2022 is about to be another banner year in venture capital investment in the crypto, block chainand web3 space – investors poured nearly $18 billion in space in the first half of the year only. This significant influx of capital funds extraordinary innovation. As brands and businesses continue to see the value of digital ownership and identity (which are fundamentals of web3), they will need to develop strong alliances to realize their web3 ambitions. They will need to create an ecosystem of strategic partners that supports business activities in functional areas such as marketing, treasury, financial reports, technologyand operationsand they will need to perform a significant amount of due diligence and joint business planning with these fast-growing newcomers.
To Vayner3 (my employer, a leading web3 consultancy), we help brands and businesses navigate the emerging world of web3, from strategy to creation to execution. We also help forge these types of strategic alliances between Fortune 500 organizations, established technology platforms and emerging start-ups. Our role is technology and blockchain independent; we help our clients envision the right solutions for their business strategies, existing technology stacks and web3 ambitions. To that end, we recently held our first Web3 Demo Daywhich was an eight-hour live presentation of 50 interesting Web3 organizations and their offerings.
In this article, I want to share the lessons I learned throughout the day and my evolving views on how companies should think about building strategic alliances in the Web3 space. The opinions expressed here are my own, not those of my employer, and I am not encouraged or interested in promoting any specific offer that I might mention here. I’m just excited about the ridiculous amount of innovation happening in this corner of the internet, and hope this is a helpful primer on how companies can consider training their new tech stacks for Web3.
Web3 growth areas
- Creative product development.
- Construction of a digital world.
- Marketplace and platform.
- Block chain.
- Typing technology.
- Web tools3.
“Work to do” for brands entering the Web3
While working with leaders of global organizations looking for Web3 opportunities, I discovered the need to create new mental models for “work to doin Web3. In more traditional digital marketing, this notion is well understood: if I want to orchestrate my social media, I might consider platforms like Hootsuite; for email campaigns, I might consider MailChimp; consumers, perhaps Qualtrics. In web3, these “to-do’s” are new – web3 allows organizations to develop new products (e.g. NFTs), interact with consumers in new ways (e.g. example, in immersive digital worlds) and to rely on new technologies and infrastructures (e.g. blockchain).
As the famous saying goes, “All patterns are wrong, but some are useful.” I present here a quick and useful way to interpret the more than 50 partners that we presented during the Web3 Demo Day and not a perfectly designed model for each Web3 technology solution. Great new partners are logging on every week, and I’m still refining my way of thinking about real-time space.
Creative product development
Companies entering web3 are bringing their intellectual property into new digital formats, amplifying their existing brand priorities and engagements, creating genuine new products and enhancing their creative storytelling. To execute, they work closely with emerging creative partners. Round21, DressXand IYK each give their unique twist to the notion of “phygital” — the mix of digital and physical experiences and products. Tafi focuses on building digital characters, and Infinite Items brings NFTs into your home decor. The sky is the limit for creative product development on the Web3!
Building a digital world
In this article I will try not to approach the infamous “m” wordbut I will say that while this is just the beginning, immersive digital worlds continue to impress and engage consumers in new ways. ZedRun, a digital horse racing experience, has continued to evolve and innovate since its peak last year. Digital galleries like OnCyber and immersive mobile-first social platforms like a place offer brands and consumers new ways to explore, interact and connect. Design studios like Last installment help businesses create digital and experiential activations. And, of course, tech giants like Meta are testing new immersive Web3 experiences across their entire product portfolio with early enterprise partnerships. All of these companies are giving brands the ability to tell their stories in new mediums and engage consumers in the digital places of the future.
Marketplace and platform
Brands often want more options and control over the consumer experience in the web3, which is often described as clumsy and similar to dial-up internet in 1996. While broadly true – it’s a bit clunky today – a lot of that venture capital I mentioned earlier is funding organizations that are create cleaner user experiences. Often, this work happens at the platform or marketplace level. CoinbaseNFT recently launched its NFT beta platform, which features a sleek user interface and new social features. Organized platforms like super rare to help digital art enthusiasts discover high-calibre artists more easily. marketplaces like One of chose specific areas of interest (sports, music and lifestyle in this case) and create familiar consumer experiences tailored to specific target audiences with web3 technology.
Choosing the right blockchain is an important first step for a newcomer to the web3. Companies may consider existing developer ecosystems, security, environmental impact, and transaction costs as key factors in choosing one over the other. As Ethereumthe leading chain of NFTs, is going through major technological upgrades (“Fusionis about to happen here in the very near future), the prominence of layer two solutions built on top of Ethereum’s layer one will continue. These L2s enable high speeds, higher throughput, and reduced costs while maintaining the security of a decentralized L1. Polygon recently signed partnerships with disney and instagramwhile ImmutableX seems to be in the lead video game industry.
As Fortune 500 companies seek to accept, exchange, and transact digital assets, they need enterprise-grade finance partners who facilitate, compile financial reports, and enable robust tax, treasury, and governance processes. Our three Demo Day participants in this category — firewall, bitpayand register — all offer a number of services tried and tested by CFOs, legal advisors and their leading teams.
NFT are now commonly regarded as digital art, in-game items, or access passes, but under the hood they involve quite a bit of computer code. Built on ‘smart contract‘, NFTs have to start somewhere, and there are a host of minting platforms that support this step of the process for organizations. Some, like Collector, are specifically designed for self-service use by artists and builders. Others, like Mojito and Selling power NFT, are designed as supporting back-end tools for businesses to deliver personalized and branded customer experiences. These partners are often judged on the robustness of their contracts, the flexibility of their solutions, their integrations, their user-friendliness and their robust support.
Ah, save the best for last. I’m especially excited about this catch-all category, because I think a lot of the new tools and use cases for Web3 will emerge from these kinds of technical innovators. As some examples: Hang builds specific tools for web3 loyalty programs, Premint is experimenting with new chain raffles and allowlists, and Token proof enables verified accreditation for events, experiences and e-commerce. Brands that want to be category leaders rather than quick followers will want to learn about the innovative solutions offered by top-tier manufacturers like these.
Prepare for enterprise for Web3
Organizations often need helpful guidance in selecting the right Web3 partners. This is a nascent ecosystem, the tasks at hand often involve developing new processes and capabilities within your organization, and it can feel a lot more like venture capital than traditional vendor sourcing. Finally, I will share here a framework developed by my colleague, Naimul Huqour SVP of Operations, in how Vayner3 helps our customers do their due diligence and identify the right partners to launch their web3 journey.