I had my eyes on one particular collection, The Heart Project, whose ambitions of creating the first decentralized creative agency strongly aligned with our goals of empowering the independent music community. I had been scrolling Rarity Tools for the past few days and finally found my match.

My MetaMask locked and loaded I hit buy now on OpenSea and held my breathe as my transaction processed on the blockchain. I clicked the transaction hash to watch on Etherscan as the blue progress bar inched its way towards 100%. And then suddenly…

Success!

I hurried back to OpenSea where the site confirmed what the chain already had. I now owned my first NFT. My coworkers looked on in equal parts bewilderment and intrigue, “you spent how much on a digital picture I can just copy”?

They didn’t get it. But in time they would (everyone in the room that night now has multiple NFTs). This afro snake tongue monstrosity was mine and no one could take it from me. No platform could shut down. No license could be revoked. This was true digital ownership. Online property. That was powerful.

This one NFT would lead me on an incredible journey. Soon I was in the discord commiserating with my fellow degens. The team, led by my now friend Aidan Cullen, was both attentive and approachable. They jumped on Twitter Spaces to discuss their plans for the brand while openly requesting feedback and welcoming critique.

This was building in public in a way I had never experienced. This was moving from Minimum Viable Product (MVP) to Minimum Viable Community (MVC). Passive consumers in web2 were being turned into active owners in web3. With incentives aligned (i.e. we all can benefit from our efforts growing the brand) it truly felt like web3 had unlocked the potential of the community. People raised their hands to host spaces, create memes, draw derivatives, moderate discords, draft DAO proposals, and generally come together for the purpose of seeing out the potential of these plucky NFT upstarts.

Then something strange happened.

Communities started to feel tribal. Floor price became a hierarchy. Criticism that was once a whisper grew louder as individuals saw grass on the other side and oh boy did it look greener. Some criticism was fair. Other remarks reeked of entitlement from those who saw their investments as equity in these projects (surprise…it’s not). Projects with soaring volume were held up as the gold standard and then just as quickly discarded at the first sign of trouble (Azuki anyone?). Some were given and then stripped of their blue chip status in response to the market considering product decisions to be missteps (Cool Cats comes to mind). At one point the meta seemed to be only projects without a central team stood a chance at long term survival. If you could point at someone to blame then it was only a matter of time before the community turned on them.

Watching this unfold left me with a nagging question - is there a right or wrong way to build product in NFTs?

Meaning, is there a way to manage the tightrope of public critique without losing your balance and falling into the deadly depths of trolls?

In short, kinda of. In so much as you can appease holders by delivering financial value via an increasing floor price and dilutive drops. That playbook is pretty well tested (see: Yuga with BAYC, MAYC, BAKC, $APE, and Otherdeeds).

But that playbook does not work for all projects. It’s heavily reliant on Yuga’s position as the Blue Chip. Dilution necessitates more interest coming into the project or else you can expect a cratering floor price.

So if that playbook only really works for the god tier projects in the space, what hope is there for everyone else?

To win projects must create “painkilling” products and balance the need to create iterative momentum and step change innovation. All while slow dripping their communities with just enough information to keep them engaged and wanting more.

Painkilling Products

In the land of product, one of the first questions the proverbial they implore you to ask is: “is this a painkiller or a vitamin”?

Painkillers are “need to have” features and products. Your customer can not live without them. A Kindle is an example of a painkilling product by solving a real problem of convenience and accessibility.

Vitamins are “nice to have”. They improve an existing solution and while not necessary have a place in a well developed product. The Kindle highlighting feature is a vitamin. Is it absolutely necessary? Of course not. But it certainly makes finding notes later on a whole lot easier.

Iterative Momentum vs Step Change Innovation

A product of all vitamins is just sugar water. It tastes sweet but is unlikely to satisfy in the long run. However, building painkillers typically requires longer product cycles. To solve real problems without existing solutions is a time intensive effort.

This is why the best products balance shipping vitamins iteratively with making space to deliver step change painkilling innovation. The iterative momentum created by these vitamins give the team space to work on the painkillers in the background. They keep the audience satiated with sugar water (for a time) until the big step change innovation is ready.

Moonbirds has struck this balance incredibly well. Their birb follow birb feature is a “nice to have” but it does its job of showing the team is building and keeping the community engaged. Shipping products like this gives the Moonbirds team the space to build HighRise, their painkilling solution to creating a metaverse that they promise will be “a dramatic departure from the existing 'never-ending' worlds that feel like a digital ghost town”.

https://twitter.com/moonbirds/status/1543045383705600001?s=20&t=Iz1sauvboJWe9YbYOV0gvQ

Communication and Product Marketing

NFT projects should take their lead from television. Humans crave both resolution and cliff hangers. Too much on one side or the other leaves us feeling bored or agitated. It’s a balance a series like Stranger Things nails almost every season (don’t worry no spoilers). The key to an engaged community is finding that goldilocks balance. They want to be both entertained and informed.

To their credit, Azuki absolutely nailed this balance with the launch of Beanz. What started as a surprise airdrop during their NFT LA event unfolded over the course of weeks. Confusion and excitement overtook Crypto Twitter as holders saw their mystery boxes opened to reveal a mound of dirt. Soon these Beanz were invading the Azuki socials as the team slow dripped just enough info about the dilutive drop to keep the audience engaged but not bored.

https://twitter.com/ZAGABOND/status/1510640821980196869?s=20&t=dvAgnm44F-IgPycL7kXPTg

Future missteps to the side, Zagabond and the Azuki team nailed the balance with the Beanz drop. This type of hype marketing won’t work for the tone of all brands but the lesson of keeping an engaged audience is agnostic.

Conclusion

Building is hard. Building in a bear can be downright brutal. Holders, while fair in some criticism are also just as likely to be projecting their own pain. A pain that everyone feels when ETH is 80% off of all time highs and NFTs, a leveraged bet on ETH, also decline.

Yet, now is time when builders and holders a like should be holding each other to even higher standards. To push for nothing less than experiences that captivate, solve real problems, and push the space forward.

The truth is we are not all going to make it. Most projects, like the startups they are, will die. Most holders, like the retail investors they are, will lose money. The hope then is to be able to identify winning strategies and utilize them to give yourself the best chance of success.