With high-profile brands like Starbucks and Reddit launching big commitments in web3, companies are catching onto the potential. But there are several challenges brands face when making their first foray into the space.
Many customers still find web3 confusing, having to learn about concepts like "hot wallets", "cold wallets", public-private key infrastructure, and "gas fees" just to get set up with a wallet, which they're told they must be hypervigilant about understanding and protecting.
Most of the NFT launches people have read about in the media have no real utility, so it's an uphill battle to convince people that it's worth the money. And the money is an issue, with Ethereum's transaction fees often costing more than the NFT itself on the customer side, and eating up profits on the creator side.
But if you've read our previous posts on the benefits of web3 for brands, you'll know that companies ignoring web3 are leaving money, and their best assets, on the table. So how can you run a web3 launch without alienating customers with new concepts?
Let's take a look at Reddit's recent launch of over 50,000 collectible NFT avatars, which has been an inspiring success for other brands. We'll find out about their unusual approach to the technical side, and how they were able to get their users on board by doing something uniquely "Reddit".
From Cryptopunks to Bored Apes, "profile pic projects" are a proven model for NFT launches. Reddit had already introduced customizable cartoon avatars of their mascot Snoo, allowing users to mix and match clothes, hairstyles and accessories on the robot in the same way that PFP projects did automatically to generate their 10,000 unique punks or apes.
Reddit's executive team, including CEO Steve Huffman, had been crypto-curious for some time and knew that Reddit was a great fit for the technology. For years they'd had "Reddit karma" and "Reddit gold", systems for users to collectively surface the best posts and reward the most thoughtful and entertaining community members. This is similar to the various "tokenomics" and decentralized reputation systems that web3 people have been experimenting with for years.
But even with that natural fit, Reddit had to worry about backlash. There's a strong overlap between it and the gaming community, which has developed an allergic reaction to NFTs and can get loud about it. Publishers in the gaming world have tried using NFTs in recent years, which gamers have seen as the next phase in a long history of bad, profiteering business practices on their part. It would have been a disaster for Reddit to have to walk back on a big web3 commitment due to pressure from its most engaged users.
So for a start, they didn't bring up any crypto terminology. Nowhere in Reddit's announcement of the project will you find the letters "NFT" in that order. Not only does this keep the focus on the value of their product - not the wrapper it happens to come in - it also avoids setting off any confusion, wariness, or misconceptions users might have about NFTs. "We try really hard not to use any crypto words," Huffman told NFT Now. "I can't figure out half this stuff."
Reddit's collectible avatars aren't just sold by Reddit to the user. Independent digital artists create the avatars in partnership with Reddit, and those artists earn royalties on primary and secondary sales of the avatars. Users don't have to set up a crypto wallet - Reddit does it automatically - and buying an avatar is as quick and easy as buying anything else on Web 2.0.
This makes for a great user experience. And since the point of the project is upgrading the avatar you already use and enjoy - either switching it out or customizing it with accessories from your new NFT Snoo - while supporting the artists, it's hard to argue this is profiteering or speculation.
And those avatars aren't just useful for Reddit. With Instagram and Twitter supporting NFTs embedded in the profile, users can seamlessly take their Snoo avatar with them on any site that integrates and supports the Polygon blockchain. They really own those avatars, and it's free brand marketing for Reddit's iconic robot mascot.
So what can brands take away from this? How can you launch your first web3 initiative - whether it's profile pics of an NFT loyalty program - without alienating key customers?
Reddit's Collectible Avatars feel like a natural extension of the brand. The web3 parts integrate seamlessly into the avatar customization options that were already available, so it doesn't feel tacked on. Reddit already had customizable avatars, with a third of the users that had made their own, so users didn't have to have the value proposition explained to them. Any brand running their first NFTs should aspire to launch something that feels so natural.
That web3 is so loaded with terminology is a sign of immaturity. When someone wants to sign up for a TikTok account, they don't have to learn all about the TCP/IP protocol and client-server architecture. The technology is abstracted away by smooth user experiences that don't force the user to think too hard. As the space rapidly matures, we're seeing more brands announce web3 projects without getting into the technical details, even talking about NFTs at all. It would be like your favorite YouTuber announcing the release of their new 2160p 4K HD .MP4 file. How exciting is that?
Maybe the most important aspect of any web3 project is user experience. Your customers might see the value in your NFTs, and you might have made it all easy to understand. But all that work is wasted if, in reality, it's confusing and time-consuming to acquire your NFTs or even set up the technology to do so.
This is also the hardest part for almost all brands. Abstracting away the hard parts of web3, for both their customers and their team, is a technical feat that requires a lot of tech talent. Not many brands have the resources to build that for themselves, and they shouldn't have to. And there has been no off-the-shelf solution to make this simple for businesses and their customers, until now.
Taco makes launching easy
With Taco, brands can set up NFT loyalty initiatives in minutes. Whether that's token-gating products with our Shopify plugin, airdropping goodies to loyal customers, or setting up programs to reward IRL participation.
And customers can enjoy the benefits of web3 - ownership, identity, portability, - without any onboarding at all. We just need their email, and we set up a custodial wallet on their behalf with all their rewards waiting for them. It's as easy as signing up to a mailing list, and they never have to get to grips with the underlying tech if they don't want to.
For brands who are making their first foray into web3, Taco is the end-to-end technology partner that makes web3 brand loyalty simple for everyone. Our suite of products, plugins, and apps covers everything from deploying on the blockchain to claiming rewards in-store. Tell us about your web3 ambitions in the form below and see how you can launch like Reddit in no time.