The 5% Web3 Utility Filter
Separate durable utility from the 95% of experiments likely to disappear
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 96%
The filter starts from the assumption that an emerging market can be simultaneously transformative and filled with weak projects. Instead of judging Web3 by its average product, assess the small minority of applications that expose a durable underlying utility. Define the real job performed, look for repeated user behavior, and compare it with earlier internet cycles in which many competitors disappeared before durable winners emerged. Reject projects whose value depends mainly on speculative prices, jargon, or temporary incentives. Continue monitoring the surviving utilities as products improve and the market clears away poor implementations. The output is not a blanket verdict on Web3, but a focused list of mechanisms worth learning, testing, or building around.
Origin
Extracted from Marketing Against The Grain during a discussion of how useful Web3 applications may emerge from a market dominated by short-lived experiments.
Core principles
- 01Expect most early-market projects to fail
- 02Judge categories by their strongest underlying utilities
- 03Treat experimentation and market cleansing as normal
- 04Use historical technology cycles to distinguish noise from potential
How to run it
- 1
Assume a noisy market
Begin with the expectation that most products in a new technology category will be weak, redundant, or temporary. Do not mistake a high failure rate for proof that the entire category lacks value.
Pro tip Study comparable periods such as early search engines or social networks.
Watch out Do not use the 95% estimate as a literal measured market statistic.
- 2
Isolate the core utility
Describe what the technology enables without referring to token prices, brands, or technical jargon. State the user problem and the new capability in plain language.
Pro tip Complete the sentence: This lets a user do something valuable that was previously difficult because...
Watch out A novel technical architecture is not itself a user benefit.
- 3
Look for behavioral evidence
Find applications where people repeatedly use, recommend, or pay for the utility. Give more weight to sustained behavior than announcements or valuations.
Pro tip Track retention, referrals, and non-subsidized usage where available.
Watch out Temporary rewards can make weak demand appear durable.
- 4
Separate utility from implementation
Decide whether a disappointing product invalidates the mechanism or merely represents a poor execution of it. Preserve promising mechanisms while rejecting weak implementations.
Pro tip Compare multiple products attempting the same job.
Watch out Do not defend every product merely because its category has potential.
- 5
Maintain a focused watchlist
Retain only the strongest utilities and revisit them as the market develops. Update the list when genuine use cases, revenue models, or adoption signals appear.
Pro tip Record what evidence would change each current judgment.
Watch out Early conviction should remain provisional.
In the wild
A retailer reviews twenty token-based loyalty tools. Rather than evaluating token prices or community hype, the team asks whether portable ownership creates a better customer experience than an ordinary points database. It pilots only two products showing repeat customer use and clear interoperability, while rejecting the rest.
→ The retailer tests the underlying utility without committing to the entire speculative category.
A strategist reviewing a crowded social-app market expects most competitors to disappear. The strategist compares the products by the durable job they perform, evidence of habitual use, and user referrals rather than treating the number of launches as proof of a lasting market.
→ Resources concentrate on the few mechanisms with credible adoption signals.
Common mistakes
Judging the category by its worst projects
A market full of weak experiments can still contain a small number of transformative utilities. Evaluate the mechanism separately from low-quality implementations.
Calling every novelty part of the 5%
Optimism becomes indiscriminate when every project is defended as an exception. Demand clear user value and behavioral evidence.
Confusing valuation with utility
A high token price or billion-dollar market capitalization does not prove that a product creates durable value.
Is it for you?
Best for
It is best for marketers, founders, and investors assessing noisy early-stage technology markets.
Not ideal for
It is not ideal for decisions requiring reliable short-term revenue or mature-market evidence.
From the transcript
“If you truly believe in web 3 and truly believe in the core underlying utility of web 3, it's pretty normal for 95% of the…”
“It's really the 5% that you and I obsess over what is the 5%.”
“Most of what we talk about isn't going to last.”
From the episode
How Web 3 Will Impact Your Marketing