Under Promise, Over Deliver
Breaking down the strategy Red Bull has used to win in Web3...
In today’s edition of The Ground Floor we are breaking down the strategy Red Bull has used to win in Web3...
Red Bull’s Web3 Strategy
“/// by Snowfro”
Established brands have had a difficult time winning in Web3.
Since the first wave of consumer adoption of Web3, we have seen dozens of established brands make moves into this space, moves that garnered great excitement and support from collectors alike.
Unfortunately, in nearly every instance, these initiatives have resulted in collectors owning assets that aren’t worth the prices they paid to mint them.
Today, we will analyze Red Bull’s strategy to do right by their collectors.
The Right Research
To succeed in this space, it’s imperative brands do the right research to understand the products people are interested in purchasing, and holding past the point the initial excitement of minting these assets fades away.
When examining the approach an established brand such as Puma made ~ it’s clear the brand sought to succeed by catering to the then current trend in Web3 by providing collectors with branded profile pictures.
While this approach meets the first criteria of creating a product people wanted to purchase, the lifespan of most PFP projects is extremely short, and these branded PFP projects have since lost any & all relevancy, and in turn their value.
While I don’t doubt this brand meant well, it’s clear this initiative didn’t accomplish a great deal, beyond moving their social media metrics as people were asked to comment and like posts to receive access to the mint.
Creating excitement is a relatively easy endeavor in Web3, creating long lasting value is a much taller task for brands.
Having taken the time to understand the products people are interested in purchasing, products that collectors appreciate beyond the initial excitement of minting these assets ~ Red Bull focused its efforts on digital artwork.
In partnership with AOI, and Bybit, Red Bull racing launched the Velocity pass back in July for 0.3 ETH, and in the time since they have provided their collectors with more than 10x the value it cost to mint one of these passes.
How have they achieved this?
By leveraging their brand, Red Bull Racing have provided Velocity pass holders access to artwork by Rik Oostenbroek, Per Kristian Stoveland, Snowfro, and next in line in the coming weeks, Jack Butcher.
In doing so, Velocity passes have provided more value than just about any other NFT access pass in 2023, with a second season confirmed for next year ~ further emphasizing their desire to do right by their token holders.
Trust is the most valuable currency in Web3.
This decision to provide collectors with access to high value digital artwork will undoubtedly result in a long list of collectors wanting to participate in any Web3 projects Redbull launches in the future.
Furthermore, it adds positive brand equity to Redbull, as any participants in the Velocity series, or collectors familiar with their ongoing efforts will have a positive association with the brand thanks to their success with this project.
Last but not least, Redbull and their partners in this project have generated a meaningful amount of revenue, all the while adding to its reputation.
With a 0.3 ETH mint price, Velocity passes provided them 300 ETH ($500,000+) ~ the dutch auction for Snowfro’s /// drop which collectors received one for free generated an additional 300+ ETH ($500,000+) in addition to royalties.
To date, many of the established brands that have entered this space have harnessed their brand's reputation to extract value from the Web3 ecosystem.
Yes, established brands that seek to extract value from this space will likely succeed in the short term, however, this immediate “success” comes at the expense of their ability to gain long-term support for their Web3 initiatives.
The implication of this is that the brands that capture the most value in the short term will likely capture the least amount of value in the long term, while the brands focused on adding value to this eco-system will be best positioned to achieve long term success, and long term support from collectors in this space.
✍️ Authors Note
I personally hold no Velocity passes, however, it has been beyond refreshing to see a well-established brand enter this space with a strong commitment to enhancing the ecosystem, rather than just profiting from it.
💡 Web3 Roundup
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See you next time! — Matt O’Brien 👋
This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity