Web2 companies use paid ads (Facebook Ads, Google Ads, Tiktok Ads etc) to reach new users, emails to reactivate unsubscribed customers and sms bump campaigns to inform users about new products. Currently there are no widely used web3 growth tools, which is a major obstacle to setting up effective growth loops.

In addition, most Web2 growth strategies assume that potential customers are known. Web3 breaks this assumption because the vast majority of activity on the chain is currently pseudonymous despite the fact that a number of companies are working to define this same "Web3 identity" such as ENS and others are contributing to the adoption of much less anonymous products through KYC verification systems.

This logically goes against the values of the blockchain and still does not prevent the possibility of owning a multitude of anonymous wallets.

The question that we come to ask ourselves is:

Web2: Targeting an audience, offer discounts, ads & retargeting.

Web3: Build a community, giving out rewards, build a brand.

We can think of the process of building a community as a multi-step funnel that leads a potential member from discovery of your project to sustained participation.

As I wrote in my recent Mirror, the biggest mistake projects make is focusing their marketing too much on monetary incentives, which attracts the attention of participants who are primarily motivated by extrinsic reasons.

Instead, focus on raising awareness of what makes the community different:

Your Branding.

In the beginning, it is unlikely that new community members will be willing to devote a significant amount of time to your project without some form of compensation. The goal is to get them to participate minimally and foster a relationship, from which trust and commitment can develop.

Here's what the 3 stages of building a strong community might look like and what the 3 A's of successful growth look like:

1- Awareness -> Craft audience

• Content creation

• Branding

• Bounties

• Events

• Spaces

• Collaborations

• Airdrop

• Media

2- Adoption -> Mass adoption

• Forums

• Workgroups

• Quests

and others…

3- Advocacy -> Convert the community into mini marketing machines

• Be creative

Once all this is well understood there is still one important thing missing:

Growth is a system that sits between your company's mission, values and business model and helps you define:

1. How do we acquire?

2. How do we retain?

3. How do we monetize?

The current acquisition strategy of Web3 companies is still full of unknowns, especially considering the inherent frictions a newcomer has to go through when entering Web3. Joining a Discord, creating a Metamask portfolio, buying an NFT, farming airdrops, etc. The system is still full of friction and barriers for "normies" to easily join and participate in the space.

Because these barriers to entry are still too rigid, supply is becoming more abundant than demand and we are seeing an increase in competition between projects to get at the ideal crypto-educated consumer.

The winners will be those who can clearly define:

1. What does success look like? (User growth, TLV, transaction volume, connected wallets,etc.)

2. How do you acquire?

3. How to monetize?

4. How to build loyalty?

If what we charge for is really well known to users and very well understood, the friction is low, but if what we charge for is rather new to the market and not well understood, an unknown, it creates high friction.

So far, the large centralized Web3 companies have used well-known monetization strategies, such as low sign-up/sales fees, which has reduced friction for new users joining and using their platforms.

The goal for new projects is therefore to find different attractive monetization ways to attract users and monetize their coming and having an interesting risk-reward.

Retention is the foundation of any growth strategy.

One of the biggest challenges between Web2 and Web3 growth is user retention and how we think about it.

Indeed, user or customer retention in Web2 is determined by our ability to engage and "resurrect" specific users through email, retargeting, etc. However, in Web3, this is not the same as in Web2, because there is no concept of "user" as an identifiable individual, and we can't target them with traditional strategies.

For example, instead of emails, you can only rely on wallet addresses as a unique identifier of the "user." The problem is that an individual user can access your DApp with more than one wallet, which can make your data potentially less accurate.

So the goal is to find ways to build loyalty so that you can start building something solid and profitable.

 This can be by introducing daily quest systems on your Dapp, special days with 50% off fees on your promotional platform via your networks and your newsletter.

 Don't forget to analyze the data when you run several tests to readjust, cut or scale what works.

📌 This Mirror gathers as much content as possible related to what I can read and learn in the field in order to synthesize my thoughts and reflections.

The reflection of all this will allow you to well define your strategies of growth of your project and to succeed at the same time in building something great, I hope.

Thanks for reading.