for long-term success. Yet, innovation is a particularly sticky problem because it is so often loosely defined. We treat it as a universal rule, as if every innovation follows the “one way fits all” guideline. This is why many Web3 projects tend to be fraught with buzzwords and rarely lead to anywhere sustainable.
The Innovation Loop (see Model #3) is a good start. However, there is a fine line between brainstorming and execution. The Innovation Matrix takes this difference into account, framing innovation as an organised practice falling into four categories. It is a good basic framework for determining what type of innovation you might want to pursue.
How it works
Start with the basic. What is the problem that you are trying to solve?
Brainstorm ideas for solutions to your problem. Are you well-equipped with resources to execute these ideas?
Categorise each idea into one of the quadrant based on your answers to the above two questions.
Determine the different strategies that can be used in each quadrant. Identify where resources are needed.
Determine what other innovation efforts could support your product or service. Identify where efforts can be coordinated. While using the matrix, it should become clearer that different types of innovations address different types of problems. Thus, they warrant different strategies. Once you have defined the quadrant that your key problem falls in, you can hone in on the best-fit strategies for your business. This provides you the clarity that can lead to action.
So you have identified your viable problem and solution and started building and releasing new launches periodically. You also managed to gain a small following of loyal users along the way. Yet, you are not scaling as much as you expect. This framework is probably what you need since it focuses on creating traction for a product that originally fits a smaller market segment, e.g. Web3 niches.
Despite having a small community to validate your product or service, you might still find trouble balancing other pieces of the puzzle that create a sustainable business model. The more innovative your company is (and that is certainly likely in Web3), the more time it might take before your business model becomes scalable.
How it works
Once your product has reached its initial target market, start looking at tweaking or scaling your business model. Is the current one working? Do you need to improve in some areas? Would combining other strategies work better? FourWeekMBA has an exhaustive list of business models you can experiment with.
Once your product and business model are aligned (which, by the way, could require years of trial and error), then start looking at your organisational design. Is the structure of your company optimised for scaling? Are there additional departments that you will need in order to target larger market segments? While this framework forces you to consider more domains as you hit different stages of growth, your product will always be at the center. This is how you turn you product into one that works for a small market segment to one that works for larger and larger segments. This might not only change your product itself as you scale, but your business models and organisational structures would most likely need rebalancing as well.
Too many startups waste time trying to perfect a product without ever showing it to a potential customer, even in a very rudimentary form. When they fail to expand and maintain sustainable growth, it is often because they never directly interact with their user base. As a result, you have invested a lot of time creating a big plan based on untested assumptions. You are merely hypothesising how the market will react to your solution.
Founders will be left wondering:
What do I do if I suddenly find out customers are not actually interested in the final product?
Do I really have to go back to the drawing board and start all over again?
What about all that time, energy, and money I have put into this?
The Lean Startup framework, developed by Eric Ries, saves you the pain. It is aimed at shortening product development cycles so that you can quickly discover if your proposed business model is viable.
How it works
Map your ideas onto a business model canvas so that you consider all possible areas for potential innovation in your Web3 niche. ThePower has a concise 9-step approach for this stage.
Formulate your hypotheses based on what you have discovered from your analysis in Step 1.
Test your hypotheses in relation to your business idea, product, or service. The best way to do this is by preparing a minimum viable product (MVP), a no-frills version of your product with just enough features to be used by early adopters. This means it should be built using the minimum amount of time and resources. At the same time, the MVP should provide just enough feedback to validate your idea.
Evaluate customers’ feedback on your MVP. Replace your incorrect hypotheses with new ideas and retest from Step 1. This cycle continues until a product-market fit is found. This is when a clear customer segment is willing to pay for the value offered by your product or service.
As defined by Eric Ries, the engines of growth are the mechanisms that startups use to achieve sustainable growth. This framework follows a simple rule: new customers come from the actions of past customers. Customers themselves help drive growth in the following ways:
Word of mouth: users’ enthusiasm for the product
Product usage: viral use of products enable network effects over time
Funded advertising: paid advertising (e.g. engaging influencers)
Repeat purchase or use: maintaining repeating customers and establishing a loyal base
How it works
There are three key engines that drive sustainable growth. Each focuses on different strategies and metrics.
It is unlikely that a startup will achieve sustainable growth by just using one engine. For the best results, founders need to identify the most relevant driver of growth for their product or service and shape their strategy accordingly.
As a Web3 founder, your community is the key driver of growth. Sometimes, tech founders can focus so much on the technical aspects of their product that they forget about how to deal with people. To do this effectively, you need a human-centric approach.
This popular framework integrates three key factors: the needs of people, the possibilities of technology, and the requirements for business success.
How it works
The model follows a general flow: understand, explore, materialise. Within this flow, there are six phases.
Empathise: conduct research to learn what your users do, say, think, and feel
Define: analyse your research and identify where your users’ problems or pain points exist.
Ideate: brainstorm a range of ideas (from the normal to the crazy) that address your users’ unmet needs defined in Step 2.
Prototype: build an MVP for one of your ideas to judge its impact and feasibility.
Test: release your prototype to users, gather feedback, and improve.
Implement: put your idea into effect by fully developing your idea into a solution.
I believe this framework is one of the most essential in the list because it helps to tackle ambiguous problems with empathy. Users going into Web3 often do not know the problem that they are facing, or at least they are not able to articulate it yet. This model will allow potential founders to identify problems and solve concrete human needs, based on data of real customer behaviour.
So you have done your research and built your product. Now it is time to market it. Easier said than done, in the chaotic network of Web3 communities. This framework allows you to filter out the noise and hone in on the right marketing channels hat will give you long-term success.
The premise for this model is that startup founders usually do not have a huge marketing budget to work with. This is when a scientific method could prove valuable.
How it works
The first layer is about what is possible. This is the brainstorming phase, where your team gathers at least one strategy per channel that may be used to start hacking at growth.
The second layer is about what is probable. This is where you start experimenting and testing the strategies brainstormed in the first step. See what works and what does not in your specific market.
The third layer is about what works, the so-called bullseye. After testing, you should be able to now identify what channels are fuelling tangible growth. Focus on these channels until they bootstrap your startup to the next growth phase.
Once you reach the next growth stage, restart the process once again.
As previously said, community building is part and parcel of growing a Web3 business. When more people or users join your platform, you can improve the value of your product or service through user feedback. The premise behind network effects is that as more people join your community, the value of your platform (be it a product or service) rapidly increases. You have essentially activated a cycle of user acquisition.
How it works
As follows, there are different types of network effects that impact how your platform operates. As your community grows, the kinds of network effects you apply often change.
Unlike traditional businesses, what Web3 founders need to leverage on with regards to network effects is their power users. These are the people who are active members, contributors, and ambassadors of your product or service. They essentially contribute much higher activity to your community’s network than others.
There are several ways to attract power users to bootstrap and scale your Web3 business:
Structure your token and governance models to incentivise power users
Target power users with NFT token-gating strategies, if applicable to your business
Leverage power users as content creators and brand ambassadors with reward incentives
Tap on the traditional social graphs of power users
Integrate with other platforms to attract their power users
Ultimately, knowing your “why” and “how” is the first step. Without any proof of concept, the Web3 founder really has no options but to learn by doing. Instead of analysing historical data, build your own new data. Based on what you have found, take on new experiences and gradually grow your understanding of the industry. (Note for a deeper dive: this concept falls under the study of phenomenology - the philosophy of experience.)
Starting and overseeing a startup can never be tied down to one strategic framework, much less one pre-determined plan. Testing, experimenting, and improving are the most productive way for an entrepreneur to succeed. Without trial and error, predicting user reaction, a key metric of success, is practically out of the question. Growing a successful company requires more than simply a firm belief on your product.
I just spent 200 hours studying various theories and strategies for startups and entrepreneurs to create and grow their business. Here are 10 essential frameworks that all Web3 founders should know.
You might be thinking: why do I even need a strategy or framework? Some founders may see it as a bore, or even something to avoid. They rely purely on gut instincts and passion to make decisions. Yet when things fail, hindsight hurts.
Some first-time founders jump into Web3, without first learning how the game works. There are also those who went against all odds and saw short-term success. Yet, they failed to grow or sustain because they never learned the fundamentals of the industry they are in. There are also founders who get too comfortable with all the tools in their hands. They tend to stop thinking about how to link these tools to a bigger strategy. They fail to experiment with new ways to play the game.
The dreamy ideal of the “Founder” sells well as a marketing piece. However, it is not the whole story. Behind all forms of successful entrepreneurship is a ton of hard work and grit, complemented by proven strategies that can save a lot of pain.
The following 10 frameworks are interrelated yet distinct. You might start down one path and realise that there is more to what you want or can do.
One of the biggest misconceptions around growth hacking is that it is a trick or a technique that suddenly spurs unimaginable growth for a company overnight. If you are lucky, this may be true. If you are not, growth hacking becomes more of a process that requires continuous analysis, ideation, prioritisation, and experimentation.
Another misconception - growth hacking solely relies on the mythical legend called the growth hacker. This is far from the truth. Growth hacking is not a one-person endeavour. Instead, there should be an actual growth team led by a growth lead who is in charge of coordinating the work of several specialists.
A growth hacking team searches for untapped opportunities. It looks for marketing channels that can impact the business. The process is simple yet powerful. From data analysis to testing and back to analysis, the loop must be followed consistently.
How it works
Start with data analysis and customer insights to generate as many ideas as possible. There is not a single team or person in charge of this step. The “all hands on deck” approach could bring out good ideas coming from seemingly disconnected departments.
Evaluate each idea’s impact and how difficult it might be to experiment or execute.
Designs experiments around your top ideas. Weight against potential outcomes and the difficulty of implementation. For instance, some experiments might require more resources than others.
Start testing experiments with higher priority.
Go back and measure what experiments had the most impact.
Proceed with a full rollout of experiments that work.
Rinse and repeat from Step 1 to generate more ideas. Growth hacking starts with the mindset. Your mentality should not be about judging and being judged. It should be about learning and helping to learn. What this means is that your growth hacking team is dedicated to experimenting and finding new ways of doing and seeing things. It is the kind of growth takes plenty of time, effort, and mutual support. When done right, it would turn you into an industry mainstay rather than a one-hit wonder.
Web3-specific business models are still in their infancy so there will probably be more content on this in the future. For now, we can break the basic framework down into four key components:
Value - core philosophy, values, and value propositions for key stakeholders
Economy - dynamics and incentives through which protocol players generate profit
Distribution - key channels amplifying the protocol and its communities
Technology - protocol rules, network shape, applications layer, ecosystem
How it works The above elements serve as the basis to build and analyse a solid blockchain-based business model. The following are key questions for each element that should be answered:
Value: What is the long-term hard problem your product/service is solving? What key values drive your platform? What set of values do each key stakeholder get from your product/service?
Economy: How does your product/service monetise? When does the underlying crypto asset gain value? How are the key players in your ecosystem monetising from your product/service?
Distribution: How do you keep your community engaged? What are the main distribution and communication channels that amplify your ecosystem? Is the underlying crypto asset valuable for investors? What agreements are in place to integrate your platform with other protocols?
Technology: What rules govern your product/service? What is the network shape that result from these rules? What kinds of applications can be integrated with or built on top of your platform?
As a founder, it is easy to get trapped in a state where you are focusing more on what you want to do rather than how truly useful your product or service is to the average person. This framework turns things around, placing the customer’s problem at the forefront rather than the founder’s solutions.
Innovation starts with ideas, but ideas alone are not enough. Starting right away with a big product roadmap and launching lots of features no longer works. The challenge today is not building more solutions, but uncovering what really needs to be built; and when things do not work, uncovering why they did not work. To do this, you focus on problems, generate ideas, and test them in a continuous loop.
How it works
Identify: what problem are you solving? For whom?
Research: understand what problems are worth solving. What are the alternatives that your target audience are already using?
Brainstorm: why and what can you do way better than existing competitors?
Experiment: start designing and validating your solution. Note: this is not the stage where you should go into building mode. You are still in research mode. So do not assume the problems you have identified are worth solving. Revise as needed.
Build: produce prototypes of your idea or solution.
Test: launch your prototype to your targeted users.
Feedback: gather survey and opinions from the community.
Evaluate: did your idea work well? Have you targeted the right people? Do you need better execution or resources?
Iterate: go back to the drawing board but first, make sure that you have gathered enough people who will be committed to your potential product or service. They serve as the evidence that you really are getting at something valuable.
Improve: do you have areas that need to be tweaked?
Once you have established consistent demand and traction, you can finally answer this much-anticipated question: “Should I build it?” Hopefully, the answer is “yes”. These are the right questions to ask. Yet, many founders still dive straight away into how to build a feature, product, or service without validating or understanding the value of the problem they are solving in the first place. If your idea did work, now you have to scale it. Do more of it, apply it on different channels, get people to buy into it. It is never going to be a clear-cut process; but since you are taking an experimental approach, at least you are not trying to sell an assumption. You are pitching data-driven results instead, which is more worthwhile. As you start to scale, you will have many new ideas about what will work and what won’t. Put them through this process too.
The Web3 industry remains at the testing stage, trying to build more breakthrough innovations that can pave the way for long-term success. Yet, innovation is a particularly sticky problem because it is so often loosely defined. We treat it as a universal rule, as if every innovation follows the “one way fits all” guideline. This is why many Web3 projects tend to be fraught with buzzwords and rarely lead to anywhere sustainable.
The Innovation Loop (see Model #3) is a good start. However, there is a fine line between brainstorming and execution. The Innovation Matrix takes this difference into account, framing innovation as an organised practice falling into four categories. It is a good basic framework for determining what type of innovation you might want to pursue.
How it works
Start with the basic. What is the problem that you are trying to solve?
Brainstorm ideas for solutions to your problem. Are you well-equipped with resources to execute these ideas?
Categorise each idea into one of the quadrant based on your answers to the above two questions.
Determine the different strategies that can be used in each quadrant. Identify where resources are needed.
Determine what other innovation efforts could support your product or service. Identify where efforts can be coordinated. While using the matrix, it should become clearer that different types of innovations address different types of problems. Thus, they warrant different strategies. Once you have defined the quadrant that your key problem falls in, you can hone in on the best-fit strategies for your business. This provides you the clarity that can lead to action.
So you have identified your viable problem and solution and started building and releasing new launches periodically. You also managed to gain a small following of loyal users along the way. Yet, you are not scaling as much as you expect. This framework is probably what you need since it focuses on creating traction for a product that originally fits a smaller market segment, e.g. Web3 niches.
Despite having a small community to validate your product or service, you might still find trouble balancing other pieces of the puzzle that create a sustainable business model. The more innovative your company is (and that is certainly likely in Web3), the more time it might take before your business model becomes scalable.
How it works
Once your product has reached its initial target market, start looking at tweaking or scaling your business model. Is the current one working? Do you need to improve in some areas? Would combining other strategies work better? FourWeekMBA has an exhaustive list of business models you can experiment with.
Once your product and business model are aligned (which, by the way, could require years of trial and error), then start looking at your organisational design. Is the structure of your company optimised for scaling? Are there additional departments that you will need in order to target larger market segments? While this framework forces you to consider more domains as you hit different stages of growth, your product will always be at the center. This is how you turn you product into one that works for a small market segment to one that works for larger and larger segments. This might not only change your product itself as you scale, but your business models and organisational structures would most likely need rebalancing as well.
Too many startups waste time trying to perfect a product without ever showing it to a potential customer, even in a very rudimentary form. When they fail to expand and maintain sustainable growth, it is often because they never directly interact with their user base. As a result, you have invested a lot of time creating a big plan based on untested assumptions. You are merely hypothesising how the market will react to your solution.
Founders will be left wondering:
What do I do if I suddenly find out customers are not actually interested in the final product?
Do I really have to go back to the drawing board and start all over again?
What about all that time, energy, and money I have put into this?
The Lean Startup framework, developed by Eric Ries, saves you the pain. It is aimed at shortening product development cycles so that you can quickly discover if your proposed business model is viable.
How it works
Map your ideas onto a business model canvas so that you consider all possible areas for potential innovation in your Web3 niche. ThePower has a concise 9-step approach for this stage.
Formulate your hypotheses based on what you have discovered from your analysis in Step 1.
Test your hypotheses in relation to your business idea, product, or service. The best way to do this is by preparing a minimum viable product (MVP), a no-frills version of your product with just enough features to be used by early adopters. This means it should be built using the minimum amount of time and resources. At the same time, the MVP should provide just enough feedback to validate your idea.
Evaluate customers’ feedback on your MVP. Replace your incorrect hypotheses with new ideas and retest from Step 1. This cycle continues until a product-market fit is found. This is when a clear customer segment is willing to pay for the value offered by your product or service.
As defined by Eric Ries, the engines of growth are the mechanisms that startups use to achieve sustainable growth. This framework follows a simple rule: new customers come from the actions of past customers. Customers themselves help drive growth in the following ways:
Word of mouth: users’ enthusiasm for the product
Product usage: viral use of products enable network effects over time
Funded advertising: paid advertising (e.g. engaging influencers)
Repeat purchase or use: maintaining repeating customers and establishing a loyal base
How it works
There are three key engines that drive sustainable growth. Each focuses on different strategies and metrics.
It is unlikely that a startup will achieve sustainable growth by just using one engine. For the best results, founders need to identify the most relevant driver of growth for their product or service and shape their strategy accordingly.
As a Web3 founder, your community is the key driver of growth. Sometimes, tech founders can focus so much on the technical aspects of their product that they forget about how to deal with people. To do this effectively, you need a human-centric approach.
This popular framework integrates three key factors: the needs of people, the possibilities of technology, and the requirements for business success.
How it works
The model follows a general flow: understand, explore, materialise. Within this flow, there are six phases.
Empathise: conduct research to learn what your users do, say, think, and feel
Define: analyse your research and identify where your users’ problems or pain points exist.
Ideate: brainstorm a range of ideas (from the normal to the crazy) that address your users’ unmet needs defined in Step 2.
Prototype: build an MVP for one of your ideas to judge its impact and feasibility.
Test: release your prototype to users, gather feedback, and improve.
Implement: put your idea into effect by fully developing your idea into a solution.
I believe this framework is one of the most essential in the list because it helps to tackle ambiguous problems with empathy. Users going into Web3 often do not know the problem that they are facing, or at least they are not able to articulate it yet. This model will allow potential founders to identify problems and solve concrete human needs, based on data of real customer behaviour.
So you have done your research and built your product. Now it is time to market it. Easier said than done, in the chaotic network of Web3 communities. This framework allows you to filter out the noise and hone in on the right marketing channels hat will give you long-term success.
The premise for this model is that startup founders usually do not have a huge marketing budget to work with. This is when a scientific method could prove valuable.
How it works
The first layer is about what is possible. This is the brainstorming phase, where your team gathers at least one strategy per channel that may be used to start hacking at growth.
The second layer is about what is probable. This is where you start experimenting and testing the strategies brainstormed in the first step. See what works and what does not in your specific market.
The third layer is about what works, the so-called bullseye. After testing, you should be able to now identify what channels are fuelling tangible growth. Focus on these channels until they bootstrap your startup to the next growth phase.
Once you reach the next growth stage, restart the process once again.
As previously said, community building is part and parcel of growing a Web3 business. When more people or users join your platform, you can improve the value of your product or service through user feedback. The premise behind network effects is that as more people join your community, the value of your platform (be it a product or service) rapidly increases. You have essentially activated a cycle of user acquisition.
How it works
As follows, there are different types of network effects that impact how your platform operates. As your community grows, the kinds of network effects you apply often change.
Unlike traditional businesses, what Web3 founders need to leverage on with regards to network effects is their power users. These are the people who are active members, contributors, and ambassadors of your product or service. They essentially contribute much higher activity to your community’s network than others.
There are several ways to attract power users to bootstrap and scale your Web3 business:
Structure your token and governance models to incentivise power users
Target power users with NFT token-gating strategies, if applicable to your business
Leverage power users as content creators and brand ambassadors with reward incentives
Tap on the traditional social graphs of power users
Integrate with other platforms to attract their power users
Ultimately, knowing your “why” and “how” is the first step. Without any proof of concept, the Web3 founder really has no options but to learn by doing. Instead of analysing historical data, build your own new data. Based on what you have found, take on new experiences and gradually grow your understanding of the industry. (Note for a deeper dive: this concept falls under the study of phenomenology - the philosophy of experience.)
Starting and overseeing a startup can never be tied down to one strategic framework, much less one pre-determined plan. Testing, experimenting, and improving are the most productive way for an entrepreneur to succeed. Without trial and error, predicting user reaction, a key metric of success, is practically out of the question. Growing a successful company requires more than simply a firm belief on your product.
No activity yet