For John Wu (MBA 2000), “Web3” means more than technological innovation. “It’s a mindset,” he says of the movement toward a decentralized internet that accelerates innovation and gives end users greater collaboration with businesses. “It’s a transformative shift in thinking, an upgrade to traditional approaches in building enterprises, their governance, and growth.’’ The technology is open source, so different teams can build together. Participants value open information flow, universal accessibility, and decentralized governance of businesses and products through community.

Wu is the president of Ava Labs, a Web3 company that helps traditional businesses use crypto-based innovations in their products. When he was a student at HBS, Wu couldn’t have imagined such a business. Ava Labs built the blockchain network, Avalanche, to streamline the transfer of assets. In the 1990s, businesses were discovering the first version of the internet, Web 1.0. It had static web pages, was open source, built by web developers, and meant to be decentralized. Only a few forward-thinking businesses were imagining what would become Web 2.0: an interactive era controlled by a few big companies. Facebook and Google, for example, own user data and keep 100 percent of profits with advertisers. In Web3, companies share revenue with users. “This is a new way to organize economic activity and incentivize humans,” Wu says about the blockchain business models emerging in gaming, finance, art, and consumer businesses.

Wu recalls studying and discussing the network effects of the internet with his HBS classmates and realized these effects could unlock exponential growth for certain companies. He later invested in those types of Web 2.0 companies and became the founder and CEO of Sureview Capital. “Now with blockchain, network effects are turbocharged, while bringing back principles of open innovation that Web 1.0 had,” Wu says.

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Building open-source applications with logic encoded in smart contracts helps businesses get to market faster. They benefit from the network effects of communities, according to Wu. A ‘’utility token’’ draws in a community from Day 1, supporting projects through engineering, quality assurance, marketing, and sales. Tokens are distributed to stakeholders for their contributions and give holders a voice in the future of the company through decentralized autonomous organizations (DAOs). Founders, investors, and developers all have a say in governing the company. “Suddenly, you’re bootstrapping the fundraising, development, and user base all at once. The users then contribute to marketing and sales,” Wu says.

Ava Labs has about 250 employees and is using Avalanche to introduce elements of Web3 into the business models of established companies. In finance, institutions such as KKR, J.P. Morgan, and Citi are using Avalanche to tokenize and trade alternative assets and foreign exchange. Within government, Ava Labs and Deloitte have partnered to create a blockchain-based disaster relief platform for FEMA. Meanwhile, in the consumer sector, Ava Labs and SK Planet, a subsidiary of the South Korean conglomerate SK, collaborated to build a loyalty platform using Web3 components on Avalanche.

Outside of Ava Labs, Wu is active in the Harvard ecosystem, where he finds many important conversations about the future of Web3 taking place. ‘’Web 3.0 innovation will create new business models in all areas of technology, and Harvard needs to be at the forefront,’’ says Wu. He believes it is imperative that there are events, courses, cases, and seminars covering these subjects. Ava Labs itself was the subject of two cases, the most recent one written last year by Shikhar Ghosh, the MBA Class of 1961 Professor of Management Practice of Business Administration, and Senior Researcher Liang Wu (MBA 2018).

Through his work with the Rock Center for Entrepreneurship, Wu speaks with entrepreneurs and advocates for both open-source and closed-source innovation, noting the enduring impact of community-built open-source software like Linux. Within the Crypto, Fintech, and Web3 Lab led by HBS faculty, he draws parallels in the innovation trajectories of both blockchain and artificial intelligence when growth is led by foundations rather than corporations.

“This is playing itself out in real time,” Wu says. “Learning about new business models requires literature and cases. HBS continues its mission to create future business leaders by teaching lessons that are ahead of their time.”

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