In a previous issue we looked at how developers and early adopters are learning about web3 and the various tools within it. This week we take the logical step into those tools, and ask ourselves "what can I use to make something myself?". It might be a cliche to say "we are still early" when it comes to the crypto and web3 community experience, and that might still be true, but it's starting to look more like the "early majority" than the "early adopters". This is certainly the case when it comes to the availability of web3 tools and platforms.
At the time of writing we can see some patterns emerging in who these tools are going after, and the direction that they've been designing (and redesigning) to that end. We can also make some assumptions that the emergence of third party services making platforms for smart contract creation is the start of a move towards commodification. And the consolidation that tends to follow a move up the stack.
The risk of this framing leading us astray is low, given the last decade has been a similar cycle for cloud computing, itself bracketed by the 30 year journey of open source software. Commodification is not only an inevitable result of the success of specialisation, but an integral part of balancing out the intense investment (and attention given) the deeper and more dogmatic efforts. Take for example the evolution of Linux from "just a hobby" to being called "a cancer" to being loved by those that once said they hate it. If we don't ever talk about Linux anymore, it's just because it is quite literally everywhere. This is a pattern that seems likely for NFTs and similar blockchain-enabled web3 technology. But how might that play out and what should we keep an eye out for?
A Wardley Map exploring the path of smart contract tools moving towards mass-market utility.
Thinking about this question as a measure of value over the timescale of maturity across both sides of the marketplace, I found myself sketching a loose Wardley map(see above). Applying the assumptions from above we can cluster and identify the key players in this space, and use them as analogs for where the market might differentiate over time. In doing so we surface the following three categories which we will explore in turn.
The low-level and developer-driven platform: the Amazon AWS of web3.
The high-level and project-driven platform: the Squarespace of web3.
The abstracted and persona-driven platform: the Digital Ocean of web3.
The latest tweak to the thirdweb brand sees it describing itself as a collection of "powerful SDKs and intuitive tools for developers". This positioning sees it as first-to-mind in many developer and technical product communities. Partly as a result of steady iteration down through the "no-code and low-code" descriptions that people echoed in the not-too-distant history of Discord banter. And partly through extensive developer relations, partner channels, and a steady flow of content experimentation. These days it's not unusual to hear thirdweb described as "the Amazon AWS of web3". Which feels apt.
When considering thirdweb through such a lens we can understand the market (and SOM) that they are aiming towards. Especially if we first consider the entire timescale of Amazon's achievement. We take for granted the dizzying extent of the full AWS suite. If you've not used it before, take my word for it, it's huge and people have strong feelings about it. But it works. And while there's almost a mythologyabout the creation of the original EC2 service, and the eye-watering revenue that AWS now takes in, the space between those extremes is full of a lot of invisible and often unglamorous work. Especially building developer tools, where "I can build it in a weekend" is the standard mating cry from the HackerNews cheap seats.
It's just that kind of unglamorous work that thirdweb have been doing. And if we connect the dots in their story so far, and extend that line a few years into the future, we can see the AWS analogy becoming clear (and not just because the team have some AWS veterans like Jake Loo and Adam Lee in their ranks). It's worth heading the various members of thirdweb tell their genesis story in their own words, like the aforementioned Jake Loo, thirdweb's CTO, speaking here at WEB3SF. The story is the playbook of "pick a pain-point we can solve and ship something to the people feeling it" that a lot of companies claim. But having watched (and used) thirdweb since the eye-catching beta announcement, they're one of the few that live it.
The onboarding experience of what is ostensibly a developer-focused product is so far ahead of the typical web3 product that's it's both thrilling (as a user) and depressing (for anyone building projects or products with such a high bar being set). The documentation has become extensive, there's no shortage of quickstart guides, and tools like a wizard to help pick which smart contract is preferable is handy for new builders. Not to mention that the overall dashboard and workflow is a masterclass in confident but unobtrusive user journey optimisation. Check out the dismissible "choose your own adventure" panel on first load, and the refreshing lack of nagging tooltips, progress meters, walk-through modals, and other SaaS obsessions. The attention to what matters and abstraction of everything else makes for a strangely comforting feeling in the various UI views.
This doesn't just apply to people like me, as a technical product manager that never wants to have to read cryptic man-pages again in my life, but also to non-technical people. You know, normal people who don't freak out when they see walls like this. Such as digital product marketer (and podcast master) Steph Taylor, who jumped into thirdweb to launch an NFT member's pass experiment as a reward for subscribers to her Web3 for Marketers newsletter. To see non-technical users shipping contracts highlights how thirdweb provides enough guide rails for people looking to experiment, but offers the depth and authority for users needing to dig a little deeper.
It's worth pointing out some of the core user journeys that thirdweb is carving out of the chaos of evolving NFT standards. The three main paths are:
select a pre-built starter from a growing library of audited and deployable contracts
build a new custom contract from scratch with the help of ContractKit
What's interesting about this range of paths is that the existing content library isn't necessarily a restricted or dumbed down set of templates. This isn't clipart. The fact that the team has audited the contracts, and has such a range of existing contracts covering token standards that developers might not have had a chance to experiment with yet, is valuable. They also make for useful building blocks in more extensive use cases, such as a basic ERC20 token contract as the mechanism for voting power, and the subsequent premade contract for voting (a new one for me that I'm keen to explore for DAO voting). I'll also add that the code commenting inside the contracts, read via the Sources view in the contract library page, is very well appreciated for those of not specialised in Solidity (which augments the less-than-beautiful official docs on RTD).
The developer-centric model is an interesting one that we will look at later on in this piece, and consider in the context of addressable market size. But it's also one that comes with it's own unique costs. Unlike a more general product offering appealing to a wider range of project founders, the competition for the attention (let alone utility) of developers in web3 is itself becoming something of a meme.
There's a classic joke along with lines of "if you're single, you should become a developer, and you will have no shortage of companies trying to have relations with you". Funny but... true. It can surprise many aspiring products taking the developer-centric approach just how much investment is required to support those efforts. It's not just a case of swapping traditional marketing teams with developer relations teams, but often an extension of those more typical efforts. And an increased challenge of maintaining alignment across them.
While thirdweb sets a high bar for this in general, devrel teams can build their micro-climates of attitude and overall culture that can seemingly slip in and out of phase with the overall company direction. This is something that anyone looking to emulate this pattern should be well aware of. There are no shortage of examples of this taken to the extreme by FAANG "developer advocates" becoming "developer activists", like some modern version of Apocalypse Now, swapping jungles for social media channels. The horror.
Outside of the individuals going rogue, the sheer volume of Twitter Spaces, conferences, meetups, YouTube videos, podcasts, and hackathons can blur into a distracting over-abundance for both the team and the intended audience. This surface area can work against a team needing to rapidly pivot (but remain in step), where the long tail of content can weigh down the casual observer and leave them well behind the product's evolution. Developer content isn't an asset in and of itself, and becomes a costly thing to maintain duration major point releases or significant changes in direction. As someone who still gets emails about JBoss configuration settings nearly a decade since I worked on it, trust me, your content can haunt you.
Let's go a layer up from the world of developers and dark mode. We are living in the golden era of no-code tools like Bubble, and the dramatic (and impressive) continual reinvention of graphical site and campaign builders like Squarespace. So it shouldn't be a surprise that the world of web3 would surface the same. And at the top of that category is Mintplex.
At the time of writing the team has come through the S22 batch at Y Combinator, it's spiritual home in Mountain View only about half an hour south of thirdweb's headquarters in San Francisco proper. But with a very different view of the web3 world. We can perhaps consider Mintplex as the Squarespace of smart contract and NFT project creation, aiming for the general purpose and end-to-end project management experience. This is a defiantly "no-code" positioning compared to many of its peers, and a bold ambition for the founding team of Timothy Carambatand Jorrel Sto Tomas. Outside of the YC batch investment, the duo have taken a seed round via Orange DAO, so are in many ways living the new model of hybrid web3 business. But how are they going so far?
The team recently announced that they have (since founding in 2022) shipped over 1000 mainnet contracts, created over 1,000,000 unique NFTs across 6 blockchains, and (the important bit) facilitated over USD $8,000,000 revenue generated for creators. That number is the interesting one for both the commercial value created for Mintplex users, and to size up their revenue potential in turn. Experiments with pricing have evolved from taking a commission (with their legacy Notion docs showing that they took a 5% cut from initial contract minting previously) to a baseline freemium model with premium upsell. And some curious bootstrapped experiments dogfooding their own product.
Mintplex has refined their value statement over the last year as "a no-code NFT smart contract deployment and community building tool". These iterations include a rebranding effort from Rampp to the Mintplex that we see now. This continual iteration is indicative of the macro shift in the ecosystem, where the demand to create and launch a smart contract of ten thousand objectively ridiculous looking animals as a "I can do that" gold rush has evolved into a wider range of genuinely useful applications. Yes, really.
This evolution is mirrored in the pricing model evolving from clipping the ticket of monkey JPEG sales and adapting the freemium model to upsell extra features. These are currently aimed around the kind of white labelling and analytics one might expect from common SaaS patterns, but include some unique web3 elements like a hosted marketplace and Discord bots optimised to interact with the generated smart contract. The cost of upgrading is 0.2 ETH (or around USD $380 in the old money at this split second of volatile exchange rates) and contains the promise of forward compatibility with all future features. It's also worth noting the FlightPass experiment, which was an NFT project that rewarded those who minted it with lifetime access to the pro level features. I can't bring myself to screenshot the PFP bird tokens but you can go see for yourself. I'm writing in the past tense as this campaign is wrapping up pretty much as I type this, and the Opensea stats (and etherscan records) suggest that this kind of bootstrapped funding model is a brilliant use of NFTs. And one worth considering.
In terms of the current campaign builder experience, Mintplex has its own guide rails for new builders, just with a decidedly more degen vibe. A walk-through wizard helps select the token type and configuration, and a clear navigation pattern walks the user through the process of customising the contract, deploying a test instance, and preparing for launch. It's interesting to see the rougher edges in the UI and overall design aesthetic of Mintplex versus that of thirdweb, which speaks to both the different user persona being targeted, and the resources at hand. This isn't a criticism of the team, especially considering how transparent the founders are in their journey so far. And it should feel familiar to anyone who has been through Y Combinator or seen teams do so—a certain Pareto distribution of effort towards the critical path of the user journey... and the rest can be worked out later.
One area that I found interesting was the way in which Mintplex promotes its "Partners and Friends" on the landing page and in the app. These should absolutely be listed on a dedicated page, as I hovered over the scrolling feed to check out every single one of them, which include some personal favourites (Pinata especially) and some I've been keen to check out (Bonfire and Carma are on the list). These kinds of early alliances, if not outright integrations, are a powerful way to circle the wagons and assert some influence over an otherwise chaotic and overwhelming new ecosystem.
This also suggests plenty of opportunity for future consolidation and the inevitable M&A rush that's likely coming in 2023. If we are already moving out of the era of "NFT collections" and heading towards mass adoption of "digital collectibles", let alone FAANG giants jumping into the fray, we can expect a lot of corp dev and M&A teams coming back from Christmas holidays with ideas (and marching orders). History shows that consolidation is the shadow of commodification, and where one goes, the other follows. Mintplex with the kind of post-YC funds that firms like a16z are pouring into the web3 space suggests that they're probably going to need a bigger office (or Zoom license).
It is perhaps more a question of time and roadmap than the Mintplex team's neglect, but the full "Squarespace for NFT communities" offering is being propped up by the very same partners we've just met. If the general user journey of a team creating a project using NFT technology continues to expand to include community engagement on either side of the smart contract creation then Mintplex has its work cut out for it. This includes things like pre-mint lists, landing page design, community management, file management, etc. It's a lot to build, and there's a lot of project teams doing just that.
These partner channels give Mintplex the ability to stitch together an end-to-end experience, and either build or buy their own capabilities. But this creates some awkward conversations with said partners over time. We would be ignoring recent history if we assume that there won't be a handful of FAANG-scale brands dominating the market, which will be motivating Mintplex (and presumably their investors!) to push even harder to capture as much high ground as possible. Especially as the early majority comes stumbling into view.
Moving up from serving developers to serving everyone, we can now look to see what's emerging to serve specific audiences and the communities around them. While there's some activity coming through on the musician side of things, we'll cover music in web3 in a future issue, so let's look to see how artists have fared now that "NFT art" has grown out of the primitive beginnings of pixels, punks and primates.
This category is extremely competitive in the same way that there's never any shortage of static site generators or Markdown renderers. Once you've scratched that itch a a developer, it's only a small (but not inconsiderable) step to make those services available to others (ahem). What gave NFT-inator the focus here is that it's not only an impressively well done product, but the Diamond Hands Hotel team behind it are capable (and amusing) in their own right. While they've got a few great projects that appear to have been stood up as a result of their agency work, and like Mintplex have their own NFT for sale that doubles as an early adopter pass (and bootstrapped revenue channel), we're looking firmly at the art compiler and considering how this serves the range of aspiring art project founders. BYO talent and taste (or not).
A big part of the phenomenon of the "Profile Picture" (PFP) in NFTs was the mixture of constraint and novelty. From the simplistic pixel forms of the breakthrough CryptoPunks experiment, to the cuteness (and collapse) of CryptoKitties, right into the watershed moment of the Bored Apes Yacht Club, the pattern of generative art projects has been well and truly cemented by a mix of rampant speculation and the resulting breathless/banal media coverage. It's hard to dig into this pocket of time without feeling like we pull out a pile of lint, chewed gum, and many (many) useless tokens. But for all the gold rush run on derivative and outright fraudulent PFP projects, there's no denying a steady diffusion of technical capability spreading in the process. As a general rule, elitism and gatekeeping of any kind of a pointless endeavour, as it's rarely the culture that needs defending as much as one's perilous position slightly ahead of those about to benefit at scale. Speaking of which...
The tool can be used to effectively prototype and generate an art collection prior to (and including) compilation into a smart contract. The only major prerequisite for an aspiring Bored Something Something Club creator is a series of vector images as ingredients for the generator. The format is typically a core character, and a series of accessories and variations. You know the drill by now. What makes NFT-inator so interesting is just how well they've designed the UI for non-technical artists. Even for the most ardent command line hero, the workflow here is exceptional, making it easy to review combinations of the various attributes, not in the least of which will surface any potentially scandalous combinations that may threaten a backlash in our current era of trigger-finger cancellations.
This emphasis on the critical path in terms the user journey of a generative project creation in the visual sense is by no mistake. Diamond Hands Hotel are clearly scratching their own itch here, and the shift from service-based agency work to product-based platform play has (in prior years at least) been the lucrative move. One that many design agencies are unable to achieve given the chasm between doing and building, which is a paradox given the other side sees many capable teams of builders unable to achieve the nuance and specific insights required to build something truly useful. Well done, snakey.
Straight up we can agree that there's going to be a lot of mixed opinions about the validity of PFP art projects. We might argue that generative art is a useful and novel way to create member's cards (be it wacky space sneks or Developer DAO's ultra-minimal Devs for Revolution). But we don't really need to. It is what it is. Yes the abundance of generative builder tools will see a vast quantity of extremely terrible, often fraudulent, content coming through. But a contrarian might also argue that the sooner one floods the lane of some emergent speculative activity with mass capability, the sooner the lower value efforts are washed away by volume (the the contempt of familiarity), and the truly exceptional works are advanced by those that can swim against the tide long enough to build up their creative muscles. While I personally don't lean this hard into the extremes, I do recognise that the act of generating 10,00 PFPs is no longer interesting in and of itself, some five years on from the original CryptoPunks contract, and tools like NFT-inator are already catering to the additional utility one might expect (such as unlockable content, airdrop lists for token holders, etc). To put it another way, punk rock didn't ruin guitar music, synthesisers didn't ruin classic music, and vector tools won't ruin art (yeah, that's AI's job, innit?).
For the Diamond Hands Hotel team, the need to lock down a sustainable business model as a platform product alone is perhaps less existential given their agency work. Cool. But this split focus does put the platform at a greater risk of being drowned out by the competition as more tools and products and more platforms come online. Especially, as we've seen with the previous example, those that are emerging from the ranks of Y Combinator, backed by the likes of a16z, or the latest focused effort of a team of considerably experienced founders with the war-chest (and network effects) to back them. While products like NFT-inator might be excellently designed and optimised for exactly the right things that project designers need and want, it's as-yet unclear whether the hyper-growth tactics of VC-funded ventures will steamroll the competition in web3 as it has in the current SaaS landscape.
The projects and products I pick to focus on are not necessarily endorsements as much as a selection of things that represent roughly distinct trends. The same goes for this week, where there's so many genuinely interesting examples of the smart contract generators evolving into NFT project creators and in turn into web3 product platforms and beyond. It would be remiss not to mention Bueno, which is accelerating ahead from an art generator that does smart contracts to early efforts at custom metaverse creation (which it calls Microverse). And then there's onemint(formerly known as nft-generator), NiftyKit, the stunningly boringly named Zero Code NFT, etc. The quality of design and implementation is surprisingly high for this mob, but drops off quickly into the long tail, with the likes of KoalaMint showing how critical design (or the lack thereof) is for modern products.
If we can take anything away from such a triage across the board, it's that brand and design capability is no longer a nice-to-have, and forms a strong part of any project's initial momentum into a marketplace. Even for developer-centric products like thirdweb, the level of marketing and brand skills at hand is an unfair advantage (although the $24M capital raise helps a little too). There's no shortage of incredible 3D artists like Amy Kilner and specialist agencies available to achieve a solid early brand foundation (and the design assets to boot). Don't sleep on the pixels.
Each of these companies are taking a unique approach to the emerging opportunities to service the demand for tools to build and manage smart contracts. All three are executing on their chosen strategy at a high level, and taking part in shaping both the tactics and trends amongst their peers (and competitors), and the expectations and assumptions of those of us using these platforms. That they are all worthy of your attention is not a question. The question is who better represents the overall direction of the future of smart contracts in digital campaigns. And for that question we need to consider how we size the market now, and in the years to come.
Speaking to one of the team at thirdweb a few months ago on Zoom, I asked about the challenge of differentiation in a crowded market of smart contract and NFT builders. They spoke to the difficulty of working through that. In the months since, we've seen thirdweb making this journey towards the developer community. Even shifting their design vibes towards dark mode. This focus on the developer persona is a strategy that feels familiar for those of us from enterprise backgrounds. I did it myself when I launched my previous company, and narrowed in on an area that I had an unfair advantage serving. But like many others before me, I got stuck in the local maxima of "up and to the right" wins that were ultimately eclipsed by the order of magnitude greater momentum that competitors had gained going for a wider market sooner.
I thought about this when bantering with one of the thirdweb team on Twitter, when they defended the laser-focus on developers by asking "what's the total TAM of the developer market?" He had a good point, as we typically see the developer tools market priced around $5B. Which is estimated to double in the next decade. But there's two dangers to holding this position.
Developers are not the TAM of "platforms providing smart contract capabilities to product and product teams". It's a chosen SOM that should move towards the TAM (or carve a defensible moat and stay put).
Marketplaces are dynamic and express a unique vector (or "direction and magnitude"). It's hard to estimate, and the "skate where the puck will be" analogy is usually a backstory that covers a lot of small bets. Or luck.
There's no reason not to consider open source software as a suitable heuristic for developer-centric crypto. When I joined Red Hat we were the world's leading open source company, "the" Linux company with a legendary IPO, and literally wrote the book on devrel. These days Red Hat is a division of IBM, hardly anybody cares what version of Linux is running in their AWS image, and there's no shortage of PaaS or SaaS to solve any desire. And Red Hat is actually one of the success stories of this transition. The same can't be said for Rackspace and countless others like it. So long and thanks for all the devrel swag.
Underlying all of this from a strategic point of view is what it says about a company's ambitions when they define a TAM. When we frame our efforts at market sizing in such a way, we're not just trying to keep a straight face while convincing investors we're onto something here, but making important bets on our ability to intercept that market vector. In the context of these smart contract platforms:
Total Addressable Market (TAM) is the entire theoretical market value. This could be "all projects teams looking to select, create, or integrate smart contracts in existing or future products".
Serviceable Available Market (SAM) is the understood market value available for your product. This could be "the majority of technical teams looking for a platform with prebuilt smart contracts and related SDKs for contract development"
Serviceable Obtainable Market (SOM) is the understood realistic market not only available but that you have the capability to serve. This could be "existing and aspiring web3 developers building on the Ethereum blockchain who are looking for starter contracts and a unified dashboard for managing and deploying them". Specificity increases as we make stronger assumptions and assign resources to them.
The typos in my chart art not very serviceable.
That's a little sloppy in terms of my examples but let's call that an iteration and work from there. We make these assumptions not only to include portions of the market to test our product iteration on... but to exclude some. Narrowing down and focusing on a specific persona and their pain-points is startup gospel, so what's the problem here?
Outside of the scope of this article is a really interesting debate about hypergrowthversus hyperfocus, with no objective truth over which is better. If you ever played Starcraft, think of the "Zerg rush" tactic versus the strategic marathon of building an impenetrable Protoss fortress. We can see thirdweb going for the fortress approach. That's working well right now as there's room in the market for a "general all-pupose web3 product tool" and "developer-focused multi-chain contract platform". But there's a likely collision ahead as the market vector suggests that powerful smart contracts will become a feature of a general purpose digital campaign builder. Which I've illustrated below in my extremely scientific chart (hands-off, McKinsey!).
Seemed like a good idea at the time.
We are of course talking about the rise of monopolies or mass-market shares. That's to take nothing away from the specialisation of niche products. In the cloud computing world there's definitely a space for the likes of Digital Ocean or Scaleway, and the same will go for the evolving web3 world. But I doubt that anyone pitching for venture capital (or going through Y Combinator, or with already iconic founders like thirdweb's Furqan Rydhan at the helm) is low-balling their ambition while being so early to a market that has the potential to be the backbone of all future digital campaigns... whether that's as an AWS or as a Squarespace, that's no small vision for the future. Now let's go build it.
In a previous issue we looked at how developers and early adopters are learning about web3 and the various tools within it. This week we take the logical step into those tools, and ask ourselves "what can I use to make something myself?". It might be a cliche to say "we are still early" when it comes to the crypto and web3 community experience, and that might still be true, but it's starting to look more like the "early majority" than the "early adopters". This is certainly the case when it comes to the availability of web3 tools and platforms.
At the time of writing we can see some patterns emerging in who these tools are going after, and the direction that they've been designing (and redesigning) to that end. We can also make some assumptions that the emergence of third party services making platforms for smart contract creation is the start of a move towards commodification. And the consolidation that tends to follow a move up the stack.
The risk of this framing leading us astray is low, given the last decade has been a similar cycle for cloud computing, itself bracketed by the 30 year journey of open source software. Commodification is not only an inevitable result of the success of specialisation, but an integral part of balancing out the intense investment (and attention given) the deeper and more dogmatic efforts. Take for example the evolution of Linux from "just a hobby" to being called "a cancer" to being loved by those that once said they hate it. If we don't ever talk about Linux anymore, it's just because it is quite literally everywhere. This is a pattern that seems likely for NFTs and similar blockchain-enabled web3 technology. But how might that play out and what should we keep an eye out for?
A Wardley Map exploring the path of smart contract tools moving towards mass-market utility.
Thinking about this question as a measure of value over the timescale of maturity across both sides of the marketplace, I found myself sketching a loose Wardley map(see above). Applying the assumptions from above we can cluster and identify the key players in this space, and use them as analogs for where the market might differentiate over time. In doing so we surface the following three categories which we will explore in turn.
The low-level and developer-driven platform: the Amazon AWS of web3.
The high-level and project-driven platform: the Squarespace of web3.
The abstracted and persona-driven platform: the Digital Ocean of web3.
The latest tweak to the thirdweb brand sees it describing itself as a collection of "powerful SDKs and intuitive tools for developers". This positioning sees it as first-to-mind in many developer and technical product communities. Partly as a result of steady iteration down through the "no-code and low-code" descriptions that people echoed in the not-too-distant history of Discord banter. And partly through extensive developer relations, partner channels, and a steady flow of content experimentation. These days it's not unusual to hear thirdweb described as "the Amazon AWS of web3". Which feels apt.
When considering thirdweb through such a lens we can understand the market (and SOM) that they are aiming towards. Especially if we first consider the entire timescale of Amazon's achievement. We take for granted the dizzying extent of the full AWS suite. If you've not used it before, take my word for it, it's huge and people have strong feelings about it. But it works. And while there's almost a mythologyabout the creation of the original EC2 service, and the eye-watering revenue that AWS now takes in, the space between those extremes is full of a lot of invisible and often unglamorous work. Especially building developer tools, where "I can build it in a weekend" is the standard mating cry from the HackerNews cheap seats.
It's just that kind of unglamorous work that thirdweb have been doing. And if we connect the dots in their story so far, and extend that line a few years into the future, we can see the AWS analogy becoming clear (and not just because the team have some AWS veterans like Jake Loo and Adam Lee in their ranks). It's worth heading the various members of thirdweb tell their genesis story in their own words, like the aforementioned Jake Loo, thirdweb's CTO, speaking here at WEB3SF. The story is the playbook of "pick a pain-point we can solve and ship something to the people feeling it" that a lot of companies claim. But having watched (and used) thirdweb since the eye-catching beta announcement, they're one of the few that live it.
The onboarding experience of what is ostensibly a developer-focused product is so far ahead of the typical web3 product that's it's both thrilling (as a user) and depressing (for anyone building projects or products with such a high bar being set). The documentation has become extensive, there's no shortage of quickstart guides, and tools like a wizard to help pick which smart contract is preferable is handy for new builders. Not to mention that the overall dashboard and workflow is a masterclass in confident but unobtrusive user journey optimisation. Check out the dismissible "choose your own adventure" panel on first load, and the refreshing lack of nagging tooltips, progress meters, walk-through modals, and other SaaS obsessions. The attention to what matters and abstraction of everything else makes for a strangely comforting feeling in the various UI views.
This doesn't just apply to people like me, as a technical product manager that never wants to have to read cryptic man-pages again in my life, but also to non-technical people. You know, normal people who don't freak out when they see walls like this. Such as digital product marketer (and podcast master) Steph Taylor, who jumped into thirdweb to launch an NFT member's pass experiment as a reward for subscribers to her Web3 for Marketers newsletter. To see non-technical users shipping contracts highlights how thirdweb provides enough guide rails for people looking to experiment, but offers the depth and authority for users needing to dig a little deeper.
It's worth pointing out some of the core user journeys that thirdweb is carving out of the chaos of evolving NFT standards. The three main paths are:
select a pre-built starter from a growing library of audited and deployable contracts
build a new custom contract from scratch with the help of ContractKit
What's interesting about this range of paths is that the existing content library isn't necessarily a restricted or dumbed down set of templates. This isn't clipart. The fact that the team has audited the contracts, and has such a range of existing contracts covering token standards that developers might not have had a chance to experiment with yet, is valuable. They also make for useful building blocks in more extensive use cases, such as a basic ERC20 token contract as the mechanism for voting power, and the subsequent premade contract for voting (a new one for me that I'm keen to explore for DAO voting). I'll also add that the code commenting inside the contracts, read via the Sources view in the contract library page, is very well appreciated for those of not specialised in Solidity (which augments the less-than-beautiful official docs on RTD).
The developer-centric model is an interesting one that we will look at later on in this piece, and consider in the context of addressable market size. But it's also one that comes with it's own unique costs. Unlike a more general product offering appealing to a wider range of project founders, the competition for the attention (let alone utility) of developers in web3 is itself becoming something of a meme.
There's a classic joke along with lines of "if you're single, you should become a developer, and you will have no shortage of companies trying to have relations with you". Funny but... true. It can surprise many aspiring products taking the developer-centric approach just how much investment is required to support those efforts. It's not just a case of swapping traditional marketing teams with developer relations teams, but often an extension of those more typical efforts. And an increased challenge of maintaining alignment across them.
While thirdweb sets a high bar for this in general, devrel teams can build their micro-climates of attitude and overall culture that can seemingly slip in and out of phase with the overall company direction. This is something that anyone looking to emulate this pattern should be well aware of. There are no shortage of examples of this taken to the extreme by FAANG "developer advocates" becoming "developer activists", like some modern version of Apocalypse Now, swapping jungles for social media channels. The horror.
Outside of the individuals going rogue, the sheer volume of Twitter Spaces, conferences, meetups, YouTube videos, podcasts, and hackathons can blur into a distracting over-abundance for both the team and the intended audience. This surface area can work against a team needing to rapidly pivot (but remain in step), where the long tail of content can weigh down the casual observer and leave them well behind the product's evolution. Developer content isn't an asset in and of itself, and becomes a costly thing to maintain duration major point releases or significant changes in direction. As someone who still gets emails about JBoss configuration settings nearly a decade since I worked on it, trust me, your content can haunt you.
Let's go a layer up from the world of developers and dark mode. We are living in the golden era of no-code tools like Bubble, and the dramatic (and impressive) continual reinvention of graphical site and campaign builders like Squarespace. So it shouldn't be a surprise that the world of web3 would surface the same. And at the top of that category is Mintplex.
At the time of writing the team has come through the S22 batch at Y Combinator, it's spiritual home in Mountain View only about half an hour south of thirdweb's headquarters in San Francisco proper. But with a very different view of the web3 world. We can perhaps consider Mintplex as the Squarespace of smart contract and NFT project creation, aiming for the general purpose and end-to-end project management experience. This is a defiantly "no-code" positioning compared to many of its peers, and a bold ambition for the founding team of Timothy Carambatand Jorrel Sto Tomas. Outside of the YC batch investment, the duo have taken a seed round via Orange DAO, so are in many ways living the new model of hybrid web3 business. But how are they going so far?
The team recently announced that they have (since founding in 2022) shipped over 1000 mainnet contracts, created over 1,000,000 unique NFTs across 6 blockchains, and (the important bit) facilitated over USD $8,000,000 revenue generated for creators. That number is the interesting one for both the commercial value created for Mintplex users, and to size up their revenue potential in turn. Experiments with pricing have evolved from taking a commission (with their legacy Notion docs showing that they took a 5% cut from initial contract minting previously) to a baseline freemium model with premium upsell. And some curious bootstrapped experiments dogfooding their own product.
Mintplex has refined their value statement over the last year as "a no-code NFT smart contract deployment and community building tool". These iterations include a rebranding effort from Rampp to the Mintplex that we see now. This continual iteration is indicative of the macro shift in the ecosystem, where the demand to create and launch a smart contract of ten thousand objectively ridiculous looking animals as a "I can do that" gold rush has evolved into a wider range of genuinely useful applications. Yes, really.
This evolution is mirrored in the pricing model evolving from clipping the ticket of monkey JPEG sales and adapting the freemium model to upsell extra features. These are currently aimed around the kind of white labelling and analytics one might expect from common SaaS patterns, but include some unique web3 elements like a hosted marketplace and Discord bots optimised to interact with the generated smart contract. The cost of upgrading is 0.2 ETH (or around USD $380 in the old money at this split second of volatile exchange rates) and contains the promise of forward compatibility with all future features. It's also worth noting the FlightPass experiment, which was an NFT project that rewarded those who minted it with lifetime access to the pro level features. I can't bring myself to screenshot the PFP bird tokens but you can go see for yourself. I'm writing in the past tense as this campaign is wrapping up pretty much as I type this, and the Opensea stats (and etherscan records) suggest that this kind of bootstrapped funding model is a brilliant use of NFTs. And one worth considering.
In terms of the current campaign builder experience, Mintplex has its own guide rails for new builders, just with a decidedly more degen vibe. A walk-through wizard helps select the token type and configuration, and a clear navigation pattern walks the user through the process of customising the contract, deploying a test instance, and preparing for launch. It's interesting to see the rougher edges in the UI and overall design aesthetic of Mintplex versus that of thirdweb, which speaks to both the different user persona being targeted, and the resources at hand. This isn't a criticism of the team, especially considering how transparent the founders are in their journey so far. And it should feel familiar to anyone who has been through Y Combinator or seen teams do so—a certain Pareto distribution of effort towards the critical path of the user journey... and the rest can be worked out later.
One area that I found interesting was the way in which Mintplex promotes its "Partners and Friends" on the landing page and in the app. These should absolutely be listed on a dedicated page, as I hovered over the scrolling feed to check out every single one of them, which include some personal favourites (Pinata especially) and some I've been keen to check out (Bonfire and Carma are on the list). These kinds of early alliances, if not outright integrations, are a powerful way to circle the wagons and assert some influence over an otherwise chaotic and overwhelming new ecosystem.
This also suggests plenty of opportunity for future consolidation and the inevitable M&A rush that's likely coming in 2023. If we are already moving out of the era of "NFT collections" and heading towards mass adoption of "digital collectibles", let alone FAANG giants jumping into the fray, we can expect a lot of corp dev and M&A teams coming back from Christmas holidays with ideas (and marching orders). History shows that consolidation is the shadow of commodification, and where one goes, the other follows. Mintplex with the kind of post-YC funds that firms like a16z are pouring into the web3 space suggests that they're probably going to need a bigger office (or Zoom license).
It is perhaps more a question of time and roadmap than the Mintplex team's neglect, but the full "Squarespace for NFT communities" offering is being propped up by the very same partners we've just met. If the general user journey of a team creating a project using NFT technology continues to expand to include community engagement on either side of the smart contract creation then Mintplex has its work cut out for it. This includes things like pre-mint lists, landing page design, community management, file management, etc. It's a lot to build, and there's a lot of project teams doing just that.
These partner channels give Mintplex the ability to stitch together an end-to-end experience, and either build or buy their own capabilities. But this creates some awkward conversations with said partners over time. We would be ignoring recent history if we assume that there won't be a handful of FAANG-scale brands dominating the market, which will be motivating Mintplex (and presumably their investors!) to push even harder to capture as much high ground as possible. Especially as the early majority comes stumbling into view.
Moving up from serving developers to serving everyone, we can now look to see what's emerging to serve specific audiences and the communities around them. While there's some activity coming through on the musician side of things, we'll cover music in web3 in a future issue, so let's look to see how artists have fared now that "NFT art" has grown out of the primitive beginnings of pixels, punks and primates.
This category is extremely competitive in the same way that there's never any shortage of static site generators or Markdown renderers. Once you've scratched that itch a a developer, it's only a small (but not inconsiderable) step to make those services available to others (ahem). What gave NFT-inator the focus here is that it's not only an impressively well done product, but the Diamond Hands Hotel team behind it are capable (and amusing) in their own right. While they've got a few great projects that appear to have been stood up as a result of their agency work, and like Mintplex have their own NFT for sale that doubles as an early adopter pass (and bootstrapped revenue channel), we're looking firmly at the art compiler and considering how this serves the range of aspiring art project founders. BYO talent and taste (or not).
A big part of the phenomenon of the "Profile Picture" (PFP) in NFTs was the mixture of constraint and novelty. From the simplistic pixel forms of the breakthrough CryptoPunks experiment, to the cuteness (and collapse) of CryptoKitties, right into the watershed moment of the Bored Apes Yacht Club, the pattern of generative art projects has been well and truly cemented by a mix of rampant speculation and the resulting breathless/banal media coverage. It's hard to dig into this pocket of time without feeling like we pull out a pile of lint, chewed gum, and many (many) useless tokens. But for all the gold rush run on derivative and outright fraudulent PFP projects, there's no denying a steady diffusion of technical capability spreading in the process. As a general rule, elitism and gatekeeping of any kind of a pointless endeavour, as it's rarely the culture that needs defending as much as one's perilous position slightly ahead of those about to benefit at scale. Speaking of which...
The tool can be used to effectively prototype and generate an art collection prior to (and including) compilation into a smart contract. The only major prerequisite for an aspiring Bored Something Something Club creator is a series of vector images as ingredients for the generator. The format is typically a core character, and a series of accessories and variations. You know the drill by now. What makes NFT-inator so interesting is just how well they've designed the UI for non-technical artists. Even for the most ardent command line hero, the workflow here is exceptional, making it easy to review combinations of the various attributes, not in the least of which will surface any potentially scandalous combinations that may threaten a backlash in our current era of trigger-finger cancellations.
This emphasis on the critical path in terms the user journey of a generative project creation in the visual sense is by no mistake. Diamond Hands Hotel are clearly scratching their own itch here, and the shift from service-based agency work to product-based platform play has (in prior years at least) been the lucrative move. One that many design agencies are unable to achieve given the chasm between doing and building, which is a paradox given the other side sees many capable teams of builders unable to achieve the nuance and specific insights required to build something truly useful. Well done, snakey.
Straight up we can agree that there's going to be a lot of mixed opinions about the validity of PFP art projects. We might argue that generative art is a useful and novel way to create member's cards (be it wacky space sneks or Developer DAO's ultra-minimal Devs for Revolution). But we don't really need to. It is what it is. Yes the abundance of generative builder tools will see a vast quantity of extremely terrible, often fraudulent, content coming through. But a contrarian might also argue that the sooner one floods the lane of some emergent speculative activity with mass capability, the sooner the lower value efforts are washed away by volume (the the contempt of familiarity), and the truly exceptional works are advanced by those that can swim against the tide long enough to build up their creative muscles. While I personally don't lean this hard into the extremes, I do recognise that the act of generating 10,00 PFPs is no longer interesting in and of itself, some five years on from the original CryptoPunks contract, and tools like NFT-inator are already catering to the additional utility one might expect (such as unlockable content, airdrop lists for token holders, etc). To put it another way, punk rock didn't ruin guitar music, synthesisers didn't ruin classic music, and vector tools won't ruin art (yeah, that's AI's job, innit?).
For the Diamond Hands Hotel team, the need to lock down a sustainable business model as a platform product alone is perhaps less existential given their agency work. Cool. But this split focus does put the platform at a greater risk of being drowned out by the competition as more tools and products and more platforms come online. Especially, as we've seen with the previous example, those that are emerging from the ranks of Y Combinator, backed by the likes of a16z, or the latest focused effort of a team of considerably experienced founders with the war-chest (and network effects) to back them. While products like NFT-inator might be excellently designed and optimised for exactly the right things that project designers need and want, it's as-yet unclear whether the hyper-growth tactics of VC-funded ventures will steamroll the competition in web3 as it has in the current SaaS landscape.
The projects and products I pick to focus on are not necessarily endorsements as much as a selection of things that represent roughly distinct trends. The same goes for this week, where there's so many genuinely interesting examples of the smart contract generators evolving into NFT project creators and in turn into web3 product platforms and beyond. It would be remiss not to mention Bueno, which is accelerating ahead from an art generator that does smart contracts to early efforts at custom metaverse creation (which it calls Microverse). And then there's onemint(formerly known as nft-generator), NiftyKit, the stunningly boringly named Zero Code NFT, etc. The quality of design and implementation is surprisingly high for this mob, but drops off quickly into the long tail, with the likes of KoalaMint showing how critical design (or the lack thereof) is for modern products.
If we can take anything away from such a triage across the board, it's that brand and design capability is no longer a nice-to-have, and forms a strong part of any project's initial momentum into a marketplace. Even for developer-centric products like thirdweb, the level of marketing and brand skills at hand is an unfair advantage (although the $24M capital raise helps a little too). There's no shortage of incredible 3D artists like Amy Kilner and specialist agencies available to achieve a solid early brand foundation (and the design assets to boot). Don't sleep on the pixels.
Each of these companies are taking a unique approach to the emerging opportunities to service the demand for tools to build and manage smart contracts. All three are executing on their chosen strategy at a high level, and taking part in shaping both the tactics and trends amongst their peers (and competitors), and the expectations and assumptions of those of us using these platforms. That they are all worthy of your attention is not a question. The question is who better represents the overall direction of the future of smart contracts in digital campaigns. And for that question we need to consider how we size the market now, and in the years to come.
Speaking to one of the team at thirdweb a few months ago on Zoom, I asked about the challenge of differentiation in a crowded market of smart contract and NFT builders. They spoke to the difficulty of working through that. In the months since, we've seen thirdweb making this journey towards the developer community. Even shifting their design vibes towards dark mode. This focus on the developer persona is a strategy that feels familiar for those of us from enterprise backgrounds. I did it myself when I launched my previous company, and narrowed in on an area that I had an unfair advantage serving. But like many others before me, I got stuck in the local maxima of "up and to the right" wins that were ultimately eclipsed by the order of magnitude greater momentum that competitors had gained going for a wider market sooner.
I thought about this when bantering with one of the thirdweb team on Twitter, when they defended the laser-focus on developers by asking "what's the total TAM of the developer market?" He had a good point, as we typically see the developer tools market priced around $5B. Which is estimated to double in the next decade. But there's two dangers to holding this position.
Developers are not the TAM of "platforms providing smart contract capabilities to product and product teams". It's a chosen SOM that should move towards the TAM (or carve a defensible moat and stay put).
Marketplaces are dynamic and express a unique vector (or "direction and magnitude"). It's hard to estimate, and the "skate where the puck will be" analogy is usually a backstory that covers a lot of small bets. Or luck.
There's no reason not to consider open source software as a suitable heuristic for developer-centric crypto. When I joined Red Hat we were the world's leading open source company, "the" Linux company with a legendary IPO, and literally wrote the book on devrel. These days Red Hat is a division of IBM, hardly anybody cares what version of Linux is running in their AWS image, and there's no shortage of PaaS or SaaS to solve any desire. And Red Hat is actually one of the success stories of this transition. The same can't be said for Rackspace and countless others like it. So long and thanks for all the devrel swag.
Underlying all of this from a strategic point of view is what it says about a company's ambitions when they define a TAM. When we frame our efforts at market sizing in such a way, we're not just trying to keep a straight face while convincing investors we're onto something here, but making important bets on our ability to intercept that market vector. In the context of these smart contract platforms:
Total Addressable Market (TAM) is the entire theoretical market value. This could be "all projects teams looking to select, create, or integrate smart contracts in existing or future products".
Serviceable Available Market (SAM) is the understood market value available for your product. This could be "the majority of technical teams looking for a platform with prebuilt smart contracts and related SDKs for contract development"
Serviceable Obtainable Market (SOM) is the understood realistic market not only available but that you have the capability to serve. This could be "existing and aspiring web3 developers building on the Ethereum blockchain who are looking for starter contracts and a unified dashboard for managing and deploying them". Specificity increases as we make stronger assumptions and assign resources to them.
The typos in my chart art not very serviceable.
That's a little sloppy in terms of my examples but let's call that an iteration and work from there. We make these assumptions not only to include portions of the market to test our product iteration on... but to exclude some. Narrowing down and focusing on a specific persona and their pain-points is startup gospel, so what's the problem here?
Outside of the scope of this article is a really interesting debate about hypergrowthversus hyperfocus, with no objective truth over which is better. If you ever played Starcraft, think of the "Zerg rush" tactic versus the strategic marathon of building an impenetrable Protoss fortress. We can see thirdweb going for the fortress approach. That's working well right now as there's room in the market for a "general all-pupose web3 product tool" and "developer-focused multi-chain contract platform". But there's a likely collision ahead as the market vector suggests that powerful smart contracts will become a feature of a general purpose digital campaign builder. Which I've illustrated below in my extremely scientific chart (hands-off, McKinsey!).
Seemed like a good idea at the time.
We are of course talking about the rise of monopolies or mass-market shares. That's to take nothing away from the specialisation of niche products. In the cloud computing world there's definitely a space for the likes of Digital Ocean or Scaleway, and the same will go for the evolving web3 world. But I doubt that anyone pitching for venture capital (or going through Y Combinator, or with already iconic founders like thirdweb's Furqan Rydhan at the helm) is low-balling their ambition while being so early to a market that has the potential to be the backbone of all future digital campaigns... whether that's as an AWS or as a Squarespace, that's no small vision for the future. Now let's go build it.
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