Positioning of the Product and Returning to the Needs Layer

When it comes to the positioning of a product, it is important to return to the needs layer. What kind of needs will make users feel happy, generate willingness to pay, and whether the speed of payment can be positively correlated with the amount.

Founder Jerry Huang of StepN shared his insights and latest thoughts with 55 Web3 application ecosystem entrepreneurs based on his own practical experience. As one of the earliest participants in the 3G mobile internet with over ten years of entrepreneurial experience, he has insight into the human nature and desires behind players, and how to view economic and business cycles. A review of the gains and losses behind StepN may bring important insights to the entrepreneurial path of the Chinese community.

Here are some key excerpts:

1. Product Selection and Consideration, How to Find the Right Positioning?

The main focus is on analyzing and understanding the demand side. Why do people play a game, why are they willing to pay, why are they willing to spread it to others, and why can it lead to social discussions? These phenomena can actually be summarized as the word "desire."

When I developed my first game, I tried to summarize what is most important in a game. Is it the technology, the plot, or the art? Ultimately, it comes down to what desires of the users we have satisfied. This is the source of happiness and the driving force behind payment and sharing. So, we initially listed out all human desires and created a large desire tree. The desires of players of different ages, genders, and professions are all different. After summarizing them, we then positioned the product based on which group of people's desires we want to satisfy. Some desires cannot be charged for, but they make the player happy, while some desires can lead to payment. Therefore, we believe that any game needs to thoroughly understand desires in order to explore the behavior of players. Desires are the soul, the game system is the skeleton, and the art and plot are the skin. Only in this way can a product be defined from the inside out. Desires themselves have nothing to do with Web2 and Web3, but different technologies can amplify corresponding desires. For example, gold farming exists in Web2, but it is only a small part. After the assetization in Web3, making money through gold farming becomes very important. Furthermore, assetization makes users' desire to show off even stronger.

For example, when 3G technology was just beginning to spread, I transitioned to developing mobile network games. Previously, they were very simple single-player games. Combining the desire tree, I thought about what could be done at the desire level with 3G technology. Firstly, the user base would become much larger, and the game scenarios for players would also become much richer. So, we tried to fully integrate the idea of climbing and socializing into the game design. Later, our revenue accounted for 20% of the national game market, and we ranked first on the app store for almost half a year.

When blockchain technology began to spread, I was thinking about what desires this asset-chaining technology could maximize, and AI is the same. It can also amplify certain human desires.

So, our positioning for the product still returns to the needs layer. What kind of needs will make users feel happy, generate willingness to pay, and whether the speed of payment can be positively correlated with the amount.

2. What Should Web3 Game Creators Pay Attention To?

Firstly, create a game that is native to Web3, rather than trying to adapt a Web2 game to the blockchain. The starting point may determine the final positioning and product form. It's not that Web2 games cannot be adapted to the blockchain, but if approached from this angle, it may end up being distorted. It is like when we think about how to make a video website more powerful than YouTube from this perspective, it is very difficult to achieve. I believe that TikTok's initial starting point was not to defeat YouTube, but it ended up creating strong competition with YouTube. So, I believe it is still necessary to be Web3 native from the start.

For example, the next game we will release follows the philosophy that if it is technically feasible, it should be put on the blockchain. What can being on the blockchain bring to users? This brings us back to the desire tree. In Web2, users spend money to buy a certain experience and respect, while in Web3, in this game, we propose a new "name, profit, and power" impossible triangle. Because of the integration of blockchain, users can play more diverse roles, not only as creators of resources but also as managers of resources. Therefore, they can gain name, profit, and power. As the platform, we only provide a set of internally circulating economic models, intervene in the game development as little as possible, and even allow players to decide the rules and direction of the game themselves.

Secondly, it is important to manage your real community well. When I was starting a business before, I often said that business should come first, rather than making the product perfect before pushing it to the market. My personal style is to push the product to the market when it reaches 65% completion, to first build the market, understand the needs of the paying customers, and grow with the players, allowing them to participate in the construction of the game.

This was difficult in the past with Web2, because Web2 players thought of themselves as the bosses and spending money was for enjoyment. How could they tolerate you giving them something imperfect? But in Web3, it is possible. Everyone needs to come together to create the entire economic ecosystem. StepN was established in September 2021, and in less than three months, we pushed it to the market. We developed a running module, a GPS anti-cheating module, an embedded wallet, an embedded trading market, and more in just two months, which was really not easy. But with limited time, it was definitely not perfect enough. However, I still boldly pushed it to the market. At that time, we received test sign-ups from over a thousand players worldwide. Many people complained, and we fixed over a hundred bugs on the first day. They did not expect that we would update the version twice a day, and each time, a large number of feedback bugs were fixed by us. The number of problem feedbacks noticeably decreased in the following days. This process lasted for a month, and the changes in the product were visible to the naked eye throughout the process. So, early players had a strong level of engagement, and later they became very loyal users.

We also did a lot of operational activities on Discord at that time, and even now, many projects are still referring to these activities. After winning third place in the Solana hackathon, over ten thousand users immediately flooded into our Discord. However, we found that 95% of them were non-valid users who came to grab whitelist spots. At that time, I did a bold thing and cleared all suspected bot users. If they did not speak for a few days, they were deleted. The ultimate development of the game requires a clean, pure, and motivated early community, rather than just looking at the number of people. At that time, WeChat red envelope gifting was very popular during the Chinese New Year, and we also thought about whether we could give out red envelopes to users on Discord. However, there were too many people trying to take advantage, so we did not dare to do this easily. So, we came up with a way to let everyone answer questions from the whitepaper. We created many questions for everyone to answer, and if they answered correctly, I would give them a pair of Genesis shoes. According to the rules, we required them to invite three friends to participate in the quiz. So, we attracted many real users. Because of this activity, our Discord, from a few hundred users that I had cleared, grew to 100,000 users in a very organic way. Even as I continued to delete suspected bot accounts, almost all of the users who remained were real. As the activity became more and more popular, from initially only needing to answer one question, to later needing to answer ten questions in a row to receive a reward, users had to continuously read our whitepaper carefully. This activity brought us tens of thousands of high-quality, loyal users who had read the whitepaper more times than I had. It played a very significant role in our subsequent explosive growth, allowing us to quickly grow to five million users. All of this was due to our community having these users who had read the whitepaper dozens of times, and they genuinely approved of our product, and even actively helped us to spread the word.

Finally, I want to talk about globalizing the market. At that time, we also spent a lot of effort considering which market to focus on first. In the end, we decided to just go for all of them, and then focus on the one that took off. In the end, our initial conclusion was correct. Our largest market was in Japan, and the second largest was in France and other European countries. Even now, we still have one to two thousand new users every day. So, our initial globalization allowed the market to select itself, and then we focused on developing it further in the markets that were growing the fastest.

3. How Should Founders Face the Fluctuations of Economic Cycles?

In Web3 games, I believe that market cycles are not so important, because games are different from other applications like DeFi. DeFi is indeed very dependent on economic cycles, because during very bleak times, users and funds disappear. However, games can form their own system, with their own pricing, tokens, and ecosystem, and are not so dependent on external macro cycles.

Additionally, I want to say that in a bull market, there are indeed more users and funds, but there are also many competitors. StepN should be at the tail end of the bull market. Initially, we had a large number of competitors, but in a bear market, if we can create our own ecosystem, there will be fewer competitors, and the market's focus will not easily be diverted elsewhere.

4. When is the Right Time for a Project to Hire a PR Team?

To be honest, we didn't do it well later on. The first thing a Web3 game project needs to do is to make players feel that we are very real and with them. So, in the early stages, we did an AMA every week, even when the product was not yet launched. The first time, there were only a dozen people, but we persisted in doing it every week until more and more people joined, and everyone could feel our sincerity. Finally, we were too busy to hire a PR team, but afterwards, we realized that we should have done it ourselves. The most a PR team can do is crisis management, but daily brand and influence building still needs to be done by ourselves. Our communication with users is the best PR.

5. Should Chain Game Entrepreneurs Focus on the Needs of Web2 New Users or Web3 Native Users?

Internally, when we do user positioning, we all agree that we need to convert a large number of Web2 users, including the many features StepN has developed, such as the built-in wallet and trading platform, all aimed at lowering the barriers to entry for more Web2 users and allowing players to seamlessly experience the technology behind it. This is something we have been doing in the past and will continue to do in the future. Our future games will also achieve login, transfers, and gas-free transactions in a decentralized manner, all aimed at converting more Web2 users to Web3. At least half of StepN's users had never encountered blockchain before playing.

6. How to Deal with Users Who Play Games Just to Make Money?

First, we need to determine if they are purely here to take advantage or if they are part of a gold farming guild. If it's the first type, we must remove them. For the second type, there are different opinions. Some games are very friendly to gold farming guilds and even invite them to join because they quickly bring in traffic. However, StepN was somewhat resistant to gold farming guilds at the time, and we also rejected cooperation with them.

7. How to Ensure Web3 Games Continuously Generate Value?

The core is still to bring happiness to users through the game. So, if your users experience happiness while playing the game, that value is already sufficient. There is no need to overly fixate on the definition of value itself and others' judgments. Essentially, games are an experiential economy. If they spend money to get the experience they want, that's enough. As for how others define this process and whether it has value, every user has a different perspective.

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