Inside Doodle’s plan to go from NFTs to entertainment brand

During NFT NYC last June, Reddit co-founder Alexis Ohanian made a surprise outside appearance to announce the latest company that his VC firm 776 opened a lead round of funding for — a company that he said would “set all kinds of standards” in what blockchain technology can do and has the potential to become a global entertainment brand. Given that Ohanian has been investing in the crypto space for more than a decade, it’s not a forecast to be taken lightly.

The company is Doodles, a collection of sherbet-colored cartoon characters that, since its launch last October, has rocketed up the charts to become one of the best NFT projects today.

Doodles counts NFT influencers and celebrities including Pranksy and DJ Steve Aoki as part of their community. (Ohanian himself owns “quite a few” that he says remind him of his five-year-old daughter, Olympia.) Pharrell Williams came on board as the company’s chief brand officer in June. And 776 recently announced that it closed a $54.5 million raise, bringing Doodles to a $700 million valuation — not bad for an NFT project in a bear market.

“Doodles is strongly positioned to continue to define the NFT industry, onboard millions on the blockchain, and become one of the most inclusive, creative, joyful media brands in the Web3 and beyond,” says Katelin Holloway, founder of 776. “Looking into the future to the Doodleverse, we see an incredible amount of potential far beyond NFTs.”

That’s what many NFT owners and creators think about: how to elevate a digital image to something more than a flex on social media. Of course, the backdrop of that race to Hollywood and beyond has been bleak with the NFT market still struggling to find its feet amid a shaky market. The Doodles team explains how they are riding the wave of volatility to scale Doodles into a next-generation entertainment empire.

A colorful past

Doodles is the brainchild of co-founders Evan Keast, Jordan Castro and Scott Martin. As Dapper Labs alumni, Keast and Castro were key players in the development of Cryptokitties, the company’s groundbreaking 2018 game that allowed users to breed digital cats as NFTs. But at the peak of 2021, the two began envisioning what their own NFT project would be—one that, as Keast puts it, would “expand the space” in a way that centered the community with a collective treasury as well as a true sense of fairness .

“In early 2021, there were tons of NFT projects, but there wasn’t a lot of transparency,” Keast says regarding token allocations and ensuring fair falls.

Equally important was finding a signature look for their collection.

Profile picture or PFP projects are key drivers for the NFT market in a landslide. According to NFT analysis platform NFTGo, the market value of PFPs is $13.3 billion compared to collectibles, the next closest category, at just $3 billion.

Creating characters that could enter a marketplace dominated by lethargic monkeys and pixelated punks was a long task, and it fell to artist and animator Scott Martin.

Around the time Keast and Castro were battling over ideas, Keast had the chance to work with Martin while he was consulting for a Web3 company. Martin’s cartoonish character style with bold outlines, vibrant colors and eyes that have trouble staying attached to faces had already earned him a decent following on social media as well as clients including Google, DropBox and Adobe.

With NFT development company West Coast NFTs providing the technical infrastructure and Martin’s whimsical universe of people, flames, pickles and Popsicles, Doodles launched in October 2021 with 10,000 generative NFTs – and some controversy.

Locking in the community, locking out the hype

About a month before Doodles went live, the team temporarily shut down Discord at just over 1,000 members. Critics charged the team with gatekeeping and FOMO ramping. But most saw it as what the founders intended: a way to lock in a solid community out of the gate.

“We were kind of annoyed by the amount of hype and noise that was in the space at the time,” says Keast. “Tons of speculative NFT drops were going on, artists or founders who seemingly came out of nowhere, would do seven-figure drops, and they wouldn’t actually continue working on the roadmap. So we wanted to try a different approach.”

After the initial minting, which sold NFTs at a relatively higher price at the time of 0.123 ETH to secure an initial treasury of 420 ETH, Discord reopened and welcomed new members and Doodles quickly began generating buzz as one of the next blue- the chip projects; and as a PFP, it’s not hard to see why.

“With these PFPs, it’s all about the art – and there is some questionable art out there,” says Yohann Calpu, head of marketing for NFT analysis platform CryptoSlam. “But with Doodles, I don’t think it’s a question. It’s definitely beautiful.”

With their childish design and pastel colours, Doodles are visual cotton candy. Also, Martin believes that Doodle’s success stems from having such approachable and playful characters because it makes it easier for people to identify with a Doodle.

“PFPs are inherently something you want to identify with. And if it’s angry or negative or masculine or hyper-detailed, it’s hard to feel good about associating your brand and your name with that kind of imagery,” says Martin.

To that point, Martin also notes how inclusivity was top of mind when creating his characters, which he feels have resonated with society. “We wanted it to be inclusive, but not hit-over-the-head inclusive,” he says. “Just that anything and everything can exist in this world – and it does.”

Doodle dominance

The Doodles team had the basics in place: a community fund, Doodlebank, where holders vote on certain aspects of the company, such as creating official derivative projects Noodles and Pukenza, and an immediate roadmap to expand the project with Space Doodles, a February drop for holders of the original 10,000 NFTs to have a room-themed option for the Doodle.

But for their long-term roadmap to becoming a global entertainment brand, the Doodles team needed a CEO with expertise in building IP. Enter Julian Holguin, the former president of the Billboard which led the release from a B2B trade to a more consumer oriented product.

Holguin was already thinking about an NFT project for Billboard when he met the Doodles team in early 2022 and did light consulting work for them. But his growing interest in the space and admiration for Doodles pushed him to make the full-time leap as CEO in May.

“There was already a lot of money on the balance sheet, and the opportunity to turn this into a full-fledged technology and media company was never more prevalent,” says Holguin.

To do so, Holguin is looking past the mass commoditization of technology around NFTs to focus on reinforcing Doodles as a brand.

“It’s not going to be incredibly special to use blockchain technology or NFTs to create new experiences for your existing and potentially new customers,” he says. “What’s special are the brands and the storytellers. The same way of making a T-shirt is not necessarily special, but being Gucci is. The same way recording the voice on a track isn’t special, but being Kanye West is. That’s what the Doodles team is to the NFT ecosystem.”

To ensure consistent brand messaging, Doodles opted for NFT holders to have limited IP rights of their own, which may not sit well with everyone.

Yuga Labs set a high standard for NFT projects by releasing full IP rights to Bored Ape Yacht Club holders and, later, CryptoPunks and Meebits following the acquisition of Larva Labs earlier this year. It’s a move that offers clear utility, something that’s becoming increasingly important as the NFT space has taken a deep dive in recent months. However, the Doodles team is betting on long-term value for the brand and the holders in general versus more immediate personal gains.

“We’re at such a delicate point in the development of a brand,” says Holguin. “We believe that controlling the narrative around Doodles in the short term is the way to go, because there is a lot of branding activity that can dilute the project’s greatest benefit.”

There has been talk of licensing Doodles from holders for things like cartoons, TV series and music videos – and the potential there, especially for the latter, could be on the horizon with the upcoming Doodles album Doodles Records: Volume 1 produced by Pharrell.

But for now, the Doodles team is mostly keeping its IP close to its chest. What that signals to Calpu, the leader from CryptoSlam, is that Doodles is seeking a high-level partnership or even being acquired down the road.

“When a project limits the rights, it tells me that they see the potential in the brand to be with a legacy company,” he says. “And I don’t disagree with that at all. Creativity doesn’t need to be outsourced [Doodles] the community because the creativity is quite strong in the team itself.”

It seems that Doodles has the right look and team to carry out their plans to create a global entertainment brand. But it’s hard to ignore the dark cloud looming over their pastel wonderland: the NFT market is still in full swing.

Getting out of hibernation

An analysis by NFT media company BeInCrypto found that global NFT sales volume hit a record low this year, falling more than $4 billion. And Doodles hasn’t been immune as sales fell by more than $100 million in June.

In Calpu’s assessment, the oversaturation and hype around collecting PFPs is giving way to more useful applications such as Ethereum Name Service (ENS) domains that contain cryptocurrency addresses, decentralized websites, and so on. But it is PFPs that certainly have the potential to ride the market downturn.

“You’re going to go into their Discord and see communities that are still interacting and growing and meeting and going to conferences,” Calpu says. “That’s usually the indicator of a quality project.”

And according to Holloway from 776, the community around Doodles is one of the main reasons they decided to support the company. “No Web3 company can survive without a strong community,” she says. “This team has been community-led from day one. Alexis and I know a thing or two about what a healthy, inclusive and thriving community looks like.”

The Doodles community – and with 776 in its corner – is strong enough footing for Keast amid the shaky state of NFTs. He says the company is in a position to scale “well into the future,” and they have every intention of continuing to build regardless of the volatility.

“Everyone can really feel the turnaround coming,” adds Holguin. “Whether it’s six months or 12 months, the real builders are going to be ready when that moment comes. We haven’t slowed down at all.”