In 2021, it became hard to avoid the term Web3. In 2022, the hype continues. Web3 is an umbrella term covering a range of ideas, including blockchain, cryptocurrency, dApps, deFi, and NFT. The high-level explanation of Web3 is relatively simple.
For example, consider a social media giant like Facebook. Imagine their networks, with them in the middle as a hub and data flowing in and out of them to users across the internet. Now imagine the same thing happening, but without the middle hub. Data can flow independently around the internet, being checked and confirmed along the way, without requiring a central, powerful, and exceedingly valuable hub. This is the promise of Web3, decentralization, and, to an extent, democratization of our data and the internet.
This article is not about whether or not blockchain is the key to ushering in a new era of human connectivity. Instead, let’s focus on the very real impact web3 is having on the developer economy as capital shifts to this emerging new space.
The developer economy as we know it
Audience economics is a field that aims to explain the movement of human capital in the form of attention spans. There is only so much attention an audience can provide at any point in time. For years, media companies have used this concept to understand how to monetize people’s attention through content and advertising.
The same notion applies to human capital. Consider the combined brainpower of the roughly 25 million minds making up the global developer talent pool which, for the last 15 years, has remained an essentially predictable ecosystem. Cloud technology dominated, certain cities became tech hubs, and talent bounced around FAANG companies and startups. Things were fairly predictable.
When blockchain went mainstream
Blockchain technology itself has always been interesting, but investing years of your career into it posed a risk for developers. Is it worth leaving a six-figure job with stock options and insurance to bet it all on something that might not succeed? Many developers stayed away because of this risk profile. It wasn't until 2020 that crypto became mainstream, and the sector had trillions of dollars at its disposal to drive innovation.
Suddenly, Web3 could offer top developers the same, if not better, incentive to move into the wild west in what felt like a blink of an eye.
The result has been the most destabilizing economic conditions the developer space has seen in over a decade.
Who will win the future of the Internet?
The future of the Internet is up for grabs, and hundreds of companies are ready to compete. The race will be won by the companies that can develop the most utility around their technology. Which players will create this utility for them to win? Developers.
In their race to become the next big tech company, web3 companies are destabilizing the developer economy with their newfound ability to pay top dollar for the top developer talent globally. And FAANG is fighting back. Of course, Facebook wants to ‘own’ the Metaverse. Current spoke and hub social networks are redundant in a Web3 world. They need a seat at a new table. Their war chests earned in Web2 could be used to help the transition, but changing your name doesn't make you a fundamentally new company. Additionally, FAANG and other large Web2 companies now have serious competition for attracting the developer talent required for Web3.
How to innovate in a Web3 world
But it’s not all bad news. Here’s what we think is coming our way as Web3 increases in popularity, along with some suggestions for how you can build a company that can compete and innovate in the next phase of the internet.
- Increasing competition for developer capital
Developer marketing acquisition programs will be more critical than ever for companies that want to stay relevant and drive innovation. This is true of both internal developer recruitment and the third-party developer ecosystems that will drive innovation on Web3.
- More focus on developer relations
Developer relations programs will become more critical as developers flock to the community-oriented Web3 space. Web3 moves faster. Active communities and influential figures work together to accelerate innovation. Developers will lose patience with corporate DevRel programs that are slow and lack human connection.
- Growing need for developer marketing and education programs
Developer marketing in the form of content and education programs will be increasingly crucial for web3 organizations as they seek to convert ‘crypto-curious’ Web2 developers to Web3 and teach them the relevant skills they need to succeed in a new space.
Web3 is already shifting the landscape of the developer economy. Players in the space would be wise to meet this change head-on and adapt to the market's changing conditions before they are left behind.
Gary Gonzalez and Richard Hurring are the managing partners of Catchy, an agency leader in developer marketing that creates vibrant third-party developer ecosystems to accelerate growth and reach more customers.