The Marketing & Growth Stack — Coming Soon
Powered by On-Chain Identity
As we’re going through the hangover of the bull market, there’s still a lot of soul searching left to do. However, one thing that’s becoming increasingly clear is that everyone is starting to focus on the numbers a lot more. The era of hand-wave guessing parameters and budget spend is disappearing very quickly since survival is at stake for many.
The trend of more data driven decisions is giving rise to a new industry that’ll be powered by a user’s existing on-chain identity and behaviour: the web3 growth/marketing stack.
This stack is going to be about bringing web2 excellence in growth and marketing to the wild west industry of crypto. In our current, where the only options to grow or market a project are:
Make a lot of noise on Crypto Twitter
Pay/network with influencers & investors
Do AMAs/collaborations with other projects
Receive press/PR about your project
All of these are basically what we’d typically define as “organic growth”. However, since everyone only has the option to use “organic” growth options — it actually becomes expensive!
For example, if we think about how to make it on CT — you need to do something outrageous that will get the algorithms promoting you. This means either doing something very ridiculous or promising to pay degens a lot of money.
When it comes to paid advertising, there’s virtually no options available yet for projects to use (that actually work). You could argue liquidity mining and airdrops are paid advertising/customer acquisition although we’ve learned they’re very poor due to their abysmal retention rates (typically shy of 15%) and are expensive due to equity not cash being given away. If you want to understand more about some data around airdrops check this article we wrote at ARCx a while ago:
Nature is Healing
I’ve mentioned this before but it’s clear that people care about the in-depth numbers a lot more than they have in the past. I’m starting to see investors start to ask questions such as “what’s the LTV of this protocol” or “how much did that airdrop cost in terms of CAC terms”.
Things are still in a rudimentary phase with people only realising these are the real questions that matter. However, I predict in the next 6-12 months this will become commonplace in crypto and anyone without these numbers will get shunned by the capital class since not knowing can cost a lot (betting on a ponzi).
For example, if we think back to LUNA/UST, the LTV of most users would have been close to $0 since majority of the money there was mercenary and there for the yield. If the ecosystem was actually fleshed out and there was a case that users over time spent more $ and time in the Terra ecosystem then they could have modelled something where their CAC of 20% interest rates could have been aligned more closely.
Instead, everyone kind of just hoped that the above would happen over time and it’d all be okay. Surprise: it wasn’t.
These kinds of “hope the numbers work out” can cause huge issues since the tiniest difference gets magnified with the scale of leverage crypto brings to the table. Not having your numbers and data on-point can be very costly due to scale. Many are still operating blind by not being equipped with the appropriate data to drive their product, growth and marketing strategies.
I’ve heard numerous accounts of investors telling portfolio cos to “just get more Twitter followers” or “grow the Discord to be as big as you can”. If these are the incentives that get capital in the existing structure, we shouldn’t be surprised when we get trash being peddled.
The Growth/Marketing Stack
Most likely what we’re going to see over the next 6-12 months is a slew of growth/marketing tools that help understand the numbers of a project/DAO a lot better. Things that we’ll probably see in this category that will help understand one of more of the following outcomes:
Ways to understand who users are in dApps
Understanding where their users came from
Creating sustainable ways to acquire similar users
The answers to these questions are very difficult to answer due to technological constraints. Because of this, the incentives shift from verifiable data-driven metrics to hype and manipulatable narratives.
For example, some of the questions that I for-see teams asking in the coming months:
What is the conversion funnel of my dApp for new users versus experienced users?
Where are all my large $1m+ whales coming from?
What’s my month-on-month retention for my user base segmented by the net-worth of my users?
How can I determine the LTV of my dApp’s users so that I can determine a realistic number for my CAC?
Where can I find users similar to the existing set that I have?
What is the expected ROI I predict to see if I do this airdrop to my existing target list? What % do I expect to churn versus retain?
The reason why I see questions like this being important to ask and eventually answer is that it optimises energy around genuine value creation rather than ponzinomic mindsets. All aspects of an on-chain business from engineering, product, marketing, sales and growth should be anchored around the same numbers and doing everything in their power to optimise the numbers.
It’s still going to take a while for the technology and products in this area to answer all of the questions above, but you can guarantee that directionally this is how the future is going to look.
The best bit? It’ll all be powered by a user’s on-chain identity and reputation.
That’s it for this post. If you’re interested in jamming about this more, feel free to reach out!
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