From auditless by Peteris Erins

In 2024, we only had one goal related to customer acquisition and it was to keep growing the newsletter.

We're closing in on 1000 subscribers now which I'm pretty happy with given the newsletter has mostly been a weekend project.

There weren't many other good options for customer acquisition.

If you haven't seen creators complaining, X is kind of a mess these days. Farcaster is not big enough. There are too many interview podcasts, etc.

So it was pretty scary to read Sam Parr (Founder of the Hustle) saying that newsletters are getting harder than before.

It's an open secret that email marketing has some of the lowest customer acquisition costs especially in B2B.

Source: FirstPageSage

Put plainly, if newsletters are getting harder, what else is left?

Luckily, our industry is a little different.

The web3 paradox

Crypto is unique in that it has very distinct customer acquisition methods compared to the typical B2B and B2C playbooks used in web2.

The following are all viable channels:

Of course, crypto also leans on some well established channels:

And ignores some others like paid ads and traditional directories like Hacker News that are uncharacteristically biased against crypto.

Don't believe it?

Our last post was actually an experiment to see if we could rank on Hacker News.

AL #89: Confession: I Barely Use Web3

Peteris Erins·December 24, 2024Read full story

The title was anti-crypto and naturally got some support from the community, however, because of our obvious affiliation it was still flagged!

Pretty clear that pro-crypto content would not go very far in HN. Use Kiwi instead…

But back to Sam Parr’s comment, can crypto escape or transcend these problems?

Could crypto startups have a significant advantage in customer acquisition?

Do we have it easier?

I do believe that web3-native customer acquisition methods when done successfully are some of the most powerful in the world.

Back in the day, PayPal had to offer customers money directly, crypto Founders now build bespoke money printers for new types of tokens and then use them for incentives.

However, incentive campaigns are often done poorly and when over-emphasized at the expense of other things can lead to retention problems (e.g., Blast).

A method that's arguably more successful is memes and specifically when applied to memecoins.

The financial and attention flywheels that memecoins create are truly unique.

But web3 also has some headwinds.

If X is becoming more crowded, as the primary town square for crypto, it will certainly have a negative impact.

The other problem is growing the market becomes harder over time. Speculation novelty has worn off so mainstream customers, especially ones that already lost money in crypto, will be harder to reengage.

Aside from these differences I do think that the most important shifts affect both web2 and web3 companies and everyone will have to adapt the way they acquire customers going forward.

Four adjustments we all have to make

1. Information spreads faster → new channels get saturated quickly

Here’s a ChatGPT sketch of dominant advertising channels for innovative companies:

The longevity of each dominant channel is drastically reducing over time and perhaps this will continue to accelerate requiring Founders to be much more adaptive in how they acquire customers.

2. Fidelity is cheap

We know that video content is preferred by most users and platforms like X are being reshaped in this way. But we've seen relatively steady adoption of video as it’s been expensive to produce.

YouTube made it easy to publish.

The iPhone made it easy to record.

And now AI tools are making videos easy to script, edit and produce.

We’re not far away from the point where companies will be able to produce synthetic Netflix-level documentaries to advertise their products.

3. New channels require building stuff

It’s also possible that the demand for customer acquisition is so high that platform channels are easily saturated and instead the most effective channel will be to build stuff.

An early version of this is mini-app websites that were built for SEO purposes but fidelity is increasing here too.

Now you can build an AI agent to tweet on your behalf, an interactive video game or VR experience. And you may need to.

4. Product and distribution are converging

Founders are often told to focus on distribution.

In fact, we covered this early on:

AL #008: Overcome ignorance debt and learn to value distribution

Peteris Erins·May 30, 2023Read full story

But what if instead of seeing product and distribution as two separate things that need significant attention, we instead look at the interplay between them?

We understand that distribution is informed by the product but the inverse is now more true than ever.

The best consumer app experts are advocating very tight viral growth loops.

And communities including memecoins are literally product and distribution all in one.

All these trends are going to make customer acquisition really confusing (and fun) for Founders.

A question I'm wrestling with personally:

Is it still important to focus on nailing one channel first or if Founders should start experimenting more?

The latter will be true eventually but what about now?