Fifteen years ago, in 2007, Marc Andreessen of the renowned a16z technology fund stated that product-market fit occurs when your business is “in a good market with a product that can satisfy that market.”
At that time, the extent of blockchain technology probably consisted of Bitcoin’s whitepaper on the back of a napkin. Still, Andreessen’s words couldn’t be more relevant to stakeholders within the Web3 universe today, leaving us with the question: what makes a good market good?
There appears to be a disconnect between the blockchain product and a good market. This generation has been blessed with what could quite possibly be the biggest technological innovation of our lifetime. Yet, it remains largely inaccessible to the vast majority of people — even those who would self-identify as technologically savvy.
While a product doesn’t need to service everyone in every market, a technology that can restore trust in our financial system, depoliticize how we store and access information and exchange digital assets should resonate with a much larger population than it currently does. Ultimately, Web3 is fantastic, but we’re still waiting for people to catch on.
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A “good market” occurs when demand dictates the speed at which a product is created and distributed. Many founders find themselves developing products and services that forecast or anticipate what the market may look like. However, studying the market as it develops and produces a reactive product proves much more practical. Designing a product that answers questions like “What do customers like?” and “What do customers need?” will ensure a good product-market fit.
Growing pains: Where are we in the Product Life Cycle of Web3?
During Coronavirus-centric internet deep-dives in 2021, Web3 maintained consistent prominence in public discourse, obtaining the fourth top Google search with ‘Dogecoin’ and tenth with ‘Ethereum Price.’ General awareness of and interest in crypto, blockchain and Web3 has reached an all-time high, so why doesn’t it feel like it? We need to consider participation levels. In 2021, New York Digital Investment Group revealed that 22% of American adults own Bitcoin. However, they also stated that more than 80% of their clients are interested in learning more about it. Meanwhile, while 93% of Americans are aware of non-fungible tokens (NFTs), only 4% have owned one. The takeaway: conversations are happening, but everyday use cases are not.
These statistics accurately describe the purgatory that Web3 followers currently find themselves in. Namely, they have mortgaged their future on the next phase of the internet’s ability to make its way down the adoption curve and achieve mainstream infiltration. Unfortunately, most entry points to blockchain technology, be it investment products or consumer goods, are far too complicated for the layperson to adopt passively.
Seed phrases, convoluted industry jargon and natural apprehension of new technology all stand in the way of a ‘good market.’ The rate of Google searches and staggering blockchain market revenue predictions ($23.3B in the next five years) are harbingers of what is to come. Still, despite this, the technology remains inaccessible, and the answer to solving this appears to sit on the far side of further innovation — more consumer-friendly gateways and products.
Usable AND Useful: the key to mainstream adoption
Technology needs not only to be usable but also useful — a very important distinction. New adopters must be shown how Web3 will quickly improve their day-to-day lives. While the conversations between crypto-aficionados convincing their friends to jump on the bandwagon may help, much of the population lacks accessible educational resources and remain skeptical.
Customers want to be wooed into adopting blockchain technology, not put to work — after all, keeping up with the current phase of the internet and your own personal traditional finances is a feat unto itself. It is therefore up to the Web3 companies to chart new paths to invest in further innovation that shifts the burden from the consumer to themselves as they develop their offering into a desirable use case and obtain a perfect product-market fit.
Related: Venture Capitalists are Pouring Money into Web3. Here’s Why.
One of Web3’s most significant value propositions and attractions to the consumer is that it provides the opportunity to streamline daily life. For this to be successful, developers must encourage Web3 consumer behavior to mimic the pattern of Web2 consumer behavior in a more efficient, enhanced manner.
Think about it like this: convincing someone to use Web3 technology at this moment is like trying to convince a homeowner to sell their house in favor of an RV — a less comfortable, more inconvenient offering with a greater logistical onus. Crazy, right? A blockchain product-market fit should have the appeal of a penthouse suite with swanky views and an easily accessible, robust elevator, and that only means one thing: it’s time to get building.