"The Ownership Economy 2022 – Variant: How User Ownership and Pinterest's Growth Strategies Shape the Future of the Internet"

"The Ownership Economy 2022 – Variant: How User Ownership and Pinterest's Growth Strategies Shape the Future of the Internet"

The ownership economy is revolutionizing the way we interact with the internet. It not only empowers builders to leverage market incentives to create new networks, but it also has the potential to distribute wealth-building assets more widely, leading to positive social change. Currently, there are over 15,000 projects in the ownership economy, ranging from user-owned financial markets to user-owned social networks and digital assets. These projects transform users into owners, making them an integral part of the next generation of the internet.

The market capitalization of tokens tracked by CoinMarketCap has reached $1.76 trillion as of April 26th, 2022. While this is a significant amount, it pales in comparison to the market capitalization of global stock markets, which exceeds $100 trillion. The largest cryptonetworks, such as Bitcoin and Ethereum, have market capitalizations of $725 billion and $337 billion, respectively. The popularity of wallets like Metamask and Phantom further demonstrates the growing adoption of user-owned assets in the ownership economy.

However, simply giving users ownership is not enough to ensure the success of a product. Token incentives and ownership need to be coupled with strong product-market fit in order to sustain usage. While tokens can capture user attention and bootstrap initial adoption, the presence of liquidity and solving a widespread need for users are crucial factors in sustaining usage. Additionally, there is a concern that ownership may crowd out intrinsic motivations to use a product, leading to more mercenary and temporary engagement. Token incentives should be carefully optimized to preserve users' intrinsic motivation.

New token distribution designs have emerged to boost user loyalty and long-term engagement. Axie Infinity's player retention has remained strong over time, suggesting that engagement is not solely driven by novelty. Liquidity mining programs, which reward users with ownership tokens for providing liquidity, have historically led to short-term participation. However, new token incentives are now placing greater emphasis on contributor growth and engagement. Curve's voting escrow contracts and Gro's vesting mechanism are examples of tokens being used to incentivize long-term engagement.

User ownership also fosters richer ecosystems of projects and contributors. The permissionless nature of the ownership economy attracts users, creators, and developers, who build around and on top of these projects. CC0 NFT projects, for example, allow their intellectual property to be used in novel and generative ways, increasing its value and reach. By enabling free use of assets, these projects stimulate building, creation, and collaboration.

The ownership economy also allows users to become owners earlier and participate in value creation. Web3 companies that launch tokens do so, on average, 2.7 years after founding, while VC-backed companies go public approximately 5.3 years after securing their first VC investment. Ownership is becoming a keystone of new experiences across all categories of software products, extending beyond the realm of cryptocurrencies.

Pinterest's growth from 3,000 to 73 million users provides valuable insights into the power of grassroots marketing and community engagement. The initial success of Pinterest can be attributed to word-of-mouth marketing and targeting community leaders. By organizing meetups and leveraging bloggers, Pinterest was able to grow its user base and tap into active communities interested in handicraft and DIY content. Pinterest's boards, carefully curated collections that reflect taste and creativity, became indicators of a user's identity and were proudly shared. This pride and sense of ownership made Pinterest a powerful marketing tool, as campaigns involving the app were deeply intertwined with the user experience.

In conclusion, the ownership economy and Pinterest's growth strategies offer valuable lessons for the future of the internet. User ownership can jumpstart growth, but sustaining it requires a strong product-market fit. New token distribution designs are boosting user loyalty and engagement. User ownership fosters richer ecosystems and stimulates building and collaboration. Additionally, the ownership economy allows users to become owners earlier and participate in value creation. To leverage these insights, here are three actionable pieces of advice:

1. Focus on product-market fit: Tokens and ownership alone are not enough to ensure sustained usage. Solve a widespread need for users and optimize token incentives to preserve intrinsic motivation.

2. Prioritize long-term engagement: Design token incentives that encourage contributor growth and long-term engagement. Consider lockup periods and vesting mechanisms to incentivize users to stay involved.

3. Foster community and identity: Emphasize community engagement and tap into active communities with grassroots marketing strategies. Encourage users to take pride in their interactions with your product and create a sense of ownership.

By incorporating these strategies and embracing the ownership economy, builders and businesses can shape the future of the internet and create positive social change.