Web3 Product Development Strategy: All You Need To Know

To avoid putting too much effort into a product vision that won't work, a framework for their product development strategy is necessary.

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Without doubts, the Web3 Product Development Strategy puts a lot of pressure on startup teams, who may waste a thousand million dollars developing a product only to find that it won’t work!

How to avoid it? Web3 startup teams must carefully build a framework for their product development strategy. Wait, what is it? Well, it is a burdening task. However, these guidelines below should ease the process to help you develop your own right now.

Why do Web3 Firms Need a Product Development strategy?

The principles of product development strategy are a recurring theme that serves to keep the focus on the most important aspects of the company’s products. This is critical in any industry, but it’s extremely critical in the fragile world of cryptocurrencies. In the end, the Web3 product development strategy is established for creating a valuable and viable product that adapts to the community’s demands.

Unfortunately, product development strategy nowadays is noticeably absent from most Web3 businesses, maybe as a result of Web3’s strong emphasis on decentralization. Having to deal with all of this makes it more difficult to create a product that only serves a select audience.

This, I believe, will cause a huge problem in alignment and cooperation: compromise paralysis, committee design, and a never-ending search for consensus,…

The challenges of Web3 Product Development Strategy

In addition to the challenges that are common in all organizations and all industries, specifically for Web3, there are some important factors that most often lead many firms to fail to plan and develop such a strategy.

  • Community-led

One of the biggest differences is that Web3 is built on decentralization.


In a decentralized system, there are no gatekeepers, and the data is available in a public ledger. Transparency and speed are both enhanced when this step eliminates the requirement for third-party verification or approval.

There’s no such thing as asking for the boss’s permission or authorization as well. For instance, while creating a product development strategy, you just don’t work with only employees in your company, but rather, a whole community—used to be the customers in Web2, is seriously involved.

However, protocols and decentralized autonomous organizations (DAOs) are expected to make major decisions via an open community vote (e.g., Snapshot). Additionally, the WAGMI (We’re going to do it) mentality is prevalent in Web3. In this context, “we” refers to not just our team or our company, but also the entire community.

  • Consensus

Consider this:

Two teams work simultaneously to improve a product’s sign-up rate. The first team moves the sign-up button to the landing page center, with a strong CTA above the fold. 

The second team, by contrast, thinks social proof is the problem and wants to replace the above-the-fold area with customer quotes. 

Both improvements cannot happen at once, and if there is no one to coordinate projects, just as in the traditional method, and provide resources, a lot of time will be wasted. That could lead to lost market time or no actual improvement.

Or, it could be like this:

Teams create product-improvement proposals for the community to vote on (this is not about surveying a community and discussing potential ideas, but actually asking members to decide which one should be implemented). 

However, it is not always the case that most voters are experts in product development strategy, so they may vote for a concept that harms the product or isn’t practical. 

You see, a lack of coordination can result in a tug-of-war that is damaging and doesn’t benefit the organization. However, to accomplish this effectively, someone must be able to establish a unified product vision based on a thorough understanding of customers, align team members with this vision, and help coordinate their actions in order to ship a successful product. 

The bad thing is that, as previously stated, the way Web3 functions is simply by vote. 

How does Web3 Product Development Strategy differ from other industries?

Using blockchain technology, Web3 ensures secure and transparent transactions between parties. Smart contracts, for example, can be used to automate interactions and administer operations. This means that numerous industries, including finance, healthcare, legal development, and more, could be reshaped by this technology.

In Web2, the emphasis is frequently on the company rather than the community. As an example, if you’re aiming to increase customer engagement, you may have a specific target in mind. The problem is that most of the time, what you’re really doing is encouraging addictive behavior that is actually harmful to your customers. Because of web3’s technological and cultural constraints, I don’t believe this will be possible. 


Furthermore, Web3.0 communities are the lifeblood of a crypto-native product. People who participate in a project are often given tokens that represent governance and voting rights, as well as money. Because user involvement can lead to full-time employment, public interest in the product’s usability and feasibility is especially high in many circumstances.

An Idea for a Comprehensive Web3 Product Development Strategy

There are advantages and downsides to both traditional organizations and the decentralized web. However, a solution, namely “Sub-DAOs” (Decentralized Autonomous Organizations), has been presented to solve the issues I’ve discussed above. The goal is to combine the finest of both classical and new Web3, rather than being solely one. 

At present, there are certain Web3 organizations that have adopted this idea, but they may be referred to under another name, such as “guilds” within BanklessDAO, for instance. However, a sub-DAO is simply a subset of persons who are contributing to a DAO with strong domain expertise, with a narrow set of tasks, and (optionally) a budget. An example of this is the Aragon Network DAO, which has already established three sub-DAOs where members are elected to make compliance, executive, and technical decisions more quickly.


So, what is it?

Basically, It suggests an establishment of a “Product Committee” sub-DAOS to bring the effect and value-creation we see in Web 2.0 to the decentralized world. These committees, which are voted by the whole community, shall have some more powers to make some decisions needed during the product development process. However, the important difference is that while they have some authority, most of the crucial decision-making during the process still fell into the Web3 community’s hands. And as part of the product development process, the Product Committee may consult with members of the community.

While Sub-DAOs may appear to offer too much authority to a few persons, which would be comparable to centralized decision-making all over again. However, the community members actually still have more rights to engage in crucial decision-making, albeit in a filtered and efficient fashion. Therefore, It is less likely that sub-DAOs will become too centralized if they have mechanisms in place that allow the community itself to dissolve a sub-DAO, override its choices, or intervene when needed.

After setting up a Sub-DAO, it’s time to go on to the next phase – establishing the product development strategy. The product development approach can be broken down into several distinct stages. 



A Web3 Product Development Strategy is critical for any blockchain company. However, it is a long journey, so make sure you maintain your goals and motivation along the way. To learn how to keep everyone on your team motivated and moving in the same direction, check out this article on business goal setting.

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