Since we last spoke, I’ve transitioned out of my role at Doodles, moved to Columbus, Ohio, and started a new company. A lot of change, to say the least. With that change, this newsletter needed a little dusting off and a refresh.

Instead of covering big-picture ideas across tech and entertainment, I’m narrowing the focus to my journey as an entrepreneur.

Welcome to the first edition of my Founder’s Journal.

Each week, I’ll share the real lessons from building something new in 2025 — the wins, the missteps, and the surprises they never put in the highlight reels.

This week marked Days 1 through 7. I expected product breakthroughs and creative flow. What I got instead was:

• Building a belief system before a brand

• Paying the “bureaucracy tax” no one warns you about

• Getting crystal clear on my unfair advantage

It’s already been more eye-opening than I expected. Here’s what I learned.

Lesson One: Build Like You Are Creating a Religion

No book has shifted my perspective more than Sapiens by Yuval Harari. One of its central ideas is that humans thrive because of their ability to create enduring myths. Governments, currencies, sports teams, and religions. All are shared fictions we coordinate around.

Company building is no different. The best create myths through consistent action until more and more people believe in their inevitability.

A week ago our myth did not exist. Now it exists in the eyes of our team, our investors, and a handful of trusted partners. Every document we write, meeting we hold, and conversation we have makes it stronger.

The myth is internal first. It is the story your team believes in and contributes to. When it moves from internal to external, it becomes a brand. That transition should be intentional, and it should happen when you are ready to defend it.

Our myth lives at the intersection of AI and entertainment. More on that soon.

Lesson Two: The Bureaucracy Tax on Innovation

There is a tax you pay before you ever make a dollar in revenue. It is not financial. It is paid in time, focus, and momentum.

For me this week, that tax looked like hours on hold with agencies, chasing paperwork across outdated systems, and keeping my phone on loud in case the right department called back to verify a form. The work is repetitive and often unclear, but it is unavoidable.

When you are racing to get something into the world, this tax feels even heavier. The only real choice is to pay it as fast as possible, clear the backlog, and protect your time for the work that moves the mission forward.

That said, I am shocked there is not a "Stripe for company formation". An agency that takes your entity documents, passport, and a retainer, then handles everything. Deferred billing, done in a week, no founder phone calls required. That is a company worth building, and if someone is already doing it well, I want to invest.

Lesson Three: Own Your Unfair Advantage

One of my co-founders described my role as "back office and front office."

Back office: business operations, finance, HR.

Front office: fundraising, investor relations, partnerships.

My job is to get the capital and systems in place for our team to build, and then make sure what they build reaches the right people. That means distribution, network leverage, finding frameworks that cut months into weeks, and cultivating an expert counsel I can tap instantly for any problem.

A great product needs two things: a great idea and flawless distribution. My role is to get us to the idea faster, make it better, and ensure it reaches the people who matter.

This is where being in both tech and entertainment pays dividends. The best opportunities exist at the intersection of industries, not within them. We are building something that could only exist now, in 2025, with AI tooling that was science fiction two years ago.

That's week one. Three lessons that will shape how we think about everything going forward.

If any of this resonates, I'd love to hear from you. Always interested in connecting with other builders working at the edges.

Best,

Austin

IP is Dead, Long Live IP

The Studio Ghibli trend that swept across social media this week wasn't just a flash in the pan—it was a preview of our creative future. Thousands of creators did what humans have always done throughout history: they remixed, recreated, and reimagined.

And here's the truth that IP traditionalists don't want to hear: the cat is already out of the bag, and it's in the style of Studio Ghibli.

In Game of Thrones Cersei is supposed to face the Seven's tribunal and simply... doesn't show up. Instead, she obliterated the entire problem with wildfire. That's exactly what we're witnessing with AI and copyright enforcement.

Sam Altman and OpenAI showed their hand with their embrace of the Studio Ghibli trend. If they believed there was a legally credible threat or they didn't have enough money to make potential problems disappear, they wouldn't be leaning into this aesthetic so openly. They're following Cersei's playbook: why submit to outdated rules when you can change the game entirely?

The fundamental issue with the enforcement-first approach is that it mistakes "IP" in and of itself for leverage. But in the AI era, that leverage is rapidly eroding. Models will either scrape content anyway and exhaust rights holders with legal battles, or they'll completely disregard certain content altogether and build alternative datasets.

Back in 2017, I was at Amazon Music negotiating contracts with record labels and publishers to license their music for our streaming services. This was before the Music Modernization Act, when statutory damages for hosting content without proper licensing were severe.

My job? Researching our license coverage to reduce Amazon's risk.

What’s important to know is a song isn't just one piece of IP—it's split between the master recording (typically owned by labels) and the composition (lyrics and production, often split among multiple songwriters and producers).

Getting 100% licensing coverage was practically impossible because:

• Songs frequently came out before all the splits were even negotiated (especially in hip hop)

• Rights weren't registered consistently across music rights organizations, labels, and the Library of Congress

• Some rights holders deliberately failed to register their rights so they could sue for infringement later

This broken system led me to research onchain licensing alternatives like dotblockchainbc and ujomusic—decentralized ledgers that could create transparent, accessible records of music rights.

But here's why those solutions never took off: the legacy players had zero incentive to change the system.

Major labels and publishers preferred going directly to streaming services where they could leverage their market power for better deals. They even grabbed pro-rata shares of revenue from unlicensed music. Meanwhile, streaming platforms weren't motivated to empower independent creators with transparency that might increase their collective bargaining power.

Incumbents profit from confusion and obscured information. Their leverage comes from perceived power, not actual innovation. Creating a more equitable, transparent system ultimately comes at their expense.

Sound familiar? We're seeing the exact same dynamics play out in the AI space today. This is why you see characters from major franchises somewhat protected while smaller creators have no viable alternatives. The largest rightsholders—Disney, Warner, etc.—have the financial resources and legal clout to negotiate agreements with AI models, while independent creators are left out in the cold with no recourse.

This two-tier system isn't just unfair—it's unstable. As AI capabilities advance and multiply, even the giants will struggle to maintain their moats through legal means alone. What's needed isn't more aggressive enforcement but a fundamental rethinking of how creative value is captured and distributed.

Instead of playing an endless game of enforcement whack-a-mole, what if we focused on giving creators and communities the tools to work alongside AI?

This is where DreamNet comes in—a protocol that flips the script by building a deep data lake of universes, stories, characters, and places that creators collectively own and benefit from.

Rather than fighting the tide of derivative content, DreamNet uses the memetic attention as a tailwind to drive interest back to the underlying universe. When your IP is remixed, that's not theft—it's an opportunity to bring new audiences into your proprietary data ecosystem.

Think about it: how many people first heard the name "Ghibli" just this week? While Miyazaki-san might disagree with the AI-generated content, I'd bet he's not upset about the new legion of fans who might watch "Spirited Away" or "Princess Mononoke" for the first time.

The most valuable resource in the future of AI content isn't copyright claims—it's proprietary data that creates experiences others can't replicate.

DreamNet creates a system where:

• Communities collectively own their creative universes

• Contributors are incentivized to build on existing worlds

• Value flows back to creators when their ideas are referenced

• Fans become co-creators rather than passive consumers

There will likely come a day when we have new regulatory frameworks for content licensing, similar to what eventually happened with music streaming. But until then, creators have a choice:

Spend resources fighting an unwinnable battle against remixing and derivation or build a system where remixing and derivation become part of your moat and monetization strategy.

In a world where everything is derivative and everything is a remix, the winners won't be those with the most aggressive legal teams. They'll be the ones who build the richest collaborative data ecosystems that others want to plug into.

The future belongs to those who own their worlds, or they'll be forced to live in someone else's.

This past week, I found myself ruminating on thoughts of durability in crypto. At its core, durability is about withstanding wear, pressure, or damage—essentially, it's about being hard-wearing. This applies to objects and concepts, from the physical (think bridges or smartphones) to the abstract (like relationships or economic conditions).

If you were in this space during the last cycle, the concept of durability might feel like a misnomer when describing consumer crypto. Writing this in 2024, the graveyard of applications, protocols, marketplaces, and projects is littered with flash-in-the-pan ideas that, at one time or another, garnered significant traction and attention.

Yet for every 100 obituaries, there seems to be one little engine that could. Solana has ridden the interest of memecoins to come roaring back to become the world’s fifth-largest token. Magic Eden capitalized on the growth of Ordinals to blossom from a bit player to the market leader. And Pudgy Penguins overcame the odds with new leadership to become one of the top projects on Ethereum.

Consumer crypto seems to be having a moment. From the growth of L2s like Base and Blast to protocols like Farcaster, consumer adoption has never felt closer. The question is—how likely are any of the recent successes to be durable?

To answer that, we need to assess what has made the various elements of the crypto stack durable over time.

When we look at the top blockchains—Bitcoin, Ethereum, Solana—they've all proven to be durable. They've weathered multiple market cycles, bouncing back from lows to attract even more development and interest. Each cycle they've gone through has only made them stronger, both physically (with improved infrastructure, tools, and utility) and psychologically (by building community trust and investor confidence).

But here's the kicker: achieving this kind of durability isn't easy. It's a bit like climbing a mountain; the higher you go, the tougher it gets. In crypto, we can think of this as a durability pyramid with blockchains at the bottom, infrastructure and applications in the middle, before creators at the top. The durability of a given layer is the summation of the durability of the layers below it.

1. Base Layer - Blockchains

Challenges to Becoming Durable:

• Initial Adoption: Think about the early days of Bitcoin or Ethereum. Achieving network effects and attracting a critical mass of users and validators was a significant hurdle. It’s like starting a new social network; you need enough people to join and use it before it really takes off.

• Security and Decentralization: Establishing a robust security model and ensuring sufficient decentralization is no small feat. Bitcoin’s proof-of-work mechanism and Ethereum’s proof-of-stake are prime examples of efforts to enhance these aspects.

• Innovation and Development: Continuous improvement and innovation are necessary to remain competitive and address scaling issues. Ethereum’s L2 (and L3) solutions highlight this ongoing challenge.

Advantages to Staying Durable:

• Established Network: Once a blockchain reaches critical mass, network effects create a self-sustaining ecosystem. Bitcoin’s vast network of miner community exemplify this.

• Foundation for Ecosystem: Serving as the fundamental infrastructure for applications and protocols ensures long-term relevance. Ethereum’s role in DeFi and NFTs is a case in point.

• Community and Trust: A strong, engaged community and proven security build long-term trust and reliability, much like Bitcoin’s committed community.

2. Middle Layer - Protocols and Infrastructure

Challenges to Becoming Durable:

• Integration and Interoperability: Ensuring compatibility and seamless integration with various blockchains and applications is crucial. Look at protocols like Chainlink, which provides decentralized oracles—they face this challenge daily.

• Utility and Adoption: Demonstrating clear utility and gaining adoption among developers and users is essential. Uniswap’s success as a decentralized exchange protocol is due to its clear utility and widespread adoption.

• Scalability and Performance: Addressing performance issues and scalability challenges as the user base grows is a constant battle.

Advantages to Staying Durable:

• Essential Services: Providing foundational infrastructure services ensures longevity. Chainlink’s oracles and the Graph’s indexing services are critical to many applications.

• Flexibility and Adaptation: The ability to adapt and integrate with evolving blockchain technologies and standards is vital. Polkadot’s adaptable network structure supports this flexibility.

• Developer Ecosystem: Building a strong developer ecosystem that continuously contributes to the protocol’s evolution and improvement is crucial. Ethereum’s vibrant developer community is a significant factor in its sustained relevance.

3. Top Layer - Applications

Challenges to Becoming Durable:

• User Attention: Capturing and maintaining user attention in a highly competitive market is challenging. Many decentralized applications (dApps) struggle with this.

• Innovation and Differentiation: Continuously innovating and differentiating from competitors is essential for survival. Applications like Aave in the DeFi space have managed to stay relevant through continuous innovation.

• User Retention: Building features and experiences that keep users engaged and loyal is difficult. Successful applications like Phantom have maintained user engagement through constant updates and improvements (e.g. adding multiple blockchain support).

Advantages to Staying Durable:

• Agility and Responsiveness: The ability to quickly adapt to user feedback, market trends, and technological advancements is an advantage. Applications like Uniswap quickly adapt to user needs and market conditions.

• Direct User Engagement: Engaging directly with users and building a strong community around the application is more straightforward at this layer. Platforms like Reddit’s use of community points on Ethereum demonstrate this advantage.

• Monetization and Revenue: There are more straightforward pathways to monetization and generating revenue from users. Magic Eden’s transaction fees on NFT sales exemplify this.

4. Topmost Layer - Projects and Creators

Challenges to Becoming Durable:

• Sustaining Creativity: For NFT projects and artists, maintaining a high level of creativity and production quality is essential to retain attention and relevance.

• Building Reputation: Establishing and maintaining a reputation in a rapidly changing market can be challenging, especially for new creators.

• Economic Viability: Ensuring that the financial aspects of creation, such as royalties and sales, are sustainable over the long term.

Advantages to Staying Durable:

• Direct Community Engagement: Creators can build a loyal following by engaging directly with their audience through social media and platforms.

• Continuous Innovation: Successful projects and artists continually evolve their work, incorporating new styles and technologies to keep their offerings fresh and appealing.

• Cross-Platform Presence: Expanding the reach of their work across multiple platforms and communities helps maintain visibility and relevance.

Blockchains and infrastructure optimize for thriving economies and ecosystems. Over time, the success or failure of any one given application becomes less impactful to its durability. Take Blast for example—they will continue to grow as long as they have a growing list of applications where users can speculate. Elsewhere marketplaces like Magic Eden have seen revenue growth despite a shrinking number of total users because of their ability to capture cross-chain market share.

On the other hand, many verticals within the stack, like brand NFTs and consumer crypto, have not yet proven to be durable. PFP NFTs, for example, have historically traded off attention, which alone has proven not to be durable for 99% of projects. In a recent conversation, a former investor from a top venture firm mentioned to me their decision not to invest in any PFP NFT projects last cycle due to the belief that there was no underlying business model—no durability. NFTs and fungible tokens are liquid culture—they reflect attention, yet we often confuse fleeting attention for durability. Attention alone is not enough to be durable.

In the same way, a rising tide lifts all boats; blockchains benefit from the infrastructure, applications, and creators who build on top of them. This makes blockchains incredibly challenging to stand up but also harder to break down. Creators, on the other hand, are the least durable, often burning bright and fast. For examples, just look at IP across industries. From the one-hit wonders to the ever-rotating carousel of Netflix’s top 10, creating for fleeting attention is a bit like trying to stop sand through an hourglass. The question is not if the show will move on, but when.

If you’re a creator or brand, this must sound pretty bleak. How does one avoid the traps of irrelevance on the path to durability? It’s a question I’ve spent the better part of 1.5 years trying to answer at Doodles.

Yes, anyone building in consumer needs to sustain attention. The key word here is sustained. Many have been able to capture lightning in a bottle for several months, but to withstand the wear and tear of multiple cycles requires continuous development worthy of attention. This development has historically taken many forms, from content creation to thought leadership, interactive experiences (gaming, events, access), and marketing. It’s also why creators stand to benefit from creating multiple bodies of work or separate IPs.

My assessment is to become durable, consumer products have to go beyond attention. They need to develop sustainable practices enabling them to develop in all-weather conditions. So while it starts with attention those eyeballs ultimately do you no good if you can’t stay in the game to keep getting more shots on goal:

• Active Community: Building and maintaining a strong, engaged community to support the brand, drive demand, and ensure continued relevance. Irrelevance is only a couple of quiet weeks away at any given time. Regularly engaging with your community through updates, events, and social media is crucial.

• Scalability & Ease of Use: Creating products and media that can meet the demand of a growing community. This means designing user-friendly interfaces and experiences that can handle increased traffic and interaction without degrading performance.

• Sustained Development: Brands are iterative and require consistent improvement. The Kano model is a good frame of reference here. Brands need to continually deliver value that satisfies and delights as consumers' baseline expectations continue to improve. For example, the first time a brand introduced “phygital” (physical + digital), it was seen as novel. The 10th time a brand did so, it was met with “meh”. This happens to all value propositions over time.

• Sustainable Economics: Designing tokenomics and economic models that incentivize participation and ensure fair value distribution among creators and collectors. This applies not only to on-chain efforts with the sale of digital collectibles but off-chain as brands expand their reach to capture monetization opportunities from traditional IP development (e.g., licensing, consumer products, advertising, etc.).

• Royalties and Incentives: With the introduction of platforms like Blur, a significant recurring revenue stream went away for most projects overnight. While projects that had been in the market for a period likely had treasuries that could withstand this shift in market economics, many new or would-be projects were left for dead. It’s imperative we implement mechanisms for creators to receive royalties from secondary sales, ensuring ongoing incentives for content creation if we want to ensure sustainable, durable enterprises can exist.

The further up the pyramid, the more you are on your own to build durability. For consumer crypto, which lives at the uppermost portions of the stack, the focus must remain on creating products and platforms that are not only innovative but also capable of enduring the test of time and market fluctuations.

A warm welcome to the 47 new subscribers who joined us last week! If you haven’t subscribed, join 839 crypto-curious members by subscribing here:

Subscribe now

The One Big Idea newsletter is powered by Rug Radio, the world’s largest decentralized media company, changing how creators build, distribute, and own their content. A platform built for creators by creators. To learn more about this creator's first community, visit Rug Radio at https://www.rug.fm/.

So first off…let’s address that last paragraph. I’m thrilled to partner with Rug Radio to bring my newsletter and podcast to the next level. Farokh and his team have continually demonstrated a commitment to elevating independent voices in web3. With their support, I will be able to boost both the quality and reach of my content. We have a lot coming, so stay tuned.

Second, we have a collaboration coming down the pipes later this week. Make sure you are subscribed to the newsletter and podcast to hear more when it drops on Wednesday.

Lastly, my sincere apologies for the abundance of emails last week. Publishing my draft was a gaffe; I felt it was important to notify you all to ensure you knew it was not a finished product. You should hear from me twice per week. Once on Mondays for the newsletter and once on Wednesdays for the podcast. This schedule may fluctuate a bit as we get into a rhythm but, I want to set expectations for you all.

Let’s get into this week’s One Big Idea: Expressing Identity.

Reddit Avatars, “digital collectibles” (NFTs, cough cough), took the Web3 world by storm last week. With over 3 million wallets owning a customizable on-chain Snoo (Reddit’s mascot), the collection is bigger than all wallets purchased NFTs on OpenSea…combined.

DANIEL GOT HITS

@danielgothits

reddit vs. opensea total NFT wallets

fucking wild lol

1,020

08:18 PM • Oct 23, 2022

Some are calling this the trojan horse moment for NFTs. For the technology to assimilate into Reddit’s community, one whose anger towards NFTs is well documented, is a win for any who hope for mainstream adoption. Yet, most of Crypto Twitter is missing the point entirely. While degens rush to bridge their ETH to Polygon for a chance as snagging a rare, many in the Reddit community are amused at our lack of understanding of what’s truly going on here.

The truth is the broader web3 community is working under the wrong mental framework. This isn’t about rarity and flipping. It’s about identity.

Reddit won by copying the Fortnite playbook.

What Are Reddit Avatars

Before we dive into what that playbook is, let’s do a quick refresher on Reddit Avatars. Believe it or not, the Reddit community has been customizing their avatars for years. These Snoos served as a user’s profile picture for use across Reddit. User’s had free and premium options as part of their Reddit subscription.

In July, the Reddit team made some pretty significant updates. With the introduction of “Collectible Avatars,” Reddit enabled independent artists to create limited edition runs of avatars. These avatars were fully customizable and available for purchase via credit card (versus being a part of a subscription), with proceeds flowing back to creators. These avatars also unlocked special benefits on the platform and would be visually unique due to their hex shape (versus circle for regular avatars).

And here’s the kicker…for the first time, users were given commercial rights to their avatars. Backed by blockchain tech (Polygon), users were free to take their purchased avatar off Reddit and use it (or sell it) elsewhere. A purchase of an avatar prompts a user to create a Vault, a crypto wallet to store their collectibles.

The first generation of limited edition Collectible Avatars launched in July and took several weeks to sell out. Knowledge of these new NFT collections was relegated mainly to Reddit forums. Then, two weeks ago, Gen 2 dropped and sold out within days. By Sunday, Crypto Twitter was salivating at an opportunity to generational wealth, pushing these collectibles to the top of the NFT charts.

Wizard Of SoHo (,)

@wizardofsoho

lol my discord went ham.. and swept Gold Midas redditt DIGITAL COLLECTIBLE to liek 12 eth. oh god. Penthouse or poorhouse i guess. lol The rarest NFT in one of the biggest forums in the world. Gold Midas... gib me 100 eth so i can paper mine lmfao

94

01:41 PM • Oct 24, 2022

I believe most of these degens will learn a hard lesson and become exit liquidity for some unsuspecting but loyal Reddit community members.

These avatars were never about financialization. They were about identity.

Copying the Fortnite Playbook

With 400 million registered users, Fortnite is an absolute juggernaut. At the same time, a highly entertaining Battle Royale game, the real secret sauce of Fortnite is rooted in its approach to skins. Fortnite enables users to mix and match their favorite IP. Have you always wondered if Darth Vader could beat Goku in a fight like this ill-tempered person?

kz

@kzroszee

all of my friends hate me i cant believe theyre feeding me this fucking bullshit darth vader DOES NOT FUCKING BEAT GOKU (CELL SAGA). how fucking STUPID d o you have to be. darth vader can barely breathe goku can just like unplug him from the outlet and hes dead

2

10:56 PM • Nov 28, 2021

Easy buddy. Still, wonder no more.

Wepaaa

@_wepaaa

Goku vs Darth Vader 🤯 #Fortnite

1

04:41 PM • Aug 19, 2022

Awesome right? Here’s the problem. This is your character.

Yeah…pretty mid. The above is a base character. Free for all users. Vader and Goku are premium skins. So how do you get access to them? Playing a lot (Boo!) or paying a small amount (Yay!). With revenue of $5.4 billion last year, many people chose the second option.

Okay, I just threw a lot at you, so let’s summarize the Fortnite playbook.

1. Identity > Financial Gain: People want skins because they are fun! The utility is enhancing the experience. While there is space for financial gain (more on that in a bit), it’s imperative players’ core incentive is grounded in the skin’s usefulness as a tool for expression.

2. A Place to Convene: A skin only you can see is like a poster you keep in your closet. People want to see and be seen. In fact, with the introduction of Party Royale, Fortnite has transformed from a game to a social platform. Now players jump on to hang out with their friends and use their skins as status symbols.

3. Premium Upsell: Fortnite is free-to-play. Anyone can use a base tier avatar and start chopping wood. These free users are essential to maintaining a healthy ecosystem (no one likes an empty party). The magic of Fortnite comes in delivering premium skins for purchase. Players are happy to fork over their money to play out their fantasies of striking someone down as Darth Vader.

4. Minimal Purchase Fricton: If you have an online console, you already have a credit card on file. Fortnite doesn’t make you jump through hoops to take your money.

5. Sustainable Business Model: With a near-endless amount of licensable IP and original ideas, Fortnite can release new premium skins forever.

The Reddit Playbook - Like Fortnite, But Better!

Now let’s copy pasta this playbook for Reddit.

1. Identity > Financial Gain: Reddit users have used avatars for years to express themselves. Financialization was only introduced after community members saw real value in using avatars as identity.

2. A Place to Convene: Reddit’s social platform serves as the hub for expression. By displaying the avatars next to the username on each post, Reddit has incentivized users to make their profile unique.

3. Premium Upsell: Reddit-free avatars serve as a base layer of identity for everyone to participate. But with collectible avatars, Reddit adds price and scarcity to drive value for holders.

4. Minimal Purchase Friction: Reddit enables users to buy avatars with a credit card. No Coinbase or MetaMask is required. Regular users are purchasing avatars, not just degens.

5. Sustainable Business Model: Reddit has released two generations of Collective Avatars, with more in the works. Unlike most NFT projects, Reddit has established an expectation of releasing more skin types over time.

Now. Let’s look at how blockchain enables Reddit to improve on the Fortnite playbook.

1. Ownership: Unlike Fortnite skins, users own their Reddit collectibles. Not only are they free to take their avatars off Reddit and display them for personal use, but they can sell them! See, I told you there was a place for financial gain.

2. Interoperability: Building Reddit Collective Avatars on-chain means the potential for users to be able to use their Snoos across Polygon. This means we could see these avatars as playable characters in games or for exploring the metaverse in the future.

3. Freedom to Exit: On-chain value accrues to holders and can be freely exited at any time. Compare this to Fortnite, where your super rare skin’s value is always locked within the game.

This Week’s One Big Idea - Express Identity

I believe Reddit’s play for social engagement that builds on existing behavior and creates a place for a new form of social interaction serves as a model for how mass adoption will happen for Web 3.

The Reddit playbook for NFTs has established an excellent pathway for users to embrace a new world of digital collectibles without much friction.

Thank you for reading this week’s One Big Idea. Be sure to claim your free OG Status NFT on Polygon at onebigidea.xyz before the claim window closes later this year!

If you enjoyed this week’s edition consider subscribing to The One Big Idea podcast on Youtube!

1. The One Big Idea Podcast is now available on YouTube and most podcasting services (Apple coming soon). Episodes will be released weekly. Be sure to subscribe to have it hit your feed.

2. An issue with the One Big Idea OG collectible has been resolved. You can claim here by connecting to a Polygon enabled wallet bridge. Instructions for setting up a Polygon bridge on Metamask are here.

3. While the collectible is free you will need a small amount of Matic to complete the transaction. You can use the free Polygon faucet to have Matic sent to your wallet to cover the cost.

Alright, with that out of the way…let’s get into it!

As the bear market marches forward, Web3 products are experiencing an ugly truth. Churn. Bored Ape Yacht Club, arguably the most successful NFT brand, has lost holders in its OG collection over the past 30 days.

Acquiring customers is five times more expensive than retaining existing ones. On the flip side, increasing customer retention by just five percent can increase profits by up to ninety-five percent. Thus, churn's downside and retention's upside seem too critical to ignore. How then can NFT brands build sustainable relationships, and therefore businesses, with their holders?

Understanding How We Got Here

As a product manager, I learned to segment the product goals into three metrics: acquisition, retention, and monetization.

Many “growth stage” start-ups obsess over acquisition. All other metrics should come second to getting as many users as possible. Once you have product-market fit and have captured an audience, you can worry about keeping people and making money.

However, if you can’t keep the customers you acquire, all the money spent on acquisition is wasted. NFT brands have been so focused on acquisition that they’ve neglected to focus on retention.

In a bull market, this is an acceptable approach. Most holders are comfortable sitting back and watching their portfolio go up and to the right. But in the bear? You can kiss those same holders goodbye.

Proof of Participation

To right the ship, NFT brands need to invest in nurturing loyalty. Attachment to a brand comes from a shared identity and belonging. This is precisely where most NFT brands fall flat. Buzzwords like community were simply a shell to create an investment club where holders were tied together by their financial interest in the project. Brands who understand identity know it is not what you own but what you do that makes someone who they are. Take this tweet from Chris Cantino:

cantino.eth

@chriscantino

Upgrading NFT image metadata based on user participation is just about the biggest missed marketing and retention opportunity in all of web3

1,332

11:46 AM • Oct 13, 2022

NFTs move from assets to identity when they let holders fully represent themselves. Instead of a fixed asset, Chris proposes a piece of identity that changes as you change. Where your actions are meaningful. Participation begets a change in the NFT and, therefore, a change in your relationship with the brand. The holder is both validated and able to flaunt their new status to the world.

Azuki recognizes the power of identity.

Azuki

@AzukiOfficial

Introducing the Azuki Collector’s Profile: a web3-native showcase for the Azuki universe.

🏅 Earn badges
🖼️ Display your NFTs
📦 Participate in upcoming drops

Set up your profile now: http://azuki.com/collector

1,672

12:40 PM • Oct 14, 2022

Their recently launched profile pages gave holders a space to broadcast who they were to the broader community through a collection of collectible pins. These pins could be earned (completing a task) or unlocked (holding a specific attribute Azuki). Post-launch, The feature became a marketing event. People within the community holders scrambled to acquire as many pins as possible and showcase their progress on socials. Outside the community, you could not avoid the wave of participation. People watched with FOMO as holders changed their profile pictures and raved about the experience. Azuki created a product that increases engagement, retention, and acquisition by focusing on expressing identity.

james alexander

@bonkertown

@ArtofConviction @dingalingts @IcedcoffeeEth hi guys, check out my 24 pieces of flair. thanks @aj_jaffy18 and @Csaw07 for helping me complete the grid.

178

07:37 PM • Oct 15, 2022

ちこ 

@0xchiko

i still belong 🥹 ily bobu 🫶 @BobuBeanFarmer @AzukiOfficial 🫘⛩️

122

09:59 AM • Oct 15, 2022

The most robust loyalty programs will incentivize consistent engagement with actions to strengthen the company’s mission.

Arkive, a self-described “global community of members redefining culture and building the first decentralized physical museum,” is implementing a DAO framework in service of its mission. Within this structure, participation is not nice to have. It is needed to function.

I spoke with Arkive’s Co-Founder, Jordan Topoleski, and Head of Engineering, Mads Buch, about Arkive Points, the project’s point-based incentive system.

My Arkive Points displayed in the Atrium

Members earn points by completing small tasks like engaging in the discord to bigger ones like voting on which pieces will be curated for the collection. Members can see their progress (and soon others) via a profile page (sound familiar?). By rewarding consistent engagement, Arkive is creating a habit loop. Engage, reward, validate. Yet, the initiative would fall flat if it was just fake points. Engagement requires strong incentives. In the future, members will use Arkive points to access membership NFTs, more voting power, IRL events, discounts, merch, and even revenue share on pieces the DAO sells. With Arkive points, the team recognizes the value of rewarding actions which are tangential to the mission.

Web3 loyalty programs will take advantage of the composable nature of blockchains.

Remember when Spotify allowed you to see how big of a fan you were of an artist? You’d connect your profile, and the app would tell you how early you were to discovering them (I was in the first 50k of Phoebe Bridgers, not to brag). It left you with a feeling of ownership and a deeper understanding of your relationship with the artist and the app. Like the Azuki example above, this campaign led to a viral moment as people ran to socials to show just how big of a fan they were.

Mint, a podcast by Adam Levy on the Web3 creator economy, rewards listeners with NFT pins for each podcast season. These pins prove participation and create a digital fingerprint of just how early you were. With this tool comes limitless opportunities to extend further utility. These tokens have unlocked content, served as entry passes to events, and even given beta access to protocols like Lens. Participation, which over time can be defined as loyalty, helps the audience because of its utility.

For Mint, these tokens give critical insight into an audience’s on-chain behavior. Using Bello Insights, a web-3 CRM platform, Adam can analyze what other tokens his audience holds. These insights lead him to book guests and sponsors that align with his audience’s interests.

Conclusion

The bear market is making it clear as day. NFT projects have neglected to nurture the relationships they already have.

In the future, NFT brands must get closer to their customers by allowing them to represent themselves within their ecosystem. Displaying identity and rewarding participation will create a pathway toward sustainable business models.

Thanks for reading! We will be back later this week with an episode of the One Big Idea Podcast.

Have a great week,

austin