Friend.tech hints on luxury online experiences
Original author: Hill
Compiled by: Qianwen, ChainCatcher
This article is not meant to be a rant about Friend.tech, and I don’t think the product in its current form can replace Twitter (and it probably wasn’t meant to be), but it does give luxury social media a shot in the arm, and has the potential to inspire a new generation of luxury experiences online.
What is Friend.tech?
There is already a lot of content available on how Friend.tech works, so this article will just cover some common misunderstandings I see in the community.
Myth 1: Friend.tech is an exclusive content platform - It appears so on the surface, but it is not the best use case for this. It is challenging to maintain exclusive content in other ways besides ongoing subscription revenue. Long-term growth requires continuous production of new high-quality content. Maintaining a uniform user cost is essential to minimize information arbitrage. Friend.tech does not provide creators with ongoing subscription revenue, instead, it only allows income through transaction fees.
Myth 2: Friend.tech is a platform for creators to gain popularity - Yes, creators can be listed as "hot" or "trending". However, as the price of the key increases, fewer and fewer users can afford the key, so the creators' content can reach fewer and fewer users and cannot expand their user base.
To understand what Friend.tech is, I want to start with the biggest difference between Friend.tech users and regular social media users. It is worth noting that Friend.tech users consider the funds they put into purchasing keys as an investment rather than an expense. However, when they put money in, they feel that they are using the entire amount of the investment to support the creator, rather than just using the actual 5% fee.
Therefore, I think Friend.tech is a social platform with luxury attributes, on which users can gain the opportunity to have in-depth communication with creators through investment.
Luxury attributes
Luxury goods vary in their definition, some define them in terms of luxury products: the demand for luxury goods increases as their price increases. Others call them “veblen goods”, which have similar properties but also affect the social status of owning/using the item. One very interesting phenomenon we see with luxury goods is that the price paid is much higher than the pure utility of the product. A designer bag can hold as much stuff as a regular bag, but the premium of the designer bag comes from its utility, which is a status symbol. Friend.tech illustrates this well. It costs a lot to buy a key, and as one's keys become more expensive, more buyers will come to chase the profit. It is a status symbol. Creators will compare the price of their keys with each other, and the more expensive the key, the more it can show off. People will think they paid full price for the key, but in fact, they only paid 5% of the fee, which is far less than the total investment amount to buy the key.
Social attributes
Friend.tech is an interesting social platform. Creators and users can communicate with each other only if the user holds the creator's key. Users cannot communicate directly with other users. Creators can talk to all users. Users and creators are not on equal footing, instead, creators are at the top and have access to all information, while users can only access limited information published by creators.
Investment attributes
Instead of investing X dollars all at once/monthly, the user invests 100 times X dollars. This amount is much larger and the user's stake is tied to what he/she invests in. This symbolizes a trust and also reduces the actual cost of using the platform if the investment makes money.
Opportunities to have in-depth exchanges with creators
It is not difficult to establish a connection with creators. Users can send a message to a creator on Twitter or leave a comment under their tweet. However, establishing a deep connection with creators is a challenge. Because there is no 100% guarantee that the creator will see and respond when users send a message to the creator.
Friend.tech has created such a platform. This is not the first “pay for creators’ time” platform. Patreon and OnlyFans are great platforms for users to attract the attention of creators. However, Patreon and OnlyFans are not a marketplace, and creators have no easy way to set the “right” barrier to entry for users, and they often set arbitrary prices and fail to attract the right people. Friend.tech sets the barrier to entry with the price of the key. The priority of the user is determined by the price of the key, which measures the strong desire to engage in a dialogue with the creator. Ownership of the key represents an exchangeable item that unlocks the right to dialogue with the creator.
In summary, we can see the first example of a market being created based on personal social connections. The key that represents this social connection is both a luxury item and an investable instrument.
Implications for social applications
Some content in the social space is investable.
Economic activity on social or content platforms has always been pure spending, such as paying for YouTube Premium, WhatsApp, OnlyFans, and SuperLikes on Tinder. They do not allow users to "invest" or "trade" a right or item. On Friend.tech, users can invest in social relationships and trade them. This brings about a market-based pricing mechanism that can discover prices more efficiently.
Social relationships can also have luxury attributes.
Friend.tech's products have high social qualities and represent high status. As the price goes up, the appeal increases, and users feel that they are not only paying for pure utility, but also for the premium of social attributes. In essence, users spend money on creators as an investment behavior. This kind of expenditure is just consumption behavior on Web2 platforms such as Patreon or OnlyFans.
Trust between creators and users can be publicly demonstrated.
Comparing the Friend.tech experience to Twitter, the most important thing about the financialization of this luxury experience is that the social graph can now be priced on the open market. On Twitter, the social graphs of different users are identical. Creators don’t know which user is more enthusiastic than others. On Friend.tech, creators can easily see who are the earliest (early buyers at low prices), the most “heavyweights” (later buyers at high prices), and the most loyal supporters (firm holders). This brings a new sense of trust between issuers and buyers/holders.
The buyer is essentially depositing his own funds into a pool of funds that is extremely influenced by the issuer, thus creating an intersection of interests between the two parties. This deep trust relationship can only be demonstrated when there is a connection of interests between creators and users. It is even more exciting to price in an open market.
If you’re building a social app in Web3, this is what you can learn from Friend.tech from a product perspective:
Trust is a scarce resource that is undervalued/non-existent in Web2 social applications.
Luxury goods can enhance social status, thereby driving adoption among high-value user groups.
Fundamentally, the act of investing is well suited to the Web3 environment, and therefore necessarily operates in a decentralized and trustless environment.
To make it easier to understand, here are a few examples:
If you’re building the Spotify of Web3, you’d better differentiate yourself by offering carefully curated, exclusive music. To achieve the best curation results, and to make the platform more engaging and fun, you might want to incentivize members to help curate the platform and earn money from the curation, thereby optimizing individual and group incentives. To identify the best curators, you could track and reward specific behaviors on the platform that demonstrate breadth and depth of knowledge.
Marine Snow allows members to participate in the platform with their monthly and annual subscriptions, helping the platform curate the best music and music artists in the world, and owning DCA ownership of the platform itself. Spotify's music curation used to be a consumption behavior: users spent time listening to music. Now, it is an investment behavior, and users pay monthly for songs and musicians.
If you’re building a deluxe version of Bumble, paying $5 for more matches probably isn’t going to work out well. Instead, it might be better to ask users to pay based on a bonding curve of lucky points, where higher points get more matches of higher quality.
For example, Mercurius Club is building a new way to socialize with strangers, in which every message sent and received is financialized. Users are rewarded based on the ratio of received/sent messages, and invest the rewards they receive into social status projects. Essentially, users are not paying to connect with other users, which is a consumption behavior. Instead, users invest their time and energy into meaningful conversations. As the conversation deepens, users are better able to invest their rewards into social status projects, thereby obtaining more "conversation investment opportunities."
If you were to build a Web3 advertising platform that required users to spend time watching an ad and wait for a conversion to happen, you wouldn’t be able to outperform Twitter ads. Instead, giving users a meaningful expected return for investing time in watching ads could be a unique Web3 way to promote Web3 user acquisition.
For example, Vessel is a platform that allows users to collect NFTs from any content from brands on the platform. This includes minting coins from brand articles or events. Instead of just spending time reading content, user "time consumption behavior" becomes a "time investment", investing one's time into "collecting" content, and then potentially being rewarded in upgraded interactions with the brand. This makes watching ads truly meaningful.
All of these cases can transform consumption behavior into investment behavior. This helps build trust through ownership and build social status through holding luxury goods.
We are greatly inspired by the achievements of Friend.tech, and we hope to see more innovations in online/on-chain luxury experiences.
Note: Contributors also include my friends and key holders at Friend.Tech, as well as Siddharth from Superscrypt, Hongyu from Mercurius Club, Tony from Marine Snow, and Steph from VESSEL.
