As the founder of soldoutnfts.io, I have incubated 50+ NFT projects with a high success rate. Follow me on Twitter @Soldoutsecrets.
The Web3 ecosystem is complex and nuanced; it’s difficult to grasp at first. Bear markets, NFT wash trading, a string of rug pulls, the rapid evolution of technology, and the fall of trusted institutions have scared many brands away from navigating the Web3 ecosystem on their own. They can eradicate this fear by having Web3 native advisors on board.
Web3 native advisors can give brands who are nervous about entering the Web3 space the confidence to go ahead and start taking steps. They can give them ideas that will help them get two laps ahead of the competition. Here’s why you should work with an advisor and how to choose the right one:
It’s dangerous to not understand what’s happening in the market.
As a respected figure in the Web3 industry, I’ve seen many founders who decided to launch their NFT collections in the bull market neglect proper marketing tactics. They had an impression that simply launching the collection after seeing bullish signals is enough to sell out a collection.
It’s important to recognize that there are certain aspects of the Web3 space that aren’t immediately apparent to outsiders, such as market sentiment. An average person may not be aware that a bull market can exist in a very isolated time and place within a bear market.
Unfortunately, many founders realize their mistake after weeks or even months. It can be difficult for them to see through the smoke and mirrors and accurately predict whether or not they will sell out. This is where an advisor can truly shine, helping brands make informed decisions.
Selling out a collection is crucial for your reputation.
Selling out the complete collection is crucial for establishing credibility. It’s similar to a Twitter blue or gold badge. If a collection has a sold-out tag, it instantly gains credibility and the owner of the collection is more likely to successfully launch a new one.
But Web3 brands often follow a different approach. When their NFT project doesn’t perform well, they instantly launch a new one without even realizing that their past failure can affect their new project. Even if they launch a new brand, people can easily look up their previous projects on marketplaces like OpenSea and lose interest in their new NFTs.
A failure in a project can be a failure in security.
In the Web3 world, failure isn’t about just selling out; it can also be about security. In one recent example, a project I was involved in got hacked in May 2022. Within just a few short hours, approximately $600,000 worth of mint money was siphoned off to an unknown wallet, leaving the project unable to recover.
Brands often end up losing money on influencers, alpha groups and promoters.
Brands are often hesitant to seek out the guidance of an advisor when it comes to important decisions, such as the choice of blockchain, the appropriate price point, the ideal number of NFTs, and the best sales strategy for the market on specific chains.
As a result, I often hear from failed brands who tried to tackle these decisions on their own.
In some cases, they hire influencers, alpha groups and promoters to sell their collection. But often these people are so busy with other things that they fail to deliver on time. I’ve seen firsthand how individuals in our incubator have spent thousands on an Instagram post and received only three Discord members in return.
The most significant issue with this approach is that brands often set unrealistic expectations. For instance, some brands only have $2,000 to invest but anticipate selling a collection worth $1 million.
Unfortunately, some agencies may accept these deals, resulting in a worst-case scenario where the project sells only a few NFTs and is forced to shut down entirely. And when a startup fails in Web3, the audience loses money.
Here’s how to choose the right advisor for your next project.
If you are a Web3 company looking to launch your next project, you should set aside a decent budget to hire Web3 native experts. Do thorough research to find the most promising Web3 native advisors based on their portfolio of work, testimonials and community impact.
Look for someone who is passionate about decentralized technology, highly active in the Web3 community, and most importantly, has bearish traits.
There are several online platforms, like Twitter, LinkedIn, Reddit, Discord and Telegram, where you can find Web3 native advisors. Ask around in the Web3 community, attend industry events, and reach out to influencers to see if they can recommend someone with a track record of success in the field.
Once you find a trusted advisor for your project, try to forge a good relationship with the advisor to get the most out of the relationship. As a Web3 startup founder, you should put your ego aside and ask for help; it will only shorten your path to success.
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