Go to Market in Web3
One of the key challenges that many Web3 startups face is the Go to Market (GTM) strategy. Unlike traditional web services, Web3 products involve unique elements such as token incentives, community management, and governance. Furthermore, it is deeply connected to the collaboration of the entire ecosystem, including the blockchain infrastructure itself—known as Layer 1 and Layer 2—and the implementation methods of smart contracts.
In this article, based on a lecture by Maggie Shu and Pierce Carroll from the a16z crypto Go to Market team, we will explain GTM strategies unique to Web3, key frameworks, and focus on "deal-making" such as partnerships and alliances. We will cover a wide range of topics, including specific metrics that early-stage startups should focus on, approaches to community building, and negotiation techniques to be "liked by the other party."
1. Five Representative Go to Market Motions
First, let's briefly organize the five types of GTM motions introduced by Maggie. While these are widely known in Web2 SaaS and e-commerce, unique nuances emerge when re-examined in the context of Web3.
1-1. Product-Led
Product-Led is an approach where growth is driven by users directly interacting with the product and starting to use it via self-service. For example, cases where users "download/create and start using" Dapps (decentralized apps) or wallets themselves fall into this category.
Example: A platform where you can simply create an account from the website and start using it immediately.
Pros: Low adoption cost and potential for viral growth.
Cons: Users are likely to churn if specific technical support or documentation is not sufficient.
1-2. Sales-Led
Sales-Led is a method where the sales team provides thorough support to customers to facilitate adoption.
Example: Enterprise contracts in the B2B sector. Because the implementation flow is complex, detailed support is required.
Pros: High-value, large-scale customers can be expected.
Cons: The sales process tends to be prolonged.
1-3. Developer-Led
In the Web3 space, Developer-Led is particularly important. Engineers utilize SDKs and APIs to integrate products and expand the entire ecosystem.
Example: New Layer 1s, Layer 2s, and various infrastructure products prepare documentation and sample repositories for developers, engaging the developer community.
Pros: As engineer adoption spreads, the standardization of platforms and protocols progresses.
Cons: If developer support is lacking, usage will not spread.
1-4. Community-Based
In cases where the community itself enhances the value of the product, such as with NFTs, social Dapps, games, and Layer 1/2 chains, Community-Based strategies become important.
Example: Members share information via events, Discord, and X (formerly Twitter), while activating fan art creation and offline meetups.
Pros: Autonomous expansion can be expected, and a highly loyal user base is formed.
Cons: If the direction of management and the community does not align, there is a risk that trouble will spread rapidly.
1-5. Integrations
In Web3 GTM, "who you partner with and what kind of interoperability you achieve" is very important. Teaming up with partners that have large "distribution channels," such as wallets, DEXs, or other blockchains, is the key to growth.
Example: Integrating with large-scale payment services like Stripe, or Layer 1 chains forming partnerships to attract major applications.
Pros: You can leverage the partner's user base.
Cons: Negotiation costs are high, and the process of contracting and implementation takes time.
2. Specific Metrics and Tracking in Web3
Metrics like CAC (Customer Acquisition Cost) and LTV (Lifetime Value), which are also used in Web2, can be utilized in Web3, but it is necessary to take into account factors such as "token incentives" and "on-chain behavioral data."
2-1. CAC × Token Incentives
For example, when acquiring users through token utilization such as "quests" or "points," those costs must also be included in the CAC calculation. It is not the case that costs are zero just because it is a free distribution; factors such as future token allocation and incentive design also involve costs and dilution.
2-2. Retention and On-chain Analysis
Retention Rate: Verify whether users are continuously using the service through on-chain wallet transactions and NFT holding history.
Churn Rate: Use the cessation of on-chain actions, such as wallet activity stopping for a certain period, as an indicator.
2-3. Engagement Metrics
To measure "how actively the community is moving," it is important to look comprehensively at factors such as the number of posts on Discord, participation in offline events, the number of NFTs held/traded, and the acquisition status of POAPs (Proof of Attendance Protocol).
"Many of the projects we support prioritize how many users are actually active on-chain or offline, rather than just having a large number of people."
— Maggie
3. Key Points for Partnerships and Deal-making
In Web3, there are a wide variety of negotiation and contract forms, ranging from partnerships with legacy large corporations to proposals to DAO treasuries, or collaborations with marketplaces. Here, we introduce the basic framework for deal-making as described by Mr. Pierce.
3-1. Due Diligence
Identify decision-makers and stakeholders.
Refer to governance forums and public information (e.g., the terms of the partnership between Optimism and Base) to research similar cases.
In the Web3 industry, the 'flow of consensus building' is often made public through on-chain data and community forums. Use this to gauge general terms and market rates.
3-2. Anchoring
'When starting negotiations with the other party, this is a technique of first presenting the values or conditions desirable to us, and fixing the market perception to a certain extent.'
— Mr. Pierce
For example, in a partnership between L2 protocols, you can establish a benchmark for negotiations by using data from past cases (such as the partnership between Base and Optimism) to show market rates, such as transaction fee sharing ratios or token swap ratios.
3-3. Framing
The approach to negotiation changes depending on whether the other party is a market leader or a market follower.
For leaders: Emphasize low risk, high return, and scalability.
For followers: Highlight opportunities for a comeback and innovative features.
3-4. Reciprocity
It is important to clearly present conditions that are also valuable to the other party.
Example: If partnering with a major NFT marketplace, present the potential for your unique NFT collection to bring new users to the platform.
What the other party is often looking for is new technological superiority or a potential user base.
3-5. Closing and Post-Activation
Even after the negotiation is concluded, it is necessary to finalize concrete action plans, such as 'contract fulfillment' and 'implementation of joint marketing'.
For small-scale partnerships, it is also effective to utilize an affiliate model to start slowly and optimize for each other.
For parties that may develop into competitors in the future, be sure to take measures such as avoiding exclusive contracts or long-term lock-ins.
4. Questions from the field seen in Q&A
4-1. How do you handle partnerships with potential competitors?
“We want to partner with bridges, but also build technology that makes bridges unnecessary in the future. How do you negotiate when the other party is both a collaborator and a competitor?”
According to Pierce, the theory is to first adopt relatively loose agreement forms, such as affiliate contracts, and avoid exclusive conditions or long-term lock-ins. By expanding or contracting the partnership content according to the growth stage, major conflicts of interest are less likely to occur.
4-2. When should you go full-scale with Go to Market?
“It is difficult to distinguish whether the number of users expecting tokens in the future is just increasing, or if you have truly achieved product-market fit.”
In response, it was answered that it is necessary to monitor on-chain data and community indicators (especially active comments and offline participation status, etc.) to “distinguish between speculative users and long-term users.” Even if metrics rise in the short term, you can determine the optimal timing by continuously checking actual engagement.
4-3. To what extent should requests from design partners be reflected?
“Is there a risk of straying from the essence by listening too much to early customers and design partners?”
Maggie emphasized that “a perspective of returning to your core is necessary so as not to pivot too much.” It is important to always verify whether requests from early-stage users will truly be beneficial to the majority of users in the future.
The Web3 ecosystem is constantly seeing new technologies and concepts emerge, and business models and market environments are fluid. However, the attitude of “growing the pie while appropriately securing your own market share” is essential.
“Being liked by the other party is a prerequisite for negotiation. It is important to build a ‘win-win’ relationship that draws out each other’s value and opens up new markets.”
— Pierce
As governance, regulations, and the state of developer communities continue to change, please continue to learn and verify while customizing the basic framework introduced here for your own company. I hope your Web3 project will be able to create value with more users.
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