The Greatest Comeback Story
Breaking down the past, present, and future of Pudgy Penguins...
In today’s edition of The Ground Floor we are breaking down one of the greatest comeback stories in the Web3 world…
Pudgy Penguins Comeback
Rewind the clocks to 2021, and the requirements to successfully mint out an NFT collection entailed a team creating some creative cartoon characters, with a story-line of how these characters would become the next Disney.
During this time, very little due diligence was done on the teams creating these collections, with the only real litmus test being the degree to which the people collecting these cartoon characters resonated with the images.
As we now know, this moment in time attracted many opportunistic individuals to the Web3 world who sought to capitalize on this opportunity.
In July 2021 a group of college students: Cole Villemain, Clayton Patterson, and two other people known simply as Mickyj and Jonah created Pudgy Penguins.
The cost of minting a Pudgy Penguin was 0.03 ($100 at the time) and the collection sold out within 20 minutes ~ netting the team over $800,000.
Fortunately for the 4 friends that launched this project, a community formed around their collection, and within a month the floor price reached 2+ ETH.
Following this success, the team launched a secondary collection called Lil Pudgys, providing each Pudgy Penguin holder with one for free, selling the remaining 13,334 for 0.03 ~ providing the team with an additional 400 ETH.
Unfortunately, the good times for this team were short lived.
ZackXBT, widely regarded as one of the most trusted on chain investigators took to Twitter to share his findings on Cole, the co-founder of Pudgy Penguins.
To make matters worse, in January 2022 ~ one of the Pudgy Penguins community mods shared his conversations with the PP team outlining their intentions to sell the project with plans to take 100% of the millions they made in royalties and the Lil Penguins drop and a capital raise from outside investors.
Better yet, the team wanted a cool 20,000 ETH for the project.
Later that day, in response to this conversation being made public, Cole asked the PP community to vote on removing him from the project.
The Pudgy Penguins overwhelmingly voted yes.
Along Comes Luca
Luca Netz, a high school dropout turned serial entrepreneur with experience creating companies, in addition to leading brands as their CMO took to Twitter the same day to make a $2.5 million offer to purchase Pudgy Penguins.
Fortunately for all Pudgy Penguin holders, the team accepted this offer.
In the time since, a lot has changed for Pudgy Penguins with the project re-building its once tarnished reputation as just another project that didn’t deliver on the promises they made ~ to one of the best examples of a Web3 brand.
Building A Brand
With significant experience working at the intersection of digital content and commerce, Luca and his team doubled down on creating content for Pudgy Penguins ~ content that now receives millions of impressions each month.
At the same time, Luca has leveraged his past experience working with some of the largest retail chains in North America such as Walmart to bring physical Pudgy Penguins characters to 2,000+ Walmart locations in 2023.
Luca has confirmed this partnership with Walmart is the beginning, not the end, as they plan to expand to many more retail stores in the coming weeks and months, all the while paying royalties to its community members who’s Pudgy Penguin characters these physical toys are based on.
Experienced entrepreneurs with the ability to build valuable brands are all too uncommon in the Web3 world today.
Having raised $0 from the PP community, instead focusing on creating cool physical products that people want to own, Luca Netzs turnaround of Pudgy Penguins represents what’s possible when a talented team has access to the right amount of capital (PP raised $9 million) to scale a consumer brand.
This success story might not be as captivating as Web3 brands reinventing the internet, or creating immersive metaverses, however, it does provide a much needed example on how to build a successful Web3 first brand in 2023.
💡 Web3 Roundup
P.S. What did you think of today's newsletter?
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