The web3 flywheel
The journey & role of the “customer” has changed from web2 to web3. Web3 is about empowering the people who create the myths and legends of brands.
This is not meant to be definitive, but a reinterpretation of commonly used web2 frameworks in a web3 context. Velocity in traditional, data/traffic-centric flywheels is driven by users returning, often based on needs. This inadvertently reinforces network effects that minimise the choices of its users and communities. Web3 flywheels, such as in decentralised autonomous organisations (DAOs), are instead community-centric with velocity driven by positive and conscious contributions from its members or users.
Two frameworks are discussed - the new marketing funnel and 5 Cs of the web3 flywheel - to demonstrate how the journey and role of the “customer” has changed from web2 to web3. These can be incorporated into the go-to-market strategy of any business to:
provide flexibility for testing core product features with an engaged audience or
be positioned to experiment with ideas for NFTs and the metaverse.
New marketing funnel
Traditional conversion funnels map a sub-conscious customer journey towards purchase, with marketing and sales driving progression through the funnel. The “customer” journey changes in web3 to conscious engagement driven by incentive alignment. The diagram below visualises each stage of an onboarding journey in web3 communities e.g. DAOs, NFT collections etc. For each step, an individual makes a conscious decision to become more engaged based on the community experience and benefits. People need to feel included by the community and be incentivised at each step to progress through the funnel.
In its simplest form, a person:
Follows a project or attends events on a public platform (e.g. Twitter) to decide whether to join a community
Accepts an invite to a closed platform (e.g. Discord) seeking trust in the community being built and its members
Contributes through conversations, competitions and content to build the community and
Purchases or is rewarded (e.g. allowlist, airdrop) for contributions with cryptocurrency, tokens or NFTs.
If the community experience is lacking at any stage and a person does not feel empowered to contribute, they stall or fall out of the funnel. Following feelings of inclusion, they are incentivised to contribute, onboard others and become owners/holders. These enhance community experience and generate financial value, shared by a platform and its users, by increasing demand for ownership.
The web3 flywheel
Amazon didn’t invent the flywheel, but is commonly associated with its use (below). Amazon’s emphasis is on traffic and data generated by attracting more sellers and selection to drive scale.
Growth drivers that determine a web3 platform’s success are very different. Referred to here as the 5 Cs, they reflect the interdependent relationship between platform and community. The numbers in red correspond to each stage in the new marketing funnel.
Content is important to branding and attracts followers. More followers enable more growth and potential virality. Together with relevant content (e.g. educational, inspirational, social) it adds to the perceived community experience, which is a product of members and their engagement. Strong community onboarding experiences encourage connections between members in Discord channels, fostering inclusiveness to find like-minded people. Once people find their fit within a community, it is their contributions through collaborations and creating content such as artworks, articles or tools that establish the culture. By crowdsourcing a stream of content from the community to then drive external engagement, it leads to more traction and keeps the flywheel spinning.
As the community scales, it provides the opportunity to introduce compensation through community tokens or NFTs that represent ownership or as a reward/incentive for contributions. Introducing incentives that align the outputs of the platform with the inputs of the community – through their connecting, contributing and creating – increases flywheel velocity while continuing to build out platform infrastructure. This again attracts more followers to continue the virtuous cycle.