Why is blockchain better and why it won’t stop growing
Blockchain is a set of technology protocols that make things cheaper, faster, more secure, more convenient and open up the potential for brand new products and services. It has growing pains and is not yet achieving all of these benefits, but it is getting there.
The application of blockchain that has been an unmitigated disaster
There are many, many applications of blockchain technology. The first and so far the largest application is as an independent financial network from which to transfer value. We got cryptocurrencies out of this, including exchanges to buy and sell.
This application of blockchain has been an unmitigated disaster, as we are now seeing with the multiple high profile failures of exchanges, platforms and investment groups in the space. The reason is not that blockchain technology is not sound. It is the application of it through the use of leverage that is getting participants into trouble.
There is tons of pain going on now, with investors loosing billions of dollars, and I foresee a lot more pain to clean out the leverage and bad actors. But we really need this. The bull run in crypto from 2020 to 2022 was way overheated, as we are now seeing. See this chart below.
Was this the mother of all bubbles? At least in recent memory it seems that way.
I think blockchain is experiencing similar to the 2000-2002 burst, when we had the first tech bubble from the nascent days of the Internet.
Take Amazon. It went public and saw its stock price reach short of $100, then crashed to $10, then took almost a decade to get back to $100, then in the decade following, went on to $3500 in unrelenting growth.
I think we will see the same here with major blockchain projects, but things are moving faster, so I am prepared for that time to be cut in half – 5 years to reach prior all time highs, then another 5 years to see unrelenting growth that pushes the space to new highs.
Web3 as another application of blockchain technology
Web3, which is my focus, is another application of blockchain technology. And it is doing just fine.
Sure, there is some blowback because web3 uses cryptocurrency as the currency with which to run transactions and transfer value, and there is reputation risk that is turning people away, but I don’t see web3 slowing down as a result.
Web3’s first major mass market activations
Most recently, we are seeing the first big mass market moves in web3 coming from Nike and Starbucks.
Nike has absolutely been killing it in revenue and activity in web3 since 2021, but they have been focused on web3 early adopters. Now, with the launch of their .SWOOSH platform, they are taking their learnings and beginning mass market introductions.
Same with Starbucks, except their first application of web3 is going straight to mass market by transforming their loyalty program with web3, which has more than 24 million members.
As of right now, I have logged in my database consumer brand web3 activities from 226 brands, most of them major brands. Here is the list
The One Formula For Consumer Brand Success
I’ve been building consumer brands since the late 1990’s, giving me pretty good history and perspective on the major technology and marketing paradigms that have transpired over that time period.
For the most part in that history, captive customers and brand staying power comes down to distribution and brand. You can develop a revolutionary product that sets you apart from competitors that captures attention, and see explosive growth, but eventually they will catch up. That is why distribution and brand are so important.
But distribution and brand are just rails. What in the end really creates a captive customer? I think the alpha comes down to experiences. While products solve problems and satisfy needs, it is better if that product can create an experience.
Why experiences? Because experiences create feelings which people remember. Positive feelings out of an experience creates greater emotional impact, which ends up tying the customer to the product and the brand behind it.
There is a saying: “People will forget what you said people will forget what you did but people will never forget how you made them feel”.
Web3 is the next technology and marketing paradigm that offers brands better tools to into creating better experiences for their customers.
So, turning this on its head and simplifying: use web3 tools to create unique and better experiences for your customers, which ties them to your company, helping you build distribution and brand, which = captive customers (higher CLTV), which = lower marketing costs, which = staying power and profits.
I fleshed this out in greater detail in this doc, titled What is Web3 and Why Important For Consumer Brands
Major Updates to my content and tools
Since my last post and email in August 2022, there have been major updates to my Web3 For Consumer Brands section of my website:
- What is Web3 and Why Important For Consumer Brands – I added a ton to this public document, especially to the section How is Web3 Important For Consumer Brands;
- Web3 roadmap published. I have published a detailed roadmap that outlines what a company needs to think about, research and do in order to add web3 to their operations, along with supporting tools and datasets. The general roadmap is here.
- All of the new tools, content and datasets that I published are in web3 for consumer brands and are restricted for use by companies in the outdoor vertical. I have a business idea targeting this vertical with an online platform and knowledgebase that brings companies together and organizes them to create web3 operating best practices. Please read the detailed FAQs around this project here and if you are an outdoor brand, please contact me for access.
Request For Help
In context of my project for the consumer brand outdoor vertical, if anyone has contacts to brands in the outdoor industry, I would be grateful for referrals. Please reply back to this email or if you are reading this as a website post, please contact me here.