Web3 represents not only a technological shift, but a movement of ideas. There’s a major focus on decentralisation and ownership, giving people control, equity, and the power of self-custody over their digital assets. It also gives businesses opportunities to connect with their customer base on a much deeper level, enabling levels of brand advocacy that solely Web2-based companies can struggle to achieve.
Most successful businesses have a clear, concise strategy guiding their operations, which includes how they’re going to gain a market share, cut through the competitive noise, and scale as time goes on. Whilst Web3 is a wide-reaching, new concept and many aspects are still being realised, that doesn’t negate the necessity for strong strategic planning if you want to see success in the space.
Whether you’re a founder that’s in the process of building, launching, or scaling a Web3 project, or the CTO of a Web2 brand with an interest in engaging with the Web3 ecosystem – it’s crucial to define your goals, core metrics, and milestones with a coherent Web3 strategy.
Does every brand need a Web3 strategy?
Many Web2 organisations may see an opportunity in the Web3 space to engage with their customers on a new level – like Adidas NFTs or Nike SWOOSH. Others, however, will dismiss it as an overhyped fad at best and a threat at worst, or will just not be able to identify a way that Web3 could generate value within their business model.
And whilst every Web3 startup could no doubt benefit massively from adopting a coherent Web3 strategy, some will inevitably ‘get lucky’ or manage to subsist on hype alone. These are the exception though, and not the rule. If you want to give your Web3 startup the best chance of success in a challenging environment, then you need to develop a well-thought-out strategy coupled with technical expertise to guide you as you build, learn and grow. Below are some of the key factors and components to consider when building a solid Web3 strategy.
Understanding the Web3 landscape
Before you can draw up any kind of strategy, it’s critical to fully understand the environment your business is operating within – in this case the Web3 landscape. It’s important to understand where your customers reside (online), how they interact with each other and businesses in the space, and what they value in their chosen Web3 projects and dApps. A winning Web3 strategy should map these key points out in a clear and concise manner and include an idea of how to build a community around your project.
Build a detailed ‘needs analysis’
A needs analysis is a formal process for determining the gaps between your current situation and its desired outcome. In this case, where you may be now (at the start of your project journey) to where you want to be (the launch of your Web3 Startup).
Doing a needs analysis early on will help to determine any aspect of the project that may have been overlooked in the initial planning and ideation phase. This will help provide actionable insight to plug any ‘gaps’ in planning and ensure you have the right resources to build what’s needed to ultimately launch your project.
Firstly, determine your situation as it stands – look at team members, skillsets, funding, available technologies and so on. Then look at where you (as a team or company) want to be in terms of having a finished product or project, ready for launch. How do they match up right now?
Do you need more in-house development experience with certain technologies? Is your marketing function going to be able to cope with the workload during a busy launch period in its current form? Do you need more funding?
It can be tough to admit that there may have been flaws or ‘gaps’ in your initial planning and ideation. But it’s necessary to be open and transparent when conducting the analysis, or else the insights gathered will be skewed and unlikely to truly influence a positive outcome.
Use the information gleaned from the analysis to inform your strategy, setting action items to achieve key objectives on the pathway to your project launch.
Deciding on your technology stack
Web3 is made up of several technologies that have both wide-reaching and highly specific applications and use cases. It’s crucial to select the right combination of tech to achieve your project aims and deliver a working product.
Some blockchains are naturally better for certain verticals or use cases than others, depending on factors such as scalability, TPS speed, consensus mechanism, developer community, interoperability and more. It all comes down to what your project is aiming to do. For instance, if you’re working on a new DeFi protocol, you may value security over scalability. It’s important then to choose a blockchain that meets those needs.
Layer 2 networks should be considered too. Layer 2 networks are solving some of the issues that Layer 1 blockchains have, such as slow speed and high fees by moving computations to their networks and interacting with the Layer 1 network on your behalf. This helps to reduce the computational load encumbering the Layer 1 blockchain and can mean lower fees and faster transactions for users.
Beyond selecting your blockchain network, there needs to be a thorough analysis of the additional elements of the technology stack that will need to be employed to either bring your Web3 use case to life, or enhance your current project. Protocols, wallets, tools and services, applications and more will all need to be considered for their value to your project.
Keeping an eye on breakthroughs and emerging technologies in the Web3 space will enable you to potentially integrate useful new tech into your stack on the fly. Being adaptable and willing to alter your strategy if a more suitable technological option appears will keep your operations agile and able to cope with any unforeseen challenges.
A major emphasis is placed on ownership within the Web3 space. Web3 offers the capacity to truly own your digital assets – non-custodial wallets and decentralised exchanges disintermediate the marketplace, allowing individuals to have greater control over their assets. This is often achieved through tokenisation of assets.
When building a Web3 strategy, consider how tokens will be used within your business. Ask questions such as:
- What is the overall tokenomic structure, and how will individuals interact with each token type?
- What types of tokens do we need? Fungible, non-fungible, both?
- Who will buy or use the token and why?
- How do we incentivise individuals to continue to interact with the business, rather than sell up and move on?
Consider, for example, what tokens you can use to bring value to your customer base. Depending on the function of your product or service, do you need to implement varying token types? Having differing tokens available brings a diverse array of benefits, and can help to create a hyper-personalised, valuable experience for people engaging with your business.
For example, If you’re a DAO (decentralised autonomous organisation), you’ll need a governance token that represents basic membership and voting rights. Alongside this, you may want to have a set of secondary tokens solely for use amongst the organisation’s members – these could facilitate different levels of access, interactions or experiences that vary based on your involvement and/or investment in the DAO.
A good understanding of tokenomics provides a solid foundation for your project, and an adaptable roadmap for token infrastructure (as well as project aims) will help to convey the long-term aims and value of your Web3 project to your customers.
Strategic challenges to consider
Accessing the relatively small (but growing) pool of potential customers
A big challenge in the space currently is that adoption of Web3 technology is still reasonably limited. This means that all Web3 startups are effectively competing for the same potential users (people with, at the very least, a Web3 wallet).
Great efforts are being made across the space to help onboard new users that would benefit from some of the products and services on offer in the Web3 ecosystem. Adoption of Web3 wallets continues to increase drastically every quarter, giving Web3 projects a growing, informed customer base who are naturally interested in engaging with new solutions – but it’s a gradual shift that’ll take time.
In the meantime, it’s important to develop a user focused Web3 strategy will help your brand to determine messaging and communications that’ll resonate with your core target audience and future community.
Launching your project in a timely fashion
Web3 is full of innovators and problem solvers – so time is of the essence. If you’re approach is lackadaisical and takes too long to get from ideation to project launch, it’s entirely possible that someone will launch a project to address the exact issue you’re trying to solve.
A comprehensive Web3 strategy would provide a framework for getting your project ready for launch in a timely fashion, with a roadmap determining the key milestones to be achieved. Building an agile framework with the appropriate technology partners is a great step to take before attempting to launch a Web3 startup or project.
Selecting a partner to enhance your Web3 Strategy
If you’re actively looking for support with the technical implementation of your project, or you need assistance with strategic direction, it can be massively beneficial to bring a Web3 consulting and/or development organisation onboard.
A good Web3 solutions partner will not only help create and optimise your Web3 strategy, but they will also provide the technical expertise necessary to either take your project from initial concept to launch, or enhance your existing product. A truly valuable Web3 partner will even offer suggestions to improve upon the initial concept or strategy, delivering further value at every step of the development process.
Talk to Protokol
Protokol are experts in helping Web3 startups realise their vision, as well as helping traditional Web2 companies create and implement their Web3 strategies. From Web3 consulting, to MVP development to white-label platforms and custom Web3 solutions, we’re a trusted technical partner that can help execute your Web3 roadmap.
Whether you’re looking for expertise in advisory and strategy, use case discovery, solution recommendation, or something more tangible such as Web3 solution development, our range of services cater for projects of all sizes and stages.