One thing about entrepreneurs, that we know at EC, is how much they must innovate nowadays. They always should explore and create new ways to keep growing, attract more customers and get the funding needed. NFTs (Non Fungible Tokens), are digital assets that represent an array of virtual and physical things, which cannot be substituted or switched with a fake. In other words, these are a digital version of property. They can be works of art, photos, music, videos, collectibles and much more. NFTs seem to be everywhere, from singers to different enterprises. However, they are perfectly designed to benefit small startups, as well.
The creators of physical things have been at risk in the digital world because it’s easy to copy anything. Therefore NFTs were created. The word “Non Fungible” means one of a kind, which ensures the authenticity and ownership of a token. They are created on a blockchain that can always be traced back to the original owner or creator. NFTs started to get popular back in 2017 with the launch of different collections of Digital Trading Cards. Currently, according to Forbes, NFT’s sales volume is at almost $30 billion. This won’t only allow you to establish a universal identity for yourself and your business, but it’ll also let you build and distribute digital goods and services with which you can profit.
10 ways startups can benefit from NFTs
- Counterfeit-proof issuance of single-use promotional tools.
- NFT as a loyalty card. Once customers sign up for it, they can download it to their mobile device. Every time they visit your business, they scan the loyalty NFT code, to accrue loyalty points, and get a reward.
- Cause-related marketing and charity support:
- Secure fundraising for expansion. An NFT campaign could be a low-cost funding alternative to a traditional bank loan.
- Sweepstakes or gamification types of promotions: NFTs bring the possibility of highly engaging gamification marketing to small businesses.
- Set up a rule in the blockchain for monetizing contracts. Every time someone sees/uses your NFT, you could get a fraction of a penny per view/use.
- Use it as stock for customers. Let them own a part of something to support the company in a different way.
- Startups can use them as a way of raising money, launching them as MVP
- Potential investors can see indicators of Product / Market Fit with NFTs with full transparency.
- NFT communities for customer engagement & feedback.
First, startups can learn how to DIY some NFTs using online resources such as free articles and videos. That way, startups use their imagination to ensure their NFTs fully target customer needs. Also they can get creative and hire a freelancer, to complete the entire project and smooth out the process. Some of the best freelance sites are Upwork, Freelancer, and Guru. In addition, some platforms that allow users to purchase NFTs include OpenSea, Rarible, SuperRare, and Mintable. OpenSea is the largest NFT marketplace and has a deeper connection to Etherium than any other platform.
- NFTs have the potential to make markets more efficient. For example, with them in the art world, artists are increasingly able to connect directly with their audiences
- Digital permanence. NFTs last as long as the blockchain they’re built on continues to exist.
- With NFTs it is much easier to divide a digitized version of a building among multiple owners than a physical one.
- The Blockchain Technology behind NFTs ensures its safety against plagiarism or fraud
- Smart Contracts
- NFTs are different from traditional investments, they can provide diversification benefit to an investment portfolio
- The market for NFTs is not very liquid. In other words, marketers don’t really understand it and the number of potential buyers and sellers is small.
- Volatile prices
- Ownership doesn’t equal control.
- NFTs don’t offer their owners any income potential, as NFT investments are based entirely on price appreciation.
- NFTs can be used to perpetuate fraud of original, non-digital pieces.
- Not sustainable. In fact, the carbon emissions, from mining cryptocurrencies and NFTs, could exceed those associated with the entire city of London in the coming years.
In conclusion, if you’re an entrepreneur, you should know that your digital goods are now valuable. Audiences, nowadays, have a massive appetite for avatars, spaces, items, digital assets, videos, audio files, etc. In fact, they are spending billions on digital goods. NFT’s will transform product research and development , from a prohibitively costly process that excludes a range of founders, into the building blocks of new startups. Therefore, the resulting market is going to result in an explosion of new businesses and new engagement.