Editor’s note: This is the second in a three-part series on what brands should do before entering Web3.
Brands building Web3 strategies understand by now that this new iteration of the internet brings a host of technical challenges. In my experience, the best way to develop tech savviness around Web3 is to participate first and build second.
Brand participation in Web3 could include everything from getting a wallet (MetaMask, Rainbow, Phantom) to buying a nonfungible token or joining a Discord or Telegram community. Most critically, a participation-first strategy helps brands understand the risk factors.
By participating cautiously, brands will learn that these ecosystems have new methods of identification. Where profiles with email addresses were primary in Web2, a person’s main identifier in Web3 is their wallet ID. Brands must be able to manage this data to sell, service and market to their new customers. They’ll learn how to do that by participating.
One big reason for careful participation is the permanence of Web3. Remember, the blockchain is forever—it’s designed to be immutable as a security feature.
This is a new technical landscape, and getting a solid education will serve you well. There is a lot of information out there you can consume; however, you need to participate. This means you need to join a community, be active in their Discord, get a wallet, buy an NFT, sell it and follow the project on Twitter. Being a customer will teach you how to create a great customer experience.
In working with some of the leading minds in the brand marketing ecosystem, we’ve identified the most important factors brands should consider before entering Web3.
To be on the frontier of the internet is to be in flux: NFT prices, cryptocurrency markets and, of course, the immense amount of noise coming from the hypebeasts and the haters. Consumers have mixed reactions to Web3, and some have even begun to push back on brands entering the space. Be aware of this reputation risk and stay away from the jargon that can trigger resistance.
Rather than an NFT, for example, NBA’s Top Shot calls them “digital collectibles,” while StudioDAO is selling “special tickets.” The old rule of technology remains the same: Focus on the value to the consumer, not the merits of the technology.
Lawmakers are also still figuring out the Web3 space. Regulations are imminent, as most states and countries currently have a variety of laws drafted to focus on consumer protection, tax and data privacy. Brands should expect Web3-related regulation in the coming years. Have conversations with your legal and financial teams now and in the future to understand the risks so you can mitigate them appropriately.
If you are going to sell NFTs in any form, you must understand that you are creating software and approach the venture like you would any other software product. This means you will need a full team to create, test and deploy.
If you plan to leverage an agency to run your launch, vet them to ensure they can handle the enterprise-scale architecture. Many brands have skipped quality testing their smart contracts and minting processes before going live, only to face disastrous outcomes. In addition to your staff, consider the processes you use to go to market with your NFTs.
We are in the early days, which means a lot of testing is yet to be done. Brands should follow a test-and-learn process of building. Whether your team or an agency is going to build your product, follow software production best practices and have a full team on standby on drop day to handle any issues.
Web3 represents a significant technological change, and brands need to think carefully about how to proceed. Learn about the technology before committing to major changes, prepare for volatility (and the likelihood of regulatory changes) and remember that selling NFTs is akin to selling software.
However, technology isn’t the only thing Web3 will change: As brands prepare to explore this new internet frontier, it’s also important to think about the new cultural ethos and ethical considerations you’ll face.