How to Use Tokenization to Drive Growth: Lessons From a Company That's Killing It - Tascha Labs

How to Use Tokenization to Drive Growth: Lessons From a Company That's Killing It - Tascha Labs

Instagram: The True Founding Story

In the world of business, it's important to get clear on what you're really in. A business is not just about what it sells on the surface but the key processes that drive its bottom line. Take Marriott, for example. They may seem like they're in the hospitality industry, but they're actually in the real estate business. Similarly, Costco is not just about selling products, but they excel in inventory management. Understanding this distinction is crucial, especially when it comes to incorporating tokenization into your business model.

Tokenization can be a powerful tool to drive growth, but it's essential to use it in the right way. One common mistake is trying to solve the cold-start problem with tokenization instead of focusing on product-market fit. Tokenization can act as a "bridge loan" from users to get your project off the ground, but the project itself needs to be viable and solve a real user problem. Ask yourself if your project would still work without a token. If it can, then you're on the right track.

Token incentives are another aspect that needs careful consideration. It's crucial to focus these incentives on key performance indicators (KPIs) that actually matter. Don't waste this powerful tool on things that don't contribute to your growth and profitability. App engagement is a KPI that truly matters, so align your token incentives accordingly.

Bringing demand from outside the metaverse is essential for the success of web3 projects. Operating purely in the digital sphere can lead to a lack of a vibrant economic ecosystem, resulting in self-referencing ponzis. To overcome this, think about how you can be the bridge between the real economy and the metaverse in creative ways.

When it comes to token utility, it's more important than limiting token supply. Token utility provides a fundamental incentive for users to keep stacking tokens, even without the opportunity to sell them. Focus on creating value and utility for your token holders, and they will continue to engage with your project.

Protecting your project from crypto market cycles is crucial, especially in the early stages. While token liquidity has its advantages, think about how market volatility may affect your core business and what you can do about it. Consider whether having your token tradable on exchanges from day one is necessarily a good thing.

Staking can be a great way to increase user engagement and loyalty, but it should be used to distribute value-added, not to solve token demand problems. When done right, staking aligns with the web3 ethos of sharing the benefits of project growth with users. However, for staking yields to be sustainable, they need to come from business profit, not token emission.

Now, let's shift our focus to the true founding story of Instagram. Kevin Systrom and Mike Krieger, with their UX skills, refined Instagram to require as few actions as possible. They eliminated the need for users to add tags about people or places to their photos, making the app simple and intuitive. Following the footsteps of Twitter, Instagram was launched as a public platform by default.

The timing of Instagram's launch couldn't have been better. On its very first day, the app managed to attract 25,000 users. This initial success allowed Systrom and Krieger to secure new financing and expand their team. Despite the opportunity to hire more people, the founders kept the company lean, with just a dozen employees. This lean approach allowed them to maintain control over the company's direction and maintain its unique vision.

In April 2012, Facebook made a monumental offer to purchase Instagram for around $1 billion in cash and stock. The key provision of the deal was that Instagram would remain independently managed. This acquisition showcased the belief in real connections over ones based solely on words.

In conclusion, tokenization can be a powerful tool for driving growth in your business. Understanding what business you're really in and combining tried-and-true business models with tokenization can lead to innovative solutions and increased chances of success. Focus on solving real user problems, align token incentives with relevant KPIs, and bring demand from outside the metaverse. Remember that token utility is more important than limiting supply and protect your project from market cycles. Utilize staking to distribute value-added and share project growth with your users. By incorporating these actionable insights, you can harness the power of tokenization to drive growth in your business.