Web3 for Product Managers

If you’re open to taking risks and love working in a fast-paced environment, Web3 PM’ing may be a good fit.

Relevance

Web3 has become one of the most talked-about concepts today. Just try to count how many times “crypto”, “NFTs”, or “DeFi” appear on your Twitter timeline.?

To many people,?Web3 is just another technology bubble , driven in part by the desire to make a quick buck. But, if you spend enough time in the industry (as I have) and ignore the media soundbites, the value of Web3 is obvious.

What is Web3?

Web3 encompasses the idea of building decentralized applications (dApps)—platforms or products devoid of centralized control and management. Built on?blockchains , dApps benefit from robust, failure-resistant architecture and promise users greater ownership of identity and value.?

Others see Web3 as a vision of a decentralized Internet with blockchain technology serving as the foundation. Just as databases power most of the web today, blockchains power the decentralized web.?

Blockchains are, in fact, similar to databases, and function as repositories of information. The difference is that the information stored on a blockchain, such as transactions, is “immutable” or unalterable.?

Moreover, these databases are collectively managed by nodes in a peer-to-peer network. This means blockchains are not unilaterally controlled by anyone, protecting stored data from undue control or exploitation. In Web2, a company’s databases are fully within its control and it can decide what exactly happens to the information, for better or worse.?

Unpacking Benefits

Explore the businesses of the future and the benefits of Web3 in this article curated by Emmanuel.

Relatable Products & How They Work?

Because of Web3’s decentralization ethos, products are significantly different from what you might know. To illustrate, I’ll compare similar products in Web2 and Web3 and highlight their differences:

Medium (Web2 product)

Medium ?is a software service that allows people to publish their writing for free. Medium’s hosted blog solution makes it easier for writers to share their work with audiences and monetize content.?

Here’s where the two are different:

1.Database management: You can expect Medium to have dedicated databases for managing application data. Conversely, Mirror uses?blockchain-based storage , where application data is stored on peer-to-peer networks.?

2. Proprietary software: Medium operates a proprietary or closed-software model, which means no one else has access to the code. Mirror’s code and application logic, contained in a?smart contract , are published on the blockchain and available to the public.?

3. Control of user assets: Posts on Medium cannot be used outside of the platform. If Medium deletes your account or removes a post, nothing can bring it back.?

Because Mirror is a dApp, no one can take down your posts or remove your information. Posts on Mirror are uploaded to a decentralized storage network, so user posts can exist even if Mirror ever goes down.?

Mirror even allows users to?turn articles into non-fungible tokens (NFTs) ?which they can sell outside of the platform.?

4. Access to user data: Web2 companies like Medium store and analyze user data to improve products. For instance, Medium may collect information about reading habits to personalize article recommendations.?

5. Decentralisation: Mirror operates a?decentralized identity ?model that grants users control of personal information. For example, you can access Mirror by connecting a cryptocurrency wallet instead of providing sensitive ID information.

6. Tokens: To use Medium, all you need is an account. However, using a Web3 product like Mirror requires a wallet and crypto tokens. In its early stages, Mirror required users to buy a $WRITE token to start publishing on the platform.?

7. Collective ownership: Signing up for a Medium account doesn’t automatically confer stakeholder status on you. However, buying a $WRITE token makes you a member of Mirror’s?decentralized autonomous organization ?(DAO). Not only can you vote on major protocol decisions, but you can also initiate proposals.?

The Art of Web3 Product Management

On the surface, Web3 product management isn’t different from the status quo. PMs are still expected to work cross-functionally, improve products to meet user needs, and drive business outcomes.

But Web3 has its peculiarities that affect the product management function.

Product management plays a reduced role in the early stages

Most crypto projects can do without a PM in the early phase. At this stage, the focus is on designing crypto-economic incentives, fostering online communities, and building out core project infrastructure—roles PMs hardly figure into.?

The need for a PM only appears as the project has achieved a considerable user base and wants to consolidate market advantage. This is where things like a product roadmap become necessary.?

The startup may also want to launch newer projects, which would be difficult for developers to coordinate. A PM could come into the picture and provide much-needed coordination for a project and ensure objectives are met.?

Speed of iteration beats the quality of iteration?

PMs at Web2 companies are used to focusing on long-term strategy and vision for products. While taking the long view is great, Web3 demands focusing on rapid execution ahead of planning and strategizing. In other words, “speed of iteration beats the quality of iteration.”?

Web3 PMs wear many hats

1. Analyze user sentiment by scanning crypto communities on Discord, Reddit, and Twitter.?

2. Coordinate smart contract audits.

3. Perform product/industry research with DeFi Pulse, Dune, Nansen, and other on-chain analytics tools.?

4. Work with engineers to create effective crypto-economic incentives.?

Should You Become a Web3 PM?

Whether you should become a Web3 PM depends on your interests and work-related values. Here’s a comparison of the benefits and drawbacks of PM’ing in Web3 to help you make a decision:

Pros

1.?Less competition. If you love the?blue ocean strategy ?as I do, jumping into Web3 might appeal to you. The landscape is still in its early phases, giving you the opportunity to carve a niche for yourself and secure a first-mover advantage.?

2.?Lucrative compensation. Crypto is Silicon Valley’s newest darling, with heavy hitters like a16z?pouring millions into Web3 startups . This means companies are ready to spend?big?on the right talent.?

3.?Fast-paced and exciting industry. Web3 is on the cutting edge of technology, with novel projects streaming out endlessly. Joining a crypto startup is your chance to be part of?the biggest technological revolution in decades.?

Cons

1.?Regulatory uncertainty. The crypto industry is pretty much unregulated, which gives room for uncertainty. You could wake up one day and?face a class-action lawsuit ?from a random Joe who deposited $10 in DeFi dApp. If you can’t deal with regulatory curveballs, you’re NGMI.?

2.?Overwork. Wearing many hats may be fun at first, but it can also lead to burnout. You want to understand your energy levels before committing to the frenetic pace of work in Web3.?

3.?Lower user base. Crypto and Web3 are still fringe ideas—just?16% of Americans own crypto ?and?user counts for many Web3 projects ?are tiny compared to traditional companies. This means you’ll be dealing with some of the lowest Total Addressable Market (TAM) figures in your PM career.?

4.?Slower decision-making. Community involvement in decision-making may slow down product development/improvement. You also need to plan around extensive smart contract audits and compliance measures.