In this episode we share panels that Jeff Kelley and Josh Kriger hosted during their visit to Austin TX in June of 2022. We’ll introduce an expert lineup of guests to speak on some exciting developments in niche areas in the space. For the first half of the episode, we dive deep into the benefits and the potential future of Social DAOs. Joining them for this portion are Shaan Ray (Head of Web3 Partnerships at Ionixx Technologies), Jonathan Gregis (Lead Blockchain Engineer for LinkPool, Co-creator of ATX DAO), Daniel Tauhore (DAO Master for MODA DAO), and Elmer Morales (CEO and Founder of Campus DAO). The hosts also discuss the move into Web3 Marketing with esteemed experts in the space: Zach Nelson (CEO of Genzio), Greg Gopman (Head of Marketing Business Development for Ankr), Tim Martinez (Co-founder of Digital Niche Agency), and Itai Elizur (Partner at Market Across). Don’t miss out on some exciting news, and stay on the pulse of the NFT space by tuning in to this jam-packed episode. Special thanks to DCentral Austin for sharing this content!
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Edge Of Austin 2022, DCentral & Consensus: 2 Panels – Social DAOs: Building Decentralized Communities & Web3 Marketing: How To Build Brands & Communities
I’m Shaan. It’s nice to meet everyone. I’m the head of Web3 partnerships at Ionixx Technologies. We build Web3 applications for entrepreneurs.
I’m Elmer Morales. I’m the Founder and CEO of Campus DAO. Previously, I’ve been a software engineer in this space for a long time and now building something cool in the Web3 space.
Let’s start with the basics for a moment. Who has the best description of what a DAO is that you would use to describe to your grandparents?
Think about a DAO as a corporation. Corporations have stock and shares that investors and employees own. A DAO is similar to a corporation, but instead of shares, you have tokens. Rather than being limited to a US audience, a DAO is a global organization that can be owned by the community, members, investors, founders, and so forth.
Society and communities are incredibly complex. What are the advantages of building a community as a decentralized DAO?
The advantage is the fact that it’s autonomous so the community can manage it. It autonomously executes the inherent logic within the DAO even when the community is not awake and at their computers. Transparency is also a very big deal, especially depending on the use case you’re looking at. For charitable DAOs, transparency is a big thing and it’s auditable at any given moment. Those are two. I’m sure there are several more.
When we think of traditional companies, we think of top-down. With community DAOs, it gets everybody’s voice. It’s a bottom-up approach of voices that you may have never heard from in a traditional company that gives proposals out or at least initiates proposals that everybody can vote on. That idea in a traditional company would never be heard.
It’s empowerment. DAOs are about voting DAOs and giving the ability for the community and token holders to have the power of the direction of where the DAO might be heading. They have a say in what is going to be happening. The way that I look at it might be a bit of a contrarian approach, potentially utopian as well, and maybe naive but flat and horizontal. The core contributors of those who are building the DAO and the community work hand in hand. It’s not like we have a hierarchical approach. It’s more like everyone collectively works together on delivering and executing what the mission is.
Another advantage of a DAO is giving access to early adopters. A lot of times, people find a cool project and they’re not able to participate in that upside. If you discover something cool, you’re part of it, and you help build it, participating in that upside is key because you get rewarded for that early adoption. In the traditional model prior to DAOs, you might get a retweet, but you don’t get to participate in that upside if you discovered Twitter on month one.
One of the beautiful things about what you talked about is the low barrier to entry and accessibility for anybody. I wanted to ask. When you think about communities in general, what makes a community ripe for the DAO model? What are the attributes of a community you would look for that say, “That’s a good fit for a DAO.”
Austin is a great place for this because with COVID and all of this migration into Austin, you have so many new people coming into this city that doesn’t know anybody. They’re either crypto curious or into the blockchain ecosystem already but they have no friends in Austin. What do you do then? ATX DAO is a big networking group. We have a bunch of meetups in real life, unlike traditional DAOs where everything is online. We create that bond between our members because we meet each other, go out, have beers, work on projects together, get people jobs, and get people that need employees. We create a massive network for Austin with all of these new people coming here. It’s a great ecosystem.
It also comes down to the specific mission at hand. What is the DAO trying to achieve? What are we trying to achieve? Who are the people that are going to be able to do that? If I’m trying to, for example, buy a Bored Ape, and I went to fractionalize the IP and give ownership rights back to those who hold it, you’re probably not looking at people who are entering into the space. You’re more than likely looking at people who have a little bit more money sitting in their wallets.
They might want to have a little bit of a piece of what could potentially be quite a valuable asset. What we’re doing at MODA DAO is trying to enable fair ownership rights for all musicians and artists on-chain. The people that we need to be able to do that are those who love music and those who want to make it. It does come down to, “What am I trying to do? Who are the people that are going to be able to help me to do it?”
The most important thing is having clarity and a very clear mission. As long as the community knows exactly what it wants to achieve and can write down the rules for how to achieve it, then everything else is easy. The most important thing is having clarity on what the common mission or the objective is.
Elmer, with Campus, we were talking a little bit about that before. Do you have some thoughts on that too?
Communities that are active and engaged and want to be part of the building of that entity are ripe for that. A lot of times, people discover things early on. They feel so connected to that mission. They’re interested in helping out even if it’s not an official role. Call it a volunteer. When you have a community with a lot of passionate members like that, then that’s very ripe for a DAO type of structure.
Passionate members are aligned around a particular vision that wants to be involved. These are some of the attributes of a community that could be ripe for a DAO structure. I wanted to ask Jon. You mentioned backstage this connection to other communities, not just ATX DAO but also looking outside of the borders of Austin. Can you talk to us about that?
What ATX DAO is trying to do is build the blueprint for city DAOs. We have talked to other cities that have that same need or want, but they don’t know how to do it. For us at ATX DAO, we started with not a single idea of how to do this. We created our Discord and our website and threw everything at the wall to try to figure out how to do this right. We want to help other cities that want to do the same thing that we’re doing in their communities as well. We’re reaching out to different cities from Tokyo to Istanbul and different states around the country to teach them how we did it and then at least point them in the right directions to start their communities in their cities.It really does come down to, what are you trying to do and who are the people that are gonna be able to help you to do it? (Daniel) Click To Tweet
Building any community is difficult, never mind one that has the infrastructure that you’re talking about, the guidelines of voting, and all the different dynamics. What are some of the pitfalls of DAOs?
Poorly written code is one of the biggest pitfalls. It also leads to a lot of security issues if the code doesn’t address some eventualities. The second thing to be aware of is regulation. There’s no such regulation at the moment but I feel like it’s coming and it’s creeping up on us pretty fast. I wrote a blog post about how the gap is narrowing between DAOs and traditional enterprise organizations.
a16z or Andreesen Horowitz wrote another blog post about how every DAO should find jurisdiction and think about the legislation that’s about to come. There’s no legislation but we know what it’s going to look like. It’s just in the metaverse, but eventually, you will have to pick a jurisdiction and operate more like a business. A lot of crypto people don’t want that but that’s coming pretty fast. That’s another pitfall.
We’re also speaking about legislation. We’re pretty lucky over in Australia. DAOs are slowly becoming more of a recognized legitimate business model. Potentially, in that part of the world, things are a little bit more progressive or a little bit faster-moving. In terms of other pitfalls, I would also think about speculation overall. You’re trying to build a community of people who are engaged in your core mission and what you’re trying to achieve. In any project, launch, or anything in crypto, there’s more than likely going to be someone who’s trying to have the next flip and make some money.
It’s about trying to figure out how to navigate that particular problem. You either turn those people into supporters by providing them with certain attributes or empowerment. It’s the deincentivization of sell pressure and trying to make sure that your DAO can hopefully succeed in this space. We’re still so early. I’m sure that over the next 5 to 10 years, we will see legitimate DAOs come from these early grassroots steps.
I wanted to add a quick comment on the poorly written code. That’s one of the pitfalls, but the way that we should think about DAOs is to think of them as traditional organizations. Even though they’re decentralized and anybody can contribute and get access to open-source code, you still want to have people within the communities that are leaders that can help navigate and define guidelines. In the case of code, there could be coding standards and other things that are still in place within the DAO that people have to follow.
That’s what we’re doing at Campus. Given we have a pretty strong background in building software organizations, we’re applying that same model within the DAO. It’s making members within the community who have been vetted and experts that can play a leadership role, guide, do code reviews, and things like that. You could still make it work if you translated the traditional how-to-run-a-company model into the DAO space.
To speak on that as well, as a company, a lot of people don’t talk about the growing pains as far as the DAO goes. As far as ATX, we started with 5 people, and then 25, 100, and 1,000. It needs to scale. You need to not grow so quickly that you outpace yourself. We tried to create a solid base that would allow us to scale to that next level. We have our committees that will each do their little thing to help our DAO grow into that size. The biggest pitfall is somebody growing too quickly or running with an idea without thinking it through. The best advice is to sit down and figure out who are your key players to create that base. From there, the sky is the limit.
Don’t leave behind the lessons learned from traditional business, organizational, and community structures. Take the best of it, leave the bad behind, and continue to grow. Dan, you mentioned the flat nature of the organization. That is a tenet of what you’re doing. How do you maintain that over time as committees form or people gain a little bit more influence or even voting power within the organization? How do you maintain that vision of a generally flat organization?
The way that I started thinking about the organization of DAOs, in general, is by thinking about them as living and breathing organisms. If you think about how a cell exists, you’ve got the barriers of the cell. In this metaphor or analogy, you can think of the barriers as the core mission. Within each part of that cell, you’ve got different parts that make up that cell. There are working groups. You’ve got marketing, tokenomics, and applicable gamification.
You’ve got something called DSC, which is the DAO Specific Component. With MODA, that’s got to with music. With PUMLx, that’s got to do with the move-to-earn. There are all these little individual working groups all working together cohesively and trying to figure out how to solve the core mission. I might get battered for this, but if you get some potentially centralized organizational structure within that flat horizontal structure, things will move.
The analogy and the way that I think about it is, let’s say you’re trying to sail a ship out to sea. Everyone has the same voting power and a voice. The problem with that is if everyone is saying, “I want to go East, West, South, or North,” the boat is going to sail in circles. You need someone to give some direction, “We’re going to go here because we want to do this.” That’s how I’m looking at it. You need that flat structure so that everyone can work cohesively and still maintain that organization so that we can achieve that core mission.
That North Star is pretty important. A lot of people are thinking about this and probably wondering, “How can I launch a DAO to support my community, grow my community, and achieve these same goals that we’re talking about here on stage?” What input or actionable advice would you have for folks that are looking legitimately to do this?
The first part of building a DAO is creating a community and a mission and getting people to support that mission. Before you go out, create a DAO and a DAO token, and do all this formality stuff. It’s testing out the market and seeing whether there’s demand for what you’re building or you can rally a community around that. In the traditional tech startup world, that would normally be an MBP where you go out and see if your idea has merit and would people buy it. Do some proof of concept for your DAO and see if people would have an interest.
I’ll give an example. I’m involved with another project called The Exotics Car Club, which is an NFT and a DAO that is doing fractional ownership of exotic cars like Lamborghinis, Ferraris, and things like that. The club allows you to rent and take McLaren out for a spin as long as you’re a part of that club. One of the things that they did to prove that motto is they hosted a small event out in Orange County, got about 50 people together, and tested the market to see, “Would people buy this?”
Out of those 50 people, probably 40 of them were like, “I’m in immediately. I no longer have to buy a Lamborghini. I can now spend this few hundred or a few thousand dollars on this DAO token, be part of that, and get access to the cars.” That was a good example of a proof of concept and how someone should test the waters. That would be step 1, and then step 2 is to go and make it a little bit more formal.
Many people don’t know this, but here in the US, Wyoming created a legal structure for a DAO. It’s a DAO LLC. They’re the first to innovate within the United States. I’m sure there are others around the world that are going to follow them. Researching the Wyoming DAO and setting up an LLC structure there is probably step two, in my opinion.
It‘s goal-oriented like any other company. When you start a company, you have to have a goal in mind, not just to start a company to start it. For your DAO, figure out what goal is that you want to attain, and then find those people with that same goal. With ATX DAO, when we first started this, our goal was to be the crypto capital of the world. Every one of our members believes that same point.
That’s why we progress further and appoint with the government side. Because we are a community DAO and a city DAO, we can help build the legal structure and the government structure by doing that as well. We were in talks with local, state, and even Federal-level legislation to get the crypto side of things better in not only Austin but Texas.
To get more technical, I think of it as development funding and deployment. Once you got the community stuff and the business side figured out, you develop the DAO, create the governance mechanisms, and think about how you’re going to fund it. Every DAO has to have a treasury. The treasury is a little bit of money that the DAO needs to execute the inherent logic within the DAO. If the DAO is about buying and selling NFTs, there needs to be some money in the DAO by the first few NFTs.Poorly written code is one of the biggest pitfalls that leads to a lot of security issues. (Shaan) Click To Tweet
The 2nd step is funding and then the 3rd step is deployment. That would be where you put all the logic you’ve created online on one of the blockchains. The developers would step back and the community would step forward. The governance from that point onward would be with the community. Our company can help out with the development part of the DAO once the business logic and the communities figure it out.
I‘ve also started thinking about how DAOs can potentially be a little bit scary, but the mechanics of a DAO and what a DAO is trying to achieve at the end of the day could be quite applicable across the board in different variations. I’ve been working on different ideas for artists. Quickly think about how musicians have teams of people who will help them do what they need to do best. Musicians are artists at the end of the day.
They’re trying to create their art but then behind them, they’re going to have a manager, A&R, publicist, etc. Instead of that model, what if the team was decentralized? What if you built a community of thousands of people who could bring opportunities to that artist? Instead of having this small group of people with 4 to 8 minds, you’ve got thousands of minds. You’ve got someone in your community who happens to know someone at Sony Records and can get you a publishing deal.
You’ve got someone in your community who knows Cole Bennett of Lyrical Lemonade and can get you a music video. You’re leveraging your community to further your career along, but you wouldn’t necessarily deem that as a DAO. None in my opinion anyway. I’ve thought of it as close to a base. You’re building a fan base of people. The mechanics at a root level still work but slightly differently.
Take note. These guys have been there and done that. They’re doing it now. They’re actionable steps for sure. We appreciate that. One part of learning and building that I’ve always appreciated is looking to others that have been there and done that. I’m wondering. In your view, other than your projects, what do you see as the most effective functioning DAOs in the space that we should look to for inspiration or guidance?
One DAO that I’m a fan of is Gitcoin DAO. They’re doing a lot of cool stuff for developers in the space. They have been very transparent about every decision, every vote, and everything. The founder of Gitcoin is not about getting rich quickly. It’s more like, “How do we support the community?” I’m a big fan of that. For those of you in the audience that are looking for a good model or someone to follow to see what they’re doing and how to run a DAO, I’m certainly a fan of Gitcoin DAO.
I like Decentraland. I’m not associated with the project or anything, but it’s a cool DAO. It’s an example of a very complicated DAO with many moving parts. Decentraland allows you to do city management and assets like you can buy digital assets in the metaverse. Another DAO I like is BadgerDAO. BadgerDAO creates DeFi opportunities for people who were holding Bitcoin. BadgerDAO is slightly smaller. Decentraland is a much bigger project. I’m associated with neither but they are very cool projects.
When we think of a DAO, it’s such a broad term now. When you think of DeFi companies, you wouldn’t think of certain DeFi projects as DAOs, but a lot of them are. When you go into Snapshot and look at all of the different projects that are happening, you say, “This is a DAO.” A lot of companies don’t have to just be DAOs. They can have a DAO mechanism as part of their company. They have some type of voting strategy, governance token, or something.
You don’t have to label yourself a DAO. Any company can be a DAO as long as they allow their employees or users to have some type of say on how that company runs in the future. I’m not necessarily bullish on any certain DAO outside ATX but I am bullish on the whole governance principle being able to help your company grow from the bottom up.
I don’t think anyone has quite cracked it yet. I agree with Shaan that Decentraland is pretty cool. I’m not associated with the project either. The reason why we have these conversations and sit up here at these conferences, and you listen to us is because no one has quite cracked it yet. It’s such an exciting opportunity for people to come out of the woodwork, work together, and build something that truly pushes the envelope forward.
I don’t think that anyone has done it perfectly. Potentially, it’s not going to happen for another 5 to 10 years. Eventually, it will happen. If you’re thinking about a DAO to follow specifically, follow as many and read as much as you possibly can. Try to take each part that you think is good and resonates with you and turn it into something different.
Here are a few other thoughts on that. To his point, we’re still early. DAOs are a very new concept. Even though it has been around for a couple of years, it’s barely picking up traction. Follow a bunch of people and other DAOs and do your due diligence but also think outside the box. One example of thinking outside the box is Goblintown NFT. You probably heard of them. Everybody thought the playbook was XYZ that everyone was following it.
They came out and said, “We’re this new NFT project. It’s free. There’s no roadmap and Discord. There’s nothing. We’re going to go on Twitter spaces and make random goblin noises and fart towns.” It went from a free mint to 90 ETH in a couple of days. I‘m a big fan of thinking outside the box and doing things differently, and just because someone hasn’t done it doesn’t mean you can’t do it.
We’re at the beginning. There’s so much more. In your view, what’s the next step for DAOs? What does the future hold in terms of innovation and evolution of the different features? What are you excited about?
I like the point that Jon made. That’s the future for DAOs. You’re going to have DAOs within enterprise corporations or organizations. I’ll give you an example. Let’s say you’re a food company that creates bread. Once the bread comes out, you could have a DAO, which is like a conveyor belt with all kinds of sensors. They take pictures and measure how the bread’s doing. You could call it the quality control DAO. Automatically, you put your bread on there.
All the machines and everything else are hooked up to the DAO through oracles. It comes out on the other side. You either get a pass or a fail for each loaf of bread. You could have DAOs within corporations. The quality control DAO is one concept but you could have it at any stage of industrial manufacturing or even regular marketing processes or anything else. The space between traditional enterprise organizations and DAOs is closing fast.
The second big thing which is going to be huge is that there’s an explosion of sensors and IoT devices across the world. They’re everywhere. If you think of each sensor, it’s a potential oracle. You could have granular data and multiple sources of that data to confirm that it’s real from anywhere in any room on any highway or restaurant. That opens up the use cases for DAOs where you could have a DAO for almost everything. I’ll give you a logistics example. Let’s say you’re shipping freight across the Canadian border. There’s a truck that’s driving up past Detroit. It enters Canada.
As soon as it crosses a certain point, the IoT device in the truck gives the GPS signal that we have crossed this point, which means all the vendors before that point can be paid. All the contracts before that point can be settled. All of that can happen programmatically. It significantly reduces the operational costs of a person coming and verifying all that. Going forward, you can add quality control, a lot of your paperwork, and your international compliance. All of that stuff could be different DAOs or different smart contracts within a larger DAO.
Are there other thoughts? What does the future hold?
I completely agree as far as large companies integrating some type of governance protocol into their system. It is interesting when you’re talking about the IoT devices working with chainlink. Our whole bread and butter is bringing the data from the real world into smart contracts. When you’re talking about a governance side of that, having the ability to use proposals in a certain way from the very bottom where you have workers that could have awesome ideas to bring that into fruition is amazing.It needs to scale and you need to not grow so quickly that you outpace yourself. (Jon) Click To Tweet
As far as the future of DAOs, this is going to become a big deal within the startup space. Traditional startups would have to go to raise venture capital funding and get approval from some male individual on whether their startups should get funding or not. A lot of startups are going to be better served with the DAO model, enabling their community that’s also going to be the users, supporters, and buyers of their product, to make those decisions rather than some individual in Silicon Valley. I’m excited and bullish about startups looking at the DAO model as a better form of fundraising and governance rather than what we have seen in the past.
Here’s what’s interesting about everybody’s points that have been made. I’m summarizing it in my mind. It’s almost like the future of a DAO is like, “Is there a decision to be made? Is there value in that decision having more than one person thinking about it?” You can do that as micro and as macro as you want. Imagine a DAO that was a sovereign state of a million people living there that were governing themselves.
It would be such an interesting thought concept to be able to do that. In a democracy, that exists but DAOs are the next step in what democracy could be on a micro level when you’re eliminating issues within the supply chain or creating opportunities for decisions to be made without the need for headaches and all the superfluous things in the middle.
The first class of DAOs we’re going to see, as soon as regulation allows self-driving cars, is people buying fleets of Teslas, deploying them on ride-sharing apps, and organizing them in a DAO where the car gets itself serviced. It picks up and drops passengers. It pays and gets tickets or whatever else. You’re going to have a DAO that’s going to have a physical implication in our real world, but it’s all going to be governed through a DAO. As soon as they allow self-driving cars, that’s the first batch of DAOs we’re going to get
This is this seriously disruptive, game-changing, and society-shifting stuff we’re talking about here. Thank you so much for sharing that. We wanted to take a little bit of time and answer any questions from the audience. Let’s do that.
There needs to be some type of leadership in any DAO. It can’t be a bunch of people running around with their heads chopped off. It needs to have structure. If you’re a good DAO, you have structure. If something happens like that, you have the ability to have people take control and then figure out what needs to be done from there.
A lot of it starts at the beginning. In the case of LUNA, if you look at their smart contract and the way it works, prior to the crash, a lot of people already saw that coming. To begin with, the way the code was structured was a disaster in the making. People were in denial about it. In the case of DAOs, outside of having good leadership, you need to have a good engineering team and engineering leaders that can prevent that from being written in a smart contract to begin with.
Research before you enter a DAO. There are a lot of stablecoins that are not pegged to the US dollar but claim they are. There are little loopholes they go around. Do a lot of research before you get into it. I agree with Jon as far as the mechanisms to course-correct when something goes wrong. You need to have some leadership in place.
Thanks, guys. Are there other questions?
That’s the model that I’m thinking about. When you’ve got your cell in your individual working groups, you could have one leadership DAO, which is ten people. You need a super-majority vote to pass something, which will then potentially go around to the rest of the working groups as well. You might have a working group where we will work on marketing, tokenomics, or gamification.
Each time, decisions need to be passed. Micro votes will need to occur in the DAO before it goes forward. Potentially, you could even think of the final step as some DAO light where the broader community who hold the tokens or token holders are the ones that are empowered, “We need your green light. We need your DAO light to be able to proceed with what we want to do.”
It’s a distributed proof of stake. Everyone is involved, but let’s say every 100 users appoint one person to the leadership committee or something like that. We need to have a couple of leadership mechanisms. One is crowdsourced from the entire community. One could be the founders of the project or someone that’s involved more full-time.
I appreciate that. That’s our time here. Before we break, I wanted to make sure we had a chance to let the panelists share where you can find them on socials and follow their projects.
I’m Jon Gregis. You can check out ATX DAO at ATXDAO.com. Come to our event. We have a big banger going on. Go to ATXDAO.com/Events. Check us out and get an Eventbrite ticket. You can catch me on Twitter @An0n_Jon and @Jon_Gregis on Instagram.
You can find me on Twitter @DAOMasterDan. You can find the projects I work on @MODA_DAO. There’s also PUML and Jack’s Base, which is a company that I’ve co-founded. It was the idea that we were talking about earlier.
I’m Elmer Morales. Thanks for coming to our talk. I’m on Twitter and Instagram as @ElmerM. You can follow my company Campus, which helps brands build spaces in the metaverse. We’re out on Twitter and Instagram as @CampusMetaverse.
I’m Jeff Kelley. It’s @EdgeOfNFT on all socials. Thanks again for coming out. Thank you to our panelists.
I’m glad to be here. My name is Zack. I’m the CEO and Founder of Genzio. We’re a Web3 marketing agency specializing in the development of influencer Twitter marketing, Discord management, and community management.
My name is Greg Gopman. I’m the Head of Marketing and Business Development for a company called Ankr. We do infrastructure to help blockchains run faster and better. I’ve been in the space for years. I also built a company called Akash, which is another infrastructure company on the Cosmos Network. I specialize in crafting narratives that communicate well to the Web3 community and products they want to see and continuing that process with content that plays on all different channels.The first part about building a DAO is really creating a community and a mission and getting people to support that mission. (Elmer) Click To Tweet
I’m not Jason Fishman. I’m his Cofounder. He wasn’t able to make it. I’m Tim Martinez, the Cofounder of Digital Niche Agency. We specialize in investor and user acquisition heavily focused on paid media. We are a full-service advertising agency located out of Los Angeles. We have a staff of about 25. We have generally focused on raising capital. That hasn’t been our sweet spot but we do many other things beyond raising capital for early-stage companies. We’re going to get into all that. I’ll stop my pitch there.
My name is Itai. I’m one of the partners at MarketAcross. We are a Tel Aviv-based PR and content marketing agency. I used to work for Wix, which is a pretty big startup. I come from Web2. We have some cool big clients. I’m sure we will elaborate about cool stuff later.
One thing I’m thinking about is hearing what you all do. We should talk about local versus national versus global marketing as part of the conversation because there are some interesting nuances there. For starters, let’s differentiate Web2 versus Web3 marketing. What are the major differences in terms of even the language and the approach to it? Zack, based on what your company does, what does influencer marketing look like in Web3 versus Web2?
We do more mainstream marketing. For example, one of our past clients was Skittles. We worked with them on a Best of Twitter marketing competition that Twitter hosts every year. Brands compete in that to see who can get the most engagement. The reason I mentioned that is because Skittles isn’t necessarily Web2 but it’s more of a traditional company.
This isn’t necessarily something native to Web2. One of the main differences here is this. Traditionally, you buy a product, you take it home, you use it, and then you’re done. If a Web3 product is good, whether that’s an NFT, blockchain, or a token, you’re going to own that forever. The community management of the people who own your different products is important because they’re a part of your community forever if your project is successful. That’s much different than buying a MacBook or something. You use it to a certain point and then throw it away. The marketing nuances there are important.
Are there any other distinctions between Web2 and Web3?
Web2 is more about the product and the users of the product. Web3 is more about the belief in the product where the majority of your people are investors. Whether they’re investors technically or not, there’s someone who’s believing in you and putting some money behind it. They want to have a shared narrative and belief in the community and feel like things are right. That matters almost as much as the product itself. In the Web3 products, you see few actual daily active users. You have a ton of people you need to engage and bring into your community. It’s more about that shared feeling, community, and brand of it.
The stakeholders converge together like technology. With that comes greater responsibility to manage those stakeholders and bring them into the narrative.
It’s a big topic. Marketing is marketing in general. It’s good, fundamental, and sound practice of marketing and finding a good value proposition. Why does that person care? If you don’t care, it doesn’t matter if it’s Web2 or Web3. It’s my job as a marketer to find that a-ha moment, help you care, and then lead you down a path and a journey. Whether it’s Web2 or Web3, I see it as a little irrelevant. Can I get an individual to care about my project, bring them where I need to bring them, and get them to take the actions in a certain sequence? That’s how I view it.
First of all, most Web2 businesses have at least one clear CTA or Call to Action on their website. When you do a campaign, you have a CTA. A lot of crypto projects or Web3 are like, “Join my Discord.” It isn’t exactly a very elaborate CTA that you get a lot out of. I agree that what most Web2 companies want is for you to come to sign up for a year prepaid and maybe share it with a friend, and then they’re happy. Web3 is more like joining a cult. There are good things and bad things about that. That’s the stuff you already talked about, but most Web3 projects have a floor price or a token price from day one.
That is stressful. That’s also connected to the community. I’m pretty sure that the users of Salesforce aren’t affected by the price of the stock of Salesforce. They wouldn’t hate the company or love it if the price goes up and down. Also, it took years for Salesforce to have a stock that’s listed. That’s a very big thing. Everyone talks about community. Community is usually as good as your floor price. There’s a lot of managing that part of it, which is what’s real and what’s not, “How do I deal with this 24-hour price thing?” There are a lot of delicate things when dealing with that.
There’s a lot of transparency and visibility around the heartbeat of the organization in its early infancy when it’s still forming itself. That leads to my next question. Tim, why don’t you kick us off on this? You have done launches. I know DNA from being in LA. Anyone in LA knows what you do. You also are about full lifecycle marketing like a lot of the guys on stage. I’m curious about what tactics and strategies you see as important to not just have a good launch but to create long-term sustainability. There have been so many projects that I’ve been a part of. They are quasi-rug pulls or rug pulls where the floor drops quickly. How do folks here prevent that from happening?
In the Web2 space, especially when we’re talking about raising capital or building businesses, let’s talk about entrepreneurship as a broad topic or stroke. If you sincerely care about what you’re building and you’re adding a lot of value to the world, the community, and your fellow man and hoping to make the world a better place, why does that need to die the second year campaign is over? You’re the founder. This is your founding team and everybody’s blood, sweat, and tears fifteen hours a day. You’re living it and owning it. Your community is going to feel that. If your campaign wraps, you’re like, “That was it. Thank you so much.”
Marketing is an always thing. It’s not a sometimes thing. That’s a very big gap when we see people or brands.
They do a project plan. It ends at a loss. They’re like, “Now what?”
I’ll give you an example. We do a lot of PR. We have a lot of super legitimate companies who come to us every few months and say, “We have something to do a PR about. Someone should care about it.” I said, “It’s very hard, first of all, to maintain a cadence like that and every six months to come with a journalist or something. You also need to show that you’re doing things.”
Not every pitch is going to work but you need to have a pitch a month so they know that you’re active. You’re coming in and saying, “We’re going to go in this building period because we’re devs. We’re going to close the blinds for six months.” It might mean a lot for the business sense that you think, but marketing-wise, it kills a machine that’s very hard to sometimes rejumpstart where it started.
I wanted to add to that too. This is where community management is important. If you think of marketing and community management in Web3, you can’t have marketing without community management. It’s almost vital to the business. I also think that Web3 users are more skeptical of traditional advertising.
Web3 users see themselves as the leaders of a new generation for privacy and all of these things that we believe in with blockchain. If they see a company that has this messaging promoting itself on a Google Ad, they may not be as receptive because they are looking for more community-based marketing. They look for influencers or other folks that they get education from versus a more traditional means. That makes it more sustainable.
Let’s hear from Greg. If you all don’t know Ankr, they have 165,000 community members on Twitter and many more, I’m sure, beyond that off Twitter. You have built a sustainable community. I’m curious about how you did it. What are some of the pivots along the way? What did you learn in the process of building such a large community?Marketing is always an all-time thing. (Itai) Click To Tweet
We had a lot of support. Ankr is lucky to be one of these middleware companies that work with a lot of the major brands in the space. We’re partners with Polygon, Binance, Avalanche, Phantom, and all the big L1s and L2s. Those are our main clients. We also work with top dApps and provide them with infrastructure. We have been lucky as those partnerships have come along to be able to engage with those communities and bring them into our fold.
It sounds cheesy, but early on, it’s nice to the contest and the things to get people excited. Contests work. We started Ankr. It wasn’t a high-token-priced product. People notice when the token starts moving. They want to join that army. The LINK Marines were a great case study on how to moon your token in a way. There’s a nice crescendo as these brands are building. Ankr is lucky to be in this stage of the process. We still believe we’re on track to be a top-30 company, but we’re not there yet.
There’s a nice crescendo of building your community and how people come on board, when they join in your journey, what they believe they’re joining for, and what they believe where you’re going. We have done a nice job of crafting that story early on. We’re at a new point in our evolution where we’re crafting a new story. We’re truly excited about what we’re launching with Itai. It’s nice to have a lot of fun and exciting things on the horizon for your community members to latch onto. If one narrative is ending, you have to have a new narrative beginning.
Were there any course corrections that you made along the way?
Ankr experimented with a lot of different products. Around 50% of them have been misses.
That’s a good win rate in this industry.
We build real products but we have also done parachain crowd loans, which didn’t hit. We were the first thing to introduce liquid staking on Ethereum but we didn’t have enough marketing support, so Lido beat us on that. We’re number 2 or 3 for liquid staking. We brought liquid sticking to seven other chains. We do innovate in the space, which is a cool thing for Ankr. People appreciate that.
It does talk a lot about Ankr. In general, companies like Ankr understand that narratives are important but it’s about doing things. That’s one tip I can tell people. Unfortunately, marketers like us have been helping projects for the past few years. The promises of how this X business will revolutionize Y industry have been covered 30,000 times. The problem is that 29,999 of these companies didn’t deliver.
The most important thing is to build and deliver. It doesn’t have to be the hugest thing in the world but there’s such a big difference between saying, “We did something. That’s why it’s important,” and saying what we want to do. The potential is overhyped in this industry. Doing ten-yard moves but showing that move all the time is a very influential thing to do.
In traditional finance, you have something called investor relations where you have to communicate with your investors. Yet, in the world of marketing, we don’t do that. Why?
I interviewed one of the co-founders of Genopets, Jay. Every two weeks, they put out what they have been working on and where it’s at.
I also want to touch on that. I have clients where I’m like, “You’ve been quiet for the past four months.” They’re like, “Go to our Twitter. Here’s our update. Go to our Telegram. That’s important.” That’s not the same thing as going out there and doing things. It’s all important but you’re going to say, “We’re talking to our community. Here’s our weekly update.” It’s important to stay alive that way but that only talks to your community members. It doesn’t signal to the outside world, “Look at these things you should take a look at.” Unfortunately, I don’t think that any brand that wants to succeed can just do one of what we’re doing here. You need to do earned, owned, paid, and everything.
One interesting thing I will say is Ankr built a lot of their things in the last bear market. As the bull market came about, we were appreciated for having a company that had products. When the bull market was there, all these companies came with products that they didn’t deliver, but they still grew up, which is interesting too. As long as you have the right thing when that market comes, that seems to be one of the biggest factors. It’s being ready.
My co-founder and I produced NFTLA. We’ve got a lot of feedback. People had a good experience but the biggest compliment is, “You said you were going to do it, and you did it.” We got hugs for that. That shows where people are at and how many times there has been betrayal in this industry where people want to know they can count on your words.
I wanted to add it because you made a good point. Before I founded Genzio, I worked at OKX. I was on the listing team there when all of these tokens, L1s, and things were getting started. They were all asking us to get listed. It was our job to figure out which of these are these are real and which of them we should list. Years ago, Coinbase and these different companies were much more selective about what they were listing. To your point, they looked at what they were building. The more you build and are putting things out, the exchanges will see that. The community rewards it.
I don’t know if we’re bull or bear. I’m not smart enough to understand that. In the past bull market, the biggest project that did the biggest success was the projects that launched in the bear market like Polygon MATIC. Full disclosure, I’ve been working with them for a long time. Look at FTX. They were another three-letter exchange. We did their launch. That didn’t do that good of a job because it was another exchange in a bear market.
OpenSea has been around for years.
Solana was another Layer 1. This is a good time to launch stuff if you did fundraise enough to have the bandwidth that you want to build.
I remember SBF trying to raise $2 million a token for Alameda in the very first seed round. We were all like, “I don’t know if anyone would invest in dollar exchange right now.”
Derivatives are what we need.Never quit. People stop too early. (Tim) Click To Tweet
I have two more questions. One, let’s talk about the common pitfalls and mistakes in Web3 marketing. Try to hit on some things that we haven’t talked about yet. What are some of those, “Oh, no. You did that,” and then you have to rewind it that we can help these folks avoid it?
I would like to give an example. Everyone remembers when Kim Kardashian promoted EthereumMax. It tanked. As a marketer, I was like, “This is horrible. She’s probably going to get sued.” To anyone in the crypto community who saw that, it came off as so inauthentic. Another example is Randi Zuckerberg’s music video. I don’t know if anyone has seen that but it’s cringy. It’s very clear that these people don’t care about Web3 and that they’re in it for a quick cash grab.
The Web3 community understands that. It’s being authentic, having community members who are building in the ecosystem be the marketers, promoting them to grow, and having it make sense. If you’re going to have a gaming project, have an influencer or someone who is already doing gaming. Don’t throw a random name on there because they’re famous. It’s going to come off very badly.
My best piece of advice is whether you’re working with a marketing agency, a new employee, or one of these influencers, you have to keep them on a very short leash in the early beginning. Hold them tight in coming through on their deliverables to know if they’re somebody who does things or someone who doesn’t, especially in the bull market. Things get frothy. Everyone wants a lot of money. You get stuck in these contracts, and sometimes they’re long contracts with people that don’t do the work. Be cautious and be tight on your leash. Micromanage the first month before you let people run because people will work for you for months and not do shit you won’t even know.
Pilots are important but also making sure that there’s not a bait and switch, that you have the right people and their team committed to you, and that they’re not taking on more than they can chew. A lot of marketing companies in Web3 I’ve found are suddenly good. They have 30 clients, and then the value is diluted for everyone.
Never quit. If you have a project, you want to drive this point home. What happens is people stop spending too early and get their feelings hurt that nobody wants to show up to their party. They’re like, “This thing sucks. No one wants to come. Nobody is in my community.” Keep going. If it’s not this project, maybe there will be another project. That’s the best piece of advice I can give to any founder or entrepreneur out there.
Everything here is correct. On the devs’ side, there’s a very big disease, “If I build it, they will come.” There’s so much cool stuff being built. I had clients who built everything that you’re seeing. People built Uniswap before Uniswap was there but people didn’t come. The concept of a lot of devs is like, “We did it. It’s done. Now, to the next thing.” MailChimp built MailChimp and then marketed it for fifteen years. I believe in getting main products out there and always innovating but this can’t be like, “I built it to say I built it and put it on my Twitter. Here’s the next thing.”
You do some global marketing. Are there any specific thoughts there to add?
I would differentiate between grassroots community stuff. Let’s put Southeast Asia. There are a lot of great things there but when it comes to the top of the funnel, I do think that usually, these places do still live off of signals from the West on the more upper-style PR level. When you go down to influencers, I do think that localization is important. I also think that most Web3 audiences are pretty prolific in English, at least in a lot of the world. Maybe Asia is a bit different but I’m not a huge believer.
Marketing is marketing. Message is message. This is a pretty connected world, so I wouldn’t go down and do super-duper different actions or tactics unless there’s a specific demographic you want to get, like grassroots. If you’re a play-to-earn game who wants growth in Vietnam, then taking us to do that specifically might not be the right thing, but taking just that agency that knows how to do Vietnam can build the playbook. It’s a bit of everything.
One more thing about global marketing is there used to be communities that were different than the other communities. Japan and Korea operate completely differently, and China as well. If you want to get exposure to those communities, you have to work with a local agency there.
There’s a huge language barrier.
All three of those communities are off the map these days. It doesn’t even matter. We wouldn’t work with anyone in Korea because no one can get listed on Upbit anymore. China banned Bitcoin. I don’t even know what the fuck is going on in Japan.
Japan was, first of all, the biggest place where Bitcoin started. The ICO boom was very big. At some point, they closed the door.
They were like, “Crypto is bad. We all don’t believe in it.”
I haven’t seen a project out of Japan in years. It’s interesting.
I love Japan. I went to Kyoto. You can bike and no one ever steals it.
That’s the weirdest travel recommendation ever.
It’s awesome. Go to a city where you could bike around, leave your bike, and not have to worry about it being stolen. Let’s get straight to the quick-fire question.
You mentioned a lot of the problems with NFT projects or whatnot are not having a product and then promising a product. For our company, Immersed, we have a utility product. We’re jumping into the Web3 space. How would you go about building a community for something that already has that utility?Turning Web2 players into NFT people by product and not by announcements, tokens, airdrops white lists or whatever, is a really good place to start. (Itai) Click To Tweet
First of all, that’s a nice plug for the product.
He kept it subtle. It was a soft shell.
In a weird way, I would argue you don’t have a product yet in Web3 because Web3 products in their own way in NFT communities are the community themselves, the promise of what that community stands for, and what it’s going to be. Look at Goblintown. You’re like, “What is that? It’s not art.” It is art. Everything is art but they have an extremely strong Ethereum community that they pulled in from their insiders.
They brought in their other insider communities. That became this thing. There’s this cool stuff behind it. When you’re launching your NFT community, brand, and product, you have to have that ethos of what you stand for. You need to have that rallying call to bring people in early to your spaces, Twitter, and Discord, or however you want to run it.
Are you trying to bring your old loyalists in there? Are you trying to focus on some new blood in and get those folks?
It’s new blood because you will probably get 10% of your old loyalists if you’re a Web2 community. A lot of them don’t believe in Web3. Some of them don’t understand it. They may not be active on Discord. They’re using your product. It’s a different industry. They could be your brand builders and loyalists, which would be great. You incentivize them with tokens, NFTs, or however you want to do it to make them feel like they’re getting paid. You have to start from scratch on how you’re going to build this new thing.
Another cool way is if you have a good gaming Web2 project and you want to introduce crypto. Do something pretty untraditional without telling everyone ten times before it. One day, tell all the people on your user base, “There’s that sword that you’ve been building. You can click and turn it into an NFT on that chain.” Turning Web2 players into NFT people by product and not by announcements, tokens, airdrops, or white lists is a good place to start. You can do all of that. A few games also want to do that because they want to be more compliant with Google and Apple. They’re looking at, “How can I introduce NFTs without doing any drops? After that, hopefully, I’ll be able to monetize that.”
A lot of our clients are Web2 clients entering Web3. What we tell them and what we’re finding is like, “Don’t even say it’s an NFT. You don’t even have to say it. Make a cool video game and have that be the utility. People who are into NFTs will figure it out but you don’t even need to say it’s an NFT on the website or anything.” We’re finding a lot of success in companies that are using that technology without marketing that it’s an NFT and being more successful than some that push the NFTs.
We have time for one more quick question.
From what I understand, you have been mentioning strategies more for startups. How do you see major brands jumping from traditional marketing to Web3?
My favorite collab is Nike and RTFKT. That’s a buyout but I fucking love both of those companies. Adidas did a pretty cool collab also into the space. They were like, “We don’t know what we’re doing but we’re a great brand. You are the top NFT people. What do you want to do?” They went to Gmoney. You probably know the story better than I did. I was like, “I can drop something and figure out an early way to make a new thing with you.” People respected it because it was a big brand but they utilized Web3 people and gave the Web3 people control with some access to the brand.
The theme in those two projects is culture. Sneakers are great streetwear. Make sure that you have the right culture for Web3. Doing a cultural audit is not a bad idea before you jump in. A lot of brands approached us around NFTLA and asked the right question, which is, “How can I authentically integrate with the community in a way that is not perceived as us as an outsider?” That’s a key theme. Guys, this has been cool. I would love to let everyone know how they can stay in touch with you and learn more about what you do in this space. If we can go down the line starting with Itai, how do people find you on Web3?
My Telegram and my Instagram are both embarrassing. It’s @CryptoGops. My last name is Gopman. CryptoGops was a thing before. It’s still there.
I’m @JoshKriger on Twitter. Check out our show at EdgeOfNFT.com or @EdgeOfNFT. We have interviewed over 150 leaders in the space. We drop two shows a week with lots of fun contests and alpha. You can learn more about NFTLA, which is going to be in April 2023 at NFTLA.live. Thank you all very much.
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