Foresight Ventures: Bear Market, Back to Paradigm-Changing Formula for Investment Opportunities

Original title: " Foresight Ventures: Bear Market, Back to Paradigm-Changing Formula for Investment Opportunities "

Original author: Forest, Foresight Ventures Co-Founder

Formula for Paradigm Change

< /p>

The formula for paradigm change has been verified more than two hundred years after the first industrial revolution in 1769, steam engine, alternating current, Internet and Bitcoin.

The formula for the paradigm shift occurred in 1769 for the first industrial More than two hundred years after the revolution, it has been continuously verified, steam engine, alternating current, Internet and Bitcoin.

Demand and technology cannot succeed alone

Amazon with a market value of 1.5 trillion US dollars was first A company that sells books online, Bezos found that the book market is huge, but the concentration is very low, and the middleman's commission and the cost of physical stores are high.

The needs of users here are: 1. Lower price; 2.  More bibliography;

And how does technology match these needs: 1. Internet business does not require the cost of physical stores, and bears less labor costs; 2. Compared with physical bookstores With a limited area, the storage space of the Internet is almost unlimited; 3. Electronic retrieval infinitely shortens the time of searching for bibliographies.

The world's largest unicorn ByteDance, its subsidiary Tiktok has surpassed Twitter and The sum of the Snaps. The original intention of founder Zhang Yiming was to use algorithms to push content to users. He tried comics, jokes, news, and short videos, all of which achieved varying degrees of success. Among them, the short video app ushered in a new era of the Internet.

The needs of users here are: 1. Diversified content; 2. Content that carries more information; 3. Content that meets their preferences; 4. Based on preferred social connections.

During Zhang Yiming’s initial financing, he was not recognized by many VCs. In the interview with Shen Nanpeng, there are two main reasons: 1. Algorithm-based content recommendation mode Haven't been successful before. 2. Other giants are trying to do the same.

The success of ByteDance is inseparable from technical support: 1. Zhang Yiming has developed an algorithm that better meets user needs. 2. 4G brings faster network experience and makes it possible to watch short videos online. 3. Short videos carry more information than text, pictures, and sounds. 4. High-frequency content loading can allow the algorithm to obtain more data, thereby quickly optimizing the push results.

From these two examples, it seems that technology determines whether the paradigm change will occur. Let's find some examples where even though the technology was adequate, it still failed due to lack of demand.

- The Segway balance car was discontinued in 2020 because a reporter drove it over the sprint world champion Usain Bolt during the Beijing Olympics

< br>

- Various new medical devices have not been recognized by the market, largely because doctors need more patients, not cooler operating rooms

CB Insights once listed 20 reasons for entrepreneurial failure, the biggest reason being to develop products without analyzing needs, accounting for 42%.

Narrative is the bond of human society

1. The importance of narrative

Narratives are crucial in the transformation of human society. Narratives are the basis of trust in social organization, and Yuval Noah Harari writes in his book "A Brief History of Humanity" that Homo sapiens could communicate what exists and what does not exist through language 70,000 years ago. Narratives make people believe in gods, and they can also work for bosses they don't know. Narrative is also a core way of human knowledge transfer and storage. Through continuous repetition and inheritance, narratives are continuously strengthened and guide human behavior. The humanistic spirit and Confucian culture of ancient Greece still have a huge influence on the countries, governments and industries of the East and the West.

In the Crypto world, Narratives capabilities are also often mentioned by us. Gavin Wood created the term Web3 in 2014. During this period, Chris Dixon The pioneers represented continue to explain and strengthen the word. For example, Polkadot, Dfinity and other entrepreneurial projects continue to use actions to realize this vision. There are also concepts such as Metaverse, DAO, Ownership and the most important Decentralization.

Let's analyze the process and details of BAYC's narrative: the rebellion against the traditional world by the new forces born in Web3; attach importance to brand membership; expand ecological content; The commercial use right is given to the NFT owner; airdrop NFT and issue Apecoin; acquire more NFT IP; create Metaverse, Game and Movie; develop public chain and Marketplace, etc.

NFT is especially a narrative-driven business model, NFT lacks Utility, this kind of "useless use" On the contrary, the property allows its valuation ceiling to be infinitely high.

We have to admit that in the secondary market of the bull market, the price performance can even be said to be mainly caused by Narrative-driven. It can rely on narrative to support a market value of billions of dollars without products and actual users.

2. How to narrate

What is a good narrative? Concise and engaging.

What is a bad narrative? Lack of focus, Without solving the pain point, it is difficult to understand.

We can see that even the world's largest enterprise, its narrative can be summed up in one sentence:

Apple: Make products with world-class design and protect user privacy.

Alibaba: Make nothing difficult in the world Business.

An entrepreneurial team usually needs an excellent narrative to attract like-minded employees to join, attract VC investors, attract users, and attract public market holders .If an entrepreneurial team lacks an excellent narrative, its success rate will be greatly reduced. Too grand and difficult to understand the narrative is often too big too launch. In the actual financing process, the ability of narrative often plays a major role in its valuation Influence.

3. Narrative is not a panacea

We must realize that narrative Important, even sometimes more important than data in driving capital market prices. But narrative alone cannot really bring about a paradigm change. We understand that in the last cycle there have been on-chain exchanges, blockchain Projects such as games were not successful at the time.

Loot's narrative is indeed interesting: giving the community open access to creation from the bottom up.

Players have a lot to say about it:

- Ethereum in NFT

- Decentralized Fundamentalism

- Infinite Compatibility and Scalability

In a week's time, the price from A few hundred dollars rose to tens of thousands of dollars, and soon gave birth to a series of derivative projects such as Rarity, Loot Realm, TreasureDAO and so on.

Why did Loot fail?

- As an asset, the fork threshold is too low, and it is even easy to create a better Loot

- Co-creation does not mean order Writing, it is difficult to create excellent products

-It is difficult to form a consensus in a chaotic community

Technical iteration

Rome was not built in a day, and the paradigm change also took place after twists and turns, and finally reached the critical point. The iterative ability of technology will significantly affect its large-scale application, and may even be replaced by other technical solutions.

Threshold

Here we mainly discuss learning threshold, usage threshold and conversion threshold.

Learning threshold: the difficulty for users to master the basic ability of using the product from 0.

Threshold for use: the cost of time, money and other conditions that users need to pay for using the product.

Threshold for conversion: the cost that users need to pay and the price they give up when they switch from other products to this product.

Stepn is an excellent example here.

The learning threshold for Move to earn is 0, everyone can walk.

There is no big difference in the running habits of people in different countries

The operation of the App is related There is no special difficulty compared to traditional running apps.

The main threshold for users of Stepn is the money cost of buying running shoes NFT, and its NFT price is usually 1-2k US dollars. Of course, if users want to upgrade or buy rarer NFTs, they will need to spend more.

The cost of entry is acceptable even for non-Web3 users. This is an important reason for Stepn's success, not all business models can apply the Web3 model in this way.

However, the conversion threshold of the Stepn model is not high, which is a challenge for its user retention. When facing similar competitors, users only need to sell the NFT and download a new app. Of course, competitors may not have better anti-cheating, economic models, and more stable yields. I am only expressing that when users want to switch to a new app, their actual cost is lower.

Looking forward to the occurrence of paradigm revolution

The paradigm revolution will be a revolution based on the technical characteristics and human needs of blockchain and Crypto.

Technical features include: decentralization, interoperability, programmability, and composability.

The needs are: ownership, asset protection and appreciation, speculation, Showoff, privacy, etc.

Let's use the first principle to imagine what Crypto's underlying paradigm revolution might be:

- Lower customer acquisition costs

- Lower transaction costs

- Sustainable, unmanaged operating environment

- Open protocols and Combined App

- Token-oriented programming

- User-owned platform, assets, data, identity

- An immutable trust system

p>- New revenue streams

- New types of stablecoins

- New organizational forms

- Etc.

So far, this article has completed the analysis of the paradigm change formula. We just went through the super deleveraging of luna, a lot of people are very frustrated, but as long as we return to the thinking of paradigm change, this is still the most promising industry. We will re-experience the resonance of capital cycle, innovation cycle and talent cycle. Expect new narratives, new models, new levers.

https://en.wikipedia.org/wiki/Diffusion_of_innovations

https:/ /novuminsights.com/post/deep-dive-into-polygon-or-ethereum-off-chain-scaling-solutions/

Original link

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia