Web3 Bootstrapping Strategies – Part 1

Leveraging Creative Toolsets & Composable Environments

The web2 bootstrapping playbook – extensively covered in my books Platform Revolution and  Platform Scale – was focused on enabling a platform’s core interactions and building out network effects. 

Web3 bootstrapping involves many of the same mechanics that scaled Web2 networks. However, bootstrapping Web3 networks requires us to factor in five key differences.

I cover these – and many other topics on building in Web3- in detail in the recently launched Web3 Builders Playbook.

DOWNLOAD THE WEB3 PLAYBOOK

Web3 bootstrapping is poorly understood and strategies to kickstart decentralized ecosystems are still evolving. Understanding these five factors will help you strategize more effectively as you look to build in Web3. We look at two of these below.

Let’s dive right in!

Web2: Creators onboarded on creative toolsets

Some of the largest Web2 platforms built out network effects by focusing entirely on creators and providing them a creative toolset. As producers created and shared content and other products using these creative tools, consumers came on board to consume this content and some of them, in turn, became creators, driving network effects.

Users initially used Instagram to take a picture and apply one of the many Instagram filters. These filters, as well as the simple three-step workflow, reduced creative friction and encouraged users to become content creators. Instagram users were prompted to share pictures on Facebook as part of the creation workflow. As the pictures spread across Facebook, Facebook users came onto Instagram as consumers, and started creating in turn.

Collaboration tools like Figma and Canva, similarly use a creative toolset to onboard creators who then onboard their collaboration networks.

Web3: Creators build in composable environments

Web3 composability allows developers to leverage existing modular programs and build on top of them. This provides an additional tool in our bootstrapping arsenal.

In addition to benefiting from creative toolsets provided by the platform, Web3 creators can engage further as part of a larger composable environment, working with other creators, building on top of other creations, and benefiting not just from platform resources and their own ingenuity, but the innovation of all other creators in the ecosystem.

On most Web2 platforms, creators had limited creative benefits from the participation of other creators. Web2 platforms benefit from positive indirect network effects (i.e. more producers attract more consumers and vice versa) but direct network effects for creators are weak or negative (e.g. more creators may mean greater competition for the same consumers, leading to lower value for every creator).

On the other hand, Web3 platforms benefit from positive direct network effects because of the composability of creation environments.

Every creator benefits from the creations of every other creator, all of whom constantly contribute to an ever growing library of components.

Composability allows dApp (decentralized applications) developers to leverage existing code and interoperate across an entire ecosystem of dApps.

Composable content

Composability isn’t limited to product development. For instance, NFT-based ownership and value accrual creates the perfect conditions for composability across a host of creative environments.

For instance, Tally Labs’ novel ‘Bored and Dangerous’ builds on the popularity of the Bored Apes Yacht Club (BAYC) and the larger Bored Apes universe to allow holders of Ape NFTS to submit story contributions based on their characters. In doing so, these NFT holders license their IP to Tally Lab and can participate in sharing 50% of net profits from the book.

Getting composability wrong

Composability is a necessary weapon in our Web3 bootstrapping arsenal but not sufficient. Communities also need guiding narratives and shaping direction. Composability without direction may not yield the desired outcome.

For instance, the Loot Project – self-described as “an on-chain ecosystem of interconnected stories, lore, games, art, and multimedia” – illustrates the limits of ecosystem innovation in composable environments.

Loot bags – randomised prompts for adventure gear – are issued as NFTs and innovation is left entirely to the ecosystem. There is absolutely no standalone value or utility in owning a loot bag.  However, loot bags are composable and any innovation around these NFTs work together and scale out value in the ecosystem. Instead of building a game and allowing users to build in-game adventure gear, Loot started as prompts for adventure gear with the hopr of relying on its creator community to build gaming worlds and other use cases around it, constantly increasing its utility.

The Loot ecosystem has attracted various forms of innovation. Creators visualise the adventure gear by drawing pictures of Loot bags, create ‘guilds’ based on the items in Loot bags, allow unbundling of items from the Loot bag for individual use, and even set up storefronts to trade these items. However, the original vision of building out gaming worlds bottom up remains unfulfilled. Games require intricate game mechanics and world building and bottom-up innovation may not be sufficient to build out entire gaming worlds around the initial text prompts