Web3 — What is this hype and what does it mean for brands?
After a few long and interesting — yet confusing — conversations with my two friends Robert Istok and Andrew Rozas about Blockchain, NFTs, DAO’s and the list goes on… it’s fair to say that following these conversations went deep down the rabbit hole when it comes to the Web3 space, which surely gave me a better understanding of it all, even though it’s still a complicated and fast-paced space. However — it’s most certainly the future and will become a commodity in 24 months' time for both brands and consumers.
Let me rewind to when I quit my job at Bambuser and Relatable a couple of months back to pursue my own venture and start my own agency. When you quit your job without having another full-time job at an established company lined up, it gives you an immoderate sense of urgency to be up to date with all things future. So, that’s what I did. I went down the rabbit hole for all things web3 — which resulted in an ability to connect the dots between today and tomorrow; and what it means for brands and consumers. But also, make the language more human.
Let’s start with the philosophical reason behind this transition. The big ‘why’ when it comes to web2 > web3 is that we’re moving from a centralized internet to a decentralized internet. Simply put — less power to central organizations aka “ the middlemen” of the internet that provide services in exchange for your data (Facebook a clear example of this where you, as a human being, is the product), and more power to peer-to-peer services and technologies that allow anyone to participate without monetizing their personal data. Which also means more power to the consumer in the end. And in this new world, everything is built upon one system known as the Blockchain. So, no more company dictators. Think about Blockchain as a kind of bookkeeping service where a lot of computers hosts data that can be searched by anyone. Users are operating this system collectively, and people are given “tokens” for participating, and the tokens can then be used to vote on decisions and much more.
Personally, I believe this is a beautiful transition as we’re building something inclusive, generous, and transparent internet where anyone can benefit.
So, in the web3 world, on the Blockchain, there are plenty of things happening at the moment, and I’ll try to take you through a couple of trendy things.
NFTs (non-fungible tokens)
Think of these as digital collectible assets and online files that you can buy and sell with. Now, there are plenty of marketplaces where you can mint your own NFT’s and sell them, but you can also trade i.e. buy and sell other NFTs. It’s not that different from the offline art world, but this is an online version, you collect digital and not physical assets. And you own all the rights to that digital asset, and it’s non-fungible which means it can’t be replaced by something else. Most NFTs are part of the Ethereum blockchain. So you buy NFTs with the (ETH) Etherium coin.
Now, the most successful NFTs and NFT ‘brands’ are not only one specific art piece, you’re also becoming a part of a community when you’re purchasing a piece. A community where you can meet like-minded people, play games, get invited to events, and much more. https://boredapeyachtclub.com/ — is a great example of an NFT collection that have bloomed in this space, and today, you buy one of the original ‘Bored Apes’ for hundreds of thousands of dollars… and celebrities such as Fallon, DJ Khaled, Steph Curry, and Post Malone are all owners of ‘Bored Apes’
Another great example is what Gary Vaynerchuk is doing with his NFT initiative called VeeFriends where he sells NFTs with his own artwork, and what’s brilliant about VeeFriends is the conceptual thinking; not only do you become a part of Gary’s community; you can also buy different kinds of NFTs which gives you access to different experiences, whether that’s a 1:1 zoom call, a keynote speech, a ticket to his VeeCon and much more.
So, what could this NFT space mean for brands?
There are tons of opportunities for brands in this space. But as with any other marketing channel whether it is Influencer Marketing, Paid, or whatever; the most important thing is to make it integrated with your other channels and marketing efforts. And at the end of the day — it’s all about reaching a new audience and showcasing that you’re an agile and innovative brand that understands cultural movements. What I ask myself if I was brand, it would be:
- What existing activations have I done where I have products or any other assets that can be digitalized and turned into NFT collections?
- Can I team up with artists to co-create digital assets that are breathing my brand, product, or a specific activation?
- Can I extend my e-commerce and create an NFT area where people can buy our digital products and become a bigger part of the brand?
- Can I create a new revenue stream with NFTs?
- What other values can I give my consumers, beyond a digital asset? I.e. events, discounts, offers.
Next up — DAO’s (Decentralized Autonomous Organisation)
Originally, the first DAO was created by a group of developers to automate decisions and facilitate cryptocurrency transactions. And, Cathy Hackl is summarising this very well in an article in Forbes “Can you imagine a way of organizing with other people around the world, without knowing each other and establishing your own rules, and making your own decisions autonomously all encoded on a Blockchain? Well, DAOs are making this real.”
I would describe DAO’s like a modern version of crowdfunding, where you and your community can go together to create a DAO. The DAO issues a token which is everyone buys into, you swap another crypto coin for the new token. And the token is now your ‘asset’ or ‘stake’ in the company. DAO’s are handled on the Blockchain, and open for everyone to see — making DAO’s extremely transparent, global, and collaborative. Friends With Benefits is a great example of a DAO, and I would describe their business as a digital Soho House, where you need to apply to become a member and buy their Token to join. But the difference between Soho House and FWB is that your Token in the FWB DAO will continue to increase in value, whilst your payment for your membership at Soho House will always be a ‘loss’.
DAO’s, according to me, will be a phenomenal way for consumers and communities to incubate brands, products, communities, and much more.
This is just the beginning, and I hope this all made sense. It’s a constantly changing space, yet very, very interesting.
Reach out if I can ever help you and your brand with putting plans together to understand this space.
