NFT Creator – Cointelegraph Magazine

Pudgy Penguins launched in July 2021 but quickly saw drama after its former founder came under suspicion. rug project.

A few months later Luca Schnetzler intervened. He has had a history of building internet businesses through his continued entrepreneurial spirit since his early teens, purchasing the project and the intellectual property of 8,888 cute little Pudgys for $2.5 million in April 2022.

“It was an instinctive and intuitive decision. I made a huge investment before buying it and saw what I thought had full potential. I was complaining and crying to the founders every day about how crappy they were and how they could do better. Rather than just doing that, we just went one step further,” says Schnetlzer.

When Schnetzler laid out his vision for a project the community could get behind, the story quickly shifted from a rug of zero to one of hope and optimism.

Schnetzler has become one of the standout PFP project leaders during the NFT bear market, with the Penguins bucking the downward price floor trend. Since he took over as CEO, the Pudgy Penguins floor has risen from about 1 ETH to 6.32 ETH. Holders and the broader NFT community believe Schnetzler has a game plan for success and the ability to execute it.

He said the decision to stop the project wasn’t as risky as it seemed.

“We bought something for $2.5 million that generated almost $10 million in six months. I was making $500,000 a month in royalties. On the surface, it was a pretty good business. Intuitively, if you close your eyes and imagine Pudgy Penguins, it’s easy to see where this is going.”

Continued momentum and growth have been key to Pudgy’s growth into one of the top PFP projects, with its cute penguin brand spreading across social media outside of traditional cryptocurrency channels like X and Discord. Pudgy’s Instagram just passed 1 million followers, and his GIF strategy has been so effective that it surpassed 10 billion views just a few days ago.

Schnetzler finds it a little sad that he receives such praise, as it highlights how little other PFP projects have done to grow the brand.

“Everyone is saying their NFT project is a brand and has raised hundreds of millions of dollars from the community and venture capital at ridiculous valuations. But none of them are actually doing the basics of brand building,” he says.

“Some people really compliment me. It’s actually pretty sad. Because we think we’re doing something really well. do not misunderstand. But what I mean is, this should continue to be the standard. “It’s a shame that we have 10 to 20 times the resources and 2 to 3 times the experience, yet we’re doing so much that so many projects aren’t doing.”

In search of entrepreneurship

Despite being only 25 years old, Schnetzler actually began his entrepreneurial journey over 10 years ago. He grew up poor, jumping from couch to couch at his friend’s house. Schnetzler said he had to earn money from a young age.

“I worked for 10 years after I left school. It sounds crazy, but it’s true,” he says, noting that most people don’t even start working until they finish college in their 20s.

“Then, 10 years after college, you turn 33, and people start becoming successful in their 30s. That point seems to be a time limit. I think my childhood made me start early. I couldn’t afford to spend my childhood relaxing or going home and playing video games and not worrying about anything. I had to go to work and figure things out.”

Character building and brand building

Most PFP projects to date have been built around centralized characters with varying characteristics to give each NFT a slightly different look and feel. Check out the OG collection CryptoPunks, Bored Apes. This also applies to Pudgys. But that’s not the case with Gary Vee’s VeeFriends, which boasts 270 individual characters.

Schnetzler believes that building a character around one individual character is the easier of the two options.

“Ultimately, I think Gary is trying to take on more difficult challenges. That’s some of the cards I received and have, and he made his own. I think he’s doing very well. non-friends. I think ultimately he has to create familiarity. Creating familiarity with a character is much easier than creating familiarity with a brand,” says Schnetzler.

“The two are different because his universe is not based on one character, but on a variety of characters and a variety of animals of various shapes. He’s betting and taking chances on the brand, the brand name versus the character.”

“I look at the character first and then I worry about the brand. “Because I think there are a lot of people who love penguins, but there are very few penguin brands.”

Brave New World – Walmart Pallet Program

In September of this year, Pudgys announced a groundbreaking deal with retail giant Walmart, allowing Pudgy Penguin physical toys to be sold in prominent locations in more than 2,000 stores across the United States.

“The Pallet Program is one of the most prestigious places you can get because it offers the best real estate to floor walkers. This speaks to Walmart’s belief in the brand and its belief that NFTs and Web3 serve as verticals for retail,” says Schnetzler.

“If this can become the norm for the world’s largest retailers, we have a chance to succeed. It’s one thing to have it in a niche on a toy shelf, but it’s another thing for it to be front and center where everyone can see it. This program does not apply to new brands. It’s usually for people who have released Barbie, Teenage Mutant Ninja Turtles or movies and TV shows.”

Build a legacy brand without a playbook

One of the most common questions consistently asked in PFP projects is “How can we return value to holders?”

In response to criticism of toy product expansion, Schnetzler laid out a plan for how Pudgy Penguins thinks about accruing value to holders using a classic funnel diagram.

This is terrible.

In the thread below, I’ll explain why this thought process is fundamentally wrong and why this take is incredibly bad 👇 https://t.co/5sGBpCJHA2

— Luca Netz 🐧 (@LucaNetz) August 5, 2023

“I didn’t actually invent the funnel. I mean, you can throw Star Wars and other big legacy IPs into that funnel. This is the strategy. But the idea of ​​NFTs is that the value of first edition collectibles becomes a great anchor for your business. First edition collectibles from established brands still make the most sense if you place them at the bottom of the funnel,” he says.

“I want to create legacy brands like Hello Kitty, Star Wars, and Pokemon.

He admitted that this is easier said than done, admitting that the PFP project does not have a roadmap to follow.

“It took 60 years to create Hello Kitty. My retainers don’t give me 60 years to make something. If you lose momentum and traction within your retainer base, you ultimately lose everything. Because we believe you can’t build a successful Web2 business while your Web3 business is failing.”

Quick Q&A

your entrepreneurial inspiration

“I love everything I think Steve Jobs represents. Personally, I tried to be my own person, but my biggest inspiration was Steve Jobs, as evidenced by my leadership style.”

Extreme pressure from founders

“It’s not easy, but it’s not the worst either. One of the reasons we’re here is because of the community. I think I’m in a very good situation because I bought the project and never received a penny from it. People with Pudgy Penguin PFP are good people by nature.”

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“You can’t be an angry and miserable person and click to buy a Pudgy Penguin. Art creates a culture that already filters out a lot of nonsense. “Now I empathize with so many other people who are confused.”

What You Want to Tell Your Mom About Pudgys

“What I want to say to moms is, ‘This is a great value proposition for your son or daughter. This is a lot more fun than any other $10 toy.’”

“Why? Because the digital world unlocks so many different things that can keep you entertained at bedtime, at recess, and even when you’re on the playground. You can also use your iPad and computer to entertain yourself when you’re at home. Buck special. It’s a 2-on-1 slugfest for you.”

Was the Pudgy GIF planned?

“The gif was completely random. But the moment we saw it, we quadrupled. But at first it was completely random. “It was purely an accident, but it was a happy accident,” he said.

“People don’t need to know about Pudgy Penguins right now, but if NFTs become a thing again and everyone keeps using Pudgy gifs, that would be a really good source. “Once everyone starts buying NFTs, trust increases.”

What is your stance on royalties?

“Not 0%, not even 5%. I think it’s somewhere in the middle. I think the number is between 1% and 1.5%, which is what I think there should be an enforceable royalty. The reason is that you only need to provide incentives to the creator. (That’s) what made YouTube great, what made TikTok great.”

Are you a Wim Hof ​​fanboy?

“Every day I practice his breathing techniques and I feel better doing them. I recommend it because it’s the fastest way to feel better for free. “I’m also preparing for a cold plunge right now.”

Where are the Pudgys three years later?

“We are the face of NFTs and the face of Web3. We provided the best value to our holders, both emotionally and financially. Three years from now we will probably have a movie released. “The movie is getting closer.”

connection:

X: twitter.com/LucaNetz

Website: http://www.pudgypenguins.com

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Greg Oakford

Greg Oakford is the co-founder of NFT Fest Australia. A former marketing and communications professional in the sports world, Greg now focuses his time at web3 on event operations, content creation and consulting. He is an avid NFT collector and hosts a weekly podcast covering all things NFTs.

Follow the author @GregOakford