The Key to Web3 User Growth: PMF, MVP, and GTM Strategies

In the Web3 space, we often see some projects experience a rapid rise in a short period, only to have users quickly churn out and ultimately fall into a "death spiral" leading to failure. Compared to traditional sectors, the impact of the cryptocurrency market on Web3 projects is more direct and significant: during a bull market, there is a flourish of projects, while a bear market eliminates most of them. These failed projects typically share a common characteristic: during market downturns, the project token price continues to decline, leading to the failure of incentive mechanisms and even harming user interests, ultimately resulting in severe user churn.

User growth is a long-term goal of the product, focusing on building an ecosystem between the product and users, acquiring market share through continuous iteration, and achieving stable growth in user scale and value. In 2022, the number of active users of various Web3 applications generally declined, but social media applications showed a rapid rise trend. This article will explore several key factors for Web3 user growth.

Basic Ideas for Web3 User rise

Although the cycles of the cryptocurrency market have a huge impact on user growth, entrepreneurs should not be constrained by macro factors. The primary task of user growth is to find the "market" that matches the product, namely the "M" in PMF(Product Market Fit). It is important to position a suitable niche market based on the characteristics and resources of one's own product, rather than blindly pursuing the entire large market. It is recommended to first deeply cultivate a single market, and only consider horizontal expansion after achieving a leading position. For entrepreneurs with a Chinese background, abandoning the Chinese-speaking community and users is unwise, as it is equivalent to giving up a potential user base of one-third of the world's population.

In product design and development, the minimum viable product (MVP) is a concept worth adopting. It emphasizes launching basic functions that meet core scenarios first, and then iterating and optimizing based on market feedback. Developers should focus on solving the user's most pressing "one" problem, simplifying the usage process, and building an MVP product that aligns with PMF. In this process, it is often necessary to say "no" to many seemingly good ideas.

Launching a PMF-compliant MVP into the market is the implementation of the GTM( Go To Market) strategy. The goal of GTM is to acquire and retain users, typically following the "funnel model": from top-level customer acquisition to bottom-level user conversion and retention, there is a decreasing number of users in this process.

Compared to traditional Web2 projects, the GTM strategy of Web3 is more diverse and rich. "Community" is a unique element of Web3 GTM and an important traffic pool for user growth. The GTM strategy of Web3 typically combines token-based community incentives with corresponding referral programs, where existing users are rewarded with tokens for referring new users, and new users may also receive rewards as a result.

PMF: Identify the market correctly and meet real needs.

Product market fit ( PMF ) is the key to project success, and the following questions need to be considered:

• Why develop this product/feature?
• Can the product/function meet market demand?
• Why develop this product/feature now instead of later?

According to research by CBInsights, a lack of market demand is the primary reason for the failure of entrepreneurial projects, accounting for as much as 42%. Therefore, developers should seriously consider market demand during the product planning stage, rather than waiting until the product is about to launch to start looking for the market.

Finding PMF is a cyclical and iterative process that requires continuous feedback collection and validation to achieve a high degree of alignment between the product and the market. The main steps include:

1. Identify target segments and user groups, and discover unmet needs.
2. Develop product strategy, clarify value proposition, highlight differentiation and core competitiveness.
3. Selected MVP feature set, completed user demand testing.

MVP: Rapid iteration, avoiding detours

The core of the minimum viable product ( MVP ) is to develop a usable product that can showcase the highlights of the project with the least cost and in the shortest time. When developing the MVP, one should consider:

• What are the components of the product/function?
• What problems can it solve?
• What is the future iteration plan like?
• What is the value of the product/function?

An MVP is not a perfect product; its purpose is to quickly enter the market to validate feasibility. By validating market demand, it continually adjusts direction and ultimately iterates to create a product with market space and revenue potential. An MVP can even be a well-designed testnet product, which helps avoid investing a large amount of capital to develop a product that is not accepted by the market.

Developers should hand the MVP over to the target user group for testing, collect feedback, and verify whether they have accurately identified the niche market and target users. If the idea is correct, they should quickly increase the product's market exposure and allow seed users to truly start using the product.

Developing an MVP requires the ability to simplify complexity, defining key features around core needs, completing the main path first, and then considering detailed branches and auxiliary functions. This ability is essentially about grasping the rhythm of business and user development, launching suitable product features at the right time, and pursuing precision rather than comprehensiveness.

GTM: Attract new users and retain old ones, manage the community

The market approach ( GTM ) strategy needs to consider the following issues:

• How does the product interact with users?
• Do users need help learning to use the product?
• How often do users use it?
• Where is the product published? Locally, domestically, or internationally?
• Which cooperation channels to choose?
• Are there any restrictions on cooperation channels?

The GTM strategy of Web3 not only includes traditional marketing but also emphasizes managing a more enriched "community". The community not only includes users but also developers, investors, and partners. Many successful Web3 projects have a strong community foundation, with some even adhering to "community-first" or "community-led" principles. Only by continuously meeting user needs can a highly engaged and high-quality community be established.

Web3 projects often use token rewards to address cold start issues, rather than investing in traditional marketing. By rewarding early users for their contributions, they attract more new users, who also hope to earn rewards through their contributions. From the perspective of user loyalty, the contributions of early Web3 users to the community may be more significant than those of traditional Web2 business development personnel.

The main directions of the GTM strategy include:

1. Acquire new users:

   • Airdrop activities through task interactions
   • Publish tasks on the Web3 task interaction platform to guide users in product engagement.

2. Increase activity and retention rates:

   • Continuously optimize product experience
   • Organize community activities, such as Twitter Space, Discord, and Telegram AMA

3. Recommendation and Self-Propagation:

   • Design incentive mechanisms to encourage existing users to share the product
   • Analyze user on-chain behavior data to optimize operational strategies

The referral program ( will break down the advertising costs into rewards for existing users who refer new users and rewards for new user registrations, effectively reducing customer acquisition costs. Although it is not a new concept, this method can bring continuous and effective conversion results for the project.

Acquiring new users is the traffic entry point, improving retention rates relies on product value, while referrals and self-propagation amplify community power. These three steps aim to generate revenue, as only with an increase in users can scalable profitability be achieved.

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