Startup mantra: Adding a social layer to NFT marketplace

If you follow the non-fungible token (NFT) space, you may have noticed the social conversation accompanying trading of licenced NFTs on different platforms like Twitter, Telegram and Discord. Combining these two experiences on a single platform, Pune and Singapore-based ‘NFT Labs’ Web 3.0 startup has developed Itsmyne a “social network meets marketplace” for licenced NFTs.

Founded in 2021 by Atharva Sabnis and Ayan Uali, NFT Labs, Inc. is exploring big ideas in community, utility and engagement to push the NFT and metaverse space forward. Itsmyne is nearing its launch, with a waitlist of over 50,000 users. NFT Labs, Inc. also provides the vision, experience, and technology for Web 2.0 brands to leverage the Web 3.0 opportunity. The startup was the official NFT partner of the “2022 Global Sports Tech Summit” and has earned recognition from the Celo Foundation, Polygon and NEAR Protocol.

In the beginning…

Pune-born Atharva had his upbringing in Sudan, North Africa and did his higher education in Rochester Institute of Technology (RIT), New York in USA. It’s this university where during 2010-14, he met his co-founder Ayan, who is a citizen of Kazakhstan and based out of Almaty city. Atharva was doing double major in finance and economics with minor in computer science while Ayan was there for software engineering with economics as the second major.

Says Atharva, “While I was pursuing higher education, bitcoin was gaining its first traction. But then, I didn’t have the vision that cryptocurrencies or blockchain would be the next big thing. In 2015, I came back to India and started looking for job. I did internships in two companies – one in Shanghai and other in Miami – but felt disillusioned in the investment banking workspace. Back there, I was reading about startup boom in India. Entrepreneurship was a calling for me, and I was feeling FOMO – the fear of missing out.”

“I started my first venture of in-taxi tablets and advertisements but had to struggle a lot to raise capital. Also, due to regulations and other reasons, the idea didn’t work out. Fortunately, very early on we had the realisation about our opportunity cost and I shut it down. Then I went into a completely different domain of ‘Sanitisation Technology’. We had repurposed machines for pharmaceutical sanitisation applications, but sans FDA approvals, we had to recall the machines. We tried the same service with hotel industry but blue labour management issues forced us to rethink. Finally, we passed on our contracts to some other companies in this sector and were able to recoup some losses made in pharma and hotel industry operations,” recalled Atharva.

‘Seven on Seven ‘

Atharva had attended the 2014 New York edition of “Seven-on-Seven” conference where the first-ever presentation on “Monetised Graphic” was made by Anil Dash and Kevin McCoy. Lot of things were happening since then in blockchain technology, Web 3.0 space, but Atharva was not focussed on it then.

Atharva said, “After handing over the previous contracts, I had started consulting assignments for a Singapore-based company and I helped them with product development and go-to-market strategy. In 2017, crypto kitties and major NFT projects had received a lot of attention. Nothing major happened during 2018-19 but in 2020 NFT sector rose suddenly. The NBA sold NFTs worth ₹3,500 crore in first six months which re-sparked my interest in this NFT space. Since I did not have a technical experience and background, I got in touch with Ayan who was also looking to do some exciting stuff. Ayan had also not heard about NFTs but he started researching about it. All this happened during the Covid lockdown in September 2020.”

Identifying disconnect

Atharva had first thought about the Indian equivalent of OpenSea NFT marketplace. He refined this idea for a month, made initial pitch deck and started approaching investors to raise capital in February 2021. However, three months down, Atharva did not receive interest from any investor.

Atharva says, “Even though I did not elicit positive response, with every interaction with the investors, I got insights in the NFT world. I met one Ajit Khurana, who is considered the godfather of Indian crypto space. Ajit asked me to change the business plan and also agreed to come onboard as a mentor to help us raise funds.”

“Till June 2021 there was no traction. I was running out of time and patience. Meanwhile, an Indian crypto startup had launched India’s first NFT marketplace but that has failed miserably. It was an early validation for us that our earlier investors were right about this aspect. So, we did a major pivot in this idea. I was researching NFT very deeply. That’s when I noticed that discussion related to NFTs happens on two platforms – Twitter and Discord – but all buying and selling happens on OpenSea, which has almost 85 per cent of global market share. This was a big disconnect,” said Atharva.

Acceleration

Atharva and Ayan began applying for startup accelerators globally and landed in the Antler Singapore Cohort of 2021. With Ajit’s backing and selection by Antler, investors started reaching out to the founder-duo.

Atharva said, “Besides Antler, we also applied for LongHash Ventures, a Web 3.0 investment fund and accelerator. Again, we thought we had enough ammunition for a fund raise and hence went back to investors. However, this time too we failed because we had got the idea right, but investors had doubts about its execution. We had no clarity on the suppliers of NFT and buyers on the other hand.

“It was quite frustrating at this point in time, because in Web 3.0 space, every resource is more expensive. It’s a fight for talent and we did not have enough to bootstrap. Without talent we could not build product. Ayan had started building the minimum viable product but he too had to learn Web 3.0 from scratch.”

NFT suppliers

We started looking for industries where we could get NFT suppliers. In the world of NFTs, sports sector has been one of the earliest adopters. One of our mentors referred us to a sports tech accelerator based out of Israel – Hype Sports Innovation – but we had missed the deadline for application in 2021, recalls Atharva.

“We literally begged them, sent over 40 emails to them to give us consideration. Fortunately, they asked us to send our deck and interviewed us. After due diligence they selected us for the 2021 cohort. The best part of this was that we got to directly pitch our product to innovation committees of international sports bodies. We were selected by FIBA during this pitch session,” claimed Atharva.

Tokenised fund raise

After three failed attempts to raise capital, Atharva went back to Ajit to seek his guidance. Ajit told him to go for a token-based fund raise, which is a completely different model than the equity funding.

“We created a decentralised organisation, issued a token and sold that token to investors. By doing these token sales we got our revenue or ‘seed funding’. Through this activity we raised about ₹12 crore ($1.6Mn) in three months by end of September 2021. I had made 102 investor presentations in two months, of which 26 responded positively and finally 22 investors made actual investments. The investors will use their token on Itsmyne marketplace and they will not have to pay trading fees on the platform. With more tokens, the investors can also get share of trading fees from other people. We made a pre-paid subscription to our marketplace and sold that which became our fundraise,” stated Atharva.

NFTs – The new tracking cookies

In sports, viewer engagement is a cause of concern as people are hooked to their mobiles even in stadiums

In Web 2.0, personalised advertisements and content delivery, user profiling is done with the help of ‘tracking cookies’

In Web 3.0, NFTs are being treated as these tracking cookies. When a user claims their first or free NFT, notifications within applications nudge them to create a crypto wallet, or link their existing wallet

A wallet is created for the new user on sign up. When user get their first NFT, backend algorithm checks which wallet has been used to collect NFT or which wallet has been linked, whether the user has done any other crypto transactions anywhere, etc.

On blockchain, a user is a wallet and everything is public data. Hence user profiling is done on basis of crypto currency trading, which other NFTs they hold, what is the size of user’s portfolio and what might be their net-worth, disposable income, what are their interest based on NFTs they hold, etc.

No personally identifiable information is taken or used

Sports team can get analytics and data on their fan’s behaviour and interests in the world of Web 3.0

When sports team launch their NFTs or trading cards, they know the right set of fans to advertise, target, onboard and engage

Crypto exchanges can acquire users based on their profiles and interests

Product offerings

Itsmyne SocialPlus marketplace

To bridge the disconnect between social conversations and trading of NFTs, Atharva borrowed the concept of ‘socialised ecommerce’ of Amazon. He says, “Amazon showed us that people like to read about other people’s opinions and reviews before making any buying decision. That is why people were conversing with others on Twitter and Discord but buying on OpenSea. So, instead of just copying the marketplace model for Indian audience, we decided to combine social conversations with buying and selling of NFTs. That’s how our first product SocialPlus Marketplace was built – where people could buy and sell NFTs, review NFTs, chat about them, talk to each other without being part of 50 Discord Servers or Twitter users – where everything is presented on single platform.”

Bollywood NFT marketplace

Atharva said, “In December 2021, we got our first break with Bollywood when auction of cricket collectibles related to sports movie ‘83’ was sold for ₹10 lakh within an hour of debut. NFTs for 83 were minted on the Polygon blockchain platform and included autographed physical cricket memorabilia, video moments, digital avatars, and unseen posters and images. Through one of our mentors, we had reached out to tennis player Mahesh Bhupathy who in turn helped forge partnership with SocialSwag company co-owned by him along with actors Akshay Kumar and Rana Daggubati.”

Itsmyne In-Stadium Fan Engagement

Beta version of this product was released on July 30 in Israel. QR codes were placed in a stadium where people could scan those codes – without downloading any app, using any crypto wallet or currency – and win autographed merchandise of players. The users could claim a free NFT of any team they supported and this NFT would be the raffle ticket for the autographed merchandise.

Ape In (yet to be launched)

In crypto terms, community apeing means onboarding customers or users, explains Atharva. He said, “We need people to have meaningful and valuable conversation on our platform. On Twitter, there are around 1.5 lakh tweets everyday around various NFTs and on Discord there are 0.2 million messages pertaining to NFTs or communities. There is massive universe of content being generated on these platforms every day. However, a new person in this space, may take time to figure out which is meaningful and relevant information. This causes friction in user retention. To increase user retention, we are scraping in real-time, all conversations about all top NFT collections on Twitter and Discord and we are presenting those conversation in an easy-to-digest manner on our application ‘Ape In’. We use Artificial Intelligence (AI) to do prioritisation of content and show information to users from Twitter and Discord about the NFT projects most relevant to them. Users won’t need to go through Twitter feed or Discord servers anymore, and this feed will integrate with the Itsmyne feed as well – providing a combination of native and sourced conversations.”