The product-market fit nuances in Web3

cointelegraph.com:

Web3 represents the next phase of the internet, characterized by decentralization, user ownership and equitable value distribution. Like all new technologies, its success depends on addressing market needs and understanding user challenges. However, many Web3 initiatives have missed achieving a product-market fit, often adopting a “build it and they will come” approach. This mindset has been harmful, especially during market downturns. While the core principles of product-market fit (PMF) remain consistent, their application in the Web3 context has evolved.

The PMF equation is one of the hardest problems to crack in Web2 as well with most startups not making it to this stage. Most Web3 protocols have alo not shown their ability to cross the chasm of a product-market fit. This is largely due to attraction speculators rather than real users — many may not survive this brutal crypto winter. My thoughts around PMF have been formulated by applying Web2 principles learned over several years of operating SaaS companies for years with some notable successes and some failures.

Pragmatically speaking, PMF is only about two levers — customers or developers using the product at a high frequency (usage) and over a prolonged time (retention). If one can crack the code on both of these, you are on a path to achieving PMF.

While principles of PMF remain constant for any product, in any era, there are nuances to Web3 due to its decentralized nature and community ownership. While most people accept groundbreaking technology with blockchain, very few Web3 projects/platforms have reached scale through PMF.

Network effects drove Web2 platforms’ success, wooing builders and investors for years. While some predict stronger network effects in Web3,