As for the positioning of the product, we still need to return to the demand layer. What kind of demand will make users feel happy and generate willingness to pay? Can the pleasure of paying form a positive correlation with the amount?

Jerry Huang, founder of StepN, shared his experience and latest thoughts with 55 Web3 application ecosystem entrepreneurs, taking his own experience as an example. As a veteran who participated in the 3G mobile Internet for more than ten years, how did he understand the human nature and desires behind the players, and how did he view the economic cycle and corporate cycle? The review of StepN's gains and losses may bring important inspiration to the Chinese entrepreneurial route.

The following are some of the highlights:

1. Product selection and thinking, how to find the right positioning?

The main thing is to analyze and understand the demand side. The reasons behind why people play a game, why they are willing to pay for it, why they are willing to spread it to people around them, and why it can form a social discussion can actually be summed up in the word "desire".

When I made my first game, I tried to summarize what is the most important thing about a game? Technology, plot, or art? In the end, it was what desires of users we satisfied. This is the source of happiness and the driving force for paying and sharing. So at first we listed all the desires of people and made a big desire tree. The desires of players of different ages, genders, and professions are different. After summarizing it, we did product positioning and decided which group of people’s desires we should satisfy. Some of these desires cannot be charged but the other party will have fun playing, and some desires can generate payment. So we believe that any game needs to understand the desires first before exploring the behavior of players. Desire is the soul, the game system is the skeleton, and the art plot is the skin. Only in this way can a product be defined from the inside out. Desire itself has nothing to do with Web2 and Web3, but different technologies can amplify the corresponding desires. For example, gold farming also exists in Web2, but it is only a small part. After Web3 is assetized, gold farming and making money become very important. Secondly, it is precisely because of assetization that users’ desire to show off becomes stronger.

For example, when 3G just started to become popular, I switched to developing mobile online games. Before that, they were all very simple stand-alone games. Combined with the desire tree, I thought about what the popularization of 3G technology could do at the desire level. First of all, the user base will become larger, and the player's gaming scenarios will also be richer. So we wondered if we could tap into and amplify desires at the level of comparison and social interaction. So we tried to fully incorporate this idea into the game design. Later, our revenue accounted for 20% of the national game market, and we ranked first in the app store for more than half a year.

When blockchain technology began to become popular, I was thinking about what desires such asset-chain technology could maximize. The same goes for AI, what kinds of human desires it could amplify.

Therefore, our product positioning still returns to the demand layer. What kind of demand will make users feel happy and generate willingness to pay? Can the pleasure of paying form a positive correlation with the amount?

2. What should Web3 game creators pay attention to?

First of all, we need to make a Web3 native game, rather than thinking about how to make a Web2 game into a blockchain. The starting point may determine the final positioning and product form. It does not mean that Web2 games must not be blockchain-based, but if we start from this perspective, it may eventually be deformed. It is still the Web2 experience method with Web3 elements added, which is considered difficult to run in Web3. Just like when we think about how to make a video website that is more powerful than YouTube, it is difficult to do it from this perspective. I believe that Tiktok’s initial starting point was not to defeat YouTube, but it eventually had strong competition with YouTube, so I think it is still necessary to start with Web3 native.

For example, we will release a game next. Our idea is to put everything on the chain as long as it is technically feasible. What can it bring to users? Back to the desire tree just now, in Web2, users spend money to buy an experience and respect, while in Web3, we have proposed a new impossible triangle of "fame, wealth, and power" in this game. Because of the combination of blockchain, users can play more roles, not only as creators of resources, but also as managers of resources, so they can gain fame and wealth, as well as power. As a platform, we only provide a set of internally circulated economic models, intervene in the development of games as little as possible, and even players can decide the rules of this world and the direction of the game themselves.

Secondly, it is very important to manage your real community well. When I started my business, I often said that business should come first, rather than making the product perfect before launching it to the market. My personal style is to launch the product to the market when it is 65 points, build up the market first, find people who pay for it, understand their needs, grow with the players, and let the players participate in the construction of the game.

This was difficult in the past with Web2, because Web2 players think they are the bosses and spend money to enjoy themselves. How could they tolerate you giving them an imperfect thing? But Web3 is possible. Everyone should work together to create the entire economic ecosystem. stepN was established in September 21, and we launched it to the market in less than three months in November. We made a running module, a GPS anti-cheating module, a built-in wallet, a built-in trading market, etc. It is really not easy to do so many things in 2 months, but time is limited and it is definitely not perfect enough, but I still boldly launched it to the market. We received more than a thousand test registrations from players around the world at that time. Many people complained that we fixed more than a hundred bugs on the first day. What they didn't expect was that we would update the version twice a day. Every time we updated, a large number of feedback bugs were fixed by us. In the following days, the number of problem feedback dropped significantly. This process lasted for a month. The changes in the product throughout the process were visible to the naked eye, so early players had a strong degree of participation and became very loyal users in the later period.

We also did a lot of operational activities in Discord at that time, and many projects are still referring to these activities until now. After winning the third place in the Solana Hackathon, Discord immediately attracted more than 10,000 users, but we found that 95% of them were invalid users who came to the whitelist. I did something very bold at that time and cleared all the users who were suspected of being robots. If they didn't talk for a few days, they would be deleted. The ultimate goal of game development is a clean, pure and motivated early community, not just looking at the number of people. It happened to be the Chinese New Year when sending red envelopes on WeChat was very popular. We were also thinking about whether we could send red envelopes to users in Discord, but there were too many people trying to take advantage of us and we didn't dare to do it easily, so we came up with a way to let everyone answer the questions in the white paper. We made a lot of questions for everyone to answer, and if they answered correctly, I would give them a pair of Genesis shoes. The rules required them to invite 3 friends to participate in the questions, so we had a lot of real users. Because of this event, our Discord has grown very organically from a few hundred people who were cleared out by me to 100,000 users, and this is when I was constantly deleting suspected robots, so almost all the users who stayed were real users. As the event became more and more popular, from only needing to answer one question correctly at the beginning, to answering 10 questions in a row to get rewards, users have to continue to read our white paper carefully. This activity helped us gain tens of thousands of high-quality loyal users who read the white paper more than I did. It played a very important role in our subsequent explosive growth, allowing us to quickly grow to five million users. All of this came from the fact that we have users in our community who have read the white paper dozens of times. They recognize our products from the bottom of their hearts and even take the initiative to help us spread them.

Finally, I want to talk about market globalization. At that time, we spent a lot of time considering which market to enter first. In the end, we just decided to go for both. In the end, we would focus on the one that was running well. In the end, the facts proved that our original conclusion was correct. Our largest market is Japan, and the second largest is France and other European countries. Now we have one to two thousand new users every day. So our initial globalization was to let the market screen itself, and then we would help the fast-growing markets develop faster.

3. How do founders face the ups and downs of economic cycles?

In Web3 games, I think the market cycle is not that important, because games are different from other applications such as DeFi. DeFi does depend on the economic cycle, because when the economy is very depressed, there will be no users and funds. However, games can form a system in themselves. They can have their own pricing, tokens and ecology, and are not so dependent on large external cycles.

In addition, I would like to say that there are indeed more users and funds in the bull market, but there are also many competitors. StepN should be at the end of the bull market. We had a large number of competitors at the beginning, but if you can form your own ecosystem in the bear market, there will be fewer competitors, and the market's attention will not be easily distracted from you.

4. When is it appropriate for a project to hire a PR team?

To be honest, we didn’t do it very well later. The first thing a Web3 game project should do is to make players feel that we are real and together with the players, so we did AMA every week in the early days. At that time, the product was not online, and there were only a dozen people doing it for the first time, but we insisted on doing it every week until more and more people came and everyone could feel our sincerity. In the end, we hired a PR team because we were too busy, but later we found that we should still do it ourselves. The most a PR team can do is crisis public relations, but daily brand and influence still need to be done by ourselves. Our communication with users is the best PR.

5. Should blockchain gaming startups focus first on the needs of new Web2 users or native Web3 users?

When we were positioning our users internally, we all agreed that we needed to convert a large number of Web2 users. Many of the features that stepN has built in, such as wallets and trading platforms, are also designed to lower the threshold for more Web2 users to come in, so that players can experience the technology behind the scenes without feeling it. This is what we have been doing before and will continue to do in the future. Our future games will also achieve login, transfer, and free gas in a decentralized way, all in order to convert more Web2 users into Web3. At least half of our entire stepN users have never been exposed to blockchain before playing.

6. How to treat users who play games for money?

First, we need to determine whether they are just here to make money or are gold-making guilds. If they are the first type, we must remove them. The second type may be backed by real people. Each company has different opinions. Some games are very friendly to gold-making guilds and even invite them to join because they can quickly bring in traffic. But stepN was also quite resistant to gold-making guilds at the time, and we also refused to cooperate with gold-making guilds.

7. How to make Web3 games continue to generate value?

The core is to make games to bring happiness to users, so if your users feel happy while playing games, this value is enough. Don't worry too much about the definition of value itself and other people's judgment. Games are essentially an experience economy. They spend money to buy the experience they want. As for how others define this process and whether it is valuable, every user has different opinions.