Brian Flynn
@flynn.eth
in early days of web2, everyone measured value for companies based off traffic and page views. because that's how newspapers and billboards worked: drive attention and ultimately some of it will convert into purchases. fast forward to web3, people are still thinking attention is what matters the most. and if you compare it to how web2 played out that's not really true: page views ended up mattering less and more advanced metrics like CAC and LTV started to matter more with advanced paid advertising funnels. tokens work similar to ads in that they are units of attention that may or may not have value attache to it. and so really what matters is building extremely robust tooling around distributing and measuring the value that tokens create. if tokens help you generate more revenue than without it, tokens are great. in the same way that paid advertising makes sense if you want to grow an existing flywheel that works. so the formula is simple: distribute tokens to new and existing users, measure LTV, and make sure incentive spend is less than fees paid. return on investment spend is the metric that matters when trying to spin the flywheel and to know if it's working, or if it's just smoke and mirrors of narrative spinners.
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abram
@abram
i like this take. paid advertising works well if there's a high ltv:cac ratio. examples of tokens/teams that've figured this out well? or seem to be on their way? the ltv piece still feels nascent/unproven (from what i've observed) but it seems like the pieces are coming together
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Brian Flynn
@flynn.eth
well, two things need to be true for LTV to be proven out: 1. you need revenue (already crossed off majority of crypto projects lol) 2. you need tooling to measure LTV (since most token incentives are either non-iterative and more set it and forget it)
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