NFT Creator – Cointelegraph Magazine

Pudgy Penguins launched in July 2021, but quickly saw high drama after its former founder was suspected of derailing the project.

A few months later, Luca Schnitzler moved in. He had a history of building internet businesses in his entrepreneurial journey from his youth and purchased the project and its intellectual property, 8,888 Beautiful Pudgies, for $2.5 million in April 2022.

“It was an instinctive and common sense decision. Before I bought this thing, I saw a lot of things I had invested in, which I thought had potential. I was complaining and crying every day to the founders about how they suck and how they can do better. Instead of just doing this, I stepped up to the plate,” he said. Schnitzel.

As Schnettler lays out a vision for a project that the community can support, the narrative of the story quickly shifts from a carpet of zero potential to one of hope and optimism.

Schnetzler became one of the prominent PFP project leaders during the NFT bear market, and the penguins broke the trend of creating floor prices. Since taking over as CEO, the floor of Pudgy Penguins has risen from the 1 ETH mark to 6.32 ETH. Holders and the broader NFT community believe Schnettler has a game plan for success and the ability to execute it.

He said the decision to scrap the project was not as risky as it might seem.

In six months, we bought nearly $10 million for $2.5 million. He was earning half a million dollars a month in royalties. On the face of it, it was a very good business. Intuitively, I think it's easy to see where this thing could go when you close your eyes and draw Pudgy Penguins.

With the Penguin brand spreading outside of traditional crypto channels like X and Discord, Pudgy's continued momentum and growth has been key to its rise to one of the top PFP projects. Pudgy's Instagram has just passed 1 million followers, his GIF strategy has been so successful that he crossed the 10 billion view mark a few days ago.

Explaining how little effort other PFP projects put into promoting their brands, Schnetzler thinks it's a little unfortunate to receive such praise.

“Everyone was saying their NFT project was a brand, they had raised hundreds of millions of dollars from the community and they had venture capital at ridiculous prices. But none of them are doing the basics of building a brand,” he said.

“Some people really sing my praises, and it's sad, because I think we do some things right, don't get me wrong, but I mean, it should have been all bar. It's a shame that we're doing a lot of work that doesn't work when most projects have 10-20 times the resources and 2-3 times the experience.

Finding the entrepreneurial spirit

Although only 25 years old, Schnettler began his entrepreneurial journey a decade ago. Growing up poor and sleeping on couches at friends' places, Schnitzler said he had to start earning at a young age.

“I actually worked 10 years out of school, which is crazy to say, but that's the way it is,” he says, adding that most people don't even start working until they're in their 20s.

“Then you do 10 years out of college, and after you're 33, people start seeing success in their 30s. That seems like a time horizon. I think my childhood forced me to start early. I didn't have the luxury of a childhood where I could go home and play video games and not worry about anything. I'm forced to go to work and check things out.”

Character building with brand building

To date, most PFP projects have been built around a central character, giving each NFT a slightly different look and feel. Take the OG set of cryptopunk, the Boring Monkeys, and the same holds true for Pudgis. But that's not the case for Gary Vee Vee Friends, which features 270 individual characters.

Schnettler believes that building a character around an individual character is the easier of the two options.

“At the end of the day, I think Gary's trying to take on a tough challenge. It's part of the cards I carry and have, and he created the cards. I think he's doing a great job with VeeFriends. I think it's ultimately about familiarity. It's a lot easier to create familiarity around a character than it is to create familiarity around a brand,” he says. Schnitzler.

“They are two different things and because his universe is not predicated on one character, but many different characters and different animals of different shapes. He is betting on the product and shooting, and the brand is with the character.

“I look after the character first and worry about the brand because I believe there are enough people who love Penguin and there are enough Penguin brands out there.”

Brave new world – the Walmart pallet program

In September of this year, Pudgy's announced a new deal with retail giant Walmart that saw Pudgy Penguin physical toys go on sale and in prominent locations in more than 2,000 stores across the United States.

“The pallet program is one of the most prestigious areas you can find because it gives prime real estate to people walking the floor. It shows Walmart's confidence in the product and their confidence in NFTs and Web3 as verticals for their retail locations,” Schnetzler says.

“If this becomes the norm at the world's largest retailer, it gives us the right solution to succeed. It's one thing to be in the recesses of a toy shelf, it's another thing to be front and center for everyone to see. That program doesn't happen for new brands. It's usually a behind-the-scenes program for Barbie, Teenage Mutant Ninja Turtles, or movies and TV shows.

Building a legacy brand without a playbook

One of the most common questions that is constantly thrown at a PFP project is “How do you return value to containers?” That's what it says.

In response to criticism of the toy product extension, Schnitzler proposed that Pudgy Penguins use the classic funnel diagram to think about finding value for the people involved.

This is a terrible move.

In the thread below I will tell you why this thought process is fundamentally wrong and why this take is incredibly bad 👇 https://t.co/5sGBpCJHA2

— Luca Netz 🐧 (@LucaNetz) August 5, 2023

“I didn't really make the smallpox. I mean, you can throw Star Wars and any other big legacy IP on that fan, and that's the trick. The idea, however, is that with NFTs, the price that the first issue collects is a huge anchor for the business. If you put it at the bottom of that funnel on any legacy brand that collects on any first edition, it makes even more sense.

“I want to build old brands like Hello Kitty, Star Wars and Pokemon.

He said there is no following roadmap for the PFP project.

“Hello Kitty took 60 years to build. My owners don't have 60 years to do something. If I lose momentum and traction in the container, I will eventually lose everything because I don't believe you can build a successful Web2 business when your Web3 business fails.

Quick-fire question and answer

Your entrepreneurial motivation

“I love everything that I think Steve Jobs represents. For me personally, I've tried to be my own person, but the person I find the biggest inspiration from, you can tell by my leadership style, is actually Steve Jobs.”

The high pressure of a founder

“It's not easy, but it's not the worst thing either. One of the reasons we're here is the community. I think I'm in pretty good shape because I bought the project and didn't take any money. People who hold Pudgy Penguin PFPs are, by nature, good people.

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“You really can't be an angry, miserable person and then click Buy Pudgy Penguins. An art form creates a culture that filters out a lot of nonsense. Now, I feel sorry for so many other people I see going through the chaos.”

Telling mom about Pudgies

“What I tell a mom is, ‘Hey, this is a great idea for your son or daughter. This is more fun than any $10 toy.'

“Why? Because in the digital world, they open up a lot of things that entertain them when they go to bed or on vacation or on the playground. But they're also entertained when they're at home on their iPads and computers. 2-for-1 bang for the buck is unique.”

Pudgy gifs planned?

“The gifs were completely random. But the second one we saw, we quadrupled it, but it was completely random at first. It was a serious accident, but a happy accident.”

“I don't want people to know about Pudgy Penguin right now, but you want to know something when NFTs are the talk of the town again, and all those people have been using Pudgy gifs the whole time, that's going to be a great source of loyalty to them when everyone starts buying NFTs.

What is your position on royalties?

“It shouldn't be 0% and it shouldn't be 5%. I think it's somewhere in the middle. I think the number should be somewhere between 1% and 1.5% of the applicable royalty. It's just to incentivize the creator.” [That’s] What made YouTube great, what made TikTok great.”

Are you a Wim Hof ​​fan?

“Every day I do the breathing technique and I choose high. I recommend it because it's the fastest way to get high for free. I'm also preparing my cold dragon now.”

Where are the Pudgies after three years?

“We are the face of NFTs, we are the face of Web3. We bring the highest value to both emotional and financial buyers. We will make a film in three years. The film is close.”

Links:

X: twitter.com/LucaNetz

website:

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Greg Oxford

Greg Oakford is co-founder of NFT Fest Australia. A former marketing and communications professional at Sports World, Greg now focuses on content creation and consulting at Web3. He is an avid NFT collector and hosts a weekly podcast covering all things NFTs.

Follow the author @GregOakford