Brands have always lived in the space between a product and a customer. What’s really changed in Web3? Two things, actually. And if you’re trying to build the community to support a Web3 project, you need to understand them, so you can put them to work for you.
I’ve been on Twitter since 2007, and for most of that time my bio has been “Venture Storyteller, Wartime Consiglieri, Lyrical Gangsta.” The first two I wrote. The latter was given to me, and it’s the one that appears to have stuck. The story of how I came to be associated with it is an instructive one in understanding how brands are born in Web3, and who decides what they mean.
The phrase “Lyrical Gangsta” comes from the 80s classic “Here Comes the Hotstepper” by Ini Kamoze. Hotstepper was Ini’s nickname, Jamaican slang for a person on the run from the law.
Speaking at an event back in the day, someone— and I honestly don’t remember who — introduced me as the “lyrical gangsta.” And it stuck. Today when people meet me they often reference that name, or ask about it, and, eventually, I just leaned in.
Now… what’s true for people is only more so for products. While there probably was a time people trusted advertising enough for the Don Drapers of the world to create brands around whatever ideas they wanted, those times are long gone. We decided Ray-Bans were cool after seeing JFK in them, or maybe Tom Cruise, or Robert Pattinson depending on your vintage. We made the Nazi-requisitioned Volkswagen bug a countercultural icon in hippie dippie 1970’s California. We made a chemical company in Rochester NY called Kodak synonymous with cherished memories, a sugar-water seller called Coca-Cola a symbol of American hope and progress around the world.
So it was for the granddaddy of all crypto, Bitcoin.
Bitcoin was conceived as a “A Peer-to-Peer Electronic Cash System.” That was actually the title of the White Paper that created Bitcoin from thin air, a white paper produced by the still anonymous Satoshi Nakamoto, who has never been heard from since.
Nobody talks about Bitcoin that way now, though. Depending when you got on the Bitcoin bandwagon, you may have seen it as a cheap payments network, an anonymous darknet currency, digital gold, or an uncorrelated — and now maybe even a correlated — financial asset. Where did these ideas come from? Bitcoin runs no advertising, has no web site. It has no CMO, no charismatic CEO. And yet it is, most definitely, a brand, whose value sits at around $600 Billion as I write this.
Bitcoin is what’s sometimes called a Headless Brand, and that’s the first thing that’s new about crypto. All those other ideas… all those stories about what Bitcoin is and (more importantly) why it matters) came from us… the community of Bitcoin supporters, buyers, users, fans and detractors. Web3 takes this idea to a whole new level… offering at least the potential to have a brand created, refined, and evolved entirely by the community of users it serves.
Even crypto projects with a head — like Ethereum, for example, as created by the oddly dynamic and omni-present Vitalik Buterin, have surprisingly little control over the story that drives their market cap. Vitalik launched Ethereum as a “World Computer,” you may recall, but few describe it in those terms today. Ethereum also has a foundation behind it, which describes it as “open access to digital money and data-friendly services for everyone — no matter your background or location.” Laudably democratic. But pure PR fluff.
One take on Ethereum’s market cap — second only to Bitcoin now — is that’s it’s really supported by its status as THE platform for decentralized finance. These are the applications that drove the last highly speculative cryptomarket run-up. And that gets to the heart of the problem with, and the opportunity for brand building in Web3.
To build a brand in Web3, you need more than a PR-team approved positioning line for your most ardent fans to memorize. You need a story even your casual fans will remember, and having one will give you an edge over everyone else.
Lots of alternate “Level 1” projects are competing with Ethereum to take over as the default platform in emerging use cases like gaming, NFTs, stablecoin, digital fiat, and even in the peer-to-peer transactions Bitcoin set out to conquer in the first place. Engineering types would rightly point out they’re all competing on the attributes of their underlying technologies… on their transactions per second, energy consumption, perceived security, and degree of decentralization. But that’s only one dimension of competition, and I’d argue it’s not even the most important.
The truth is the vast majority of people who get behind a currency or crypto project have no idea about its underlying technical fundamentals. Very few look deeply into the technical, contractual, or governance fundamentals of a single cryptocurrency — let alone evaluate those fundamentals relative to alternatives competing for the same use case. We saw that quite spectacularly last week in the collapse of the algorithmic stablecoin Terra, just as we’ve seen it many times before.
The contests of competing blockchains, tokens, enabling technologies and Web3 applications are contests for the hearts and minds of a community, a community invested in not just the use of a platform, but the ownership of it. That’s the second things that’s changed in Web3.
Crypto is at least as tribal as it is technical…
…and to capture the imagination of a community of fellow owners what you need is a story good enough to share, an idea I like to call a contagious narrative.
So what makes for one in Web3? What stories have captured the imagination of a community and why, and how can you do the same?
Let’s talk about Dogecoin. ICYMI… Dogecoin is a cryptocurrency, essentially a copy of the Bitcoin blockchain, which like all cryptocurrencies can be copied by anybody. Software engineers Billy Markus and Jackson Palmer decided one day to create a payment system as a “joke”, making fun of the wild speculation in cryptocurrencies at the time. DOGE was the first “meme coin”, meaning it’s visual representation took the form of a meme popular among the crypto bros on Reddit and elsewhere. Needless to say, that community — then the dominant sub-culture of the crypto speculator metaverse — loved it. When the ever prescient Elon Musk picked up on the trend, he started to flog it on Twitter, and Dogecoin went to the moon.
Dogecoin is a cryptocurrency success built on a story, specifically a story that captured the imagination of a community, then the dominant community behind speculation in cryptocurrency. It’s a joke, really, an absurd idea to think about applying for a commercial entity. Yet it’s current market cap is $10B, just about what American Airlines is worth.
Bored Ape Yacht Club is another example of a story well matched to its audience. The NFT phenomenon is built on a series of simple ape illustrations, modeled after ennui-filled Russian oligarchs dripping in wealth and tired of all the world has to offer. The Bored Apers took things further, creating a Metaverse clubhouse open only to coin holders, and then a whole series of innovations that made membership more and more attractive as the coin took hold and prices rose in open markets. When celebrities like Steph Curry, Steve Aoki, Mark Cuban and Madonna got hold of the coins, the phenomenon soared, to it’s current level of about $23B, roughly the equivalent of Best Buy, with a 1,000 retail superstores across the US.
“The next big thing usually starts looking like a toy.” Chris Dixon
So can you put the power of stories to work for you in a commercial venture? And if so, how? What’s the secret to doing that effectively in Web3, and how does that idea intersect with the very nature of a brand?
Thanks, and I’ll see you next week.