The Marketing Game

I was listening to a podcast called The DarksideofPodocasts on YouTube, and I had this epiphany;

Here was a host, speaking about a #blockchain project I am very interested in, and involved with the community's social engagement, and he was saying that their marketing approach has yet to be determined.

Why Does Marketing Matter?

I have to say I agree with his point-of-view. One thing that does not get talked about all that often when it comes to blockchain-focused businesses, is the business-development part of Building.

Too many people who are financially-driven and not vision-driven tend to make this mistake. To be a successful business, you have to #create a product that produces enough income to pay for all your expenses, then break even, and even make a profit. No one goes into business to perpetually lose money, that would not succeed in “normal” #economic conditions.

I'm not saying that businesses who break-even aren't successful, but, profits help contribute to re-investment in the business, that way you are able to grow with more capital, and have better #financial positioning for when the economy inevitably takes a dip.

Too often, businesses will pursue a growth-at-all-costs path, even when they don't have the financial means to do so. This can be counterproductive, because, instead of focusing on a single, #flagship (or MVP) product, businesses will branch out into other services and attempt to built a "suite" of #applications.

We Already Have a Good Model of What an “Everything App” Looks Like

In China, there is AliPay and WeChat. Those are the two major applications, on nearly every single citizen's #smartphones. There is a clear system put in place by the #government that dictates that you will have a checking account connected to the app. It's not optional anymore. If you do not use one of those applications, you will not be able to purchase #food, fuel, or really participate in most of the formal Chinese domestic economy.

WeChat is more of a multi-pronged approach than AliPay, but AliPay has major e-commerce application, so they balance each other out in a lot of ways. They both serve a purpose: to control the flow of capital from the “wallet” of the subject (citizen) to the government, and vice-versa. In China, there is a full-strength Social Credit Scoring system. This #system determines who is allowed to travel, buy food, attend public events, and even drive a car.

The level of control that China’s government exerts over its citizens is due largely to the consolidation of power through WeChat and AliPay (also Tencent & Alibaba who built the apps).

The difference between most successful businesses, and those two, are due to the scale of it all. When there's hundreds of millions of people with smartphones, you have to target them where they transact from. If people are only using a digital #wallet, and there’s no cash allowed, you would want to advertise to them, products on their smart phone.

The “Enshitification” of Everything Continues

Say you wanted to #advertise a new skincare product for women. Would you advertise it in a Men's Health magazine? Would you advertise it in a catalog of "Top Cigars of 2023?" Even better, would you plaster that skincare product advertisement across your state-run #newspaper that no one under the age of 50 even looks at?

No, of course not, because, you're not going to reach many #women that way. You have to go where they are to engage with them. Most people don't understand the first thing about communication, because they never learned how to communicate to begin with.

How About the Facebook?

The point of #marketing is selling someone on their need to buy or use a product or service. I was telling people in one of my Working Groups that I only heard about #facebook in 2005 because an older classmate of mine had college-age friends who used it, and it was invite-only back then.

Fast-forward 18 years and Facebook has ~3 billion users, and its holding company, Meta, now owns Facebook, Instagram, Messenger, WhatsApp, and Oculus, and has a gigantic cash stash of more than $53 billion and levered #free cash flow of $20.25 billion. Regardless of whether you like them or not, you have to admit, what they have built, amounts to a money-printing machine.

Even if you disagree with their methods, they built a relatively-thriving advertising business and are cash-rich. Their trailing-twelve-months #revenue clocked in at over $120.5 billion. That’s a monthly run rate of over $10 billion. Ten Billion Dollars a Month. They can do whatever they want, finance whatever #ideas they have – even waste tens of billions of dollars attempting to create a “Second Life” clone in their concept of a metaverse – because they can.

The latter of which is something that is lacking with blockchain-based projects. Most projects spend so much money on #development and keeping people on-board, that they forget to build the business into a sustainable model, along the way.

Where Does This Lead Us Heading Into the End of 2023?

Many #projects that I follow will need to dilute existing stakeholders in order to finance their businesses next year. I’m not saying that it’s somehow a bad thing to raise more money to #finance a business. What I am saying though, is that, for all the billions of dollars that have flooded into the Cosmos #ecosystem, Ethereum, Solana, Polkadot, and others, you’d think there would be more..thriving businesses with positive net cash-flow, but there aren’t.

Most businesses in the blockchain space pay their employees and contractors in their #cryptocurrency token of choice. So long as that token is able to be easily exchanged for something stable that can then be used as a form of payment for goods and services, that model will exist.

But the moment the bottom of this market falls out, and #bitcoin takes its inevitable dump, don’t say I didn’t warn you. This is why having cash-flow and multiple sources of income for a business is so important. This isn’t rocket science, but with the scarcity of cash-flow, you’d think it was.

It's a shame that few seem to take notice..