Web3 User Rise Strategy: How to Build a Successful Community Operation

In the Web3 space, many projects experience a rapid rise in the short term, only to quickly lose users and ultimately fall into a "death spiral." Unlike traditional sectors, the impact of the cryptocurrency market on Web3 projects is more direct and significant. Many failed projects share a common characteristic: in a bear market environment, token prices continue to decline, leading to ineffective incentives and even harming user interests, ultimately resulting in a large loss of users.

User growth is a long-term goal of the product, focusing on building a positive interaction system between the product and users, obtaining market share through continuous iteration, and achieving stable growth in user scale and value. In 2022, aside from social media applications, the number of active users for other mainstream dApps saw varying degrees of decline.

The Basic Approach to Web3 User Rise

Although market cycles have a significant impact on user growth, entrepreneurs should not be constrained by them. The primary task of user growth is to find a niche market that matches the product, namely the "M" in PMF(Product Market Fit). The appropriate target market should be positioned based on product characteristics and resource advantages, rather than blindly pursuing the entire large market. For Chinese entrepreneurs, abandoning the familiar Chinese-speaking community and user base is unwise, as it is equivalent to giving up one-third of the world's potential user base.

In product development, the minimum viable product ( MVP ) is a great concept. It emphasizes launching basic functions first to satisfy the minimum business loop of core scenarios, and then continuously iterating and optimizing based on market feedback. Developers should focus on solving the users' most pressing "one" problem, simplifying the usage process, and building an MVP product that aligns with PMF. In this process, it often requires saying "no" to many seemingly good ideas.

If PMF is the state of product-market fit, then MVP is an effective way to achieve PMF. Pushing an MVP that meets PMF to the market is the GTM(Go To Market) strategy. The goal of GTM is to acquire and retain users, typically following the "funnel model": from the top of customer acquisition to the bottom of user conversion and retention, it is a process where the number of users gradually decreases.

The GTM strategy of Web3 projects is more diverse compared to traditional Web2 projects. "Community" is a unique area of Web3 GTM and is an important traffic pool for user growth. The GTM strategy of Web3 often comes with token-based community incentive measures, as well as corresponding referral programs, where old users are rewarded with tokens for referring new users, and new users may also receive rewards as a result.

PMF: Identify the market, meet real needs

Regarding product market fit ( PMF ), it is necessary to think about the following key questions:

• Why develop this product/feature?
• Can the product/function meet market demand?
• Why launch 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 consider these issues during the product planning phase, rather than waiting until the product is about to launch to start looking for the market. People often overlook the necessary market research work in the early stages due to their own biases.

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

1. Identify the niche market, target the user group, and discover unmet needs.
2. Formulate product strategy, clarify value proposition, highlight differentiated advantages and core competencies.
3. Selected MVP feature set, completed user demand testing

MVP: Rapid iteration, avoiding detours

The core of the Minimum Viable Product ( MVP ) is to develop a basic product that showcases the highlights of the project with the lowest cost and shortest time. Although the functionality is simple, it can quickly validate ideas. The purpose of the MVP is to quickly launch in the market to test feasibility, rather than pursuing perfection. Through market demand validation, continuously adjusting the direction, and ultimately iterating to produce a product with market prospects and profitability.

When developing the MVP, the following issues need to be considered:

• What are the core elements that make up 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 development requires the ability to simplify complexity, defining core functions around fundamental needs, focusing first on key nodes in the critical path, and then considering detailed branches and auxiliary functions. This ability is essentially the capability to grasp the rhythm of business and user development: launching appropriate functions at the right time, not seeking quantity but accuracy.

GTM: Attract new users and retain existing ones, manage the community

Regarding the market entry strategy (GTM), the main questions to consider are:

• How do products interact with users?
• Do users need help learning to use the product?
• How often do users use it?
• Where is the product released? Locally, domestically, or internationally?
• Which channels to cooperate with?
• Are there any restrictions on cooperation channels?

In Web3, GTM is not only about acquiring users through marketing, but more importantly, about managing a rich "community". The community includes various stakeholders such as users, developers, investors, and partners. Only by continuously meeting user needs can one have a highly engaged and high-quality community.

Web3 has changed the traditional user acquisition model. Token rewards provide a new approach to solving the cold start problem. Project teams are not investing funds in traditional marketing but are using token rewards to attract users in the early stages where network effects are not yet evident. This approach can attract more new users, who also hope to earn rewards through their contributions. From the perspective of user loyalty, early Web3 users' contributions to the community are more important than those of traditional Web2 business development personnel.

The key points of the GTM strategy include:

1. Acquire new users

   • Airdrop activity through task interaction
   • Use the Web3 task platform to publish tasks to guide users to participate

2. Increase activity and retention rate

   • Optimize product experience
   • Conduct community activities ( such as AMA )

3. Recommendation and Self-Propagation

   • Design incentive mechanisms to encourage users to share
   • Analyze user behavior data to optimize operational strategies

Acquiring new users is the traffic entry point, improving retention relies on product value, and recommendations and self-propagation amplify the community effect. These three steps are all aimed at achieving scalable profitability. According to recent data, there are significant differences in the profitability of different types of dApps, and project parties need to choose appropriate business models and operational strategies based on their positioning.