Finding Community on the New Internet
Humans are social creatures. As we have shifted to remote work, we have struggled to replicate the same sense of belonging we had pre-pandemic.
Finding community on the internet takes many different forms….a parenting group on Facebook, an Austin friends WhatsApp thread, an Instagram group that shares extreme skiing videos or a channel on Reddit for taking care of roses. Identities that I share with these communities, on multiple platforms, can be very different depending on if its a gardening group or my Minnesota Vikings football thread.
The user experience trying to manage multiple identities across these products is fragmented and disjointed due to conflicting incentives of the web2 companies that host these interactions.
“Having one identity is a core principle for Facebook, which is great for advertising if nothing else, but at odds with the desire of many to be different parts of themselves to different people in different contexts.”
We have gone from 1 identity on Facebook, used to connect with immediate family and friends, to many different products which help us globally connect with influencers/entertainers/information.
TikTok, Twitter and YouTube helps users efficiently find great global content. People still spend time sifting through a lot of noise to find communities that are fits each of the niches they care about. “Top 10” lists help with finding a fun bar, a new restaurant or even the best vacuum but underlying monetization motives can break long term trust. Expert curators, who can monetize outside of sponsorships and ads, can help us find signal in the noise.
“Curators are the new Google. What started as a well-intentioned way to organize the world’s information has turned into a business focusing most of its resources on monetizing clicks to support advertisers rather than focusing on the search experience for people.” -Sari Azout
The evolution of social interactions through the internet are as follows
v1 = connecting friends and family via the internet and
v2 = algorithmically-surfaced global content → interest-defined trusted groups
v3 = interest defined trusted curators → trustless groups with membership denominated by holding a Non-Fungible Token (NFT)
There is a new wave of entrepreneurs that are focused on helping facilitate curated special interest groups which are both trustless and decentralized. Web3 has a new arsenal of tools used to build companies focused on community which are a step-change from the status-quo.
Does this industry have staying power? Is this a fad?
We are still in the very early days in the adoption of this new technology. NFTs have had a record breaking year so far. The next wave of adopters are coming from channels like:
- Coinbases recently announced NFT marketplace
- Coinbase’s recently announced NBA deal
- Bitcoin Futures ETF
- FTX.US Launches Collectibles Arm
Using Dune Analytics, and a dashboard built by Richard Chen, we can see that purchase volume on one of the most popular NFT marketplaces (OpenSea) crossed the $3B mark in August this year.
The volume, admittedly with a little bit of hysteria and FOMO, brought in a lot of new users. OpenSea, as of 10/18/21, had ~566k registered users who have made at least one transaction.
I don't want to sugar coat where web3 is in terms of usability. There are plenty of issues such as:
- Learning how to buy crypto, transferring it to a wallet, and then buying an NFT is confusing, non-intuitive and filled with pitfalls and scammers
- Transactions are slow and costly. Just conducting a single transaction can cost hundreds of dollars in “gas” if you are using Ethereum.
- The User Experience is either built for the technical user, or has been created as an afterthought. Early founders have dedicated their time solving technical challenges related to security and speed.
- Tough for non-technical creators to participate and launch successful projects (building the community, leveraging technology to its full potential on the art, flawless release process)
In spite of all these issues creators like Pak, and his project Lost Poets, are pushing the boundaries of what we have thought possible in art and entertainment. His audience is spellbound by his communication cadence, his puzzles and the art underlying the performance. His partnership with Manifold.xyz is blazing the trail for a generation of upcoming artists.
What’s next?
NFTs and DeFi have all the attention right now. There will be a lot of winners, and more losers, by attempting to pick the winning NFT projects and tokens.
Smart investors will deploy a pick and shovel play focused on the web3 primitives (base critical technology) that enable better communities to take advantage of this new paradigm. The technology critical to this space are
- No-code NFT creation and mechanics — Manifold.xyz and Rare Circles
- Decentralized identity/wallet — Metamask, Phantom, Rainbow
- DAO creation — DaoHaus and Aragon
Other notable enabling tech— Marketplace (OpenSea and Coinbase), Communication (Discord and XMTP), Identity (TBD best applications)
Creators, Capital (aka Whales) and Companies
These 3 forces will increasingly combine forces to develop the above primitives together. Creators will inform their communities about emerging trends, useful technology, and other up and coming creators. Whales will fund new ideas and creators, galvanize other whales around the best projects, and professionalize the capital allocation in the space. Web3 Tech Companies will support creators who will help shape and inform their future projects. Product development will go hand in hand with the whales (and institutional money like a16z’s crypto fund) closely watching, and backing the best tech.
This space is technically challenging, fragmented and socially/culturally under the radar . If you are reading this you are still early. Drop me a note if you are investing in this space and want to talk strategy, are a founder looking for product/strategy input or are a NFT enthusiast and want to talk about the best projects.
*Final note — If you want to see what a blue chip NFT project looks like, check out CloneX by RTFKT (called them out in August here). Check out the website, join their Discord and enjoy the community.
WAGMI
