Why Build in Web3

Today’s dominant internet platforms are built on aggregating users and user data. As these platforms have grown, so has their ability to provide value — thanks to the power of network effects — which has enabled them to stay ahead. For example, Facebook’s (now Meta’s) data on user behavior helped it fine-tune its algorithms to a point that its content feed and ad targeting were dramatically better than what competitors could offer.

Amazon, meanwhile, has exploited its broad view into customer demand to both optimize delivery logistics and develop its own product lines. And YouTube has built a massive library of videos from a wide array of creators, enabling it to offer viewers content on almost any topic.

In these business models, locking in users and their data is a key source of competitive advantage. As a result, traditional internet platforms typically do not share data even in aggregate — and they make it difficult for users to export their social graphs and other content. So, even if users grow dissatisfied with a given platform, it’s often not worth it to leave.

Read the complete article on Harvard Business Review >

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