Web3 User Rise Strategy: How to Effectively Launch Community Marketing

In the Web3 space, many projects face the problem of user attrition after achieving rapid rise in the short term, ultimately falling into a "death spiral." Unlike traditional industries, the impact of the cryptocurrency market on Web3 projects is more direct and significant: in a bull market, there is a flourishing of projects, while a bear market eliminates most projects. These failed projects often see their token prices continuously decline in a bear market environment, leading to the failure of incentive mechanisms and even harming user interests, resulting in severe user attrition.

User growth is a long-term goal for the product, with the core focus on building an ecosystem between the product and users. By continuously iterating, the aim is to capture market share and achieve steady rise in user scale and value. In 2022, the number of active addresses for different types of decentralized applications varied: the number of active addresses for leading applications in fields such as collectibles, DeFi, GameFi, and trading markets generally saw a significant decline, while social media applications exhibited a rapid upward trend.

The basic idea of Web3 user rise

Although the cryptocurrency market cycle has a huge impact on user rise, entrepreneurs should not be constrained by macro factors. The primary task of user rise is to find a "market" that matches the product, that is, the product market fit, with the "M" in PMF (. It is important to accurately position the suitable niche market based on the characteristics of one's own product and resource advantages, rather than blindly pursuing the entire market. It is recommended to first deeply cultivate a single market and consider horizontal expansion only after achieving a leading position. For Chinese entrepreneurs, giving up the Chinese-speaking community and Chinese user groups is unwise, as it amounts to giving up one-third of the potential user base globally.

In terms of product design and development, the Minimum Viable Product ) MVP ( is a very effective concept. It refers to first launching the basic functionality that can meet the minimum business loop for core scenarios, and then iterating and optimizing based on market feedback, ultimately developing a product that best meets market demand. Developers should avoid attempting to create a perfect "whole" product from the beginning, and instead focus on solving the user's most urgent "single" problem, simplifying the usage process, and building an MVP product that aligns with PMF. In this process, developers often need to say "no" to many seemingly good ideas.

If PMF is understood as the state of product-market fit, then MVP is an effective way to achieve PMF. Launching an MVP that meets PMF into the market is referred to as the GTM)Go To Market( strategy. The goal of GTM is to acquire and retain users, usually following the "funnel model": from customer acquisition at the top of the funnel to user conversion and retention at the bottom, it is a process of decreasing user numbers.

Compared to the GTM strategy of traditional Web2 projects, which includes pricing, marketing, and sales, ), the GTM of Web3 is richer in connotation. "Community" is a unique area of Web3 GTM and is an important traffic pool for user growth. The GTM strategy of Web3 is often accompanied by community incentive measures using tokens as a medium, as well as corresponding referral programs, where existing users are rewarded with tokens for referring new users, and new users may also receive some rewards as a result.

( PMF)Product Market Fit###: Precisely locate the market and meet real needs

Regarding product-market fit (PMF), the main questions to consider are as follows:

1. Why develop this product/feature?
2. Can the product/function meet market demand?
3. Why choose to develop this product/feature now instead of later?

According to a survey by CBInsights.com, the primary reason for startup project failures is "lack of market demand," accounting for as high as 42%, surpassing factors like "funding depletion" and "inappropriate team." Given the importance of this issue, developers should consider it thoroughly during the product planning stage, rather than waiting until the product is about to launch to start looking for the market. People often overlook the necessary market research work that should be conducted in advance due to personal biases and obsessions.

Finding PMF is a cyclical iterative process. By continuously collecting feedback and validating, the product reaches a level of relative alignment with the market, and in the subsequent validation process, it returns to specific steps for optimization and refinement based on feedback information, in order to improve the alignment between the product and the market.

1. Precisely locate niche markets, target user groups, and identify unmet needs.

Accurately positioning the segmented market and target users will ultimately determine the extent to which the product can meet the needs of the target users. By segmenting the large market to lock in the target user group, a user profile database can be established and demand analysis can be conducted. After establishing the target user profile, the next step is to understand their real needs. When trying to create value for users, it is also necessary to identify the market opportunities corresponding to this demand. If the user needs in a certain market have already been well met, then one should not enter this market but instead seek new market opportunities. When it is found that the user needs in a certain market have not been well met, then it can be considered to enter.

2. Develop product strategy, clarify value proposition, highlight differentiated advantages and core competitiveness.

Users will inevitably compare your product with various competitors at some point in the future, so user satisfaction largely depends on the standout features of your product. These features constitute the product's differentiated advantages. The so-called value proposition is to prominently showcase the highlights of the product, allowing users to experience that this product can better meet their needs compared to competitors. Among the many needs that the product can satisfy, which specific need should we focus on? What unique features does the product have to attract users? How does the product stand out in competition? These are the three core questions that need to be answered when formulating product strategy.

3. Select the minimum viable product ( MVP ) feature set, and ultimately complete user requirement testing.

Once the product strategy and value proposition are clear, it should begin to carefully select the features that the minimum viable product ( MVP ) should include. It is undoubtedly frustrating for developers to spend a lot of time and energy working hard only to find that users do not like the product they developed. After several repetitions, they may run out of funds. The purpose of the MVP is to determine whether the development direction is correct and then create sufficient value at points that target users consider valuable. Once the MVP is completed, it should be thoroughly tested among the target user group to ensure that the collected feedback comes from a sufficient number of users in the target market. Otherwise, that user feedback may lead the product iteration in the wrong direction. Based on accurate user feedback, readjust assumptions and return to earlier process steps to iterate the MVP until a product highly aligned with the market is designed.

( MVP)Minimum Viable Product###: rapid iteration, avoid going astray

Regarding the Minimum Viable Product (MVP), it is important to consider the following questions:

1. What elements make up the product/function?
2. What kind of problems can it solve?
3. What are the future iteration plans for this feature?
4. Where does the value of the product/function lie?

The concept of MVP is to develop a usable product that showcases the highlights and innovations of the project with the minimum development cost and the shortest development time. This product, although simple, can quickly validate ideas. People generally have a pursuit of perfection mentality, feeling that lacking certain features would be terrible, when in fact it may not have a significant impact. If a non-MVP approach is taken, not only may a large amount of time be spent on peripheral, auxiliary, or enhanced features in the development of the first version, but there may also be constant detours in subsequent version updates. However, when we start developing products with an MVP mindset, we can focus our attention on more important aspects.

The MVP is not the perfect product; its purpose is to quickly launch into the market to validate feasibility. By verifying through market demand, it continuously adjusts direction, ultimately iterating to produce a product with market space and protocol revenue. In fact, the MVP does not even need to be a mainnet product; it only needs to be a well-designed testnet product that provides users with a clear experience. This can avoid the dilemma of spending a large amount of money to create a product that is not recognized by the market.

Developers should deliver the MVP to the target user group and collect relevant feedback on their product preferences to see if they believe there is a need for this product, in order to test the initial product concept regarding whether the right market segment and target user group have been identified. If the idea is correct, the product's exposure in the market should be rapidly increased, allowing these seed users to truly start using the product.

Hold more internal product meetings to discuss which features are unnecessary at this stage. After eliminating these features, what remains is the MVP. Developing an MVP requires the ability to simplify complexity, defining core functions around fundamental needs, first focusing on the key nodes in the critical path, and then refining the detail branches and other auxiliary functions. This ability to simplify complexity is essentially about grasping the rhythm, aligning with the pace of business and user development: launching corresponding product features at the right time, not seeking to be comprehensive, but aiming for just the right fit.

( GTM) Go To Market ###: attract new users, retain old users, manage the community well

Regarding going to market GTM, the main issues to consider are as follows:

1. How do products interact with users?
2. Do users need help learning how to use the product?
3. Is the user frequency high?
4. Where are the products published? Locally, domestically, or internationally?
5. Which channel partners to look for?
6. What restrictions exist for cooperation channels?

In Web2, GTM usually acquires users through marketing methods. In Web3, GTM not only needs to acquire users through marketing methods but also must manage a "community" with richer connotations. The community includes not only users but also developers, investors, and partners, all of whom are stakeholders in a Web3 project. Each excellent Web3 project usually has a strong community. Some projects adhere to the "community-first" principle, some projects have decisions "led by the community," and some projects directly let the "community own" it. Only by continuously meeting user needs and maximizing users' subjective utility of the product can a high-participation, high-quality community be achieved.

In the traditional sense, GTM refers to pushing a product to market after its development is completed, through advertising, product launches, channel training, and other means. Web3 has changed the entire traditional Web2 funnel model. Token rewards provide an alternative solution to the cold start problem. Development teams do not spend real money on traditional marketing to acquire early users; instead, they use token rewards to attract users during the stage when network effects are not yet apparent. Rewarding early contributions from users will attract more new users, who also hope to receive rewards for their contributions. From the perspective of user loyalty, early users in Web3 contribute more to the community than traditional Web2 business development personnel.

1. Acquire new users

Airdrops with task interactions are an important GTM initiative, referring to the distribution of tokens to users based on project direction. Users need to complete certain specific tasks to have the opportunity to receive tokens, and there may sometimes be additional conditions, such as having to hold specific tokens. Incentivizing early users to complete task interactions is a common cold start method for projects, allowing them to acquire the first batch of seed users at a very low cost.

Publishing tasks on a Web3 task interaction platform to guide users in product interaction is a win-win operation. For project teams, it means gaining traffic; for users, they can obtain on-chain activity proofs, receive airdropped tokens, and accumulate platform usage experience during the task interaction process.

2. Increase activity and retention rate

Although token incentives can attract users, they are not enough to increase user stickiness on their own. Since the cryptocurrency market entered a bear market in 2021, the