How brands can avoid reputation hits with NFT drops (with examples)
Many brands are making moves towards web3. Let’s explore how the journey has been for some…
Brands are looking at ENS domains, metaverse experiences, crypto buys and NFT drops to name a few. We’ve seen crazy successful wins with iPhone1-like anticipation. We’ve also seeing badly managed first moves. This can lead to reputations hits. While we do appreciate bold moves, smart planning and the right partnerships are key. With this in place, brands can magnify the chance of success with strong on-ramps into Web3.
I’ve seen criticism on Twitter?from NFT enthusiasts who aren’t in support of big brands stepping into this space. They've felt this space is for creators, collectors, tech elite, investors, and gamers. Sentiment in the creator community points to big brands failing in their web3 activities. They feel big brands are missing the mark. Lower tier brands and ground level movements (with deep communities) are seen as more legit. This is due to pulling in the right partners, coordination of systems and communications for drops. The feeling is big brands can do more to collaborate with those who have proven experience.
Understanding the driving force for NFTs
NFTs started with digital art. From simple images right through to complex augmented reality experiences. The initial hype reached fever pitch. According to Reuters?“NFT sales hit $25 billion in 2021, but growth shows signs of slowing”.
Moving beyond the hype,?the value of ‘utility’ is a significant driving force. What does ‘utility’ really mean in this case? It can vary, but think of it as a VIP experience behind the NFT. The value of being a holder beyond the asset itself. For example, the Vee Friends NFT collection?unlocks access and experiences for holders. His VeeCon event is an exclusive conference for Vee Friends NFT holders only. The “Mentor Meeting Mongoose” NFT grants the holder several personal mentoring meetings in NYC with Gary Vee himself. Ignoring utility can put a brand’s reputations at risk.
Recent NFT launches/drops from big brands
Website crashes, bad user experiences, frustrating communications, and confusing utility. These are additional factors putting brand reputation at risk. Here are a few hiccups that I experienced first-hand along with some community reactions.
Warner Bros. Matrix NFT drop Dec 2021?—?Unstable tech & planning issues, yet superb comms.
Warner Bros. partnered with Nifty’s to launch their collection of 100,000 matrix avatars. Let’s just say there were definitely *glitches* in the matrix. I personally considered this NFT opportunity from a couple of reasons:
I’ll cut to the chase. The site crashed. The line paused several times. Users lost their place in line. Transactions failed. Buyer rules were frustrating. However, the communications were superb, and they even offered a make good to compensate. We all received a free ‘glitch in the matrix’ NFT.
In the community Discord and Twitter, the updates were relatively frequent and honest. During the site crash you had some idea of what was going on. A big concern was the plan to allow 25 avatar purchases per account?per day?… but the community spoke, in droves. They voiced their hate of the rule. The operators listened. So, 2hrs after the sale opened, they lowered the purchase limit to 5 total per account. Now more people had the chance to grab some.
Gap Threads NFT drop last week?—?Unstable tech, bad site UX, utility confusion & comms issues
This drop by Gap interested me for similar reasons. Again, an established trusted brand. This was another chance to experience an attempt from a big corporation. The cost of entry was also very low. On opening day (1 of 3 rounds to purchase NFTs) the site crashed. Gap leaned on the positive side of the crash. They posted a celebratory tweet on “breaking the internet”. There was confusion on the purchase process. Was it through connecting a wallet (in this case, Kukai) or was it with a password? Apparently, both worked. Throughout all this we didn’t see any communications from the brand to explain the issues.
Many of us were holding on to see if this drop had more to it than Gap initially described. Surely it couldn’t be simply buying an NFT to unlock the opportunity to buy more NFTs and a hoodie! But it appears that way. As of right now, many saw this as way too much work without any exciting experience attached. Gap hinted at additional digital experiences in the future. We'll see what's in the pipeline.
So, who did it right?
In short, here are some brands that executed well and continue to drive value for their communities.
Thoughts for entering the web3 space
If you drive a brand, these are some aspects to consider.
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Have a long-term vision
Successful projects nail this first. They tell a compelling story to ensure the audience understands the value prop. For example, the Bored Ape Yacht Club (BAYC) NFTs are way more than 10,000 images of different apes. It was launched with an engaging narrative and a clear vision. These Apes come to life in a future-focused world where crypto billionaires hang out at a yacht club. Those members hold a ticket to exclusive experiences IRL and virtually. Think about all the whacky things you could do with that…
Adam Bomb Squad is an NFT project by The Hundreds. There are 25,000 unique combinations of bombs and accompanying backgrounds related to their 20-year history. They are a global, community-based streetwear brand with an emphasis on ‘People Over Product’. In their?public whitepaper,?they state the exact reasons beyond their strong following. They point to identity, community, and sense of ownership. “Beyond the usefulness or quality of a product, people commit to brand names because of those 3 things”. That is a strong drive behind their web3 vision.
Learn from others
So many brands have moved into this space. Study them… see what’s working for them and where others have failed. Hint: pay attention to the social media conversation around previous web3 projects. Both from competitors and others outside your market. Use those signals as input to guide you.
Partner with experts?with proven track records.
Seek out those who have executed well in this space. Creators, artists, collectors, strategists and technologists. Makers, thought-leaders, platform vendors, gamification experts and UX designers. Customers, brand loyalists and social followers. They can all provide amazing value to your mission. Hire them, listen to them, collaborate with them. Be comfortable that you’re as ready as possible.
Know the power of community
Community is everything. Empower your most loyal supporters to be ambassadors. Listen and take guidance from them. They can help shape and drive your strategy and the resulting experiences you create. You may be surprised by the lengths your fans will go to engage. When they feel valued, that can send shockwaves of enthusiasm throughout the community.
Be ready for launch with a proactive plan.
Well before launch day, be ready with a game plan. Be ready for things to go wrong on all levels. Make sure the technology is load tested and able to scale. Make sure the comms team has a crisis management plan complete with ‘if this, then that’ scenarios. Be ready to spin each point of potential failure in your favor.
Don’t try to break the internet
It used to be a claim to fame. Now it’s a reputation killer. The Matrix avatar launch triggered over 300,000 hungry collectors to line up for a shot at those NFT’s. For unprepared websites, 300k users is more than enough to bring an infrastructure crashing down.
Dial up the comms
Communicating clearly, honestly and quickly can be a deal breaker. Guide your audience through the steps and remind them what to expect in the future. Radio silence doesn’t instill confidence. It can kill momentum and suck the life out of your project.
Be Brave
Take calculated yet bold steps. Disrupt normal for your industry. Unlock new ways to connect and reward loyalists. Uncover new potential customers with engaging experiences. Give customers new reasons to support your brand. Strengthen relationships. Document what you learn and be open pivot if it lines up with your vision.
** UPDATED ** Be environmentally conscious with your projects
Energy efficiency and green solutions are hot topics in the world of NFTs and crypto currencies.?The environmental impact of these innovations?have cast doubt for many people.
100 Thieves recently released a free digital collectible with Polygon, a layer 2 blockchain tied to the Ethererum network. They mention the energy impact of acquiring one of their theses was the equivalent carbon impact of sending 2 emails. See here. However, while layer 2 solutions may be independent networks and considered greener, they sit on top of and require the security of the underlying Layer 1 network. So the full picture of energy consumption should be considered.?
Immutable X considers itself 100% carbon neutral as a Layer 2 ethereum platform for NFT marketplaces, games and other applications. They mention all NFTs traded on their platform are completely carbon neutral offsetting the carbon footprint with certified climate conscious partners, Trace and Cool Effect. According to Trace, Immutable is stamped as a ‘climate positive product’.?Since August last year Immutable has?a 1000.0 tCO2 offset with 5714 trees planted and are in support of various environmental efforts in Australia, Indonesia, Nepal and Thailand.?
Green approaches combined with carbon offset efforts will be recognized as environmentally conscious steps by brands as more web3 and NFT related projects are launched.
The opportunity for progressive brands is tremendous.
With web3, brands can completely reimagine how to engage and offer value to supporters. It takes a big vision, solid planning, and transparent execution. But with that, brands can avoid any reputation hits in entering this new space.
Another great article, John! I do think your rosy outlook needs to be tempered with a warning about staying away from scammy behavior or scammy partners and just generally spotting scams. There are so many rugpulls and scams in this space right now, that investing without knowing what you're doing is a huge mistake...
Helping Health & Hospitality reach preferred tomorrow's sooner.
2 年*UPDATE* - I have included another key takeaway on "Be environmentally conscious with your projects". There is much discussing around the environmental impact of NFTs. Green approaches combined with carbon offset efforts will be recognized as environmentally conscious steps by brands as more web3 and NFT related projects are launched. Carbon neutral offsetting can be achieved with certified climate conscious partners such as Trace and Cool Effect. More details including examples in the article.
Father, Founder, Futurist. Building a better future for humanity.
2 年Great article John
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2 年GREAT article John Duffield! Practical roadmap and great learnings. Keep up the good work!
You know I have crazy respect for you John, but my NFT is still "Not Feeling This." The mad rush for these in the brand sitches you describe seem to be about potential perceived or imprinted value among "those in the know." I get a Matrix rarity so I can then flip it? For the average person, especially in healthcare, where's the emotional or utility value? More power to the artists getting in early who can cash in/cash out.