How does Product Management differ in Web3.0?
I enjoy Marty Cagan's books and articles because I appreciate his emphasis through repetition - Marty's PM fundamentals are on repeat throughout his content to help anchor PM's to the core of their role. This is important in every industry, especially in the ever-changing crypto-verse.
Great products solve real problems for our users and customers, in ways that our customers love, yet work for our business. Marty Cagan.
PM's are essentially responsible for delivering a valuable and viable product. In this article, I'll identify 4 important factors in Web3.0 PM and how they address the biggest risks in building a valuable product.
1.Community-Led Product
Web3.0 community engagement is a crucial part of a project's success. In context, I regularly wish my Discord communities a GM (good morning) and GN (good night), they get the attention they deserve
Communities are a means for a PM to receive fast, unfiltered and unsolicited feedback to address your products usability and feasibility risks
Spearheaded by Crypto-Twitter, Discord, and Telegram, product feedback has never been more freely available. Web3.0 communities are the lifeblood of a crypto-native product, and a daily read-through of the comments and tweets can provide a PM with extremely valuable, unfiltered user feedback, step by step use-cases and problem scenarios, market movements, and product comparisons. With a thick skin, this can be gold.
Web3.0 Build, Measure, Learn Loop
I elaborated on the familiar Build, Measure, Learn Loop to highlight the importance a community plays in each step of the process.
Community and ownership. Oftentimes, community members hold project tokens that signify governance, voting rights, and real monetary value. In many cases, users involvement can provide them full-time employment and hence the public is extremely invested in the usability and feasibility of the product.
2. Incentive-fuelled, product-led growth
Geoffrey Moore's famous book “Crossing the Chasm” explores techniques for high-growth startups to bridge the product adoption gap between Early Adopters and the Early Majority. I call this the Web2.0 Product Adoption Curve.
Web 2.0 Product Adoption Curve
Web3.0 bridges the “Chasm” described above via product-led growth fuelled by incentives and rewards. Incentives and rewards for early adopters, long-term holders, and developers support the industries exponential growth.
Web3.0 Product Adoption Curve fuelled by Incentives & rewards
I've seen the below incentives and rewards used as fuel in Web3.0 products I've used recently:
1.Token Launch: Whitelists and Token Launches create buzz around a product and can disproportionally affect early users. Similar to Airdrops, Whitelists often reward early adopters and Token Launches can be an exciting time to gauge a products release success in the market. However, PM's need to be aware of the metrics post-token launch as oftentimes, short-term/pump-and-dump investors can significantly affect the usage and token price, and in turn cause harm to the product profile and market sentiment. It's important the product and company have prepared mechanisms to gracefully limit expectations and prepare honest communication
2.Airdrops: Early adopters are often rewarded for early use by “Airdrops”, a reward given to the user usually in the form of the project's native token. Tasks such as early usage, referrals, and community participation are rewarded with airdrops. With economic opportunity and community participation in mind, Airdrops act like product virality. PM's need to keep in mind; many people are around only for the airdrops and those initial users may or may not represent real traction (here's a list of known airdrops (opens in a new tab))
3.Community Perks & Participation: Tokens like Ethereum and NFT's like the Bored Ape Yacht Club enable certain utilities for their holders. Bored Ape Yacht Club (BAYC) released 10,000 NFTs, as an owner you have access to certain privileges that only the other 9999 members do. For example, Mutant Ape Yacht Club (opens in a new tab) (MAYC) is a new range of NFT's by the BAYC team that can be produced by owning an original BAYC. Furthermore, a recent party in NYC (opens in a new tab) was only accessible via owners of their artwork. I'll discuss these social tokens in more depth in another article.
BAYC release the Mutant Ape Yacht Club on Twitter
4.Developer Grants: Crypto companies incentivize their community and user-base with token grants. When a token launches, the organisation releasing the token generally keeps a portion for enabling liquidity and business growth.
Developer Grants usually start with a budget and a goal the company wants to achieve, developers submit proposals or compete in hackathons, winners are then voted on by token holders, the more tokens held generally = higher vote.
The platform and product team needs to be open and extensible to support anonymous developers building within or on top of the platform. This is inevitably a win-win for the platform as community developers build items that the community needs which increases the company value and increases the value of the token
5.Fake Products & Scams: I thought it's necessary to mention the fake products and scams in Web3.0. As PM, our role is to provide value to the customer by providing in-product feedback and signifiers helping the customer to avoid fake products and scams. A simple but effective example is found on the Decentralized Exchange CowSwap (opens in a new tab), warning users to ensure they're on the correct website
3. Decentralization
Chris Dixon, in his article “Why Decentralization Matters (opens in a new tab)”, outlined many differences between Web2.0 and Web3.0, and why he believes decentralization will win.
Centralized platforms follow a predictable life-cycle…
As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows…
As they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. To continue growing requires extracting data from users and competing with (former) partners. Chris Dixon.
Chris Dixon — Why Decentralization Matters (opens in a new tab)
Knowing our personal data is used for marketing, sales, and even maliciously by organizations to influence presidential votes is never a good feeling. When creating the guiding “North-Star” of a Web3.0 product organisation, the PM's need to consider the core principles of decentralization and design metrics to be in line with the Web3.0 ethos. The below identifies differences between Web2.0 and Web3.0 product-improvement questions:
Web2.0: How can we harvest rich user-profiling data for our profit?
Web3.0: How can our users stay anonymous?
Web2.0: How can we control and own all assets on our platform?
Web3.0: How can we implement self-custody of assets?
Web2.0: How can we reap profits from users on our platform?
Web3.0: How can we transfer profits and opportunities to users?
4. Liquidity
Liquidity is the measure of how easily you can convert an asset into cash or another asset without affecting the price. Trying to sell your MacBook on an island without electricity, you probably won't find a buyer- you're illiquid. Selling a Swiss-army knife? You're liquid!
High liquidity can be caused by a high trading volume and importantly, it's a sign of success and is important for happy customers of a crypto-company. Higher liquidity = market stability, better transaction times and increased company value, thus solving many business risks a crypto company faces.
Increasing liquidity draws parallels to the role a growth PM plays. Growth PM's in Web3.0 can focus on liquidity with the following OKR format
Outcome
- Increase token liquidity
Key Results
- Increase daily trading volume by 10%
- Reduce time to first purchase/trade per wallet address by 10%
Growth Questions
- What part of our platform slows customer transactions or growth?
- What part of our product is hard to learn?
- How can we onboard developers faster?
- How can anonymous developers build on our network?
Summary
The PM's responsibility is to deliver value to customers by solving their problems, and this core fundamental doesn't change between technologies and internet phases. Web3.0 does however bring new methods to validate a product or platforms value, usability, and business viability risks — 3 of the biggest risks PM's face.
For many Web3.0 products, a PM must be knowledgeable about the 4 factors identified as well as a love of continued learning.
I'm sure there's plenty I've left out and I'd greatly appreciate you sharing your opinion and feedback to help widen my view on the industry.