Why create a crypto startup? Talking about the opportunities in the Web3 era and the strategy of entering the market

For startups, the crypto industry holds opportunities that no other industry can match. The core vision of crypto and Web3 is to create a native digital economy that is open to everyone. Web3 is supported by blockchain, smart contracts and oracles at the bottom layer, and will have the potential to create a new pattern. In it, processes are automated based on uniform standards and consensus sources of truth for encryption.

To develop Web3, it is necessary to rebuild the digital infrastructure in today’s society. Today, the ecosystem built by blockchain, layer 2, and decentralized applications is the first step in the transformation of this emerging digital economy, and its implementation is accelerating. At the beginning of 2022, the cumulative global crypto users will rise to 300 million, and the total market size will grow to more than 1 trillion US dollars. 

Entrepreneurs should seize this once-in-a-lifetime opportunity to gain a first-mover advantage in the fast-growing industry of Web3, lay the foundation for the future, and disrupt and challenge existing mechanisms and technologies. The user base of Web3 continues to expand, and traditional enterprises are also increasing their investment in innovative projects, so now is the best time to participate in Web3 development.

Anyone with a computer and access to the Internet can enter the world of Web3. Obviously, Web3’s value proposition is to create a fairer Internet, and this has also triggered the public’s infinite imagination. However, Web3 can not only change the Internet itself, startups that want to participate in the development of Web3 must also rethink how to bring their products and services to the Web3 market and deal with the unique challenges in the blockchain ecosystem.

traditional go-to-market strategies

Traditional go-to-market strategies typically employ sales and marketing strategies that filter consumers with a marketing funnel or flywheel. The main purpose of this is to identify pain points and target customers, and formulate consistent pricing, product and channel distribution strategies to verify whether the product can be recognized by the market.

Web2’s go-to-market strategy typically includes the following elements: 

  • Target customer groups – Identify specific customer groups most likely to need a product or service, and segment the market based on key characteristics such as demographics, psychological traits, and behavioral tendencies. 
  • Product-market fit— that is, the specific problem a product or service hopes to solve. This is an essential condition for a successful go-to-market strategy. Product-market fit determines whether a product or service can really meet market needs.
  • Distribution and Sales Strategy – This is the concrete and executable part of the go-to-market strategy. Distribution and sales strategies are robust, aimed at raising awareness of the product or service, and are aligned with the dimensions of “product-market fit” and “target audience” at the same time.  

This framework is still useful for most Web3 projects that have the same business model or organizational structure as Web2 enterprises. For example, although NFT marketplaces such as OpenSea and SaaS companies such as Alchemy are undoubtedly Web3 projects, their go-to-market strategies can still refer to traditional marketplaces and SaaS companies because their business models are similar.

How is Web3’s go-to-market strategy different?

Although Web2’s go-to-market strategy still has some reference value, many Web3 projects have unique organizational structures and business models, so they need to redesign their go-to-market strategies. Sometimes, even a completely different design philosophy is required.

The biggest difference between Web2 and Web3 is the ownership and governance model. In a Web3 enterprise, the lines between owners, users, and investors are relatively blurred, and sometimes even overlap. Contributors to many Web3 projects include developers, team members, and active community members whose common goal is to move the project forward.

To develop a successful Web3 go-to-market strategy, this particular organizational structure must be taken into account. Among them, building an active and high-quality community is one of the core elements to ensure the success of Web3’s market entry strategy.

the importance of community

There are several key factors involved in building a strong community, namely: a loyal user base, an internal talent pool eager to drive the project forward, and community members who are constantly promoting and promoting the project. Web3 startups not only need to have a “Minimum Viable Product” (MVP), but also need to work on building a “Minimum Viable Community” (MVC).

In the Web3 industry, project control is usually handed over to the community through a decentralized governance model. Therefore, an active, high-quality community is an important factor in the success of a go-to-market strategy. The community is not only a user, but also a contributor and decision maker, and can fully represent the entire Web3 project.

While most Web3 projects will have some core contributors in leadership roles (note: core contributors are usually from the founding team), there is still a need to coordinate with the entire community to adapt the project and improve product-market fit. In addition, community members usually also hold the governance token of the project.

Therefore, Web3 projects must have a clear vision from the start to be successful in the long term. Once a clear vision has been developed, the various stakeholders can be aligned so that everyone can work together to drive the project toward that vision.

All of the above elements have fundamentally affected the design thinking of the Web3 market entry strategy, and differentiated it from the Web2 market entry strategy. If the project does not have a clear vision, it cannot effectively assemble a high-quality community. And projects that cannot effectively manage the community will have difficulty coordinating various stakeholders. Therefore, the go-to-market strategy of the Web3 project should focus on building community and aligning various stakeholders.

Go-to-Market Strategies for Web3 Verticals

To discuss Web3’s go-to-market strategy in more detail, we can look at how the largest verticals in Web3 execute go-to-market strategies, especially decentralized finance (DeFi) protocols, blockchain game projects, and for a specific Decentralized Autonomous Organization (DAO) established with the goal of

Decentralized Finance

DeFi protocols can often be combined arbitrarily. That is to say, anyone can use its infrastructure to develop new content on it. The larger the ecological scale a project integrates, the more likely it will be successful.

Large-scale applications will in turn drive functional iterations, and we should look at DeFi protocols from this perspective. In fact, this also means that DeFi protocols must be integrated into various trading platforms, wallets and related projects in the multi-chain ecosystem.

Therefore, DeFi’s go-to-market strategy focuses on business expansion and attracting developers. Business development enables high-value integration strategies and makes them more focused. At the same time, developers can also develop open source, self-service infrastructure for organic growth and adoption.

For DeFi protocols, the community holds many functions. The community can supervise the core developers to ensure that the changes made by the developers conform to the vision of the project; the talent pool in the community helps to accelerate the development of the project; members in the community continue to promote the project externally, which will naturally improve Project popularity and word of mouth.

blockchain game

Like DeFi protocols, P2E blockchain games also need a group of high-quality core contributors to jointly deal with various problems and challenges in the development of Web3 projects.

Here, the go-to-market strategy focuses on expanding the player base directly. As we all know, it is difficult to make traditional games from scratch, because the game needs to attract enough players to ensure a high-quality game experience, which often requires a lot of marketing resources and faces fierce competition.

The underlying game mechanics of blockchain game projects are usually not much different from traditional games, but various market entry strategies are adopted that are different from traditional games. For example, a common way to cold start a game project is to hand over ownership of in-game NFTs to the community, which activates the in-game economy and drives organic growth.

After that, you can leverage internal and external communities to acquire new players. Here, go-to-market strategies include airdropping game NFTs to other Web3 communities, letting players control how the game develops through a decentralized governance model, and launching a scholar program that allows users to rent NFTs at the entry-level.

A DAO established for a specific purpose

DAO operates based on a trust-minimized social cooperation mechanism. DeFi and blockchain gaming projects typically transition from a centralized governance model to a decentralized governance model, while DAOs are entirely governance-centric.

The most important part of bringing a purposeful DAO to market is to develop a clear vision and establish a robust community governance mechanism.

A typical example of this is LexDAO, which aims to create a world-class association of legal engineers. Lawyers and legal engineers from all over the world can join this DAO and collaborate with other members on the future smart contract law.

In this case, a clear vision ties together individual community members and encourages them to work in a distributed organizational structure, execute key initiatives and accelerate growth. For a DAO like LexDAO, the most critical go-to-market strategy is to establish a robust governance mechanism, incentivize high-quality community participation, and remove friction in the collaborative process of community members when publishing internal DAO initiatives.

The new world of Web3

Web3 not only enables entrepreneurs to achieve profitability, but also improves the fairness of existing business models.

While Web3 can refer to some of Web2’s go-to-market strategies, Web3 entrepreneurs need to retool them to meet the needs of different stakeholders and to capture Web3’s unique growth opportunities. This is not a small challenge, because Web3 projects need to be built from scratch.

The Startup with Chainlink program is dedicated to providing Web3 entrepreneurs with world-class resources and support on their entrepreneurial journeys. The program aims to provide one-stop assistance for startups from initial project idea, proof of concept, system development to community incubation.

All Web3 teams currently developing unique products and services are welcome to apply. Subscribe to the Chainlink newsletter for more information on Web3 startup resources.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/why-create-a-crypto-startup-talking-about-the-opportunities-in-the-web3-era-and-the-strategy-of-entering-the-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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