It’s hard to be in the technology industry without hearing whispers everywhere about Web3. As with most exciting things in the tech industry, this is a big, impending event and no one has any idea what it’s going to be!
If you’ve landed here, chances are you’re not sure what it means for Product Managers. Maybe you’ve had your head buried so deep in your own product, you’ve resurfaced to talk about NFTs and blockchain and thought ‘What?! When did this all happen?!
Fear not! We’re here to tell you how Product Managers can prepare for this new era of the Internet.
Web 3 in a nutshell
Web 3, in a nutshell, is the next iteration of the internet.
It will not be the result of any one technology or the efforts of any one company. Rather, it will be the evolution of how companies create digital products, how engineers create websites, and how consumers use the internet and its content. New laws and regulations will be needed to ensure that the internet remains as safe as possible, and the potential for new business ventures is making investors’ heads spin!
Much of Web3 is still undecided, and it’s something for which many people have different visions. But the general consensus is that Web3 is about cutting out the middleman. Through blockchain technology and peer-to-peer networks, power over data, finance, and communication will be redistributed and decentralized.
For product managers, it’s hard to predict how Web3 will change their day-to-day lives, or if it will lead to a change in the skills needed to be a product manager. Instead, we’ll offer advice on how to work with the unexpected and how to make sure you’re adaptable in a constantly changing game.
A Brief History of the Internet: Web1, Web2, and Web3
Although the Internet is a collection of technologies, it actually functions more like a civilization. Cultures and tools evolve over time, and moments in its history can be grouped together.
Web1, from the early 90’s to 2004, was the first form of the internet known to the average consumer. While today everyone contributes to the internet (mostly through social media), the vast majority of Web1 users were simple visitors.
Like all periods in history, this era also had its wars. The first browser war of 1995 saw Internet Explorer, Firefox, Netscape Classic and others, including the new Safari, battle for market dominance.
Web1 was a mostly text-based experience, with static pages and very simple GIFs. To go back in time, look at the Space Jam site, which is frozen in time in 1996. What a gem of the internet!
Web2, our current era, is best characterized by the change in consumer behavior. The internet has gone from a place where a few people disseminated information to the many to a hub of collective intelligence and user-generated content.
As social networking sites like MySpace and Facebook gained popularity and video content became the next big thing, Internet users became content creators.
The advent of smartphones and their ever-improving cameras turned everyone into photographers and videographers. Every time you post on Instagram, leave a comment on a TikTok video or chat with your friends on a forum, you are contributing to Web2.
So what’s next for the internet in Web3? The truth is that we are not sure.
Web3 will supposedly be based on blockchain technology. The idea is that instead of selling your soul (your data) to a platform in order to use it, the internet will be built on a foundation of decentralized autonomous organizations (DAOs). Big Tech dominance has become a concern for many, and some versions of Web3 see a version of the internet where FAANG companies and their ilk have less power.
To use the terms of the game, the house always wins. Web3 enthusiasts believe that all this is about to change.
While all the details of Web3 are still unknown, very little is set in stone, the Internet has begun to experiment with some key elements:
Elements of Web 3
There is absolutely no chance that you have escaped the world of NFTs, even if you have only heard about them in passing.
NFTs (Non Fungible Tokens) are unique, and cannot be exchanged for their like anywhere else. If you have a ten dollar bill, you can exchange it for another ten dollar bill that is identical. But if you have the real Mona Lisa in your possession, you cannot exchange it for another Mona Lisa. There is only one. You must exchange it for money or another work of art of similar value.
NFTs are the same concept, but with digital art. (Actually, anything digital, but the current goal seems to be to create a market for fine art in the digital world.)
Let’s take an example. Nyan Cat, a viral video animation from 2011, sold at auction for 300.00 ETH ($982,311.00). Although anyone on the Internet can watch Nyan Cat, and can download it and make copies, only the « owner » owns the original file.
If you own the Mona Lisa, people can photograph it, print it and screen print it on t-shirts. But only you own the original. If you can imagine that the Mona Lisa is not made of oil and canvas, but of pixels, you have discovered NFTs!
Some people find the idea of NFTs and digital art collection very exciting (although « fine » is a bit of a stretch considering what’s being offered! Perhaps « expensive » is a better word for it.) Others find it all ridiculous.
Whether NFTs are here to stay and whether they will be an important part of Web3 remains to be seen. While we may end up not paying thousands of dollars for a PNG of a monkey in pixel art, the theory of NFTs will probably have an as-yet-unknown use in the future of the Internet.
Crypto-currencies are not big news right now, although they are certainly making headlines. But we’ve come a long way since the early days of bitcoin, and crypto-currencies still have a long way to go.
Many are excited about the role crypto-currency could play in the future of the Web3. Amidst growing financial inequality around the world, fans say that crypto-currency takes power away from large traditional institutions and redistributes it to people. Authority over currency is taken away from banks and the government, and given back to the general public. It will also be more widely available to those who currently cannot access traditional financial services.
In theory, anyone with access to the internet should be able to earn and receive money through crypto-currencies.
However, the volatility of crypto-currencies in terms of value has given many people pause. With money being at the core of almost all human activities, it is hard to imagine revolutionizing the system we have been using for hundreds of years. As far as the general public is concerned, the dollar, euro and rupee have nothing to worry about at this point.
Data has been a central part of the internet since its inception. But its use and concerns have evolved with Web2, leading legislators and the general public to call for change.
Privacy and data protection is one of the main areas that Web3 proponents focus on and tout as one of the main benefits. Trust is hard to come by online, and even those who think big tech companies are misusing their data still depend on their services.
With Web3, it is believed that we will move from « data monarchy to data democracy, » with data operating via peer-to-peer networks rather than being owned by a single company.
Advantages and disadvantages of Web3 :
Will Web3 be a glorious, decentralized, democratized future? Or will it be an ungoverned mess?
With new technology comes new opportunity, and with new opportunity comes innovation! The problems facing the technology industry (concerns about data, monopoly held by large corporations, etc.) are not easy to solve, and Web3 is inspiring professionals and enthusiasts to think about a radical change that will hopefully bring new solutions.
Providing alternatives to the « walled gardens » of large technology companies will help redistribute power over users’ online experiences. Individual creators and communities will have more say in how they operate, and they will be able to cut out the middleman from their transactions.
In the utopia of Web3, huge outages at Meta or Google will no longer stop the online world in its tracks. In a decentralized model, there is no single point of failure, making systems more secure.
Decentralizing content will likely make it harder to monitor content. With individual communities in charge of their own guidelines, and without a large technology company and all its decision makers to monitor them, there is a fear that we will see an increase in harmful/illegal content. Freedom can come at a price, as many alternative platforms have become a breeding ground for hate speech and dangerous propaganda.
Much of the technology on which Web3 will apparently be built is still poorly understood by the public, and is still experimental. Basing entire economies on a currency that collapses as frequently as bitcoin seems a bit far-fetched. Online banks have always been the target of hackers, but customers (usually) have the peace of mind of knowing that the bank will be able to refund the stolen money. If an exchange is hacked and you lose your bitcoins… tough luck.
How should product managers prepare for Web3?
We now know that Web3 will change the way users explore and experience the internet… but we don’t yet know exactly how.
One theory is that Web3, whatever it brings, will run parallel to Web2, not replace it. So it’s unlikely that the elements of Web3 will disrupt your industry in the near future.
It’s hard to talk about the skills that product managers will need to develop to deal with this technological ebb and flow. When you don’t know the size of the waves, it’s hard to know whether you need a surfboard or a submarine.
What is clear, however, is that all product managers need to stay informed about the potential trends that are coming their way. If your management team is quick to jump on any headline train, you’ll need to be adept at stakeholder management. You may find yourself having difficult conversations in the future about why it’s not a good idea to accept crypto-currency as a payment method in your app. Or why it might be fun for the product marketing team to get involved with NFTs, but that it’s not what they should be focusing on right now.
Maybe you’d have conversations about why your company should get into Bitcoin and NFTs, who knows? That’s the exciting thing about the tech industry: you never know what kind of arguments you’ll have to make in the future.
In addition to staying informed, product managers of the future will need to stay agile. But keep in mind that being quick to react should not replace making well thought-out decisions. If you haven’t already done so, consider finding the executives who will help you weigh your options in a way that is clearly communicable to management.
The Internet may change, but the fundamentals of product management remain the same. When you feel like the technology industry is changing so fast that your head is spinning, these principles will be the harbor for product management in the storm.