While some brands are flocking to the blockchain by launching NFTs or establishing themselves in the metaverse, other companies are still on either side of the spectrum. From contemplating whether their customers are ready for a new virtual shopping reality, or if the crypto-native internet users will be receptive to their brand’s debut in Web3, not all companies are ready to embrace the blockchain.
But in these early stages of blockchain development, what a lot of brands aren’t realizing is that the move to Web3 doesn’t have to be an all-or-nothing transition and can be taken gradually and thoughtfully. That’s how Amanda Cassatt sees it, according to the latest episode of the Digiday Podcast.
Cassatt is a pioneer in Web3, having assisted in the launch of the Ethereum blockchain as well as co-founding two companies, Serotonin and its subsidiary Mojito, both of which work with companies to find their footing in the Web3 space. As CEO of marketing agency Serotonin, her team works on customer acquisition strategies that are directed to crypto-native audiences, and as president of Mojito, a NFT studio and tech platform company, clients like Sotheby’s have worked with her team to execute NFT drops and Develop metaverse presence in some cases for the first time.
While there is a lot to understand about the blockchain, Cassatt said the strongest approach a brand can take to enter this space is to remain focused on the unique value proposition of a company.
Below are highlights from the conversation that have been lightly edited and condensed for clarity.
Taking a more digestible Web2.5 approach
Most of Mojito’s customers and most of Serotonin’s clients aren’t coming to us saying, “We want to recreate our entire business in Web3 and dispense with Web2.” Web2.5 is a term that we’ve coined for that in-between area that’s getting denser and denser and makes sense for companies to be in.
A lot of the best-known businesses that are known for working in the crypto or Web3 space actually are not themselves Web3 business models. I would point to Coinbase, for example, which is a really well-known company in Web3, but their main business model [is] a centralized exchange. That type of business has existed since the dawn of money markets being the way they are, and they are [taking custody of] your crypto for you, [which is antithetical to the Web3 ideal of a decentralized internet but is necessary for this stage of Web3 development that we are in].
Centuries-old companies are evolving into Web3
Sotheby’s was founded in 1744 and they saw, very early to their credit, the burgeoning NFT space as an opportunity for their business. And they, in partnership with us, we’re able to take the core thing that makes Sotheby’s Sotheby’s, and that makes Sotheby’s valuable, and translate that into Web3.
So what makes Sotheby’s valuable? They’re these incredible curators of the best goods in the world and they add so much value to the market by putting that Sotheby’s seal of approval on an object, saying this is worthy to sell in [an] elevated context because this has some kind of special story and special value. And they validate its authenticity and they validate its merit. They did their first NFT sale in April [2021as a] digital artists pack, [and] they sold that for $16.8 million. It was only the start, they did more than $100 million in NFT sales last year.[Sotheby’s] was able to make that journey by translating what made them special and valuable from the context in which they operated into a Web3 context. That’s what works. What I’d recommend to brands is that they introspect and think about what the DNA is of their brand, or [what] they’re offering that makes [them] so beloved, that makes [them] so treasured and valuable. And think about a way to translate that into Web3, that brings that same advantage into Web3.
Customers new and old can benefit from Web3 experimentation
For most brands that are in or approaching the Web 2.5, they have these really engaged existing customer bases. And by going into Web3, they also have the opportunity to engage Web3-native users. And the problem — and also the opportunity — there is that those two audience types expect different experiences. So existing fans of a given traditional or Web2 brand might not have a Web3 wallet.[But] the opportunity, whether we’re talking about Web3-native users, [or not, is brands] align incentives with [their] customers in really powerful new ways. So traditionally, brands and their customers have had an arm’s length relationship from each other. And there’s an arm’s length relationship with the investors or the stockholders. And one thing that Web3 is a powerful alignment engine to collapse the categories of user or buyer, company or team and investor into a single group that’s aligned and part of a community that cares about a certain artifact or a certain experience. And that’s all participating together. And part of the value of that web three project comes from the community that is able to accumulate.