Recently, a wave of NFT (Non-Fungible Tokens) startups have taken the internet by storm but what really is this buildup all about?
NFT (or Non-Fungible Token) are one-of-a-kind digital assets that provide certification of ownership for the resource or good a user is buying. They assign a unique identity to digital assets, allowing companies to create and offer rare collectables. This provides the buyers to truly own a digital collectable and generates an additional revenue stream.
Most NFTs live on the Ethereum blockchain network and are bought and sold online where all transaction details are secured. Ethereum is an open-source blockchain-based platform that creates and shares business, financial services, and entertainment applications. The network’s users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Also, as a cryptocurrency, Ethereum is second in market value only to Bitcoin, as of May 2021.
How are NFT’s redefining the Startup Landscape?
Non-fungible tokens have been around since 2014, but their cultural relevance solidified in 2021, infiltrating almost every industry from art and music to charity. In September 2021, two NFT start-ups raised a total of $930 million, highlighting continued appetite from investors for cryptocurrency companies as the industry experiences massive growth.
In today’s world, whether you’re a startup entrepreneur in an industry where an NFT use case hasn’t been established yet or someone that is thinking about starting a business, it’s important to have an understanding of NFT technology and its potential growth aspects in various fields.
However, the question still stands that what exactly is so special about NFT startups that have left such a massive footprint in the market?
The 21st century is much more dependent on digital media than ever before, which is why everything is getting digitized at an even faster pace. It was only a decade ago that digital currency seemed like a far fetched thought and now, we talk about investing in crypto. From retail to education and trading, various different fields are being digitized.
NFT opens a portal to a much more secure digital market, where the creator can sell their art, collectables, luxury goods or even games and buyers can buy them. This makes one ponder over the next big question;
This also happens in regular eCommerce then what’s new here?
Well, as mentioned earlier it allows the users and organisations to make much more authentic and traceable transactions, helping them to stay safe from financial fraud.
The ingenious power of NFTs right now is the incredible transparency it brings to the startup landscape for NFT entrepreneurs, their customers, and even potential investors, giving the business a much more sustainable and futuristic approach.
While traditional eCommerce websites or startups usually require customer surveys or sometimes some other form of data collection to gather feedback. Customer engagement & feedback is woven right into the culture of NFT communities. Customers in strong NFT communities are the major deciding factor in product creation. They actively work together through different social platforms to discuss product ideas and help shape the future scope of their projects.
To generate capital and get an idea of product demand, startups typically need to build a product and monitor sales, however, instead of this, an NFT startup allows the entrepreneurs to initially focus on building a community around a shared idea by bridging the gap between a company and its customers. Companies can develop a product and then sell a limited number of NFTs to early customers. Each NFT sale will provide early proof and generate startup capital for the founders.
The most notable aspect is that each sale allows potential investors to see indicators of Product or Market Fit with NFTs in full transparency.
So, while NFTs can streamline a startup’s ability to gain customer feedback and generate early capital, it by no means suggests that NFT entrepreneurs can skip over the rest of the steps of building a startup. They still need to identify the market gap and come up with a unique approach to fill that gap. NFT’s only create a new opportunity for these companies to get started.