Doing our own expanded on the Web3 Growth Playbook by Lattice! We’ll recap and share some thoughts on Lattice’s original article here, and in the coming weeks, we'll dive deeper into specific sections around customer acquisition/retention that’ll look at partnerships, community building, and token incentives.

Protocols face 3 foundational challenges when expanding their userbase

Identity

• Web2 is growth built on personas and social graphs based on real-life identity in which product features are designed and marketing targeted toward. By acquiring information about your users, you can help to build targeting profiles.

• However, as on-chain activity is mostly pseudonymous this is much harder but there are teams in the space working to define profiles based on on-chain data.

Communication

Web2 uses a combination of:

• Ads to reach new users

• Email to reactivate churned customers

• Push notifications to tell users about new products.

However, there are no popular crypto-native growth tools to replicate this.

Platform constraints

• Naturally, there is a large amount of apprehension from users with regard to custodying their private keys. However, with interest in account abstraction, this may become less of a factor going forward.

• Similar to AA, we’re seeing a growing approach to abstracting away crypto-native UX/UI so that dApps represent more familiar web2 platforms.

So despite these challenges, what are some growth avenues we can look to address these?

The transition from web2 > web3 is as follows:

• BizDev > Partnerships & Integrations

• Customer retention > Building engaged communities

• Growth hacking > Incentives

Growth frameworks

Partnerships & Integrations

• Tech companies growing through large BD deals is nothing new and many Web3 projects have adopted this strategy. For example, Polygon has had one of the most successful partnership programs to date.

• A few examples of Web3 partnership categories:

  • Product & utility - projects that have a native token want to make it as useful as possible. This could include exchange listings, collateral listings, or partnering with DEXs to drive additional liquidity.

  • Distribution - how do you get your product in front of as many users as possible? For instance, almost all of us use Uniswap which is well known as the DeFi-native hub for executing swaps. What if they wanted to expand? They could look at partnering with companies like Robinhood to route altcoin swaps through their platform.

  • Composability - leveraging another DeFi primitive to bring additional utility to your product. For example, Notional leverages Compound to increase its effective yield.

Community

• In web2, we drive loyalty amongst users through engagement and retention campaigns. Whilst still important in web3, incentive design is fundamentally based on user ownership. Users fund the products, information, and services we consume.

• A highly engaged community acts as an effective feedback loop in web3 as they can substitute or complement key stakeholders in Web3 projects:

  • Early customers (and cheerleaders)

    • Having a small, diehard group of customers is important for any startup. Community members are both early customers and have the most upside of participating in token networks from the beginning.

  • Leverage & extend the core team

    • Community members can help with hiring, token design, fundraising, and any other tasks for which they have the skills. On occasion, those who provide significant value often end up joining the core team.

  • Feedback

    • Communities provide real-time feedback. This allows for rapid iteration, product improvements, and adapting to the needs of users.

    • When your community helps build your product, their input creates stickiness which helps them to stay longer and promote the products/services organically, reducing churn and increasing word-of-mouth referrals.

  • Distribution

    • Communities can be leveraged across different social media channels.

    • The buzz and energy from cult-like communities serve as the ultimate marketing tool. Such energy is infectious and is organic marketing, helping to lower customer acquisition costs.

Token-based incentives

• Web2 has historically been on building affordable, repeatable growth loops.

• In web3 the focus in crypto has been on leveraging a project's native token to drive growth loops.

• Just as VC funds helped subsidize marketplaces until they reached scale, Web3 protocols can bootstrap their growth using their native token.

• Crypto projects that have grown through token incentives have faced similar challenges to Web2 startups that burned through piles of venture funding.

That’s a wrap for today folks, stay tuned for more thoughts on customer acquisition, retention, and token incentives coming soon!

The Web3 Growth Playbook by Lattice