Winning with Web3: An Enterprise Journey

As people continue to outmaneuver the uncertainty caused by the pandemic, and the current inflation and supply chain environment, companies must build the "next normal". Fortune 1000 corporations strive to use innovative technologies to identify new ways to reach consumers and build enterprise resilience. Due to digital expansion sped up by the pandemic, customers, employees, and the market have all changed forever. Ambitious companies now embrace the disruption and use their investments to design a new future.   

Some of the biggest winners during and after the pandemic have been the companies that could digitally pivot their business models, strategies, applications, and channels. Technology innovation is no longer a "nice to have" but a strategic imperative that is vital to decisions being made today. With the right approach, companies can use innovative technologies to create rapid responses today, shape the journey to the future, and set tomorrow’s standard.  

Dion Hinchcliffe, VP and Principal Analyst at Constellation Research, writes in Znet: “With all the innovations in the world, it can be difficult to separate the signal from the noise when it comes to often controversial subjects like metaverse, cryptocurrency, blockchain, or NFTs.” And the emerging technology innovations underpinning these trends have formed a major wave of innovation under the general rubric of Web3.

So, What Exactly Is Web3?

A PWC article describes the evolution of the internet as follows: 

• Web 1.0 simply connected computers and users worldwide (hence the name World Wide Web) and is often called the “read only” internet. 

• Web 2.0, often called the read-write internet, broadened content and connections to encompass social media, real-time content/news, smartphones, online shopping, and more elaborate web applications. Web 2.0 companies such as Facebook, Twitter and YouTube have reshaped the internet into a user-centric experience, enabling people to create content rather than just consume it.

• Web 3.0 is the web's next generation, often called the read-write-execute version. It represents the next big step in the evolution of online interactions by making the internet smarter by handling information with human-like intelligence using artificial intelligence.

• Web3 is a decentralized and open web based on blockchain technology. Web3 hopes to reclaim data ownership from Web2 giants and return it to users using blockchain technology, decentralized storage, and self-sovereign identity in a community-driven environment. Users will have the final say regarding who can access what data.

According to a Silicon Valley Bank article, today’s corporations take Web3 seriously as both an opportunity and a threat. Some are developing Web3 capabilities in-house or collaborating with crypto-native companies, while others use corporate venture capital (CVC) to invest in key innovators within Web3. Executives see the push toward decentralization as a trend they cannot afford to ignore, even if the implications — or use cases — are not always fully understood. 

The SVB article cites data from Pitchbook that in 2021, U.S. Corporate Venture Capital deals in Web3-related startups reached $12.5 billion, up from $2.4 billion in 2020. That trend has continued in 2022, with $4.8 billion invested through May 2022. The VC firm Andreessen Horowitz is already into its fourth and largest-ever Web3-related fund, Crypto Fund 4, which raised an unprecedented $4.5 billion for a gamut of blockchain-related investments that will flesh out "the next generation of computing."    

How to start building strategies and experimenting with Web3

Companies that understand the technology and use it effectively can gain an advantage in much the same way that certain brands have tapped influencers and social media to achieve big gains. For now, business and technology leaders can benefit from familiarizing themselves with Web3 and developing a strategy to capitalize on its opportunities. 

The HBR article cited above mentions how many brands are creating their own Web3 products, often in partnership with established producers of and platforms for virtual assets. Think non-fungible tokens (NFTs), Roblox avatars, Fortnite skins, or property in Decentraland. Kering, the luxury holding company, has a team dedicated to Web3, and its brands Gucci and Balenciaga have unveiled several metaverse initiatives. 

Author Bernard Marr points out how Nike acquired RTFKT Studios, a maker of “next-generation” NFT collectibles, and sold 600 pairs of NFT sneakers in just six minutes for a total of $3.1 million.

Web3 can change how governance and oversight happen

The PWC article cited above mentions, "By its decentralized nature, the need for a third party to oversee operations is gone. Much like how cryptocurrency works today, Web3 has the potential to be self-regulating and self-monitoring just by virtue of how the protocols are created. Regardless of what level of involvement your company is considering, you should get to know how the infrastructure of a Web3 world could work and what you should do to get comfortable with it.”

Invest in edge computing 

Decentralization and Web3 require recognizing that our existing infrastructure was designed for centralized data/applications with clouds and data centers. According to Alibaba Cloud, this new model will require planning and investing in edge computing and peer-to-peer, private, guaranteed delivery so that the new data models and applications can deliver their value without poor performance.

Rethink and rewire your brand and relationships with consumers  

Web3 represents more than an incremental change in the way brands and consumers are going to interact. Business leaders should rethink and expand how they view relationships and prioritize authenticity. Among other things, Web3 introduces a true two-way channel with each customer, providing several avenues to participate with the company. This makes it possible to buy things from them while also selling things to them. 

Companies have the opportunity to view brand advocates as partners rather than consumers or subscribers. Another HBR article suggests that: “Web3 platforms also have the potential to unlock a novel and especially powerful network effect through community engagement and social cohesion. Ownership of digital assets fosters a sense of psychological ownership that can make consumers feel so invested in a product that it becomes almost an extension of themselves. A platform’s users become “fans” who form a bond through the shared platform experience — similar to how fans of a sports team or obscure band see themselves as a community.”

Conclusion 

The shift toward Web3 is already underway. It is marked by the increasing proliferation of distributed apps and services (dApps) running on blockchain networks instead of centralized servers. While it is unlikely that a decentralized web will entirely replace today's tech giants, corporations are not taking any chances. 

Companies are adding Web3 elements into their current businesses. Shopify acceptsbitcoin payments, and Twitter verifies NFT profile pictures. Some companies are taking it a step further. Google launched a “digital assets” team to focus on blockchain projects. The payments company Square renamed itself Block to signal its new mission in crypto payments.

In the same way corporations understand they must share value creation with their users, they know partnerships with disruptors will be crucial to success in Web3. This poses an incredible opportunity for startups, innovators, and new entrants to leverage these giants' expertise, resources, and scale in co-creating the next evolution of the web, which is sure to be its most impactful iteration yet.

About the Author 

Asha Saxena is the Founder and CEO of Women Leaders in Data and AI (WLDA), an exclusive membership organization for senior leaders in Data and AI, helping them succeed both personally and professionally. She is also a professor at Columbia University in NYC, teaching graduate students health care consulting and entrepreneurship, and is a partner with CEO International, where she coaches CXO leaders. 

As a serial entrepreneur, Saxena has built and sold three successful businesses. Most recently, she served as CEO and Chairperson of Future Technologies Inc., a data management firm that provides warehousing, analytics, and intelligence services. She was also the CEO and Chief Innovation Officer of ACULYST, which provides best-in-class health care analytics services through a pre-built model that integrates clinical, financial, and operational data. 

Saxena has served on several for-profit and nonprofit boards, and is a contributor and international speaker on various technology, data, AI, and women-related issues. She is a member of the CDO Magazine Global Editorial Board.