Although fundamental product management (PM) theories like strategy, prioritization, and execution still apply, there’s new considerations for PMs building products in the blockchain space.
My primary focus has been building a smart contract protocol for the event ticketing industry at HelloSugoi. The event ticketing industry is in serious need of disruption. High fees, prohibitive secondary market prices, and fraud are only a few of the problems currently facing the industry. With smart contracts, we’re able to program rules that govern how revenue is split between event stakeholders as a ticket flows through markets. For example, event organizers can cap the price a ticket can be resold for on a secondary market, preventing resellers from price alienating fans, and enabling consumers to pay reasonable prices for their tickets.
Blockchains are a blue sky opportunity for product managers
The blockchain space is currently dominated by engineering talent. While we owe our tech brethren much respect, these products are built by engineers, for engineers. As a result, usability has taken a backseat to expensive thought experiments. PMs can help build products that mere mortals may actually want to use, helping the underlying and liberating crypto asset class reach a much wider audience.
With few exceptions, blockchain startups don’t spend nearly enough time talking with actual users. A majority of token-based ecosystems have built Rube Goldberg machines that may satisfy the intellectual desires of its creators, but have very little practical utility in the real world. This is in large part why blockchain products currently have so few daily active users.
No one (with the exception of speculators) wants a shitcoin that solves no real problems, likely causing more problems than it solves. Many of these tokens assume that humans are perfectly rational and behave like vending machines: insert token, output result. Turns out, humans are far more complicated, and without actually talking with them it will be near impossible to get your token to achieve the desired outcome.
PMs can help to close the gap between intellectual vanity and real utility by talking with users. This is not a new insight, but one that has been overlooked. In 2017 everyone in the space was in a mad dash to sell tokens and raise a bunch of money without really considering whether or not the token would be of any value at all to real users, and not just speculators. And it turns out, very few have proven to be useful to real people. There remains a huge opportunity for PMs to change this.
Having a user focus will not only differentiate your product from most, but you may also discover that you’re looking for a problem that doesn’t exist. Talking with users will help you avoid building products with no real market value. And let us not forget that writing smart contracts is expensive and difficult to change once deployed to a main network where the money is real and which I talk about later in this article.
Blockchains introduce new kinds of user behaviors
In order to interact with blockchain ecosystems, users need to buy crypto from an exchange. Exchanges are the gateway to the crypto world. Navigating the account creation process can be cumbersome. This differs from creating an account on something like Facebook, in that people are trading their fiat money for a new kind of “magic internet money.” This can be a scary process for new users.
In addition, there’s a lot of education required to successfully navigate a blockchain ecosystem. The vocabulary can be intimidating. Words like address, tokens, private key, wallet, etc., all have specific meanings and functions. PMs need to be aware of these things when designing new customer flows. As always, customer feedback is critical to making good product decisions.
Once an account is created, users also need to know how to create a wallet, manage their private keys, send and receive coins, in addition to an array of actions new users may be unfamiliar with like calling the functions of a smart contract.
Securing one’s private keys is a major hurdle to mass adoption, as it requires more work than simply remembering the password to their Facebook account. If you send some of your crypto to the wrong wallet address, or worse, lose your private keys altogether, there’s nothing you can do to recover your funds. In short, managing crypto assets requires more work than creating and managing an online banking account at something like Bank of America. As a PM, it’s important to note that crypto is full of tradeoffs. Regarding private key management, it’s a tradeoff between security and convenience. Being aware of and communicating these tradeoffs with users is critical.
Blockchains are multi-disciplinary
PMs need to be a polymaths. This should come naturally to many PMs, who often need to fulfill multiple roles to get the job done. In crypto, a PM must be knowledgeable about securities law, financial regulations, markets, trading, game theory, incentive design, monetary policy, social psychology, and governance. Crypto is an almost endless treasure trove for the intellectually curious, a kind of “mind virus” if you will.
Teams would benefit from hiring PMs who have backgrounds in these disciplines. These PMs would be better able to empathize with their target users given their domain knowledge, which would in turn produce better products and lead to increased adoption.