Web3 has a lot of money for it – well, yes, a little less than a few months ago – but it’s still hard to say that mainstream consumers have lined up to adopt Web3 Internet services. So far, there have been some flash hits, but investors are still looking for consumer use cases that get the most out of blockchains, tokens, and NFTs beyond just exchanging them.
Andreessen Horowitz (a16z) GP Sriram Krishnan thinks web3’s incentive structures make this space a natural fit for social media, he tells us in the latest episode of TechCrunch’s crypto podcast Chain reaction. Krishnan has extensive experience in Web 2.0 social networking businesses; he was an executive at Twitter, Facebook and Snap before joining a16z, which notably just launched its latest $4.5 billion crypto fund.
“People ask me, ‘What is the thing that you spend a lot of time on, that really interests you?’ said Krishnan. “I think the intersection of social media and web3 is really fascinating.”
While web3 has yet to see a platform equivalent to Twitter or Facebook take off, Krishnan thinks the structure of blockchain-based platforms offers some great incentives to bring creators into their networks, which could to his in turn attract their audience. He notes that some of the most popular existing social media services have pegged on the sale of providing content creators with a platform with reach, but that doesn’t necessarily give them the financial advantage of the network itself – whatever. something he thinks NFTs and tokens could rectify.
“With web3…the people who bring value to the platform now have a piece of the economy happening in the platform itself,” says Krishnan. “In some web3 social media, you might actually have the spiritual equivalent of a spot on the cap table.”
Beyond tokens and other crypto assets, Kirshnan alluded to mechanisms such as Decentralized Autonomous Organizations (DAOs) that allow stakeholders of a platform or protocol to make decisions about how this project is maturing, which he notes as quite alien to existing ideas about how Big Tech companies interact. with their most popular content creators.
“[With web3], you now also have a say in the governance of said platform, which is really very interesting. It opens up a whole new toolbox and a new power dynamic between creators and social media platforms,” says Krishnan.
Krishnan says the open nature of the protocols operating in web3 means that clients will be more beholden to the interests of their users, as users could more easily transfer their assets and content to a new platform if they feel their interests are not shown. something that sort of reframes the idea of exporting data from social media services.
“This ‘exit right’, this right to create alternative customers is one of the social things about web3 that I find really exciting,” he notes.
Web3 social is pretty theoretical at the moment, and while a few startups have tried to make a splash, the onboarding issues for users getting wallets, buying tokens, and joining a platform are still much more difficult than the experiences on more streamlined sites like Twitter. Investors are hoping that some of these issues are just growth issues that developers will overcome, developers that VCs like Krishnan hope to be able to fund.
Subscribe to Chain Reaction on Apple, Spotify, or your alternative podcast platform of choice to follow us every week.