(You want your community to be super fans, like these peeps⬆️. Source)
Before diving into this blog I want you to check out today’s sponsor. It’s the Zima Red podcast! If you want to learn all about NFTs and the metaverse then I highly suggest this episode with John Egan. John is the CEO of L’atelier, a subsidiary of the French banking giant BNP Paribas. BNP Paribas is the 8th largest bank in the world so if they are researching the metaverse then it’s a good signal that it’s about to get big.
How To Create Evangelists (For Your NFT Project)
Users within the NFT ecosystem have hundreds of projects to explore, and thousands of NFTs to buy. Why would they get involved with your NFT project and buy your items? How can an NFT project create a group of hardcore fans and evangelists that promote their product at every turn? It’s simple: Make them money. Now, let me explain.
Step 1 - Build a Reputation
This should be obvious, but your reputation is everything. Whether your project is an artwork, virtual world, or crypto-collectible, you should invest your blood, sweat, and tears into it. Making something great and showing proof-of-work (read more about NFT proof-of-work here) will inevitably cause you to gain a reputation as a quality project. The process to make something great is not easy, but your hard work will eventually be recognized and your reputation will grow.
Step 2 - Sell Below Market Rate
Selling below market rate is the key step to creating evangelists for your NFT project, but it seems counterintuitive. “Market rate” obviously means fair value. So, if your NFTs are generally trading (or auctioning) for 0.5 ETH each, then you should price your NFTs at 0.25 ETH. Your income will suffer in the short term, but if you are focused on the long-game then it will be worth it.
Pricing your asset below market rate will make it more accessible to new users. People rarely want to spend a large amount of money on an asset that they have just heard about or are buying for the first time.
The second and most important reason to sell your asset below market price is to enable early adopters (first buyers) to make money. If you purposely price your NFTs below the going market rate, then it’s very likely that early purchasers will be able to sell those assets for a profit. If a user experiences an increase in income each time they buy and sell your NFTs, then they will have an extremely positive view of your project. It will also cause them to promote your project out of their own self-interest, in the hopes that other people will become interested and increase the overall market activity.
To recap, selling below market rate accomplishes two things:
It builds a holder base. A lower price means it is more approachable to new users.
It enables early adopters to make money. Early adopters that make money will be happy and become evangelists.
Bonus Strategy - More Holders
I think a strategy that tends to help NFT asset creators is to create more NFTs. This also sounds counterintuitive because scarcity is a primary aspect of NFT value, but the more users who hold your NFTs, the larger the group of evangelists you will have. It’s actually better to mint five NFTs and price them at 1 ETH instead of minting one NFT and pricing it at 5 ETH. You will lower the entry price, making it more accessible, and have five fans instead of just one.
Plan In Action?
One of the best examples of this general strategy is from the artist JOY. JOY’s first 82 NFT art pieces were sold at 0.001 ETH each, and the sales process was designed in a very interesting way. Collectors could “steal” pieces from other collectors by paying a higher price than what was previously paid. For example, if I purchased a JOY piece for the initial 0.001 ETH, then anyone could come and pay 0.002 ETH and “steal” that piece from me. This is genius because the previous owner makes money and a new fan is able to own the piece. It is very likely that the piece will continue to trade hands many times over until the price gets to a point where it has reached its perceived correct market value. With this single strategy, a long list of JOY artwork fans were created and have made money. When I was researching secondary sales for crypto art pieces (check out my blog about it here), I was astonished at how many times JOY pieces have changed hands. JOY did this for his first 82 pieces of art! Now that is the definition of being dedicated to the long-term vision in exchange for losing out on short-term profits.
The virtual land platform Cryptovoxels is another NFT project that has implemented the strategy of selling below fair market value. The founder of Cryptovoxles, Ben Nolan, sold parcels of land below fair market value for an extended period of time. The land sold below fair market value for roughly one year while the user base slowly grew and early adopters became fanatics: they loved the platform and their land value was increasing. It wasn’t until there was a strong community of users (roughly one year after launch) that Ben started to sell the parcels for fair market value. This is another great example of transforming community members into evangelists by taking the time to build a strong reputation and selling below market value.
You want a community of evangelists. A group of people that support you every chance they get. Bootstrapping your community and turning them into fanatics is quite easy: Build great stuff and sell your NFTs below market price. Users will love you for your dedication to building and for enabling them to flip NFTs for a return. Lastly, to add more fuel to the fire, you can create more NFTs to create a larger community of evangelists.