Animoca Founder: 3 Insights from ChatGPT for Web3 Entrepreneurs

Author: Yat Siu

Source: Coindesk

Compiled by: Colin, 7upDAO

For a startup trying to be taken seriously by top venture capital firms and attract new user attention, first impressions are everything.

But what if your project or the entire industry is going down the wrong path? A year and a half ago, after Facebook rebranded itself as Meta Platforms, many Web3 projects introduced themselves to the world during the metaverse boom. Too many blockchain applications failed to seize the opportunity to advance blockchain applications and instead fell into the trap of hype.

The crypto industry is filled with projects, protocols, and companies that have made significant mistakes, leaving a bad impression on industry stakeholders and causing the entire market to stagnate. Now, founders have a unique opportunity to learn from the AI platform ChatGPT developed by OpenAI and its remarkable success in changing the paradigm of AI development. While Web3 and AI face similar issues in the public eye—part of a general "tech shock" against seemingly reckless innovation and wasteful spending—cryptocurrency can adopt ChatGPT's development and branding approach to improve adoption rates.

1. A Different Journey
The main obstacle for Web3 today is that its grand vision of decentralized computing and finance has outpaced practical and user-centered development. This is not a lack of enthusiasm for the technology behind it.

Many crypto founders and developers have a "North Star," but this often does not prevent them from getting caught up in the hype of a bull market or trend, forgetting the most important part of building a product—creating something that people will love or want to use.

Looking back at the history of adoption waves, significant growth only truly happens when elements of interoperability and user experience (UX) come together. Tangibility, or the feeling of technology to potential users, is crucial in almost every new technology development, especially when it involves abstract concepts like AI or Web3.

For years, consumers have been using AI through Google searches or Netflix recommendations, often without realizing it. However, after ChatGPT caught people's attention by clearly demonstrating the impressive capabilities of generative AI, they began to care about machine learning.

In contrast, Web3 remains vague. Most people do not see or use the majority of its applications, making it difficult for projects to prove why anyone should care about it.

With the launch of GPT-4, Web3 can adapt to the rapidly changing environment in three ways.

2. Build Products Within the Industry, Not From Scratch
Yes, having a grand vision for Web3 is important, but not every company can bear the weight of the entire industry. When developers achieve the goals they intend to build, solidifying a niche market or "hero product" that makes a meaningful contribution to the entire ecosystem can set an example for others.

During the last blockchain boom, too many projects attempted to create all-encompassing ecosystems that would fundamentally replace banks or dominant blockchains. Of course, the idea that a single company could disrupt and replace an industry shaped by hundreds of years of experience and development is absurd. Web3 is not immune to economic realities either.

To truly succeed in Web3, just like in almost every other industry, founders must start from gaps they can realistically address. For example, the motivation behind launching Sending Labs came from our founding team noticing the almost non-existent communication infrastructure in Web3, especially at the team level.

This created a catalyst to start building a product that specifically addressed this apparent issue within the broader Web3 context. Of course, we could have aimed to develop an entire ecosystem from scratch. However, if the foundations of technologies like blockchain wallets already exist, improving upon what people are already using is a more viable way to achieve our goals as a company and ultimately push Web3 forward as an industry.

3. Don’t Let the Industry Be Your Selling Point
If you want blockchain to be the main attraction of your product, then you’ve already shot yourself in the foot. Just as you cannot see the gears turning behind ChatGPT, users don’t need to know they are using blockchain. This is not to say that the underlying technology of a product should be a secret or a black box, but outsiders should not need an encyclopedic knowledge of blockchain processes to enjoy a product.

Positioning your industry as a selling point will also alienate those outsiders who may not necessarily understand the underlying technology of your project. If you are leveraging blockchain to provide users with specific utilities, they should be able to feel those benefits while using the product, rather than reading in your white paper about how blockchain brings revolutionary information.

Let the product stand on its own while giving users the opportunity to learn more if they wish, which can strengthen their connection to the technology. Similarly, OpenAI does not require you to understand how its AI models work in order to use ChatGPT to outline your article or come up with catchy slogans.

4. Not Every Web3 Product Needs to Attract Outsiders
Most consumer-focused blockchain projects dream of cracking the code for mainstream adoption. However, before turning to a mainstream audience, it is essential to provide something practical and novel for communities that are somewhat familiar with or fully immersed in blockchain.

When a crypto project promises the wider public an alternative internet service that "protects privacy," they are clearly targeting the wrong audience. Those who have never purchased Bitcoin won’t care—even if they have heard of it. This is a reliable way to lock the project permanently in the first square.

Instead, to build Web3, innovative founders should meet the needs of consumers who are already using Web3 products to some extent. If your product is effective and provides utility to an audience that has already seen it all in crypto and blockchain, they will be able to vouch for it.

This expert-level word-of-mouth adoption happens in any emerging industry or new technology. Think about it: if you are considering downloading a new investment app, you might ask a friend who is familiar with investing and finance and has seen millions of similar programs whether it’s worth adding. The same principle applies to attracting outsiders to join Web3.

5. The Trend of Technological Development is Human-Led
The design of Web3 as an integrated ecosystem presents unique challenges for startups in creating products that solve the entire Web3. It’s already difficult enough to build a train while laying down the tracks.

Imagine building a train while laying the tracks. It requires strict discipline and intense focus. This type of development model is unsustainable because projects either lack resources or are overwhelmed trying to solve every specific sector's problems instead of addressing a particular issue.

OpenAI did not create ChatGPT to fix the world or make everyone understand neural networks. It started with a prompt that anyone can use without guidance, allowing the audience to experience firsthand how this simple prompt can improve their lives. When we can do the same for Web3 users, the ChatGPT moment for Web3 will arrive.

Social media has the potential to drive widespread adoption of Web3, and the building blocks are already in place. Decentralization can serve as a pillar for sub-industries, such as direct messaging, group communication, and the commercial value of blockchain, all of which can be built in an accessible way.

Creating an entire ecosystem and infrastructure from scratch is a uniquely daunting challenge for Web3 startups. Simply believing in creating cool tech products is not enough. If ChatGPT has taught us anything, it is that we must always remember that adoption occurs when users find your product interesting and enjoyable to use.