Growth Marketing Strategies for Web3 Brands to Achieve Product Market Fit

Building Web3 Products That Truly Connect with Communities

Marc Andreessen defined Product-market fit as finding a good market with a product capable of satisfying that market. Marc is often credited with developing the PMF concept

In other words, it is the point at which a product satisfies a strong demand within its intended market, resulting in widespread customer adoption, engagement, and satisfaction.

Generally, PMF is characterized by many factors which could be Customer Demand, Usage and Adoption, Customer Satisfaction, Engagement and Retention, Competitive Advantage, etc.

Many startups often focus on reaching this stage before scaling their operations and investing heavily in marketing and expansion efforts.

If you remember the early days of Netflix, how they originally started as a DVD rental service but then achieved PMF when they transitioned into a streaming platform.

They identified a growing customer demand for convenient and on-demand access to a wide variety of movies and TV shows.

And then capitalized on the shift toward online streaming.

This led to increased adoption, customers found the service more convenient and cost-effective. And the binge-watching culture, enabled by the platform’s seamless viewing experience, further contributed to user retention.

Now, Netflix has expanded beyond the United States to a global audience, tapping into a vast international market hungry for accessible and diverse content.

It’s not just Netflix as a startup that has hit PMF, other brands like Apple, Tesla, Lemlist, Nike, Airbnb, Slack, Meta (Instagram, Facebook, Whatsapp), Paypal, Superhuman, Stripe, Supreme, and Linktree amongst many other hundreds of startups have also hit PMF.

Like Netflix, many of these brands identified customer demand to solve a problem and offered a solution (as a product), that has been iterated on over the years to become a superior product.

It’s my belief, however, for PMF to happen, the Product and the Market must be fitted together. Sounds cliche, however, that fitting is like a bowl of spices — filled with different spices — all mixed and called Brand Connection.

Many of these brands I mentioned went viral, people loved their products, and till now, their core customers are true stans; they have a strong brand connection.

Just like I do with Nike, Binance, and Redmi, you also have those brands you connect with.

This means that if Virality is always engineered from the get-go, so also, Brand Connection is engineered from the get-go too.

And these top brands — that have achieved PMF — have figured out how to engineer Brand Connection with their audience.

Dan Olsen's PMF Pyramid Framework explains that PMF is the point where the User Experience, Feature Set and Value proposition of a product meets the Underserved needs of the target audience

However, while this is Web3. It’s the same gameplay as Dan and Marc have explained, but now, the ethos is decentralised.

And this decentralised structure should normally encourage Web3 startups to facilitate brand-to-community relationships in their efforts to hit PMF.

Often they have failed to both facilitate such a relationship and also hit PMF.

I believe when we think of hitting PMF, we consistently look through the eyes of numbers and graphs.

Trying to optimise adoption, and increase retention, thereby avoiding churn — it’s the numbers we always look at, almost every time.

We fail to see how PMF emphasise the importance of people. And Brands connect with people, not numbers.

When we have people who are our target audience, we can no longer observe marketing only from a quantitative standpoint, we should also observe from a qualitative standpoint.

When we do this, we’d begin to lean into the idea that Product Market Fit is Product People Fit or Product Customer Fit or Product Community Fit.

By simply changing the lens, we can now observe that people are more than numbers, and if we’re going to hit PMF, our strategies must be created with that in mind.

So you see, PMF is hinged on Brand Connection, which is a bowl of spice for multiple ingredients like:

1. Superior product,
2. Customer Research and Validation,
3. Iterative Product Development,
4. Progressive feedback from customers that align with the brand’s Mission,
5. Lean Marketing and Growth Strategies,
6. User Onboarding and Retention,
7. Measuring and Analyzing,
8. Leveraging Early Adopters, and
9. Pivoting if Necessary

All of these ingredients — which are important topics and will require a strategy to execute — when mixed, should help strengthen the Brand connection; which is the focus of this article.

Ultimately, they ensure Web3 brands build product people care about, love to use and would gladly refer their friends to. Products people Care about tend to always hit PMF.

Well, if that is true, how do we put all these pieces together, how do we build products people care about?

Mixing em Spices: How to Build Products People Care About; An Opensea Case Study

People are crucial for businesses because they are consumers or users of the products or services a business offers.

Understanding their needs, preferences, and pain points allows businesses to tailor their offerings effectively, ensuring they provide genuine value and resonate with the intended audience.

This alignment leads to higher customer satisfaction, increased adoption rates, and long-term loyalty, which are essential for sustainable growth and success in the market.

With Web3 and its decentralisation ethos — which must also reflect in how we build communities — people, have now become more important for brands.

So much so, no matter how great the brand is, if people don’t, Want, Like and Connect with it’s

1. Product
2. Solution
3. Mission
4. Vibe

That brand could as well not have started investing in the product, because it won’t fly. Hence the Mantra, Build the solution people (target audience) wants.

However, you can’t build these solutions, and know how they (people) want them, and what they (people) want them for, if you do not validate the market.

To validate the market is to establish a communal relationship with them — it’s to get quality feedback.

So yes, the idea of building the community first, before the product, then test the product, before launching, is an execellent approach to get quality feedback.

It’s also important to understand that achieving PMF is not a one-time event, it is a continual milestone.

This means When you Validate — Build — and Launch, you continue to Validate — iterate — re-launch — validate — iterate — re-launch … to consistently reach the PMF milestone.

Why does PMF somewhat change, why is it not constant?

Well, it’s because we are dealing with people, not numbers and we know one thing, wants are insatiable. This means there’s no final product out there.

The best product solutions are built on the foundations of existing problems, anticipated problems and known market demand for a solution to that problem.

With people as a factor when building, you truly need a superior product (a consistently iterated product) in the market, more than that, you need to be able to connect with people, your community members, and paid users on a more real relationship.

The goal here is to build relationships with your true customers or community members where you connect with them on three levels:

1. Solution and Problem Matrix — the first and most important level.
2. Interest and Desire Matrix — the second level.
3. Intrinsic and Extrinsic Incentive Matrix — the third level.

By achieving these three levels, the relationship between your community and your product becomes way more than just a Solution and Problem Matrix.

And this is important because there might always be better a better product from your competitors and yet you could still retain a huge number of your market share (geeky word for saying your customers) while you iterate your product solution to become more competitive.

The possibility of still retaining your market share is hinged on a principle that says: People Love Your Brand enough to still use your product.

And this has shaped my belief that Brand connection is built in the hearts of people. Hence, the Market share is won in the heart of people.

If your brand can connect to people’s (target audience, Community members etc) hearts, outside of a superior product solution then you are on the right track — you get the point?

Just looking at this in itself, you’d agree with me that this is a biased choice people would have to make just to stick with a product even if there’s a new shiny solution out there.

The truth however is that, at first, this choice has nothing to do with a superior solution.

Just like my love for Nikes. Still, Puma and Adidas and New Balances are great products too …

I love using Notion. But Asana, Trello and the other products are great too …

And guess what, if you right now, think deeply, you have such sentiments for some brands and products too.

The reality is, 7 out of 10 times, I believe there is a better or competing alternative right now in the market, but you still love what you love.

That choice, and preference, are completely biased, because one way or the other, you connect with that brand even when a new or better solution is on the horizon.

Now all this happens at first, remember I said market share is won in people's hearts, well, it is also lost there too.

With a new solution, offer, or whatever it could be, that’s better than what your brand offers,

The failure to validate and iterate and re-launch a worthy solution for your users at warp speed will mean you lose their hearts,

Then lose market share, then experience poor retention and out goes PMF.

It’s the same happening with Opensea vs Blur.

This is the current case with Opensea and Blur. Openseas have had the monopoly for the longest time, hence the largest market share, and, in comes Blur

Built for Traders, a superior product to opensea, and is clearly loved and cherished by NFT Traders.

With Blur's introduction of Zero royalties — an update that traders clearly love — creates a huge problem for Opensea who’s now lost a ton of market share and volume to blur as virtually all Traders have migrated to blur

Traders create Volume, they consist of a large chunk of the market

That migration means, Blur now has more trade volume than Opensea, increased retention, more market share etc

Opensea's need to respond with a worthy solution is delayed (in my opinion) and when they release their solution, they also opt for Zero Royalties but called it Operator Filter — a bad mistake.

This leads to heavy backlash from Creators and NFT brands that survive on royalties as back-end revenue.

Yeah … it’s pretty messy, even more so with Yuga Labs teasing their own Marketplace,

To put things into perspective: Yuga Labs houses top collections like BAYC, MAYC, BAKC, Otherdeed, Meebits, Otherdeed Expanded, and Kodas. Here’s their recent volume ratio; based on when this article was written.

1. BAYC’s 30d volume = $26.5M
2. MAYC’s 30d volume = $18M
3. BAKC’s 30d volume = $4.07M
4. Otherdeed for Otherside 30d volume = $1.6M
5. Meebits = $972K
6. Otherdeed Expanded 30d volume = $943K
7. Otherside Koda 30d volume = $765K

Yuga Labs Total Volume = $52.85M While OpenSea’s 30d volume = $66.7M.

It’s not looking good as other Brands like Pudgy Penguins and Rootroop already have existing Marketplaces, and other brands will follow suit

The reality would be this; Openseas loses retention, the Market share (people's hearts), and any opportunity to have achieved PMF which they could have gotten if they pivoted to a Creators' platform, rather than chasing Blur shadows.

So, When you Validate — Build — and Launch, you continue to Validate — iterate — re-launch — validate — iterate — re-launch.

You do this at warp speed because you want to build and maintain a product/solution that consistently helps people achieve their primary goals.

The reality of this is you get to have true fans (customers that align with the brand’s Mission) that love your brand, love your mission and purpose, and truly connect with what you stand for.

Just because of this affinity they have for the brand, it is easy to get quality, primary feedback which you can now utilise for improved product iteration on Product Development, Marketing, Community building etc.

You must have noticed this sentence for the third time in this article: Customers that align with the brands’ Mission,

Well, it is very important to know that you will have many kinds of customers who use your solution for many purposes.

Like How Blur is built for Traders and Opensea for Creators and Collectors.

However, the ones that align with your brand’s Mission are the ones who use the product for the purpose it was created. Their feedback will be the most optimised, and most efficient data you will need for iteration.

Going back to Openseas' recent announcement of a technical Zero Royalty and the Heavy backlash from the community, even I am pissed.

Our feedback — from the backlash — especially feedback from collectors, indie Creators and NFT brands, should be the one they optimise and use for iteration.

I do expect them to do so, hopefully, and completely pivot back to a creator marketplace in other to regain some form of market share and gradually hit PMF again.

It’s great using Opensea as a case study, because as of this time, it is the most relatable event, and if you’re in the space, you’d relate excellently with it.

As a founder, you will need to remember why you built your product and serve the people that primarily use the product for the reason it was built.

I believe these people are the true customers; they love the brand and align with its core purpose.

With them, it’s easy to scale viral co-efficient via a properly incentivised loyalty program which can create a viral loop within each user’s network effect.

This brings new people (Traffic Acquisition) at a very cheap Cost per Acquisition and also can lead to high retention rates — based on different factors.

I know, Building products people love is a lot of work.

But web3 brands can do all of this at Scale and put their brands in a position to scale growth.

How? By focusing on building product solutions that solve real problems, maintaining that solution via warp-speed iterations, and connecting with people past the problem-solution matrix.

I believe Web3 offers a huge benefit to traditional industries, but for us to get these solutions out there, we must begin to push for adoption, for increased market share we must push to win people's hearts.

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