In the past few years, numerous brands have begun their journey entering the world of Web3 with the goal of cementing their place as early adopters in the space. While many brands have heard of success stories, not many are aware of the pitfalls that come with navigating the complex and sometimes even confusing world of Web3.
Web3 is often described as a paradigm shift for the Internet that prioritizes values such as openness, transparency, and decentralization. Based on blockchain technology, Web3 aims for permissionless platforms that utilize smart contracts as opposed to centralized servers or platforms. Some prominent examples of how blockchain technology is practically applied include DeFi short for decentralized finance) and NFTs. Many DeFi and NFT platforms leverage heavily on permissionless smart contracts as a means to execute and operate on a peer-to-peer basis without the need for third-party intermediaries. Despite the massive potential of Web3, it also comes with its own set of pitfalls for brands. As the space is fairly nascent, many brands that choose to enter Web3 often struggle with the complexities of the technology such as smart contracts, as well as the intricacies of managing massively growing online communities on mediums such as Discord and Twitter. Having spent some time working with brands looking to enter the space, we have spent countless hours poring through case study after case study of successful and unsuccessful new entries to the space. In doing so, it is our aim to help brands better position themselves within the space, in order to deliver the best results. So, without further ado, let’s dive into some of the things brands get wrong about Web3 and how you can avoid them. Mistake #1: Entering Web3 For A Cash Grab
Web3 has quickly become a flashy new buzzword for a diverse range of things. Since the advent of Web3 entering mainstream consciousness, people are increasingly convinced that a new frontier of the internet is being built as we speak. Despite that, many continue to be unfamiliar with the fundamentals of Web3 technology that define it.
While brands are interested in entering the space, they often view it as a one-off collaboration to sell their product rather than entering the space with commitment. Brands sometimes view Web3 as a way to reach new audiences who may not have previously interacted with their products or services. However, in doing so, they often fail to grasp the intricacies of the concepts and values held by Web3 communities. These values are essentially the building blocks of communities in the Web3 space and ignoring them can often lead to these communities alienating your brand..
This short-termism results in challenges for new entrants into web3, such as the inability to build a strong and lasting relationship with communities. Brands often enter the space without proving themselves as being able to uphold values such as permissionless communication, transparency in action and more. Brands that fall into making such mistakes often find it difficult to break into the space and find that their products and services make little to no impact within the Web3 community. Mistake #2: Using Web2 Technology In A Web3 World Since the inception of blockchain technology, the term Web3 has come to encompass a full suite of tools that describe a certain way of doing things. The aforementioned values of an open, permissionless, and decentralized internet are often viewed as the fundamental principles of how Web3 is built. Communities in Web3 often leverage tools such as decentralized autonomous organizations (DAOs), smart contracts, wallets, and many more as ways to mediate interactions within the space. Another mistake often made by brands entering Web3 is building interactions around their product without considering the ideal customer experience from a web3 perspective. Often, this results in misuing Web2 technology rather than leveraging Web3 technology. For example, a brand may choose to use a fiat payment gateway as opposed to a crypto wallet on its website. When this happens, brands quickly realize that communities in Web3 often become disinterested in their products.
It is therefore critical that brands thoroughly explore how tools within Web3 can bring actual leverage to their product. While it may make sense to use popular web2 tools, like Twitter and Discord, also consider decentralized alternatives, like Lens for social media and Console.xyz for community building. When brands adopt this mentality, they often find that communities become much easier to penetrate, and eventually become receptive to their product offerings.
Mistake #3: Not Investing In Community Community forms the backbone of many Web3 brands and projects. Transparency, decentralization, and permissionless collaboration are often the underlying values of such communities. Communities in Web3 are often found on platforms such as Discord or Telegram that allow them to discuss, build, and iterate ideas of what they want from Web3 brands and projects. These values often inform the final version of the product itself as it goes through lengthy periods of co-creation and collaboration within the community. In spite of this, many brands often overlook the importance of community in Web3. Brands sometimes enter the space with little to no interest in building spaces for these communities to grow. When this happens, communities in Web3 find it difficult to resonate with the brand as they lack the space to gather, discuss and develop the product offerings from brands.
Therefore, it is important for brands to establish spaces in which communities in Web3 can gather. In doing so, brands can build a strong and inclusive community that informs their relationship with Web3. This in turn will help impact the development of products that better serve the needs of their community in Web3.
It’s not just establishing those community spaces – it’s actively investing in them over the long term. By nurturing a community of loyal fans, brands can recapture some of the value that web2 gatekeepers have been siphoning away. Investing in the long-term health of these communities ensures that brands never allow another intermediary to stand in the way of customer relationships.
As a company dedicated to building in the space, we want to ensure that brands get the most out of their dive into Web3. By understanding and breaking down the fundamentals of Web3 in a format accessible to brands, it is our vision to help brands to build and thrive within Web3. When brands are equipped with the right tools for Web3, they can in turn thrive and grow within the space.