For more than a decade, we have seen the rise of digitally native brands powered by internet culture, IRL activation, and most importantly, community. Brands like Parade, Topicals, Supreme and Glossier. From passionate beauty blog readers to avid streetwear enthusiasts, these brands have created platforms that transcend CPG. We’ve seen brands create cultural relevance and loyal communities surrounding their products, all powered by web2. However, early consumer loyalty hasn’t been rewarded in direct correlation with a brand’s success.
In this piece, I’ll be covering community-driven brands of web2, web3’s potential for emerging & incumbent brands, and the emergence of crypto-native brands (“CNBs”).
Before diving in, I wanted to set a bit of context. Web3 is an evolution of the internet powered by blockchains and decentralized protocols, enabling new experiences for and operated by its users. Users own and control their data and are rewarded through contribution. Ownership of virtual goods and tokens are unlocking new possibilities for communities and driving alignment across stakeholders. If you’d like to learn a bit more of the basics of web3, I wanted to highlight a few great primers:
We’ve seen community drive a brand’s success for decades. A few examples below from both newer and scaled brands:
These are just a handful of examples of companies whose communities have created a sustaining brand. Now imagine being one of the early contributors and supporters of these brands - today, besides some social capital and other minor perks, value has not accrued in a proportional way to these individuals.
Rewarding early consumer adopters that accrues value in correlation with a brand’s growth hasn’t truly been possible. Loyal consumers have been actively engaged by purchasing products, supporting R&D, creating content and sharing via word-of-mouth, for example. However, there are clear limitations to this and eventually as preferences change, there is drop-off in loyalty.
By aligning incentives between a brand and its consumers a new level of loyalty and engagement can be unlocked. NFTs and social tokens, for example, can create the mechanism to enable early adopters and consumers to have a stake in the success of a brand.
Poolsuite is a brand that initially started out as a passion project by founder, Marty Bell, who wanted to create a vibey internet hangout site, influenced by the 80s. What started off as an internet radio station (Poolside FM) has grown into a passionate community of leisure lovers. Marty launched a sister brand for the Poolsuite community called Vacation - a sunscreen brand - which has grown so much in popularity due to the community love, that it has been featured in top publications like Vogue and Vanity Fair and even sells in Kith. The brand recently announced that it will be leveraging web3 to create a more robust platform for its community. It launched a collection of “Executive Member” NFTs which grants holders early access to projects and tools that are being built, alongside access to a future Poolsuite token, which will power the brand’s “soon-to-be-thriving internet leisure economy”. Poolsuite wants to co-create experiences and products with its community and enable them to have a voice and stake in the direction of the brand. With both NFTs and community tokens, community members are jointly aligned for the success of the brand.
Another example is popular streetwear brand, The Hundreds - an OG community-driven brand that has been at the forefront of leveraging technology for fashion. In the early 2000s, by leveraging a web blog, the brand was able to tell stories and cultivate its community of streetwear enthusiasts. In an effort to continue to push the boundaries, the brand recently launched an NFT collection called the “Atom Bomb Squad”. Holders of the NFT will have access to exclusive drops and events, as well as the potential for future royalties from clothing that features a holder’s NFT.
These are just a couple examples of brands that are leveraging web3 capabilities to foster their communities and drive loyalty across their consumer bases. We are in the early innings of the capabilities of web3, but it's evident that we are at a technological shift for community-driven brands and the opportunities are ample.
One of the prime examples of this concept, which has been well documented, is Bored Ape Yacht Club. BAYC has been alluded to as the next “Supreme of the Metaverse” (shout-out to Ana Andjelic for this great piece) and it’s no surprise why. What started as a collection of 10k Bored Ape NFTs, developed by Yuga Labs, has now become a global phenomenon with individuals waiting in lines for hours to purchase merch (akin to Supreme) and a loyal community of holders who display their membership through everything from Twitter profile pictures to sneakers. As the brand has grown in prominence, with members now including Steph Curry and Jimmy Fallon, early adopters have been rewarded in a correlated manner. The floor price to purchase an Ape is now ~50ETH (~$200k in today’s pricing environment), but it’s not just about the monetary value accretion for the early adopters. BAYC members have been able to participate in exclusive experiences including IRL events and NFT airdrops (including the most prominent Mutant Ape Yacht Club drop). BAYC is a prime example of a brand that has been built bottoms-up and I’m excited to continue to see what comes next.
An interesting byproduct of being “bottoms-up”, or in other words community-led, is that community members are creating derivative projects amplifying the brand in other ways. A newer project called the “Bored Breakfast Club” is one such example, initially collaborating with coffee company Yes Plz. BBC will co-create coffee blends that will be dropped on a recurring basis to holders of its NFT collection (starting with 10k unique breakfast scene NFTs). One can imagine that overtime, as brand equity increases, so will the value of the NFTs. Moreover, community has already started forming amongst holders who are anticipating the first drop of the coffee blends. While the project is technically unassociated with BAYC, the founders of the projects are passionate BAYC members. I plan to write more on “derivative brands” in the future.
Another interesting project I’ve been following is Crypto Besties, which is creating the first makeup collective in the metaverse, starting with a makeup line co-created with its community members. The objective is to involve more women and underrepresented groups in web3 and give early community members and contributors a stake in the direction of the project.
Without investing in actually fostering an authentic community, a one-off NFT project isn’t going to drive meaningful engagement and loyalty long term. However, there are ways to progressively engage and incentivize a community meaningfully.
Below, I’ve thrown together a high-level spectrum including the evolution of community involvement for a brand. From content creation & loyalty programs all the way through full community governance and ownership (community members vote for key actions made by a brand based on token holdings), brands have the ability to activate community in many ways.
Leveraging web3 capabilities can be extremely impactful for a brand, and there are many ways to get started. From digital storefront solutions for brands to create interfaces to sell their NFTs (ex: Metaplex, Bitski, Nftify) to community engagement platforms that help brands sustain engagement (ex: Afterparty, Coordinape) and fuller stack solutions (ex: RareCircles, Mojito), there is a ton of innovation happening in the space to support web3 adoption by brands. Communities like ClubCPG can also be extremely helpful to get involved in.
Tokens can also be extremely impactful, whether they enable partial or full governance. Not only can they be used to reward early adopters, but create new stakeholders and mutual alignment. Platforms such as Rally, Bonfire and P00ls are enabling creators/brands to launch their own currencies.
For any brands that are looking to leverage web3 or projects that are enabling brand & community development via web3, I’d love to chat!
Thank you to Asad Khaliq, Kerry Cooper, Emma Bates, Raj Parekh and countless others for the engaging conversations around many of these topics.
About the Writer
Hi! I’m Maitree. I’m an investor at Acrew Capital. I’m passionate about the power of communities and inspired by the consumer journey. I invest in companies across web3/crypto, the creator economy and fintech. I am a creator (catch me on TikTok), DAO contributor and a soon-to-be NFT artist 🎨.
I’m always happy to connect - DM me on Twitter to get in touch.