Has anyone seen this tweet by Chris Dixon before?
This tweet means the internet transition happened over the past 10 to 15 years. We started from just web one, which is read-only. You can go into a website and look at what’s been created. It’s just an entry point to see what’s been curated for you. 10 years later, comes web2, read and write. There’s user-generated content, and UGC is something you guys are familiar with. Web2 is about how you contribute to the space and write to add value to the ecosystem.
At the same time, think about when we create an Instagram account. We create or curate content as influencers and organizations. If one day, Instagram and the likes of it decide to shut down the server, all the information, IDs, and content you have created for yourself or your company will be gone that day. It’s a very scary afterthought.
Too many people think that’s not a possibility, but that’s possible. For whatever reason, a server can shut down completely. It has happened before. Six months ago, Facebook, Instagram, and Whatsapp suddenly stopped working. They had some server shortages. “Why can’t I post my tweet? Why can’t I post on Instagram” — the marketers of the world started panicking.
The afterthought of such a crisis is scary, but this sets the premise of how web3 came into existence. Read, write, and own.
In web3, you can own the information, content, curated information, and IP created by you. That’s the whole premise. We could read the information online, contribute to it, and create our own IP, but now we can also own it.
Here is a little bit more backstory about myself. I started my web2 journey in 2016.
We helped them with their proper development and through the entire fundraising process to the eventual acquisition by Lazada in 2016. Then I went on my path for three years; I learned a lot and failed a lot.
That’s when my crypto journey started with CoinMarketCap, back in 2020. I helped them in their own acquisition by Binance in April, where we were being acquired for 400 Million Dollars and had a lot of responsibility to figure out ways to help transform and rebuild the organization after an acquisition. That’s a story for another day. Let’s fast forward from CoinMarketCap to Spartan Labs.
Going back to the topic, decoding the current market trends in web3 at this point. Today’s market climate is very bearish. How many of you are familiar with Luna and other market crashes? It’s a largely bearish sentiment and little investment in the market. Investors are much more cautious at this point, which doesn’t apply to web3. Even in private markets and the more traditional tech startups, funding has dried up, and everyone is only thinking about profits and sustainability.
What we noticed in the past four-six months is that there are a lot of strong builders and operators who understand the playbook of web2 coming to build web3. That’s exciting because it brings smart capital and people to build projects and create new innovations within the space. We see many people asking why things need to be done in a way and why we need to build the right infrastructure for the crypto space. We do see that. We will now get multiple strong and credible web2 operators who have built the best tech in the world, the best payment gateways, and marketplaces coming into web3. They are excited about the whole ownership aspect of web3 and are coming to build new projects. I am very bullish that a lot more utility-based innovation will come out of blockchain in the coming years.
To share my experience in web3, I have experience of building a traditional web2 company to web3 right now. During my banking days when I started my career, there was much relevance in terms of how we looked at the financial industry and how we take a more decentralized approach towards building in web3. There are many possibilities.
Think of any user experience at this point, whether it’s a payment platform or a marketplace platform. How do we take out that intermediary or return the value to our users and let our users own the data?
There are a lot more use cases that have come out of it. DeFi (Decentralized Finance), NFTs (Non-Fungible Tokens), Metaverse, and Gaming. There’s a lot of innovation, the space is moving too quickly, and it’s fascinating to speak to these web3 builders every day; understand what new innovations can come up with web3 at this point of time.
Crypto, Metaverse, NFTs – what’s the limit, what lies ahead?
People are still determining what will happen in the next 5 to 10 years. Everyone is pushing boundaries at this point. As cliche as it may sound, we are still in the early days of building web3.
That’s why we started a web3 venture studio model. Instead of just investing capital into projects, we have more insights into what’s happening within the space. Why not take on that more proactive approach of building in this space?
Think about this, NFTs are primarily profile pictures. Bored Ape, for example, is worth 8 Million Dollars for this one profile picture. There’s a lot of speculation. It’s evolving from being a digital asset where you look at it, and it looks nice, like a profile picture, to giving you exclusive access to events.
The Nikes of the world got into NFTs because they want to get onboard on this train and allow their communities to engage with them when they own a digital asset that’s curated and created by Nike. But this is not owned by Nike. It is owned by users who bought the NFTs.
Going back to something more relevant for the organizations these days when you think about growth. This is a meaningful conversation for the world’s market leaders because when you are in a market-leading position, your job is not to look at your competitors and say, “How do I optimize and move better than them?”. Your job as a market leader is to figure out the next growth phase. How do I think about growth from a new frontier perspective?
How do I integrate, expand, and attract the adjacent users to come to my platform versus just looking at competitors and asking how do I ensure their market share is 30% and mine is 40%? The goal is to expand and build a better user and bring the adjacent user to your platform.
To me, it’s not so much about the transition from web2 to web3. It’s not about being a web2 company; now, my job is to go into a web3 company. The goal is to understand each individual distinction of the technology’s pros and cons. Web3 can be used as a tool to expand the company’s existing business model to new life.
Look at Nike, a market leader in the sports industry. How do you get them to expand in new lines of business? They have done it well, and also Adidas. Facebook rebranded to Meta. They were also market leaders in web2. What’s next for them? They are taking that proactive approach and getting into the metaverse, building payment, and other infrastructures. It’s about going into that route and understanding, not just transforming your company to web3. Incorporate elements that make sense for a business and expand your new lines of products.
When incorporating elements for transformation, there are challenges ahead. The industry is moving fast, and we are constantly building. This reminds me of Facebook in the earlier days. The goal and ethos of Facebook were to build great things and move fast. Now it has transformed to build things and move fast and responsibly. This can be applied in web3 because new innovations are happening daily.
How do we ensure that as the space moves, we, as operators incorporate the fast pace of innovation? There is a potential backlash from existing customers, so more communication needs to happen. There are a lot more processes and planning required to make this before you make that sort of incorporation on new business units. If we don’t do it as marketers, no one else is in a position to do it. We have to move on as an industry together.
From a solution perspective, you are immersed in the space and working with experienced operators who understand the space and how you then work and collaborate with them to expand the new materials.
When you think about building a product where you think about spending, it’s really about understanding your customers. Going back to what Rashi mentioned, the product-customer relationship, it’s always the same whether you are building a web3 or a web2 product. The best way to understand the customer is to understand the purpose. Why do you want to make the shift? If a certain business model is failing in your current business, it makes sense for you to expand into web3. You need to understand the purpose behind the shift. Through that, we can collaboratively devise a strategy or work out a way to transition efficiently. It’s always about communicating these challenges with people.
The last slide is about what we primarily do. We are a 100 million dollar venture building studio. The space is in an early stage and very young. We want to build and fund ventures web3 companies on our end. By deploying capital to the entrepreneurs of the world, we build the infrastructure together with them. We must invent, mandate, and build web3 startups to accelerate projects from ideation to launch.