Web2 Will Catapult Web3 Businesses

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In this post you will learn:

• What is a web3 business

• How to use web2 tools to build a web3 business

• Examples on how to apply the playbook

A web3 business is owned by users. Compare that to a Web2 business where there is a centralized ownership and control (e.g. management teams) that make critical decisions. In web3, there is no centralized decision making. Product updates are transparent and voted on by token holders. Additionally, “owned by users” means that users receive benefits for engaging with the organization, rather than simply being a member.

For example, imagine if your friends who post a lot of content on Instagram actually received benefits (monetary or other) for consistently posting and “adding to the platform”. As it currently stands, users willingly give data to these platform companies and receive nothing in return other than the utility of the platform.

Despite the differences, the web2 world will play a critical role in adoption of web3. For example, artists and musicians will need social media platforms to announce the launch of new projects. Artists will continue to use these platforms to build followings and get discovered. Once the following gets large enough, they may take their work elsewhere – launching NFTs and fundraising on different platforms.

But wouldn’t Meta or Spotify launch projects to allow artists to sell NFTs?

Maybe.

Meta’s business model is to collect user data to sell ads. Selling NFTs to anonymous user wallets doesn’t directly support that strategy. Spotify has partnerships with record labels who own music rights. Engaging with artists to directly sell their music rights to fans could upset their existing customers. Both companies are publicly traded and have to justify large capital expenditures to shareholders.

Most importantly, once users discover that they can be rewarded for engaging on other platforms, they’ll demand the same from the bigger ones today. Fortunately for startups in the space, they don’t have to answer to shareholders.

What does the future look like?

We are on the verge of meeting creative new entrepreneurs who will build web3 businesses on the backs of web2 companies. Businesses that are hard to comprehend right now.

Here’s how it could potentially work:

• Podcaster builds following on Spotify

• Sells NFTs to fund new project

• NFT owners get exclusive access to new shows and guests

• Uses proceeds of NFTs to purchase studio or broadcast directly to consumers

Technology is a critical competitive advantage in business. Businesses will need to evolve with technology and momentum is on web3’s side. Winners in this space will find ways to use current tools to make it the brave new world because these tools are cheap and reach a wide audience.

It will certainly be fun to see what future entrepreneurs, creators, and artists can dream up.