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Before quitting my job in 2020, I used to work as a Product Manager. I spent a lot of time reading and studying different techniques applied to tech products to measure growth and increase usage. As I started writing about NFTs and talking to many NFT artists, I noticed that some of these techniques could be very useful in this space.
Do you get offended if someone calls your NFTs or your art a product?
Before cutting the chase, I know some NFT artists might not like to refer to their art as a product. This notion applies to all kinds of artists. Billy Corgan from the Smashing Pumpkins 🎸 felt offended when the music industry managers treated his art that way (forward to minute 15 for that specific part in this interview for Joe Rogan’s podcast).
Nevertheless, If you are looking to monitor your sales progress and grow your audience, applying some of these techniques might be beneficial. I will describe multiple frameworks, but I don’t think you should use all of them - that could be very stressful and overwhelming! Use the ones that seem practical and shape them however you like.
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1. What is the right price for your NFT?
Price discovery is one of the biggest challenges for NFT creators, and setting it too low or too high could have long-term implications. You can always set the price you feel your work is worth, but the market might not see it that way. So if you want to find the right balance, there is a technique used to determine the most optimal price for a product. Patrick Campbell from Profit Well outlines a methodology that consists of asking your customers (collectors) four questions:
At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
At what price would you consider the product to be a bargain—a great buy for the money? (Cheap/Good Value)
The last question is exciting because it tells you the bottom price of your product. Once you collect the data, you could use the intersection to pick the right price.
The sweet spot should be that middle ground between all the answers—image by Price Intelligently.
You might be thinking, wow, this is a lot of work! And it is. You can simplify it by using Twitter polls or selecting a group of collectors and asking them directly. For all the details, check this article.
2. How can you measure your progress?
You can use Key Performance Indicators (KPIs) to track your performance. I know, mixing KPIs and art feels weird… But it can be very effective. Here are a few indicators that could help you measure your progress.
Unique Collectors: How many individual collectors own one of your NFTs? Increasing your fans is more important than the actual sales volume in the long term, and that’s why I rank unique collectors much higher than other KPIs.
Listings %: How many of your NFTs are listed for sale? Your goal should be to reduce this number, as it means some of your holders are looking to sell your NFT. Don’t be too hard on yourself about the listings; remember, you are getting a royalty for each sale, and it is normal for collectors to make a profit.
Floor: What is the lowest price someone can pay to own one of your NFTs? This one is tricky. On the one hand, you want your floor to be high as it means your collectors value your NFTs highly, you get a more significant % on every transaction (royalties), and it lets you stand out from the crowd. On the other hand, high floor prices can be a barrier of entry for new collectors; therefore, the first KPI in the list could suffer.
Secondary Sales Volume: What’s the volume of your secondary sales? You get royalty fees for every transaction, which could be your most valuable source of a steady income in the long term.
Twitter Followers: Twitter is king in the metaverse. A new Twitter follower is a potential collector, so it is essential to spend some time there.
Twitter Engagement: Followers don’t count if they aren’t engaging with your work. Tracking your engagement rate is very useful for that purpose. In addition, you could go one step further and analyze what type of art, collections, or styles are getting more engagement.
Twitter Analytics is a fantastic tool to measure your Twitter growth and engagement.
You don’t need to monitor all these metrics. Again, this can be very stressful and overwhelming. Pick the ones you like and make sense to you (one is enough). After selecting the KPIs you will be tracking, you could follow Silicon Valleys’ growth rate to understand your progress. They expect 7% week-to-week growth on your chosen metric (we are talking about measuring the fastest-growing tech companies on the planet). The takeaway is if you are growing close to 7% every week, you are doing incredibly well, but remember, this is a super high bar.
Mattan Griffel wrote a great piece on this, called Y Combinator and The One Metric that Matters.
3. How to attract collectors and build an audience?
One approach that has become very popular over the last years is called “building in public.” It simply means sharing your creative process and your progress along the way with your followers. Don’t fear the outcome; the goal is to get feedback and improve your work based on their advice. One person that has mastered this is Peter Levels. He is very popular in the Indie Makers community (I don’t think he considers himself a Product Manager, and he probably will hate being called that). He has built unique products used by thousands of people. What’s his secret? Building in public. You can read Pieter’s article from 2017 about launching a tech product in public here.
Here are some ideas that translate well into NFTs:
Share your sketches and early works from the beginning.
Share the evolution, comparing it to the earlier versions.
If you are stuck with a problem, ask for advice. You probably have some very talented artists and enthusiastic collectors ready to jump in.
I’ve been using this idea for my newsletter, sharing ideas and parts of my articles before they are ready. I recently shared the evolution of my first FxHash project called “Impossible Sneakers” on Twitter, and I got valuable feedback from my followers.
4. My NFTs aren’t selling well. What can I do next?
You can make one more drastic thing when you aren’t thrilled with the reception of your NFTs. It is called “pivoting” and means to change the direction of your product, services, or in this case, NFT art. Many famous artists encountered success after making a drastic change in their craft, either in the style, story, or way of distributing it.
What are some pivots you could explore in the NFT art world?
Trying different art styles, like collage art, photography, 3D, generative art. I also heard music NFTs might become a big thing soon…
Try out profile pictures (PFPs), unique 1/1 editions, or try to release multi-edition work.
Not sure if this is necessarily a pivot, but you could try out different platforms or even other blockchains, like Tezos, Ethereum, Solana, or maybe layer two solutions to Etherium like Polygon or Arbitrum.
Everything Changes by 𝙰-𝙼𝚊𝚜𝚑𝚒𝚛𝚘
Some of these ideas might be useful, while others might require a lot of time and effort. Your goal shouldn’t be to use all of them, but rather think about adapting them to your needs.
Feel free to reach out to talk PM stuff… I am a big product nerd 🤓
Until next time,
- Kaloh
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