Web3 User Rise Strategy: Achieving Long-term Sustainable Development

In the Web3 space, we often see some projects achieve rapid rise in a short period, but then users quickly churn, ultimately falling into a "death spiral" and failing. Unlike traditional fields, the impact of the cryptocurrency market on Web3 projects is more direct and significant: during a bull market, there are blossoms everywhere, while a bear market eliminates most projects. These failed projects usually share a common characteristic: during market downturns, the project token price continues to fall, leading to ineffective incentives or even harming user interests, which ultimately results in serious user churn.

User growth is a long-term goal of product development, with the core being to build a healthy interaction system between the product and users. Through continuous iteration, it aims to gain market share and achieve steady rise in user scale and value. Data from the entire year of 2022 shows that the number of active addresses for mainstream decentralized applications such as collectibles, DeFi, game finance, and trading platforms have all declined to varying degrees, while social media applications have shown a rapid growth trend.

The basic idea of Web3 user rise

Although the cyclical fluctuations of the crypto market have a huge impact on user增长, entrepreneurs should not be bound by macro factors. The primary task of user增长 is to find the "market" that matches the product, which is the "M" in product-market fit (PMF). It is important to focus on niche markets that fit the characteristics and resources of the product itself, rather than striving to satisfy the entire large market. For Chinese entrepreneurs, giving up 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 concept worth adopting. It emphasizes launching basic functions that can meet the minimum business loop of core scenarios, and then iterating and optimizing based on market feedback. Developers should focus on solving the most urgent single problem for users, simplifying the usage process, and building an MVP product that aligns with PMF. In this process, it is often necessary to say "no" to many seemingly good ideas.

Bringing the PMF-compliant MVP to market is known as "go-to-market" strategy GTM(. The goal of GTM is to acquire and retain users, usually following the "funnel model": from top customer acquisition to bottom user conversion and retention, it is a process where the number of users gradually decreases.

Compared to traditional Web2 projects, the GTM strategy of Web3 is richer in connotation. "Community" is a unique area of Web3 GTM and an important traffic pool for user growth. The GTM strategy of Web3 projects is often accompanied by token-based community incentive measures and corresponding referral programs, achieving growth by incentivizing old users to refer new users.

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

When determining product-market fit, it is necessary to consider the following key questions:

• Why develop this product/feature?
• Can the product/function meet market demand?
• Why choose to develop this product/feature now instead of later?

Research shows that a lack of market demand is the primary reason for the failure of entrepreneurial projects, accounting for as much as 42%. Therefore, developers should think deeply about these issues during the product planning stage, rather than waiting until the product is about to launch to consider the market. People tend to overlook necessary market research due to personal biases.

Finding PMF is a cyclical iterative process that requires continuous feedback collection and validation to gradually achieve product-market fit. The specific steps include:

1. Identify target market segments and user groups, and discover unmet needs.
2. Formulate product strategy, clarify value proposition, highlight differentiated advantages and core competitiveness.
3. Select MVP feature set and conduct sufficient user demand testing.

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) Minimum Viable Product ### MVP (: rapid iteration, avoiding resource waste

When formulating the MVP strategy, the following issues need to be considered:

• What are the core components of the product/function?
• What specific problems can it solve?
• What is the future iteration plan?
• What is the core value of the product/function?

MVP emphasizes developing a usable product that highlights the project's key points with minimal cost and in the shortest time. Although the functionality is minimal, it can quickly validate ideas. Adopting the MVP approach can avoid over-developing peripheral or auxiliary functions in the initial version, thus focusing on the most important aspects.

The purpose of an MVP is to quickly launch to the market to test feasibility, rather than pursuing perfection. By validating market demand, the direction is continuously adjusted, ultimately iterating a product with market space and revenue potential. In fact, an MVP can even be a meticulously designed testnet product to avoid developing expensive products that are not recognized by the market.

Developers should deliver the MVP to the target user group for testing, collect feedback to validate initial assumptions. If the direction is correct, quickly increase product exposure and allow seed users to start using the product.

In internal product meetings, we should discuss which features can be temporarily cut. Define key functions around core requirements, focus on the main path first, and then consider detail branches and auxiliary functions. This simplification capability is essentially about grasping the rhythm of business and user development, and launching appropriate product features at the right time.

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) Going to market ### GTM (: Attract new users and retain old ones, manage the community with care.

When formulating a GTM strategy, it is necessary to consider the following questions:

• How do products interact with users?
• Do you need help teaching users how to use the product?
• How frequently do users use it?
• In which markets is the product released?
• Which channels to cooperate with?
• Are there any restrictions on cooperation channels?

The GTM strategy of Web3 not only includes acquiring users but also involves managing a more enriched "community". Community members include stakeholders such as users, developers, investors, and partners. Excellent Web3 projects usually have a strong community foundation. Only by continuously meeting user needs can a highly engaged and high-quality community be established.

Web3 has changed the traditional user acquisition model. Token rewards provide a new way to address the cold start problem. Project teams no longer invest all their funds in traditional marketing, but instead use token rewards to attract users while network effects have yet to manifest. Rewarding early contributions can attract more new users to join, who also hope to earn rewards through their contributions. From the perspective of user loyalty, early users of Web3 often contribute to the community in ways that are more critical than traditional BD personnel.

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1. Acquire new users

Task interactive airdrops are an important GTM strategy, where tokens are distributed to users who complete specific tasks in the project direction, sometimes with additional conditions. This method can acquire the first batch of seed users at a low cost.

Publishing tasks on the Web3 task interaction platform and guiding users to participate in product interactions is a win-win move. The project side gains traffic, users receive on-chain activity proof and token rewards, while also accumulating usage experience.

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2. Increase activity and retention rate

Relying solely on token incentives is insufficient to increase user stickiness. Since the crypto market entered a bear market in 2021, "users come quickly but leave even faster" has become a major challenge. Project teams should focus more on how to convert first-time users into loyal users, continuously optimize products, carry out community activities, and provide a better user experience. Holding AMAs on Twitter Space, Discord, and Telegram is a common method to enhance community activity and engagement.

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3. Recommendations and Self-Propagation

Self-propagation refers to promoting a product to more new users through existing users. If the user experience is good, they will spontaneously share in the community or recommend to friends, which is the lowest cost and widest coverage method for acquiring customers. The project team needs to design an incentive mechanism, which can use token rewards or physical gifts. At the same time, it is necessary to analyze user on-chain behavior data to improve conversion rates and adjust operational strategies.

The referral program breaks down the costs originally intended for advertising into rewards for existing users who refer new users and rewards for new user registrations. This approach significantly reduces customer acquisition costs and is more efficient than directly purchasing keywords or information flow ads. Although it is not an innovative method, it can bring lasting and effective conversion results for the project.

Acquiring new users is the traffic entry point, improving retention rates relies on product value, and recommendations and self-propagation amplify the power of the community. These three steps aim to create revenue because only with an increase in users can scalable profitability be achieved.

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