By Ryan Rubio, Principal, Zero Labs
The current economic downturn has had a significant impact on businesses worldwide. In challenging times such as these, it is essential for those developing a Web3 strategy to focus on the fundamentals: establishing trust, forming coalitions, and prioritizing business objectives. This blog post will explore the importance of Web3 during times of economic uncertainty, provide insights on how businesses can leverage this technology to further their core missions and present a mental framework for cultivating the partnerships necessary to realize its potential value.
Web3 & Innovation in Times of Uncertainty
Web3, also known as the decentralized web, is the next generation of the internet. Its aim is to offer a more open, secure, and user-centric experience. Built on the blockchain, this emerging set of technologies allows businesses to unlock value not just across previously disconnected parts of their business, but across the ecosystems in which they operate. Although the obvious temptation is to pull back from experimentation and innovation during times of macroeconomic distress, we argue that the need for creativity in business is never stronger than during these times. Every new product or service could mean incremental dollars that help organizations weather the storms they face.
Leveraging Web3 Strategy to Create New Value
Every company can have a Web3 strategy, but each company’s strategy should be unique. The pundits on Twitter may tell you to prioritize implementing blockchain-based loyalty programs, gaming experiences, back-end accounting systems, employee engagement mechanisms, and a thousand other “must-do” projects. However, your company’s Web3 strategy needs to be tailored to your specific business needs. Treat everything you’ve read or seen in other organizations as inspiration for creating a strategy that will move your business forward. The reality is that having a differentiated Web3 strategy will eventually become as outdated as companies in the early 2000s who proudly talked about their groundbreaking digital strategies. Success with new technologies requires a deep understanding of your core business and its goals. From there, you can choose from the many options available in the Web3 ecosystem and identify those that best align with your needs.
Unlocking Value: A Decentralized Mental Model
That being said, I won’t spend any more words in this article telling you which protocols and use cases to focus on. Instead, I’d like to discuss a mental model for thinking about how Web3 can be used inside your business. Once you have a deep understanding of this model, it may help unlock creativity and unearth the Web3 use cases that make the most sense for you and your team. In general, I like to think that this new suite of technologies does not necessarily create new value from scratch, but rather unlocks new possibilities for accessing previously inaccessible value that already exists within the systems you operate today. What I mean by this is that the blockchain generally allows entities that previously had no formal relationship, or were even in direct conflict with one another, to efficiently cooperate in a way that is mutually beneficial for themselves and the customers they share. By allowing entities to orchestrate complex transactions with complete transparency and no formal integrations between their unique systems, businesses can more freely connect customer experiences across formal institutional boundaries. This enables attribution, value sharing, and enhanced engagement without additional administrative overhead. I’ll provide two brief examples that are not meant to be copied and pasted, but rather jumping off points for your own explorations:
- In the world of regulated casino gaming, thousands of hours are spent meticulously collecting, preparing, and sharing the outputs of different gaming devices with regulators. Certain companies are exploring moving these data feeds on chain, reducing the management overhead of preparing these reports through a direct connection, and increasing the efficiency and effectiveness of critical regulatory supervision by making the compliance information available to regulators around the clock, globally, in perpetuity.
- The world of loyalty partnerships today is highly complex and extraordinarily fragmented, relying on point-to-point connections where highly bespoke deals are crafted on a one-to-one basis with little to no flexibility when it comes to meeting the rapidly changing needs of the corporate environment and customer expectations. A number of organizations are beginning to experiment with programmable loyalty objects that carry their own set of pre-programmed rules and behaviors, and which can dynamically interact with other loyalty objects, even in the absence of a formal relationship between two companies. Over time, this may allow more complex, more personalized loyalty experiences to emerge and thrive that are unique to each one of us and the brand that we interact with.
Getting Started with a Web3 Strategy
Experimenting with Web3 may seem daunting, but it is no different from experimenting with any other new capability within your business. The fundamentals of sound innovation still apply:
- Understand your core business.
- Build relationships and coalitions.
- Start small and grow.
Understanding your core business means:
- Looking beyond your organizational silo.
- Developing a deep understanding of shared priorities and historical conflicts.
- Synthesizing those elements into a loosely prioritized list of relevant experiments.
To cultivate strong relationships and coalitions, businesses should:
- Continuously learn through engagement with industry forums and events, both online and offline, to network with like-minded professionals.
- Collaborate on joint projects, sharing expertise and resources to create mutually beneficial outcomes.
- Be open to learning from others, embracing different perspectives and ideas to drive innovation.
Starting small is the key to organic growth. To ensure sustainable growth, businesses should:
- Identify high-impact projects: Assess the potential of different Web3 technologies and prioritize those that align with your business goals and values.
- Start with a proof of concept: Before committing to a full-scale implementation, test your chosen technology with a small-scale project to assess its feasibility and potential benefits.
- Scale and grow over time: Once you’ve validated your proof of concept, gradually scale your project, learning from your experiences and iterating as needed.
By starting small and remaining focused, businesses can achieve organic growth, minimize risks, and ensure that their Web3 strategy remains aligned with their overall objectives.
Conclusion
Developing a Web3 strategy during an economic downturn can help businesses build trust, forge strong relationships, and grow organically. By embracing Web3 technologies and adopting a deliberate, focused approach, businesses can not only weather the storm but also emerge stronger and more resilient. Understanding your core business, building relationships and coalitions, and starting small are the fundamentals of sound innovation that still apply. By starting small and remaining focused, businesses can achieve organic growth, minimize risks, and ensure that their Web3 strategy remains aligned with their overall objectives. Now is the time to explore and implement Web3 strategies in your organization. By doing so, you can not only position your business for success in the current economic climate, but also future-proof your organization for the opportunities of tomorrow.
Read Ryan’s previous post here.
