Community Effects: Beyond Networks in Web3

The transition from Web2 to Web3 is bringing a significant shift in how growth and value are achieved. The key is understanding and harnessing 'community effects', an evolution beyond the network effects that dominated the previous era.

Network Effects in Web2: A Prelude to Community Engagement

Web2's growth was largely driven by network effects, a phenomenon where a product or service gains additional value as more people use it. Think of social media platforms or e-commerce giants; their value amplifies as more users join, creating momentum and growth. This model, though successful, often lacked a deeper sense of user connection, ownership and engagement.

Community in Web3: Ownership, Engagement, and Responsibility

Web3 is a new phase of the internet partially based on blockchain technologies. These new mediums for transaction and interaction are redefining growth dynamics using digital asset tokens as quantifiable units of ownership and participation in a broad range of communities. Unlike the impersonal networks of Web2, community in Web3 implies a deeper sense of belonging, ownership, and responsibility.

Ownership and Decentralization

Web3 communities offer a sense of ownership rarely seen in Web2. Through mechanisms like tokens or NFTs, members can own a part of the platform they contribute to. This ownership isn't just financial; it's also about having a say in the governance and direction of the community, be it brand, company or social enterprise. This embodies the decentralized ethos of Web3.

Enhanced Engagement

In Web3, engagement goes beyond mere usage. Community members are not just users; they are active participants, contributors, and even decision-makers. Their engagement is fueled by a vested interest in the platform's success, often linked to the value of tokens or assets they hold.

Care and Responsibility

Community in Web3 also implies a level of care and responsibility towards the platform and its members. This isn't just about platform growth; it's about nurturing a healthy, sustainable ecosystem where members look out for each other and the platform’s long-term vision.

The Implications for VCs and Entrepreneurs

For VCs and entrepreneurs in the Web3 space, understanding and fostering community is crucial. Unlike Web2, where user numbers and network size were king, success in Web3 is measured by the strength and engagement of the community. This requires a shift in mindset from mere user acquisition to community cultivation.

Building with Community in Mind

Startups in Web3 need to build with a community-first approach. This means creating platforms that are not just user-friendly, but also encourage active participation, reward contributions, and offer real governance power to community members.

The Role of VCs

For VCs, investing in Web3 goes beyond funding. It's about understanding the community dynamics of each platform and how they contribute to its value. It's about supporting startups in building and nurturing these communities, recognizing that they are the real drivers of growth and sustainability in Web3.


The paradigm shift from network effects in Web2 to community-driven growth in Web3 is fundamental. Community in Web3 is about much more than just numbers; it's about engagement, ownership, and a shared sense of responsibility and purpose. For businesses and investors entering this space, understanding and leveraging this shift is key to success.