come for the memecoin, stay for the network

I love the idea of business ‘entry points’ that Chris Dixon’s famous blog post, ‘come for the tool, stay for the network’, describes. The playbook of attracting users to some tool which gives them immediate benefit, and then building a network based on this attraction, always felt brilliant to me. Instagram is a famous example in which it started as a filter tool (single-player mode) and then extended into a social network (multiplayer mode).

I think this playbook happens in quite a similar way around crypto memecoins or generally speculation. Users that speculate on memecoins need to jump through some fiery hoops to get to the point where they can purchase the memecoins - they need to download a wallet, onramp (most new memecoins are not listed immediately on centralized exchanges), and learn to interact with the respective blockchain. A lot of time this also requires some degree of technical savviness, because these new memecoins are only available in new applications that live on the crypto frontier.

After this initial bootstrapping phase (‘come for the memecoin’), there is a group of users that went through the learning curve of using the chain and its tooling, plus some initial liquidity they seeded. Because capital that flowed into the chain doesn’t easily flow out, there is now some ‘potential energy’ in the chain in the form of educated users and some initial locked capital.

Builders looking to build some new blockchain apps now have a distribution of users they can interact with. Getting users that already onboarded the chain is much easier than persuading them to jump through the fiery hoops of the learning curve from scratch. So although memecoin speculation is a casino game, it does seed some potential in the respective chain. That is why for new blockchains without any substantial usage, becoming a short-term casino has some obvious benefits.