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Mar 3, 2023

Top Quotes From the Luca Interview

Jack Burt
Jack Burt


In case you missed the recent Luca Netz (CEO of Pudgy Penguins) interview on Youtube, we’ve compiled and paraphrased our favorite quotes for you:

Why Pudgy and not other collections

For me, Pudgy Penguins represented an inner child type of IP that was clearly magical to everybody else . . . that also gave me the ability to do anything that I wanted . . . you know some collections have a cigarette in their mouth, and for a lot of brands that's just like an instant killer of partnerships, right?  And for me, when I closed my eyes and I pictured the vision for Pudgy Penguins, it was always super clear from the moment I bought it as a collector to the moment we bought the project itself that this had the potential to be the brand that was going to Trojan Horse NFTs to the masses.

Why Pudgy is conceptualized as an IP Company

Pudgy Penguins identifies itself as an IP company, and why we did that is because . . . an IP company can do games, it can do short film, it can do consumer products, it can do merchandise, it can do licensing, it can do content, it can do all of those  things, versus if I said “hey we're a gaming company,” well, if I'm a gaming company that's who I am . . .

I'm surprised more people don't look at it from the same lens.

Step one for us is character awareness — the more people that understand and know and follow and engage with Pudgy Penguins the better, because if I have 5 million followers on Instagram, millions of followers on TikTok, tens of billions of views on Giphy, and people are familiar with the IP, then I can go build a game and actually find product market fit and bring users over; I can sell toys and actually make meaningful revenue; I can create content and pitch it to Netflix or Hulu and actually give them a real value prop on how it can bring users and increase their lifetime value  . . . and so . . . that's kind of the lens that I'm looking at it. I think a lot of projects should be looking at their NFT project like an IP company because the opportunities are endless.

Managing the expectations of delivering endless utility and value accrual

If you look at the success of previous projects up until this point, you know, Yuga did something better than everyone else, which is: make their holders rich. And so how did they do that? New collections . . . right . . . same thing with Azuki . . . one move they [Azuki] did that was extremely intelligent was they gave each holder not one but two beans, right? So they made their holders rich . . . and this is today what I believe the backbone of the space is built off of  . . . transactional utility.  Now, there's one flaw here — which is that Azuki and Bored Ape were able to do this because there was an overflowing bull run; new addresses were getting made by the tens of thousands every single day . . .

But I think you have to have the right market conditions to do that — like, right now we're building out our story and there's other characters in our universe, and I want to airdrop those characters . . . but I'm not going to do that in an underwater market.

Until that point [the bull market] I think licensing is going to be back the backbone of our value accrual model . . . create brand awareness and . . . emotional utility.

Emotional Utility

Until NFTs came around, IP was built off of one utility and one utility only, and that's been emotional utility.

How can you create people an attachment to their Penguins?

Let me walk you through this my imagination here: if you go to a Christmas party or a Thanksgiving party (and you're a Pudgy Penguin holder) and you see a niece or a nephew playing with a Pudgy Penguin toy — I would argue that's emotional utility — you feel proud to own that; you feel like you're a part of that; there's a connection there.

Or maybe you're having a bad day – and your wife is upset at you – and you see an uplifting Pudgy Penguins Instagram post – what a coincidence – and you send it to your wife . . . now she's happy, and now you guys talk. That’s emotional utility.

Or you're reading your son or your daughter a children's story at night, and that story is a Pudgy Penguin's children's book . . . that's emotional utility.

And I think these are the utilities that people are underestimating in this space. I think if you're looking at it from a long-term lens, that's the utility that . . .  is going to create a global brand, not just one that goes up in price because then you get caught in the Ponzinomics game.

Luca’s rude awakening

I had a rude awakening when I was 19 . . . I grew up homeless for 10 years with my mom . . . then I became a millionaire at 19, and I was really upset; I was like “damn this sucks, I thought this would solve all my problems” and then I found that just like helping people is really what life's about. Like, we're all going to die — that's our common denominator; I hate to get pessimistic here but this is the truth, so what are we really here for? . . .  you know, to raise a family, to help people, to make the world a better place than what you came into.

Expanding NFT brand awareness outside of web3

If you really want to grow this ecosystem to tens of millions of active users, you're going to have to create an IP that people fall in love with — you're going to have to create a trust factor or a level of credibility because right now crypto is still taboo and it's still intimidating and people don't want that to be the front end, and they don't want to be brute-forced that narrative — they want to be massaged that narrative.

I promise you the world loves this technology; they love what this is about, and they believe in it . . . they just don't know it yet because everybody is approaching it from an improper lens — they're approaching it from the point of: you're at the dinner table and I'm going to force-feed you this food because you have to eat it . . . but you're gonna end up not liking the food and you're going to have trauma about eating that food. My mom did this to me when I was younger; I had like trauma over bananas — she like force-fed me a banana, and dude, I'm terrified of bananas now.

It's the same thing with NFTs — we're brute forcing NFTs down people's throats, but nobody wants to hear that anymore. So how do you get them in again? Make them fall in love with a cute little character like this Pudgy Penguin, and once they really love the brand and consume it and they engage, and they start sharing it with their friends . . . maybe then start teaching them about NFTs and web3.

Disclaimer: This is not financial, legal, or tax advice. This article is strictly educational and is not investment advice, legal advice, tax advice, or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not legal, financial, or tax advice. Talk to your lawyer, accountant, or tax professional. Do your own research. See Flip’s Terms of Service for more details.

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