Published March 14-22, 2022
It is the near future.
Arun checks his Micronbox for brand messages. 20-odd messages that have come in overnight vie for his attention. There is no spam because every one of the messages is from brands he has opted in to. That is why he switched his brand interactions from Gmail to Micronbox. The Subject lines prefixed with µ tell him what brands are willing to pay for his attention. He opens the email from A1 Books – there are 5 recommendations for him. Micronbox has interactive emails, so he can click on a book and read more right inside the email. A1 Books offers him 5µ for reading more about each of the books. He checks out two of them, earns 10µ and adds one of the books to the shopping cart. He doesn’t need to leave his Micronbox at all.
GreatGadgets has sent Arun an email about the new iPhone that has just been released, with an offer to watch a 2-minute video and be rewarded 50µ for answering a question about the iPhone. Arun is keen to check the new features, and goes ahead.
Arun then taps on the CryptoWorld email. He has been learning about the basics of social tokens. This is the tenth email in the series. Arun is keen to maintain his opening and reading streak, since the reward is 10µ for this email. (If he ignores it, the next email will reset the incentive to 1µ.) There is a quiz in the email to test what he has learnt. He answers 4 right out of 5 questions and is rewarded 20µ.
He then checks another email from Martecho about a forthcoming webinar. He registers by accepting right inside the email once again. Martecho rewards Arun with 25µ with the promise that attending the webinar will earn him 500µ.
An email from the telco wants to know more about him – “zero-party data” as it is called. He answers two questions and is rewarded 30µ by the telco.
Arun then engages in “Word Play”, a Wordle-like game that gets delivered to his inbox daily. He guesses the word on his fourth try and earns 3µ. (A guess on the third attempt would have gotten him an extra µ.)
Until a few years ago, Arun detested checking his inbox – spam had overwhelmed it. Micronbox changed it. Every message is from brands he has given permission to and most have rewards that value his attention and engagement. He loves this extra bit of gamification.
Arun’s µCount has reached 4500. He goes to the µExchange and offers 4000 for sale. He sees that the price is a bit higher than it was a month ago when he had done the last trade. The sale is done, and he is happy to see the extra cash in his crypto wallet. His aggregate µ earnings have now elevated him to the next tier, making him eligible for some new benefits in the µniverse. A delighted Arun exits the Microbox and gets ready for the rest of the day.
Jeni at A1 Books
Jeni is the marketing manager at A1 Books. She handles the µProgram as part of her responsibilities. Besides overseeing the email program, she also has responsibility for ensuring an adequate supply of µ for rewarding customers. She uses the µExchange to make periodic purchases of µ, which are in turn then given to customers for their attention and engagement. She has seen a multi-fold increase in transactions after A1 Books joined the µniverse ecosystem.
Jeni remembers the earlier times. She would send emails and hope for the best. Only a fraction of the recipients opened the messages and an even smaller fraction clicked through to the website. She invested a lot in creating interesting content, but ignoring emails seemed to be the norm for most customers as their inbox was flooded with good and bad email, and they could not tell the difference. The emails (along with push notifications, SMSes and WhatsApp messages) were the only way Jeni could bring her audience back to the A1 Books website and app for transactions. All of these push channels filled with messages fragmented the end customer’s attention and impacted response rates. This forced Jeni to keep spending on new customer acquisition via the BigTech companies and marketplaces, where the costs rose sharply each year.
It was then that Jeni came across the µniverse, a decentralised blockchain-based platform to connect brands with their customers. The innovation was the idea of “atomic rewards” – micro-incentives for actions. There was no intermediary. Jeni could buy µ from the µExchange and reward her customers for their time, attention and engagement. The price was set by the trades being done – much like the stock market. End customers earned µ and could either use it for vouchers and special discounts in the µShop or sell their earnings on the µExchange. Since the absolute µ in circulation was capped and there was no single centralised entity who could potentially debase the value of µ, it was up to brands and customers to determine the fair value in the marketplace.
For Jeni, µniverse helped solve the biggest problem she faced – attention recession among her existing customers. She could now use variable rewards to incentivise the actions she wanted. Her customers also were happy that their time was valued. This win-win relationship helped Jeni get more from her existing customers, reduce her new customer acquisition spends, and put A1 Books on the path to sustained profitability.
That morning, Jeni started to think about new applications for µ. Could she use it on her website and app to get people to read a section of the book? She knew that once they spent time looking “inside the book” (as was possible in a physical store), the probability of a purchase increased dramatically. She was also thinking about how to use µ for referrals to bring her cost of new customer acquisition even further. She was even contemplating replacing A1 Books’ own loyalty program with the publicly tradable µ. She was also fine-tuning the µBenefits program as part of the µShop – collect enough µ and get invited to an exclusive interaction with authors. The simple idea of “atomic rewards” is so rich with dizzying possibilities!
Continuing with the near future…
µniverse exists in cyberspace. There is no single owner who decides, only rules that determine the actions. It is a two-sided marketplace, an exchange. It connects brands with their customers. Unlike the BigTech companies who play the role of intermediary and take a huge cut, µniverse simply enables a direct connection via its µ token as enabler. It lies at the intersection of three worlds: gaming, loyalty, and crypto.
MuDAO (Mu Decentralised Autonomous Organisation) was born in the early 2020s. As the crypto revolution was sweeping the world and attention was focused on the cryptocurrencies and their volatility, various entrepreneurs decided to look at Web3 and solve real world problems beyond finance. One such problem was the massive spending brands were doing on adtech – $400 billion annually paid to Google, Facebook and their ilk to connect with past, present and future customers. The dirty secret was that half of this spending was wasteful – going into reacquisition (churned customers who were retargeted and converted) and wrong acquisition (new customers who churned within the first few weeks). Marketers had few options, and so the arms race in acquisition via adtech continued at the cost of profitability for most brands. With pandemic-fuelled easy money from investors, spending kept rising. It was a land grab out there – the “land” being digital customers. And then almost as suddenly, the tap was turned off. Brands had to take a hard look at their expenses, and of course, marketing budgets were near the top (after employee salaries). An answer needed to be found. And thus came MuDAO.
With any new technology, it takes multiple hype cycles to draw in the investment into building out the new infrastructure. The Internet’s foundation was laid in the second half of the 1990s, and it was only over the subsequent two decades that real value creation happened. Second- and third-order companies beyond the initial pioneers built out the digital world as we know it today. Google was not the first search engine or even the second. Chrome and Firefox were not the first browsers. Apple’s iPhone came when a seemingly invincible Nokia’s market share touched 40% and Blackberry was seen as the next cool thing. Facebook was one of many social networks and definitely not the first. Netflix started life as a video tape mail-order company. Amazon started with books and today Amazon Web Services is the profits engine that enables it to keep investing in its eCommerce machine.
The bitcoin-blockchain revolution was born in 2008. It took the free money era during the pandemic to fuel its rocket growth. More importantly, the world of crypto attracted massive venture capital which in turn brought together the smart developer talent to build out the infrastructure for a new Internet – decentralised, permissionless, user run, automated, transparent and consistent. A new vocabulary emerged: blockchain, smart contracts, dApps, NFT, DAO, Ethereum, Web3. Even as the naysayers had their doubts, entrepreneurs started thinking about the transition from online to on-chain – just as their predecessors had made the offline to online.
It was into this world that MuDAO was born to solve the problems of attention recession, limited loyalty, and high acquisition costs – and in doing so reset brand-customer relationships.
How It Happened
Continuing with the near future…
Version 1 of MuDAO was a much simpler points system – MuCo. A centralised entity managed the creation of Mu (µ), which it offered for a price to brands, who in turn could offer it to their customers. This idea of a pan-brand attention and engagement loyalty program was in itself a big step forward; almost all rewards till then had been focused on transactions and the exchange of money. The realisation that attention was upstream of transactions led to the creation of MuCo. It solved a coordination problem among brands – no single brand pushed enough messages to create a micro-loyalty program of scale. Customers liked it because it enabled them to have meaningful earnings through rewards which could then be encashed in the µShop.
But the centralisation aspect of MuCo was a problem. A couple of people could alter the value of µ, and brands and customers would have little or no say in the matter. The way out was a decentralised entity, with direct connections between brands and customers. This is where the blockchain came in. If MuCo had to successfully challenge the monopoly of BigTech, it would have to cede control to the community. It was time for version 2 of MuCo – a shift from online to on-chain. MuDAO would be run by rules, not its rulers; MuDAO would be a blockchain, not a chain of command.
MuDAO had to solve the cold start problem and get both brands and customers to trust that a decentralised system could work. Luckily, the popularity of cryptocurrencies helped address the initial scepticism. Besides, the initial success of MuCo had enough brands and customers on board to get traction for the second avatar. The µ collected by customers now could be traded on an exchange so brands could buy it. The combination of abundance and scarcity of µ created value for both sides and helped drive µ not just as a means of earning some goodies but also as a long-term investment. For the first time, attention was being monetised – not by BigTech, but the people themselves.
Step by step, MuDAO solved the three biggest problems that brands faced: attention recession, repeat customers, and new customer acquisition. Attention recession was solved by using atomic rewards in the form of µ in push messages, starting with email and then expanding to the other channels. By calibrating µ to customer lifetime value, brands also started driving repeat purchases and loyalty – for the first time, they had a hotline via the Micronbox to their existing customers. With end customers valuing µ, it became easier to ask existing customers to help spread the word among their friends and family about the brand. Both the referring customer and the referred customer benefited from the rewards, and the brand could save on spending via the BigTech platforms.
MuDAO thus created a new ecosystem – the µniverse – between brands and customers. The relationship had meaning for both – attention was not taken for granted by brands, and incentives helped customers along their engagement journey. Arun and Jeni, at opposite sides as customer and marketer, created a mutually beneficial relationship. Web3 proved its mettle!
Innovating on Infra
The µniverse can be thought of as a second-order innovation built on the emerging crypto and Web3 revolution. Many companies are working to build the underlying layers to enable the creation of a new generation of applications. What we need to do is to think of the problems in the Web1 and Web2 worlds which can perhaps be solved by leveraging Web3.
Go back to the late 1990s. The promise of the Internet was to solve the problems of physical distribution. Offline to Online. When I started IndiaWorld in early 1995, the idea was to provide information to Indians globally – the solution was not to create a newspaper or magazine that would be limited by offline logistics, but a portal that instantly connected people everywhere. We need to think similarly with Web3. The new tech and terminology can be daunting, but once we understand the basics and the possibilities, the focus needs to shift to finding solutions for the problems.
In the past few years, the focus has been on money (Bitcoin as a hedge against rampaging central banks) and decentralised finance (DeFi, as a counter to the centralisation and fees charged by banks). These are very large problems and have plenty of inefficiencies and financial rewards for the winners. This has drawn the capital for building out the underlying infrastructure.
What we need to do next is to think of what else we can do with this infra. As digital media and ecommerce were emerging in the late 1990s as the early applications on the Internet, the world of social networks, feeds, OTT and computing grids was still far away. And that is what began in the early 2000s in the aftermath of the dotcom crash.
Similarly, we need to look beyond the daily ups and downs of cryptocurrency prices and imagine tomorrow’s world. What are the centralised entities that can be disintermediated? How can power shift from a few to many? In my previous essay, I addressed two such problems: Attention Recession and Voter Aggregation, with µniverse and Bharatverse as possible solutions. Look around us. Every Google, Facebook, Amazon, Instagram and Tiktok (giants of the Web2 world) can potentially be disrupted by Web3. The same applies to political parties and governments. The first generation of Web3 entrepreneurs will lay the foundation. It is up to subsequent generations to imagine new futures and build tomorrow’s world.
In “The Expanse” (a book series by James S.A. Corey, and available as a TV series on Amazon Prime Video), the Ring Gates open up new worlds for Earthers, Martians and Belters to settle and colonise, mirroring the expansion a couple hundred years ago in the American West. A similar such adventure awaits entrepreneurs in the coming Web3 world of cryptography, blockchains and DAOs.
So: how can the µniverse be brought to life?
Written from a future viewpoint…
MuCo began as a pan-brand attention and engagement tokens issuer. Brands and messaging service providers could buy tokens from MuCo and issue them to end customers. MuCo put a cap on the total tokens (µ) that would ever be in circulation. It auctioned a third at the start, it then had daily auctions where it incrementally issued new tokens (this was for a period of a couple years), and it kept a third for developers, miners, and others.
The early days did not see much interest. A few brands and email service providers used the tokens. Email was the first channel where the tokens were deployed. End customers earned µ for opens, clicks, other in-mail actions, streaks, and providing zero-party data. Very soon, brands realised that these atomic rewards were helping drive customer behaviour. This gamification in email led to more attention and engagement, and driving even higher conversions.
At the start, the tokens had little or no value. While there was a Mu Shop where the tokens could be redeemed for some digital goods, the consumer interest came from two factors: the thrill of earning rewards for specific actions, and the belief that the value of the tokens would rise in the future. An exchange offered a market for those who wanted to trade. Over time, a marketplace began to emerge where businesses accepted tokens in return for sales of some products.
The turning point came a few months after the launch of the tokens when an independent research study confirmed what the early adopters (brands and ESPs) had started to sense: tokens were driving changes in behaviour and solving the attention recession problem. This kickstarted the flywheel for tokens adoption: more brands started using them in emails directly and via email service providers, the exchange started buzzing as brands needed to buy tokens in the spot market leading to a steady increase in value, and consumers started wanting to earn more tokens by doing the actions desired by brands.
The problem of Attention Recession finally had a solution. Tokens embedded in emails helped drive meaningful actions. Brands controlled who could earn tokens, and thus had some measure of control on preventing fraudulent and frivolous behaviour. Consumers liked the fact that their attention (time) was no longer being taken for granted.
The success of the MuCo model led to calls for improving its governance. MuCo was a corporate entity, and even though there was a clear set of rules defining the issuance of Mu, there was a desire that it should be organised as an entity where no single person could wield power and change the rules to the detriment of the community.
It was time for MuCo to transition to MuDAO.
Written from a future viewpoint…
A DAO (decentralised autonomous organisation) is run by rules, not rulers. It can be considered to be a ‘codified corporation.’ MuCo switched its governance model to becoming a MuDAO. The tokens now resided on the blockchain and were tamper-proof. Governance decisions (not that many were needed) were made by the community consisting of miners and developers.
The creation of MuDAO greatly increased the confidence in the tokens. The use cases multiplied – from other push messaging channels (SMS, push notifications and WhatsApp) to usage in apps and on websites of brands to nudge customers in their journey. With every new application, the value of the µ also increased making it even more attractive for customers. The tokens also started appearing in ads – the value exchange being tokens for time.
The DAO structure ensured trust. There was no fear that the token value could be debased. The very factors that had driven the popularity of Bitcoin in its early years also helped popularise the µ tokens. The focus was still around attention, engagement and habit creation.
The origin of µ in the martech world was what led to its success. There had been many initiatives that focused on new customer acquisition which offered incentives for watching ads or clicking on links. The big difference was that in the adtech world, brands had no control on who was being targeted and thus there was plenty of scope for abuse. In the martech world, brands could decide which of their customers were offered the rewards; their identity was known, there was a transaction history, and the customers were in a journey that brands with the tokens could direct.
The permission-only Micronbox helped eliminate the spam problem entirely. Only messages with an opt-in would compete for an end user’s attention, with the tokens offering the incentive add-on. This led to a better relationship between brands and their customers: brands now had a hotline to their customers, and customers had brands competing for and paying for their attention.
MuDAO became a very good crypto case study. The underlying use of blockchain enabled the creation of a trustless and permissionless system. No single entity could mould the outcome to their wishes. The voluntary trades on the exchange determined the price of the tokens. An upper cap on the total tokens in circulation (much like the 21 million cap for Bitcoins) created the scarcity that helped drive a steady increase in the value of the tokens, benefiting the entire Attention ecosystem.
Written from a future viewpoint…
DAO vs Duo
With the attention problem solved, it was time to move on to two other challenges faced by brands – repeat purchases (loyalty) and the rapidly increasing cost of new customer acquisition. MuDAO’s tokens offered the answer, and in doing so, upended the adtech world.
A bit of history is in order to better understand loyalty and adtech. Brands came up with loyalty programs for the twin purposes of collecting data and driving repeat purchases. The airline frequent flyer programs were the most successful among loyalty programs – because the differential between cost and value was very high. (A free ticket based on miles that we treasure costs the airline practically nothing.) The flip side of the proliferation of loyalty programs was that it became impossible for customers to track their points, and in many cases, the points earned were too small to be meaningfully redeemed. What was needed was a pan-brand loyalty program, but one which could not be used by any single entity to its advantage. For a brief period, airline loyalty programs played the role very well.
In the adtech world, Google and Facebook had established a powerful duopoly. Any new digital customer acquisition had to be driven via these two platforms. Their auction-based system ensured that bidding for popular keywords or targeting desirable customer segments drove prices higher. The “cost of a click” increasingly hurt profits as brands were forced to compete in a war that most could not win. Half of the adtech spends were wasted because of reacquisition and wrong acquisition, but brands had no alternative but to keep the spends going. The answer lay not in trying to optimise adtech spending but in solving the martech problem – deepening relationships with existing customers.
The solution to both the loyalty and adtech problems lay in the martech world. If a brand’s existing customers could pay attention to incoming messages, it would be much easier to drive repeat transactions thus solving the loyalty problems. If a brand’s most loyal customers (“Best Customers”) could refer their family and friends, the cost of new customer acquisition could be sharply reduced. What was needed was an incentive mechanism to enable brands to persuade customers for their time and network. This is where MuDAO with its tokens came in.
The attention and engagement tokens had no reason to be limited to just that; brands could incentivise transactions with them. The advantage of µ was that it worked across brands already, and there was an exchange where it could easily be purchased by brands. Consumers loved the tokens – the marketplace gave them spending options, and it also served as an investment that appreciated steadily.
The same hotline that brands had crafted for the upstream of transactions (attention and engagement) could now work to fast-track transactions with the tokens serving as the replacement for a brand’s own loyalty program. Customers were also selectively incentivised for referrals – a zero-cost method for new customer acquisition. The key for both these programs was switching budgets from adtech to martech. The 10% marketing budget spend on existing customers (martech) rapidly rose as the wasteful adtech spending was eliminated. In this switch, brands also discovered their path to profitability as the RoI for martech spending was much greater than that of adtech.
The Martech Era
Written from a future viewpoint…
So was born the martech era – the µniverse with a token (µ) at its heart! A universal token for attention, engagement and transactions. A token that worked across brands. A token where the price was set by no one and everyone. A token whose value was determined by the collective actions of the ecosystem of brands, service providers and customers. A token that took marketing into the Web3 world. A token, which by its simple idea of putting a price to an individual’s attention, transformed brand-customer relationships. A token where brands knew that their voice would be heard (and not ignored) by their customers. A token that delighted customers. A token that put brands on the path to exponential, forever, profitable growth. A token that ended the adtech era and ushered in the martech era.
It was always a travesty that brands spent 90% of their marketing budgets on acquiring new customers and just 10% on retention and engagement with their existing customers. Until the emergence of MuDAO, there was no easy solution. Brands had only three ways to bring their existing customers to their properties (websites/apps) – either they were a monopoly, or they had phenomenal mental recall so consumers acted on their own to initiate the engagement, or they had to rely on push messages to pull people. With every brand trying to do the same, the inboxes of consumers were flooded. This information overload caused the attention recession problem which led to retention recession, and which in turn led to continuous churn – with the result that even more money was spent on the adtech platforms for reacquisition.
The tokens of MuDAO stopped the bleeding spends and also transformed the end customer mindset from ‘delete to delight.’ The gamification of the inbox rewarded time, attention and engagement. It created a desire to check out new messages from brands. It brought in excitement and rewards. MuDAO solved the problem by following Buckminister Fuller’s advice: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
The success of MuDAO was a great example of Web3 and the blockchain in action. For many years, experts had questioned the usefulness of blockchain beyond the creation of cryptocurrencies, many with dubious value. MuDAO created genuine value for all stakeholders – brands benefited from their customers’ attention, and customers were paid for their time. Waste on both sides was reduced – brands spent less, and customers got less spam. An economic arrangement built in a decentralised manner helped address an otherwise intractable problem.
Back to the present…
What I have written in this series is a vision of tomorrow’s world and shown a pathway to getting there. There are many different futures that can be imagined. I don’t know if it will play out the way I have articulated, but what I do know is that some of us have to envision it and start talking about it, so some entrepreneurs can get inspired and start building it out. Constructing the µniverse will be a big leap. Every business in the world has customers, and if that relationship can be made better, we all benefit! The Martech era and the µniverse are ideas whose time has come.