Traditional product analytics tools fall short in Web3. They can't see onchain data, leaving product teams to guess about what drives real product usage. This forces a reliance on vanity metrics, like raw transaction counts, instead of sound product metrics.
Effective Web3 growth strategies require moving beyond these surface-level numbers. This guide covers the unique role of a Product Manager (PM) in Web3, essential growth strategies for onchain apps, and the key metrics needed to make data-driven decisions.
What a Product Manager Does in Web3
A Web3 PM's role is different from its Web2 counterpart. The user journey is split between onchain and offchain activity, which requires a new approach to product management.
Community is everything. In Web3, users are not just customers; they are stakeholders who often participate in governance and have a direct impact on the product's direction. A PM must engage with this community to gather feedback and build trust.
Understanding tokenomics is also crucial. The design of a project's token can directly influence user behavior, and a savvy PM uses this to drive adoption and long-term growth.
Product Growth Strategies for PMs in Web3
Growth strategies must adapt as a project matures. What works for finding early adopters is different from what's needed to scale.
Early Stage: Finding Product-Market Fit
The initial focus should be on community building. Platforms like Discord and Telegram are essential for engaging early adopters. Using tools to run quests and campaigns can attract initial users and, more importantly, generate feedback to refine the product. The goal is to build a core group of advocates who believe in the vision.
Growth Stage: Scaling the Product
Once product-market fit is established, the focus shifts to user acquisition and retention. This is where product analytics become critical. By identifying which features or channels drive engagement, teams can double down on what works. At this stage, it's time to layer on new channels like partnerships, paid growth, and referral programs to accelerate adoption.
Key Web3 Growth Metrics to Track
To measure what matters, PMs need to track metrics that reflect genuine user activity, not just noise.
Active Users: Go beyond simple wallet counts. Use Qualified Daily Active Users (DAUs) to filter out bots and airdrop farmers to measure real, sustained engagement.
Retention: Track how many users return to your app over time. High retention is a strong indicator that your product provides real value.
LTV:CAC Ratio: The Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio shows if your growth is profitable. A healthy ratio proves your acquisition strategy is sustainable.
How Project Managers Drive Growth with Analytics
You can't improve what you don't measure. PMs need a unified view of the entire user journey, from the first website visit to onchain transactions.
Funnel Analysis: Track users through key steps, like connecting a wallet or completing a swap. This helps identify where users drop off so you can fix friction points and improve conversion rates.
Cohort Analysis: Group users by when they joined. Analyzing the behavior of different cohorts helps identify the actions that lead to long-term retention.
User Behavior Analytics: See exactly how users interact with each part of your product to spot patterns and pain points fast.
Audience Insights: Build wallet profiles and segment users to discover who your most valuable customers are.
Retention Analytics: Track which users stick around and why. Use retention reports to spot successful onboarding flows and surface weak spots before they hurt growth.
Data-Driven Decisions: With these insights, PMs can prioritize features on the roadmap that will have the biggest impact on growth, retention, and revenue.
Build a Better Onchain App
A successful Web3 PM understands the community, focuses on the right Web3 growth metrics, and uses analytics to make informed decisions. It's time to stop guessing and start measuring what truly matters for onchain growth.
Formo gives you the tools to implement these strategies today. See how you can connect your on- and offchain data to get a clear picture of your users. Try Formo today.
Frequently Asked Questions
What are the most important Web3 product metrics for measuring growth?
Focus on metrics that reflect real user engagement and value creation. Instead of vanity metrics, track user retention rates to see if people are returning to your app. Analyze LTV:CAC (Lifetime Value to Customer Acquisition Cost) to ensure your growth is sustainable and profitable. It’s also vital to measure onchain activity specific to your product, like transaction volume or smart contract interactions. Using wallet funnels helps visualize the user journey from initial contact to core actions, revealing where users drop off and what drives conversion. These core Web3 metrics provide a clear view of your product’s health and growth potential.
How can product managers use wallet funnels to optimize user journeys and drive growth in Web3?
Wallet funnels give product managers a clear, step-by-step view of the user journey. By tracking each stage—from initial interaction to onchain actions—PMs can quickly spot friction points where users drop off. This data empowers them to refine onboarding, simplify flows, and guide users toward high-value actions. Working with wallet funnels lets PMs set targeted improvements, measure the impact of changes, and iterate fast. Paired with metrics like retention and LTV:CAC, funnel insights help PMs allocate resources where they’ll move the needle most for growth.
How can product managers use analytics and wallet funnels to improve Web3 product performance?
Product managers can leverage analytics and wallet funnels to pinpoint friction points and optimize the user journey. Start by tracking each stage, from onboarding to core onchain actions, and identify where users drop off. Use these insights to streamline flows and boost activation rates. Pair funnel data with metrics like retention and LTV:CAC to prioritize features that drive engagement. Regularly experiment, measure changes, and iterate—this data-driven approach ensures you’re focusing on improvements that move key product metrics and deliver more value to your users.
