A Guide for Artists Launching a New NFT Collection—Part 1: "Who Are Your Buyers?"
When a non-crypto native artist learns about the NFT world, the pitch is frequently that they "just" need to produce their art, mint it "online", and people will step in and buy their pieces for extraordinary amounts of money.
This is both somewhat true, and also completely off-target.
I am writing this guide as a way to offer insights as both an artist and collector. As mentioned in prior articles, working with artists and helping them onboard to crypto is a passion of mine, and I hope this guide can help artists who are thinking about launching a collection avoid common pitfalls.
(I originally intended this to be a single article, but as it expanded, I’ve decided to break it into parts. I hope you will follow through these thoughts and refer your friends to this article as guidance as I will continue update it.)
Understand Your Buyers
Just like your artwork is now merging technology and art, your audience is a merging of investors and admirers. Yes, ultimately, the ideal situation is that your work speaks for itself. People love what you do and are willing to buy it and support you and you can do what you love as your sole job—but that doesn’t mean there aren’t other elements that you’ll have to consider.
Yes, your work has value. Yes, what you are doing matters. And also yes, you have to continue to develop yourself outside of your comfort zones.
You have to hone your strategy, no matter what field you’re in, to reach your full potential. This doesn’t mean that you’re corrupting your pure artist’s spirit. It just means that you are aware of your audience, and you are deciding who you want to speak most to.
If you are still on the fence, think about it this way: it’s like facing the camera for a photo versus turning your back to it. Sure, some people can turn their back to the camera and get away with that and be praised for such dramatic and touching work, but this is the minority case.
What I am hoping to establish is that every collector is assessing your work with a different goal in mind, and before you simply launch a collection of random pieces of personal works, you need to realize that without a specific design, you’ll end up with less buyers, worsening reputation, and potentially angry investors.
Don’t be afraid, though—it’s only a matter of forward thinking.
First, let’s understand who your buyers are:
They may be flippers. These people see a future value that is higher than what it currently is. They may not even care about your art to be quite frank. They care most about the momentum that your collection has. These buyers are often high-intensity with how they engage with you. They may harass you, or constantly ask you questions about anything that can affect their bottom line. Their goal is to move quick and their loyalty is fickle. They may talk a big talk and be gone in the next instance.
They may be affectionados who love your art and want to support you. This is a category of collectors that you may be most familiar with. However, because crypto is an open market, everyone can see every trade in your body of work. It’s often important to these people that the entire collection’s value continue to rise in the long term, to affirm that they made the right decision should they ever choose to let go of one of your pieces. Some will become defensive on your behalf when you aren’t being recognized "as you should be".These are the type of investors you enjoy being around because their positive energy and encouraging support is generously given. Keep in mind that in any relationship, if it’s too one-sided, it will eventually run out, so you need to remember to always return value to your affectionados.
They may be investors. These are also frequently longer term holders, but they are also cold, merciless, profit takers. They frequently purchase more than one of your pieces because they can sell one piece and hold the other for potential future profits. They generally are defensive investors who make big purchases carefully, but when they believe in your collection, they often go hard, shocking even you with what they are willing to spend to obtain your work. Their backing can often make a significant difference to your perceived success as they will help spread the word and increase your reputation between others of their ilk. Just keep in mind that NFTs collections have relatively low liquidity. That means less money can move the price more dramatically, and exit liquidity is difficult so when one person has a lot of your collection, and they want to sell fast, they can single-handedly take your perceived value (and thus, reputation) down quickly.
They may be metaverse buyers. These are people who are purchasing to build their online identity. What they purchase, they literally identify with, or, they hope to utilize something in your collection in the future metaverse. This may be for a game, or this may be simply for an online persona they want to create. These investors frequently are picky about what they are collecting, and the specificity can sometimes seem a bit strange. The value of the overall collection matters less than the future utility and the online identity your art gives them personally. These buyers, if they become significant individuals in a space, may expand your reputation as well by branding themselves with your work so that all their fans who want to be like them also will want your work as a result.
They may be seeking social credit and bragging rights. If your collection has enough prestige, they want to own something from you because of the reputation it offers them. They often come late to the party, but they are here for the social advantages that owning something in your collection offers them. They often don’t engage much, but they will wear your images proudly and talk about your collection value to other groups aspiring to be like yours, thereby building your reputation passively.
They may be utility seekers. These are buyers who are looking for collections that have direct and measurable value for other things, be it merchandise, gameplay, DeFi, or other uses both in the real and digital realm. These buyers are often looking for future promises, and while they are understanding of the need for time to develop, they frequently will be asking "wen". The utility must be clear to these buyers, because otherwise, there’s no guarantee and everything is worthless to them.
Membership buyers are those who are purchasing NFTs primarily to gain special access to communities that they see as valuable. This could be projected value, future value, or current value. It is similar to those who purchase for social credit, except that unlike people seeking only the social credit, these buyers will engage heavily once they are inside the group. They love to participate. These benefits may vary, as everyone evaluates membership value differently (social, networking, etc), but this is the framework to most early NFT collections and remains one of the most clear values of owning "expensive jpegs".
They may be digital hoarders, gamblers, and spontaneous buyers. These are those affectionately called "degens". Some people collect just to own everything, and others buy for no known reason—even to themselves. These buyers are often on the wrong side of a purchase, meaning they often buy at the top of the hype, and therefore the price, but they can easily convert to any of the other categories because they are stuck holding the bags.
There are always blends of the above, of course, and I myself have changed my buying strategy based on how the collection has presented themselves. As you can see, while there may be similarities to traditional art collectors, the weight of individuals interested in the investment proposition is much greater in this space.
This is both a positive and negative. You may have wondered why people feel okay paying such high prices compared to other spaces, even the physical space; it’s because the buyers often see the purchase as an investment. Therefore, it’s not expensive if they can gain greater returns in the future (and prove their own intelligence as investors, and not only as collectors).
Do not underestimate how important your collection’s floor price (the cheapest one being sold in your collection) is to these investors, because in any of these categories of buyers, floor price on the open market is important to not only their satisfaction, but it also is a numerical measure that investors use to summarize your reputation to each other.
Brief aside: I feel it’s important to re-emphasize that most artists are only thinking about improving and releasing their art. If you choose to ignore your audience, that is your right, but you will definitely have different experiences if you neglect your buyers’ mindsets.
There is only one exception to this, and I hesitate to say it because I fear some artists will take it as an excuse to ignore what I’m saying, but it is true that when you the artist has enough following, reputation, and sheer skill, you can still create significant demand for your work. I would point an arrow at EJVII’s collection which you can see here, for example:
Now, most artists aren’t EJVII, so let’s talk about what your buyers want, now that you’ve been introduced to them.
What NFT Communities Have Been Conditioned to Want
Typically, in the largest NFT spaces, collections are generative. This is when art pieces have been created, but the pieces are randomly combined in a way that results in complete pieces. This is because when you have a collection of 10,000 (a common number in NFT collections), that would be a lot of work to make each piece by hand.
In the Dotsama space, artists generally have chosen to make each piece unique as handcrafted 1/1s. This is a good approach because the NFT community on Dotsama is just getting started and is smaller than most chains, but you still need to keep a few things in mind, especially when considering the objectives of buyers listed earlier:
- The NFT space prizes "rarity". This means that each piece generally should be somewhat comparable. If your images are too different, casual collectors don’t know how to evaluate between "which is best". Having some amount of consistency in pose, angle, or subject lets collectors compare between features, trying to find the "most rare" of items. It isn’t always just the art, character, or creativity. It might be best to choose a similar look between all pieces just so that the collection looks cohesive. If you have too broad a range of art styles, poses, backgrounds, or characters, you may end up with a weaker collection overall. Your buyers may not be trained art collectors, so they may need more obvious signals for the collection.
So, seriously consider having surprises, rarity, and uniqueness built into your collection that is visually obvious. It’s one thing to state rarity, but it’s another to see it in an obvious way. In the situation that your collection is small (in the sub 100-300 number), all your pieces can be special in their own way. That’s great. But if you’re doing a large collection, don’t forget to create "normies" as well so that people know that the ones that are special are REALLY special.
- The NFT space currently is used to PFPs (profile pics). This is largely because of human nature, to relate to things we own, but also because of the majority of buyers in this space interact with one another completely digitally which means that if they can’t use something that represents them as individuals, they automatically place less value on the piece.
Thus, it is harder to relate to certain types of collections like buildings, inanimate objects, and arguably, even machines. Imagine writing a story, and consider the popularity of a story written about inanimate objects and places instead of people. Sure, it can be done, but it’s much more challenging and you often have to personify your objects or places to make them relatable. You’ll have more personal investment from investors if you are creating relatable characters from the start that people want to identify with—especially for those buyers involved in metaverse. Ultimately, and I will repeat this again and again in future pieces, you are telling a story through your visuals, and the story needs to start with relatable characters.
- If it takes you a very long time to create each piece, then you may not have enough pieces to be tradable. Volume, or trading action, is important in this community, and there needs to be people trading in order to bring more attention to your collections. Investors see volume as a major indicator of attention and demand, and when people are assessing collections, low volume must mean low attention even if the floor price is high. This is because the floor price has not been "proven" by enough buyers.
So, if you cannot create pieces quickly enough, then you may lose momentum and people may begin to ignore your collection because there simply aren’t enough pieces available to be traded and all your holders are "diamond handed". Yes, long term holders are nice, but this is why flippers are important as well; they contribute to volume. The other point here, which I’ll cover more later, is that if you are distributing your collection over a long period of time, there are significant positive and negatives. One is that you’ll typically hold the floor price down to your mint price—whatever it is—and the other is that releasing over time gives you a longer spread to build hype, or lose hype (or just miss the trend). 4. There are certain themes to be aware of in the NFT space. You’ll frequently see punks, apes, pixels, cartoonish line drawings, and anime. These trends change quickly, but some continue to persist and every sub-market is slightly different. It’s important to research.
For instance, there’s an egg trend that’s special to the Dotsama space because of the correlation to birds and the canary network. It might not be your cup of tea, but you should be aware of its importance to investors.
However, on the contrary, everyone is often doing the same thing and seeking the easy answer isn’t always the best answer.
If you choose to do any of these thematic plays, realize that you are competing with several other collections, and there must be something either to set you apart, or you need to be first to launch and aggressively market that trend. If you are not first, and you don’t have something unique, and your best offering is that you’re a derivative of something already popular somewhere else—chances are you’re actually making your job far harder because people will assume that you’re unoriginal, or at worst, money grabbing. Skepticism of projects that seem lazy is high.
- The supply of your collection will make a huge difference to how much people are willing to pay for each piece. Most the NFT space has connections with crypto, and as such, they are used to checking supply. Higher supply means more people will be needed to move the floor price, and lower supply means that there may be less possible volume.
As mentioned before, on popular chains, 10,000 in a collection of generative art is fairly standard. However, during times of uncertainty, even on popular chains, this is frequently too high a number. On the other hand, if you have a supply of only 10 total, unless your work is marketed only to elite collectors, then it is likely that you will not have enough trading volume or owners to be able to sustain attention on that collection. On Dotsama, at present, I would suggest making it clear if your supply is infinite, or limited. If it is limited, I would rarely recommend a supply over 500. There may be a few exceptions to this rule, such as games, which I will discuss in later parts.
Choose Your Audience, and Market to Them Specifically
Unfortunately, you can’t please everyone, and, I’m sorry, but you do have to put on several hats in any business, at least until you can build out a team to take on the roles you don’t enjoy. Too many hats is dangerous and it can lead to frustration, unhappiness, and decreased productivity, but too few hats means that important stuff simply doesn’t get done.
My suggestion would be to choose two, perhaps three of the types of buyers named earlier to focus on as your target market. Here are some thoughts in how to manage each of these types:
- Flippers- Flippers are looking for a low entry price, discounts, and promotions. Most of them leave quickly, but that doesn’t mean they won’t come back. As suggested before, they are important to help increase volume on your collection because they are the only ones willing to sell. They may not care much about your grand vision, personally, but they want to know that there is a grand vision that they can sell to someone else.
For these individuals, raffles, gifts, drops, and special sales will attract them, and while they are difficult to deal with—remember that they probably won’t stick around long, anyway. Think short term promotion for short term buyers in this case. Whatever you do, however, do not shame them or encourage the dialogue of attacking "paper hands". In fact, when you accept them as part of your community, they will likely value your work more and they can begin to blend into other categories of buyers.
- Affectionados- These are the people that love your work. Show them the effort behind your work. Give them a glimpse of the behind the scenes, and for these buyers, they are quite happy to earn or be gifted more of your artwork. I would say that new collections that benefit original collection holders please these type of buyers the most.
In the Dotsama space, there are thankfully many affectionado buyers, which has allowed a lot of pure artists to thrive in this space. They are here to support you, so give them opportunities to support you. Ask them for help, ask them for connections, and get them involved in your process with feedback, suggestions, and other support. Thank them publicly.
They are your core, your earliest supporters, and the more you give them with your efforts, art, and appreciation, the happier they will be even if they never realize a profit. Always come back to reward your early supporters, again and again, and they will do anything for you.
- Investors- As mentioned earlier, no matter how much they love your work, these buyers maintain discipline to sell your work even if they have every reason to keep it. This is because they desire to have more involvement in other investments. Ultimately, the only way to do this is to continue investing new capital into new projects.
Thus, they will behave both like affectionados and also flippers. Because of their constantly moving capital, they have very wide networks. Giving these individuals 2 for 1 deals within the same collection is an effective way to attract them, but gifting these investor types 2nd generation art or associated collections are less valuable to these buyers as they frequently seek only the highest value collections.
These buyers will often target your most expensive, most rare, and strongest pieces. Keeping these individuals happy will be dependent on the "bottom line" in which your floor price is continuing to grow, the volume is continuing to grow, and your brand reputation and social influence is growing.
When these things begin to wane, they can make your situation that much worse, but if you’re showing strength, these are the ones who will take your collection to the moon. The nice thing about investors is that even if they have already sold, and the price drops later, if they still believe in your work they may re-enter and thus support your reputation in the long run. A good strategy is to use these connections to help you form partnerships with other players in the space as they often have special access to closed-door groups.
- Metaverse- Metaverse investors LOVE custom work (so be ready for an influx if you ever say yes to custom). It might be a bit of sheer luck that your art relates to them, but these "wild cards" are often surprise investors that can make your day. They buy, and are willing to pay at a premium for something they love, and they will probably never sell. If you enjoy making creative and custom work, this is a good direction to go.
That said, to these buyers, you do need to build out your network. They want to see your art integrated with other things they are invested in. They want to see you plugging into metaverses, adding customizability, adding value again and again and again based on future technology.
If you desire to please these buyers, be ready to be networking with teams of all sorts to push your brand into adoption on more platforms. Frequently, you’ll need help, teams, and techy people—but the nice thing is that in this NFT world, networking is easy. Everyone knows someone, and you can very likely get all the help you need just from the community you are building within your collection.
When you market to metaverse buyers, however, be aware that you may end up with a collection that is unrelatable to others, low volume, and difficult to market. In such a case, your esteem as a custom artist is what people will seek you out for, and management of this type of branding is very different than other strategies.
- Social Credit- These buyers value scarcity and prestige within a community. The way you brand yourself, the elite nature of the people who own your collection, and the high price you command is a massive part of becoming a social credit play.
In a way, this is not something that you can predict or plan, except that the consistent effort you put into your community will be the prime determinant becoming a social credit play. You will ultimately end up with a core group of "diamond hands", who, after your volume has been proven long enough and thus, your floor is stable (whatever that means), who owns your collection may matter more than your work itself.
Getting the attention of the big players in a space can come down to being first, being best, or being lucky. Sometimes, it could be what partnerships you have, or what contributions you’ve added to the community at large that gets the attention of "important people." But, it could also be argued that the only thing you can craft to become a social credit collection on your end, is a social system.
For instance, by continually benefiting those that you’ve determined to be highest in a caste, you are tapping into human behavioral psychology that parallels social orders. Or, by making sure everyone is treated fairly (like a DAO where everyone has equal voice) you are tapping into the ideals of equal representation and the social values behind that.
Whatever the case, the net result is that people outside your collection will be staring into your collection with longing, and as unfortunate as it is, often their greatest barrier to entry is a lack of capital (which also means that creating special gateways to your collection reserved for those who prove or earn their value in your community is a good method to building a social credit collection). A sidenote: If you don’t see yourself as an elite artist, this may be a good target for you. You can often see mediocre art become social credit plays because it really isn’t about the art itself as much as what the art represents.
- Utility Seekers- Long section here, but this is perhaps one of the hardest segments to target. Utility seekers don’t necessarily see the value in your art, or possibly NFTs in general. They always want to know what they can DO with your work. In this category of buyers, they will be measuring cost vs value proposition, constantly, and the truth is that most models fall short of the value proposition side.
The most common answer is gamification. The problem with gamification, which I discussed in an earlier blog, is that it is premised on the idea that there is a constant inflow of new capital and new players. If you don’t have this constant inflow, the value of your collection will diminish over time. It’s ultimately an uphill battle.
Additionally, if you wish to create a game, unless you have the backing of an army of programmers, AAA studio skills, or lot of time in the industry with prior proof of success, you probably won’t be able to compete with experienced game developers, especially on-chain. Your game is likely to take a long time, and then when released, it’s likely to "suck".
So, your options come down to highly simplified games (think, mobile games, early flash game, riddles and social games), or, you can partner with other games and metaverses and you adapt to them and what they are offering. The challenge here is that there is no guarantee that you’ll have control over the utility of your collection, because so much depends on other teams and what they are offering.
You can of course gamify aspects of your collection itself which usually comes down to buying and selling more art. For instance, by saying, "collect points that will let you build a related NFT, and that NFT will get you more points for another NFT". Or perhaps, "Win a random item for your NFT if you do these tasks and own these things and contribute these pieces."
You can see the circular reasoning of this, but if you make it entertaining enough, then you can potentially keep things simple, engaging, and fun in a way that collectors won’t mind.
Now, let’s say the utility is for you to make a finished project, such as a comic or a film or a song. The problem here is that this cap on expectations will make individuals feel like they are investing as a kickstarter rather than a collection. A kickstarter is a totally different investment proposition in which the chances of return are much lower and based on concrete data like sales and popularity. You also run into potential future legal issues when you promise future value (US security laws), and, you are extremely likely to deal with disappointed investors.
Let’s taken an example: if you declare that you will be creating a manga, and that is the value of your NFT collection, then people will invest skeptically or short-term enthusiastically, waiting for the manga, and if the manga becomes popular, then their NFT gains value (in their eyes). But we all know how difficult this is, even if your investors do not, to become a breakout manga with hundreds of thousands of other talented artists seeking the same thing. So frequently, investors will say something akin to, "Well, Hollywood could take it up and make a movie from it!", and everyone who actually knows that this isn’t a simple thing will roll their eyes. Anyway, the point is that the probability of a successful comic/movie/song isn’t as easy as the saying, and in fact, the chances are about 1-in-a-million.
Some people would even argue that a kickstarter isn’t utility for the NFT itself, either, and you would have to build in additional utility (like making decisions in the storyline of your manga) for it to actual have utility—and that begs the question: why or how much should someone pay to be able to do x/y/z in your manga?
There are many other models of utility that I’ve come across, such as using funds to buy mining farms, or using NFTs funds to invest in other projects, or getting special real-life access to performances, merch, or whitelisting into other projects—but keep in mind that if you choose this route, the work is heavy, and you will likely do far less of the art part than you may ever have wanted.
If, however, you are creative, original, and smart about this, (and I recommend you use this as a supplement to your collection rather than a goal), then you can potentially find an additional boost to the value of your collection that makes it stand out from the rest. Think carefully about IP in this situation. IP can be an easy and powerful way to give utility to your holders.
- Membership buyers- This is the most classic NFT participant. "It’s all about community," after all. When you build this type of collection, you will spend significant amounts of time trying to find ways to get people to engage with one another. Think about this as an event organizer, where you have to find ways for people to break ice and connect with one another. It can be fun, if you enjoy building a platform for people to socialize, but it can also be the most frustrating part of an NFT collection, especially if you’re antisocial by nature.
In this case, think about your collection as a club where people can have exclusive access to club events. It could be group gaming, group movie watching, networking between members, early access to information or products, discounts on your collection, on other collections, etc. The options are limitless here, but the energy devoted to this is also limitless. Frequent, small engagements is the name of the game here. Ultimately, you are trying to break down social barriers to get a bunch of online strangers to be invested in each other, and thus, the value of your collection depends on the value that people have for each other. In most cases, sharing alpha (early information) is the current biggest benefit to joining NFT collections for membership reasons.
- Hoarders and Gamblers and Randoms- These investors come from spontaneous exposure to your collection. They usually won’t necessarily know how long they intend to stick around, but if you have built a strong infrastructure, community, or utility, they might stay to find out. There are actually quite a few of these investors floating about—perhaps the majority. These are the kinds of people that buy first and ask questions later.
Actually, the typical pattern is buy first and regret later, if I’m honest.
These buyers are drawn in through things that appear on their social radars, such as a tweet or the front page of Singular marketplace, or their casual stalking of other collectors. They don’t know anything about you, your art, your community, or even NFTs, necessarily, but they may buy because someone told them so or because it "looked neat".
To attract these people, and to keep them, is very important for everyone involved. These are ultimately, new adopters.
This is where marketing and the marketing funnel are most important. You can acquire this attention through educational pieces, cross promotion, through becoming a curated collection on Singular, getting on various best-of lists, etc. Think classic marketing.
Perhaps the most sustainable way to continue getting an influx of these random investors is to get people of prominence and established reputation to feature you. This category of buyers often want to, or need to, trust other people’s opinions because they are new, so having the backing of influencers, writers, and analysts, can create long-lasting momentum. Some of these influencers take payment, but others are simply happy to know more and be thanked in various ways such as NFTs (after the fact so that they can remain objectively neutral), tips, or just given a shout out.
Whatever the case, it’s ultimately down to the infrastructure of first impressions that you’ve built. You will always have an influx of random people exploring your collection, and time is always limited and the competition is fierce. How you share important information, the buyer’s first impression of your community and art and motives (which means having a good description, artist bio, social links, website), is critical to getting them involved.
When I fall into this category, however, as a buyer, the first thing I’m asking myself is if the artist is in it for the money, or the art. If I get the read that the artist is in it for the money more than community or art, then even if I made the impulse buy, I’m trying to flip the piece as soon as possible.
PHEW! That was a lot, wasn’t it?
I recommend, as mentioned before, that you focus on 2-3 of these types of buyers to design your collection and plan. You’ll notice how much further work than "just art" creating a collection is in the NFT world.
Remember that buyers can float between the different categories, and they may behave in different ways for different collections (meaning that an investor type for one collection, and a utility type for another collection).
What matters most is that you’ve considered the implications, work, and future of your collection BEFORE you launch.
In Part 2, I’ll begin to cover specific strategies in running and promoting a collection.
Follow my spaces on Dotsama and NFTs here: https://app.subsocial.network/5892
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