This is part of a series of interviews with founders and builders in the Web3 space called the Web3 Growth Handbook. The official handbook will be released in the coming months, but you can read all of the other available interviews here.
“My prediction is that there will be an explosion in the use of decentralized storage. With Filecoin going live and infrastructure being built around IPFS, there will be more opportunity to use decentralized storage.”
There’s a visibility problem with Web3 applications. This is true both from a user perspective (getting people to know and use applications as they come out), but also from a development perspective. Terminal is solving the latter. CEO Harrison Hines, a veteran of the Web3 space, is tackling the issue of getting developers important information about their applications in an easy to use way. Data such as total users, activity within the applications, and what wallets are being used are just the start of what Terminal offers.
Founded in August of 2018, Terminal has raised $3.7 million to help build out the monitoring and analytics infrastructure necessary for Web3 applications to not only survive but thrive. The company offers a simple interface to track the important data specific to a given application. This includes dapp performance and usage, infrastructure logging, and notifications.
Harrison took the time to talk with us about how Terminal has grown and hopes to grow, how the Web3 space will look going forward, and more.
What does growth look like to you at Terminal?
Growth for us is definitely defined more in the traditional sense. I would say the way a lot of people in the space look at growth is incorrect. For example, a lot of people are looking at money locked in DeFi. The problem with that measurement is that it could be driven by just one person locking those funds. Numbers like that are a good starting point, but for Terminal, growth is more along the lines of traditional user growth and engagement.
One of the things that’s lacking is being able to track engagement across dapps. With wallets and the way people are interacting with dapps, it’s not as easy to track.
Another difficult part of growth in the ecosystem is that dapps were essentially considered things like MakerDAO, but those types of apps are now considered protocols and dapps are a layer above.
For actual dapps, tracking user metrics and engagement is what we’re focused on building product-wise and that’s what drives how we consider growth. Metrics like the number of dapps on the market are a good metric for tracking the growth of the ecosystem as a whole which then drives everything else. I think of it like how we saw mobile apps. iOS introduced completely new types of applications, and that’s what we’re seeing with Ethereum. We’re starting to see explosive growth in the dapp space. With that in mind, I like tracking whether there are enough projects in the ecosystem to make sure that Terminal can have a business here.
What has been the most difficult part of growing Terminal so far?
I would say outside of the exchanges and lending businesses, Web3 is still in the experimental phase. It’s experimental in the sense of companies still needing to understand the key points of how you build a business in this space. Even with apps that have shown great traction like Metamask or Truffle or DeFi abstraction layers like Argent or InstaDapp or Zerion, user growth is there, but how you build a sustainable business model out of that is still very much unknown.
VC subsidized companies have a ton of pressure to grow their user base. That strategy has backfired a few times in the past. For most companies, it’s a matter of who can raise the most money and keep the company going long enough to win. You have a lot of projects that, because they don’t know how they are going to make money, they shy away from metrics like growth and retention or spending on marketing because there’s no clarity on the other side to show what you get out of investing in those things.
For anyone trying to sell a product in this space, especially if you want to charge for it, you have to walk a delicate path between what decentralized developers and the decentralized ecosystem needs and what offers enough value that people would pay for it. I feel there’s a big supply and demand imbalance. There are a lot of companies building tooling and infrastructure, but there aren’t a lot of apps that can spend a ton of money on these products. That’s a positive side of the VC subsidies because it does take time to lay the foundation and because it’s a necessary evil to build products and get people using those products.
Clearly, there are a lot of problems to solve around growth, but what do you think needs to happen to overcome the general growth challenges in the space?
I think a few things need to happen. One is the ability to track your application data needs to get better. That’s specifically what Terminal is focusing on. Being able to provide these dapps with the tools to get visibility into their apps to start iterating and figuring out what’s working and what’s not. A lot of people are doing similar things along the value chain for areas such as onboarding.
Other things that need to happen include developers figuring out how to monetize. Some experimentation is good, but you need to make money. In that same vein, developers need to start caring more about growth metrics. Regardless of whether you have figured out a business model or whether you have raised money or not, you’re going to eventually need more capital. So if you walk into an investor meeting and don’t understand whether you’ve grown month over month or what your conversion rate is, you’re in trouble. Even if you don’t have a business model yet, in Web2, people took big bets that if you attracted a big user base and built a good product, you’d be able to monetize that user base somehow. But the big caveat was you had to be able to show user growth metrics. We’re starting to get more mature entrepreneurs in the space that are starting to recognize this and think about how to get these numbers in a way that matches the Web3 ethos.
2020 will be a year where things get serious and to compete you're going to have to separate yourself somehow. Taking those things more seriously will benefit the ecosystem as a whole
What tools do you wish existed to help with growth in Web3?
I would say there are a few things that can be very beneficial. With Terminal, it is our main focus. Rather than take a contract and on-chain data approach, we’re taking an application-specific approach so that we can surface information specific to these applications so that we can provide info to these apps that they would normally get from google analytics or segment. They can start tracking conversion through and through with Terminal.
Besides the data itself to tell you what’s going on, what I think would be very helpful are tools that let you execute on the results of the data. You have the information and you’re staring at it and the growth isn’t going the way you want, so what do you do with the data? I think there are some unique opportunities to do marketing and acquisition using that data. I think most people in the Web3 space have only really tried airdrops to attract users. If you think about Uber or any referral or incentive acquisition program that has worked, it’s not that that they just gave away money, it’s that you take your first ride and THEN we’ll give you a credit. Providing a way for applications to acquire users through goals that are specific to them and their success could be important.
Better onboarding tools are going to be important as well. For attracting the non-crypto user base, you don’t necessarily need to know anything is touching Web3 until it’s necessary or maybe it’s disguised entirely. The more that gets disguised, the better things will be. For onboarding stuff, it’s important to have an option to let someone use the dapp as pure Web3 but providing the option to let the user use the app in a more normal way will go a really long way.
What are your predictions for Web3/Blockchain growth in 2020?
My prediction is that there will be an explosion in the use of decentralized storage. With Filecoin going live and infrastructure being built around IPFS, there will be more opportunity to use decentralized storage. A lot of dapps are centralized in data storage still. There will be growth in the category of dapps, not just ones using smart contracts. Many might just use decentralized infrastructure plus IPFS or 3Box.
If you’re building a decentralized application, you should care about the data that makes your app tick. Terminal can help provide this data in a clean, easy-to-use way. Check them out today.