Web 3.0: The Go-to-Market Inversion

The hype around Web 3.0 is astounding nowadays and most of us agree that neither definitions nor standards are clear yet. However, a lot of its critics come from the linear era where they built products, used sales teams to sell them, and centralized revenue and profits. It has been harder for many folks attuned to the linear thought process to understand the exponential technologies, decentralization, or network effects on steroids such as Web 3.0. I have tried to outline the counterintuitive aspects of Web 3.0 which cause resistance within the old economy mind.

Introduction

The very ethos of Web 3.0 is rooted in decentralization and optimization of shared value spread across the greatest number of people called the community. Creators and users own the rights to their creations i.e., digital assets and with time and engagement, they enrich the asset value and influence to drive future technical advances with their specific projects and platforms.

Inversion Principles

Web 3.0 is a paradigm shift, it also changes the way value is created, protected, accrued, and distributed causing a significant departure from traditional strategies, go-to-market models, revenue-oriented thinking, etc. ?Many elements of Web 2.0 are flipped on its head, challenging the old economy mind and traditional thinking making it harder for them to comprehend this phenomenon. ?Their dismissive posture is generally adopted due to their inability to comprehend these shifts. However, Web 3.0 is not a rip and replace of Web 2.0, there are elements of the web suitable for decentralization and they make the most sense.

Application to Protocol

In the Web 2.0 world, the economic value was delivered by protocols like TCP/IP, HTTP, SMTP, etc. but it was distributed only to the application layer. Big Tech empires like Microsoft, Google, Facebook, Amazon, etc. were built on these protocols which caused massive aggregation and centralization of value. As the power of these centralized aggregators grew, they monetized creators to their shareholders without letting them reap value from their own creations. In Web 3.0, the protocol accrues most of the value while not locking out applications (apps can also build tokens by specific use case). Layer 1 protocols like Ethereum, Cardano, Avalanche, Solana, etc. have thriving ecosystems built on them. The communities which build on these protocols inject fundamentals into them. Ethereum’s fundamentals lie in the ecosystem that drives FCF (free cash flow) for the owners of the protocol. For example, at the time of writing this article, Ethereum produces approximately $2 billion FCF per month at almost no cost. The community owns pieces of the ETH protocol which grows exponentially as communities grow the ecosystem further. As protocols accrue exponential value, it is distributed to their token holders driving new economic wealth.

Protocols like Ethereum have thriving ecosystems which inject strong fundamentals. It produces approx. $2b of free cash flow per month at limited cost

From Market to Community

The biggest stakeholders in Web 3.0 are the community, the most successful Web 3.0 projects have woven strong and sticky communities around themselves. They have also engaged these communities through common beliefs, a brand, and effective incentives to feel empowered to participate and grow these communities further.

The “community before market” mindset enhances the experience and infrastructure around the zones where people can create, engage, and grow the value of their digital assets. Web 3.0 is about distributing value, not aggregation like in the last decade.

Go-to-Community, not Go-to-Market

Web 3.0 is a community-owned company that values distribution to its members. The GTM (Go-to-Market) model is replaced by the GTC (Go-to-Community) strategy which hinges around orchestrating the creation and distribution of value through the community itself. Communities are not woven around products or businesses, but new business models are built around communities. Value, revenue, profits, scale, etc. are outcomes of good GTC strategies and not the other way around i.e., building a community is a part of the strategy to drive value or revenue. In Web 3.0, a GTC plan subsumes the GTM plan – the opposite of the Web 2.0 model. Those in transition from Web 2.0 to 3.0 should think about the exponential scale enabled through GTC e.g., create and distribute value faster, engage 10OK community members or fans rapidly, lower building/distribution economics, reap decentralized network effects, etc.

CRM to ORM

A new paradigm drives customer relationships based on ownership i.e., from CRM to ORM (Owner Relationship Management). The ownership typically unfolds in NFTs, they can reach new communities and demographics previously impossible through conventional Web 2.0 methods. Legacy businesses have also used integrations into CRM systems to create wallet and identity mapping leveraging analytics, visualization, and marketing automation. Wallet management solutions require heavy decentralization and management of a community-based workflow generating better visibility and value exchange.

Top-Down to Bottom-Up

The traditional method of value creation was always top-down i.e., CEO driven and implemented through the organizational rank and file. In the new economy, an organization with a community-first mindset acts as a decentralized platform, facilitator, and enabler to create value and set the direction for the group to accelerate value. Web 3.0 works bottom-up where community members decide what they create and as decisions and ideas flow in this manner, the output is better with a focus on priorities eliminating red tape.

Reverse Reporting Relationships

In Web 2.0 corporations, everyone reports to a centralized CEO who reports to the Board of Directors and shareholders. In Web 3.0, the community is the organization, and they are also the shareholder and board equivalent by holding governance tokens. Web 3.0 leaders (some are called CEOs) are also members of the community. So, who reports to who? This is yet another aspect the old economy has not processed in their minds.

Web 3.0, the Key Levers, and Accelerators

While the operating principles are inverted in the new economy of Web 3.0, things are still nascent and evolving with several protocols in their rudimentary stages battling adoption and scale. There will be an era where Web 2.0 and Web 3.0 will still co-exist, and we must make peace with this phenomenon. ?There are a few accelerators one must consider deploying as Web 3.0 scales through the GTC efforts. Let us analyze a few.

Web 3.0 is not a rip and replace of Web 2.0, it should be leveraged where decentralization and community-driven business models make sense.

Weaving Rapid Value through Smart Contract

Smart Contracts are the underlying machinery of Web 3.0 which help exchange information, and assets to create value. They can enable trade between anonymous parties with no middleman by eliminating old economy inefficiencies while maintaining credibility, security, authenticity, etc. Deployment of smart contracts can rapidly bring unknown people together by weaving a community to scale.

Token Catalysis

Tokens are usually created and distributed to drive creators e.g., writers, influencers, artists, etc. to create digital products and services to come together and form a large community or ecosystem. The token-driven tactics include DAOs, grants, and airdrops to drive a win-win situation for digital owners of the asset and their followers who interact with these assets or use them. It is one of the most widely adopted GTC strategies in Web 3.0 today.

NFTs to Replace Traditional (Web 2.0) Forms

NFTs are non-fungible, immutable, indivisible, and reside on the blockchain. They can associate ownership to a single account preserving owners’ rights and validating authenticity. NFTs come in multiple variants and one of the most successful use cases is utility NFTs. These can replace forms in the Web 2.0 world by providing access to content and as the NFT becomes more valuable, they can access more premium content and vice-versa. This enhances GTC engagement and accelerates value for creators and even community owners.

Stickiness through Collectibles

Limited edition Web 3.0 content can be minted as NFTs, enabling people to collect them using various tokens that drives engagement. Enabling integrations with tradable NFT platforms like OpenSea or Rarible drives significant engagement. A good GTC strategy is to introduce gamification and people who collect a series or multiple series would get giveaways like exclusive access, unlocked product features or new collectibles, etc.

Monetize Attention and Consumption

Arguably the most perishable commodity in the universe is people’s time, one needs to respect and reward people for it. Rewarding people for their attention, consuming, or enhancing your content can be rewarded with community tokens or even NFTs driving the expansion and usage of products created by the community.

Concluding Thoughts

It has been challenging for many folks to wrap their head around Web 3.0 and people who grew up in Web 2.0 and hold onto those beliefs strongly. The massive inversion of principles and approaches make it harder for traditionalists to comprehend the exponential effect. Web 3.0 should be leveraged where business models make sense and in the near-term, Web 2.0 and Web 3.0 will make peace to co-exist.