Discuss how the cryptocurrency project will enter the market from the three dimensions of product, audience, and execution.
Written by: Danny Aranda, Managing Director of Ripple Strategic Growth Compiler: Perry Wang
Lebbeus Woods, 1995
To date, no one has written a signature script on how encryption projects gain mainstream popularity. So how should new cryptocurrency project founders start to gain attention? What enlightenment can this popularity bring to other functions such as products? What unique considerations will encryption technology bring to traditional go-to-markert methods?
This article will try to answer some of these questions.
background
There are so many things to love in the cryptocurrency field. There are many new experiments and breakthroughs in various fields such as engineering, game theory, monetary policy, capital markets, political philosophy, and Internet celebrity meme. Everything happens in an open environment and is evolving at an extremely fast rate. However, there is always a risk that all activities may fail to increase user adoption.
Let’s try to quantify this risk a bit, comparing the number of active crypto developers with almost all traditional development platforms:
Encryption field: 350 Bitcoin developers; 900 DeFi developers; 2,400 Ethereum developers (data from Electric Capital) .
Traditional technology: There are 2 million developers using Docker; 5 million developers using Twilio; 12 million developers using JavaScript (data source: Slash Data) .
Admittedly, this comparison is not perfect. Crypto is not a single network development tool, and encrypted data does not include a large number of closed source projects, such as exchanges, miners, and wallets. In addition, cryptocurrencies provide impressive indicators, many of which are unique to cryptocurrencies in terms of categories_ (e.g. hash rate, miner fees) and their aggressive public availability (on-chain transactions)_. But in the end, the number of developers and end users will need to be realized before cryptocurrency can enter the mainstream .
This article mainly discusses three areas to help various encryption project teams consider popular issues:
- Products : How to match core products with popularization strategies
- Audience : How to identify target users
- Implementation : How to optimize when the product is released
In addition, this article is intended to be helpful for encrypted native projects (L1, L2, on-chain applications) whose main audience is developers , and more consumer-driven, integrated cryptocurrency applications (Square Cash, Robinhood)_ Perhaps more should benefit from traditional growth methods.
The issue of the popularity of encrypted native projects is relatively unknown. Therefore, the title of this article uses the word “incomplete”. Many thanks to those who provided feedback on this content on Twitter, and future versions of this manual will be added.
product
Most decision-making is that the path depends on the core product, which means that the nature of the product will determine the most important choice _ (vision, goal, culture) _. It is very important to know the goal of the product .
Especially in the field of encryption, the content expressed by the product directly announces the way and reason for its popularity. For example, Bitcoin’s mission is to serve as an autonomy currency, or no matter how it is interpreted, autonomy currency is the front and center position of Bitcoin applications, even though it has gained widespread attention from the mainstream society that is not based on cyberpunk. One way to articulate the product vision is through a disruptive perspective embedded in the DNA of cryptocurrency. Understanding what to subvert is a useful tool for clarifying the new world that the product will bring (for example, Bitcoin subverts trust in financial institutions, or Uniswap subverts the rent collection model of exchanges)_.
The main goal of any popularization strategy is to provide feedback to the product and improve it . The growth of the user base and the continuous increase in participation are necessary external factors to improve the product. The feedback cycle in the crypto world can be particularly powerful. Although early users of traditional web services are usually rewarded through incentives and subsidies, users who use encryption technology directly own the product. This consistency leads to active participation, which is especially useful for early projects, where the feedback process itself can win equity .
One of my favorite examples is that I saw this in the incentive testnet of the Cosmos staking game, which was nailed, and the latter became part of the web product release manual. (Similar projects include Celo’s Great Stake Off, Near Stake Wars)_.
In addition, successful popularization strategies are embedded in the final analysis, and the roots can be found in the product itself. You will see this in several crypto projects, and their target audience is clearly expressed in the product, that is, how they target specific developer groups, such as game developers (Flow and Forte) and artists (Zora And Foundation)_customized interface to abstract the complexity of encryption.
Audience
If you don’t know which audience you are building for, then you don’t know what the specific building is. But there are inherent limitations in defining target users: if you want to build something new, the user group has not yet been brought together by the product. Maybe you really don’t know who wants to be a taxi driver until seeing is believing. There are two ways to solve this problem, both of which are full of challenges:
- The first is to use yourself as the target user by default and promote it to a wider audience in the community.
Tickling yourself can trigger others to imitate, and it has complementary significance in the early stages of encryption technology. Encryption is facing huge user experience challenges, and these challenges will eventually become opportunities for some people.
The challenge with this approach is objective risk. Personal itch may be so unique that not many people can experience it, so it is not easy to find the correct market size. The general response to this is to target users in the nearest community by default, but it is likely that this proposal is not the best choice_ (for example, imagine the behavior of a competitive L1 public chain sponsoring the Ethereum hackathon)_.
- The second is the opposite-the largest potential market is the target user by default.
For example, if you create a new development tool, there may be 24 million developers around the world using it for cryptographic development. Once successful, Amazon Cloud AWS will also become your defeat. But this method has the risk of diluting the product.
Existing Internet operators may find some discrete value when using encryption, but their biggest motivation is to protect their existing businesses. Therefore, there is a direct relationship between the user’s base and the marginal degree of encryption applied (for example, I have not found a better marginal application example than cargo ship tracking)_.
One way to manage this risk is to consider highly specific use cases when constructing, but existing solutions cannot meet the needs of such use cases (for example, the issue of sponsor realization) . This eliminates the method of wide-spreading aimed at mainstream audiences with effective targets or insertion points. But in the end, non-native users are faced with the most basic encryption mechanisms (for example, recharging on-chain wallets)_ and they don’t know how to start, so this task to some extent becomes a native resident of encryption .
But there is still good news. Encryption products already have an inherent competitive advantage: the absence of a mature community means a great opportunity for new users to grow substantially. This means fully targeting users who prioritize growth. If existing solutions hinder its growth, encryption solutions will be attractive in the eyes of these users. For example, crypto exchanges that do not involve banks are an opportunity for Tether to issue stablecoins. Now that the growth opportunities of crypto exchanges have actually produced real money, banks are scrambling to serve exchanges, and the liquidity of Tether stablecoin has broken through the horizon.
Targeting high-growth users is very difficult, first of all because the audience appears to be small and may not even exist. But accepting risks in the face of your customers is the best way to get rewards from them. So how to identify high-growth users?
Pay attention to the “all-in” users of your product . “All-in” means that they are completely building on this platform, and all the core functions of their applications will be implemented on the chain. Encrypted networks are multi-faceted (users, liquidity providers LP, developers, etc.). When all application logic is publicly released, its network effects have the best chance to soar to the sky. Therefore, third parties can build customized user interfaces, plug-ins, and new applications on the Internet.
In the beginning, the developers of “all-in” looked like weird enthusiasts. But in the long run, these initial internal developers become powerful distribution engines (developer relations, support, content, meme, etc.) .
You can clearly see this because most platforms demonstrate the Pareto principle, where 80% of activities come from 20% of users. The same is true for encryption. As shown in the figure below of Electric Capital, one of the top crypto projects _ (with more than 1,000 active developers) _ can win more than 100 “all-in” developers. Promoting a small number of core users with extremely high enthusiasm is much more valuable than the general public who attracts a large number of people but few interactions.
Another way to identify high-growth users is to summarize the long tail of scattered behavior . In the automatic market maker AMM, this dynamic does not occur once, but twice.
First of all, although AMM seems to be an oversimplification of the mechanism for professional traders, if it is more convenient, there is a long tail market that users want to provide liquidity for. Second, there are many long-tail token projects that seek liquidity but cannot enter traditional exchanges. Empowering long-tail audiences fits well with the permissionless architecture of encryption technology. Popular access rights _ (every user has root access rights) _ is a heavy weapon in the encryption field. In addition, if long-tail users succeed, the opportunities will become so great that mainstream users cannot ignore them.
carried out
There are many ideas about how to gain popularity, but the problem is that many ideas are good. One tool for combing the ideal method is timing: although an idea seems reasonable, it is necessary to explore whether it is reasonable now so that the right decision can be screened out. Some ways to think about timing:
Internal : Is the team or product ready? Do we have the resources to effectively support this idea and make it a success? Projects like Compound have demonstrated a large number of lessons learned from encryption project sequencing.
External : Is the market ready? Will users appear and have enough motivation to grow together? Given the short and dense history of cryptocurrency, this is the reason why many ideas have been seen more successfully in a few years (decentralized exchange DEX, algorithmic stablecoin, and even loyalty points)_.
Another tool is simplicity . A popularization strategy that works can be stated very simply. This can be well understood among team members, partners put into practice, users repeat, so the project can be scaled up. For example, Facebook’s popularization strategy for attracting 1 billion users can be summarized as “make anyone have 7 friends in 10 days”.
Finally, keep looking for opportunities. When the product is released, please pay more attention to emergency behavior. This is especially true in the cryptocurrency field where most projects are in unknown waters, and the signal is most likely to come from unexpected sources . This applies to more traditional considerations, such as product/market adaptability , but also to challenges that are of particular concern to the encryption field, such as community building .
in conclusion
Although we can see the hope of cryptocurrency crossing the chasm, the script on the popularity of cryptocurrency is still being compiled. The good news is that areas where there is no ready-made script have the greatest opportunity. Recap:
All decisions are based on the path to its core products, including popularization strategies.
Product feedback is the main goal of popularization. Encryption can speed up this process.
Target users who are willing to make a desperate move and all-in your product for growth.
Pay attention to timing and simplicity in implementing decisions.
After the product was released, we continued to seek opportunities for urgent user behavior.
Many thanks to Ahmed Moor, Alex Pruden, Asheesh Birla, Brett Seyler, Georgios Konstantopoulos, Howard Wu, Joe Lallouz, Maria Shen, Nick Chirls and Philipp Banhardt for reviewing and contributing to the text.
