From Jpegs To Creative Empires

Emerging just a few years ago, the NFT space has faced many ups and downs. We have lived through intense debates and had to deal with a strong market volatility. It led us to focus on the question of the real utility, the impact on the physical world. As we navigate a sea of .jpgs tied to blockchain entries, where exactly are we headed?

The investor roller-coaster

Let's face reality. When you ape into a new collection, you have strong feelings. You are carried out by the hype. You are swept up in the excitement of joining a new community. The many announcements of the founders make you confident about the future of your new investment. You enjoy looking for the rarest and the cleanest pictures, and you are satisfied to be part of this new movement.

But a few days or weeks later, you feel bored. You expect new milestones that take weeks or months to come. Then, you realize that your favorite project won't change the world overnight. Worst, you are not sure anymore about where it's going, you get impatient. Frustration creeps in, and what once felt like a game-changing investment may now appear clueless.

Some argue that owning an NFT is akin to wearing a brand status. That's why it doesn't necessarily need a practical application. We could agree with this idea, but the market doesn't seem to feel it that way. At the time of this writing, all collections are down, and perspectives are thin. So, why hold when everyone seems to leave the boat? The mass market isn't excited by digital avatars, and no clear connection with the physical world is taking off.

Creative brand and Intellectual Property (IP)

I have good news. The roller-coaster feelings prevent you from seeing what is right under your nose. A strong utility that is already there and has been already proven. A utility that could bring everyone's interest in NFTs. Il will not only be about the average degen trader but a mainstream audience. This utility is pretty simple: NFTs are the ultimate foundation for launching and nurturing new creative brands or what business people name IP (Intellectual Property).

Let's first define what is an IP. It is everything related to a fictional character and its universe. Mickey, The Smurfs, One Piece, and Barbie are all IPs. Every single commercial element related to the initial character or universe is part of it, covering both artistic and business aspects.

How to build new IPs

Ok, but what is the link with NFTs? Let's first imagine that you want to build your own IP. Without even mentioning the artistic skills required, you will face many challenges. To begin with, you will need funding to develop representations and graphical references of your main character in diverse forms: drawings, stories, universe, related characters, and more.
Once you have something solid (which sometimes takes years), you will need additional funding to build a product from it: an animated series, feature film, theme park, merchandising, etc.

So how do you get the money? Most of the time, you must rely on public funding or convince producers to back your idea. It usually requires a good network, good diplomas, and an excellent track record. It's something open to a very few of us.

What makes things harder is that if you succeed in funding the making of your stories and your universe, you will still have to make your creation known to the world. And sadly, a good concept is often not enough. The marketing efforts required will be significant. And during that time, no revenue stream is working for you.

Kickstarter did a good job of solving this problem by creating the possibility to crowdfund your project. It's a great platform, but it's centralized (not censorship-proof), and the community-building aspect is limited. It's a step towards a better creative space, but it's not enough.

Now let's go back to NFTs, with them, the challenges become far less daunting. In the following, we are going to explore how NFTs can help with building a new creative brand and its related IP.

Get the funding: The collection mint

Now let's think about the structure of an NFT collection. People can build a light marketing campaign that leads to a successful mint without much initial funding. The success is tied to the initial concept, but it doesn't require a fully-fledged universe. The amount raised is decent ($200k-$1M) and sometimes can be really impressive (>$10M). The fundraising can be done through multiple mints too, which can make the brand building more progressive.

The first mint average value matches the amount needed to develop an initial idea. And it can help a lot to convince other people, like producers, to fund the rest of your project. In some cases, it can even be enough to build the first materials that will already generate revenues (and thus allow you to build more materials).

Get the community: 10,000 zealots for free

The second aspect of the mint is that it comes with thousands of people wanting to see you succeed. If you manage your community well, you have many holders available to make your new idea known everywhere. The feeling of beholding the NFT will be much stronger than having only a few perks tied to the amount given to the project like it happens for traditional crowdfunding campaigns.

Your holders will use your main character as an avatar, they will post about it on social networks and will consume and share your first creations. Your new space will already be crowded, which is much better for newcomers. Not only will your funding be kickstarted, but your social media presence will be also. Once your mint succeeds, you get the marketing fuel to launch your IP.

Get a revenue stream: royalties

With the royalty mechanism, you have a way to keep getting funds. If your IP and collections are successful, it can create a decent income stream. Which could help to make your stuff better and expand faster. Sometimes, it can even ensure a payroll to your team, it improves the longevity of your project, and already constitutes a revenue stream.

Happy holders

Initially, for non-degen people, the NFT may not seem very attractive or of any value. But don't forget that an IP lives by itself. Once an anime is airing, merchandising is sold, or a theme park is running, it generates revenues. If a video game is out, people buy it or use in-app purchasing. The project grows, and more people know it. It can become famous and thus increase the value of the initial NFT. If the collection founder makes the initial NFTs more meaningful, it can lead to some perks like VIP events, figurines, and free access to new products.

And now, imagine owning an official NFT of Luffy that was emitted during the first episodes of One Piece. Holding it won't be about the utility, the collectible aspect won't be questioned (and I don't mention the potential amount of royalties, reward sharing with holders now much more sense). With successful IPs, holders will be proud, satisfied, and rewarded.

Wrapping up

If you assemble these three aspects: funding, community, and revenue stream, NFTs constitute a formidable way to start a new creative project.
Even better, because NFTs can become the default way of building a new creative brand, it makes all the space infrastructure meaningful: launchpads, marketplaces, galleries, etc.

What is beautiful is that what I describe is not theoretical. It is already happening with collections like Bored Ape Yacht Club, Doodles, Azuki, Claynozaurz, The Bastards, and more. These projects have different goals, but they all share in common the fact they get their initial funding through NFT minting. They were able to grow their community from their first holders and still get recurring funding from their royalties or additional collections.

For them, it was much easier to create an IP that got substance quickly. Some were even able to attract VC funding. By using decentralized technologies and relying on a community of early fans, they were able to build the creative universe of tomorrow without having an initial network in the creative space. NFTs aren't just digital assets: they are a revolutionary means of kickstarting a new creative brand. It doesn't mean that all will succeed, but that they will be more likely to impact the world.

That's why, for creative brand collections, I recommend you to see beyond a direct utility. Instead, estimate if there is a potential for a collection to be the next Dragon Ball Z. You will get a longer-term vision for your holding and enjoy contributing to its success. And who knows, you may own a piece of the next creative empire!