How Marketing is Baked Into Protocol Tokens…Or Should Be

One of the things that is very powerful about protocol-based tokens is how the earliest adopters have built-in incentives to evangelize the network to others, doing the customer acquisition work on behalf of the creators.

For any start-up, getting the “flywheel” going is very difficult. While early customers are usually supportive, their energy will wane (naturally) as they have other commitments.

However, when those earliest customers not only have passion but also have a financial incentive, the equation changes. That makes the design of the network economy- in which the tokens are going to exist, pretty damn important.

Putting the pieces together of something that is intended to be a circular economy is not easy.

It requires an understanding of monetary policy, fiscal policy, game theory, behavioral economics, incentives, motivations, needs, psychology AND the capabilities of a blockchain-based/decentralized system.

In some respects, the paragraph above represents the job requirements of a CMO of the future.

These marketers will really have to understand people at a deep level. Not all people…just the kind of people you are intending to serve. You have to understand what motivates them and how they respond to environmental factors (not climate change stuff, rather the things that surround them in the network economy) and then influence the design of the protocol accordingly.

Many of today’s protocols are designed by technologists. Some of them understand the other components. Some don’t.

At the end of the day, however, these protocols will need to be adopted and evangelized by real people.

The protocol CMO is the person responsible for ensuring that the needs of the target audience are integrated into the very design of the network from the outset.

Get this right and you have the potential to unleash highly-incentivized network effects.

Like a world-class product (where the bulk of the marketing has been baked into the thing itself-e.g. iPhone, Bose headphones, and Harley-Davidson), a world-class protocol will have marketing baked into its technology and token design.

Sure, there will be marketing “stuff on top” like promotion and PR, but at the core, the value and utility of the protocol will be measured by the people who are the early adopters. They will either evangelize or leave.

Those are marketing moments that could be big hits or big misses in a decentralized world.