Network Effects, Moats, & the Business of web3

web3 with a16z crypto

with @skominers @smc90

In this deep dive and tour through key business concepts, from theory to practice, we cover the topics of strategy, competitive advantage, network effects, moats, and more -- covering both both basic foundations, as well as the tricky nuances in a new world of open source, including web3. In the first half of this discussion, we cover foundational business concepts and questions -- such as the nature of competition, and how it *really* changes in web3; as well as how network effects really work -- and then, in the second half (in case you want to skip ahead), we cover mindsets and general guidance for builders…

Our expert guest -- in conversation with editor in chief and host Sonal Chokshi -- is a16z crypto research partner Scott Duke Kominers, who is also a professor at Harvard Business School; a faculty affiliate in Harvard’s Department of Economics; and advises several companies on marketplace development, incentive design, and more; as well as advises, and is directly involved, in several NFT communities.

Scott also teaches on these topics -- both at Harvard and also recently at our Crypto Startup School -- so be sure to subscribe to our playlist for those talks on the a16z crypto YouTube channel to get the latest updates as we release more videos from the 2023 cohort.

related links // see also:

• Can web3 bring back competition to digital platforms? by Christian Catalini and Scott Duke Kominers
• Why build in web3 by Jad Esber and Scott Duke Kominers
• Vampire attacks: A theory (and thread) on 'blood sucking' platform competition by John William Hatfield and Scott Duke Kominers
• Why NFT creators are going cc0 by Flashrekt and Scott Duke Kominers
• Decentralized identity: Your reputation travels with you by Scott Duke Kominers and Jad Esber
• Increasing returns and the new world of business (1996) by W. Brian Arthur
• Network effects, origin Stories, and the evolution of tech with W. Brian Arthur, Marc Andreeessen, and Sonal Chokshi
• The five competitive forces that shape strategy (2008 reformulation of 1979 paper) by Michael Porter
• Strategies for two-sided markets (2006) by Tom Eisenmann, Geoffrey Parker, and Marshall Van Alstyne

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As a reminder: none of the following is investment, business, legal, or tax advice; please see a16z.com/disclosures for more important information -- including a link to a list of our investments.

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