Upside co-op | What Web3 Unlocks for Brands

What Web3 Unlocks for Brands

How digital ownership and community co-creation unlock transformative opportunities for brandsI am fully pregnant now. Over the last 9 months I’ve been gradually going down the rabbit hole, progressively broadening and deepening my understanding of web3’s core concepts and first principles as they relate to user engagement and experiences. With the scope of web3 being so vast and overwhelming, I have stayed within my comfort zone and passion for looking at technology from a user value perspective, whether that user is a consumer (brands), subscriber (media), member (communities) or fan (icons and creators). In the process, I have tried to connect the dots by building my own mental frameworks, inspired by a diverse mix of web3 thought leaders and communities, and building upon my experience as a product and brand strategist. Along the way, I have become a strong believer and advocate of web3’s transformative potential, while being conscious of where we are in the hype cycle and wary about some of the challenges, gaps and pitfalls of web3’s early-stage experiments.

I have done a lot of zooming in on various aspects of web3’s principles, opportunities, and challenges, covering a variety of topics within the scope of creating more direct, engaging and meaningful connections and experiences between brands and creators, and their users and fans respectively. With this post I want to zoom out again, to take stock of my learnings and insights to date, and try to formulate my own, most likely intermediate, thesis.

“The great web3 unlock for brands = digital ownership + community co-creation.”

Let me try to unpack this (with references to some of my earlier posts). 1/ Digital ownership Web3 enables people to own and transact things digitally, similar to how we own and transact stuff physically. This is why web3 often gets referred to as the internet of value or the ownership economy, thanks to native ownership and transaction mechanisms enabled by blockchain’s immutable and permissionless decentralised infrastructure. Blockchain created the infrastructure the internet needed for hosting digitally native assets that are able to be owned, transferred, and exchanged between people. The key difference with web2 is self-custody or self-sovereignty, i.e. not having to rely on intermediary platforms, which would typically lock you in and extract value in the process. This will greatly accelerate the digitisation (and tokenisation) of everything, creating entirely new asset classes and new economic and social paradigms, with increased blending between the ‘real’ and the ‘virtual’ world enabled by digital twinning and more immersive interfaces.

Web3 enables people to own things on the internet, similar to how we own things in the physical world. Web3 Explained In Simple Terms So Your Mom Understands (

2/ Community co-creation Decentralisation and tokenisation are the perfect foundation for communities of any kind to share ownership, co-create value and share in the collective upside. Tokens act as programmable incentives to engage, empower, activate and reward community members, and align all stakeholders to a common purpose. Tokens are the fuel to spin a community flywheel in higher gear, driven by the fundamentals of mutuality and agency, as members become active participants who have both a voice at the table and a stake in the direction and success of the community.

Community as the killer app for web3, owned by the people leading and participating in them, and orchestrated by tokens. Web3 — Community first. Community is the killer app for Web3 | by DocTom | CryptoStars

3/ Transforming customer relationship, experience and value When brands issue their own native tokens through the blockchain, they create a direct unmediated relationship with their token holders; unlike web2 social platforms who mediate and control the brand-audience relationship. Tokens can be issued in many forms and at various stages of the customer journey or lifecycle. One obvious use case is to augment physical product ownership via digital twinning, by issuing NFTs with (high-value) product purchases. These non-fungible twins not only authenticate the ownership (and guarantee rights), but could also be linked to incremental utility, unlocking additional experiences and benefits for product owners. This type of product-driven token gating has enormous potential for building customer loyalty and improving retention. In fact, a brand’s loyalty program can be fully tokenised, combining fungible token rewards with non-fungible and non-transferable membership tokens, capturing and managing every single customer’s relationship with the brand in the most individualised way.

Brands can use NFTs to recognise their customers in a more fine-grained, ultra-personalised way. An NFT can unlock specific personalised privileges, such as unique benefits within a programme that might otherwise only have one or two tiers of differentiation. NFTs: The Latest Loyalty Currency? (

The more transformational shift however, is when brands unlock the power of community and address people’s desire to both fit in and stand out. People, especially younger generation consumers, crave belonging and seek active participation. By building and tokenising their own communities and sharing ownership, brands unlock agency, turning loyal customers into value contributing community members and brand stakeholders. In doing so they create a closer connection to the brand as well as amongst like-minded (brand-loving) customers, moving the engagement model from one-to-one to many-to-many. At the same time they introduce ways to segment and recognise customer-members based on actual contribution and lifetime value, and reward them accordingly with increased permissions, power and ownership

Creating a sense of belonging has become a business imperative Why Brands Need to Act Like Membership Organizations — Altered (

Tokenised brand communities combine elements of individual consumer ownership and loyalty with the power of group network effects and collective co-creation: the power to not only own, but shape a brand, to share ideas and make them have an impact in something bigger than oneself. By aligning incentives between brand and community, members will be triggered to contribute in creating additional brand value, as they share in the value being captured. The value proposition for loyal customers and brand fans changes from one of consumption and promotion to that of (co-)ownership. For consumers, this becomes not only a matter of spending, but also investing in brands. As such brand ownership is no longer the exclusive domain of the company, but one that is shared with all community members in a progressively decentralised way.

The concept of brand is, by design, a manifestation of the community which adopts it into their lifestyle. It means seeing the dissolution between brand and community, where “brand is community, and community is brand”. Web3 — Adding a 3rd dimension to Brand Activation | by DocTom | CryptoStars

Finally, through digital ownership and community co-creation, brands have the opportunity to create increasingly blended experiences across the real and virtual world. The metaverse is not only a parallel universe for brands to replicate how they connect, sell to and service their customers, taking advantage of the new spatial and immersive capabilities these virtual worlds offer. More importantly, it’s an opportunity for brands to deliver augmented ‘phygital’ experiences, seamlessly interconnecting digital touchpoints, assets and communities, with physical channels, products and experiences. And by doing so, shift the engagement model from transaction focused interactions to a sustained omnichannel relationship.

Phygital blurs the line between physical and digital channels to create a consistent omnichannel experience … a united phygital strategy that unites both sides to create an immersive digital experience, no matter where customers shop. The Rise Of The Phygital Experience (

4/ The road ahead Tokens (or tokenised communities) are not a magic fix for customer loyalty or retention. A brand’s web3 strategy needs to align with and reinforce the core WHY/WHAT/HOW brand pillars. Given the current state of experimentation, immature infrastructure and tooling, and lack of regulation, a ‘crawl/walk/run’ approach would be most sensible.But more importantly, there are a number of fundamental mindset shifts required along the way: 1) how brands (and creators) think about relationships (moving from one-to-many to many-to-many, from transaction to engagement, from drops to drips), 2) how they think about people (recognising individuality, respecting pseudonymity), 3) how they empower people (inclusivity, sovereignty, ownership) and in the process, share (or give up) control.

Mindset shift, or mindset expansion? FROM go-to-market TO go-to-community; FROM personas TO identity; FROM audience TO protagonist. Three mindset shifts for Web3 — by Justin Peyton (

At the same time, I firmly believe it will be brands (next to fandom and ticketing) that will onboard the masses to web3. Not with a hype and push approach, but by pulling loyal customers and brand fans into web3 based on incremental value being offered, whether in the form of new social capital (fitting in and standing out), augmented utility (drips vs. drops) or co-ownership rights (governance and decision making). To do so, they will need to adopt a hybrid approach in gradually adopting and integrating web3 assets within their existing web2 infrastructure to combine the best of both worlds: proven models for discovery, growth and experience from web2 with the tokenised ownership and community flywheel dynamics of web3.

What these brands have transitioned into is a model we call web2.5: the adoption of web3 assets like NFTs within web2 infrastructure that allows for strong discovery, user experience, and brand retention Crypto Goes Mainstream: Welcome to Web2.5 (

This is only the start …I’m sure my thinking will evolve as I continue my journey down the rabbit hole. But there is no turning back. There is simply too much magnetic energy and excitement in the ecosystem. And despite the current ‘winter’, there is growing evidence of a winning formula behind the ‘read-write-own’ web. So I remain all-in and hungry for more. Time to move away from the sideline and on to the playing field. To be continued …