At the moment of writing this article, about 20 NFT projects are launching everyday. Most of them will fail and not have sold out and I will write a few main reasons why that happens!
Currently, the NFT market is down following Bitcoin and all other Crypto prices dropping in this bull market. But regardless of this, there are still some projects that have good success. In this post, I will consider and touch on few main points on why why most NFT projects fail. There are other ones like quality art (not AI), building of community and etc. but these are the ones I see people doing wrong most of the time.
So why most of the NFT projects fail
1. Not treating the NFT project as a business
As I work with a lot of NFT projects, by now I can almost immediately predict if the project will be a success or not. One of the biggest red flags is the relatively big ETH price of NFT in a combination with project owners saying we don't do paid marketing. Is it possible to have a successful project without paid marketing? Of course, it is but it requires a lot of work, knowledge, an innovative roadmap, unique cool art, posts, twitter spaces, and 10s or 100s of collaborations with other projects. Most of the projects don't check all of these criteria so for the success of the project, investing in paid marketing is a must. Like all businesses and companies in real life are investing in marketing to stand out from the competition, the same applies and is necessary for NFT projects. As it is unrealistic to expect to have good results with the launching of your soda without making any marketing, and there is a lot of new up-and-coming competition on the market which has the same quality, same price and unlike you, they are investing in marketing and branding. Let's not forget existing competition like Coca Cola which is also there. If you are doing an NFT project just for a money grab, you don't have prior successful experience with one and you don't plan to invest in marketing and you expect to earn 100s of ETH, don't even bother starting.
2. Not beeing inovative enough
Every day we can see a lot of spin-off collections that are just copy-paste of other collections with slight variations. One of the most popular ones is Ape & Punk variations. People take Bored Ape Yacht Club and add a similar name like Neanderthal Ape or Lucky Ape. The thing is they don't offer anything new and innovative to the Web3 collectors so the logical question is why would there be anybody that would buy that if the marketing is the good only reason would be to flip the NFT, mint it and sell it for a higher price. But that is short-lived and the collection is doomed to be a failure after only a few days or one week in the best-case scenario.
3. Utility
Each NFT collection brings new art, some are unique and good-looking, some is AI designed and some are a spin-off of existing ones. But the NFT technology purpose and use case are much wider than just owning unique art. The main application can be the addition of unique benefits that only the holder of that NFT can use. For instance, if you own an NFT from BAYC (Board Ape Yach Club) you are able to get a free airdrop of their Ape token, you can attend their close-door event and get access to the members-only Discord server. So when making an NFT collection it needs to have some additional benefits to the holder, it can be special access to the cartoon that will be made using the art from NFTs, attending some events or getting beta access to the upcoming game, or even getting physical items or discount to them, like t-shirts or toys with the NFT collection brand identity. Whatever it is, it is almost necessary to have some kind of utility for your collection to be unique and desirable to investors. Lacking one is one of the main reasons why most NFT projects fail.
To conclude NFTs are new technology with specific kind of marketing that is necessary for it to be a success, if you are considering creating the NFT collection for your company I think it is a great iniciative and step which can be really beneficial and profitable for your brand if done correctly. But if you are new to the Web3 and NFT space and you don't know where to start I would advise you consult with the expert, in case you have any questions be free to reach out to me. you can do it by clicking here.
