Lessons on Growth and Community from Yuga Labs and Others
Sharpen Your Edge
Hi 👋 welcome to Brian’s Bulletin. I write essays about blockchains, cryptocurrencies, and NFTs to figure out what’s happening and where it’s going next.
This week Yuga Labs announced a new NFT art collection TwelveFold launching on the Bitcoin blockchain. Many of their community members responded that it seems odd and a far departure from their existing Ethereum-based projects like Bored Apes, CryptoPunks, and Meebits. But it’s fully on-brand if you know how the best NFT companies operate.
I led community and growth at multiple NFT companies over the past couple years, during which time I studied the industry leaders—Yuga Labs, Dapper Labs, ArtBlocks, FWB, PixelVault, and more—to understand their patterns of success. I put these patterns in practice and learned a lot more about what moves the needle. In this article, I'll share the four most useful and non-obvious lessons I found.
It all boils down to: SHARPEN YOUR EDGE. Define who you are, amplify your differentiation, and cut through the noise to grow. Or else your dull efforts will bounce off people like a nerf gun.
TRUE FANS ARE THE TRUE NORTH.
Futurist Kevin Kelly famously described True Fans as the ones who will consistently buy your products and recruit their friends to as well; they're your best sales and marketing engine. They'll stick with you through market downturns and media bashing. They'll keep you afloat for the long term. Cultivate this group and you have a good shot at an enduring business.
Yuga Labs True Fans are the NFT degens, the early adopters, the techies, nerds, gamers, metaverse-believers. The ones who own a Oculus, who are in 15 Discord servers, who have ledger wallets and twitter profile avatars. This person loves to be at the forefront of tech trends like the recent Bitcoin NFT momentum.
These are the people to build a company around. They're consistently ape-ing into new Yuga-led experiences like Mutant Apes, Dookey Dash chase game, and Otherside metaverse. Casual fans are nice-to-have, but True Fans are must-have. Yuga projects are consistently the top traded NFTs.
To put this in practice, you need to first define what a True Fan profile looks like, and then help them win at the thing they're doing. For example, Star Wars true fans show up to the premier in a Storm Trooper costume signed by Harrison Ford. Find a way to excite them, and you'll have a valuable customer.
BE A DUNGEON MASTER.
There's a saying in crypto: "buy the rumor, sell the news." It's proven correct time and again. We're all playing a game: it could be the status game, the money game, the entertainment game, or the fandom game. We all love to be part of an important story, to be on a compelling adventure. The best NFT companies create the environment for people to fall into the adventure together. They tease announcements days in advance, they leave questions unanswered, they create mystery and surprise.
Underlying all of that, they're masters of incentive design. They know incentives drive behavior, and they create mind games that instigate actions and guide fans to lose their shit. No one is better at this than Yuga Labs. Every drop is headline news.
From my experience, the lowest hanging fruit to quickly generate this dungeon-master characteristic is to create inner-rings of exclusive benefits for your best customers and to tease future benefits to everyone. This creates desire and FOMO to get in on the action, and rewards those who achieve inner-ring status.
EXCLUDE PEOPLE.
One lesson from Influence: The Psychology of Persuasion is that opportunities seem more valuable when availability is limited. NFTs have essentially zero cost of replication, but the best NFT companies know that limiting availability is important to drive demand. Scarcity drives FOMO.
On the community side, boundaries create a safe space for members to be effortful and vulnerable. It creates a space with shared knowledge of what it's like to be on the inside. This creates stronger relationships and social value to the community members.
Twelvefold is limited to 300 art pieces. It's a stroke of the keyboard to add more, but they know scarcity will drive attention and demand.
The most powerful and quickest way for you to evoke exclusion is limit supply of the NFTs and create inner circles with exclusive benefits for token holders. This is offered easily with token-gated Discords and exclusive merchandise.
PEOPLE ARE HERE FOR NFTS.
Your stories and community are important, but today's market wants NFTs. The consistent buyers are early adopters who want to be at the forefront of the technology.
Yuga Labs started as one PFP project Bored Apes, and have retained attention by presenting a stream of breakthrough NFT experiences. TwelveFold being the latest.
I learned this lesson the hard way by facing the momentum-killer of waiting for IP contracts to sign for new drops. If you're working with an IP partner, consider how you can sign one contract to cover multiple NFT drops. Signing a league like the NBA is great for an NFT company: one deal, many NFTs. This is also why the music industry is so hard because each artist and label needs its own contract.
LEARN FROM YUGA LABS. They endlessly sharpen their degen-serving edge. Bitcoin NFTs makes sense because the proud techies and geeks lose their shit for the new and weird technology. Or said another way by Yuga founder and degen idol: because "fuck doing expected things."