Lessons for Building Communities in WEB3

Damian Routley

Chief Commercial Officer, Founders Factory

Damian Routley, CCO at Founders Factory shares why cultivating digital communities in Web3 should get even bored apes excited.

Communities are the centrepiece of the Web3 movement, promising to repair the broken dynamics of Web2 platforms. As Chief Commercial Officer at tech accelerator and venture studio Founders Factory, which recently launched ff3,  a new Web3 knowledge sharing community – Damian Routley is building and scaling Web3 businesses, from NFT studios to membership token platforms. From considering how to empower rather than profit off communities to leveraging tokenomics, here he gives his key lessons on building communities in Web3.

Expect to learn:

• The inherent flaws of Web2 communities
• How Web3 technology enables community ownership and governance
• What are the mechanisms for community building
• Why your users are your most important asset in Web3

Humans are social animals, fundamentally drawn to community. Over history, it has taken many forms, from religion to trade unions, all under the guise of bringing together people with shared interests under one umbrella.

Community has particularly flourished online. People moved their lives online overnight during lockdown, and many have stayed there—for events, for discussions, for art. Yet, on many of the social media platforms where people have flocked, there’s a fundamentally flawed relationship between the platform and the community, one where the former extracts value from the latter. This model is neither fair nor sustainable.

The Web3 movement promises a fairer, more equitable approach. Community is a central value to this new iteration of the internet which isn’t about individual gain, but rather about the success of the collective.

From its infancy, communities have formed the backbone of the internet as we sought out other members of our tribe. Forums were the engine room of early internet activity, bringing people online to debate and discuss on topics of shared interest. Much of this was knowledge sharing on how to build the internet into a powerful collective resource (see the Open Source movement); much of this was far less formal, discussing the hit TV show of the time, or sharing concern for Jerry Garcia as he slipped into a coma. This movement even birthed early meme trends, particularly from forum websites like 4Chan and Reddit.

The transition from list format (Web1) to a more interactive format (Web2) saw the dawn of social media. At face value, this was a boon to community organising. On Facebook, you brought forums, events planning, and messaging all under one roof. On creator platforms, like YouTube or Twitch, individuals could suddenly build a living off their interests, and the community that surrounded them.

As communities filed into these aggregators, without realising, we suddenly lost ownership over them. All our data was centralised in these big tech companies. Not only does this create a one-sided ownership dynamic, it also puts immense power to monetise. Users are taxed for their attention via advertising, while creators are taxed through the hefty commissions taken from their content. The community essentially lines the pockets of the platforms.

This seems anathema to the idea of community. How can something really be in the interests of the collective if it’s a) extracting rather than creating value, or b) not governed in their interests?

To understand how Web3 can empower rather than profit off communities, it’s worth understanding the technology that underpins Web3. These platforms are powered by blockchain technology: instead of transactions being processed by a central administrator, they are done decentrally and automatically by an immutable protocol—a set of rules which can only be changed by mutual agreement of all stakeholders. From a community perspective, this is important.

This fixes the broken one-sided dynamics where data was pooled in the hands of the big tech companies. Previously, we might have used Airbnb to mediate a transaction, and were willing to pay a premium to do so (to avoid the risk of passing money to someone you don’t know): but now, the trustless technology means that users no longer rely on these ‘aggregators’. Communities, instead, have independence over where and how they gather.

Another feature of Web3 is data portability which means that we can carry our data with us: we’re no longer tied to Facebook purely by virtue of them holding our existing ‘profile’. These aggregators can no longer extract value from the community, while users and creators are fairly incentivised and rewarded for their engagement. Or in short—cut out the middleman and reward those who actually create value.

It also promises to restore the degree of control users have over the platforms they’re using. As it stands, creators are at the behest of any spontaneous decision of the platform: for those who earn a living here, this is frightening. The new Web3 ownership dynamic, however, offers communities governance over their platform. Braintrust, a freelance work platform, uses token (i.e. financial) incentives to drive the desired behaviour on both sides of their marketplace, for workers and clients: in return, they can contribute to discussions and vote on key community decisions. This is a much purer democracy.

Behind many of the early successes in Web3, you’ll see a concerted effort to build, grow, and engage communities. In a bottom up model of IP creation, the model underpinning web3, community-led is the rule of the day.

Over the past twelve months NFTs have exploded into the public consciousness, the most popular form being the programmatically generated profile photo (PFP). They’ve often been maligned as the ‘point and laugh’ subject of Web3 cynics: so why have they been so popular? The way they’ve fostered community is certainly a strong part of this. You only need to scroll down your Twitter feed to see the number of PFPs to understand the sense of belonging these projects espouse. Some even take this a step further: owners of Desperate Ape Wives are invited to in-person parties and events across the world, while the Tunney Munney NFT from artist Peter Tunney will get you into the Wynwood Walls art gallery in Miami.

In a world where we attribute social status to the objects we display—be they designer handbags, rare sneakers, or body art—tricking out our digital avatar or our slice of the metaverse with items of value help us convey a sense of status in these communities.

Certain Web3 projects actively offer incentives to join and engage in their community. This can be particularly powerful in a professional context. VitaDAO offers a remarkable new approach to drug development. Members can earn tokens through contributing funds, work, or valuable research data or IP assets; in return, they’re given governance and decision making power, and the tokens act as equity in the project. What they’ve built is a pharmaceutical company funded, owned, and operated by the same community.

Incentives don’t have to be financial. Certain tokens are considered ‘illiquid’, demonstrating a longer term value over a quick cash-in. Instead, users are rewarded with symbolic ownership, closer access, or gated content. Temple, a fan membership platform built in the Venture Studio at Founders Factory, uses a token-based system to enhance engagement between creators and their fans, offering closer access to their content. Think Patreon for Web3.

In the Web3 movement, we’re seeing the natural culmination of a decades-long movement to decentralise control and give it back to the people. These were the founding principles of the early internet and what we’re seeing now is a continued experiment in building the consensus models that will govern the future—as profound a shift as when we emerged from feudalism and saw early democracy take hold.

From a social perspective, the implications are huge. Communities can tap into the power of technology which can connect them with people around the world, without the skewed power dynamics which unfairly capitalised off their participation. In the workplace, this could mean an entirely new employment dynamic, where employees have governance and control over where they work, how often they work, and how much they’re paid.

If Web3 holds the promise to repair Web2, and regenerate the internet as a shared resource for good, then this seems like a good place to start.