-- Lauren Tierney, Venture Investor, Decasonic
Emphasizing Web3’s Problem-solving Potential
Hot Take: What's stopping mainstream consumers from using Web3 isn't the user experience. It’s the use cases.
If a product fundamentally solves a massive problem in your life - you will jump through hoops to use it.
Take the UN's refugee agency which has partnered with blockchain and money transfer companies, for example, to obtain vital aid for people displaced by conflict. Ukraine's experience demonstrates the potential value of cryptocurrency for providing aid during times of crisis, leading to the government's interest in further exploring its use for economic recovery and even considering the issuance of its own cryptocurrency.
Or the story of Beeple, an unknown artist who had been creating digital art for over 13 years but had never sold a piece for more than a few thousand dollars. However, in 2021, his NFT art, Everydays: The First 5000 Days, sold for $69.3 million at Christie's, making him a multi-millionaire overnight.
The user experience (UX) during the emergence of those use cases was far from "easy" or "familiar," as they addressed fundamental needs rather than being mere wants or Web3 adaptations of Web2 applications.
While an aesthetically pleasing, user-friendly, and familiar UX is undoubtedly desirable for most consumers, what holds utmost importance is that Web3 applications effectively address fundamental challenges individuals and society face.
When an application successfully tackles a significant problem in a consumer's life, they are likely to go to great lengths to adopt it, even if it means overcoming various obstacles.
The Thesis for Mainstream Adoption of Web3:
At Decasonic, we focus on investments that drive the mainstream adoption of Web3 technology. The next billion users in Web3 represent a trillion-dollar opportunity, and most importantly, our focus lies in investing in this technology's most durable use cases.
To ensure thorough research, we draw insights from multiple sources. These include analyzing the current deal flow, incorporating iterative ideas from our existing portfolio companies, observing themes observed by other investment firms, tracking concepts circulating in the media, and gathering findings from reputable research firms.
Decasonic analyzes the use cases for Web3 technology with a specific three-part hypothesis in mind:
Value Proposition: We believe that all Web3 use cases should adhere to the fundamental principles of Web3 technology, ensuring that they leverage the decentralized nature, transparency, and trust offered by the blockchain.
“Verbs”: Decasonic recognizes the significance of owning a distinct "verb" within the Web3 ecosystem, which can help drive word-of-mouth marketing and establish a strong brand identity.
10x Better: We emphasize that to achieve mainstream adoption, a use case must provide significantly superior value propositions, at least ten times better than existing solutions, to attract a wide range of users and accelerate adoption rates.
4 Web3 Commerce Use Cases for the Mainstream Consumer:
Below are several representative use cases that I’m exploring with founders day to day. If you are building something similar, please don’t hesitate to reach out.
Use Case: Consumers can verify the authenticity of a digital product, verifying its issuance from a brand they love.
Brands can leverage the power of AI and blockchain technology to issue tamper-proof certificates of authenticity in the form of NFTs, enabling the verification of digital and physical items through digital twins. This offers a significant advancement, as NFTs can encapsulate the unique qualities and characteristics of a specific physical item, establishing a seamless connection between the digital representation and the tangible object itself.
By anchoring ownership and authenticity to the blockchain, this approach delivers a transformative value proposition that ensures heightened trust and certainty in the verification process, revolutionizing how brands and consumers can interact with and validate the authenticity of their products.
Use Case: Consumers can co-create new products and earn royalties on blockchain from their contributions.
The advent of blockchain technology has revolutionized the co-creation process, empowering consumers to actively participate in developing new products and earn royalties for their valuable contributions. This approach substantially advances by addressing a significant limitation of the current consumer-brand engagement landscape. Traditionally, consumers who actively engage with their favorite brands by offering feedback or creating custom designs are not rewarded or able to profit from their valuable input.
However, with blockchain integration, brands now have the means to incentivize their most loyal consumers, fostering a collaborative environment where individuals can not only engage with the brand and contribute their ideas but also reap financial benefits from their involvement. This innovation introduces a transformative value proposition, creating a mutually beneficial relationship between brands and consumers and propelling the co-creation process into new realms of creativity and inclusivity.
Use Case: Creators can monetize their digital creations and engage directly with their audience through the sale of exclusive products and experiences on the blockchain.
With blockchain, creators now have the opportunity to monetize their digital creations and establish direct engagement channels with their audience. This is made possible through the sale of exclusive products and experiences on the blockchain through NFT membership commerce. Different from traditional methods where creators struggle to monetize their audience effectively, the emergence of blockchain technology offers a transformative solution.
By leveraging blockchain-based sales, creators can now generate revenue from their digital creations while fostering a direct connection with their audience. The transparency of transactions and the implementation of NFT membership models grant customers privileged access to exclusive content and early previews of products and events. This not only fosters a sense of loyalty and trust among consumers but also creates a more efficient and empowering system for creators to monetize their work. Through this approach, creators can harness the power of blockchain technology to facilitate secure transactions, further bridging the gap between them and their audience in a mutually beneficial manner.
Use Case: A customer can access exclusive content and experiences through digital memberships and collectibles, such as early access to new products and exclusive events.
NFT memberships and collectible programs offer customers a unique and enhanced experience by granting them access to exclusive content and events. Web3 Membership Commerce revolutionizes the way individuals engage with brands and enjoy special privileges. Before the advent of blockchain technology, the customer-brand relationship was fragmented, and tracking loyal customers through traditional loyalty programs presented significant challenges.
However, with NFT memberships, individuals now have a seamless and efficient method to showcase their membership and establish a closer connection with brands, ultimately gaining access to exclusive offerings. By embracing digital collectibles, brands can unlock new avenues for engagement, rewarding their most loyal customers with unique content and experiences. This approach transcends traditional loyalty programs and harnesses the potential of blockchain technology to create a seamless and immersive relationship between customers and brands. With NFT memberships, exclusivity is taken to new heights, offering individuals unparalleled access and reinforcing their commitment to the brands they admire.
Durable Use Cases Win
The mainstream adoption of Web3 technology is not solely contingent on improving the user experience. The key factor lies in the use cases that effectively address significant real-life problems. Examples like the collaboration between the UN and blockchain companies to aid refugees and the success story of Beeple's digital art demonstrate that while a polished UX is desirable, it is the core problem-solving capabilities of Web3 applications that drive adoption.
At Decasonic, our focus is underwriting companies focus mainstream adoption of Web3. We do this by evaluating compelling product narratives, looking for early signs of product-market fit, and underwriting founders' ability to execute in the largest markets.
The use cases shared in this article highlight how Web3 technology presents transformative potential in revolutionizing commerce, empowering individuals, fostering trust, and enhancing customer experiences. By addressing real-life challenges and providing effective solutions, Web3 applications can drive mainstream adoption and reshape our interaction with technology.
Web3 technologies are still emerging, and undoubtedly, the innovators will continue to evolve and shape this adoption to improve our lives 10x better collectively.
My door is always open for those building in Web3 and addressing real-world problems with blockchain solutions. Email me at Lauren at Decasonic dot com.
The content of this material is strictly for informational and educational purposes and is not meant to constitute investment advice or a recommendation or solicitation to buy or sell any asset or to make any financial decision. Nothing in these blog posts should be considered legal or tax advice. You should consult with your own professional advisor before making any financial decision. Decasonic offers no warranties on any content in the material posted in these blog posts, including that it is accurate, complete, or correct. The opinions expressed in these posts are those of the authors and do not necessarily reflect the views of Decasonic. Decasonic is not liable for any errors or omissions in the content of this newsletter or for any actions taken based on the information provided herein.