Web3 Blight - Chase Consumers NOT Investors
Muse #3 arriving in full force - something clicked in my head the other day. Perhaps it was the rotation through multiple telegram chats and seeing a common pattern. Community after community:
“…the team needs need to market better to investors…our narrative is too weak….”
At the heart of this harsh feedback is a stark reality.
People are more poor now than they were 3 years ago. Curious retail folks that ventured into alt coin land have been utterly DECIMATED. Average retail investors are stressed about their car payments, grocery bill, and mortgages.
Simply put, the number of people that can climb up the risk curve and venture out into crypto land is an ever shrinking # of individuals. High interest rates (6-7%) have stymied the ability of younger generations to obtain housing. Depression and anxiety are at an all time high in the United States within younger generations.
Enter crypto projects.
They raised on the glut of liquidity in 2021, and since then have spent the vast majority of their time, money, and energy chasing investors instead of serving consumers in a relevant way. Our primary offering as an industry has been: “…you can make money…”
Believe it or not, what the average consumer wants right now is ways to save money. The purchasing power of the dollar is receding, while the battle of inflation remains brutally predictable (inflate away debt, leverage the middle class to climb out of liquidity crunches). Ironically, crypto possesses many of the tools that can bridge back to everyday folks.
Permissionless markets that can earn yield on your dollars (lending/borrowing). Flatcoins (such as SILK) that are inflation resistant. Stores of value like BTC that over the long whole have properties that the dollar simply cannot promise you.
And yet, investment after investment + builder after builder chases investors. “Please buy my coin…” or “…the users will come back once interest rates drop…” or “…once institutional money pumps bitcoin surely the users will come back…”
This is the crux of what is wrong with this industry. We are waiting for dopamine addled risk takers to know and appreciate the products that have been built instead of going directly to consumers with the products they need. No wonder a large swathe of investors have entered into a stage of crypto nihilism that treats everyone and everything as a game of entry and exit liquidity.
As they should. Valuations & PE ratios for crypto projects are largely detached from cash flows and the reality of # of consumers being served. We are a bubble of risk takers praying the technology will have applications that will eventually serve consumers. But everyone is afraid to do it because gluts of market participants continues to reward narratives over real world adoption.
This era is coming to a close. The industry is undergoing a painful stage that will weed out DeFi for DeFis sake in favor of DeFi for normal everyday folks. Until we make the pivot, we are stuck in a soulless cycle of waiting for folks to climb back up the risk curve and appreciate our far off brilliant contraptions.
I feel bad it took longer for me to realize pieces of this reality. I’m sure my mental model is missing large bits of details, and perhaps you may mistake my tone for cynicism.
It is not.
We have a massive opportunity to CHANGE THE GAME WE ARE PLAYING & the product we choose to build. We can connect consumers to this permissionless market of Web3 in a way that out performs the TradFi rat race.
If we are brave enough to be measured.
If we are brave enough to stop building products and stories around winning investors to our cause and instead pursue consumers like our life depends on it.
Onwards.
-Carter Woetzel
The lower the altcoin's market cap = the more they have to play the VC game
The VC game is forced on them because they won't build something that will be used by consumers
If consumers like it, they tell other consumers = you have marketing, traction, demand
Great article