The Web3 startup world & the creator economy became very popular in the last two years and more ventures than ever are building on Web3 technology. Many creators see potential in future business models and tailormade solutions for a more decentralized Web and a boost in community governance.
Web3 in short will be the new era of the internet, where the fundamental infrastructure is blockchain technology. This means that, unlike Web2 where we can only read & write data, Web3 is offering also the feature of verifying the data. Verification offers a lot more transparency to users and allows them to own their data, instead of big tech giants where users are seen as their product.
In this article, we will introduce you to the world of Web3 startups and how they will shape the future of the creator economy. This knowledge is important for you to kick off your Web3 startup career. Enjoy your journey and welcome to Web3!
Before the Web3 startups
Startups have existed always, as they are basically just newly formed companies, but the definition as we know it today attracted a lot of attention in the 1990s. As a rule, startups are associated with the idea of a novel solution (innovation) to a very specific problem, and this can be basically anything as long as the company started off small at the beginning.
The term startup refers to a company in the first stages of operations. Startups are founded by one or more entrepreneurs who want to develop a product or service for which they believe there is demand. These companies generally start with high costs and limited revenue, which is why they look for capital from a variety of sources such as venture capitalistsInvestopedia
The startup pioneers
Edison General Electric (now GE), for example, could be considered one of the first startup companies. The growth and difficult path to success of this company resemble the typical path of a startup. Many companies such as Nokia could also be considered start-ups in their early days.
Silicon Valley as the center of start-ups
Startups are often associated with the rise of Silicon Valley. This concentration of technology companies around Stanford University has had a significant impact on the world’s technological development since the 1970s. The term Silicon Valley was first coined in Electronic News magazine in 1971, and at the time referred primarily to the companies in the region that manufactured semiconductors (silicon being the main ingredient). By the 1980s, the term Silicon Valley was used to refer to the entire area of Palo Alto, Cupertino, Sunnyvale, Mountain View, and others.
The dot.com boom and its impact on the scene
The startup boom in the region didn’t begin until the late 1990s when the dot.com boom took off. Belief in technology and the possibility that the Internet could change the world grew to unprecedented heights. Companies like Amazon and Netscape paved the way and gave the sense that success awaited anyone who knew how to register a domain. Things got out of hand and the dot.com bubble burst, leading to one of the biggest collapses of the global economy in decades.
History teaches us to be cautious and wary of economic bubbles. But we must also keep in mind that in any new economy, there is a peak phase in which different players aim for the pole position and try to prevail in the long run. Let us discuss the opportunities within the Web3 and creator economy landscape and why you should consider building a Web3 startup.
Why not start a Web3 startup?
In this section, we will discuss the key features of Web3 and how they might fit your business model. You need to make sure if these features are beneficial or just an obstacle along the way. This is the most important step in starting a new business, as it addresses the core values of your organization. You can ask questions like for example: decentralized or centralized leadership? How do I set up the company hierarchy? Are there coordination and decision processes decided in DAOs? How important is community? and many more.
Web3 boosting technology innovation
Web3 startups can play an essential role in many different economies today, as they provide a novel approach to many legacy structures, such as banking, real estate, or logistics.
For example, supply chain professionals can apply blockchain-based reasoning to reduce additional costs through transparent transactions. This setting will also improve coordination between trading partners as they trade efficiently with traceable products within the chain.
Another key advantage of a Web3 startup is decentral governance, which supports a shift in power and data integrity. This also provides enhanced immutability and transparency, allowing you to launch your business on applications with a largely distributed logic under multiple nodes of the Blockchain.
Arguments for choosing Web3 infrastructure
Web3 applications are built from open-source software and by an open and accessible community of developers. The technology used, code and progress can be tracked on for example GitHub. The community can actively participate and comment on tech decisions.
- Data ownership
As an end-user of Web3, you will acquire total ownership of your information under encryption or tight security. This differs from the data-sharing activities performed by Web2 that were sold to large tech organizations, marketers, and advertisers. You cannot share the data unless you issue permission or under the case-by-case process.
Eliminating the central base of data control assures you of maximum privacy. Ethereum is an example of applied blockchain offering a safe platform for data encryption with tight, strict, and unbreakable rules. This protects your data from common leakages under intermediaries such as Google or Apple. Decentralization blocks spying entities or the government from interfering with your sites, services, and identities.
- Permissionless networks
Using Web3, you don’t require permission to build a blockchain address or interact on the platform; the access authority to these sites is permissionless and free from getting overstated. You can also transfer your tokens quickly and efficiently at any location in the world. Additionally, all users are welcome regardless of sociological and geographical factors, such as gender, orientation, income, among other personal aspects.
- Risk reduction
Web3 has staunch measures reducing instances of service denial or account suspension. This stability minimizes disruptions, and you can still access your data from the multiple backups placed on the nodes.
Arguments for not choosing Web3 as the foundation
- Decreased power
Web3 definitely gives you less power over products, customers, and their data, as it is less centralized and the community enjoys more rights and involvement. If we think about Netflix, centralization might be key to their success and users actually benefit from this massive amount of knowledge and power to produce custom products.
- Slow dApp integration
You may encounter slow services when running your applications on Web3. The speed is lower than Web2, which functions under a centralized system. For instance, Twitter uses a Twitter API that posts on your behalf after tweeting. The application also maintains a lightweight structure, offering fast results on Web2, unlike Web3, which lacks this option.
Discussion of pro versus contra arguments on Web3 technology
Web3 is a new technology that challenges the status quo and brings with it the need for innovative design. Not every business model is suitable to be built on Web3, but an important point in this discussion is the necessity to re-evaluate the current state of your solution. This approach will generate new ideas and opportunities to improve the existing business model, or even convert the legacy structure to Web3.
As far as the maturity of Web3 technology is concerned, there is still a long way to go. On the one hand, this makes development quite complex or bumpy. On the other hand, it provides freedom for development and added value for the community when customized solutions are developed. If a small and eager community of developers and entrepreneurs is exactly what you are looking for, this is the place to be.
Future founders track welcome to Web3
We welcome all founders, entrepreneurs, and community members to this exciting new space, where collaboration and an involved community are highly valued. Web3 and the future of the creator economy is a new form of global cooperation. The more builders and creators join this revolution, the better we can shape the future of tech and the creator economy together.
The initial steps on creating a Web3 startup
A growing number of entrepreneurs realize the potential of the discussed technologies and protocols to improve the web. These startups are developing new ways to manage data storage and security.
A few things to think about when starting out in the Web3 and creator economy landscape:
- Understand what your company is trying to achieve clearly, i.e. What problem are you trying to solve? What value can you offer to your customers?
- Focus on the specific technologies and protocols you’ll need to make your ideas become a reality
- Think about the practicalities of running a startup, such as putting together your team, planning how to take care of data storage and security, or figuring out who your customers are and how to attract them
For example, you can find advice on thinking about your company differently, learn more about blockchain technology, or read up on Web3 protocols. Even check out a guide on how not to run a Web3 startup which will take you through the basics of what not to do! Ready to start taking your blockchain business idea seriously? Here’s some inspiration.
Should I start a Web3 startup?
For entrepreneurs who want to launch a Web3 startup, a plan for technological adoption and growth is essential. Web3, like many other tech breakthroughs, has significant business advantages. Most of them are connected to the first-mover advantage, where you have the opportunity to be the first solution ever built on the market. This can create huge gaps in your competition.
In Web3 community building and care becomes a lot more important. To build a good community you will need a lot of resources and time, which also supports the first-mover in Web3. A good example of this is Ethereum, where an amazing community of developers and users around the globe together believe in and stick to it. One of the biggest features of Ethereum is definitely its striving community.
But before you start building your Web3 startup, ask yourself the following crucial questions to decide whether the game is worth a candle. Here are 5 areas where you need to take a closer look:
Make money off your data
It has long been known that the Web2 model means that tech giants Facebook and Google are making high profits by collecting and selling user data that people “give away” every time they interact with such platforms. In this model, the user is often compensated by bombardment with recommendations and tailored ads.
In contrast, Web3 provides an excellent opportunity for modern users to see a little return on all that data they create with every online interaction. The main reason for this is the implementation of blockchain.
The data generated in the blockchain remains with the people who develop it. Thanks to Web3 protocols, you can easily collect and monetize your data.
Promote your currency
Using Web3 technology and blockchain business ideas, you’re able to create your tokens or cryptocurrency and distribute them to the creator economy investors via different resources, including your own crowd sale website and specialized crypto exchanges. As the creator, you will be able to control the total number of issued and distributed tokens.
Public blockchains, such as Ethereum, provide a trust-less platform that helps companies remove the intermediaries and allow individuals to interact directly. In Web3, tech giants like Apple and Google won’t have control over user information, preventing malicious parties from using this personal data.
In addition, independent identification may allow users to verify their identity in applications without providing personal information to an intermediary. Instead of giving a bank or landlord access to your credit history, you will have the option to use a blockchain-based ID.
Use open code
One of the most profitable characteristics of Web3 technology is that most of the technology is “open-source”. The content creators and contributors can easily interact with or modify it. What does this mean for your project?
Put simply, your company will no longer be limited by the strict rules set by big tech organizations. Instead, you will have the freedom to make truly creative content that will captivate your target audience.
Help your Web3 Startup stay afloat
Web3 is still in its infancy. We have yet to learn which Web3 business models will catch on in the market and which will fail. Therefore, your idea should remain flexible and keep up with the latest developments within the Web3 ecosystem. Web3 uniquely provides new opportunities to make money, including the creation of the NFTs and the launching of IDOs.
Conclusion & DEIP constructor for Web3 startups
Web3 startups are business ideas built on blockchain infrastructure. This means they benefit from a very different foundation that brings features such as decentralization, immutability, transparency, and greater community involvement. One of the most exciting value propositions is the new wave of innovation coming to the tech world. These far-reaching opportunities are motivating creators around the world to bring new ideas to life by creating their own Web3 startups.
Challenges & opportunities
Many of the arguments discussed are in favor of Web3 and its main features. We encourage you to take a closer look at this exciting new field and its underlying technology, as there are many new challenges and opportunities that it presents. The Web3 community is more than happy to welcome new developers and creators into this space to shape the new era of the internet together.
Adding to this you have to consider the tooling for building a Web3 startup. Web3 is not just about blockchain, but also about governance structures, powerful APIs, token economics, scalability, performance, security and much more. If you are new to the space, this added complexity might be a huge barrier of entry. That is why we set up this blog, our community forum, and why we are building tools that enable everyone to build Web3 solutions.
Launching a Web3 startup with DEIP constructor
Creating a Web3 project for a decentralized Internet might seem complex and time-consuming, but using the DEIP platform to build your Web3 startup you’ll find the process can be quick and easy.
DEIP is a blockchain-based Web3 technology solution for creators, intellectual property, and asset owners. It enables them to monetize and generate liquidity using NFTs and F-NFTs (Fractionalized Non-Fungible Tokens). We give you access to fully managed, scalable Web3 infrastructure and the possibility to use the Web3 constructor Casimir.