Insights 002: The biggest mistake of companies and celebrities when launching an NFT collection
Many companies and celebrities are creating NFT collections. Despite not receiving much attention in the news, there are several collections of these that have gone wrong. But what is the main reason?
The number of companies and celebrities entering the crypto world is undeniably on the rise. The same goes for the interest in NFT collections. You'll find news about a wide range of companies, industries, and famous individuals creating their collections. And when I say diverse, I mean truly diverse, including names like Playboy, Alpha Romeo, Sylvester Stallone, Pringles, Quentin Tarantino, Matrix, Nike, among many others.
However, what we don't see as often in the news are companies and celebrities who have launched NFT collections that didn't succeed or at least were not well-received by the public. Despite not grabbing as much media attention as someone like Neymar buying a Bored Ape, there are quite a few collections that didn't take off. There's an interesting aspect in most of them that I believe constitutes the biggest mistake and the main reason they didn't meet their creators' expectations. That's precisely what I want to address in today's article, and I also want to present some potential solutions.
Communities and web3
A significant portion of the community involved in blockchain, NFTs, and even what we call the Metaverse believes that the entry of major corporations like JP Morgan and Andreessen Horowitz into the decentralized universe serves as a sort of validation of this new technology.
I don't necessarily disagree with this idea, but I believe that in some cases, there is an overemphasis on it. Blockchain is already validated, regardless of the adoption by these companies, and the same holds true for NFTs.
Nevertheless, some of these companies and celebrities have successfully transitioned their web2 communities and customers to web3. I would say that Nike and Adidas are excellent examples of this migration process. But those who failed to understand that communities are the heart of web3 most likely stumbled when launching an NFT collection.
Not understanding communities is the biggest mistake for those who want to explore web3.
Some thought that because they had a large number of fans and customers in web2, they would be successful in web3. But that's not exactly how things work. In this new universe, large companies are like foreigners; they don't belong to this place, at least not initially. Don't get me wrong; web3 is for everyone. However, if your company enters this world treating users as commodities, it has already lost.
NFT collections that didn't take off
WWE is a clear example of this approach, as even with a huge fan base, their NFT collection sold only 37 out of 500 units at the launch. Some might argue that the main reason for this failure was the $1,000 price per NFT. However, I continue to believe that if they had focused on the community, bringing value to web3 rather than just selling a benefits club, the result would have been different.
Furthermore, we also have the Ubisoft collection that sold only $400. There's also the singer Chris Brown, who sold only 3% of his NFT collection at launch. This is just to give you an idea that success in the real world doesn't necessarily translate to success in the metaverse.
All of this without considering the collections that were canceled even before they were launched, like the one by my namesake, Tim Heidecker, and the virtual band Gorillaz. In these cases, the main reason was the backlash due to the environmental impact of NFTs, which the media often misguidedly emphasizes.
Possible solutions
Before thinking about launching anything, get involved. This applies to companies, artists, projects, and basically everyone. Contribute to an existing community without expecting anything in return. Buy NFTs, give them as gifts, interact with people in this ecosystem. This point is crucial for you to understand that NFTs are not just a product to be sold. They are much closer to a partnership or a collaboration with the community.
Metaverse-native companies are already worth much more than large multinationals. Even if you or your company have many followers in web2, remember, you are the newcomer, you are the foreigner here. So, being the intern willing to learn and contribute can be much more effective than just launching an NFT collection.
And last but not least, the community comes before your NFT project.