Are your web3 tactics merely the noise before defeat?

Business has its roots in the battle filed.?

In a battlefield, strategy is key. Not all battlefields are the same and it requires a discerning general to carefully map its contours and strategise every move.

The rise of web3, with its decentralized protocols and disruptive technologies, requires a paradigm shift in strategic thinking. One that you have neither been exposed to nor have you experienced before.

It is worth knowing that

• The battled field has shifted with web3
• The rules of engagement have transformed
• The web2 strategy playbook has become obsolete

When building strategy in web3, deploying your web2 playbook would be a fatal mistake.

Let’s delve into the resons why and understand the new forces that face you and their implications in the context of web3 strategy.

Threat of new competitors – High

Your web3 initiative may involve decentralized protocols on blockchain-based systems. The open nature of the networks empower discerning competitors and new entrants to create better products and services. With adequate custoner incentivisation, which is also easy in web3, a new entrant can enter your pen and steal your customers.

Developing interoperability protocols and technologies in the future will further lower the barriers for new entrants and your competitors.

The traditional competitive advantage via economies of scale, or the moat building via IP, copyrights, walled gardens lose their power in web3

Remove these weapons from your armoury and think how you will retain your customers without these in the new open world.

Threat of supply line disruption - Low

Napoleon Bonaparte said - an army marches on its stomach. He was referring to robust supply lines.

A business does not build in isolation. It has its supply lines that are both internal (skilled employees) and external (services, components, distribution etc).

Securing supply lines is as crucial as fortifying the frontier on the battlefield. In the business context, suppliers hold their own power, derived from know-how, control of key components, or proprietary technology etc. However, the decentralized and open-source nature of web3 lowers this power. With limited opportunity to create uniqueness, skills and services gradually become available with increasse in demand.

Risk of customer flight – High

web3 provide users with more control over their data, digital assets, and identity shifting the power dynamic towards buyers.

With low switching costs in web3, buyers can move easily across platforms. With increasing interoperability of assets, buyers will have even more bargaining power in the future.

Strategy of creating closed ecosystems of web2 with high switching costs no longer works in web3. The approach to creating network effects in web3 is diametrically opposite to the usual approach of locking in customers via portfolio of services – whether owned or offered via locked platforms.

In web3, customers can move lock stock and barrel at the push of button with minimal switching cost. So how do you retain your customers and build your community?

It is a mix of collaboration, co-operation, co-creation with scarcity as a catalyst

Discussion on that is beyond the scope of this blog, but it imprtant to realise that web2 tactics don’t apply.

Risk of shifting battle fields - High

This refers to customers being offered a different product or service that is cheaper, or better, or both. Substitutes with a low switching cost have the power to shift the battlefield overnight. You find your fighting a diffent enemy!

Decentralized nature of Web3 fuels innovation, empowering developers, and entrepreneurs to collaborate and create alternative solutions that can rival established offerings. Composability, which is the ability of applications to interact and build upon the other further opens the gates for substitutes that cater to specific user needs. As interoperability standards continues to develop the risk will keep getting stronger.

Community centricity with extreme agility is the only way to survive. Community in web3 is beyond a one way incentive based loyalty program. Think collaboration, co-creation and shared value extraction to keep the wolves at bay. Its web3!

Threat from aggressive competitors – Low

This is a new battlefield, and the spoils of war are scattered wide and not very clearly defined. In the business context, business models are still evolving, number of players is limited, and everyone is on a learning curve. There may be a little concentration of customers, which is the early adopters but the rivalry to secure a larger market share is low.

Real wins will belong to those broaden the customers and lower their barrier to entry. web2 market expansion playbook is redundant in this context web3 onboarding challenges are unique. It is up to you to innovate, learn and forge ahead. High intensity wars are not on the horizon for now.

As you build,

the biggest barrier you will face is the mindset shift from the command-and-control approach of web2, to collaboration, co-operation, co-creation of web3.

So build small, learn, adapt and then grow.?

Summary:

Sun Tzu said:

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

As you navigate the intricate realm of web3, the tactics that once held sway in web2 are now the noise before your inevitable defeat.

web3 is not a dream in the future but a reality reshaping your digital landscape right now.

Think and build for web3. Forewarned is forearmed!

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Let me know what you think in the comments.

#web3 #strategy #marketing