[Dive #15] Cute NFTs vs. The World
They've won our hearts, can they win our minds?
I was on a Twitter Spaces with the Little Lemons Friends project this morning and I ended up sharing some of my thoughts on how the project could sustain it’s growth. I wasn’t planning on writing about this today (I never really know what I’m going to write actually lol), but the conversation got my brain going, and here we are…
Overview
Since the Cool Cats in Summer 2021, there has been a proliferation of projects that share similar style art and a similar ethos. These projects are generally the most friendly, wholesome, and welcoming communities in the space. And that’s why my mascot is my Cool Cat :)
Here’s some of the NFT projects that I’m a part of that fit this ‘cute’ meta (theme):
Adorable, right?! If you wore a tshirt with one of these fellas and walked downtown it’d be a matter of time before you got a compliment. I’ve gotten compliments while wearing my Cool Cats hat multiple times due to the sheer fact that it’s just plain cute.
So these projects have strong communities and are seeing a lot of success right? Well, not quite…
The Problem
Over time, the value of a vast majority of projects has slowly trended down, and the cute meta has not been spared. This isn’t for a lack of effort, not having a recognizable brand in the space, or not being ‘cute’ enough.
I would break down the components driving the price down as follows:
Expectations vs. Reality: This is a rampant problem in the space, especially for those that are focused on financial return (we all are to some degree). There is a large portion of NFT owners in the space that expect the projects that they invest in to turn into a Bored Ape Yacht Club and provide a 100x return in a matter of weeks or months. This mindset has even creeped into NFT art, where some buyers are get upset that they’re buying art and not being provided any utility or an increase in value immediately.
When these expectations are not met, these NFT holders become vocal through their actions (selling at a loss) or words (publicly via Discord or Twitter). This is fine and a reality of the ecosystem we’re in, but it does have a ripple effect across the project as well as the broader space.
Building a brand takes time: Combined with the first point, BAYC, Moonbirds (these are edge cases in the space!!) and other hyped projects are sucking the air out of the room in terms of $ and attention. Net net, this is a good for NFTs overall, but some projects get the short end of the attention stick.
A great example of this is that most projects have dropped in value this week because many people (including myself) are accumulating capital to deploy for The Other Side land sale (part of the Yuga/BAYC ecosystem) this Saturday.
These projects are art driven: To be clear, this does not mean these projects don’t have strong technical chops, don’t have big partnership conversations behind the scenes or don’t have a robust roadmap for the rest of the year. What generally captures one’s attention with these projects is that it’s CUTE (aka great art!). However, a 10k pfp project that is art-driven will only go so far value-wise, largely due to the first point.
I generally see two outcomes for these types of projects in the short/medium term:
😭 Decline continues until the most committed members/holders are left. Other projects and institutions come in with deeper pockets and create their own projects and ecosystems. For the cute meta, think of Disney and Sanrio as the institutional competitors.
💫 The trough in price is in. The core community members rally together to promote the project further, the team roll out a robust roadmap and execute brilliantly, partnerships that were under wraps are revealed. All the dumpers were proven wrong and all is well again!
History tells me scenario 1 is more likely. However, I think there’s another strategy to consider!
TPan’s Proposed Solution
The enemy for the cute meta isn’t other projects like BAYC. It isn’t a Disney creating a NFT project. It isn’t even each other.
The enemy is attention.
NFT projects don’t need to win every battle for attention, but they need to be top of mind justttt enough to win the war. What does being top of mind do?
Maintain relevance
Keep their holders happy (enough)
Provide more opportunities
How do these projects win the war on attention? Introducing…
The Cute Project Alliance! (CPA)
Call it whatever you want, but I’ll use CPA (ew, taxes lol) since it’s easier to type.
What is the CPA?
The CPA consists of ___ NFT projects (4, 10, ?) that have strong communities, share similar values, and have a strong art component.
These projects are in similar situations in terms of challenges and opportunities. You don’t want a BAYC to join this as they’d amplify the ‘enemy’ (attention).
There is a council of representatives from each of the core member projects of the CPA.
There is a shared knowledge and contact pool (I think this is critical, I’ll get into this later).
What does the CPA work on?
Joint efforts and Independently Shared efforts
Joint: Efforts that the CPA council are all actively involved in. Here’s a great example of what a joint effort could like, and that happened a month ago at NFT LA. Wish I could’ve been there!
Independently Shared efforts: This goes back to my previous point around shared knowledge pool. The more knowledge that is shared between the core alliance, the stronger the unit is together. An opportunity that doesn’t make sense for one project may make sense for another. This is something projects in Web3 can do that is much harder in Web2. Can you imagine Pepsi and Monster Energy forming an ‘alliance’? 😂
Example: One project might want to create a comic but doesn’t know where to start. Another project doesn’t have a comic on the roadmap but comes from the comic space so has a bunch of contacts they’d be able to share.
IMO this category of effort is compounded because these projects are categorically similar, which means they opportunities that are presented to them are likely similar as well.
So how do we implement this?
Create a CPA Festival!
These projects have a presence at all the NFT conferences, and they should continue it! However, they are often overshadowed by the heavyweights in the space. That will likely continue with bigger projects and deeper pockets.
Remember, this is a war on attention!
So what does a CPA Festival do? It creates a thematic focus.
Pre-COVID, I went to the Renegade Craft Fair in SF.
This fair had a clear theme of supporting small businesses and independent creators. You won’t see Ikea, you’ll see Sally’s handmade furniture. You won’t see Taco Bell, you’ll see Vic’s organic Taco Shop.
Why can’t this happen with certain categories of NFT projects? Can there be a CPA Fest?
By having a stronger theme beyond just ‘NFTs’ you’ll be able to hone into a specific target audience.
But TPan, there’s only so many holders and fans of these projects.
This is where the unique advantage of this meta gets interesting 😏
I saw this tweet earlier this morning, so cute!
While I’m patiently waiting for the Wonderpals merch store to open up, I sent this pic to my fiancé. I knew she’d love it, but I wasn’t expecting this reaction.
The CPA fest isn’t an event for those interested in NFTs or holders.
In fact, it SHOULDN’T be for NFT holders.
It should be for people that love cute shit. It should be for families. It should be for the Sanrio fans. The people who love strolling down the aisles at Miniso because it’s a pleasant experience. And some of these people are NFT holders.
This is the moat that the cute meta has 💪
I’m sold. How do we kick this off?
Create the CPA. Which project is going to initiate this that’s the big question. The cold start problem is unfortunately real.
Figure out financial and legal items. What is everyone committing to that will give the CPA a real shot at success?
Create a MVP (minimum viable product) for CPA Fest
What does a MVP look like?
Find a date and location that makes sense. A couple months after NFT NYC?
Have a coordinated plan to market to all the communities that are participating
Test making it available to the public and being kid friendly.
Create incentivization models for non NFT folks to attend. What if everyone that got invited by a NFT holder got a free sticker set of all the cute projects? Maybe they have to join a discord server first and say hi (and then be welcomed by the whole community!) What a great way to propel the brands to non-NFT folks!
If that works out…what does a bigger version of this look like?
Well, there’s ComplexCon, Comic-Con, why not CuteCon (holy crap what a great name lol. I just Googled it and nothing popped up). Brand the thing! Who wouldn’t want to go to a CuteCon?!
Get a real event organizer to help with the logistics for this. We’re in the big leagues now. It probably won’t be cheap, but this could really propel the CPA’s respective brands
Bring in more creators. Other ‘cute’ NFT projects, other ‘cute’ creators that aren’t in the NFT space.
So what does this do?
Solidifies brand creation beyond the existing holder base
Another revenue stream for all of these projects via merch sales and ticketing sales
A pumped up community seeing IRL activations of their NFT project (think Doodles at SXSW)
More PR + exposure to the cute meta for partnership opportunities.
An additional on-ramp to NFTs helping the broader space!
This isn’t panacea for all the cute meta and their respective challenges. But it may be a pillar to a broader strategy, or at least get our brains thinking about other ideas.
I’ll be sharing these ideas/thoughts with the various projects I’m a part of, and hope it provide additional sparks for inspiration. Who knows, maybe there’ll be a CuteCon 2023 :)
Awesome breakdown and I love the Cute Project Alliance. A project team holding on to continue delivering value to their community that slowly loses interest because of financial reasons is tough. But project teams joining up and helping add value to other similar projects is awesome.