The recent success of Pudgy Penguin founder Luca Schnetzler, better known as Luca Netz, has sparked conversation in Web3. But Netz has a history mired in controversy, including shady marketing schemes, NFT projects gone awry, and drop shipping debacles. Despite multiple ventures met with backlash, he pivoted to massive success with Pudgy Penguins, ending up with plushies on the shelves of the world’s biggest retailer, Walmart. Despite his questionable history, Netz's success story raises a critical question: Could a Black founder in Web3 overcome similar challenges and achieve a remarkable comeback?
The answer, given the current landscape, is a resounding 'no.'
Understanding Web3
Before we delve further into this topic, let's clarify what Web3 represents. Web3 is the term used to describe the fast-growing landscape of financial technology that encompasses cryptocurrency, blockchain networks, NFTs (Non-Fungible Tokens), and more. While the definitions of success and business models within Web3 are still evolving, mainstream metrics revolve around funds raised, user adoption, and brand recognition.
Case Studies
BitcoinBaddiez and $JUGS Cryptocurrency
Meme coin co-founder Taylor, known online as BitcoinBaddiez, launched the cryptocurrency $JUGS in 2021 and promoted it heavily on crypto Twitter. She claimed to be a co-founder, but the coin ultimately rugged, scamming investors out of 72 ETH. Leaked messages revealed Baddiez planned to scam investors all along. As a result of hateful attacks from angry Web3 investors, Taylor left crypto Twitter for a time and now maintains a low profile on other social media platforms.
J’Von and Loser Club NFT
Musician and artist J’Von lent his artistic IP to Loser Club, an NFT project promoting authenticity and uplifting “losers.” The project skyrocketed, garnering over 35,000 followers on social media and generating sales worth 5,100 ETH, equivalent to $20 million at that time. Despite this incredible traction, Loser Club’s leaders failed to deliver on promises of growing the brand into a global entity. The project soon fizzled out, leaving J'Von to contend with "rug pull" accusations, which tarnished his reputation as a supporter of underdogs in the Web3 space.
Although these examples are not exact parallels, they underscore the uneven playing field. Both J'Von and Bitcoin Baddiez have attempted fresh starts within Web3, but haven’t yet obtained the same redemption as Netz.
Systemic Barriers for Black Entrepreneurs
Netz could leverage connections, status, and community support to fuel his comeback. Black founders face unique systemic barriers when their ventures hit roadblocks. They are frequently excluded from influential networks and insider access that enables second chances. Mainstream tech journalism also rarely spotlights Black-led initiatives, denying them both visibility and hype. The concentration of venture capital funding in the hands of white men makes it difficult for Black entrepreneurs to secure later-stage backing. Included here is also a lack of mentorship from experienced Black entrepreneurs. Without access to the technical know-how, financial support, and specialized guidance that propels comebacks, Black founders are denied the room for growth that failures afford others.
Fostering Equality in Web3
The standards for success in mainstream Web3 tend to favor non-Black entrepreneurs, placing Black entrepreneurs at a disadvantage. But the ingenuity present in our community cannot be denied. This prompts the core questions: What specific actions can Black Web3 entrepreneurs take to achieve mainstream success? How can the broader Web3 community shift to provide the support needed to thrive by more inclusive standards?
Strategies for Success
As a community, we must continue building each other up; our community is eager for fresh opportunities. The 2022 Ariel-Schwab Black Investor Survey revealed that 25% of Black investors own crypto compared to just 15% of whites. It's also worth noting that 23% of Black Americans under 40 made crypto their first investment versus only 4% of young white investors. Funds focused on underrepresented founders can help match this investor demand with promising ventures. In contrast, experienced founders can share insights or vouch for other emerging entrepreneurs to expand opportunities. By investing in one another, we push progress through collective advocacy.
Confronting Biases
The broader Web3 community must confront its own biases, but this is unlikely to happen without pressure from outside the closed loop of top networks. Non-Black founders and investors should actively seek out and uplift Black-led projects, but they need persuasive reasons to prioritize them. Examining why certain voices are amplified over others can help shift the balance. Still, incentives from those with more capital, both social and financial, often work against these initiatives.
Conclusion
Achieving equality in Web3 will not be easy or quick. But with sustained commitment from all sides, it’s possible. By staking their claim in the space and demanding accountability, Black founders can obtain the respect and success they deserve. The community is ready to do the work. Netz represents an anomaly — his success, despite repeated failures, contrasts starkly with most Black entrepreneurs’ Web3 experiences. His trajectory highlighted flaws in the system rather than inspirational perseverance. The real question remains whether Web3 can be moved to change through activism and moral leadership. Our path forward must challenge systemic barriers at every step, not accept rare exceptions. Let's expand our view of the Web3 landscape by demanding accountability from all corners of this groundbreaking space.
Special Thanks to Brian Vaden & Ghyzmo