The product-market fit we know and those we're learning about
How Web3 will change the game
Finding the product-market fit we know
In the 90s in small-town India it was not uncommon to find snake charmers. Their busking would always draw the same manner of reaction from people around. First, a handful would gather around loosely to gawk at some garden variety reptiles. Then seeing the clutch of people hovering, some more would find reason enough to pop in. Mindful of the growing buzz, the charmer would amp up the performance. In minutes, there would be a roadblock.
Find the most curious audience for what you’re trying to sell and make it easy for them to come to you. The low-curiosity-threshold group are your early adopters. They only need a nudge. They are your engine crank. Seeing them gather, others with a higher curiosity threshold will be urged. The desire to mimic what we see is often underrecognized, maybe because it tells us that we are not as independent-minded as we think we are.
Having to push or drag people to your product drains you out. Avoid that. Give them something of value instead. A “give first” motto works best where the gifts have zero cost of replication. Free ebooks, free subscriptions, free credits. That in turn drives curiosity among the yet-to-be-initiated.
But even after, if you’re still searching for takers, then you need a rethink. Pause. Find something people are more enthusiastic about. Make it fit better. Iterate. The goal is to get more people across the curiosity spectrum ready to cross over with a nudge.
Don’t attempt to solve the hardest problem upfront. Avoid getting into a situation where you are forced to convince the least curious audience first. That’s selling cat food to dogs. They’ll sniff and snort and turn around in circles and you’ll lose a lot of time and money trying to make them care. In that time, the more curious cats may have found their kibble at your competitors’.
One way or another, there needs to be resonance between what you offer and what the market needs. All of this becomes easier with those who are willing to give you the benefit of the doubt--the curious ones. Find them and get them hooked.
The product-market fits we are learning about
In the age of the Great Resignation, businesses have to find product-market fit twice. Once like they always have, by testing value propositions and getting to one that clicks. But there is another test that is coming their way earlier. This test, seldom as emphasized, is currently driving executive insomnia: finding the right talent to carry the business forward.
There are two sets of changes at play here. One is at the door, the other is round the bend.
Let’s take the one that’s here already. Whereas it sufficed for employers to offer compensation and stability previously, this generation’s demands have made that mere table stakes. The pandemic has brought life’s priorities sharply into focus. We can’t imagine our lives from before. Today, values, culture, flexibility, and benefits make up the product we are looking for. With expanding options available for the knowledge workforce, organizations now have to listen to what is important to their talent.
Even that may not be enough. Employers have always had the right to appraise knowledge work and decide how and what they are willing to pay for it. But something may fundamentally change in the ask of knowledge workers in the future. They may want a different currency. In fact, they may not wait to ask at all. They may simply step forward and claim it.
Web3 is about ownership. The builders want to own a piece of what they help build. What does the market of creators and developers and users want to own? Services, data, artifacts. These are currencies businesses and platforms are not used to paying in. Value accrual has always happened for businesses first; the rules of the game have always been decided by platforms. Decentralization threatens to change the game.
But how will this happen? Are people going to say no to a steady income to take a punt, we may ask? Chris Dixon from a16z highlights a key difference between what drives the current Internet (centralized) and what will drive Web3 (decentralized):
“Centralized systems often start out fully baked, but only get better at the rate at which employees at the sponsoring company improve them. Decentralized systems start out half-baked but, under the right conditions, grow exponentially as they attract new contributors.”
A few things may happen. The chance to create visible impact and capture a part of the value could be a calling card for creators. Their community could swell. This could trigger powerful feedback loops. But what are these “right conditions” that Chris is referring to that will kickstart a decentralization flywheel?
He tables two tests that Web3 must pass:
product-market fit between the platform and the developers/entrepreneurs who will finish the platform and build out the ecosystem, and
product-market fit between the platform/ecosystem and end users.
At this point, imagining the future, the low-curiosity-threshold groups may separate from the rest. The early adopters and creator communities may bet on a decentralized internet finding a product-market fit. The others--the ones who tend to look at the past to predict the future--may be tempted to bet on status quo.
Where do you see yourself?
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