Examples of NFT communities are Bored Ape Yacht Club (BAYC), Creature World, WorldofWomen, VeeFriends, Rumble Kong League, and Cool Cats NFT. These communities allow their members to have that sense of belonging and finding a space where members feel safe and can express themselves without judgement. These communities create their own culture, while making sure they bring value to their members. For example, BAYC has airdropped (the equivalent of gifting) NFTs to their holders that have been sold for up to $1MM, if they were the lucky ones that got a ‘Mega Mutant Serum’, or maybe just made $20K if they got a regular M1 Serum, by selling them on OpenSea.
We will devote future posts on how to build culture within and bring utility to an NFT project, but as a way of introduction, let’s review how two successful projects have achieved it, and extract a handful of key takeaways.
How did Bored Apes Yacht Club (BAYC) create a cult-like following?
First of all, what is BAYC?
- It’s a collection of 10,000 NFTs, representing different ape-like figures with unique styling angles to them. The rarity of these styling aspects feeds into the pricing of the NFT. Below, as example, we have included the first Bored Ape to be minted (=created).
- Each Ape gives its owner access to a community of like-minded people, and to community-based projects, such as a shared graffiti board (The Bathroom) that updates every 15 minutes. Each ape-holder is able to paint a pixel on the bathroom wall every 15 minutes. This is a collaborative art experiment for the cryptosphere.
- BAYC ties IP rights to the token itself, which means an individual can lease it out or charge a third party for using their intellectual property in a publication. Initially, every Ape issued by BAYC cost only about $200, however, as of December 2021, the cheapest one was $220,000. Although there are 10,000 apes, only 6,000 wallets hold them.
- They are a Vablen good (in conventional economic terms): A type of luxury good for which the demand for a good increases as the price increases, in apparent contradiction of the law of demand, resulting in an upward-sloping demand curve. However, scarcity alone does not explain the price increase…
What are the other reasons for the price increase?
Identity Signaling: BAYC NFT owners are power-users within crypto, with very specific crypto-centric interests and skills. The type of community you would want to know about your own crypto projects and plans, as their backing is sure to bring additional interest, and funding, for you.
Only about 1,000 wallets bought BAYC initially, then this increased to 5,000 in the secondary market. This means that most of the holders today only discovered it after it went mainstream, after the original holders built its reputation and made it a destination for those that were, and wanted to be perceived as, strong players in this industry. They were able to purchase the tokens at a much higher price, effectively purchasing their reputation.
As time goes by, the people that acquire tokens will be long-time holders, and fewer people will be looking to exit at any given time. Individuals won’t see them as tradable assets. Of course, this is always under the assumption that the community is handled well, but since members have their identities linked to owning this asset, they have a strong incentive to continue to invest in the success of the community, and keep representing and engaging with it.
Currently this engagement has moved from online only, to IRL meetings in different cities, now fully linking their online and IRL identities to the project. NFTs, and other modern online community-building tools, have allowed us to reduce the time to build a strong community from years or decades – with a tribe, religion or state being the ‘source’ of identity – to months, by creating micro-niches that support one specific aspect of our human identity.
Additional financial benefits: Although the reputation and identity building associated with BAYC indirectly bring financial benefits, the creators also make sure that they bring more tangible additional benefits, such as free airdrops. For example, holders recently received a new collection of dogs – Bored Ape Kennel Club – that quickly became valuable.
Is utility the key to success for VeeFriends?
Gary Vaynerchuk (better known as Gary Vee) is an entrepreneur, author, speaker and internet personality, who has made it to the top through sheer hard work, hustle and grit. An inspiration for many aspiring entrepreneurs.
He has created an NFT collection, where the design itself is very aligned with his core values, and also with his core message to his followers – 268 characters, designed and drawn by Gary himself, with names like ‘Adventurous Astronaut’ and ‘Empathetic Elephant’
All tokens grant access to Gary’s annual conferences (VeeCon) for three years. Some characters provide additional benefits: His ‘Mentor Meeting Mongoose’ grants the owner 3 two-hour mentoring meetings in NYC, while other tokens give in-person access to Vee, for example, the chance to play tennis or have dinner with him.
There are 555 gift tokens (with a Gift Goat drawn on them), and as the name implies, the owners will get gifts from the VeeFriends team. Last July 4th, the holders activated the gifting experience through the website, and they will receive a minimum of six physical fits in a span of three years.
The Sorcerer Scholarship offers a mentoring session from Gary Vee himself, but they cannot be bought, they must be applied for – 45-minute mentorship session with GaryVee and 30 hours of learning sessions with GaryVee’s personal and professional network.
The benefits are expanding, including a ‘Pre-Launch Program’ – Give upcoming projects, above a certain level of quality and growth projection, a starting point in terms of building their own community, and in exchange, PLP participants will donate 555 of their own project tokens to Vee Friends.
Gary understands what his followers want and need from him, and he is using his NFT project as an engaging and deeply personal way to bring it to them.
Is utility the key to success for VeeFriends?
Some key learnings are:
- Launching an NFT, and giving IP rights to the token holder, makes community members have skin in the game.
- You only need 1000 true fans to build an extremely successful community that will give you – as creator, brand or developer – far reaching benefits and recognition.
- Interacting with your tribe in different ways and constantly is key.
- Hangout where your customers are Twitter, Discord, Clubhouse, Tik tok.
- Creating Ask-Me-Anything sessions, and in person meetings or events are key to make strong connections.
- Design and create physical goods (ie. coffee mugs, t-shirts, hoodies, hats) so customers can interact with your brand, and your values, when drinking a coffee, or hanging out with a friend.
- Create different experiences for each token holder.
- Memes are key in this new economy.
Is there a framework that we could use when assessing existing projects, or creating our own?
Jonah Berger, Marketing Professor at The Wharton School (U of Pennsylvania), in his #1 New York Times best seller book ‘Contagious: Why things catch on’ explains how to make content a viral success that ‘sticks’ with its followers. He posits that the success of viral content can be attributed to just six elements, or ‘STEPPS’:
- Social currency: Everybody wants to be the in-the-know friend with great recommendations. The result is that the most valuable content is the content that can be shared.
- Triggers: A trigger is a word, phrase or image associated with a message. Ultimately, anything that reminds your audience of your product or brand is a trigger. Partnerships become particularly important.
- Emotion: People share things they care about. Emotions of awe and excitement drive people to share content.
- Public: Always create content that your audience can proudly share. Berger uses the phrase ‘built to show, built to grow’
- Practical value: People want to be helpful, so relevant and informative content has extra value. Consider your audience’s interests and pain-points.
- Stories: Telling a story is the best way to deliver a message, as stories can actually change how we think and feel.
Here are some ideas about how STEPPS applies to NFTs and Web3
| STEPPS | APPLICABILITY |
|---|---|
| Social currency (We share things that make us look good) | As mentioned at the beginning of the article, the ’15-minute Guide to NFTs’ provides great insights on this point. NFT just give us the “right to brag about some piece of art/ game/ etc’. It makes us look good because only a few people know about this movement and being a pioneer always feel great |
| Triggers (Top of mind; Tip of the tongue) | We hear more and more about Web 3.0, with great influencers talking about it and the potential opportunities |
| Emotions (When we care, we share) | Because of the volatility on the price of some NFTs, they have become a great speculative tool, often generating generous profits for owners. People share about it (did you gift an NFT this Christmas?), because it’s an ‘easy way’ of making money that others benefit from. |
| Public (Built to show, built to grow) | Showing your avatar on Twitter, or bragging about your crypto profits has never been so normal and accepted. |
| Practical Value (News you can use) | The power of marketing influencers has been critical in this movement. |
| Stories (Information travels under the guise of idle chatter) | Sharing examples of how people are generating profits, making connections, and starting new businesses is always a compelling story to tell |
