The Ownership Economy: Crypto & The Next Frontier of Consumer Software – Variant

The Ownership Economy: Crypto & The Next Frontier of Consumer Software – Variant

In the world of technology and innovation, the concept of ownership has always been a powerful motivator. When individuals have a stake in the products they use and contribute to, they are more likely to be deeply engaged and committed. Traditionally, ownership has been limited to a select few, such as founders and investors. However, with the rise of cryptocurrencies and blockchain technology, a new era of user-owned and operated networks is emerging.

The protocol innovation of tokens in the crypto space is transforming the way software platforms are built and adopted. These tokens act as packets of value, allowing users to not only participate in the platform but also own a stake in it. This shift in ownership is a game-changer as it aligns the economic interests of the platform with its users, ensuring better cooperation and innovation.

The current landscape of the internet is dominated by large platforms whose economic interests are often poorly aligned with their most valuable contributors – the users. This misalignment can hinder the growth and potential of these platforms. However, the ownership model changes the game by giving users the opportunity to earn the majority of the value generated from their contributions. This creates a more cooperative economic model that fosters better alignment and ultimately leads to larger, more resilient, and more innovative platforms.

The success of Bitcoin and Ethereum, the first user-owned and operated networks at scale, is a testament to the power of user ownership. Instead of the value being concentrated in the hands of a select few, it is distributed among the users who actively participate and contribute to the network. This not only creates a fairer distribution of wealth but also incentivizes users to engage more deeply with the platform, whether it's through sharing ideas, providing computing resources, writing code, or building communities.

Adoption is a major challenge for any startup or new technology, especially when network effects are crucial. The key to overcoming this challenge lies in making the new models and platforms more accessible to a wider audience. By building products and protocols that facilitate economic alignment with users, founders can bootstrap adoption and participation. This means creating incentives for users to join and actively contribute, thus creating a network effect that drives growth.

Now, let's shift gears and delve into another topic that is relevant to growth in the digital space - metrics. Metrics play a crucial role in growth hacking, providing valuable insights into the success and progress of a product or platform. However, not all metrics are created equal. Vanity metrics, such as total users, daily active users (DAU), and monthly active users (MAU), may look impressive on the surface but fail to provide meaningful insights into growth rate or user quality.

To truly understand and track growth, growth hackers should focus on metrics that matter. One such metric is daily net change, which tells you on a daily basis how much your user base has grown or shrunk. This metric provides a holistic view of user acquisition, re-engagement, and retention, allowing you to assess the impact of each component on your overall growth rate.

Another important metric is core daily actives. Unlike DAU or MAU, which can be inflated by sporadic or one-time users, core daily actives only count users who have been using your service on a regular basis. By calculating the number of users who have used your service today and have also used it five or more times in the past four weeks, you can obtain a more accurate measure of user engagement and loyalty.

Lastly, the cohort activity heatmap is a powerful metric that reveals how your user retention curve has evolved over time. This metric provides valuable insights into the effectiveness of your retention strategies and allows you to identify any adverse changes in user behavior. Even a small difference in conversion rates can compound over time, making it crucial to track the conversion funnel for important flows on a daily basis.

In conclusion, the ownership economy fueled by cryptocurrencies and blockchain technology is revolutionizing the way software platforms are built and adopted. By giving users a stake in the platforms they use, we can foster better alignment, cooperation, and innovation. Additionally, focusing on meaningful metrics that truly reflect growth can help growth hackers make more informed decisions and drive sustainable growth. To harness the power of the ownership economy and achieve growth, here are three actionable pieces of advice:

• 1. Embrace user ownership: Consider how you can incorporate user ownership into your product or platform. Find ways to incentivize users to actively contribute and share in the value they help create.

• 2. Prioritize meaningful metrics: Instead of getting lost in vanity metrics, focus on metrics that provide valuable insights into user growth, engagement, and retention. Daily net change, core daily actives, and cohort activity heatmap are just a few examples.

• 3. Foster economic alignment: Ensure that the economic interests of your platform are aligned with the interests of your users. This can be achieved through equitable distribution of value and creating incentives for users to actively participate and contribute.

By following these pieces of advice, you can tap into the power of the ownership economy and drive sustainable growth in the digital landscape.