On March 11th, the New York Times ran a story on the artist Beeple’s jaw-dropping digital art sale under the headline: “JPG File Sells for $69 Million, as ‘NFT Mania’ Gathers Pace.”
The sentence was hard to parse for many and difficult to understand even for the most digitally literate. Who would pay $69 million for a JPG? And how do you even auction off digital art? And, fundamentally, what the hell is a NFT again?
What is an NFT?
Fundamentally, an NFT is a non-fungible token, which differentiates it from a fungible token, like Bitcoin or other cryptocurrencies. While those other identical tokens can be traded for one another (making them fungible), an NFT is a one-of-one digital asset.
So, in the same way a collector would pay millions for a one-of-one original Monet or Picasso, the Beeple NFT “Everydays — The First 5000 Days” went for $69 million because it’s a one-of-a-kind digital item. Kind of. That’s where things get stranger.
The reason the massive NFT bubble has become so confusing to many is that anyone with the internet can view or download “Everydays” by simply right-clicking on it within your browser. Here it is right below:
Now, the argument would go: you can also buy a print of a Monet or a Picasso and hang it on your wall, and that doesn’t diminish the original’s value. If anything, the fact of the many prints actually burnishes the value of the original art. But, in the case of an NFT, the original and the duplicates are identical digital files. So, you’re buying a claim to ownership, but it’s unclear, this early in the “NFT Mania”, what that ownership actually grants you. What’s not unclear is that scarcity has created value — every day there’s more news of NFTs selling for jaw-dropping sums!
Why do Companies Give Swag?
If you’ve lived in a tech industry hub, you know that tech companies love swag. You’ll see young workers wearing Facebook shirts or Twitter backpacks or drinking from Salesforce water bottles. The swag serves multiple purposes — a) the free stuff is a perk for employees; b) wearing it lets them show pride in their company; c) having the branded items out in the world is a clever form of marketing for the company. Most important, the swag builds culture and team bonding. If you have swag, you are part of the team. You are in the know. You are special. Since you’re wearing or using the swag, you are also, hopefully, proud to be part of that tribe.
The three-pronged advantage of good company swag is a clear boon for a startup. When workers start to balk at wearing the gear (like they did at Uber near the end of the Kalanik era), that can be a sign that company morale is dipping. As New York Times writer Mike Isaac explained in an interview with Slate: “One thing I read about was the cocktail-party test. You want to be able to go to a cocktail party in Silicon Valley and be proud of the company you work for or be able to wear a T-shirt that says ‘I work for Uber,’ and that started becoming a point of shame, not a point of pride for a lot of people.”
So, swag serves as a jersey and a conversation starter — a healthy company will have employees who are excited to proclaim “I work here!” Swag is a great way to let them do it.
Swag in the Virtual Workplace
As we covered in an earlier post, Covid-19 has accelerated the trend toward the virtual workspace. As early stage technology investor Zach Coelius explained in a LinkedIn post titled “Thus Begins Gen V, Generation Virtual”
With the move to the virtual underway, companies must find a new way to build culture. Whether that be virtual game nights, breakout Slack rooms, fantasy sports leagues or anything else, the need to consciously pursue community-building is as pressing as ever. Swag — once an easy way to create a team feel at a company — has also lost some of its muster in the age of the virtual office. So, what can be done to bring swag into Gen V?
Though there is an external value in the form of advertising, the internal value of swag is actually much more important to work to recreate in this new remote era. The conversation sparked by that cool sweatshirt from the 2017 retreat during lunch is hard to replicate, but has an intrinsic team-building value. The item proves longevity and allows long-term employees to celebrate (subtly and humbly) that they were there. These items silently assert a shared history, a collective memory and a mythology of the startup. It’s that ethereal thing that employees are wearing when they decide to proudly wear the swag.
So, how can a modern boss recreate that shared history and time-capsule of a moment or an achievement? An NFT, of course.
NFTs as the New Swag
NFTs derive their value from scarcity. Similarly, one-off or earned swag at a company also derives value from scarcity. Only so many workers ever reach the 5-year mark; only a handful were there for the early product launch. So, to create NFTs-as-Swag, you’d need to create a system where the scarcity makes the digital item desirable within the company ecosystem. If you’re an early startup, an NFT delivered to the engineering team when they push out your first big v1, or to the Sales Team when you lockdown your 1,000th sale, or to the entire founding team when you raised your seed round is a good way to create an NFT as a unique memento. The token becomes a way to say, “I was there and that moment in time will never come again”. This piece of digital swag will be a little badge, with provenance guaranteed on the blockchain, to show future coworkers that you were early and helped build the company and the culture. This is the 2016 retreat sweatshirt in digital form; it’s a reimagination of swag for the virtual world.
What would NFT Swag look like?
Just like the IRL equivalent, NFT swag will be a badge of honor. What GIF or Digital Art piece or Song would you reward a worker with for 1 years or 3 years or 5 years at the company? In a world where a commemorative fleece is rarely seen on a video call or email, the NFT could take its place. It’d be important to make the NFT a commissioned piece of art or an inside joke (a GIF of some bad CEO karaoke?); the goal would be to make the swag NFT something fun, but also valuable within the company. This token can’t be traded (it’s non-fungible, remember?!?); it has to be earned by putting in time and commitment to your startup.
In a way, a piece of NFT swag is a perfect use of the item: the blockchain proves its provenance and it serves as proof of the person holding its hard work and determination. Unlike IRL swag that wears out or is lost, NFT swag lives on. How cool would it be to be the employee who owns the first swag from AirBnB? I bet that employee could even sell it just like Jack Dorsey just sold his first tweet for $2.9 million.
Swag companies like Swag.com and many others have made branded items a part of their business. They’ve been thoughtful about how to create the perfect swag for the remote worker for 2021: branded yoga mats, branded ring lights for your Zoom meetings, coffee swag, and, of course, branded sweatpants. But we’ve yet to see the NFT-as-Swag offering. Whenever it comes, AbstractOps is ready to be the first customer — we think it’s the perfect piece of swag for Gen V.
In the meantime, since we’re heads down on building the OS for back-office operations, we’re putting this idea out in the world. Free startup idea! Oh, and once you start the NFT Swag company, let AbstractOps know so that we can take ops off your hand and you can get back to building something amazing!
Like our content?
Subscribe to our blog to stay updated on new posts. Our blog covers advice, inspiration, and practical guides for founders of early stage startups.
Note: Our content is for general information purposes only. AbstractOps does not provide legal, accounting, or certified expert advice. Consult a lawyer, CPA, or other professional for such services.