Author(s): cufee#4126
Editor(s): faevy#6563
Last updated: 26th Oct 2022
Introduction
One of web3's biggest differentiators is the shift of data ownership from a centralized data platform to the user. If you think about it for a moment, you'll realize that companies that monetize their data in some way or use it for marketing and sales need to find other ways to make money. Every business needs capital to thrive. Without them, you wouldn't survive. Staying in business means that you have enough revenue to cover your costs, leaving some surplus. Startups aim not only to survive, but to grow by returning profits to development. If you look at the evolution of Web 1.0 and Web 2.0 business development models, you'll find many success stories. In the 90s, many companies tried the business model of copying and pasting offline content online, but it didn't seem to work. Other companies have tried to treat websites as applications for buying things, interacting with others, getting shares, etc. Successful examples of this are Ebay and Craigslist. Then came the Web 2.0 business model in the 2000s, bringing mobile, social media, and the cloud. Examples of successful companies from this generation include Facebook, Google, Twitter, Whatsapp, MailChimp, Uber and Airbnb. Amazon's famous loop model also proves its worth. A better customer experience means more traffic, more sellers visible on the platform, better selection, and a better customer experience. This loop provided growth and made Amazon one of the world's most valuable companies. Every business needs a sustainable model to exist and thrive. The challenge for many startups is getting enough time to kick off a project and beat the competition. A startup needs more capital to grow aggressively, and revenue alone is usually not enough. So what are the possible solutions? For example, a startup could issue shares like Amazon did, and sell those shares to investors for cash. In this way, it will help you boost your project and grow faster. You can also draw capital from the future into the present by issuing shares. Spending that money wisely can help the company grow faster and sustain itself. This is not only done by companies, but also by governments when the economy is rough. Governments have the ability to increase consumption and spend more to cushion the economic downturn. But if not done wisely, printing more money can lead to inflation, which in turn can lead to hyperinflation, where money loses its value. But by spending money judiciously, we can influence economic growth and improve the welfare of our citizens. Now let's talk about Web 3.0 and the blockchain. Typically, blockchain product founders generate tokens, sell those tokens as fiat currency to generate revenue and sustain product development, and then ship the product into the ecosystem. From this point onwards, the goal is to increase the value of the token to maintain profitability, and typically founders sell more fiat tokens to sustain the project. However, this reduces the supply of tokens and the chances of project success. Is there a better way? The answer is yes! Going back to our Amazon loop model example, we can see that the same principle can be applied to the blockchain. Visionary companies and blockchain projects are taking a similar approach to Amazon and applying it to token distribution, revenue generation, and investment. Instead of paying all the tokens at the beginning of the project, we pay the majority of the tokens over time to workers and partners who add value to the project. This gives teams a longer path to iterate toward Product-Market Fit and more resources to drive growth once Product-Market Fit is achieved. This approach also shows parallels with successful companies and nations. At its core is a loop designed for ecosystem growth. Employees contribute to the growth of the ecosystem, and products and services generate income. A portion of the proceeds will be fed back to the project as network revenue to drive growth and ensure adequate funding in the early stages. Network rewards are returned to employees and partners. This ensures project growth and continued performance based on the experience of the aforementioned leading companies.
web3 is a decentralized new virtual world business model. It enables peer-to-peer value sharing, and ownership sharing, without the need for intermediaries. Take helium for example. Helium is a Wi-Fi network owned by everyone and powered by cryptocurrency. Sign up, connect your device to your router and offer to share extra WiFi capacity with others. In return, you will receive Helium Crypto Tokens. The more you use your personal hotspot, the more tokens you earn and use these to access Wi-Fi services elsewhere. Self-described as "the people's network," Helium decentralizes its Wi-Fi, a service previously provided by major telecom and fiber optic companies.
-DAOs, the future of work: One of web3's most obvious innovations is the DAO (Distributed Autonomous Organization). Every day we see new communities motivated by tokens (aka DAOs) attempting to replace traditional businesses or innovate with something completely new to address many of the world's problems. It is also interesting to consider how this new community-focused business paradigm will affect the workforce. A DAO essentially turns everyone on the web3 into a mix of entrepreneurs, freelancers, directors and investors. Just as web3 provides permissionless and open technology, DAO creates a permissionless and open workforce. My point is that anyone can join and contribute to any community or business (aka DAO). What matters is whether you can add value to the community.
Resumes are a thing of the past as Web3 is all about contributing at the moment to land a role in a company (aka DAO). Instead of 'promising' them to do a good job by showing past performance or training, web3 rewards 'doers'. It is unclear if or how this will lead to more "jobs", wealth, or mass opportunities. It's clear that it continues to remove friction for those willing to put in the effort.
-Social tokens for creators and artists: A few years ago I found an aspiring songwriter and producer. I helped share his songs on the media and brought friends to his live shows. I remember thinking, "I know I'm in the early days of this artist, how can I make money here?" How can I put my head down?” The answer was, I couldn’t. Today he has become a renowned songwriter and producer. If only web3 existed at the time. From the beginning, we should have had the tools to motivate and support each other.
Social tokens issued by individual creators, artists, or anyone with an audience, allow community members to jointly share ownership of jointly created value. A way to encourage fans, followers, or customers to accompany you on your journey as a creator. Participate in business, marketing, PR and revenue management. If this artist had dropped tokens out of the air to their first 5,000 fans, and those tokens shared a percentage of their future earnings/equity, they would soon have my own experienced marketers and various Me would have taken advantage of 4,999 other marketers who have the skills and experience that supports him on his way to becoming a world-renowned music writer and producer. I have shared his music and attended some concerts, but some of the financial benefits and/or some VIP access or voting for his business/music (all made possible by tokens) If I had, I would have done so. I wanted to do more to support his career when he needed it most.
The conventional world (and the gatekeepers of Web 2.0) can keep creators from accessing the true power of their fans and communities. They have a tradition of throwing most of their earnings/equity/power into the corporate world in hopes of support and notoriety, instead of taking advantage of loyal early fans who support them without financial incentives. We are forced to stick to that path.
web3, on the other hand, gives you the tools to tap into your fans and viewers long before you have the money to build a team or strike a deal with a company. But social tokens are more than just a means to achieve equality. You can provide:
Seamless access to IRL shows and online events
Governance to manage the careers of young artists
The internal currency that pays people who support promotions, content, partnerships, etc.
Rewards/rewards for the most loyal and devoted fans Point system
discounts on merchandise, tickets and more
The possibilities that web3 offers creators are endless, not even using his NFTs for royalties, intellectual property and ownership of anything physical/digital the artist creates.
-NFT membership DAOs: Everyone reading this article has some form of membership. Favorite newsletters, Amazon Prime, internet providers, iCloud, and more. The subscription model and membership have become one of his most profitable business models today. web3 has already taken the subscription business model and taken it to a whole different level. The problem with the Web2 model is that when you pay for a subscription, it usually only works on that one platform, with little to no interoperability between other platforms. Ever run a paid newsletter on Substack or embed a paid community on Facebook or another social platform? It's a horrible experience and almost impossible. NFTs can make this process seamless and deliver better value to customers. With a variety of tools, you can now productize NFTs as subscriptions and use those NFTs to seamlessly control access to content on any platform through Web3 interoperability. Additionally, NFTs can now be used to create experiences and opportunities that are simply not possible in the Web2 world.
sources:
https://www.livemint.com/opinion/columns/web3-is-the-business-model-of-a-decentralized-new-virtual-world/amp-11654791974780.html
https://www.exodus.com/news/web3-is-transforming-business-models/