Why Doodles Are Down
Breaking down the sharp decline in the value of Doodles assets…
In today’s edition of the Ground Floor we will be breaking down the sharp decline in the value of Doodles assets in 2023.
Why Doodles Are Down
Doodles was brought to life 556 days ago.
As a company, Doodles has experienced a significant amount of success during this time ~ selling $12+ million in NFT primary sales, reaching $500+ million in secondary sales.
🎨 Standing Out
Doodles artwork immediately made it stand out at a time whereby countless NFT collections were being created each week.
As a profile picture project, Doodles was perfectly positioned to succeed thanks to the recognisability of the collections artwork, and the floor price of Doodles soared.
Taking things off Twitter, Doodles was one of the very first Web3 brands to successfully create an in person brand activation in 2022 at SXSW where they wowed collectors.
austin was magical 😛🌈 @sxsw
@Shopify @BehrPaint @VTProDesign https://t.co/dzdxhmQ5kN
— doodles (@doodles)
Mar 23, 2022
Thanks to custom Doodles coffees, and a Doodles decorated space that captured collectors imaginations ~ demand for Doodles assets increased once again.
During this time, collector sentiment was extremely positive as Doodles continued to provide its community with reasons to remain excited about the future of the project.
Building A Company
To accelerate growth, Doodles raised $54 million from Alexis Ohanian's firm Seven Seven Six at a $700 million valuation ~ demonstrating Doodles desire to build a big business.
To lead this new charge, Doodles hired Julian Holguin ~ the former President of Billboard.
All signs suggested Doodles would continue to climb to new highs as collectors continued to celebrate the collections growing success.
With a treasure trove of capital, and a new CEO ~ Doodles continued to expand its team and began exploring new ways to expand its brand.
In late 2022 Doodles announced they would be creating a second collection, Doodles 2.
Unlike other follow up collections such as Mutant Ape Yacht Club which was capped at 10,000 ~ the supply of Doodles 2 was uncapped.
Doodles confirmed they would take their time rolling out the supply, with Doodles Genesis boxes seeding the Doodles 2 eco-system that they wanted to grow to millions of NFTs.
Creating this new collection allowed Doodles to reward its existing collectors, however, Doodles also capitalized on the opportunity to raise more capital by selling additional Genesis boxes ~ generating $10 million in revenue.
❌ What Went Wrong?
While macro issues such as decreased spending on NFTs has certainly contributed to the Doodles collection continuously declining in value ~ Doodles has made a number of errors with the brand's recent expansion plans that directly impacted the collections value.
1) Slow To Ship
In the Web3 world, collectors attention spans are short ~ Doodles took 8 months to allow collectors to open Doodles Genesis boxes.
During this time, there was very infrequent communication with the Doodles community, and the attention Doodles once held gradually moved to other projects in the space.
By the time Doodles did ship Doodles 2, Genesis boxes had declined to less than 0.1 ETH, an 80% decline vs the price people paid to mint.
Consequently, despite the Doodles community responding resoundingly well to the initial Doodles 2 experience, overall collector sentiment towards Doodles 2 remains negative as this collection has continually lost value since its mint.
2) Communication Errors
The very best NFT projects in 2023 understand the value of clear communication.
Doodles communication has left a lot left to be desired, and whereas once we could call Doodles communication strategy “speaking when they have something important to say” ~ recent comments regarding Doodles no longer being an NFT project provided collectors with additional reasons to reconsider the value they were receiving from owning a Doodle.
✅ What's The Solution?
Blur has made it 10x easier for collectors to exist positions they hold in projects.
Now, more than ever NFT projects need to clearly communicate with their collectors what they’re focused on building, and how the NFTs they created fits into this vision.
Better yet, collections such as Doodles that have raised millions of dollars from their community need to focus on finding ways to provide value to its community today.
While projects such as Doodles 2 show great promise in providing new users with a reason to want to own NFTs, projects cannot overlook the need to provide existing collectors with reasons to remain excited about their project.
Following the acquisition of Golden Wolf ~ it’s clear Doodles has big ambitions, and a talented team to bring its vision to life, however, absent the ability to clearly communicate with its community, the value of Doodles assets will continue to decline.
While falling floor prices is not an existential problem for the company given how well capitalized they are from their raise, creator royalties and selling $10 million worth of Genesis boxes ~ Doodles success to date has been its ability to sell high priced NFTs.
This strategy worked extremely well when Doodles were selling for double digits ETH, however, Doodles ability to sell high priced NFTs will be extremely constrained moving forward as collectors appetite for these assets continues to decline.
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See you next time! — OB1👋
This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.