When is a PFP Project Not JUST A PFP Project?
There are a HUGE amount of people building in the Web3/NFT space right now. But are they building the right things? We hear a lot about product market fit. I think that the ever-shifting sands of Web3 trends tend to swing wildly on a weekly basis, so determining what to build can be incredibly challenging. And chances are, if you don’t have something in the market by now, you might struggle to break through the malaise, stagnation, and rigidity of the space.
Can a space be rigid and incredibly tumultuous at the same time? I believe it can. The rigidity is seen in the mentality of many of the entrenched Web3 ‘degens’ — those OGs in the space who have been flipping jpegs since the early days. The speculative drive is strong — and the financial motivations that attracted so many to the space in 2021 are no long as attainable — but the degens are still hunting for that ‘needle in a haystack’ PFP project that can 10X overnight.
I personally don’t see PFP projects and pure entertainment IP plays as viable in the this market right now. There will certainly be a few that sneak into mainstream consciousness and pump (i.e. Renga, DigiDaigaku), but the vast majority of projects will fail — even those with great art, great founders, and great communities. The barrier to entry is low, but the barrier to success is incredibly high.
So then the creator question shifts to ‘What the heck should I launch’? Well . . . I think that the future of PFP will be rooted in broad utility that may have little to no IP associated with the story or content. Rather, that PFP will serve as access — and the utility behind it will be the key value driver. What utility you ask? Well . . . let me give you an example.
At GenCity Labs, we have a three pronged approach to the Web3 universe. This certainly isn’t visible when you view only our generative NFT collections (NFH Heroes/Villains/Gods). That is the first prong of our business, and the most visible. That said, true growth and scale lie elsewhere. Let me explain:
Web3 Strategy and Experimentation
Non-Fungible Heroes sits squarely in the ‘Web3 native’ side of the business. We are creating community tools to empower storytelling, content creation, and participation. We have signed with WME to represent us in Hollywood as our creative team collects concepts from the collectors based on brainstorms, games, Discord participation, and more. It’s an awesome display of what happens when like-minded collectors come together to build something — and we are making significant progress on the IP goals of the project.
That said, if IP advancement was our ONLY source of revenue — we’d be in trouble. The time it takes Hollywood to catch up and provide substantial revenue to IP is . . . not fast. And while a sold out launch gave us solid startup capital, it won’t support the project team indefinitely. And ‘selling more NFTs’ is not a scalable revenue option for us (or any project not named Bored Ape Yacht Club). So — we evolve.
Agency Services
In a former life, I built out an experience design studio creating interactive experiences for Fortune 500 brands, from zero revenue to eight figures in sales in seven years. Knowing the appetite for brands and creators to explore the space, we have turned part of our dev and design team to the task of helping provide an onramp for them to jump into this crazy world of Web3. And it’s working — the revenue we’re generating from the agency side of the business is solid, and can sustain the team indefinitely. It’s a great business, but it’s not as scalable as we’d like . . . and it makes it difficult to drive value back to the collection (although all of our clients end up with NFH characters to use as PFPs during our Zoom and Teams calls 😉). So what’s next?
Platform
Building out toolsets that can scale massively and broadly apply to just about anyone entering the space — the ‘picks and shovels’ approach — is where you will find the largest opportunities. We’ve seen creators build anything from Web3 analytics tools, smart contract deployers, DAO managers, and more. THIS is the space that, if the product market fit is right, can provide rocket fuel for a project and launch it into the stratosphere. And THIS is the space in which we’re building. The biggest pain points for brands are understanding community formation, getting them to engage, and holding their attention. So why not build towards that?
Bringing it back to Non-Fungible Heroes
Now — you may find yourself asking how that benefits our launch project, NFH. Well — we have some unique and never-before-attempted plans in the works to provide platform access, discount, and more to anyone that holds NFH NFTs. Not only can we provide enterprise professionals with the start of their Web3 origin story/digital identity, but we can incentivize them to hold those for discounted access and other benefits within our platform. So NFH will benefit from both exposure AND additional customer loyalty — while also pushing creative professionals towards the storytelling side of our business. They’ll be equipped with insight into the incredible community participation and contributions we’re leading.
The moral of the story? Build BIG. Think beyond the PFP.
And while I think that launching an NFT project to support and provide a central hub/offering for clients is definitely a great path for many creators, if you’re building simply to get something out the door without much of a plan for the future . . . then you’re building in the past.
