How creators can tokenize a community with NFTs

Transcript

GM GM Welcome Friends back to another episode of web3 Academy I am Kyle reidhead and today we are talking about the ultimate guide for creators to tokenize communities with nfts we this is number three of a three-part Series where we've been breaking down the best ways the best business models the best way to do this sustainably to tokenize communities using nfts for creators in the first two episodes if you haven't checked them out yet I highly recommend you do just scroll back uh and wherever you're listening YouTube Spotify Apple podcast and you'll find these episodes but we discussed the business models around tokenizing communities and you know we talked about all the different

ways you can earn revenues whether that's royalties or launching a second token or holding back tokens uh we talked about subscription models we broke down the difference between sort of like products for your audience products for your community um and really just looked at you know and kind of explored what makes sense here and so for from those learnings we're taking those learnings from the last two episodes and putting it all together here in sort of the ultimate guide and if you are a Creator looking to tokenize your community then this is exactly what you need and what you should be um you know looking for before you go and do such a thing now before we dive into this there's another thing I want to talk about and that is building community obviously if we want a tokenize

community we need a Community First and even without web3 even without tokens Community is one of the most important things that any business should be building and focusing on doesn't even have to be web 3 related some of the all of the biggest companies in the world have large communities or Cults you know around their products think apple right Tesla they have insane Cults around their products that is the power of community and it creates some of the biggest companies in the world because Community is the new moat and so one of the things we want to do at web3 Academy is explore what are the best practices to build communities and specifically how do we build those online and how do we scale them to be you know tens of

thousands to hundreds of thousands even bigger right this isn't an easy thing to do and so what we have decided to do is launch a community-led mastermind where we're going to bring in everyone from around web3 okay experts new people people with experienced people without experience and we're going to bring them all together and we're going to do a community-led mastermind on how to build community and scale it online okay and so what this is going to be is each week we will have a different topic about community so it may be why Community is important what are the foundations of community how do you architecture Discord to support Community or slack or whatever you use how to use social media memes to amplify

your community how should you use tokens in your community and so on and so forth okay the community will decide the most important factors over this eight weeks and we'll have someone present uh for the beginning of it and then we will have a a discussion and this will all happen inside of our Discord so if you would like to join this community-led Mastermind on building Community all you have to do is check out the link below it's in the show notes there's an application form this is free we're opening up to anyone and everyone okay now we'll see how many people apply if it's too many we may actually have to uh gate it and only allow a certain uh amount of people but put your application in uh and we'll keep you posted on um on how this is

going to work it'll start November 8th at 4 pm EST um once you complete the application you'll be redirected into our Discord and so feel free to go Cruise in there there's lots of channels you can go in and chat about our content here on the on the podcast uh you can also chat about a bunch of the news in there we work with the community to decide what we're going to be talking about on the weekly roll up we have you know sandbox sessions with other applications and communities inside of web 3 and we do lots of jam sessions with the community and just kind of explore different components of web3 so get in there and start those conversations and start networking and you will also see that there will be some channels in there that eventually will open up and start this Mastermind so we hope for this to

be a big event for the web 3 world and allow us all to dive in and collectively you know write the Playbook on how to build and scale online communities so hopefully we will see you in there in the meantime let's get into the ultimate guide for creators to tokenize communities with nfts but before we do let's take a quick second to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens protocol web 2 social platforms are broken and right for disruption you see the epicenter of social media is the creators and yet they are the most neglected web 2 platforms like Facebook Tick Tock and Instagram are all essentially robbing creators of their worth creators are a new type of entrepreneur forming new

types of businesses yet with web 2 platforms creators don't own their content to their profiles and that's their product in business instead there are tied to the platforms they choose to create on well just like how crypto is freeing us from Banks web 3 is freeing us from these centralized platforms on lens protocol creators own their content own their profile and even their social graphing followers in the form of nfts this allows you to move freely from one social application to another with your content profile and followers moving along with you lens protocol enables self-saverty for your social graph and interoperability across the internet at Webster Academy we believe this is the future of Social and that's why we've partnered with lens to ensure that the path of social media is heading in the

right direction visit lens.xyz to learn more today tokenized communities are the future the cat's already out of the bag and there really is no turning back when done properly it creates better experiences and incentives for both the customers and the Creator it unlocks creative community and building potential which is simply not possible using web 2 Tools in articles or in episodes one and two of this series we analyze the current business models of communities and audiences in both web 2 and in web 3. we also looked at what it means to tokenize a community and share some alternative business models to ensure this is a profitable Endeavor for the Creator while giving value back to the community

now we're going to put everything together and design a step-by-step guide for a Creator to tokenize their Community with nfts as a reminder this guide is meant for Content creators to establish an audience or community in a specific Niche think the bank list of D5 the Tim Ferriss or productivity or the Tim Tony Robbins of self-development but this also may be a useful guide for creators like musicians artists influencers and others who are building an online audience regardless the first step is finding out your why why are you using nfts right you need to understand the purpose that your nft will serve remember an nft is not your business it's simply a tool for your business so in this case it's a tool to

provide ownership and shared incentives with your community the reason you do this is to turn your passive audience into an active group of contributors who will help take your business to the next level if you don't want to build a community and work with a large group of individuals or your audience isn't the type who will want to contribute and build then you may want to rethink tokenize your community via nfts instead you may want to just gamify your community of social tokens or use a more traditional web 2 membership model right like subscriptions now this can also be done with nfts but that's for another day now for most creators especially if you're creating web 3 today your

audience will consist of two categories consumers and contributors every Creator will have people in their audience or Community who just want to consume content and those who want to contribute okay the Creator's goal should be to create products that suffice for both of these types here's what to consider consumer okay so consumer these are fans who want to learn listen or consume your content they're happy to pay for your content but aren't looking to help you build a new business or contribute to building your existing business right not everyone has the time to be involved in the Dao and be involved in a community right some people just want to listen to their favorite music or listen to their favorite podcast or whatever

that may be but they're doing their own business or you know busy with with life okay this group doesn't need ownership or incentives nor do they need a product with limited Supply if anything tokenizing this group with an empty collection will only limit the revenues you can generate while also limiting the number of consumers who can access your product right the product for consumers should be scalable and ideally at a low entry price subscription-based models are great for this audience type as it achieves both scalable revenues and maintains a lower price point for the average consumer if you're creating music or you know you're creating a podcast or a newsletter or whatever you probably don't just want 10 000 people to be able to access that

content right you probably want I don't know hundreds of thousands millions and so a tokenized community might not make sense for these people these types of products don't even need to be web3 in nature as ownership is less important that said there are some interesting ways to use web3 for scalable products like nft subscriptions being one of them I talked about this in episode number two of this series so the next of the two is a contributor a contributor is a Community member who shares your mission they are passionate they don't just want to learn and consume they also want to participate in moving the mission forward they want to help you create content build additional products help other community members and be part of something bigger this is when tokenizing your community with nfts is an absolute no-brainer you

provide ownership and share incentives with these individuals and you unlock the power of web3 you can build your own Army of helpers with the mint of a token better yet your contributor group will help you build the consumer focused product mentioned above just like the bakery Dow example from episode 2 of this series now I originally wanted to dive deeper into building products for consumers as well but have decided to save that for another date uh just for the sake of time here so this guide will cover how to tokenize your community of contributors specifically so let's look at some tips for tokenizing your community with nfts I like to think of tokenizing community as starting a business with strangers okay for this to make sense for you and the token owners that this business needs to

create value if it doesn't token holders will have little reason to hold on to the nft which will result in tanking the price of your holder's assets and potentially destroying your community's trust this is no good where many nft collections went wrong in 2020 and 2021 is they didn't build a strong community of contributors instead they hyped up their project which led to token holders being mostly speculators and nft Traders as a result they had no Community to help them build minimal to no ongoing revenue and ultimately a broken business model so let's fix that for creators tokenizing in 2022 and Beyond before you even think about tokenizing you need the following one a clear Mission and

direction for the community now this is true when starting any business but it's even more important when you aim to start building with thousands of strangers from all over the world you need a guiding North Star for everyone to head in the right direction number two commitment and contribution from the community before a token exists remember if you're tokenizing Community it's all about building with them it's not about making a lump sum of money at mint okay that business model is broken and will only hurt your business it can be long term if you don't have commitment and contribution from your community already then it's not time to launch a token you still just have an audience of consumers and they require different products and a different business model now once you have the

commitment and you're ready to begin our taking your nft here's what you want to be thinking about and before I dive into this again if you want to learn how to get that commitment from your audience from your community join our Mastermind the link is in the show notes below to apply that Mastermind is going to help you get this commitment pre-token launch so here's the things we want to think about once we have this when you're architecting your nft the first ensure the right people get these nfts so you can use things like invite only exclusive access Etc if you're tokenizing Community it seems pretty obvious that your community members should be the ones who actually get your token right yeah in the last few years many creators have launched with absurd

prices and opened their mint publicly to whoever could mint first excluding many of their own community members the launch of your token should not be about hype it should be about giving ownership and sharing incentives with the people who are going to help you take your business to the next level you should think about using invite-only mints or finding ways to provide exclusive access to your existing member okay those who've already proven to be loyal and willing to contribute my best advice is to build in the open with Community discuss pricing and launch strategies and they will help you make this a reality your goal here is not to sell out or make the most up front it's to onboard the right people into your tokenized community I actually think the best metric to

understand how well a Creator tokenizer Community is looking at secondary sales after mint the closer you can get that number to zero the better and this is flipping what most people think about tokenizing their communities it's not about secondary sales and royalties that's not a good business model right now why why do we want this closer to zero because that means you've put ownership into the hands of the right people who in their right mind would want to give their company and give ownership to someone who just wants to go and sell it that's not what a community is using hype and hoping speculators and Traders buyer nfts for a quick sell it will only prop up the price of your nft collection and ultimately end in a broken community and dissatisfy token holders this is not how you build a sustainable business model

number two of things that you want to consider consider the nft supply based on community or potential Community size less is more that's the key here you don't need to have 10 000 nfts in your collection I actually don't even know where that number came from maybe it looks nice I'm not exactly sure but it's important to understand the size of your community and those interested in building with you if you only have 100 people what's the point launching ten thousand nfts all you're doing is creating more noise and confusion in your tokenized community you're also just asking for speculators and Traders to be involved and by the way I'm not saying that speculation Traders are completely bad in some cases you may want some of them involved at the mint for example some creators are looking to go big and build the next

game or metaverse which requires some serious funding right in these cases it may make sense to have speculators to help raise funds provide some liquidity but you better make sure you're going to deliver on that big promise okay someone like Kevin rose with proof and moon Birds they're someone that might want to do this V friends with with Gary vaynerchuk okay but none of all of us are in that position have that big of a team to actually build what they are trying to build now for most creators I recommend you mint your nft collection in cohorts if you think your potential Community size is 10 000 yet you only have a few hundred currently that's okay start with an invite only mid for those few hundred that way you can start small get organized and begin building if you've listened to any other any of our other

podcast episodes about building an endowed building a community starting small is very important and I repeat if you want to build with your community AKA created Out start small you'll see why soon and you will thank me later now as your outside audience grows and more people want to get involved you can mint more in the future if your community is on track and creating value you can likely charge more over time for these ongoing cohort mints as well I'd also recommend saving some of the future nfts for yourself to sell at a later date think of it like equity in your own company you could also save some in your tokenized community's treasury for some extra incentive too this is the second alternative Revenue model I discussed in the episode previous to this in this

series found out make sure you are up front with it with your community about the total amount of MTS which will be minted like in total you definitely don't want to be printing new ones at a thin air right I'd recommend looking into jump um they launch their community nft in the way that they did it uh today this is by far the best example I've seen so far in web3 they actually have probably the lowest secondary sale rate of any NFC collection I have seen so far the third thing you want to think about here as you architect your NFC is sharing funds raised with the community sharing is caring web 3 is about aligning incentives with all stakeholders within a community that's the wonderful thing that the ownership that ownership enables right there are two ways in which you should think about

sharing with your community and honestly there's probably more but I'm just going to share the first two first is mint Revenue right so you may want to share some of the mint revenues with your community to help get them started put some of the revenues in a treasury and let the community figure out how to spend it to further the mission as mentioned above you can also share some Equity by holding some of the unsold nfts in the community treasury itself the second thing is ongoing revenues as your community helps you build products and takes your business to the next level you can offer them a percent Revenue share I think this is a great way to align incentives and keep the Creator and the community focused on Building Together the community might go off and build other products as well which is great too but at least this sets you both on a

similar path to support one another and you know what maybe even the community will want a revenue share the products that they create with you as you're the Creator and you're the one with the audience who can help them sell their products and services the whole point here is you want to align incentives together so you continue to build and accomplish the mission that you originally launched the community for the fourth and final one here is branding and identity for the community and its members so to pfp profile picture or to not pfp that really is the question now most nft communities went the way of creating 10 000 piece entity collections with pictures of animals faces or anything else that might be amusing to host as your profile picture on Twitter Discord or other social platforms now this ended up with most people trying to figure out

how a monkey picture could be worth a hundred thousand dollars plus too much Focus was put on the images of these nfts when in reality the value of this energy these nfts has nothing to do with the art these are Community nfts not art nfts there is a big difference and I think it's really important that this industry starts to wrap their head around around the fact that there are many types of nfts they can do many different things nfts are the Swiss army knife for business so the value comes from owning the unique ID which gives you access to the community to the potential Revenue share to the events you host or whatever else comes the Mt now the reason I say this because I want people to understand what really matters in a community-based nft

that said I think going the route of a pfp is actually extremely smart look how much attention these collections received in the last couple years some of the biggest celebrities in the world changed their profile picture to board at Yacht Club and other pfp nfts it's free marketing an incredible branding that can go viral why wouldn't you take advantage of this if you're launching a business wouldn't you want every one of your employees flaunting that they're part of the company across their social channels I mean of course you would not to mention it gives the members of the community a sense of identity a sense of belonging right nft or not this is an extremely powerful feeling for your community members to have now let me be clear here the picture of your nft has nothing to do with the success of your tokenized

community okay now that said when it's done properly it can be used as great marketing and branding tool for that community and for that business Okay so don't get too caught up on the image if you want to include a pfp I do think it is a smart idea but that's not the purpose of these and hopefully most people can start to wrap their heads around it now I want to talk about building with thousands of strangers so what I shared above are the main things I recommend you think about before tokenizing your community with nfts if you nail those four things you're going to be off to a really good start so long as you have the two things I talked about at the beginning before you tokenize but before I end this guide I want to share some insight into what it's like to build

with such a large community just so that you have some perspective and expectations as you launch into this new most creators looking to launch a token to their Community have likely never tried to build something with their Community before in fact most people in your community have probably never tried to build something with the large community before either the idea of a Dao a decentralized autonomous organization and incentivizing communities is still very very new right now I've had the pleasure of being part of the Genesis of bankless Dao which is a tokenized community spun out of the bankless audience as well as web3 Academy Dao a tokenized community spun out of the web through Academy audience so I have some first-hand experience here to share so in this section I'm not going to go

into like how to or provide tips on building a community right though of course you're going to learn that in the Mastermind that we're talking about in our Discord so make sure you apply and join that but instead I just want to paint a picture and manage expectations for creators thinking about tokenizing their communities so let's start by saying this both experiences were one of the most fulfilling and exciting parts of my entrepreneurial career in addition to some of the greatest learning experiences and finally some of the most exhausting think about this in both cases hundreds to thousands of strangers around the world came together inside a Discord server in one moment and attempted to organize and find roles establish Direction and ultimately begin building

together as you might imagine it is pure Mayhem for the first few weeks honestly it's probably pure man for many for for much longer in the first few weeks but there's just so much passion and excitement combined with pure confusion and loss of Direction you know most people have no idea who the others are or what experiences or skills they hold nor do most people know where they fit in what roles are required or who's taking the lead on what it literally is just pure chaos now of course over time both groups become organized ish they you know the found roles for the members and agreed on Direction however it's a long and difficult process so my first piece of advice here is to understand that tokenizing Community is not easy nor will it succeed immediately

if you're busy creating content and running your existing business then don't underestimate the effort and time required to help the new community get on its feet right don't expect to and this is why you don't just give all of your Revenue all of your business to the community because if you are a Creator still creating content still working on your existing business you need to be able to fund that still you need to be able to find your existing team uh your own yourself Etc right this is why you share and you share and that the amount you share just depends on your business model I'm not going to get into that here but it's just something to think about this takes time to build the Dow side of things so there's a lot of things about when attempting to tokenize a community in the hopes of building

something of value together I think the big mistake most creators have made so far is simply expecting that Community the community will know exactly what to do and start building amazing things immediately in reality it's very much the opposite it's a long-term Endeavor that will take time and effort just like any business so some parting words my advice is really to get to know your community before you launch understand who they are and what they want to do also build in the open let them know your intentions and work with them to generate feedback and explore different ideas the more you can make your community feel like an organized doubt before you launch your token the better also the more you remain open and involve the community in your token launch the better your chance of success

right there you have it friends this I hope is kind of the ultimate guide for creators tokenized communities with nfts if you have some feedback here you want to share your own thoughts on this topic please do so all you have to do is join the web3 Explorers Club Discord and head to the podcast discussion Channel inside that you'll see a bunch of it's like a form and there's a bunch of different posts each post is from a different episode of the pot of the web3 academy podcast okay and in there you can chat with the community members and you know share your feedback have discussions maybe there's something you don't agree with maybe there's something you want to add I want to hear that and so do the other members so please pop in there and share your thoughts I'd love to hear

more I do think that tokenizing Community is going to be one of the biggest things in the future it's going to be something that so many of us do and to gain some experience in this now is just an incredible opportunity um so let's chat about it let's learn about it and let's continue forward finally as I wrap up thank you all for listening please please please share this uh follow us on Spotify on Apple podcast on YouTube it would mean the world to me it helps us grow it helps us continue to share this to the rest uh of web3 and the rest of people wanting to get into the space so thank you again so much for listening and again finally if you want to join our how to build and scale Community Mastermind simply check

out the show notes below uh and jump in and fill out the application and we will see you inside of our Discord soon friends thank you so much for listening and I hope you all have a wonderful wonderful day thank you for listening to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode code And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as Financial advice

thank you friends and see you in the next one