I’ve spent a while trying to articulate why user acquisition in Web 3 is so difficult. Here’s an initial list I came up with (and by no means an all-encompassing one): - Consumer decisions are majority price driven. - Brand loyalty is determined by the “number go up” utility (which is also the best marketing strategy). - Current market participants are focused on value extraction. - The industry largely operates behind a significant reputational veil. - 1% of wallets/participants influence the behavior of 99% of the participants. - Traditional marketing channels and information distribution channels aren’t developed. - Informal social groups and channels (Discord, Twitter, Telegram) are most effective and not available to the average consumer. - Trying new platforms can pose security risks due to wallet vulnerability. - NFT projects dominate attention making it difficult for “traditional” platforms to gain visibility. - The attention spans of crypto natives couldn’t be shorter. - Operating on-chain adds a layer of complexity no matter the intuitiveness of the UX/UI. - Web 3 product development sees significantly more horizontal growth than vertical. - Retail sentiment at an all-time low. I guess the pitch here is that if you’re building products that solve any of these issues, the team and I at Outlier Ventures would love to hear from you. Also, feel free to comment on anything I overlooked.
Tom Gibb
1y
Oversized amplification of a project can cause a fomo 'rush in' which then later falls flat, hurting that project for a long time (see Checks VV). This is caused mostly by those 1% of wallets driving up price to lock in profits. It burns new users.
Igor Kaufman
1y
This is insightful! Let me add a couple of cents. User acquisition has 3 parts: 1. Finding the users you want. 2. Channels to outreach them. 3. Measure if you reached them. 1. Thanks to openness of web3 data, segmenting users is trivial. 2. Channels do not exist. The native messaging will create a lot of spam, no go. Outreach in web2 requires stitching the web3/web2 user data - a number of startups are tackling this, including us. Personalization in web3 native products (like app stores or wallets) - something to come. 3. Measurement is done with attribution products that are only coming to the market. I spoke to many dapps about measurement, and can tell that the industry is very pre-mature and helicopter funding of 2021 did a bad service. To sum up, my view is that connecting web2 to web3 is essential to leverage standard acquisition practices and tools while effective native forms of acquisition do not yet exist.
The change will come when Web2 leaders and value-driven individuals with a long-term perspective join the industry and begin building companies around their core beliefs, providing "non-material" value, much like how communities were formed in Web2 or in real life before. The main reason why attribution is hard in the crypto industry is that the brand of crypto is associated with terms like "risky," "x100," and "scams." This makes it difficult to attract people who align with the industry's values. However, as the industry continues to evolve, this perception will change. Many problems you've stated are not easy to solve by the "product" it's more about the trend and what's right in the industry. Frameworks, leading by example - is what good founders should do. What I will be doing with the community and products is focusing on the North star metric - which is long-term contributors. I believe it can change the state of things
If you build for everybody, you build for nobody. There are different types of consumers and each type will use NFTs and web3 differently. The first split is between retail and institutional that want mostly to tokenize debt (financial instruments) or commodities (gold). Retail customers that are affluent have also different needs, e.g. wanting luxury NFTs to confirm ownership of brand watches or cars. The challenge we have in Web3 today is that most of the protocols do not know for whom they build. If you build for everybody, you build for nobody.
Rajaram
1y
Thanks for putting this together. A very handful of brands have cracked the user acquisition/distribution in web3. They simply spent more on PR, Large brand campaigns, etc, apart from the usual channels. Most new and small projects couldn't do it. Because it's expensive for them. They used Twitter, discord & telegram as their core like other small projects. And these channels are already saturated and have limitations for web3/crypto brands. And also they couldn't understand sometimes your target audience is not on TG/Discord or Twitter.
Would you say this is an 'all-time' list or does it mainly apply to current 'bear' conditions? I'd love some examples on past web3 acquisitions to understand the rationale behind them. Thanks for sharing!
Yaniv Fogel
1y
Hi Thomas, I'll be sending you a DM. I would like to hear your thoughts on our efforts in Sandigo particularly in addressing the issue you raised regarding on-chain and UX. We added a personal layer to facilitate ease of use.
I couldn't agree more. The space feels still tribal and we are not doing much to overcome the obstacles.
We just started building the community around www.warshmallows.com and I can add alors add That aiming casual lambda player/users in early phases of the project is utopic.
Founder | Harvard MBA
1yNo native digital advertising channel > High reliance on social media, influencers or micro-influencers, and community-driven growth through quests & loyalty programs > No infrastructure to measure ROI of marketing activities > No ability to optimize marketing activities resulting in high spend for mediocre user acquisition The promise that user acquisition should actually be better by using wallet holdings has not played out due to 1) no 1st party data connecting wallet to social identity and 2) no onchain wallet messaging protocol with enough traction