Scaling Your Web3 Startup: Unconventional Growth Tactics That Actually Work

Yoav Tchelet
5 min readMar 8, 2024

You’ve got a web3 startup and are eager to make your mark. Building an innovative product is a solid start, but to gain traction, you need a growth strategy that sets you apart. We’ve compiled a list of proven tactics to help you accelerate your startup’s growth. Drawing from successful examples within and outside the web3 space, you can learn from the best and apply their strategies to your venture. Let’s dive in and explore some unconventional approaches to scaling your web3 startup.

Harness the Power of Community

In the world of web3, community is everything. Successful web3 startups understand that nurturing an engaged, passionate community is the key to driving organic growth. Companies like Uniswap and Aave have mastered this art, using liquidity mining and governance token distribution to incentivise user participation and create a sense of ownership among their communities [1][2]. Take a cue from their playbook and find creative ways to involve your community in your project’s growth.

Ride the Wave of Network Effects

Network effects are the secret ingredient behind the explosive growth of platforms like Facebook, Twitter, and Uber. In web3, the potential for network effects is amplified by the interoperability and composability of decentralised protocols. Startups that build on top of existing infrastructure, such as Ethereum or Polkadot, can tap into established user bases and benefit from the network effects of the underlying ecosystem. Compound, the DeFi lending platform, is a prime example of this strategy in action [3].

Prioritise User Experience

While web3 technologies can be complex, startups prioritising user experience have a better chance of attracting mainstream adoption. Coinbase and Revolut have set the bar high, making buying and selling cryptocurrencies as simple as ordering a pizza. In web3, startups like Argent and Dharma follow suit, creating intuitive, user-friendly interfaces that abstract away the complexities of interacting with decentralised protocols [4][5]. By reducing friction and providing a seamless onboarding experience, these startups are positioning themselves for success.

Embrace Collaboration and Integration

In the spirit of decentralisation, web3 startups should embrace collaboration and integration with other projects in the ecosystem. Building bridges and forming strategic partnerships can help startups expand their reach and tap into new user pools. THORChain, the cross-chain liquidity protocol, has integrated multiple blockchain networks, enabling users to swap assets across different chains [6] seamlessly. Similarly, Ontology, the decentralised identity platform, has partnered with various enterprises and governments to drive the adoption of its technology [7].

Get Creative with Token Economics

Token economics, or tokenomics, is a unique aspect of web3 that can be leveraged to drive growth. By carefully designing the utility, distribution, and incentive mechanisms of their native tokens, startups can create powerful network effects and align user interests with the project’s long-term success. Filecoin, the decentralised storage platform, uses a dual-token model to incentivise storage providers and clients, creating a self-sustaining ecosystem [8]. Similarly, Augur, the prediction market platform, uses its REP token to incentivise accurate reporting and dispute resolution [9].

Build Trust Through Transparency and Decentralisation

Transparency and decentralisation are the cornerstones of trust in web3. Startups that embrace these principles and build trust with their communities are more likely to succeed in the long run. MakerDAO, the decentralised finance platform, has built a reputation for transparency by publishing regular updates and engaging with its community through open forums and governance processes [10]. Similarly, dYdX, the decentralised exchange, has open-sourced its smart contracts and undergone extensive security audits to build user trust [11].

Leverage Social Proof and Influencer Marketing

In the crowded web3 landscape, social proof and influencer marketing can help startups gain visibility and credibility. Securing endorsements from respected figures in the industry or partnering with influential content creators can quickly put your project on the map. NBA Top Shot, the NFT marketplace, gained massive traction by partnering with popular basketball players and leveraging the NBA’s brand recognition [12]. Similarly, Theta Network, the decentralised video platform, has collaborated with influential content creators and streaming platforms to drive adoption [13].

Invest in Education and Onboarding

Given the nascent stage of web3 technologies, startups prioritising education and onboarding are more likely to attract and retain users. Creating beginner-friendly guides, tutorials, and educational content can demystify web3 concepts and lower the barrier to entry. Trust Wallet, the crypto wallet provider, offers a comprehensive learning hub with articles, videos, and quizzes to help users understand blockchain technology and securely manage their assets [14].

Cultivate a Culture of Experimentation and Iteration

In the rapidly evolving web3 landscape, startups must be agile and adaptable. Fostering a culture of experimentation and iteration allows startups to quickly validate assumptions, learn from failures, and optimise their growth strategies. Uniswap, the decentralised exchange, has undergone multiple iterations and upgrades based on user feedback and changing market conditions [15]. Similarly, Aave, the decentralised lending platform, has continuously innovated its product offerings, introducing new features like flash loans and credit delegation [16].

Adopt a Data-Driven Mindset

To effectively drive growth, web3 startups need to be data-driven. Tracking key metrics, analysing user behaviour, and conducting experiments can help startups identify areas for improvement and optimise their strategies accordingly. Zerion, the decentralised finance dashboard, uses advanced analytics to help users track their portfolio performance and make informed investment decisions [17]. Similarly, OpenSea, the NFT marketplace, uses data-driven insights to improve its user experience and curate personalised recommendations [18].

Scaling a web3 startup requires a combination of proven strategies and a willingness to experiment with new approaches. By harnessing the power of community, riding the wave of network effects, prioritising user experience, collaborating with other projects, getting creative with tokenomics, building trust through transparency and decentralisation, leveraging social proof and influencer marketing, investing in education and onboarding, cultivating a culture of experimentation and iteration, and adopting a data-driven mindset, web3 startups can position themselves for success in this exciting new frontier. Remember, there’s no one-size-fits-all approach — adapt these strategies to your unique context and make them your own. The key is to stay agile, take calculated risks, and keep pushing the boundaries of what’s possible in web3.

References:

[1] https://uniswap.org/blog/uni/

[2] https://medium.com/aave/aavenomics-phase-2-59b47d52b030

[3] https://compound.finance/docs#integration

[4] https://www.argent.xyz/

[5] https://www.dharma.io/

[6] https://docs.thorchain.org/

[7] https://www.prnewswire.com/news-releases/ontology-partners-with-germany-based-daimler-south-east-asia-to-build-mobility-blockchain-platform-300955064.html

[8] https://filecoin.io/blog/posts/introducing-the-filecoin-economy/

[9] https://www.augur.net/blog/augur-v2/

[10] https://makerdao.com/en/whitepaper/

[11] https://dydx.exchange/blog/solo-margin-trading

[12] https://www.nbatopshot.com/

[13] https://www.thetatoken.org/partners

[14] https://community.trustwallet.com/

[15] https://uniswap.org/blog/uniswap-v3/

[16] https://medium.com/aave/aave-v2-the-seamless-finance-d52075d97a70

[17] https://zerion.io/

[18] https://openseablog.com/posts/recommendations-on-opensea/

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Yoav Tchelet

Yoav Tchelet has over 25 years experience working with some of the world's largest brands, helping them scale and grow their businesses.