How Web3 is redefining Memberships and Subscriptions
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🧑💻 How does Web3 redefine relationships with customers? Community Insights on Memberships vs Subscriptions.
“Because of the changes that are happening in the developing Web3 ecosystem, we can think of Web3 being more strongly associated with memberships, and Web2 with subscriptions.”
Chris Sotraidis, author of the Spatial Awareness newsletter
Editor’s note: This is a recap of the article “Phoenix Rising: How web3 is Redefining Memberships and Subscriptions”, written by Chris Sotraidis.
Why are memberships ≠ subscriptions?
While a subscription-centric business might be focused on the product and customer satisfaction, a membership-centric business places a greater emphasis on community. The relationship is social, so membership-centric businesses must publish and release content frequently, with exclusive content, access, and perks. Subscriptions can stay static, memberships cannot.
Values, thoughts, and interests matter when creating a membership – they do not matter when creating a subscription. By creating a membership, members are sharing an ethos, and ideally a culture.
🔥 Effective memberships draw higher valuations from investors, and can offer better analytics down the line.
NFTs as a multi-pronged membership tool
We can agree that memberships certainly sound like a higher value opportunity and investment for businesses. If you can make it work, the value flywheel can truly do magical things. But how do we get there? Where do NFTs fit into membership?
NFTs are used for:
Access to premium or gated content (via ticketing);
Discounts on products or access to exclusive products;
Access to IRL or virtual events;
Early access to digital or physical products;
NFTs can be seen as an evolution of many of the core ideas posed above surrounding membership. They can act like VIP access, a membership pass, a club card, or all of the above. They are truly multi-pronged, and are largely desired because of their verifiability for authenticity on the blockchain.
🔥 The usage of an NFT to unlock value within a business is limited only by that business's creativity and knowledge.
The stages of membership (Web2 → Web3)
Here Chris brings a membership journey outlined by Unlock Protocol:
There’s a lot to take in from the above. As time goes on, the more successful a membership is, the higher chance the project or organization will become self-sustaining.
Greater value at earlier stages creates the backbone necessary for group identity to occur within membership. A great degree of complementary projects usually indicates a greater degree of value and collective interest for a core project.
For many traditional businesses, many of the ideas in stages 4 and 5 will feel foreign, because value begins to be distributed or increasingly decentralized. Remember, this membership is also a form of investment for members.
How to pivot into Web3 memberships?
If you want to pivot into using Web3-based NFT memberships, the best way to proceed is to consider what key use-cases posed above might apply to your business, and learn from other major players to make a more informed decision.
Three steps to pivoting:
1. Create the NFT membership by defining the details of that membership and recruit a team to make it happen (art, smart contract, website).
2. Introduce the membership to your customers, explain why it is valuable, and build the new community (consider Discord).
3. Work with the community to generate increased value, provide ongoing utility, and embrace partnerships and collaboration.
Eager to dive deeper into the topic? Read the full article & subscribe to the Spatial Awareness newsletter. There, Chris brings interesting overviews of companies entering Web3 and covers deep topics of the ecosystem.
More on the topic
1️⃣ What are NFT-Based Memberships? Full Guide
Moralis explores the fundamentals, as well as creation of NFT-based memberships and NFT-gated websites.
2️⃣ Are NFTs the Future of Subscriptions?
Peter Yang, Senior Group Product Manager at Reddit, explores why NFT memberships are better, what drawbacks they have and how they could work in practice.
3️⃣ The Art of NFT Memberships: A Guide For Brands and Users
A deep look at how scarcity, incentivization, and liquidity function in NFT membership programs to better serve both brands and holders.
4️⃣ From Starbucks to sailing leagues, Web3 loyalty programs are being tested more broadly
A bit off-topic but still worth a read overview of brands enabling Web3 loyalty programs.
5️⃣ How to build a Web3 community of paid members and add real value
Quick business tips founder-to-founder of Web3 community-centered membership projects.
And of course, here’s your weekly dose of the latest & hottest Web3 news:
🤝 Polygon scores deal with Instagram to support NFT creators. Meta is testing these new features with a small group of creators in the U.S. first, and hopes to expand to more countries soon.
🤑 Origami, a company that helps launch and run DAOs, receives $6.2M funding. It’ll use the capital to enhance its software platform, infrastructure and DAO playbook.
💸 DeFi protocol Centrifuge raises $4M in strategic round. With Coinbase, BlockTower & others among their investors, the company aims to unlock liquidity for real world assets.
🥶 NFT winter isn’t getting any warmer. Total trading volume and the number of NFTs sold both fell in October, with Solana trading falling by 50% and Ethereum losing steam as well.
🛸 However, we do have a winner. ‘Rick and Morty’ creator’s NFT Collection sees $14M in trade volume (several hours after mint release).
Alright, that’s it for today! We're always here for y'all if you want to kick back 👋
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See y’all on Monday,
Epic Web3