In my career, I have fallen into two rabbit holes: product management and web3.
I can’t stop thinking about how much the potential paradigm shifts proposed by web3 will influence the Product approach: web2 vs web3, centralization vs decentralization, Google login vs Metamask connect, user vs community, free vs ownership of data...
A mental model proposed by a16z explains that web3 will provide the ability to not just "read" (web1) + "write" (web2) but "own" (web3) pieces of the internet. If you have never heard of web3 or if you’d like to dive deeper into some of the concepts covered in this article, you can learn more here.
What does a Product Manager do?
A product is nurtured by a team of people who care about making it great:
📐A designer plans a great user experience 🔨A developer builds up the product 📢A marketer promotes it to just the right audience 💼A salesperson actively seeks buyers
How can all these folks do their jobs well, without knowing their core audience — the user — inside and out? Not with an angle to sell, but rather an angle to actually serve their true needs. This is where a PM comes in.
👤 A Product Manager’s number one obsession is to represent the user. Their objective is to smooth out any frustrations and pain points in the user experience and create real value in the product.
According to Marty Cagan, founder of the Silicon Valley Product Group, "The job of a PM is to discover a product that is valuable, usable and feasible. A Venn diagram represents this positioning at the intersection between business, technology, and user experience
The role of the PM is often split into “Discovery” and “Delivery” phases, where they first identify an opportunity to create value, then ensure that the proposed solution will indeed satisfy the user’s need with a sustainable business model.
Web2
1,2,3,4,5. We love series in tech. In reality, we’re only at the very start of wherever the internet is heading. In today's web, web2, there are two emblematic products: the marketplace and the social network. The first one allows to match an offer and a demand, the business model being built around the recovery of part of the transaction value. The second allows to connect people according to their interests, the business model being built around the monetization of data. In both cases, platforms centralize the exchanges. This centralization led to two concepts: "uberization" and "First takes it all" and has allowed the creation of the giants we know today as the GAFAMs: Google Amazon Facebook Apple Microsoft. This is web2.
The technical maturity of digital platforms like these allows PMs to place a lot of careful time and attention into prototyping the product and quickly testing its UX.
Web3
And here we are, already at a new iteration of the World Wide Web! This time, based on blockchain(*) technology and introducing the concept of decentralization.
Here’s what’s crazy about Web3: we could potentially do entirely without intermediaries like Google, Amazon, banks, platforms. That’s because the superpower of blockchain is to allow the exchange of information or value (like bitcoin), without them! So now you get why there’s so much commotion around crypto and other NFTs. They’re potentially opening the door to a new era where we don’t depend on the big tech giants as we know them. But for this to really happen, users need access to web3. They need a "wallet"(**) identified by a public key (the address to send assets) and the associated unique, unchangeable, private key (which allows the holder to validate transactions).
Decentralization(***) is a key notion in web3, and can be proposed in various degrees. We’ve got a grey area between web2 and web3, web2.5. A representative example is the project Sorare (a game inpired by Panini cards or, baseball cards) which uses blockchain technology but still centralizes part of the data, especially those that have no value (only rare cards are NFTs and therefore on the blockchain). If users don’t have a wallet, the platform still allows them to manage their digital assets via a classic web2 account, often with Google or Facebook logins (it’s called wallet custodial service as opposed to self-custody). But if you don’t have a wallet, you’re not really in web3. 😉
What are the different possible product approaches?
The blockchain trilemma
The blockchain trilemma is a term invented by Vitalik Buterin, founder of Ethereum. This trilemma is based on 3 main axes: scalability, security, and decentralization. According to Vitalik Buterin, a cryptocurrency cannot be developed on these 3 axes at the same time. Most often, two axes are favored and the last one represents the weak point of the cryptocurrency.
The consequence in the Product approach is that, contrary to the centralized web2, there is prioritization work to be done between these 3 axes.
The user experience
The main advantage of decentralization is to not depend on a platform for data management. Rather, the idea is that users can manage data themselves, it's the concept of self-custody. But new users to web3 are likely accustomed to centralized platforms, and with web3, they’ll find they need to be much more involved than they’re used to. That’s why web3 industry put a heavy focus on user experience, like Sorare mentioned above. User experiences are more complex, so careful thought must be put into educating users. They’ll need to clearly understand the value of choosing Web3, especially since accessing web3 costs significantly more.
Well, this is crucial for mass adoption of web3.
Maturity of the technology
The maturity of the technology available to a Product team greatly influences their approach. Centralization of platforms allows global control of the product (security, architecture, stack, framework), and mastering the development technology will greatly limit any risks. In web3, the notion of the smart contract(****) is recent and new constraints are appearing such as immutability by design... beware of lingering bugs. Wormhole can testify to this. As for developers who have no enabler and no framework, there are fewer tools available to them. The technical ecosystem has yet to be built.
So, how does this influence the Product approach? Firstly PMs must be more attentive to technical risk. Secondly, they’ll find that existing methodologies for rapid iterations and testing are not as simple as they used to be.
User vs. Community
Decentralization creates a paradigm shift in the marketing approach. Instead of aiming a product at a user, it's aimed at a community. It must enable the community's engagement and take into account interactions between members.
Therefore, in the Product approach, the search for value applies not only to a “user” persona, but to an entire community. User research changes focus, to explore the needs of the community and understand its ways of working and being.
Untapped potential
Blockchain technology is a new tool whose potential seems immense. This potential is so great that the phenomenon has already been given a name, web3, even before any real impact on the functioning of the Internet has been observed. I’m convinced Product Managers, deftly applying our field’s principles, will be key players in getting buy-in for web3! I've talked to many web3 addicts and everyone agrees that we’re still at the beginning of a revolution. Bitcoin is symbolic of this: the technology is amazing but its value for users just isn’t obvious yet.
Product managers are all about identifying an opportunity to create value. Well, web3, what a place to be! I can’t stop thinking about this uncracked audience, yet to be convinced. The potential is bewitching. A true world of wonder for PMs — to build for the future.
Linkedin post: don't hesitate to make comments !
https://www.linkedin.com/feed/update/urn:li:activity:6982938886675046400/
Book a spot:
https://calendly.com/xavierlonjon/meeting?month=2022-10&date=2022-10-12
web2 vs web3 at a glance
Source: What is Web3, this decentralized version of the Internet (French article)
(*) Blockchain: A blockchain is the equivalent of a register of transactions that can be freely consulted by anyone with Internet access. Each transaction is recorded in a block (the equivalent of a page of the accounting book) which is then sealed when it reaches the end of its capacity or time limit, which has the effect of creating a new block (the equivalent of turning a page of the book to start a new one). The blocks are linked to each other by a unique identifier that serves as a fingerprint for the next block, making them tamper-proof since a change to one block would change all the blocks that follow.
(**) Wallet: A wallet allows the storage and use of crypto-assets, the equivalent of a wallet for your fiat currency. There are two types, the hot and the cold wallet. Both require: a public key (the equivalent of a postal address) and a private key (the equivalent of your home key), which allows access to the assets. A hot wallet (virtual) is a crypto wallet that can be connected to the Internet in any way. A cold wallet (physical) is disconnected.
(***) Decentralization: Decentralization, as opposed to centralization, is a planning process that consists of transferring competencies, data, computation... to several distinct entities (or communities) in order to allow for greater autonomy within the community concerned and to avoid one person (or entity) making all the decisions and carrying out all the actions without consulting the others.
(****) Smart contract: smart contracts are decentralized computer programs, most often deployed on a blockchain, that execute a set of predefined instructions. They are innovative because of their autonomous and fast execution, their immutability, the blockchain being the trusted third party. Used in some digital asset transfers, in decentralized finance.