Every few years, an important new platform emerges as the new go-to-market strategy for consumer founders. In the crypto world, the popular GTM (go-to-market) has been to own the Twitter narrative and be noisy online, which creates the right awareness to pump your project.
In a bull market, the strategy focused on getting a wide audience to share your airdrop, mint, or waitlist — the noisier, the better. People aped into your project without thinking twice because there was financial incentive to move quickly and not ask questions. This GTM strategy made many founders and crypto Twitter people wealthy, despite most of the products not having true Crypto Market Fit.
There is something sobering about a bear market, where Twitter noise feels more shallow as the world falls apart. We are all searching for real conversations that feels authentic and real (and maybe some alpha too, but does that exist?)
Why do so many of your highest quality conversations happen on Telegram, WhatsApp, and in iMessage groups, and basically anywhere but public forums? Because you can talk about real things without people shilling things or toxicity. Twitter is no longer the place that conversations happen and Facebook is obviously not it.
In Q4 2022, we want conversations instead of noise, and we have time to understand new technologies entering the zeitgeist instead of mindlessly fomo’ing into every mint or airdrop that trends on our timelines.
The most under appreciated part of a bear market is that we all have time to get smarter because crypto deal pacing, the broader venture capital ecosystem, and the public markets are largely at a standstill.
In the middle of a cold crypto winter, the web3 community has discovered the perfect product at the perfect time — Farcaster. So much of a successful product release is capturing a zeitgeist at the right time (see: Product Zeitgest Fit) and it appears that Farcaster is that product for crypto right now.
Farcaster is the opposite of hype beast crypto culture and rewards thoughtful conversations, with a community that has a shared passion for cryptocurrencies and emerging technologies — and generally kind to each other.
Techno-optimism is in fashion again. We are all tired of depressing news and there is a lot of really cool shit happening in crypto and the broader tech world, despite what your social media timelines and spot prices tell you.
Farcaster is “a sufficiently decentralized social network” that is designed to feel smaller and rewards high quality conversations instead of likes.
The big question for Farcaster that so many consumer social founders have faced is how to keep the community strong and grow. The best part of Farcaster so far is that like much of crypto, a small network can be extremely valuable (see my Crypto Market Fit essay) and the growth playbook of a web3 social network are just different.
Built by Dan Romero, formerly an early employee and VP at Coinbase, Farcaster has been in beta for over a year and has been built at a deliberate pace, even during the insane bull market.
How many consumer crypto founders resisted public launches during the crypto hype cycles of Q3/Q4 2021 and Q1/Q2 2022? Dan chose to stay heads down and build for a small community while onboarding high quality users.
I asked Dan how he plans to solve the “scaling quality” challenge and in a very Farcaster way he created a screenshot essay open sourcing the strategy, which he titled Scaling Quality:
**We’re planning to keep the protocol invite-based for the first 1 million accounts. Currently, this is “DM dwr on Twitter”, but the plan is to move to community-driven invites soon. We’ll likely start with a small number of active users to test the community-driven approach and expand from there. If we feel like quality is declining, we’ll adjust.
Additionally, we’d like to keep growth consistent but not overwhelming — ideal is +5% DAUs every week. (This gets harder with compounding!). This should also allow us to incrementally adjust our strategies for maintaining quality without suddenly being overwhelmed by a spike in sign ups.
**The deliberate growth strategy will allow us to iteratively adjust the defaults for the initial client: what shows up in your feed, who to follow, etc. We’d like to make product improvements that emphasize actual conversations which we believe is the behavior that will most benefit the Farcaster protocol. We also plan to nerf engagement farming.
**After Farcaster v2 is shipped on mainnet, our focus for the protocol will be to make it straightforward for other developers to build new clients. Think open source libraries and UI components, as well as tutorials (imagine a Farcaster version of the famous DHH build a blog engine with Ruby on Rails in 10 minutes).
By making it easier to build a new client, developers will be able to permissionlessly experiment with different algorithms, novel UI/UX mechanics, content types and subgroups of users. Here are a few examples of what a developer might do to maintain (or improve!) quality:
A client with an algorithm that’s just focused on URLs being shared, with a special emphasis on URLs from blogs or other indie / niche websites.
A client focused on Q&A or AMAs
A client focused on UX for displaying visual content like images or NFTs
A client that is only accessible to users with certain on-chain characteristics like sent an Ethereum transaction before 2018 or was in the first 10,000 users on Farcaster.
Product-Led Protocol Development
One other fascinating roadmap strategy that I’ve had to wrap my head around as a product person who believes in very focused roadmaps is building an application as you build a protocol.
I remember talking to Dan in early 2021 about this approach and thinking that this would be a prioritization challenge for the tiny engineering team, but I now realize I have to evolve my own frameworks for product roadmaps in crypto.
In web2, building a consumer application as a standalone product and engineering effort is a remarkably hard challenge and the odds of success are low. Most people fail with the application, so why would you be crazy enough to try building an application before the protocol? This felt like a suicide mission to me.
But Dan knew that developers, especially in crypto, are being wined and dined by Developer Relations teams from every L1, L2, and protocol with marketing, grants, and incentives. Developers in the crypto ecosystem are still a relatively small community — we have 5300 WAU developers execute on-chain commits last week, so the bottleneck is real (the number is higher in reality as there is off-chain development happening but there are 24 million developers in the world… so we have ways to go).
If you’re going to build a new protocol, you likely have to either offer developers financial incentives or build a network of high quality users. Financial incentives are not sustainable and do not attract longterm builders who want to find Crypto Market Fit.
With Farcaster, Dan and team built a platform that has already attracted many of the highest quality and most influential community members in crypto, so longterm oriented developers (i.e. revolutionaries, not mercenaries) now are incentivized to build on the network.
Dan describes product-led protocol development in a screenshot essay that I predict will become the roadmap prioritization playbook for the entire crypto community — and potentially even web2 teams who need to attract developers too:
If your goal is to build a new decentralized social networking protocol, start from the end goal— internet-scale protocol like DNS, HTTP, SMPT—and work backwards.
A protocol is only as good as the number of independent and thriving clients, applications and businesses on it. A protocol with a lot of users but one dominant client is just an app with open APIs (for the time being). Practical alternative clients —not theoretical— matter for exit with interoperability. (Note: Farcaster is not here yet! Why we’re still in beta / testnet and spending so much time on making Farcaster v2 great for other developers, e.g. enabling read/write clients.)
Developers care far more about addressable daily active users (qDAUs) more than tech stack. A protocol with a lot of high quality qDAUs an slightly worse technology will attract more developers than a protocol with better technology but few qDAUs. Quality defined as not bots or accounts that sign up and immediately churn (creating a ghost town effect).
Users don’t use protocols, they use apps. So if your goal is to build a protocol, you should build the initial app that’s high quality enough to earn the attention of enough qDAUs that developers start finding building on the protocol interesting. Lastly, it’s easy for people to fall into the Field of Dreams fallacy for protocols — “if you build it, they will come.” Can’t expect others to spend the time and effort to build high quality products if you’re not willing to do it yourself.
qDAUs (quality daily active users) is the term that stands out to me in this strategy and aligns with my premise that we need new metrics to define product market fit in crypto, which I’m trying to define through explorations of Crypto Market Fit. This is a crypto-native metric that I’ve never heard in a FAANG product meeting.
We are already seeing a vibrant developer community build their own applications with the Farcaster protocol, so it’s easy to imagine a world where the Farcaster network creates thousands of intimate social networks that maintain the same ethos of quality > quantity. At some point, I’ll do a deep dive on the Farcaster protocol itself, but that feels like a different essay.
A product-led protocol is a tightrope act that very few teams will be able to execute against, as delivering on the application before the protocol is incredibly hard. Only the best product and engineering teams will survive (and Dan and team are world class).
Most projects will struggle to develop a strong enough community for developers to care, so proceed with caution if this is your roadmap strategy. You might never get beyond the application stage.
Farcaster is solving the chicken-and-egg of retaining high quality community members in the early days, and they have many talented developers building on the protocol.
Crypto founders are recognizing the power of the Farcaster community as the new GTM for reaching perhaps the most valuable community in crypto. We’ve seen Chapter One portfolio companies build early awareness on Farcaster in powerful ways:
Daylight a product that helps you “never miss a mint, airdrop, or token-gate” - launched on Farcaster and their access pass NFT quickly became #1 on Farcaster’s trending NFT Mint list. They built a huge wait list and now have strong awareness in the crypto community.
Kyle McCollum (Daylight, CEO) saw the Farcaster community rally behind their product:
”Farcaster’s user base is cryptonative and a strong fit for a product like Daylight. Opening up our closed beta to that community resulted in high quality feedback (new friends were sending in Loom videos and Google Docs full of suggestions!) and high retention users. A positive spillover effect started happening where people outside of Farcaster saw Farcasters minting the Dawn Pass and wanted in, too.”
Coherent is building a web3 developer kit and has found similar success with organic growth. In the Farcaster typed words of Carl Cortright (Coherent):
Perl — a “wisdom treasure hunt” launched on Farcaster and has early community love. The same project likely would not have stood out on a platform like Twitter. In the words of Alex Kwon (Perl):
Will the quality scale? Will Farcaster qDAUs (quality daily active users) become lesser quality DAUs as the network grows?
Our product minds are trained to ask these questions like we’re trying to sound smart in a job interview, but let’s instead celebrate the fact that a tiny piece of the open Internet exists where people want to be friendly, and optimistic, and explore new ideas.
**Farcaster is where the highest quality public crypto conversations are happening.
And in a bear market where “nothing in crypto is working”, this masterfully roadmapped application/protocol is capturing the crypto zeitgest and giving us a reason to feel optimistic again.
Farcaster is a Chapter One portcolio company. Dan did not ask me to write this article, but I did bug him for feedback and research help. You can ask him for an invite on Twitter, but I have no idea how he is going to keep up with the requests.
Daylight is a Chapter One portfolio company and they’re some of the most productive builders in crypto right now. Very methodical like Dan and Farcaster. The product is also extremely cool and helps you find free internet money you’re eligible for so I recommend signing up.
Coherent is also a Chapter One portfolio company — and we do love their APIs, so if you’re building a portfolio tracker, dapp or wallet, go check it out.