Usability / monetization death spirals
Certain categories of web2 websites and apps fall into a usability-monetization death spiral. 🧵
Relying on ads and monetizing at low CPMs, the incentive is to add ever more intrusive ads to increase click rates.
User experience degrades, requiring more intrusive ads, in a downward cycle.
News sites, cooking sites, games, music, Q&A, travel, and many other web2 categories that didn’t figure out subscriptions or high-CPM business models fall into this trap.
This isn’t the fault of the sites or the people behind them. They are generally hard working, creative people. The problem is that, until recently, ads were their only option.
This can be fixed by web3 and NFTs. Imagine NFTs that are some combination of collectibles, patronage, social status, and access.
Creators can develop deep, meaningful relationships, with their fans, instead of the transient, transactional interactions they have today.
Creators can get paid appropriately for their work, and users can enjoy a clean, modern experience that doesn’t compromise their privacy with intrusive ads.
We’ve already funded a series of game companies working in this area, and would love to fund teams in other categories.
Lack of genuine ownership and the reliance on ads was the original sin of the internet. We now have the tools to fix this.
Originally published here.
The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.
Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.