Startup mantra: Adding a social layer to the NFT marketplace
If you follow the non-fungible token (NFT) space, you may have noticed the social conversation that comes with trading licensed NFTs on various platforms such as Twitter, Telegram and Discord. By combining these two experiences on a single platform, Pune and Singapore-based ‘NFT Labs’ Web 3.0 startup Itsmyne has developed a “social network meets marketplace” for licensed NFTs.
Founded in 2021 by Atharva Sabnis and Ayan Uali, NFT Labs, Inc. explores big ideas in community, utility and engagement to push the NFT and metaverse space forward. Itsmyne is approaching its launch, with a waiting list of over 50,000 users. NFT Labs, Inc. also provides the vision, experience and technology for Web 2.0 brands to capitalize on the Web 3.0 opportunity. The startup was the official NFT partner of the “2022 Global Sports Tech Summit” and has received recognition from the Celo Foundation, Polygon and NEAR Protocol.
In the beginning…
Pune-born Atharva grew up in Sudan, North Africa and did his higher education at the Rochester Institute of Technology (RIT), New York in the USA. It is this university where during 2010-14 he met his co-founder Ayan, who is a citizen of Kazakhstan and based in Almaty city. Atharva did a double major in finance and economics with a minor in computer science while Ayan was there for software engineering with economics as a second major.
Says Atharva, “While I was pursuing higher education, bitcoin gained its initial 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 jobs. I did internships in two companies—one in Shanghai and one in Miami—but felt disillusioned in the investment banking field. Back there, I read about the startup boom in India. Entrepreneurship was a calling for me, and I felt FOMO—the fear of missing out.”
“I started my first investment in tablets and advertising in taxis, but had to struggle a lot to raise capital. Due to regulations and other reasons, the idea did not work. Fortunately, we had realized very early about our opportunity cost and I closed it. I then entered a completely different domain of “remediation technology”. We had reused machines for pharmaceutical sanitation applications, but without FDA approvals we had to recall the machines. We tried the same service with the hotel industry, but problems with blue labor management forced us to rethink. Eventually, we extended our contracts to some other companies in this sector and were able to recover some losses made in the pharma and hotel industries,” recalls Atharva.
‘Seven on Seven’
Atharva had attended the 2014 New York edition of the “Seven-on-Seven” conference where the first ever presentation on “Monetised Graphic” was made by Anil Dash and Kevin McCoy. Many things have happened since then in blockchain technology, Web 3.0 space, but Atharva was not focused on that then.
Atharva said, “After handing over the previous contracts, I had started a consulting assignment for a Singapore-based company, helping them with product development and go-to-market strategy. In 2017, cryptocat and large NFT projects had received a lot of attention. Nothing major happened during 2018-19, but in 2020, the NFT sector suddenly rose. The NBA sold NFTs worth ₹3,500 crore in the first six months, which rekindled my interest in this NFT space. Since I had no technical experience and background, I contacted Ayan who was also looking to do some exciting things. Ayan also hadn’t heard of NFTs, but he started researching about it. All this happened during the Covid lockdown in September 2020.”
Identify disconnection
Atharva had first thought of the Indian equivalent of the OpenSea NFT marketplace. He refined this idea for a month, created an initial pitch deck and began approaching investors to raise capital in February 2021. But three months later, Atharva did not receive interest from any investors.
Atharva says, “Though I didn’t get a positive response, I gained insight into the NFT world with every interaction with the investors. I met one Ajit Khurana, who is considered the godfather of the Indian crypto space. Ajit asked me to change the business plan and also agreed to to come on board as a mentor to help us raise money.”
“Before June 2021, there was no traction. I ran out of time and patience. Meanwhile, an Indian crypto startup had launched India’s first NFT marketplace, but it has failed miserably. It was an early confirmation for us that our previous investors were right in this aspect. So we made a big pivot in this idea. I researched NFT very deeply. That’s when I noticed that discussions related to NFTs happen on two platforms – Twitter and Discord – but all buying and selling happens on OpenSea, which has almost 85 percent of the global market share. This was a big disconnect, Atharva said.
Acceleration
Atharva and Ayan began applying to startup accelerators globally and landed in the Antler Singapore Cohort of 2021. With Ajit’s support and selection from Antler, investors began reaching out to the founding duo.
Atharva said, “In addition to Antler, we also applied to LongHash Ventures, a Web 3.0 investment fund and accelerator. Again we thought we had enough ammunition for a fundraising and so went back to the investors. But this time too we failed because we had the idea right but the investors were in doubt about the execution We had no clarity about the suppliers of NFT and buyers on the other hand.
“It was quite frustrating at this point, because in the Web 3.0 space, every resource is more expensive. There’s a battle for the talent, and we didn’t have enough to start up. Without talent, we couldn’t build a product. Ayan had started to build the smallest 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 NFT world, the sports sector has been one of the earliest adopters. One of our mentors referred us to a sports technology accelerator based out of Israel – Hype Sports Innovation – but we had missed the application deadline of 2021, recalls Atharva.
“We literally begged them, sent over 40 emails to them to consider us. 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 pitch our product directly to innovation committees of international sports bodies. We were selected by FIBA during this pitch session,” asserted Atharva.
Tokenized fundraising
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 fundraising, which is a completely different model from the equity financing.
“We created a decentralized organization, 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 approx. ₹12 crore ($1.6Mn) in three months by the end of September 2021. I had made 102 investor presentations in two months, out 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 multiple tokens, the investors can also get a share of the trading fees from other people. We took a prepaid subscription on our marketplace and sold what became our fundraiser,” said Atharva.
NFTs – The new tracking cookies
In sports, viewer engagement is a cause for concern as people are hooked on their mobile phones even in stadiums
In Web 2.0, personalized ads and content delivery, user profiling is done using ‘tracking capsules’
In Web 3.0, NFTs are treated like these tracking cookies. When a user claims their first or free NFT, in-app notifications prompt them to create a crypto wallet, or link their existing wallet
A wallet is created for the new user upon registration. When the user gets their first NFT, the backend algorithm checks which wallet has been used to collect the NFT or which wallet has been linked, if the user has done other crypto transactions anywhere, etc.
On the blockchain, a user is a wallet and everything is public data. Therefore, user profiling is done on the basis of cryptocurrency trading, what other NFTs they have, what is the size of the user’s portfolio and what might be their net worth, disposable income, what is their interest based on NFTs they have, etc.
No personally identifiable information is collected or used
Sports teams can get analytics and data about fans’ behavior and interests in the Web 3.0 world
When sports teams launch 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 offer
Itsmyne SocialPlus marketplace
To bridge the gap between social conversations and trading of NFTs, Atharva borrowed the concept of “socialized e-commerce” from Amazon. He says: “Amazon showed us that people like to read other people’s opinions and reviews before making a purchase decision. That’s why people talked to others on Twitter and Discord but bought on OpenSea. So instead of just copying the marketplace model for the Indian audience, we decided to combine social conversations with the 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 presented on a single platform.”
Bollywood NFT marketplace
Atharva said, “In December 2021, we had our first break with Bollywood when auction of cricket collectibles related to the sports film ’83’ 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 photos. Through one of our mentors, we had reached out to tennis player Mahesh Bhupathy who in turn helped build a partnership with the SocialSwag company owned by him along with actors Akshay Kumar and Rana Daggubati.”
Itsmyne In-Stadium Fan Engagement
The beta version of this product was released on July 30 in Israel. QR codes were placed in a stadium where people could scan these codes – without downloading any app, using any crypto wallet or currency – and win autographed merchandise from players. Users could claim a free NFT from any team they supported and this NFT would be the raffle ticket for the autographed merchandise.
Ape In (not launched yet)
In crypto terms, community hopping 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 every day around various NFTs and on Discord, there are 0.2 million messages related to NFTs or community. There is a huge universe of content generated on these platforms every day. However, a new person in this space may take time to determine which is meaningful and relevant information. This causes friction in user retention. To increase user retention, we scrape in real-time all conversations about all top NFT collections on Twitter and Discord and we present these conversations in an easily digestible way on our application ‘Ape In’ We use artificial intelligence (AI) to prioritize content and display information to users from Twitter and Discord about the NFT projects most relevant to them Users will no longer need to go through Twitter feed or Discord servers and this feed will also integrate with the Itsmyne feed – providing a combination of native and acquired conversations.”
