How to prepare your business for Web3

Web3 has been splashed across headlines in 2022. Characterised by decentralisation, open source platforms and increased data ownership for users, much has been made of its emancipatory power for private citizens. Less has been reported on how the change from Web 2.0 to Web3 will impact businesses, or how they should prepare. 

The transition to Web3 won’t be instantaneous. No switch will be flicked where one day users log into Web3 whereas yesterday they logged into Web 2.0. Rather, the internet will evolve over time. But while this might dampen the urgency to adapt your business for the next web iteration, it’s important to note that many organisations have already started experimenting with Web3 technologies and its metaverse use-cases and like with any technological change, preparation is key to first-mover advantage.

Why Web3?

In this proposed next phase of the internet, the web, its platforms, apps and organisations, will be built on distributed technologies, such as blockchain. The open and communal nature of public blockchains means that, at least in theory, the web will be transparent, democratic and collectively owned by the people, not monopolies or intermediaries such as banks, newspapers, social media platforms and so on. 

Data will be owned by the user, and flow through blockchains, not companies. Platforms and applications will be run collectively via smart contracts and allow users to own stakes in, govern and create Web3 businesses, or Decentralised Autonomous Organisations (DAOs). 

Web3 conversations can be undeniably tech-utopian and there is controversy over whether its promise is more hype than reality – will it benefit society in the way imagined? The technologies that underpin Web3 – blockchain, crypto, NFTs, smart contracts etc – are already here and for the most part, usable. On the people side of the equation, there is increasing concern over the use and abuse of data by corporations and a world where autonomy is given back, perhaps an attractive one to many.

Five key areas to focus on

There’s still time to access the gains from early adoption, and to be prepared for the ways Web3 could change the societal and business landscape. Now is the time to begin preparing the groundwork. 

1. Secure your strategy and bolster your business model

   • The decentralised nature of Web3 runs counter to most traditional business model structures. How might such a change affect your business? Your industry? Can you see areas that are ripe for customer disruption? What might that look like and how would you respond? Explore some of the Web3 use cases already popping up in the market such as metaverse, blockchain, tokenisation (NFTs) and crypto.

   • Recognise where you could need help in the future. When you’re ready to build, will you be in a position to? This could mean partnering with blockchain providers, smart contract experts and UX designers.

   • Web3 and the metaverse are at the beginning of their hype cycle; there will be failures, changes in use cases and a resurgence of interest to come, so it is necessary to keep abreast of what’s happening in the market and your industry. 

   • Perform a SWOT analysis to identify high level opportunities, risks and where your organisation could gain a competitive advantage

2. Organise your operations for transition

   • It’s good business sense to accelerate the removal of legacy tech to be able to make use of new opportunities, whether its Web3 or the advances in predictive analytics and data. What you don’t want is to be in a position where you cannot access Web3 because you are shackled by old tech.

   • …and with that in mind, have you migrated to cloud yet? You will likely need a developed cloud presence in order to make use of the advanced functionality of new technologies and systems. 

   • The way businesses manage customer identity and validation is set to transform, and it is not impossible to foresee the death of the password given new decentralised methods of identity validation. There are clear identity-related opportunities in Web3; such as improvements to Know Your Customer (KYC) processes, higher security data-sharing from consumers to businesses, and the verification of human or individual ownership of accounts (for example, as a way to curb negative content in social media).

3. Count your capabilities and uplift skills gaps

   • Web3 technologies operate very differently from traditional technologies, and if in an open source landscape, there will always be others that can improve upon things you come up with – to keep customers you’ll need to keep iterating, so it’s likely you should be upskilling your developers in technical areas and innovative, agile thinking. 

   • Digital skills will also be necessary for non-technical staff. To understand Web3 is to participate in it, and most people have not yet dabbled in crypto or NFTs – despite what the media would have us believe. From basic understanding of the concepts to the ways in which a Web3 world could reorganise business, all learning will be beneficial down the track.

4. Securing your systems and understanding risk

   • While Web3 is being described as the antithesis of regulations and governing bodies, it will be regulation that forms the guardrails that make Web3 a reality for businesses. Regulation of cryptocurrency and crypto exchanges is on the cards in many jurisdictions. The pace is slow, but it is happening, so keep an eye on the regulatory space.

   • What customer data do you own? Is your business dependent on it? What will you do if data moves to personal ownership and customers can choose to share it with you, or take it back. Review your data ownership processes and procedures and make sure they are sound, future-proof, and give your customers confidence that their data is safe and secure.

   • It goes without saying that cyberattacks and data breaches are on the rise. With new technologies comes new risks, so make sure you have the basics locked-down and are keeping up with new vulnerabilities.

5. Creating an innovation culture

   • Like most consumer technologies, it is only a matter of time before businesses – and their employees – become accustomed to their benefits and want similar options in the workplace. Think about ways that you could use Web3 concepts internally. Could a blockchain solution make your people’s lives easier? Or a community run platform give them more skin in the game? Experiment to discover how you can derive value in other ways.

   • An innovation culture will be critical to Web3 experimentation. Not only are inspired employees productive and loyal ones, but if they have the psychological safety to fail and iterate, your business will be more likely to develop successful use cases.  

   • Web3 is a challenging concept. Some of it is shrouded in Silicon Valley romanticism. Other parts, such as the technology, are more concrete and could solve very real business needs. To get employees and leadership on board, tackle the myths and mysticism around Web3 and educate your staff so they can approach it with ability, capability, and confidence. 

Web3 readiness – are we there yet?

Without a crystal ball, it is near impossible to say what the next phase of the internet and its effect on society will be. While there are many potential use cases, a lot of the technologies mentioned are still being trialled and in some cases, still finding their respective niches. However, there is merit to how Web3 technology could be used. It sparks the imagination of the tech community, and that’s no small thing when looking at the way business has been changed by technology over the last decade, let alone the last four or five. 

No matter how it plays out, technology has a way of affecting ‘big change’. The areas outlined above provide strategic considerations to prepare for potential change, capitalise on actual change, and provide resilience no matter which way the winds of technology blow.

Source by www.pwc.com.au