Bitcoin was to change the world. It would give us all freedom from banks and government prying. It would speed up payments and reduce their cost. It would democratize finance and bring opportunities to those who need them most. In fact, many of the big promises echo those of the dawning internet a generation ago. And most of those promises have not come through as hoped.
Ethereum came along and updated many of the same with similar results, as did all the new tokens that followed.
Why Market and User Research is Necessary in Cryptocurrency
We’re all aware of technical limitations that have been hit; slowing performance and volatility of costs being key. Those are real issues, to be sure. But a key one that is not addressed very much is basic user needs.
As an alternative to fiat, crypto has a lot of challenges. It’s difficult, it’s a new set of concepts to learn and responsibilities to accept. There are cost issues as well. When compared to a debit card or cash – it’s a pain in the ass to use any cryptocurrency.
Today, after the 2018 cryptocurrency market drop, the “common wisdom” is that no one (or at least too few) want to spend crypto. I don’t accept that. I think we have yet to design an offer that is sufficiently engaging. We are missing much of the opportunity offered by it.
Fortune and the Bold
With cryptocurrency we get to redefine what value is and how it’s passed from one person to another, we get to reinvent money. I don’t mean simply as a “new dollar” but as something entirely new. That’s where our opportunity lies. We can launch companies trying new models and, a bit like trying to win a war by more or less blindly sending soldiers off in random directions hoping to win key battles, hope that the investment in time and effort pays off. This approach is reminiscent again, of the early internet. Pets.com and Webvan.com are examples. Or we can choose a different route.
Awesome Solution for the Right Target
The key question to me is twofold: to what target(s) is what solution(s) motivating enough to try something new?
People have adopted new technologies and changed their behavior and accepted entire new cost categories for themselves many times. The internet is a perfect example. In 1980 no one wanted to shell out $1-2,000 for a computer and then do stuff on it daily. In 1990 it was still a tough sell. By 2000 it was common. The internet provided the motivation for most non-geeks to jump in. Mobile phones are another example. Cable TV before that. It’s not that “no one wanted too”, it’s that the motivation to do it didn’t exist – or maybe better put – came gradually. From 1980-1990 desktop comps were geek toys. From 1990-2000 they were toys and tools for writers, home accounting geeks (yes, there is such a thing), graphic artists & print layout people, and gamers. Each group was new wave of adoption – seen from today a tiny one. Seen from back then each wave increased adoption by 10 or 50 or 300%. Big jumps.
Better Tools, Fantastic Fit, Reduced Risk
Today we have tools to much better design successful offerings. It’s easy to to conduct research to gather data on attitudes, current habits, and to find target audiences that are more eager to try something new but haven’t done so yet. And it’s very easy to test ideas in limited pilots to see what solutions are really promising. It looks expensive – individual studies can cost $30,000 or more and market experiments can be much more, depending on what’s needed and how it’s done. But it’s a bargain compared to the millions of dollar cost of a failed startup – especially if the failure is simply because no real target was aimed at or the technology was presented poorly. It’s the principle of prototyping – you try lots of cheap, disposable things in order to dramatically increase the chances of your main effort working out. This means we can be really creative. We can even launch experiments that we expect will fail just to understand the failure better.
A startup makes promises to investors, usually concerning the development road-map and the ROI. That means the product offer is usually fairly conservative, mimicking what we think is “tried and true” with a couple small change. We’re almost guaranteed to provide, at very best, a small motivation to the customer base to change their current habits. And it means that any adopters of that offer will probably feel, at very best, a minor benefit. Nothing worth telling friends about.
In my work mentoring startups I always suggest to them finding the target audience for whom the startup’s project will bring the biggest benefit the fastest. Don’t try to be “for everyone” – that’s a guarantee of bland & boring. Find the group for whom you can be SPOT-FUCKING-ON ROCKIN’!!! Sure, this group will be smaller. But they will be the foot in the door. By targeting you will gain a couple really important advantages:
- Trust: they will know you are one of them – hence trustworthy be default.
- Communication: You will be able to reduce long descriptions for very strong keywords that they will immediately understand.
- Design Constraints: You won’t need to include features for “everyone” – just the ones that bring most benefit to the target. This not only makes for better design but saves tons of time and money.
- Opportunity to be Creative: You may be able to go wild with that product – making something really awesome.
Cryptokitties is the best effort on those lines I’ve seen so far. To most people it looks silly and utterly ridiculous that a picture of a cartoon cat can sell for $140,000 (three have gone for $100k or more that I know of to date) but to collectors, value is subjective and very, very real. I don’t know if anyone has used one as currency, for instance using some CryptoKitties to buy a house or something but there’s no reason why they couldn’t. Technically they are cryptocurrency with a couple interesting new properties. Money, fiat and most cryptocurrencies are, except for identifying numbers, identical. One USD is exactly like another. By design, they are fungible, the ultimate commodity. Cryptokitties and other collectibles are the exact opposite and derive their value from their uniqueness. That might, MIGHT I say, be a property of money reinvented. There could be any number of other properties, limited only by our creativity and market acceptance.
Other possibilities might be the ability to influence or even control how a Token is spent after I spend it, or maybe a built in team-like feature. Or something entirely new.
I believe that we can make a world that escapes most of the dangers we see today and improve on what we’ve now got. I really do. I also think the cryptocurrency can be a part of reshaping an economy that will be part of that better future. I don’t know what the key elements to brining crypto to the masses will be (I wonder if anyone predicted that porn would be the key driver in bringing home computing, the internet, and online payments systems to the world). I think we can design some of those elements using the tools we’ve gotten so good at using elsewhere.