Rajesh Jain

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!

Early 2020s

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.

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!

Arun’s Micronbox

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.