Brand and story provide any IP oriented web3 project a foundation for a healthy ecosystem and a mainstream audience.

Brand represents a project’s mission and values. For example, inspired by a young boy asking if astronauts can be black, Aku is arguably the most mission oriented web3 project with real potential to crossover and appeal to a mainstream audience.

Story is the other key pillar of any IP oriented ecosystem. This includes the key characters (heroes and villains), the setting, and conflicts that drive the narrative. Story gives an audience a reason to care about the IP beyond the mission and values its brand represents.

Mainstream Audience

Building a large engaged audience is the primary aim of any IP oriented project.

Web3 punches way above its weight in terms of funding for the creator economy. While this enables some creators to make a living from fewer fans paying more money to support them, most IP oriented web3 projects will need to crossover to a mainstream audience in order to build durable businesses.

Traction with a mainstream audience enables a web3 project to adapt proven business models for multiple verticals and evolve from a passion project into a thriving business.

Verticals provide different ways for the audience to engage with a brand and its story canon. They can also enable the project to develop repeatable business models which generate revenue and access to other resources the project needs to grow, resulting in a flywheel effect.

More capital + resources ⇒ More innovation ⇒ More traction and audience ⇒ Repeat

At Amazon, games, media, and entertainment are combined in a single business unit. This reinforces the idea that there are repeatable business models which enable a project developing a compelling IP portfolio to build a presence in multiple verticals and scale to a massive audience.

Games, video, audio, and live entertainment are four ways a mainstream audience can interact with a story. There are standard business model playbooks which apply to all verticals and more niche strategies better suited for some verticals but not others.

A few examples:

• Events, where the audience pays for access to an experience

• Licensing, where an entity pays for IP rights in a specific domain (eg. film)

• Distribution, where an entity pays for exclusive rights to distribute a product

• Retail, where an audience pays money for physical (and/or digital) items

• Marketing: where a brand pays to be featured prominently in the ecosystem

• Web3: token sales, community owned IP, and token gated incentives

Mega OG Showcase

Mega OGs (MOGs) are a 529 item subset of Aku’s core avatar collection. They are unique from Aku in that they represent community owned IP and MOG collectors have commercial rights — unlike Aku which is IP wholly owned by the project’s parent company. Plus as part of the Aku ecosystem, Mega OGs inherit benefits of the Aku brand by association and over time can establish their own distinct brand identity.

Micah Johnson, Aku’s founder, and his team are codeveloping five MOG chapters with the community. These chapters can provide a foundation for the MOG universe story canon and if you squint, you might see how this could benefit the overall Aku ecosystem in several ways.

Expand the Audience

To the extent Aku is focused on a younger demographic (kids), the Mega OG ecosystem can be tailored to an older demographic (teens and young adults).

Activate the Community

A vibrant creator community empowered with tools and digital assets to produce their own content can be a powerful tailwind for a web3 project.

RTFKT creators is the gold standard. It is a great example of a founding team activating its community by enabling collectors to develop compelling characters based on its IP and evangelize its brand.

Plus developing story canon enables community generated content to share common elements such that the whole is greater than the sum of its parts — which wouldn’t be the case if each creator’s fan fiction went in an entirely different direction.

Generate Revenue

A healthy ecosystem can also generate meaningful revenue for the parent company of any IP oriented project.

Digital Collectibles: Whether or not royalties continue to provide recurring revenue, a passionate and engaged collector base will be more likely to pay money for digital collectibles such as new characters, digital wearables, environments, and other in game items such as vehicles, weapons, and other consumables.

Physical Items: When people care about a brand and a story they are willing to pay for physical items and merchandise such as clothing, sneakers, toys, and other physical collectibles.

Collectible content: As audience grows, there will be opportunities to sell collectible editions of content from top creators, either in digital form such as chapters or in physical form such as limited runs of graphic novels, books, etc. This is even more true to the extent an ecosystem can attract talent with an entertainment track record such as comedians, musicians, and actors.

Marketing partnerships: Brands will be more likely to sponsor activations and align themselves with projects who build an audience that cares deeply about its IP. Nike digital wearables. Rimowa loot boxes. Porsche digital vehicles. Faze sponsored esports tournaments.

Intangibles: Momentum in the web3 ecosystem is accretive to any IP oriented brand and its parent company by reinforcing its track record, both in web3 and beyond. In web3 when a new collector is evaluating whether to allocate time and attention to the Aku ecosystem, MOGs can be a key pillar of the thesis. And beyond web3, MOGs have the potential to strengthen the case for Aku as a portfolio of IP with mainstream appeal, including kids, teens, and young adults. As the Aku ecosystem gains momentum, support for larger scale projects such as films and AAA games become more likely.

Longer term, a rising tide lifts all ships. And in the case of business models for IP oriented projects, those ships can generate meaningful revenue in all the aforementioned ways: events, licensing, distribution, retail, marketing partnerships, and web3. Disney does over $50B a year in retail sales and the Pokemon franchise does close to $10B. As I explored in a piece at the end of last year, culture is big business.