<\/p>\n
The \u201cfreemium\u201d model \u2014 where basic app features are free but users unlock more features with payments \u2014 has been enormously successful in the Web2 world for years.<\/p>\n
Even so, most freemium apps only convert between 2-5%<\/a> of users into paying customers, with the rest of the crowd keeping their credit cards tucked neatly in their wallets. Essentially, Web2 apps find a \u201cproduct market fit\u201d and gather up a massive user base first, figuring out the money side of the equation after everybody has arrived on the scene.<\/p>\n Web3<\/a> apps often take the opposite approach, starting with monetization as the first step. This makes the barrier to entry considerably more significant, but once users get over the monetary hump, the average revenue per user can be far greater than the legacy model.<\/p>\n On the Lightspeed podcast (Spotify<\/a>\/Apple<\/a>), Jeff Morris Jr. explains that both strategies have their advantages, but the Web3 \u201cfinancialized use case\u201d approach tends to be misunderstood. He helped Tinder become the top grossing app in the App Store, ballooning the Web2 app\u2019s annual recurring revenue (ARR) from $20 million to $1.2 billion during his tenure with the company.<\/p>\n The former VP of product and revenue at Tinder gained some key insights from his successes before joining the Web3 world as a managing partner at Chapter One. \u201cIn Web2,\u201d he says, \u201cthe goal was always to build the biggest network possible and then figure out how to monetize them later.\u201d<\/p>\n \u201cThe benefit of Web3 is \u2014 everything is very monetizable. It\u2019s one of the reasons why I actually think the space is really interesting as an investor,\u201d he says. \u201cIf you have a small subset of users that are active traders, there are very easy ways to build a business.\u201d<\/p>\n Morris cites Uniswap<\/a> trading volume in Q2 of 2022 as an example of his thought process. \u201cMonthly trading volume was over $170 billion with 400,000 monthly traders.\u201d<\/p>\n \u201cI compare that to Coinbase<\/a>, which had a little over $200 billion of volume with 9 million monthly traders,\u201d he says. The centralized trading application hosted 9 million users while the decentralized version \u2014 Uniswap \u2014 only hosted 400,000, \u201cwith almost equal trading volume,\u201d he says.<\/p>\n \u201cYou could argue that those both have product market fit,\u201d he says, \u201cbut if you were to go on a public road show and try to take Uniswap public as a company and explain the fact that you had 400,000 users\u2026they\u2019d be like, \u2018this isn\u2019t an interesting business.\u2019\u201d<\/p>\n \u201cBut it\u2019s clearly an interesting business,\u201d he says.<\/p>\n Morris says the common crypto trope that centers on reaching \u201ca billion users\u201d<\/a> is probably the wrong goal. \u201cIf we had 30 million people who were really passionate about crypto and found value in the ecosystem, that would be enough to build a multi-trillion dollar asset class that was great for founders and investors and LPs.\u201d<\/p>\n Morris says that some people have criticized his perspective as giving Web3 builders \u201can easy path\u201d \u2014 claiming they have achieved product market fit despite low user numbers \u2014 but he prefers to focus on the positives he sees in Web3.\u00a0<\/p>\n \u201cI spend a lot of my time looking for signals of positivity or hope, because I think it\u2019s really important in a bear market to say things aren\u2019t as bad as everybody thinks.\u201d<\/p>\n But crypto applications still need to be more accessible, Morris says. Citing Friend.tech<\/a> as an example of what might be considered by Web3 users to be an \u201caccessible\u201d mobile experience, Morris asks what a non-crypto user would think of the app\u2019s onboarding process.<\/p>\n \u201cI would love to look at the completion rate because most people just aren\u2019t going to go through this kind of janky web experience<\/a>,\u201d he says.<\/p>\n \u201cCrypto right now still feels like it\u2019s in 2007 or 2008 relative to where the rest of consumer experiences are. And so yeah, we have a long way to go.\u201d<\/p>\n Get the day\u2019s top crypto news and insights delivered to your email every evening.\u00a0Subscribe to Blockworks\u2019 free newsletter<\/a>\u00a0now.<\/strong><\/p>\n Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can\u2019t-miss tweets and more from\u00a0Blockworks Research\u2019s Daily Debrief<\/a>.<\/strong><\/p>\n Can\u2019t wait? Get our news the fastest way possible.\u00a0Join us on Telegram<\/a>\u00a0and follow us on\u00a0Google News<\/a>.<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" The \u201cfreemium\u201d model \u2014 where basic app features are free but users unlock more features with payments \u2014 has been enormously successful in the Web2 world for years. Even so, most freemium apps only convert between 2-5% of users into paying customers, with the rest of the crowd keeping their credit cards tucked neatly in […]<\/p>\n","protected":false},"author":2,"featured_media":149052,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-149051","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149051","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=149051"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149051\/revisions"}],"predecessor-version":[{"id":149054,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/149051\/revisions\/149054"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/149052"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=149051"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=149051"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=149051"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Reaching a billion users is the wrong goal<\/h2>\n
\n