Marketing web3: Audience, Community, More

Steph: Hi, everyone. This is Steph, and welcome back to the a16z podcast. We have a bunch of exciting episodes in the hopper, from hardware to healthcare to fintech and more. But today we're coming to you with a feed drop from our sister podcast, Web3 with a16z.

Steph: Now, this episode is all about marketing, and it relates to the common startup fallacy: if you build it, they will come. With the exception of outliers, many of us have learned the hard way that without distribution, they won't come. But equally important, as the tools to build become more accessible than ever, your ability to capture attention also matters more than ever.

Steph: In this episode, longtime host Sonal Choksi sits down with a16z crypto CMO Kim Milosevic and also Amanda Cassatt, who helped bring Ethereum to market. Together, they discuss the fundamentals of good marketing, starting with what marketing even is, all the way to understanding and finding your audience, the differences in reception that people have to companies versus individuals, the relationship between product and marketing, what metrics really matter, and so much more.

Steph: Now, this episode tackles these questions from the Web3 lens, but many of these lessons can be applied more widely. Plus, you'll get to hear how Ethereum was marketed in the very earliest of days. Finally, this podcast was produced by a16z crypto, who also recently released their annual State of Crypto Report, relevant to all kinds of business leaders, builders, and policymakers seeking to understand the next internet.

Steph: That report also comes with an all-new State of Crypto Index, an interactive tool to track the health of the crypto industry from a technological rather than a financial perspective. So, if you're curious to see the monthly growth of 14 key industry metrics, from the number of verified smart contracts to transacting wallets, check out the index at a16zcrypto.com slash stateofcrypto. Or you can find the full report at a16zcrypto.com slash s-o-c. And of course, that stands for state of crypto.

Steph: All right, let's get started.

Sonal: Welcome to Web3 with a16z, a show about building the next generation of the internet from the team at a16z crypto. That includes me, your host, Sonal Jackson. This show is for anyone, whether entrepreneur, developer, business leader, policymaker, creator, gamer, or marketer.

Sonal: Today's episode is actually all about marketing. Relevant not just to marketers already in Web3, but also to anyone doing community management, dev rel, or developer relations, or simply doing marketing in Web2, or classic growth marketing, and wants to understand some of the latest trends. It's also one of our special book launch episodes because we have the author of the new book, just out, Web3 Marketing: A Handbook for the Next Internet Revolution, which covers everything from what is Web3 to Web3 marketing in theory and practice.

Sonal: We'll also cover a lot of the themes that are in the book and which are also top of mind questions for many builders out there, including finding your audience and product market fit to tactics such as community marketing. The author and our expert guest today is Amanda Cassatt, who was the first CMO at ConsenSys, helped bring Ethereum to market, and also founded and leads the pioneering and native Web3 marketing agency, Serotonin.

Sonal: Also joining this episode to share insights and ask questions is Kim Milosevic, CMO at a16z crypto, who oversees brand, marketing, events, and communications. Before that, she was VP of communications at Coinbase, where she took the company through its direct listing while leading internal, policy, product, and corporate communications internationally.

Sonal: As a reminder, none of the following is investment, business, legal, or tax advice. Please see a16z.com slash disclosures for more important information, including a link to a list of our investments.

Sonal: So anyway, this is a big topic, top of mind for many crypto founders, which is how to do marketing in Web3. And by the way, marketing, I feel like is a big bad M word. It can mean all kinds of things for people. I am curious, maybe just to kick us off. Kim, how would you describe marketing? That's a very big question.

Kim: I don't know if I can make it concise. It's really a promotion of something, whether that's a promotion of an idea, a person, a product, a category, you name it.

Sonal: That's a really great point because the product can be a person as well, which is actually very relevant in Web3. Amanda, how would you define marketing broadly?

Amanda: Sure. I think of marketing as a matching exercise between a project or a product and people that would use it if only they knew about it. The reason I describe it as a matching exercise is actually when I came into ConsenSys, the reputation of marketing was damage from Web2 style marketing, which involves influencers on Instagram hawking vitamin waters, all these ads constantly in your feed for products that you don't want. There's this idea that marketing is putting things in your field of attention that you wish weren't there, and that it's trying to get you to do something that's not in your interest, like buy a product that you don't really need.

Amanda: This idea of marketing as a matching exercise is about finding the people that actually want or would want the product if only they knew about it. That matching exercise isn't always possible because not every product or project has people out there that would want it. Not every project is actually solving a real problem. But it really starts with understanding what that product is very deeply, even if you aren't technical, being able to understand how your product works, what it does, and then understanding your audience. Who are they? What do they pay attention to? What are the channels where they live? Not just digitally, but physically, environmentally. What kinds of messages resonate with them? What kinds of price points are appealing to them? And then figuring out how to bring those two things into closer proximity.

Amanda: So you can test how well they match up with each other. It's a part of the product market fit process to match the product with its audience and see how that match is going, and then to feed data from how that's going back into the product development process. So the other thing I would say is if a product or project is struggling to get that match, it could just need a few tweaks. So that process informs a cycle that goes into product building.

Sonal: That's great, Amanda. I never heard marketing described that way as a matching exercise. That's super interesting. And what does it encompass?

Amanda: My friend Eva Balin tweeted something really smart that I included in my book, which was: there's either building or trading. Everything in between is marketing. Marketing is a much more expansive activity than perhaps some technical founders originally believe. It's everything you do from your name of your company to your logo, to which social and community channels you choose to use, to if you decide to go out to the press to earn media coverage, to any kind of blog content you write, or even any kind of developer documentation. You're putting that out into the world and it's causing someone to respond to your project or your product in a certain way.

Kim: And job descriptions, right? As they're trying to hire and recruit. That's all marketing too.

Amanda: Totally. The blurb at the bottom of your email about what your business is. All of this is marketing.

Sonal: Right. But why do you think founders and builders in crypto and Web3 don't get why marketing matters? A lot of our listeners are not familiar with the world of marketing, but I believe a lot of them probably even have this idea, which I think is a mistake. Let's just jump right into this: if you build it, they will come, which seems like a very big, faulty assumption. I think we should help our listeners think through that. There might be some truth to it because some of the most viral products are natural word of mouth marketing, but that doesn't mean that's not a form of marketing. So I want to dig into that a little bit. Kim, from your perspective, why do you think that is? I wonder if it's even just lack of awareness.

Kim: Yeah, I think you have a lot of technical founders who are very focused on building the product, the architecture. And as you know, Sonal, when you have technical founders as leaders, the focus really is on the product, which is where I think the focus really should be in the beginning. But that often means that they are rarely marketing experts or have marketing experience. So their core expertise is not in marketing, which is fine. It's a muscle that you can build over time, or you can look to augment that by hiring great people, whether that's in-house or consultants. But it's not as much of a focus for them. It's often something that they're just not always thinking about early.

Kim: But I'd say in Web3, they probably should be because so much of it is about building communities. And those communities don't just develop overnight. You have to have a good product. You have to be solving a need, as Amanda said, but you also have to bring people together. And now with so many competing communities within Web3, what makes yours different? How do you stand out from the very beginning? How is your proposition different?

Kim: Look, if you're marketing your product to very technical people, then it's okay for that message to be fairly technical. It will always stay at a smaller audience. But if you're trying to market to more of a consumer audience or a wider audience, you obviously have to start distilling the core message or benefits and getting it to a higher level of abstraction in terms of what you're trying to say earlier on in order to reach more people. So I think it starts with being a function of having a technical founder, and maybe they just don't have as much experience with it. But I would say that the marketing needs to start happening earlier now, because there's just naturally more attention.

Sonal: Amanda, when you were in the early days of building the Ethereum community, I'd be curious for you to talk about this more. What you guys were doing was fairly novel. It was sort of like the first real composable blockchain. So the concept of building a community was also very new. Now you have a lot of blockchains and people trying to build communities around them. So I think the stakes are a bit higher and it's just harder to get attention.

Amanda: Early Ethereum days were really interesting because you realize early on that the Web2 style marketing skill sets aren't going to work to popularize Ethereum. When I was hiring the first Web3 marketing team at ConsenSys, and I was the first official marketing hire, most of the applicants came with what have become standard marketing skill sets, which is just running a paid budget on Meta's various business suites. So running a paid budget on Facebook, on Instagram, on Twitter. And at the time, actually, in 2016, 2017, the major platforms banned crypto terms. So you actually weren't allowed to use the word blockchain, the word crypto, Bitcoin, Ethereum in a paid campaign on any major platform, or even many of the email platforms. MailChimp had a ban at one point. Google Ads had a ban at one point.

Amanda: And so we were forced to get back to the growth hacker roots of marketing and move away from this calcified marketing skillset that had gotten used to these Web2 platforms and used to the Web2 style of marketing. And what we learned is we're not a centralized comms department. We can't control what everybody is going to say about Ethereum. So all we can do is bottom-up exercises in order to make sure that correct information gets out there.

Sonal: What do you mean by bottom-up exercises in this context specifically?

Amanda: Let me tell you exactly. For example, we noticed really early on that there were meetup groups popping up all around the world, not just in San Francisco and New York, but also in Budapest, also in Buenos Aires, also in Istanbul, where individuals were stepping up to become their local Ethereum meetup organizers. And instead of saying we as the Ethereum Foundation, or we as ConsenSys need to be the ones to run all of the different Ethereum meetup groups around the world, what we did was we kept an eye out for new organizers cropping up. We invited the organizers into groups so that they could connect with each other and share best practices. We offered standard materials like decks and design templates in order to help these meetup group leaders standardize their presentations and look more official.

Amanda: And we also helped curate a roving roadshow of new dApps and new projects to come to all these meetup groups and talk to them about what they were building. That was great because it meant new content for all these different meetup groups. And it meant that new projects building on Ethereum could get feedback and get users in all these meetup groups around the world. This is one of the themes throughout my book: in Web3 marketing, instead of building a giant centralized full-time employee comms or marketing department, it's about paying attention to what's going on organically in your community and figuring out how to blow oxygen on those sparks in order to help them grow, as opposed to assuming that all of the great ideas and all of the work is going to come from you.

Sonal: That's great. And just to quickly define for the listeners who may not remember this, because that term kind of comes in and out of vogue: dApps or decentralized apps or applications. And what you're obviously describing is the fact that Ethereum is a platform for others to build on. So on that note, when you blow more oxygen on some of these organic efforts and it's bottom up, it's decentralized, as you said, it's not a centralized marketing department. How do you then market the things that are built on top of your platform? Because in this case, and we'll talk about this a little bit more when we go into different types of domains, this is very novel for a lot of people because in crypto, you often have layers, I mean, literal layers: layer one, layer two, L1, L2. In your product narrative, where do the boundaries begin and end? What I mean is theoretically anything built on top of Ethereum could be marketed as part of Ethereum. So where do you define those lines?

Amanda: Right. So in the early days that I'm talking about, I could name every project being built on Ethereum. So there wasn't really a need to define those lines because it was remarkable that anyone was building on Ethereum. And between ConsenSys and the Ethereum Foundation, chances were that we would know the people. Each of the projects that we helped grow at the time, whether it succeeded or failed, was a showcase of what was possible with Ethereum. And oftentimes you saw a project fail to gain traction, but then many years later, another project get inspired by that first and become successful.

Amanda: Just as an example, Ujo, a really early music project on Ethereum that was pioneering music NFTs in 2016, 2017, ended up helping to inspire Audius, which is popular now.

Sonal: Yeah, it's a decentralized Spotify is maybe how one can describe Audius. Or decentralized SoundCloud.

Amanda: Right, right. So a lot of what we were doing was identifying projects that could succeed and if not, could become inspirations to others. The way to market something like Ethereum was not run paid campaigns on Facebook targeted at developers to try to get them experimenting with Ethereum software and then somehow measuring what the ROI of that activity was for Ethereum. That would have been a laughable way to go about it when you're talking about a platform. It's about getting as many at-bats as possible of builders coming onto the platform, trying their hand, using their creativity to try to build against a use case, and then fanning those flames, injecting oxygen into that situation to help grow that product or at least make it a beacon so that others can see it and be inspired by it.

Sonal: And does a project have to be successful in order to breathe more oxygen onto it? Because I sometimes wonder if the narrative is more compelling than even the track record. And that could be a good or bad thing, to be clear, but I just have to ask.

Amanda: You know, I think of the relationship between marketing and product like muscle and bone. The product is the bone and the marketing is the muscle. And if you're going to take a walk around the block, you need both. If you're all product and no muscle, you're going to sit on the floor. You've got something solid, but you're going to be stuck. If you're all muscle and no bone, you're going to be floppy. There's nothing holding it together. There's nothing solid. So you need both.

Sonal: Very interesting. Kim, anything to add from your perspective on this idea of marketing a platform versus marketing an actual specific product, this whole range?

Kim: I mean, I think that's true of all technology really. Even look at Apple and the App Store. What brings that to life is all the applications that are there, and what people can do with it. I know, for example, they have a number of dedicated folks who are just marketing the applications on the App Store. The same is true of developer programs or really any product. It's like, what are people doing with that? And how does that really tell the story of the company and the product and what's possible? I think the same is true for here.

Kim: I think what Amanda is talking about though is in this more decentralized world and Web3 world, you probably have a little bit less control. Apple's probably going to be a little bit more heavy handed in terms of what the people in their App Store can and can't say or do.

Sonal: I mean, they are, yeah.

Kim: Right, absolutely. I mean, I remember dealing with Microsoft or other large companies like that and being on the other side where you are the application and there were so many do's and don'ts. You can't say this, you can't say that. And in the Web3 world, there's both the beauty and the curse: they can say whatever they want and there's very little control there. But how can you really arm them with the right kind of core messages, help, like you said, resources to benefit you? I mean this in the best possible way. It's just like, how do you really help put them to work for you where it's a very mutually beneficial situation? They can market off of your platform, which usually that platform will have a little bit more visibility or higher reputation or be a little bit more well-known. So they can take advantage of that. But then you also are really looking to show the value of what you guys are building. So you need those applications. It's a very mutually beneficial relationship and can be great. But there's also obviously risks. Some of those projects can flame out. They don't all work. So that's where the lack of control comes in. But I think there's a lot more reward there than risk.

Sonal: Do you change the playbook accordingly, though, given that there are those projects that can flame out? From both of your perspectives, does that change what you do or don't do? Or is it just like you just move on and that happened and that's sad?

Sonal: I'm guessing, Amanda, there probably are certain classes of applications that you guys are probably more interested in promoting and talking about to show the value than you were of others. Obviously, if you're a platform and you've got all these, you can't be playing cop or going deep on every single one of them.

Amanda: Right. We outsource our diligence to venture firms like you guys. Obviously, things need to meet our own standards. We're very diligent about checking that everything they're saying, let's say in a press release, is actually true. We would never go out to press or to a partner or post something on social or help create a post with information in it that we deem to be inaccurate. So that's also really important to us.

Amanda: That being said, we certainly have projects that we wouldn't take on. And I'll give you an example. A really big meme coin project reached out to us and said, essentially, "Our coin has been going crazy. We just wish that there was some kind of utility. Can you work with us to create a message about what the utility is of this meme coin?" You want me to create utility for you? That's interesting. I was just curious to meet them and figure out who they were. They were anonymous. And it was very interesting to learn who the people were behind this project. But I said, you know, I can't retroactively create utility for something.

Sonal: That's so funny.

Amanda: That's not how it works, right? And so an example like that is something that we wouldn't do. Whereas something exploratory, something we'd love to play with.

Kim: I mean, this is true of any startup, right? Most startups don't make it.

Sonal: Yeah, good point.

Kim: And so, especially in these early stages, there are great ideas or they're building something, all the momentum's there. And a lot of them don't work out for a variety of reasons. The same is true of crypto. And we are in a space where most of the companies are at these very early stages still. That's just a reality of it.

Amanda: The flip side is you sometimes see some epic pivots.

Sonal: Oh, yeah.

Amanda: Yeah. I remember working with the Gnosis team, for example, on their original Gnosis token sale, which was one of the first token sales on the Ethereum blockchain. And they were focused on building prediction markets. And today, most people interact with the Gnosis smart contracts by using the multi-sig.

Sonal: The Gnosis safe.

Amanda: Exactly. That's a great point, you guys.

Sonal: So let me pick on a couple of threads. First one: you mentioned that sometimes you are marketing people as well as products and users and other things. One question that's really unique about Web3, when you think of classic Web2 marketing and even non-Web2 marketing, just classic marketing period, a big part is figuring out profiles and who to profile and who not to profile. I mean, Kim, gosh, we've been doing this for years at a16z. And Amanda, I'm sure you and your clients have worked on many examples of this. There's a fine balance between taking a visionary leader, like say Vitalik, and when to have him be that visionary spokesperson, and when not to in a decentralized community. A. B, there's another nuance where sometimes you have a very open source model, obviously, and you can see who made what contributions, but sometimes an engineer might get called out more than a non-engineer or another person might get called out. So that's the second point. And then the third example, a kind of weird nuance in crypto and Web3, is you also have anonymous and pseudonymous players who you don't even know who they are. So these are all weird nuances of crypto and Web3. Let's talk about marketing on that aspect and what that changes and doesn't change.

Amanda: I think it's important for every project that has some kind of face that it can put in front of the project to go ahead and do that, and to build in both those directions. To build up profiles for the actual company, to share product updates, to share community events, what have you, but also for the leaders to come out and be known. One of the first things that I said to Joe Lubin when I joined ConsenSys as CMO was that we were going to have to build his profile a ton. And he wasn't super psyched about that. He wanted to be less visible. He wanted to be focused on building. And I knew that a lot of people connect with ideas, but even more people connect with people than ideas.

Amanda: I'd come from working with Arianna Huffington, which was my first job out of college, who obviously built an empire around her own personal brand. So I'd seen firsthand how important those personal brands are. And if you look on crypto Twitter and look at leaders in the space versus companies in the space, often leaders will have larger, higher engagement accounts than companies. And if you think of your own behavior on a platform like Twitter, you're much more likely to engage with a person than engage with a company.

Amanda: We've struggled sometimes with anon founders. We work with a number of anon founders at Serotonin. We've struggled sometimes to get them as much visibility if they can't, for example, show up to a physical event because they're anonymous. But the flip side is non-founders can thrive on social media.

Sonal: Yeah.

Amanda: They don't necessarily need those physical events. So you get someone like Punk6529, who has a brilliant Twitter account. And then you get an anti-hero like Chef Nomi, who also had a highly followed Twitter account before that project blew up. So you get both sides of the same coin with the anons. They're just constrained to the digital world.

Sonal: Well, and they can also go on podcasts in digital form, which is what Punk6529 did. He came on with a voice modulator. I think he also spoke at a conference like ConsenSys via a voice modulator.

Amanda: Yeah, yeah. And you get all kinds of funny combinations like what G-Money did before he revealed his face.

Sonal: Oh, yeah.

Amanda: He would always put a cartoon image over his face in pictures.

Sonal: Yeah, that's right. We had him on the Coinbase podcast when he did that.

Kim: Yeah, people follow people. People become attached to people. So it's hard to really give people a sense of why this one project is different than another without giving some of that color behind who started it and why they started it and how are they approaching it differently and why are they the best suited to start that project and for it to succeed. And so I agree with Amanda. I think there's this really interesting tension in Web3 with that, because I think that people are trying to go for that ideal of, it shouldn't matter who Vitalik is, right? It shouldn't matter who the leader is. It should work without that person. And the reason that we had all this focus on an individual or this hero is why we got into the trouble we have with Web2.

Kim: I think in the early stages, it is important for those founders and leaders to come out and really build their profile and help people understand who they are and again, what makes them different and why they started that project. But as the project becomes more successful, they can step away a little bit more. Like with Vitalik, obviously everybody wants to hear from Vitalik still and whatever he says has great meaning and has a lot of impact. But there is a lot going on with Ethereum these days with Vitalik not weighing in, right? It has sort of created a life of its own. So I think as you go forward, you can start to extract some of the leaders or founders or other voices, perhaps like the applications built on top, etc., can play more importance. But I do think in those early stages, those founders or whoever you want to put as the face of the project, it is important for you to build that profile around them.

Amanda: I really like what Kim is saying about phases, because I think there are two phases to marketing a true Web3 platform. One is creating an incentive system and plugging people into that incentive system, solving the zero to one problem of building your early community. And the second is actually decentralizing, moving away from authority being overly concentrated in the original leadership and moving toward true ownership by the community. And if those are the intentional phases, then people matter a lot in the first phase.

Sonal: That kind of maps really nicely into this concept of progressive decentralization. And you guys are both sort of saying that you can progressively decentralize away from your profiles too. When you mentioned, Amanda, and Kim, when you mentioned that there are phases. On the flip side, you did say earlier that it is kind of chaotic in Web3. And sometimes you have no central corporate marketing that's deciding everything for everybody. So theoretically, that means anybody who works on X can go and claim to be a spokesperson for that product. How do you tactically manage that? I do want to get into a couple of tactics in here as well, because that seems like insanity to me when I'm hearing this. Like what? Just because I worked on a bunch of GitHub code on this one project, I can now go and claim that I'm so-and-so person. What do you tell people to do in that scenario?

Amanda: Yeah, I think it's really important to set a standard tone and behavior within that community. And that starts with those early founders. How do people talk to one another? How positive are they? How technical is the conversation? How responsive are people?

Amanda: I think setting that kind of culture and tone for the community is really important.

Sonal: Totally.

Amanda: Who you have in your early community is that kernel that's going to attract everybody that comes on later. At Serotonin, we think about this almost like imagine an alien spaceship descends from outer space, puts down a ladder somewhere on the planet, has room for 20 people. 20 people, wherever the ladder was, get on the spaceship, then the spaceship flies off. That's how important it is to form your early community thoughtfully and how much those people really matter. Because once it's larger, you lose control over the tone because you've decentralized away from that original founding team. So things like crypto events are super important. The crypto space loves going to physical IRL events because that's how you build that first kernel of community and build that trust to plug people into those incentive systems so you can eventually decentralize and pass off a lot of those responsibilities to the community.

Sonal: When you mentioned this analogy of the spaceship and how do you pick the 20 key people that get a seat on that spaceship, it's not an elitist thing. It's actually about how you curate this community so that it sets the right tone and value. And I bring that up because Chris Dixon on our end has often talked about how even if you have a bunch of marketplaces and they're open-ended and their code is shared, actually the right marketplace is the one that has the right community. And that is such a key differentiation in Web3 when you don't have that same moat that you might in another model where you're locked in in a different way.

Amanda: I think the mentality of a traditional or Web2 comms or marketing department is to silo information and to control who represents a project. This is the opposite. You have to move away from the mentality of top-down control and move into the mentality of bottoms-up support. And that means making, if everybody is going to be a spokesperson, you need to bring their ideas into your messaging. The flip side is if you're a centralized corporate comms department and you emit a certain thing, you're held responsible for that. But if you're a totally open community of contributors and one nutty person of their own accord came and contributed to your project, goes and says something, your accountability for that as the project is a bit different. And you can handle that as a community and you can vote and decide whether that person should have certain rights and responsibilities. Maybe they shouldn't anymore. You, like Kim was saying, can set standards at the beginning and then adjudicate whether that behavior made sense according to those standards, especially if you got that person's explicit agreement to those standards.

Kim: Yeah. And again, open source communities have been around for a while. I know, for example, at GitHub, they had something similar. I don't believe they had a policy internally. I think internally, anybody could be a spokesperson, for example.

Sonal: Oh, yeah. I didn't know that.

Kim: Which for somebody who's coming from a very corporate comms background, it's terrifying, right? And I can understand that. Once again, it's sort of that lack of control, but I think that there can also be a lot of power in empowering the community.

Sonal: So on that note, I think this is a good time to dig a little deeper into just what is community and community marketing and what that entails. One question here is first, like, what is a community? And you have a nice, neat definition in your book of like, what is a community? So let's talk more about community and what that is, what it isn't, what that changes behaviorally in marketing, and what are some of the things that you guys wish Web3 marketers knew about marketing community?

Amanda: So I'll start with the definition of Web3 community, which is an incentive-aligned group that includes team or builders, it includes investors, and it includes users. And in the Web2 world, those groups have bright-line distinctions between them, and sometimes even adversarial interests. And you can think of Web3 as an incentive alignment engine or as a substrate for building incentive alignments. And what it basically does is allow you to collapse those categories into a single blended group where you could have an investor who's contributing to the code base and acting as a builder. Or you could have a user that's acting like a member of the team and that's helping with the marketing of a project. And all of those categories merge together and everyone is incentivized to contribute however they can to the growth of the product or the project. And oftentimes marketers talk about community channels and that can be Discord, that can be Twitter, that can be Slack or Telegram. But the idea of Web3 community isn't confined to any particular channel. It's that constellation of people that are plugged into that incentive alignment system.

Kim: Yeah, I think that what it changes for marketing is that it's really a two-way conversation. Without a community, it's more of a kind of one way. You're sort of telling them what you want them to hear. With a community type of approach, you have to be listening. You have to be incorporating the feedback. You have to be treating them like they are a true member, an equal member. And that's to your point, Amanda, too. That's also how the incentives line up, too. That's the beautiful thing about Web3. Because in Web2, people talked about community, people talked about media, but Web3 is actually encoded in the way it works. So you have an actual vote. You can exit if you want and take what you have with you.

Sonal: Rage quit.

Kim: Yeah, yeah, exactly. So in Web3, it really takes community to the level at which I think people really had in mind when they throw that word around, but was never really possible before. Because, sure, like some of these Web2 companies had a community and some of their folks would complain, but they could easily ignore and just walk away, right? Whereas in the Web3 world, you can't ignore it. They absolutely are like a part owner in this whole thing.

Amanda: Absolutely. The consumer who was held at arm's length in the traditional world and in the Web2 world is being brought in. And as we move forward, a huge proportion of people are going to see part of their economic activity as investing activity and part of it as builder or maker or creative activity. We're no longer going to see a certain group have to only do that. We're going to see it blend. And we're seeing that trend with the blending of these categories.

Sonal: Yeah. So what both of you just said, the fact that it's a two-way street, that it's democratized, as you just mentioned, this sounds like utter and complete chaos to me as a marketer. And I don't mean this in terms of just like, oh, this is chaotic. Like we all acknowledge that. What I mean though is how do you then decide what to do, what not to do, what to prioritize, what not to prioritize? Because I'm listening to this and a lot of these teams have very scrappy budgets or maybe they can extend their budget by having volunteers and community members who are really dedicated do more with less. There's a lot of different things. There's a lot of asymmetry, powerful asymmetry and like guerrilla marketing and viral memes and vibes. But I'm just trying to get to the bottom of like, well, what do you do and what do you not do? Like, how do you actually even come up with a strategy in a world like this?

Amanda: So I think it's actually super efficient for marketers to plug community into incentive systems and then have them help grow the project as opposed to needing to buy everything themselves. Web2 marketing is basically an arbitrage that takes place on these third-party platforms and you're constantly paying the piper in order to spin the flywheel of growth, continue reaching your own audiences and bring in revenue. Whereas Web3 marketing is actually more sustainable because once you push out your message of why what you're building is interesting on the channels where your potential target audience lives and bring them into your community and bring them into your incentive system, they can go and help create for you. And you don't need to be constantly paying out some ad budget in order to make that happen. Just to give you an example, on the software side, that can look like bug bounties, having the community participate in battle testing your code. On the marketing side, it can look like meme contests where you have the whole community come up with the best meme about your project and help circulate it on crypto Twitter or whatever platform your audience lives on.

Kim: Yeah. I think what every brand's dream is for their consumer or user to feel like they are kind of part owner of that product, that that's how engaged they are. That's how much they care. But it's never been a reality until you have Web3 where they actually are a part owner, right? And they have a deep passion and conviction and they have a lot of care for where it's going. And yeah, to your point, you can scale the marketing to a much greater degree. Like you're not thinking about, okay, what are the 10 events that we're going to do this year? You are empowering that whole community and they're creating those 20 events or what have you.

Sonal: So then just to dig in a bit more, because this is another question that's super top of mind. Both of you mentioned audience, both of you mentioned community. And Amanda, you've mentioned a few times you have to go where they are. How do you actually even find where they are? How do you know who they are? This is a big question.

Amanda: So in the book, I actually have a list of questions that marketers can ask to learn more about their target audience. Who has the problem that your product solves? Do they already know they have the problem? How are they solving the problem today? What are the flaws or shortcomings of the current solution? What value proposition of the product that you're building resonates with them? What platforms is that audience currently on? Is there a particular kind of content or signal that that audience pays attention to? Are there other products they like? Is there something that those products have in common? What other communities or groups is this audience part of? Are they allergic to any particular channel or messaging style? How do they respond to intrinsic versus extrinsic incentives? In what ways are they able and willing to help with a project? What kinds of activities is our community already engaging in? What do members want from this community, from this product? Why do they leave and why do they come back for more? And no matter what stage you're at with your audience, these are questions you can ask to get to know them better and to shape your product to be a better fit with them.

Sonal: That's a really great list, Amanda. So is there an ideal phase? Because sometimes it feels like, are some of these questions too early? Or Kim, the opposite version of this question, especially given your background at Coinbase, where it was a much more mature product and market. I'm curious for how you think that changes or doesn't change. Like, was there a form of community marketing there? Is there less of that there? Because at that point, they've gotten, quote, more accepted and known.

Kim: You know, Coinbase is probably a little bit more of a traditional approach that we maybe saw a little bit in the Web2 world in the sense that it's a little bit more of a closed product, if you will. They certainly get a lot of feedback from their consumers on every channel you can imagine. Take a look at Twitter. But it's a little bit less of a two-way conversation as it is for more decentralized projects, especially where there's tokens involved and people have a vote and there's more kind of ownership there. But I would say early on that Brian and Fred had to go through the same process that every startup does to Amanda's point, right? They had to go to all the meetups. At the time, it was all Bitcoin meetups. How are you buying Bitcoin? How are you getting it? What is the friction that you're experiencing? How do we solve that? How do we make connections to banks? How do we make it easier for people to gain access to these new digital assets? So they had to go through that same process that every startup has to go through and is crucial to go through to understand, okay, what is my market? And is this a product that people really need and want?

Amanda: I would just note as a point of distinction that Coinbase is a centralized exchange. And it offers people access to the upside from Web3 digital goods and tokens, but not by default in a way that involves root ownership in a self-sovereign wallet, although that is possible in some contexts. And so a lot of the Web2 style marketing strategies work for a centralized exchange, which is why you do see centralized players with big ad budgets on the standard marketing platforms and why that converts really well for them.

Sonal: But Amanda, this is worth pushing on, especially for our listeners. You've kind of said this a few times. You're just clearly not a fan of Web2 marketing, like, you know, use a meta tool kid and the paid and et cetera. Does that mean, is there no paid marketing in Web3, even for non-centralized players and entities that are more established?

Amanda: With the true Web3 startups that we work with and that I worked with at ConsenSys, there's a lot less emphasis on paid marketing on standard social media channels, but there is paid marketing. And you see that in the form of paid podcast sponsorships. You see it in paid advertising on media websites and print media, even sometimes you see it in environmental ads. So in the physical world around conferences and events, and you see it in paid investments in physical things. So meetups, events, these are huge in the space. And yes, you also see a Twitter ad. You'll see the occasional Facebook ad or Instagram ad from a decentralized or decentralizing project that has Web3 style goals. But you see a lot less of that. And I wonder whether that's permanent or whether that's just this moment in time when a lot of those startups are earlier and smaller. I would argue it's more a function of the stage that we're in right now with Web3 and it just being very early.

Kim: I mean, I want to kind of hit here, like, where are places where you can do classic tactics and they work in Web3? It seems like don't throw the baby out with the backwater.

Amanda: I recommend usually that startups start doing big paid growth campaigns, especially on social media platforms, only when they can really measure the ROI. And an earlier stage startup has more trouble measuring that ROI. So either we're going to see the Web3 ecosystem as it matures, not use those platforms as much, which I would predict is the case, but that also we'll see them using them more over time, just as they get bigger and as they can measure their ROI better. The baby not to throw out with the bathwater is understanding your product, understanding your audience, figuring out the channels where your audience lives, distilling your message and pushing that out over those channels, setting up a funnel to see how well that audience converts toward whatever goal you want. That's the baby from the traditional world and Web2 that should certainly not be thrown out with the bathwater because that's the fundamental practice of marketing.

Kim: Yeah, I would say to Amanda's point, it's all about who your audience is and how to reach them. And it really is what stage we are in as a space, but then also just zeroing in on who your audience is. The Web3 community has come up with a lot of new novel ways to use native digital platforms like social, et cetera, to really reach their audiences in a unique way. A great example of that is Other Deeds and all the various things that they're doing. I think they do a really amazing job of engaging with their community online in a really great way. As you have products that are reaching a more mass consumer audience, you have to use every tool at your disposal. And some of those are going to be more traditional methods targeting the people who are just coming in and buying their first Bitcoin or their first ETH. And it's less trying to maybe reach a very niche audience of, let's say, folks in Web3 infrastructure, right? If that's who you're trying to reach, then paid marketing is probably not going to do a lot for you. And I'd say that we're at that phase where Coinbase kind of stands alone and probably reaching a very mass consumer audience. I think some of the NFT projects have started to go into that arena a little bit more, but again, it's going to be more successful for them to target the pretty engaged Web3 community than it is for them to go to mass consumers who still don't really understand what Bitcoin is.

Sonal: Yeah, great. By the way, Amanda, you mentioned the funnel. One of the key points in your book is that it's a slightly simplified funnel because it only includes discovery, engagement, use, and retention. Do you want to quickly spend like a couple of minutes kind of giving a high level summary of that page of what is the Web3 marketing funnel?

Amanda: So the Web3 marketing funnel, as described in the book, isn't so different from the marketing funnel in Web2. It's just that the actual tools that are used at each stage can be a bit different. So everything starts with discovery. Discovery is the phase where your potential user, your potential audience member first meets you. They see your brand for the first time. They see your key message for the first time on some kind of channel. Maybe that's at an event where they stumble on you speaking. Maybe it's a media article. Maybe it's social media. But for whatever reason, they've seen you. They've seen your message. And at that moment, there's a call to action. And if they take that action, then they come to the next stage of the funnel, which is engagement. And what the engagement stage basically does is it forms a contract between you and the potential user or audience member where they agree to let you reach them again. Your message in the discovery phase was good enough that they're going to agree to let you retarget them. That could be through an email newsletter. That could be through a follow on social. It could be by joining your community. But whatever it is, you have them in some kind of engagement holding tank. And we've talked a lot about community in Web3. Community is the ideal engagement holding tank in the marketing funnel because people are in there, they're engaged, they're excited, they're motivated to help grow the project. And whenever you have a new feature or a new product or something that you want them to do or something that you want help with, they're there. And so I think in Web3, we almost get a really bloated kind of middle of the funnel because we have so much emphasis on community and having people stay in that tank and ideate and come up with stuff there. And that becomes really fertile ground to convert people into using your product. And then those people are motivated intrinsically and or extrinsically to go ahead and refer your product to more people, bringing more people into that community. And so it looks a lot like a Web2 marketing funnel, but it ends up working a little bit differently in the middle with these community platforms.

Sonal: That was a great summary. So I'm hearing a couple of really resonant themes, like it might depend on the phase of the project, about the time we're in. But I'm also hearing you both say in terms of what's working in terms of for your marketing effort to be able to measure that ROI. I think it's worth also adding this nuance, which we've actually covered in a classic past podcast about just growth marketing in general, which is if you do do that paid thing too soon, you don't even know what's working in your product. And that's kind of a false signal. So it can be very dangerous sometimes to get those mixed signals. So now you both have mentioned ROI and metrics and what's working, what's not working a few times. I think this is a great point to maybe spend a couple of quick minutes deep diving on what are the kinds of metrics that matter then in this kind of marketing in Web3? Because you can't just go back to like your CMO or your CEO and be like, yeah, okay, vibes are great. Like that's the answer. Like that's obviously not going to apply.

Amanda: Vibes are important. I do agree with that.

Sonal: But like talk to me about metrics and how to measure what matters.

Amanda: So early on, there are obviously both quantitative and qualitative metrics. There are metrics around community size, how many people are in, let's say, your Discord server, and then who those people are, how they're engaging. Are they actively contributing or are they just asking when you're going to launch your token? Are they coming up with ideas? What are their profiles? Why are they interested in the project? Are they motivated intrinsically, extrinsically? Are they referring other new community members? A lot of times early projects over-focus on size and under-focus on quality. They focus on these vanity metrics like having a ton of Twitter followers or having a ton of people in their Discord server without paying attention to who those people are and what they want. Because founders are going to be stuck with those people and new potential members coming into that community are going to see those people. They're going to see the content that they're sharing. They're going to see the nature of their engagements and decide whether they want to be part of that community or not. So I definitely encourage not just thinking about size, but also thinking about quality early on. And then there are metrics. If you're a DeFi protocol, you're going to think about something like total value locked.

Sonal: TVL.

Amanda: TVL. If you're an NFT collection, you're going to think about things like the mint price that you can sell things at. You're going to think about the volume in the secondary market. You're going to think about price, but you also want to think about quality. Are great people buying into your community? Are they participating? And that may be more important in the long-term than the prices day over day.

Kim: So I think for me, it's probably a lot more qualitative than quantitative, especially in those early stages, which is again, where most of these projects are. I think you can get a little bit more quantitative as you scale to a good size. But even with a, let's say you get a good press article, it's fairly qualitative with ROI is going to be for that, right? It's going to be like, how many people are reaching out to you? Is it going to be easier for you to get the next funding round because people know who you are? Or recruit that great talent because they saw—

Sonal: Recruiting is a huge one.

Kim: Yeah.

Sonal: Great. Okay. So we did a big kind of overview on the mindsets and the differences in Web3 versus not. We've gone into different aspects like community and some of the nuances and the chaos and what it means to actually market decentralized. We've touched a little bit on some of the strategy and some of the high-level tactics and things like finding your audience. Let me switch then to now talking a lot more about some of the tactics around hiring and the talent that you hire for building an org, even if it's not classic centralized marketing org. I would love to hear from you guys on everything from like org structure, where they should sit in the org, how they should report, not report. I think this is where we want to go a little deeper for a couple minutes. Let's first just maybe break down some of the high-level functions that are often included in marketing. So it's everything from, you know, obviously we talked about community marketing that can include users, consumers, customers, advocates, evangelists. It could also be developers and be classic dev rel, like developer relations. We also have comms and communications and PR. Then we have like brand, which is obviously more than just an identity system and a logo. And brand can often be a moat in Web3. Then you also have go to market and the motion of going to market in Web3. I'm just like making like a quick laundry list. So let's talk through what I'd love from both of you here is to give me a little bit more texture about who people should hire or not hire or what to look for.

Amanda: Sure. So when I was building the Web3 marketing team at ConsenSys, my goal was a mixed department between full-time internal hires and external agencies. I wasn't able to accomplish that because I wasn't able to find any external agency partners that knew about crypto or Web3. And eventually that was my motivation after my time at ConsenSys for starting Serotonin so that the next generation of marketing leaders at new projects in the space could form the ideal structures for their departments as I'd seen, but as I'd been unable to actually execute because it was early. So I think the first marketing hire should be a generalist Swiss army knife hire. And that needs to be someone who can understand the product, what it is, how it works. They may need to be an engineer or a developer, depending on what the product is. They may not need to. They need to be able to be a counterparty to an agency or any kind of external partner, like an event. And they need to be able to represent the project and they need to understand what the other basic marketing functions are. They need to basically understand earned media, media relations. They don't have to execute everything themselves, but they should understand. And as that department grows, the important thing to think about is permanent versus intermittent functions. You're not always going to be going out to press. You're not always going to be starting a new social media channel. And so as functions become constant, you want to consider having an internal hire or some kind of permanent consistent partner that's doing that thing. Whereas you want to be efficient by working with some kind of external player, like a contractor or an agency if something is intermittent, like needing to create a video or doing PR. They should understand content marketing and how content gets distribution. They should understand brand and how to create a package of verbal and visual brand that's going to resonate with a target audience. And they should be able to do research on target audience, what channels to use in the space.

Sonal: By the way, when you said that General Swiss Army Knife, Amanda, and then you went and listed that list, I was like, that sounds like a unicorn to me. I guess that person doesn't need to know how to execute every bit of that function. They just need to know what good would look like and be able to find someone that can do it.

Kim: Yeah, I agree with you that you need sort of the Swiss Army knife or Jack or Jill of all trades, who is not afraid to kind of roll up their sleeves and do a lot of the work. I think that's why more junior to mid-level folks are often some of the first hires because they're kind of willing to just kind of do whatever needs to get done. They're not too precious around, well, that's too below me or that's out of my job description or that's not really marketing. You just need people who are very, very passionate about what the project is doing, what the product is, and just really excited to get a ton of experience. I would say that I tend to advise that for marketing in comms in particular that they hire consultants or agencies in those early stages. Because to Amanda's point, they tend to be a little bit more intermittent needs versus full-time needs. It's also a great way, especially if you're bringing on a consultant to see if they are a good fit, a good cultural fit and somebody that you could maybe bring on full-time. I've seen that happen quite a bit and that works quite well. I definitely sympathize with what you were saying about it. It was really hard to hire people early on. I found the same thing early on too. People were, I think, intimidated by the space. It was very technical. They also weren't quite sure where it was all going to go. I think that's changed a lot in the last year in particular, and it's wonderful to see so many people self-selecting into this space. I think that more than any other part of tech I've ever worked in, you really are looking for the true believers as much as possible, the people that are self-selecting and they're excited about where the future of this is going. They have had some experience with it that's brought them into it. And they really believe this is the future. I think it's harder to have folks who are like, oh, I did a little bit of security and then I did a little bit of enterprise and now I'm just gonna try this out, right? Because we do go quite deep and it is very all encompassing. And as we all know, it moves incredibly fast and it's very, very dynamic. Not everybody has a stomach for that. So you need folks that are really willing to dive in and to jump into some of the chaos that we live in, especially in the last year. But yeah, I'd say usually it's good to bring in consultants or folks from the outside in those early phases. And then as you start to grow, to start investing in a Swiss Army knife who can do it all. Like, okay, we need to get a website going. We need to think about the brand. But then we also need to start thinking about what we're going to do on the PR side. And then we also need to think about, we want to represent ourselves at this event or we want to do our own event. And how do we put that together?

Kim: And, you know, it's sort of a little bit of all of that. I love what you said about these first hires needing to be willing to roll up their sleeves. And the litmus test that I had for that was always, will they tweet and will they pick up beer bottles? We came in sometimes with this mentality that running social media accounts was for a more junior person or someone in college or straight out of college. And then it turns out in our space, having an interesting Twitter account is one of the most valuable things your business or your founder can have.

Amanda: Yeah, I usually tell our founders when they're hiring that first marketing person, you don't want the person that's been a CMO somewhere and is really great at building large teams. Because the chances of you having a large team in the next two to three years or so is probably pretty low. So you're optimizing for the doers who love the work and are able to start recruiting and bringing on a couple members over the next couple years, but who are not managers. That's not their main strength, just being a manager, building a team and managing. You will get there at some point and you will need that person, but probably not for many years.

Sonal: Let me just ask you now another quick question, which you guys had an answer to, which is where should this function report or not report into a decentralized or Web3 org? Like who's the best reporting structure for the functions of marketing in Web3?

Amanda: The marketing leads should report to the CEO.

Kim: Yeah, I second that. The more connection that they have to the founders, the better. They need to understand the major business decisions that are being made. They need to be able to run things by them very quickly. They need to be kind of at that nucleus. Otherwise, they just can't do their job.

Amanda: Totally. The biggest failure modes we see in Web3 projects are when marketing is in a silo. And if there's not a lot of access to the ultimate decision maker, perhaps a founder, perhaps a CEO, then the actual marketing activities, no matter how well planned or executed they are, can't actually see the light of day.

Sonal: Yeah, I definitely feel like you were preaching to the choir on that one because Kim has been on podcasts we've done in the past about just PR in general and comms. And that was a theme that came up over and over and over again, which is not only that that person should report into the CEO, but that you're not even going to retain the top talent or attract the top talent if that isn't the case, both for context and just being able to do the job really well. And I think you guys even said, Kim, that even if that person has like a dotted matrix, so like the COO or CFO, they still need access to that CEO in an extremely tight way.

Kim: Yeah, they need to know what that CEO or founder is thinking at all times. How we feel about things. Why are we making these particular decisions? Something happens. There's a security breach or some other crisis, like having good conversations about what we're going to do and how we're going to handle this. A true partnership. I think without that partnership, that role won't be successful. That person won't be successful. And to your point, Sonal, they're never going to be able to attract the right level of great talent without showing that they're taking that role seriously.

Kim: I think separately, you mentioned developer relations. I think that is a separate thing. I'm curious, Amanda, how you guys handled that at Ethereum Foundation. But I think it's probably the most in-demand role in our portfolio. So if there are people out there that see themselves as developer relations, you can have a fantastic career in crypto and Web3. I think that is probably one of the earliest roles. If you are indeed developers are your prime audience, which many of the companies in this space are, it is a very important role to get, but I think a very difficult one to hire for. What sometimes happens is that you start to build that community. And if you can find people who might, again, self-select in and want to be more involved in your project or somebody who you feel like is particularly passionate, really understands what you guys are doing, that's somebody who can naturally take on that role. But I would sort of separate that from marketing and comms, if you will.

Amanda: I agree with a ton of that. A lot of the best engineers, developers, computer scientists want to focus on their work. They want to code with music or in silence, and they don't want to build community. Maybe they enjoy tweeting or social media to some extent, but maybe they don't enjoy going to events. It's a personality thing. So finding folks that are technical, that are developers, that are engineers, perhaps even that are computer scientists, that also just personality-wise enjoy talking about their products with new people, that love to host, that love to bring people together, whether it's digital or physical. Those people are ideal candidates for these kinds of DevRel roles, whether they're formal official DevRel titles, or whether they're just that engineer in the organization that's the one raising their hand to go out and speak at conferences. And they don't necessarily need to have that official DevRel title if they're doing the work. And I wouldn't see a DevRel title as lesser than an engineer or a developer or another title in the organization, because oftentimes those people are doing both. They're contributing extraordinary things to the code, and they're also warmly bringing people together around a project. And I think it's a personality thing and you get all types.

Sonal: Yeah. I mean, to be very clear, I don't think it's lesser, even if they're not coding, because there's a certain sense of DevRel is king given the rise and importance of developers, communicating with developers, retaining developers, incentivizing developers. All right, so now I'm going to do a couple of wrap-up lightning rounds. What I'm trying to do in this section is just quickly go through all the different domains of Web3 and have you guys just quickly add some nuance about what are some key mindsets or things to know about. So let me start with a very simple one, which is just DeFi. Simple as in it is the most popular established category. A key thing you would want someone to know about marketing and DeFi for Web3?

Amanda: You should remember that a DeFi user is probably being asked to trust a protocol with money and accommodate the fact that they're probably a bit nervous about that. You want to make sure it's really clear what steps they need to take and to show them that there are other people using the platform, for example, by broadcasting a TVL number in order to get them comfortable or to show that other businesses are using the platform. Also, it's important to showcase how battle-tested or how audited a DeFi platform is and to be transparent about risks that folks may be taking by using the platform.

Kim: I was going to say, I think trust and security are paramount when it comes to DeFi. And unlike traditional centralized institutions, it's less trust in people and more trust in the code and the product. And to Amanda's point, that's how battle-tested it is. But if you're going into that space as a marketing or comms person, you just have to walk into it knowing that policy is going to be a big part of your role. It's something you can't ignore. You have to think about it, and you have to think about it even more so in DeFi.

Sonal: Great. Now let's do NFTs. What would you guys say about marketing NFTs? And it's probably a very broad category, but just anything that comes top of mind.

Kim: I'd say that there tends to be more of a consumer angle to NFTs. And you have to really nail that culture, tone, whimsy, you name it, that is sort of associated with that kind of community. Because oftentimes, it's not about that specific NFT that they're buying into or want to be a part of. It's they want to be part of that community and what it stands for and sort of what the language of that group is. And I think that as a marketer, you have to really understand that at a pretty intuitive level. Like, okay, what's going to work with our community? What's not? Because I feel like things can backfire very, very quickly in that world, whether that's how a drop is done or mint is done or how things are communicated, how things are explained. I think that the sniff test on that for the community is just very, very sensitive. So you have to really be just really sensitive to the needs of that particular community.

Amanda: Absolutely. So think about giving before you ask anything from a community. I think creators that are native to Web3 and Web2 players coming into Web3 have a failure mode where they expect to sell some high-priced NFT right out of the gate as their first experiment in Web3. I would advise those folks to offer something first, whether that's a free mint, whether that's a membership that's awarded by retroactive distribution to folks that have interacted with a brand in the past. There's something that you can give. There's a way to start actually building on-chain community and transaction history in Web3 without demanding upfront that people pay. And you earn the trust of that group that you bring into your community on-chain, and you earn the right to offer them something at a cost.

Sonal: You mentioned a retroactive distribution, and I think you meant an airdrop, or maybe you didn't.

Amanda: So a retroactive distribution is when you reward a group of people for a past on-chain activity. So for example, when Uniswap launched its token, it launched by retroactive distribution such that you could go ahead and connect your wallet on a website and claim tokens commensurate with how much you had used the platform in the past. So that's a retroactive distribution. An airdrop is one way that you could execute that retroactive distribution by sending tokens to certain wallet addresses. A claimable is a way that you could execute that by creating some kind of webpage or address where you could go ahead and connect your wallet and claim the tokens that are yours. There's actually an interesting distinction here where if you go ahead and just send tokens to addresses that have interacted with your smart contracts by some formula of how many times they've interacted, how much value, et cetera, some of them might not even notice you did that. Or some of them might not be interested in using your platform anymore and might just go ahead and sell your tokens. So a lot of projects have decided to do claimables so that a person has to actively go and claim their tokens. And their idea is that that person is more likely to be active as a community member than just sending out tokens.

Sonal: Great. Infrastructure. And that is really broad. So let's break that down to include L1s and then separately L2s. And then let's also cover developer tooling in this one.

Kim: I think it's a more technical message, especially in the early days, and having the sort of technical builders and founders from the project very out there in the different forums and out there talking to people, explaining things, breaking things down. That's going to sort of build a lot of trust in that infrastructure. And then after a certain point, it becomes more about community and partnerships and all of that. But I'd say in the early days, it's really convincing people that you have a really strong technical solution.

Amanda: You really need to show that people are using your tool also, which is why there's this huge prevalence where someone will build an L1 or an L2 or a tool and notice that nobody's actually coming in and building with it. So the organization that built that tool or that L1 or L2 then goes ahead and itself funds, like what ConsenSys did, or itself builds some of that tooling to showcase what's possible with what's been built. So if you've built an L1 or an L2 or a tool, marketing is going to be really focused on showcasing that there are businesses or individuals, depending on who your target audience is, using it. And partnership marketing, making sure that you're cross-amplifying with your users your core messaging, getting it out into the market, that you are there and that you're solving a problem and that these are the kinds of use cases. And that's going to end up inspiring way more people.

Amanda: A story that's in the book that perhaps not many people know or remember about Ethereum in its fairly early days is that what set off a lot of the price action happened on January 28th, 2017. And that was the launch of the EEA, the Enterprise Ethereum Alliance. And for the first time, it brought together companies like Microsoft, JP Morgan, Santander, Intel, Accenture to announce that they had groups inside their organizations that were experimenting with Ethereum and working together to build a common set of standards for enterprises. The cool thing about this in terms of marketing and public perception was that before, if you Googled Ethereum, you would get Vitalik Buterin. 19-year-old Russian-born Canadian computer prodigy creates amazing thing. And that's going to resonate with a lot of people, but it's not necessarily going to resonate with large institutions or large investors. And so suddenly, after February 28th, this ended up having a huge impact on the market. It generated lots of different news stories in most major publications that spread the word about Ethereum far and wide to the point where it brought in price action that took ETH prices from single dollar ranges up in a matter of days and then led to one of the fastest price run-ups in crypto history from then until the summer when it hit astronomical new highs for the project. And the funny part was the early Ethereum community was and is very kind of anti-corporate, a lot of basement hackers, a lot of desire to disintermediate the big banks, to move away from Web2, to move away from some of the corporate control that we've had. And yet the news cycles around the EEA launch ended up having the second order effect of bringing in a lot more engineers and developers and hackers into the space. And if you ask those people why they got into Ethereum, they would never say because of the EEA. Of course not. But that ended up starting a flywheel that ended up attracting a lot of people that maybe wouldn't have even enjoyed that particular announcement.

Sonal: My takeaway from that is the value of partnerships, which is a big theme in go to market, especially in Web3. But another takeaway to me is going back to this question of what's similar and what's different and what to throw out with the baby in the bathwater and what not to. Which is this is a classic business thing actually. It's not Web3 native. It's Web2 too. It's also classic marketing. And that's an important message I think that the audience should also hear. So last question, what advice would you guys give to people who came to crypto but this is their first kind of winter or the period where they've come across like crises and they haven't experienced that before? But there's a lot going on whether it's a crisis like FTX or banking crisis, which actually is not about crypto, or a policy crisis.

Amanda: I would say that certainly those events have an impact, but I think it's important to just look at the historical data and know that every new wave has brought in new innovation, new projects, new builders, new investment, and then those stay and build throughout the bear market such that the market comes back even stronger next time. And the strongest indicator of that to me isn't the consistency of the cycles, it's actually one of the most important assets migrating increasingly into Web3, which is talent. Every one of these waves brings new talent onto the shore and then they stay. And so if you go to DevCon, if you go to ETH Denver, you see the brilliance and the growth and the power of this movement.

Kim: I think what you just said there, that it's a movement, and that's very true. And I think that's what makes it so unique. You're not just joining a company or joining a movement. And look, it's not for the faint of heart. It's not for everybody. I get that. But I think if you really love a good meaty challenge that has every element, this is a great place to do it. We've got some really interesting policy challenges happening right now that you have a chance to impact. These companies are really building fundamentally new, the next internet and next sort of major technologies and infrastructures, and having a chance to figure out how to translate that and bring that to a bigger audience. The idea that we are working these decentralized models, trying to figure out how do you really build a community and a project and a product within this new world. I just think there's no more fun, meaty challenge out there for a marketer or a comms person right now. Your choices are you can go into Web2, which I think we all kind of know what that looks like. And this is a new frontier. I think that's incredibly exciting for folks to have maybe like a slightly higher risk appetite.

Amanda: Yeah. If you were alive during the Italian Renaissance, you would wish you were living in Florence, and being in Web3 is the Florence of our time.

Sonal: Okay. So to kind of sum up, it's interesting. Neither one of you precluded that the person does or doesn't have to have a background in marketing or has to be only from Web3. What I'm hearing you both say is it actually doesn't really matter. It's more about the mindsets. It's more about their willingness to pull up and dig in there, to be able to be very mission focused and willing and to be excited about the space.

Amanda: This is part of my motive for writing the book and making sure the book is a really accessible journey through the history of Web 1 to Web 2 to Web 3 to the origins of Bitcoin and Ethereum, the metaverse, etc. Because what got us here won't get us there. The actual number of professionals that are currently working in Web 3 is so small compared to the total number of professionals that are really great at marketing. So what are the chances that the people that have already arrived here in Web3 are the very best at what they do? So the way that we're going to grow is making our space accessible to more people, getting more at-bats, getting more qualified talent into our space so that we can continue growing even faster by having the best people. Hence this book and hence this podcast episode.

Sonal: That is a great note to end on, you guys. Thank you so much for joining this episode of Web3 with a16z. Thank you so much for joining, Kim and Amanda.

Kim: Thanks for having me.

Amanda: Thanks so much.

Sonal: Thank you for listening to Web3 with a16z. You can find show notes with links to resources, books, or papers discussed, transcripts, and more at a16zcrypto.com. This episode was produced and edited by Sonal Choksi. That's me. The episode was technically edited by our audio editor, Justin Golden, with Seven Morris. Credit also to Moonshot Design for the art and all thanks to support from a16z Crypto. To follow more of our work and get updates, resources from us and from others, be sure to subscribe to our Web3 Weekly Newsletter. You can find it on our website at a16zcrypto.com. Thank you for listening and for subscribing. Let's fucking go. Thank you.