Braintrust's reversed marketing flywheel
Why you shouldn’t ask your marketer to build a "web3 social media presence"
A little while ago a friend asked me "If I want to build web3 components into my startup, what can I tell my marketer to start doing in order to create a social media presence around that?"
With all the buzz around web3, smart founders want to know whether web3 can help them grow their companies. I decided to dig into my new favorite web3 marketplace, Braintrust (think Upwork, but owned and controlled by its users through the BTRST token), to understand what’s driving their growth.
From Braintrust’s example, I’m convinced that while web3 tools can create a powerful growth engine, social media (or marketing more broadly) is probably not the place to start.
This is because:
Braintrust’s web3 social media presence is a collection of conversations. Not only would this be very hard for a marketer to create, it’s also not the most direct path to more users (i.e., in that audience, there are at least as many web3 enthusiasts who have no interest in using the platform as there are actual Braintrust users).
A marketer’s job is to build an engaged community of users, but it’s the same job in web3 as it is in web2. Users care about the usefulness of a product or service, not the technology behind it.
Web3 companies have a huge advantage in attracting users over web2 ones, but investing in marketing underutilizes web3’s potential when compared to investing in aligning user incentives through ownership.
I get where my friend (and so many other founders who are starting to learn about web3) is coming from. If this were a marketing flywheel, the flow for a web2 company with social media as one of it's marketing channels might look like this:
It’s just that, web3 gives companies like Braintrust a new way to get users. The web3 user acquisition fly wheel looks more like this:
Put another way, Braintrust reverses the familiar web2 marketing flywheel: the company attracts users first, which leads to more engagement, and then a social media presence gets created organically as the result of that engagement.
Not convinced this can work? Braintrust has been executing on this reversed flywheel brilliantly. They showed off some super impressive stats in their recent announcement of a $100M token sale to Coatue and Tiger Global.
Since coming out of stealth in June 2020…
Gross Services Volume (GSV) grew by 2,250%, from $1.2M to $28.2M.
The number of enterprises (Clients) jumped 752%, from 63 to 474.
Job-seekers (Talent) flocked to the platform growing from 2,194 to 36,000+.
The network’s Community grew 70x from 10,000 to over 700,000.
Then, just 3 months later, they announced that their GSV crossed $40M.
Their secret sauce is giving users ownership. But let’s dive deeper to see how each piece of that flywheel works for Braintrust, and how marketing fits into the picture.
Social media presence
When I see forecasts say NFTs are expected to reach a $35 billion market cap this year, I’m reminded that web3 really stretches my brain, and start grasping for something a little more rooted in a familiar reality.
Braintrust is helping real people find real jobs, and is one of the most “rooted in a familiar reality” web3 projects I’ve come across so far. The internet seems to agree:
Braintrust has turned into a case study for applying web3 tech in a tangible and compelling way, which is making it a topic of discussion on social media, in newsletters, podcasts, and the press. This kind of engaged dialogue is my new mental model for what a web3 social media presence looks like.
To see what I mean, here are even more examples of conversations about Braintrust:
Social
Adam Jackson twitter
Gabriel Luna-Ostaseski twitter
Newsletters / blogs
Podcasts
Press
See the list on Braintrust's site
Judging by what’s here, a marketer probably can’t create this. It would be insanely hard to replicate the authenticity of it.
I also noticed that the audience for all this content skews toward people who are excited about the web3 space (as founders, investors, employees / contributors) as opposed to freelance workers and clients with hiring needs.
So even if all this were possible for a marketer, creating a social media presence that focuses on Braintrust’s “web3-ness” would be a pretty poorly targeted marketing exercise. To many freelancers and their clients, "it is web3" is not a relevant value proposition, just like how "it is online" was was not relevant to most people who decided to shift their book purchases away from physical bookstores and onto Amazon.
Community engagement
This is where a marketer’s skillset shines. But there’s no reason to expect otherwise, because web3 or not, explaining how the platform works and communicating its value to a community of users still works the same way.
Posts on Braintrust’s blog emphasizes how:
For freelancers, using Braintrust lets them increase their take home pay, get better projects for building up their resumes, and enjoy more personal freedom
For companies looking for talent, using Braintrust lets them fill open roles faster, with better quality talent, for less money than using recruiters or other talent marketplaces
Every once in a while there is a post that talks about the company vision or the company reaching some new milestone, so web3 gets a few mentions, but nothing about the blog really screams web3. To reinforce my point earlier, I’d guess that’s because to users, web3 is a buzzword that is a novelty at best and intimidating or off-putting at worst. Most users just want to know how the platform helps them accomplish their goals, and that’s where your marketers should focus.
Attracting users with ownership
I’m burying the lead a bit, but since you’ve made it this far, you get to read the one point that I hope will stick if you take away nothing else from this post:
Web3 is an ownership strategy, not a marketing one.
Okay, more precisely, web3 is simultaneously a meaningful innovation in distributing ownership, and a marketing hype train. But the marketing hype train is 1) sub-optimal unless you are targeting a web3-specific user base, and 2) potentially off-putting to users who are looking to you to solve a real problem, only to get an ear full about how they can earn “tokens” that they don’t see the point of. Web3 can work as a marketing strategy, but to see it only through the marketing lens misses the bigger picture.
The real innovation in how web3 companies attract users is a massively scaled-up version of how startups attract employees: by awarding ownership (in the form of tokens) as compensation.
In the same way that startup founders would put careful thought into identifying people who could add the most value to their companies and offer those people shares for their contributions, web3 teams can extend this now widely-accepted practice to entire communities.
That’s exactly what Braintrust has done. As a marketplace for project-based work, the core things that make the network more valuable are:
Grow the supply of people looking for work on Braintrust, ensure they are high quality and can get the job done
Grow demand from clients who create job listings
Improve the platform’s ability to match supply with demand over time
And sure enough, from Packy’s deep dive on Braintrust:
There are a few main types of contributors who receive Community Incentives and Rewards:
Connectors are anyone who refers talent or clients to the network. They receive rewards for bringing people into the network, and then receive a portion of their referrals’ invoices. Anyone can become a Connector and refer Talent, including individuals like me, professional recruiters, or even recruiting agencies.
Vetters are people who screen new candidates to ensure that they meet Braintrust’s quality bar. These people must complete the courses on Braintrust Academy, for which they receive tokens, and then receive BTRST tokens when they complete screens.
Talent can receive tokens for filling out detailed profiles, taking courses (mini-learn-to-earn), and successfully completing jobs.
Grant Recipients can receive tokens for doing work for the network in three categories: Ambassador Grants, Builder Grants, and Educator Grants. Braintrust is using the $100 million it recently raised from Coatue and Tiger in part to create a Grants Program, which is in its first MVP wave now.
Critically, because growing the network using tokens doesn’t rely on spending $$$ like traditional user acquisition strategies do, Braintrust’s growth engine is running on more organic, sustainable fuel.
Not only does distributing the work that would otherwise have to be done by a centralized team help Braintrust conserve cash, compensating the community with ownership lets the entire community participate in the network’s (and thus the token’s) long term increase in value, which has the added benefit of reducing user churn, since rewarding users with tokens makes them literally invested in the platform.
As an aside - now you’re probably wondering: that all sounds nice, but does Braintrust just keep minting more tokens to compensate its community? Doesn’t that dilute everyone else’s share of ownership? How does the token increase in value?
How the BTRST token works - as concisely as possible:
Q: Does Braintrust just keep minting more tokens to compensate its community?
A: The total token supply is capped at 250M, with 135M in the Braintrust treasury set aside for community incentives and rewards. Braintrust does not mint new tokens.
Q: Doesn’t that dilute everyone else’s share of ownership?
A: There is no dilution, since no new tokens will ever be minted. But when Braintrust awards tokens to its community from its treasury, it does put downward pressure on the price of the token in the short term, since it is increasing the token’s circulating supply.
Q: How does the token increase in value?
A: The token’s value goes up if demand for it exceeds supply, and vice versa. The supply is fixed in the long run at 250M tokens. Demand should increase as the network grows because:
Token holders can participate in governance and vote on changes to the network. Voting power is proportional to the amount of tokens owned, so the more users rely on Braintrust to find work, the more they’d want a say in making sure the network keeps serving their needs, and the more they’d want to own more BTRST tokens in order to vote for changes they want implemented (or prevent changes they don’t want)
Braintrust charges a 10% fee on all invoices (these are in USD) paid by clients on it’s platform. This fee is is converted into USDC and used to purchase BTRST in the open market (which replenishes the treasury for more community rewards and incentives); this way, the more invoices clients pay, the more BTRST gets purchased from the open market
There are plans to add more utility to the token; one example is to implement token staking, where talent can stake tokens in their application for listed jobs in order to stand out to clients
If things work as planned for Braintrust, the more valuable the token gets over time, the more powerful the incentive becomes for the community to contribute to the network’s growth.
This sets off a positive feedback loop that I’d argue knocks any amount of investment in marketing out of the water. Instead of a marketing flywheel, Braintrust is powered by an ownership one, as captured in this Twitter thread, created by a Braintrust community member as a part of a bounty to explain how Braintrust works
And the magic is just beginning. This post focuses on the advantages a decentralized marketplace has in attracting users, but as I learned about Braintrust, I’m realizing that user ownership could be the perfect solution to many other challenges that marketplaces face as well.
I look forward to diving into those in a future post. For now, thanks for reading!
Thanks! From what I can tell based on the few comments in reddit (below), enterprise side is approaching this very transactionally (they are using Braintrust to fill open roles efficiently / at minimal cost), and freelancers are saying things are pretty good right now but concerned about commoditization of talent
My main takeaway is web3 is not a silver bullet and Braintrust faces some of the same challenges web2 marketplaces do
https://www.reddit.com/r/freelance/comments/ngfrbo/anyone_have_experience_with_braintrust/
Really nice post Andrew! I’m suddenly really curious to hear what someone who is actually using Braintrust either as a freelancer or from the enterprise side has to say about their experience with the platform.