Welcome to the Block & Mortar newsletter! Every week, I bring you the top stories and my analysis on where business meets web3: blockchain, cryptocurrencies, NFTs, and metaverse. Brought to you by Q McCallum.
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We’re deep into That Time Of Year, when people are paying more attention to family and friends than their handheld screens. So I’ll keep the next couple of newsletters light.
(If you are, on the other hand, staring into your phone in an attempt to avoid people at social gatherings … might I suggest browsing the newsletter archives? You can pretend that each issue is a hot new message that demands your full attention.)
In light of recent news about a certain celebrity meltdown – this is an evergreen statement; no matter when you read this, there will be someone who is due for an apology tour – I’ve been thinking about the risk a company saddles when it pairs its brand identity with a face. I touched on this in September, in a segment on Kingship. That’s the virtual band made of Bored Ape Yacht Club (BAYC) NFT characters:
When a label backs a band, or when a film studio backs an actor, they’re investing in high-profile people with real lives and real personalities. It’s entirely possible that there will be some messy story in the press. The scandalous love affair. The shocking drug habit. The old, racist tweet rant that somehow slipped through the nonexistent due-diligence exercise.
Those BAYC characters? They only have the life and personality that they are given. They only “exist” when and where the company wants them to. They can’t get into trouble. And because this arrangement lets Universal decompose the notion of a “music group” into its constituent parts of “personality,” “songwriting,” and “performance” – it can leave each facet to an expert in that domain. These BAYC band members are the perfect, low-risk celebrities – wrapped up tight like a movie script.
Such is the appeal of synthetic brand ambassadors. The Geico gecko, the Aflac duck, the League of Legends K/DA? Not only can they “work” 24/7 and appear in multiple places at once, but it’s unlikely they’ll damage the company’s reputation.
I wager, brand safety is one reason why cosmetics company Nars created the “The Power Players” – virtual brand ambassadors Maxine, Chelsea, and Sissi. As a bonus, Nars has primed their backstories for partnership opportunities:
Chelsea is a digital artist who could conceivably create her own collection of NFTs — for which Nars could collaborate with a female digital artist. Sissi is a recent graduate of fashion school — Nars might dress her by partnering with physical or virtual fashion designers, Fierro says. Or, she could partner with digital designers building their own careers for a Sissi collaboration collection.
(Partnering with another business carries risks similar to pairing up with social media influencers. Maybe they’ll be fine. Maybe they’ll be the next Enron. You won’t know till you know. But I digress…)
If you’re still on the fence about creating virtual brand ambassadors for your company, there’s one more statistic that should excite your marketing team:
Virtual influencers have higher engagement rates than humans (over twice the amount across all but two follower counts studied, based on average engagement data), according to research from VirtualHumans.org and Hype Auditor. This is, in part, due to avatars’ strong fan communities — to the point where 35 are now verified with a blue tick on Instagram.
Can a virtual character still get in trouble? Sort of. Their (scripted) line in an ad campaign could strike the wrong note on some social issue, triggering public backlash. But at that point the “spokesperson” simply disappears for good. They can’t resurface, years later, dishing dirt on your company in some desperate Where Are They Now style of interview.
Franklin Templeton, the behemoth investment firm, is exploring use cases in NFTs. That may not seem like news. I mean, who isn’t checking out web3 these days, right? And since they haven’t revealed much of what they’re planning, it’d be easy to write this off as a lot of Trust Us We’re Definitely Doing The Cool Thing We Really Really Promise kind of talk. Maybe. Maybe not. Time will tell.
But one point about their approach caught my eye:
Franklin Templeton allowed attendees of its Innovation Forum the ability to download the NFT through the firm’s Benji Investments app. It acted as “a badge” and was non-transferrable, the company said, and clients could use the token to access research from the Franklin Templeton digital assets team.
Did you see that? Franklin Templeton isn’t just exploring use cases; they’re also smoothing their clients’ on-ramp to web3. “Wanna try this? It’s free. And it unlocks some cool stuff.”
By the time the company has sorted out specific NFT-based initiatives, their client base will already be familiar with the technology. And who knows, maybe those clients will propose ideas to Franklin Templeton as a result. Win-win.
Take note of this as you plan your company’s web3 rollout. You don’t have to make a big announcement. You don’t have to force the NFTs on your clients. You can just … offer them a complimentary, low-risk sample and provide some incentive to use it. Nothing eats away at FUD quite like letting a person experiment with something in their own time.
I’d prepared a brief spiel on hardware wallets and crypto safety, but then saw that pseudonymous NFT champion @Punk6529 said it better:
_Get a hardware wallet for Christmas/Hanukkah/Festivus Make 3 addresses on it:
- Vault (never connect to any contract)
- Trading (for buying and selling on serious exchanges)
- Minting only (for unprotected ETH sex with unknown contracts)
This will get you 90% of the way there
One point I’d add is to be mindful of where you buy your device. That refurbished, “gently used” wallet may not be the low-cost deal it appears. Translating an article from France’s BFMTV:
“The risk of buying a [used Ledger] hardware wallet is that the seller could have modified the software that runs on the device,” emphasizes Sébastien Leguell. [founder of crypto media website Au Coin du Bloc].
“And so when the person creates their wallet and adds crypto funds to it, the pirate could gain access and rob the person. It’s sort of like selling someone a computer with a virus on it.”
The safe path is to stick with reputable vendors. Buy directly from the source, when possible. (No, Ledger didn’t pay me to share that link.) And if you can hold out a few more weeks, maybe score one of those fancy new Stax devices.
The discovery problem is a situation in which a product is effectively invisible. Usually that means the product is hard to find because it is in a crowded space of similar offerings. Think “apps in the iOS App Store” or “machine learning books on Amazon.”
The other side of the discovery problem is when your product is hard to find because the space is too sparse. Think of islands in the ocean or websites in the days before search engines. Metaverse events face this problem because they are scattered across a variety of platforms. How do you know what’s happening, when, and where?
A startup called Lighthouse wants to address that side of the discovery problem for web3:
The platform indexes information about experiences and events from more than 20 blockchain-friendly virtual worlds, including Decentraland, The Sandbox, Voxels and Mona. It’s releasing the platform following a successful beta in which over 40,000 testers registered, according to the company.
Lighthouse is another example of a company that is going one level below creating web3 experiences, to build the infrastructure that powers those experiences. This should reduce the barrier to entry for event attendees by helping them see that there are indeed things to do in this virtual space.
It should also reduce the anxiety of event hosts, by increasing the chances that people actually show up. Because no one wants to throw a big, expensive metaverse party that is mostly empty.
While looking up something else on Digiday (since you asked, it was this piece on Netflix’s ad platform) I found “Token to Play,” an interactive explainer for all things NFT.
If your social circle knows you as “the crypto person,” and they’re peppering you with questions … you can share that link with them. The “game” is really a collection of ten articles on NFTs. That will keep them busy long enough for you to slip away.
This was an issue of Block & Mortar.
Who’s behind Block & Mortar? I'm Q McCallum. I've spent the past two decades in the emerging-tech space. And I'm very interested in web3 use cases.
Credit where it's due. Big thanks to Shane Glynn for reviewing early drafts. Any mistakes that remain are mine.
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