How Web3 analytics differ from Web2

Welcome back to Web3 Creator!

Today, we’re diving deep into the difference between measuring marketing analytics in Web3 vs traditional platforms and how founders can tackle the two BIGGEST yet common Web3 challenges.

~1173 words, a 4 minute read. 

You can reach us at [email protected] for any reader queries or feedback.

Let’s get into the headlines:

• Web3 marketing analytics: how they differ

• Two core challenges for Web3 founders & how to overcome them

• Quick news & updates

• Charted insights

Web3 marketing analytics: How they differ from Web2

Web3 marketing analytics introduce new dimensions by leveraging decentralized platforms, blockchain networks, and NFTs. 

These differences offer unique advantages over traditional marketing analytics, which primarily rely on data from cookies and pixels.

Web3 data vs. traditional marketing data…

In Web3 marketing, data is generated from smart contracts, decentralized applications, and blockchain transactions. This data provides insights into user behavior, transaction volumes, and token and NFT holdings. 

Unlike traditional social media data, on-chain data reflects real purchases, offering a more accurate picture of user actions and engagement.

A key feature of Web3 marketing analytics is linking on-chain activities, like blockchain transactions, with Web2 actions, such as social media behavior. This integration provides a comprehensive view of user behavior, leading to more effective marketing strategies and better online presence for organizations.

5 best tools for traditional marketing analytics…

• Google Analytics: Tracks website traffic, user behavior, and engagement metrics.

• Adobe Analytics: Provides insights into customer segments and behaviors with advanced real-time analytics.

• HubSpot: Integrates marketing tools, including email marketing, social media, and CRM capabilities.

• Nielsen: Specializes in market research and audience measurement across traditional media channels.

• Mailchimp: Focuses on email marketing analytics, tracking campaign performance and audience engagement.

7 best tools for Web3 marketing analytics…

• Dune Analytics: Custom dashboards that pull data directly from blockchain sources.

• Nansen: Insights into blockchain wallets, tracking smart money movements and token analytics.

• Token Terminal: Combines traditional financial metrics with blockchain-specific data.

• Messari: In-depth reports on cryptocurrencies, including market data and regulatory news.

• The Graph: Decentralized protocol for indexing and querying blockchain data.

• DeFiLlama: Provides analytics for decentralized finance (DeFi) protocols, tracking TVL (Total Value Locked), lending, borrowing, and liquidity pools.

• Coingecko: Offers comprehensive cryptocurrency data, including market capitalization, trading volume, and price information across various exchanges.

Why this matters: Embracing these Web3 marketing strategies is crucial for Web2 companies transitioning into the decentralized digital landscape. These strategies build awareness, trust, and adoption.

Two core challenges for Web3 founders & how to overcome them

Starting a web3 venture is both rewarding and challenging. As a web3 founder, you'll face several obstacles on your journey. These challenges can hinder your success, but with the right strategies, they can be overcome. 

Here are two common challenges and high-level advice on how to tackle them.

1. Finding product-market fit…

Finding product-market fit is crucial for the success of your web3 business. According to CB Insights, 35% of ventures fail because there is no market need for their service.

• Identifying a pain point: initially, you will have assumptions about your potential customers' pain points, not concrete facts. Start by understanding your target audience through interviews to identify their pain points. Supplement this with secondary data from industry reports, on-chain data, Twitter threads, and blog articles. Focus solely on the needs and problems of your audience.
  

• Developing a solution: based on your findings, outline a solution and test it to see if it addresses the identified pain points. Use surveys, interviews, and a low-fidelity MVP (e.g., landing page or click dummy) to gather feedback. If your idea resonates with the market, build a high-fidelity MVP with essential features and test different pricing and marketing strategies.
  

• Watch out for token hype: finding product-market fit is an ongoing process requiring continuous research, testing, and iteration. Be agile and willing to adjust your product and business model to meet customer needs. In the crypto industry, hype around tokens can mislead you about product-market fit. Users might use a service just to qualify for a potential airdrop, leading to false conclusions about demand. 

2. Raising capital…

Raising capital is essential for starting and growing your web3 business. Options include bootstrapping, crowdfunding, angel investors, venture capital, and bank loans. However, raising capital is often a significant challenge; for instance, Andreessen Horowitz funds only 0.7% of all inbound applications.

Increase your chances of securing funds by creating a solid business plan, researching investors, and preparing a compelling pitch. Be ready to answer tough questions and adjust your plan as needed. 

Here are some guiding questions for investor meetings:

• What pain point are you addressing?

• How did you validate this pain point?

• How will your solution add value?

• What is the competitive landscape?

• What makes your team the right fit?

• How do you plan to enter the market?

• What do your financial model and unit economics look like?

• For what do you need the funds?

• What are the potential risks and challenges?

Building relationships: Focus on building relationships with potential investors by networking, attending events, and proactively reaching out. Always be prepared to answer the above questions to build trust and increase your chances of securing funding.

Why it matters: Building a web3 venture is a challenging but rewarding process. By focusing on finding product-market fit and raising capital, you can increase your chances of success. Support from a venture builder can provide valuable resources like capital, mentorship, infrastructure, and expertise, helping you overcome challenges and become a successful entrepreneur.

Quick news & updates from the decentralized world 🗺️

• SEC to drop investigation into Ethereum: though Consensys says the fight isn’t over yet. [Link]

• Hashdex files with SEC for combined spot Bitcoin and Ether ETF. [Link]

• Kraken says its being extorted following bug bounty report. The bug resulted in at least $3 million worth of stolen funds, but no user funds were endangered. [Link]

• 41% of top ZK airdrop wallets have already sold everything — Nansen.The data covered the “top 10,000 addresses” that received zkSync’s new ZK token. [Link]

• Ronin to scale Web3 games with new zkEVM. The company is preparing for a future when it will have to handle 400 million to four billion transactions. [Link]

• Helium Mobile introduces tech stack to enhance DePin connectivity.  [Link]

Charted insights: Bitcoin block size hits yearly low

The Bitcoin network saw a big drop in average block size and transaction rates, along with a price fall to about $64,100. 

This drop in block size, which measures the amount of transaction data in each block, shows a sharp decline in Bitcoin activity, hitting a yearly low on June 7.

The network’s transactions per second (TPS) rate also fell in June, indicating less activity and possibly lower miner profits due to reduced BTC rewards after the halving.

Editor’s Note: Based on the price action clusters, Bitcoin could fall below $64,000 before entering the “parabolic phase” of 2024’s current bull cycle.

Next Issue Preview: We’ll discuss how founders can build the right team in Web3

That’s it for today! See you next week for more B2B crypto insights for your business.