Blockchain Week 2024

How your Web3 business can leverage consumer research for success

Long-term success in Web3 is really about who you know – your end user, that is. Jonathan Inglis from Protocol Theory explains how to harness invaluable consumer insights for your business.

With mass adoption of Web3 being the ‘end goal’, what top three challenges do you see native Web3 businesses most commonly face today?

It’s a great question. You’ll often hear that the main barriers to Web3 adoption are poor user experience or a general lack of understanding of Web3 technology. But both of these arguments are largely missing the point. Although UX is clearly important, a seamless UX will count for nothing in the absence of a compelling value proposition. And there are countless examples of highly successful products and innovations that achieved mass adoption without requiring any knowledge at all of the underlying technology – the internet and TCP/IP, for one.

Instead, the main challenges that we routinely see amongst Web3 projects and builders are the lack of clear, compelling value propositions relative to existing Web2 solutions. Secondly, a preoccupation with positioning Web3 value propositions around technical product features rather than meaningful, real-world outcomes for the end-user. Finally, a lack of true consumer-centricity throughout the product development and marketing lifecycle.

We are routinely surprised at how few Web3 companies actively engage with or solicit feedback from their target audience – especially mainstream, non-crypto native audiences. If mass adoption of Web3 really is the end goal, then not listening to these audiences or actively seeking to understand their true wants, needs, goals and preferences should strike all of us as very odd.

How does consumer research and insight aid in overcoming these challenges?

Consumer research is really about one thing: understanding deeply what consumers (or end-users) want or need, and why. Hopefully, the benefits of this should be obvious from a general product design and marketing standpoint, and it’s one reason why Web2 companies spend tens of billions of dollars every year on consumer research to help them gain a competitive edge.

Understanding your target audience and their pain points enables you to develop superior products and market them more effectively. This approach de-risks the innovation process by putting the end user at the core of your decision-making. In nascent categories like Web3, we are still in the exploratory phase of understanding consumer pain points that are crucial to identifying how Web3 technology can meaningfully solve them. 

In your experience so far, what is a key message that Web3 businesses need to know to help them onboard more users to their platform?

Offering a seamless onboarding experience is not enough. In fact, even offering a legitimate, differentiated value proposition is not enough. What really matters is the relative advantage that your Web3 product or service offers over existing solutions, including an appreciation for any trade-offs that the end user is having to make. This latter point is important because these trade-offs can often represent ‘hidden’ barriers to adoption – and yet they can regularly be the difference between a winning product and a failed one.

An excellent, albeit non-Web3, example of this is the Dvorak keyboard layout, which offers significant advantages for English-speaking users in terms of typing speed, accuracy, and ergonomics. But it has failed to achieve mainstream adoption over the technically inferior QWERTY keyboard layout. This is for one simple reason: switching from QWERTY to Dvorak requires a significant amount of retraining in order to break deeply entrenched habits. We humans tend to avoid expending effort wherever possible. Evidently the effort spent learning a new typing interface is not worth the very real yet apparently marginal benefits offered by Dvorak. There’s an important lesson in this for many Web3 projects.

How did you first get involved or how did you get started in Web3 and crypto?

I first heard about Bitcoin back in 2013 or so, around the time it had just crossed $100 for the first time. Although interesting, like most people I largely dismissed it as some kind of scam internet money that was devoid of any intrinsic value, and an irrelevant technological curiosity at best. It was during the 2017/18 cycle that I began to deeply explore and understand the promise of decentralised currency, the value of economic self-sovereignty, and the real-world potential of smart contracts. This period marked my shift to a more considered and thorough examination of these concepts. I’ve been hooked ever since.

What excites you most about being in this space?

Without question this is the most exciting industry I’ve ever been involved in. I would say that the most exciting thing is the opportunity to accelerate global adoption of blockchain and Web3 technology to create a more equitable, transparent, and inclusive future. We’re a long way from realising the full potential of this, but there are already myriad real-world examples of this occurring. The most familiar being the ability for crypto and DeFi to provide financial services access to traditionally unbanked or underbanked populations. But there are many more use cases than this. This includes blockchain-based voting systems to improve the integrity of democratic processes, to self-sovereign and privacy-focussed digital identity solutions, intellectual property rights for artists and creators – the list goes on.

What sparked you founding Protocol Theory?

There were two key reasons. The first was what I mentioned above – the opportunity to help bring about a more equitable, transparent, and inclusive future enabled by blockchain and Web3. This is what drives me more than anything else. I’m not a builder or programmer and couldn’t tell you the first thing about how to write a smart contract script in Solidity or Rust. So, I was never going to be much use from that perspective. But I am pretty decent at research, and understanding how and why consumers do the things that they do, and turning these insights into actionable recommendations to create commercial value. Prior to this I was an Associate Director at [consumer research company] Kantar and I’ve been in the market research industry for approximately 7 years in total. So, this felt like the best way for me to make a contribution to this industry that I love.

The second reason was, quite simply, it felt needed. The Web3 industry is still relatively unsophisticated when it comes to consumer marketing. There’s still a massive job to be done to improve the way we build, launch, and market Web3 products in a truly consumer-centric, data-driven way. Yet when I surveyed the market, no company seemed to combine expertise in Web3, consumer research, and marketing science to meet this market need adequately. So, to me it felt like an obvious opportunity and a natural fit.

What’s next for you and the team at Protocol Theory?

We’ve grown very quickly in a short period of time – a testament to the incredible work that we do and the unique value that we provide to our clients. In the near term, we’ll keep providing insights and clarity to help our clients make smarter product and marketing decisions. This will ultimately get their Web3 products and services into more users’ hands.

Long-term, we have exciting projects that we believe will transform how companies access and engage with consumer research, promoting core Web3 principles of decentralisation, ownership, transparency, and inclusivity.  Needless to say: we’re only just getting started.

Alison Goss, Head of Strategic Insights at Protocol Theory, will present the team’s recent Blockchain Australia Industry Analysis on Day 1 of Blockchain Week.

A very big thanks to Protocol Theory  for coming on board as a major sponsor for Blockchain Week 2024.