In our @HarvardBiz article last week, @Jad_AE and I discussed not only the value web3 provides [
(thread 👇)
https://twitter.com/skominers/status/1526265534525874182], but also how it may (and may not) change business strategy.
(thread 👇)
Today's dominant internet platforms are built on aggregating users (and their data!) to harness network effects – a key source of competitive advantage. [hbr.org/2019/01/why-so…]
BUT...
BUT...
... how does competitive advantage work in the more open, user-focused ethos of web3 – where, for instance, users can own their digital assets, which are typically created according to interoperable standards on public blockchains (instead of on a company's private servers)?
Because a web3 platform's users own their digital assets, they can take them with them when they leave an incumbent platform in favor of a competitor.
This introduces new competitive pressures: competitionpolicyinternational.com/can-web3-bring…
This introduces new competitive pressures: competitionpolicyinternational.com/can-web3-bring…
In web3, new entrants can incentivize power users to move over to them through a strategy called a "vampire attack" that uses an incentive to "suck" users out of another platform (more on how this works, and views of whether it has worked or not at blog.coinbase.com/vampire-attack…).
Plus web3 platforms run on shared infrastructure layers – typically, public blockchains – which again makes it easier for new entrants to start out: they can innovate on top of existing software, and plug into existing content networks.
So while portability of digital assets increases the potential for competition, it also makes the overall dynamics of Web3 less zero-sum – and that means a platform's value creation opportunity can be bigger for all. hbr.org/2022/05/why-bu…
The ability to integrate pre-existing digital assets can help resolve the classic "cold-start problem" for new platforms; help existing platforms bootstrap off existing assets (vs. uploading directly) [medium.com/etherscan-blog…]...
... and help source content even for established platforms [bloomberg.com/opinion/articl…].
Sharing infrastructure means that web3 apps can focus on building great experiences – driving towards a greater emphasis on platform design as a source of competitive advantage. Even in Web3, design and user insight will continue to differentiate apps and marketplaces.
All of this suggests an exciting new era of business strategy is being born, even while drawing on classic strategy frameworks.
Full article here: hbr.org/2022/05/why-bu…
Full article here: hbr.org/2022/05/why-bu…
Shoutouts (again!) to my incredible co-author @Jad_AE; to our fantastic editors @tom_stackpole and @GretchenMarg (and @smc90); and to @lukeabc for the extraordinary header art. Special shoutouts here to @ccatalini, who's shaped my thinking around web3 and competition for years.
QED, and gm. 
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