This is part three of a three part series on Blockchain Product Management. Click here for parts one and two.
Although fundamental product management (PM) theories like strategy, prioritization, and execution still apply, there’s new considerations for PMs building products in the blockchain space.
Blockchain Ecosystems Are Ethos Driven
It’s important to see blockchain ecosystems as more than just products, but as market based communities that form around a shared ethos. For example, an ecosystem’s token often represents a kind of badge of honor that signals alignment with a community’s ethos (or you could buy exclusive patronage badges with the token). At HelloSugoi, our ethos was centered on empowering entertainers and their fans by removing the brokers and scalpers who exploit them. Having a strong and clear ethos can motivate people to evangelize your product, even if it has some sharp edges.
PMs need to consider a community’s ethos when designing and prioritizing product features. In many cases, a token can be used by community members to vote on proposed product features and upgrades. Because these communities are open-source, development teams need to make sure that they don’t exert too much control over the product or risk alienating their community. And since an ecosystem’s community is the main driver of the network, misalignment could lead to mass exodus, with them joining a competing ecosystem. PMs need to be aware of this, because at this point network switching costs are low.
Community Management is Critical to a Product’s Success
Blockchain communities typically communicate via Twitter, Reddit, Telegram, and Medium. Since tokens trade 24/7, there’s an almost instant feedback loop between ecosystem participants. Token holders drive network innovation by directly communicating, in real time, with development teams. This differs from traditional products where there are more walls between a product’s customers and its development team. Instant communication is a boon for PMs, as gathering customer feedback is a major part of their role. In short, money is a powerful emotion, so it’s no surprise that some communities are very passionate and vocal when it comes to changes in the software. Feedback can be brutal at times, but as any great PM will tell you, brutal (honest) feedback tends to yield some of the best insights.
It’s important to be honest and transparent about product developments. An informed community is a generally happy community. Constant contact is a way of building trust, which is essential to the success of a blockchain ecosystem. Money is another word for trust, and without it, your community will quickly fall apart. Also worth noting, the blockchain community in general is full of super passionate people that will tear you apart for not being real with them. Do yourself a favor and be real with both your success and failures, or risk the onslaught of trolls on Twitter and Reddit.
In person meetups are a great way to engage your community. My co-founder and I founded the “Real World Blockchain” meetup as a way to connect with fellow blockchain enthusiasts and skeptics. Facilitating meetups gives PMs a direct connection to the more engaged community members. Meetups are a great way to make announcements about product updates and to receive in-person feedback from users.
Bootstrapping a Community
Token distribution is in its early days, and it remains to be seen the most effective ways to bootstrap a network by getting tokens in to the hands of your users. There are many token distribution mechanisms to be aware of, but I’ll cover the most popular ones that you’ll need to know as a PM.
ICOs gained popularity in 2017 as a “no strings attached” way to raise capital to fund blockchain ecosystems. ICO hype has faded recently in large part due to regulatory uncertainty, and token purchasers wising up to outright scams (some claim that they are dead entirely). In addition, ICOs often fail to align the incentives between token purchasers and the teams that create them, as they enrich the founders and early investors (who buy tokens at a discount), and dump them on main street investors who are left holding a bag full of worthless tokens.
Airdrops are an emerging way to bootstrap an ecosystem’s community by distributing tokens to engaged participants without making them buy the tokens. Airdrops are a way to incentive network activity, awareness, and to drive platform usage age and growth. An engaged community member may be defined as active in chat rooms, attends meetups, contribute code, content, etc. It’s also a great exercise for PMs looking to better understand their customers.
Airdrops tend to work better when the platform is usable (MVP), unlike ICOs, where tokens are sold and token holders have to wait some undetermined amount of time to actually use the tokens.
Airdrops are a way to avoid (or at least reduce) distributing the tokens in to speculators, who are less likely to actually use the product. It’s unknown how effective this strategy is, because if there’s demand for the token, you better believe the speculators will be waiting in line to get their hands on it.
Bonding curves are another emerging token distribution mechanism. Users stake ETH along a bonded curve, which generates a proportional amount of the native token. Tokens are generated as needed through a continuous token model. Users can exit at any time and collect their stake of ETH. This is a more organic way of bootstrapping a network.
The value derived from curved bonding is that it rewards participants for being early and buying tokens in that project. If they leave at a later point, selling their tokens back into the communal pool will net them a reward. The Continuous Organizations concept takes this a step further.
To conclude, build products that allow people to do things that they couldn’t before in a way that’s easy and adds value to their lives.
UI/UX needs a lot of help
UI/UX is a major opportunity for PMs. Onboarding new users can take up to 20 steps and 30+ minutes. This is much too high a barrier for mass consumer adoption. Consumers use apps because they are convenient and make something they need to do easier. At this point, most blockchain ecosystems reflect the intellectual curiosity of its developers at the expense of solving the problems of real users.
At HelloSugoi, we implemented a series of model windows to guide users through our product experience. Although not ideal, it was the best way to educate new users while helping them achieve their goals with the product. Projects like MyCrypto have taken model windows to the next level, and for good reason: mismanaging your private keys is a super painful experience.
Conclusion
The blockchain space is an amazing opportunity for PMs looking to pioneer a new field. Hardly anything has been written on the topic, which is why I’m excited to share my insights with the PM community. Although building blockchain products isn’t a complete departure from traditional PMing, there are indeed a number of new considerations that PMs need to understand. I hope this article acts as a primer for those interested in building new technology this this emerging field.
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Big thanks to Matt Lockyer for the amazing feedback. Click here for parts one and two.
This story originally appeared on BlockchainBeach.com. You can read it at https://www.blockchainbeach.com/new-considerations-for-product-managers-building-on-blockchain-part-3/