The bear market has taken a severe toll on numerous NFT projects, causing many once-popular collections to decline not just in terms of price on the charts but also in terms of their community presence. Visiting the Discord servers of these projects feels like wandering through a deserted town.
Amid these challenging times, the Pudgy Penguins continue to shine brightly, so much so that we believe that the Pudgy Penguins are reshaping our perspective on establishing brand uniqueness in the world of Web3.
Image source: Pudgy Penguins
The Pudgy Penguins have orchestrated a jaw-dropping spectacle, amassing an astonishing $300 million+ in trading volume on Opensea. Now, here’s the kicker: Luca, the mastermind behind the Pudgy Penguins’ success, not only achieved this incredible feat but did so without ever setting foot in a college after dropping out of high school.
“ …14 different cities in ten years, guest room to guest room, couch to couch, dropped out of high school when I was 16, got my first Job at a tech startup called Ring Doorbell, I was one of their earliest employees,”Luca Netz
His previous stomping ground, Ring Doorbell, was later acquired by none other than Amazon for $1 billion dollars, so it’s hard to deny that Luca had a knack for orbiting in the Milky Way of remarkable achievements early on.
However, that’s not all. Luca started and sold his first jewellery consumer brand company between the ages of 18-19, and went on to contribute to reviving the signature pinstriping designs company, Von Dutch in 2020. One of Luca’s noteworthy dips into the waters of marketing was investing, co-founding, and later becoming the CMO of one of North America’s fastest growing Toy companies, Gel Blaster.
So, although it came as a surprise when Luca entered into that famous bidding war to successfully take over the Pudgy Penguin project from the original owners in 2021, it was unclear to everyone else but Luca that the plan was to build one of the biggest “Trojan” NFT brands.
If you’re here, in 2023, looking at how far the Pudgy Penguins have come, then you can attest to the strength of the brand in terms of influence on the target market. Luca and the team didn’t just achieve this with a wand.
He said: “There is a part of this story I failed to mention which is monetizing social influence, I basically built a business building brands and merchandise around influencers and celebrities”
Luca’s mastery in capitalizing on social influence played a pivotal role in the sale of his jewellery consumer brand. With this epiphany of his potential, he transformed into a formidable force in the realms of brand establishment and influencer marketing. To put it in perspective, he was raking in a staggering $100k a day, all while leisurely sipping piña coladas in the vibrant city of Miami. How’s that for a remarkable journey of success?
You might be tempted to ask how it all began. Well, Luca’s foray into crypto was born out of his unwavering belief in human rights —the right to communicate, transact, and enjoy freedom.
However, the catalyst for this journey was a frustrating personal experience. When he attempted to send money to his Grandma, it took over seven agonizing days to reach her, all while the bank imposed a hefty 3% fee.
This ordeal prompted Luca and his brothers to take the world of crypto seriously. They rolled up their sleeves, mined coins with sophisticated technology in their mother’s basement, and even made it a daily ritual to check CoinMarketCap religiously every morning before brushing their teeth. You have to give an A for this sort of dedication, and you would agree that it’s the type of dedication we surely need if web3 is going to achieve mass adoption.
Image source: blocmates Archives
As things went on, Luca’s first NFT was the Pudgy Penguins and he made the purchase not to flip for profits. The real reason why the Pudgy Penguins were his first ever NFT was because they more than passed the eye test for a PFP and had all the ingredients to evolve into a huge NFT-Toy brand. Given Luca’s background and expertise, it’s safe to say he possessed a well-earned sixth sense for such opportunities.
“I believed in it because being in the toy business I understood what a good character was and Pudgy Penguins had all those ingredients,” he says. “I just believed in it… I texted the group chat when these things were worth $100 a piece and said ‘this is the one’, long before I even had the idea of purchasing the project.”
A couple of million dollars later from a $25,000 investment in NFTs following the success with the Pudgy penguins trade, Luca doubled down on his interest in the NFT space. This led him to eventually bid to buy the project for $2.5m from the original founders who were some teenagers who started the project in their dorm basement with little to no entrepreneurial experience whatsoever.
Furthermore, Luca’s determination to acquire the Pudgy project for a hefty sum of two and a half million dollars stemmed from a deep-seated frustration.
He couldn’t stomach the sight of numerous projects worth hundreds of thousands of dollars showing little to no dedication to nurturing their brand’s growth. Even those who made an effort often displayed a skewed understanding of what effective brand-building truly entailed.
In response, Luca was determined to take the reins and set a new standard for success in the NFT space. After all, he understood what was needed which in his words was leadership, marketing, and brand building. To Luca, purchasing the Pudgy Penguins at the price he did was a steal.
Both as players in the NFT arena and as a media outfit with a tendency to observe, we can tell that the Pudgy Penguins are taking a distinctive, unconventional route, building the project as an Intellectual Property brand. Luca’s approach to this is interesting; while it is distinctive from the path of a thousand other projects, it’s also nothing out of the ordinary. The secret according to Luca is to bring value to your holders rather than take from them.
“Your job is to bring value to your holders, your first believers, not take value from them, and I think that’s the biggest problem. And there are a plethora of ways you can bring value.
“You can do it through gaming, SaaS, and personally, I think the best way is how it’s been done for the last 150 years with the likes of DC, Marvel, and Warner, and how they accrue value to collectables. And so I look at this (Pudgy Penguins) as collectables. All that’s left to do, which we are doing, is getting people to fall in love with the brand.”
Luca’s strategy is clear: if he can get a million people to like his brand, then surely he can get 8,888 people to hold the NFT while constantly creating value for these people. And if they hold the NFT and don’t want to sell it because of the value, then eventually, what you get is a highly-priced asset. Surely this doesn’t look like rocket science, right?
This strategy seems to be working quite well as the Pudgy Penguins have sold over $10m in retail, selling toys this year, and are doubling down to become a brand for the real world (none of that metaverse stuff). However, the stirring question remains the same: What’s next for Pudgy Penguins?
Luca said: “On the 26th of September, although I won’t give you the alpha, we will be announcing our biggest moment yet, it solidifies what I’ve just told you here, one of the biggest companies in the world is really backing us in a meaningful way and activating with us in a meaningful way and this solidifies our thesis.
“And by the end of the year we are aiming to be the number two (in the NFT space), although I think we are number one, but to be pragmatic, we are aiming for number two by the end of the year.”
Luca also admits that it is not as easy as it seems and believes the web3 space is a cave of behemoths. He’s also constantly under public scrutiny, viewing the Pudgy Penguins as some form of publicly traded company already. And you can understand that when it comes to the NFT space, Luca is one bad tweet away from sending the floor price to hades. This underscores the immense care and meticulous planning required in every move within this space.
Image source: Pudgy Penguins
Luca’s vision is clear — to become “the face of NFTs”. At the moment, does it feel like it? Well, some people may argue that Luca has already achieved that. Nonetheless, given how the latter has performed in terms of public sentiment in recent months, you’d be hard-pressed to deny that Luca and the Penguins aren’t far off.
In the race to become the face of NFTs, one recipe Luca seems to be paying attention to is that of experimenting along the way. Whatever sticks he doubles down on and whatever doesn’t, he shoves aside and moves on. An experiment we are likely to see in the future is a whole Pudgy Penguin universe that might involve games and other entertainment activities.
Finally, if you intend to start your own NFT project or you already own one, Luca wants you to view your business as a web2 business selling digital products but leverage the hive-mind nature of the web3 space to think collectively and collaborate on the vision of the project to achieve set goals.
An approach to this would be communicating your idea to the community as frequently as possible and getting all the contributions in but making the decisions that get things going.
Luca’s approach to brand and character building is marked by a conscious effort not to force Crypto and NFTs upon non-Web3 audiences. Instead, he focuses on conveying that blockchain is the underlying technology enabling accessibility and ownership, rather than emphasising it as the forefront of the experience. It’s a thoughtful strategy aimed at making these concepts more approachable and relatable to a wider audience.
In terms of his mindset to get things going, Luca channels his inner love for sports to motivate himself.
“I’m very much a huge sports fan and so when I’m feeling down I just think to myself like I’m Muhammad Ali against the ropes and I’m either gonna get knocked out or I’m gonna punch back, and I’m not the guy that gets knocked out.”
Luca seems tailor-made for the world of NFTs, and the Pudgy Penguin community is undeniably fortunate to have him at the helm. The anticipation for what’s in store on September 26th is palpable, but equally exciting is the prospect of future iterations.
And as a delightful tidbit to wrap things up, Luca says Yes! to pineapples on pizza, and frankly, that’s about the only thing there is to not agree on.
N/B: This featured article has undergone editing to enhance its brevity and clarity.
This feature article was written by Excel Oliva —Ollie is a jolly good fellow exploring the wormhole of crypto and web3. He enjoys researching protocols and breaking down complex ideas into digestible chunks. Give the lad a follow on Twitter or LinkedIn will ya?