How Web3 is transforming business models as we know them

How Web3 is transforming business models as we know them

How Web3 is transforming business models as we know them

In part 1 of our Web3 series we discussed the foundational changes to the internet with Web3 and what this may enable for communities and businesses.

Today, we’ll explore 3 examples of how Web3 tools are changing business models.

DAOs, the future of work

One of the most apparent innovations in Web3 are DAOs (decentralized autonomous organizations). We’re seeing new communities incentivized by tokens (aka DAOs) spin up daily, which attempt to tackle many of the world's problems (ie. Ukraine DAO), replace traditional businesses or innovate with something completely new.

At Web3 Academy, we talk alot about DAOs, but it’s also interesting to think about how this new paradigm of community-driven business is going to impact the workforce. DAOs essentially turn everyone in Web3 into some combination of entrepreneur, freelancer, board member and investor.

Just like how Web3 is providing permissionless and open technologies, DAOs create a permissionless and open workforce. What I mean here is that anyone can join and contribute to the communities or businesses (aka DAO) they want to. Location, age, race and even past experiences in some cases are irrelevant. What matters is whether you can provide value to the community today.

CVs become a thing of the past as Web3 is about contributing in the moment to earn a role within a company (aka DAO). Rather than showing past achievements or education and "promising" you will do a good job, “doers” are rewarded in Web3.

It’s uncertain if or how this will result in more “jobs”, wealth or opportunity for the masses. However, it’s obvious that technologies like the internet and now Web3 continue to remove friction for those willing to put in the effort to find work and create revenues for themselves.

Social tokens for creators and artists

Years ago in College I found an up-and-coming DJ that I had a feeling was going to go big. I shared his songs on social media and brought friends to his live shows. I remember thinking to myself: “I know I’m early on this artist, how can I make money here? How do I share the upside?” The answer was, I couldn’t. Today “Tchami” has become a well-known DJ leading the way for the genre of future house. If only Web3 existed back then; we would have had the tools to incentivize and support each other from the beginning.

Social tokens issued by individual creators, artists or anyone with an audience enable the community members to collaborate and share ownership in the value created together. They are a means to incentivize your fans, followers, or customers to be more than just that: to be alongside you on your journey as a creator. and to share in the direction of the business, the marketing, the PR, and the revenues generated.

If Tchami had airdropped tokens to his first 5,000 fans and these tokens shared a % of Tchami’s future revenue/equity he would have immediately accessed an experienced marketer in myself, in addition to 4,999 others with various skills and experiences to support his journey to become a world renowned DJ. While I did share his music and attend some concerts, if I had a share in the financial upside and/or some sort of VIP access or a vote in the direction of his business/music (all enabled through the tokens), I would have been incentivized to do so much more to support his career when he needed it the most.

The traditional world (and Web 2.0 gatekeepers) can restrict, creators from accessing the true power of their fans and community. Rather than utilizing their passionate early fans who support them even without financial incentive, they are forced to stick to the traditional rails of giving most of their revenues/equity/power to the corporate world in hopes for support and exposure.

Web3 on the other hand gives you the tools to tap into your fans and audience well before you have the means to build a team or land a deal with the corporates. Social tokens can be so much more than just a means of equity though. They can provide:

- Seamless access to IRL shows or online events
- Governance to help guide a young artist’s career
- Internal currency to pay those who help with promotion, content, partnerships, etc.
- Rewards/point system for the most loyal and engaged fans
- Discounts for merch, tickets, etc.

The capabilities Web3 offers to creators are endless and this doesn’t even get into the use of NFTs for royalties, intellectual property and ownership of the physical/digital things artists create!

NFT membership DAOs

Everyone reading this article is subscribed to some form of membership. Whether that be your favorite newsletter, Amazon Prime, your internet provider or iCloud. Subscription models and memberships have become one of the most profitable business models today.

Web3 is already tapping into the business model of subscriptions and taking it to a whole other level. The problem in Web2 models is that when you pay for a subscription, it typically works only on that one platform with little to no interoperability between other platforms. Ever tried to run a paid newsletter on substack and include a paid community inside Facebook or another social platform? It’s an awful experience and most of the time not even possible.

NFTs make this process seamless and can extend a much better value-add to the customer. Using tools like Unlock Protocol, we now have the ability to make NFTs the product of a subscription and then use that NFT to seamlessly gate access to content across any platform via Web3s interoperability. Moreover, that NFT can now be used to create experiences or opportunities that simply are not possible in the Web2 world.

To better understand this, let’s take a look into a real world use case of BakeryDAO, which is using NFTs to create a multi-platform newsletter membership. BakeryDAO seems like your typical investment newsletter at first glance, however there’s so much more to it than meets the eye.

Bakery DAO NFTs
Grab a pixelated pastry to take part in Bakery DAO

To access this membership customers must purchase 1 of 2 tiers of NFTs that provide different features and access levels. Tier 2 NFT is a monthly subscription whereby the NFT expires every 30 days and it provides basic access to certain content in the newsletter and discord community. This NFT tier has an unlimited supply, so it’s not so different from your Web2 subscription model.

Tier 1 NFTs on the other hand are more exclusive as they provide lifetime access to the membership, full VIP access across the newsletter and community as well as access into the Bakery DAO.

Here’s the really interesting part of this. Tier 1 NFTs also have a limited supply, meaning there’s only a certain number of customers who can purchase this tier and members of this tier receive dividends from the revenues of Tier 2 purchases.

Not only are those Tier 1 customers going to be more engaged inside of this community, but they are now incentivized to help market and grow the Tier 2 customer base to ultimately generate more revenues. The DAO could also decide to create additional products and services to generate even more revenues for the NFT holders. Should they succeed in this, Tier 1 membership access may appreciate significantly resulting in Tier 1 NFT holders having VIP access into a membership, dividends on tier 2 sales and an asset that may appreciate over time… what a value-add for your customers!

Just another example of how Web3 can enable things that simply are not possible in Web2.

Where to learn more about Web3 and changing business models?

To learn more about Web3 business models or if you’re a creator, entrepreneur or marketer looking to use Web3, check out the following report written by Web3 Academy:

2022 Web3 Report: Community, Growth and Marketing in the New Internet
How Blockchain, NFTs, Tokens and the Metaverse are revolutionizing how we think about marketing and business models in 2022

This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.

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