An actionable framework for founders bridging into web3

What’s your web3 strategy?

I doubt it’s the first time you’ve been asked that question. It’s been on the lips of a growing number of investors on the hunt for disruptive opportunities blockchain-based technologies can offer.

But for founders looking to foray into the world of decentralization, it’s all too easy to become distracted from core business objectives by shiny new buzzwords emanating from the space.

FOMO is real. If everyone else is doing X, Y or Z, you wonder, then shouldn’t we?

I understand that pressure. As the founder of an infrastructure project that has been around since 2016, I want to remind you that web3 isn’t just a drop-down menu of features to be bolted on to your project. It’s a transformational ethos that should be the cornerstone of what you’re looking to build.

My message here is simple: Focus on the basics, and don’t allow yourself to get distracted by the hype.

I’d like to offer some insights into how to build a strong project that can tap into the enormous power and potential of web3.

If you aren’t addressing a problem, you’ve got a problem

A successful web3 company, project or DAO starts with a clear-eyed view of the use case (or cases) blockchain equips them to serve in a way that was not possible before, and how they can change the game for a problem.

Until you’re satisfied you really have identified both a well-defined pain point and a compelling solution, you’re unlikely to convince users to beat a path to your door.

Once you’ve identified the problem or need you plan to address, drill a little deeper. What is the functionality that web3 can bring to the party? Blockchain is at its most powerfully disruptive when it supplies the missing link.

For instance:

• Does a global, permissionless, digital money layer change the game?
• Will access to a shared, open, data layer make your offering more attractive than if you hoard the data in a proprietary database?
• Does the ability to make users collective owners in the platform’s success give you an advantage over Web 2.0 incumbents?
• Can you bootstrap one side (or both sides) of a marketplace through in-protocol incentives?
• Can web3 primitives such as NFTs, on-chain credentialing, crowdfunding and wallet-based-identity enable an experimental experience for users?

If the problem you’re solving can benefit from one of these uniquely web3 value propositions, then you are probably on to something interesting!

Next step, shape your product

It’s tempting to jump right in and start spreading the word about your great idea, but any time spent on product development is never time wasted. The journey to attracting investment, users and a top-flight support team will be shorter — and infinitely smoother — if you’ve worked on shaping your product before shopping it around.

The product development choices you make will, of course, depend on the scope of the work, the type of blockchain solution you’re developing and your budget. Asking a few foundational questions will give you a solid start:

• How are you going to shape a product suited for web3?
• Is there a way to build web3 features and functionality into a new or existing Web 2.0 product? (Big brands like Gucci, Ralph Lauren and the National Basketball Association are all experimenting with web3).
• Would it be better to start fresh and build a version of your product based solely on web3 technologies and philosophies?

You’ll need incentives, and they have to align

In the Web 2.0 universe, we’ve been taught that “communicating,” “persuading” and “influencing” are the tools required to get customers to buy. Web3 is about action and incentives — it’s a totally different mindset.

We still need to communicate with our stakeholders and communities, of course, but only when we really have something interesting or useful to say. That generally means when we’re getting stuff done — passing key milestones, launching new services or features, upgrading the protocol, running events and so on.

We are also very different from Web 2.0 in how we reward those who use our products. We don’t onboard users with likes and love hearts, nor do we promise audiences they will feel younger, look better or be more popular or cooler so long as they hand us control of their data and online identities.

We offer something more powerful: ownership and self-determination. Blockchain offers creators control over what they produce, and the chance to be fairly remunerated for their work. All stakeholders in your network — from liquidity miners and stakers to node operators, developers and users — will be vital to its success and will need to be appropriately rewarded.

Let’s sum up:

• Incentives are central to the web3 ethos.
• Incentivization should be part of your infrastructure plan from the start.
• Your planning and budget proposals should factor in everything and everyone in your product’s ecosystem, from content creators to bug hunters.

Community comes first

This is a big one. If the people who form the backbone of your community — the content creators, NFT artists, software developers, liquidity providers and so on — do not feel good about your project or their participation, you’re in big trouble.

In web3, loyalty is often a product of transparency. This means the inner workings of your protocol and the work it carries out must be open and accessible to all.

You’ll also want to provide regular opportunities for designers, software engineers and enthusiasts to contribute to your project’s ecosystem. Successful web3 companies operationalize the imperative to build alongside their communities.

Here are some of Livepeer’s rules of transparency:

• Show your work: In addition to open source code, developers using web3 platforms require straightforward, no-nonsense product information and support. Our documentation includes clear video guides, tutorials and sample code to ensure both network operators and developers have everything they need to get started quickly.
• Ditch the concept of ownership: There is a note on our website that makes clear it’s not an “official” site. Nobody owns or controls the technology behind Livepeer. Anyone is welcome to help improve the platform. However strongly you believe your product to be, its true utility, and potential, will only become evident as others build on it.
• Build your community: In web3, it’s all about community. It’s the community that drives growth and builds healthy long-term brands. We launched the Livepeer Community Grants Program to support our goal of building a fully decentralized video stack. Since then, we have committed more than $410,000 to community members creating value for the ecosystem. Bringing your community together generates energy as well as great ideas. You’ll need some of that on your own marathon run.

Support the developers

In a word: Hackathons.

These hands-on sessions can be resource-intensive but are a fantastic way to accelerate experimentation and build a lasting foundation for your product. They also foster community, which, as we’ve covered, is core to web3.

Virtual hackathons became the norm during the pandemic, and we are only just seeing a return to in-person events.

Whether live or online hackathon support can:

• Demonstrate your support for the developer community.
• Get the name of your product out there.
• Connect you with actual or potential users of your product.
• Facilitate networking.
• Surface new use cases.

Here are some ways you can take part:

• Host a booth.
• Apply to be part of a panel or be a guest speaker.
• Sponsor social events.
• Provide bounties (prizes) for the best innovations using your technology.
• Join a team and build with the hackers.

If a full-blown hackathon is too big an ask, consider smaller community events instead. These more intimate settings can provide a great opportunity to talk to innovators and learn about new developments in the space.

Invest in education

Ongoing education nourishes your community, builds trust, expands the developer-user ecosystem and deepens skill sets within the talent pool.

Here are some issues to consider around education:

• Take nothing for granted: There’s no need to patronize your audience, but beware of making assumptions. When you eat, sleep and breathe blockchain, it’s easy to think everyone’s up to speed on DAOs, dApps and difficulty bombs. In fact, many of your potential customers may be dipping a toe into web3 waters for the very first time.
• Teach, don’t preach: On the other hand, it will prove counterproductive in the long run to over-simplify genuinely complex and important information that your community needs to grasp.
• Quality pays: It’s worth investing time and resources into high-quality educational materials. For example, we used simple text and fun illustrations to convey complex information in an accessible way. To lessen the risk of confusion on key questions, we made sure we defined all terms, even those that seemed obvious to us (e.g., the difference between an “orchestrator” and a “delegator”).
• Choose your channels: The Web 2.0 model often prioritizes volume over quality, with businesses feeling they have no choice but to maintain a constant stream of communications via every available channel. In web3, we can be more selective, prioritizing the media that best serves our platform and our community.

Don’t throw the baby out with the bathwater

Web3’s portable digital assets and data are just that: portable. Users who feel they’re not getting what they need are entirely free to ditch and switch. This means our old web2 friends CX, UX and market research remain as critical as ever. Perhaps more so now that creators and developers are no longer locked into restrictive copyright and ownership contracts.

A recent article in the Harvard Business Review suggested the web3 value proposition makes user experience a particularly crucial consideration for platform design. Shared infrastructure means “apps can focus on building great experiences, driving toward a greater emphasis on platform design as a source of competitive advantage.”

What founders know about their market should be evident in the UX and UI of their product(s). User insight remains the key to retaining a competitive edge.

Build from the ground up

Projects that consciously align with the web3 ethos have a far greater chance of success. That doesn’t mean Web 2.0 companies can’t participate or that repurposing Web 2.0 insights for new use cases is pointless. It’s just that a web3 product will work better if it is built from the ground up as a web3 product that doesn’t compromise on values.

The blockchain revolution has unlocked technologies with such vast scope for transforming almost every aspect of our lives that it’s easy to get carried away and forget why we needed it in the first place. Transparency, accountability, ownership of personal data, fairer rewards for our work, freedom from monopolies — web3 values are not passing fads; they’re why we’re here.

Every new challenger with a well-conceived web3 strategy has the potential to wrest users — and dollars — away from dominant gatekeepers who’ve held the keys for far too long. But simply reframing old Web 2.0 ways, or “web3 washing,” won’t cut it.

So, build from the ground up. Go back to what really matters: the difference you and your project can make in the world.

Then go share it!