In recent years, with the rise of Web3, we have seen some Web2 giants, such as Google, Facebook, and Amazon, which have dominated internet development for the past few decades, enter the Web3 space. For example (the following cases are from Gemini):
Google has created a Web3 division to provide infrastructure services for blockchain developers. Facebook changed its name to Meta and is betting on the metaverse and Web3 gaming. Microsoft has invested in blockchain startups and is developing its own blockchain platform. However, these giants seem to be struggling to keep up. The main reason from a macro perspective is that Web3 is a decentralized internet vision based on blockchain technology, which is diametrically opposed to the centralized model of Web2. However, only by being in the microcosm do we understand that the so-called decentralization is not simple.
Here are a few points that I have observed as a participant:
1.Cultural Conflict:
Organizationally, Web2 giants are accustomed to centralized control and decision-making modes. From architecture to employee behavior patterns, everything is centralized. The behaviors encouraged and evaluated for employees are more based on whether they can implement the will of their superiors at the execution level. For employees, career success depends on their ability to manage upwards. In contrast, in Web3, due to ICOs, many decision-making powers are partly decided by community members (token holders). For example, if a decision does not meet the expectations of the community, it may lead to FUD or whales dumping tokens, so the project team needs to consider the interests of the community more when making a decision, rather than the high-level management making arbitrary decisions. This is a huge challenge for Web2 giants who are accustomed to top-down management models.
2.Legal Risks
Web2 giants are often the vested interests. Their biggest motivation is to maintain their existing platforms and business models, to ensure the stability of their current business before considering development issues, so any risks that may challenge their existing business interests should be eliminated. Among them, the biggest risk is legal compliance risk. Secondly, most people in Web2 giants are still uneasy about cryptocurrencies, and the legal department may even believe that cryptocurrencies are involved in illegal activities such as money laundering, so unconditional opposition is naturally a matter of course. And so far, there is no indication that the expected value of the profit of Web3 products will be greater than the cost caused by legal risks.
3.Technical Challenges
The new technologies involved in Web3, such as blockchain and cryptocurrencies, are very unfamiliar to people in Web2 giants. Some people may ask, can't we just hire people who understand them? First, there are a few problems to be solved:
Web2 managers themselves are often not Web3 users, they cannot accurately measure and identify Web3 experts, and they do not know what level the job seekers are at, which will lead to them spending a lot of money to recruit people who are not as professional as they thought they were;
The criteria for Web2 managers to screen people are often those job seekers who are good at managing upwards. These job seekers understand the boss's preferences and make them the top priority after they are hired, which leads to deformation of basic actions and eventually produces nondescript products;
Web2 managers often make Web3 products based on upward management, rather than truly recognizing the value of Web3. This leads to the unsustainability of Web3 products in resource allocation, because the organization will be reorganized, the boss will change, and if the next boss does not understand or interested in Web3, the whole project is likely to be delayed or cancelled;
4.Iteration and Community
In many Western companies, there are no operation positions in the company due to product positioning considerations, so the community cannot be established and operated. In order to avoid legal risks, some large companies with operation positions often need to outsource a large amount of manpower to maintain a "pure and compliant" UGC community atmosphere, which is not the optimal solution from the cost and incentive perspective. On the other hand, Web3 teams can use token allocation to incentivize the community, attract talented people to spontaneously maintain the community and create content. After obtaining the initial traffic, as long as the content is of high quality, user stickiness will increase. After the stickiness increases, many users will provide feedback on the content to incentivize the creators, thus forming a positive feedback "flywheel".
Conclusion
The development of Web3 is still in a non-consensus stage, and whether Web2 giants can successfully transform remains to be seen. For those with Web3 ideals, it is only by bravely breaking the old order and exploring hands-on that they can seize the opportunities of the Web3 era.
WGMI ~