During the great cryptocurrency boom of 2017 everyone believed there wasn’t a problem that couldn’t be solved by Blockchain or Distributed Ledger Technology (DLT), the tech underlying Bitcoin. But now as the market flounders, and with very few live use cases, many are questioning whether this is the panacea everyone thought it was last year.
But the facts remain, DLT offers many potential technological possibilities that could significantly change how certain types of apps and transactions function. The problem currently is that the world of blockchain is too full of developers and dreamers and not enough product managers.
Why Product Managers?
Ultimately, a product manager is in charge of finding product-market fit and making sure an app is successful – and describing what exactly it means to be successful. This is done by understanding core business objectives, understanding the market and users in the market, and ruthlessly innovating and re-prioritizing to craft a software product that brings the greatest outcome.
That is what blockchain needs.
Technology With Huge Potential
The potential for advancement of blockchain technology is enormous. If you are new to the technology, it’s best not to think about Bitcoin, but rather to think about the advantages of having an encrypted public log of transactions coupled with a distributed conditional transaction processor (I won’t get into the details here, but there is a great article on this by NY Times). DLT technology can add value in many possible ways:
- Enabling transparent tracking of goods through a supply chain
- Digital goods for gaming and collecting
- Loyalty and reward programs
- Content monetization
- Low cost financial transactions and trustless escrow
- Decentralized systems: databases, file storage, etc.
- Decentralized applications that don’t rely on central authority
The possibilities are seemingly endless, and many projects have been launched to pursue these potentials as well as a host of others.
KPIs and Friction
Product managers measure their success using heuristics called Key Performance Indicators (KPIs). These are essentially data points that indicate the success of app objectives. These could have to do with interactions within the app, daily and monthly users of the app itself, or whatever else indicates to the business whether the app is succeeding or not.
A product manager analyzes these KPIs and analytics to find where things aren’t working. The screen in the registration process where people drop. The denial of permission for the app to use the camera or location service in a mobile app. Anywhere that an app gives an opportunity to drop or not complete an objective is a friction point. A PM spends a lot of time thinking about how to remove friction.
Blockchain technology today is full of friction.
Dapp User Flow
Let’s take a look at what it takes to use a decentralized application, or Dapp. A Dapp utilizes the blockchain to handle the backend transactions. The advantage of a Dapp is that there is no centralized database or API. This means there is no middle man and can result in lots of savings. For example, a ride sharing Dapp would allow you to call a car anywhere but not have to pay a fee to a central organization like Uber or Lyft.
Keep in mind that in most blockchain/DLT environments it costs the end user tokens to perform function calls. Yes that’s right. If you want to call a car from your Dapp, you will have to pay something, usually not too much, but it will require you to have the tokens of that ecosystem ($ETH for Ethereum, $GAS for Neo, $EOS for EOS, etc.) The purpose of this fee is to prevent spam, pay the miners or stakers who are processing the transactions (these are the people who enable the blockchain to work and be distributed as they provide the processing power), and because many function calls initiate or complete financial transactions – the transference of tokens from wallet to wallet. But this means users have to have tokens to use an app. So here is the flow:
- Obtain tokens. This is not simple because currently we can only purchase a few different tokens using fiat currency (aka regular money). So in the US it would look something like this:
- Buy BTC or ETH from Coinbase, Robinhood or Square.
- Move that to an exchange.
- Use that to buy our token.
- Set up wallet. Most Dapps require the use of Metamask, which is a Chrome plugin. Install it. (Don’t use Chrome? Add another step: install Chrome. On mobile? Well, you will just have to use a supported mobile browser.)
- Transfer tokens to wallet. Now send your tokens from the exchange to the wallet.
And all this has to happen before you have even started the process of using the Dapp itself which will invariably be littered with friction points (all apps are).
Enter Product Managers
Here is where the PM can step in. By setting clear OKRs – Objectives (goals) and Key Results (outcomes) – we can look for ways to reduce friction and improve outcomes. Very often in blockchain today (as in the Ethereum example above), there are multiple players: the Metamask plugin, token exchanges, and the Dapp provider that make it more challenging to close the gap. But there are still ways to overcome it or at least facilitate greater success.
A product manager playing in the Dapp space would have to be creative and look for ways they can ease this process. How do we do this?
- Brainstorm solutions.
- Prioritize ideas based on theoretical value.
- Build or prototype solutions as simply as possible.
- Test using sample users: first qualitatively, then quantitatively.
- Repeat 1-4 based on results.
This process will allow for drilling in to find what methods will work best to overcome these friction points. Keep in mind that these solutions can vary from UX/UI changes to offering real and app-based rewards for completing an action to anything else the PM and team can come up with. They key factor here is that methods need to be conceived, and then validated in the real world as best as possible – and preferably with minimal work so as not to waste time on solutions that don’t achieve statistically greater results.
Blockchain and DLT technologies are in the early stages, and up until now, it’s been driven by hackers and PhDs. There are so many amazing possibilities, but at the end of the day, blockchain is a backend technology that will only be successful when people are using it without even knowing it. This is where product managers come in – to ensure that business cases are being optimally executed and are exceedingly easy for end users.