Web3 User Rise Strategy: How to Build Successful Communities and Products

In the Web3 space, we often see some projects achieve a rapid rise in a short period, but users quickly churn, ultimately falling into a failed "death spiral." Unlike traditional sectors, the cryptocurrency market has a huge impact on Web3 projects - during a bull market, everything flourishes, while in a bear market, many projects collapse. These failed projects often share a common characteristic: in a bear market environment, the project's token price continues to decline, leading to the failure of incentives and even harming user interests, resulting in severe user churn.

User growth is a long-term goal of the product, focusing on building a healthy interaction system between the product and users, gaining market share through continuous iteration, and achieving sustained rise in scale and value. In 2022, the number of active addresses for mainstream dApps such as NFT, DeFi, GameFi, and trading markets experienced varying degrees of decline, while social media applications showed a rapid growth trend. This article will explore the key strategies for Web3 user growth.

Basic Approach to Web3 User Rise

Although the macro market environment has a significant impact on user growth, entrepreneurs should not be constrained by it. The primary task of user growth is to find a target market that matches the product, which is the "market" in product market fit ( PMF ). It is important to focus on a specific niche market rather than trying to cover the entire large market. For Chinese entrepreneurs, abandoning the Chinese-speaking community and users is unwise, as it is equivalent to giving up one-third of the potential user base globally.

In product development, the minimum viable product ( MVP ) is a great concept. It emphasizes launching basic functions that meet core scenarios first, and then continuously iterating and optimizing based on market feedback. Developers should focus on solving the user's most pressing "one" problem, rather than trying to develop a perfect "all-in-one" product all at once.

Launching an MVP that meets PMF to the market is "going to market" ( GTM ) strategy. The goal of GTM is to acquire and retain users, usually following the "funnel model": from the top of customer acquisition to the bottom of user conversion and retention is a process of decreasing user numbers.

Compared to traditional Web2 projects, the GTM strategy of Web3 is more diverse and rich. "Community" is a unique traffic pool in Web3, usually accompanied by token-mediated incentives and corresponding referral programs, achieving rise by incentivizing old users to recommend new users.

Product-Market Fit ( PMF ): Identify the market, meet real needs

PMF is the key to product success and needs to consider the following aspects:

1. Clarify the motivation and purpose of product development
2. Ensure that the product can meet market demand
3. Analyze whether the timing for launching the current products is appropriate.

According to research, the lack of market demand is the primary reason for the failure of entrepreneurial projects, accounting for as much as 42%. Therefore, it is necessary to conduct sufficient market research during the product planning phase to avoid overlooking objective market demand due to personal biases.

Finding PMF is a cyclical iterative process that requires continuous feedback collection and validation, gradually achieving the best fit between the product and the market. The specific steps include:

1. Segment the market, target user groups, and identify unmet needs.
2. Develop product strategy, clarify value proposition, and highlight differentiated advantages.
3. Select MVP features, conduct user demand testing, and continuously optimize based on feedback.

Minimum Viable Product ( MVP ): Rapid iteration, avoid detours

The core of MVP is to develop a usable product that can showcase the project highlights with minimal cost and in the shortest time. Key issues include:

1. What are the core components of the product?
2. What specific problems can it solve?
3. What are the future iteration plans?
4. What is the core value of the product?

The MVP does not pursue perfection, but rather aims to quickly validate the feasibility of ideas. By collecting feedback from the target user group, it verifies whether the product positioning is accurate. The development team should frequently discuss which features are non-essential at the current stage and focus on delivering the core functionalities along the critical path.

Going to Market ( GTM ): Acquire New Users and Retain, Manage Community

The GTM strategy of Web3 not only includes traditional marketing but also emphasizes the management of a richer "community." Community members include users, developers, investors, and various stakeholders. Only by continuously meeting user needs can a high-engagement, high-quality community be established.

The GTM strategy of Web3 mainly includes the following aspects:

1. Acquire new users

   • Attract seed users through task-based interactive airdrops
   • Publish interactive tasks on the Web3 task platform

2. Increase activity and retention rate

   • Continuously optimize product experience
   • Regularly hold community events, such as AMAs, etc.

3. Recommendations and Self-Propagation

   • Design effective incentive mechanisms to encourage users to share
   • Analyze user behavior data, optimize operational strategies

Through these strategies, projects can achieve low-cost and high-efficiency user rise. The ultimate goal is to achieve profitability through the expansion of the user base, which is also an important indicator of the success of a dApp.