NFT Startup RTFKT Acquired by Nike in Metaverse Strategy
In this interview, you will learn how to market and promote your NFT project, and what makes an NFT so attractive to investors. Teppei Tsutsui, the managing partner of GFR Fund was the original investor of RTFKT, a virtual show company recently acquired by NIKE.
Join Teppei, share his insights as an investor and what set RTFKT apart from all the other NFT projects and the community that convinced NIKE. Learn about how Teppei selects NFT projects and what signals he looks for.
Click the play button above to listen to our conversation with Teppei on the Crowdcreate Chats Podcast.
Crypto VC Investing with Teppei Tsutsui
Teppei is the managing partner of a company called GFR Fund that invests in seed and early stage companies anywhere from game studios, consumer technology, media, blockchain, and FinTech. GFT Fund is based in San Francisco and invests globally.
Digital IDs in the Metaverse
When we first started back in 2016, we were excited about XR: AR (augmented reality) and VR (virtual reality). No one was talking about the Metaverse back then. But as more and more people are spending time in the digital world, creating a world for themselves. It’s becoming more natural to think about your digital identity, and how you can find and interact with other people’s digital identity will become more natural.
Nike Acquires NFT Startup RTFKT to Invest in the Metaverse
We were the original investor in RTFKT back in 2019, even before they started the company. The three founders are Steven, Chris, and Benoit. I first met Benoit Pagotto when I was visiting the E3 gaming conference in LA in 2019. He shared his vision of creating a digital sneaker fashion brand. I was fascinated by the concept vision, and we knew that people were spending more time in the digital world. So creating a brand for a new digital generation, this is a huge opportunity.
People are used to getting commercial goods in games and other VR spaces, and a lot of gaming companies are embracing creators to launch new content on their platform. It really resonated with us. So we helped them from the company and some initial funding. It feels like a long time ago, but it was actually just 2 years ago.
How Do You Invest in NFTs?
There are a few signs to look for when determining how interesting or investible a project can be. Look at how much organic content is being generated around the project and where the younger generations are spending their time and money.
For example when you look at VR Chat, there are so many people creating content, AKA user generated content (UGC). When they publish that content in the digital world, it becomes more natural and common.
In the case of Fortnite, people are buying skins for $20 or $30, and this is now a trend with the younger generations who are spending more time in the digital world and are more comfortable buying digital items even though they cannot be worn in the real world.
When companies are building the new “It” brands in the digital world that’s really spot on, and NFTs are allowing people to create these digital contents that are authentic
What Crypto & NFT VC Investors Look For
- Experience of the founding team (founder-market fit). The founder-market fit is very important especially in the early stage of a startup when the team needs to iterate product improvement fast. If a founder knows the industry and potential customers/users well, the speed of this iteration would become much faster. If the founder has an extensive network in the industry, s/he can hire and build the team fast. So it really comes down to the speed of finding a product-market fit.
- Unique perspectives of the market: Successful founders have very unique views on the market and user behavior. For instance, the founder of Coconala, the company I mentioned above, saw a new user behavior in which people were willing to share their skills and expertise online with someone they don’t know personally. Another example is Adam Arrigo, the co-founder and CEO of WaveXR, a VR-based music platform for virtual concerts that connects artists (as avatars) with their fans. Adam has a background in both games and music and he had envisioned a new format of live music. WaveXR became the pioneer to spread the concept of “virtual concert”.
- Clear vision of the company: As I mentioned earlier, a leader should always have a vision for the company and where they’re heading. The same requirement applies to a founder, who defines the company’s destiny. When I met with Angelo Stracquatanio, the founder of Apprentice.io, which offers AI & AR driven software for the life science industry, I was very impressed that he had a very clear vision of the company and where the company should be in 5 and 10 years. So far, the company’s growth trajectory has pretty much followed his plan and it is on the way to becoming a new standard management tool for manufacturing in the life science industry.
- Strong focus on execution: We can’t emphasize enough how important the execution is for startups. Some founders are good at talking, networking, fundraising, etc. But what we’re looking for is a doer or someone who takes action and executes. As a startup, you must continue to deliver what is needed — for customers, employees, partners and investors. Otherwise you’d be running out of cash soon. Sometimes you make a mistake, but as long as you continue to execute, you’d be better off than doing nothing and making no mistakes.
- Timing: There are two meanings here. One is whether a founder is solving a problem at the right time; i.e. “why now?”. For example, starting a VR company in 2013 might have been too early as there was no technological backbone to support it. In 2016–17 however, when all the big players like Facebook/Oculus, Sony and Google introduced new VR headsets for consumers, it could have been an excellent time. The other aspect of timing is whether a founder is talking to us (investors) at the right time. We often see people coming to us too late and we end up trying to unwind some things if the direction is slightly off. It’s better to get in early than course correct once they are already in it.
Using Collectibles with Ecommerce NFTs
How Do you Find NFT Projects?
It was truly their team and their vision. There are three founders, and starting with Chris who was a game designer and one of the top content creators for Counter Strike where he designs the skins, guns, and items. He was the earliest one on the RTFKT team. Steven was the sneaker guy in the group where he was designing his own sneakers at an early age. Benoit is the marketing genius who was running his marketing team in an esports team and he had the vision of combining games with these digital items. It was this unique of digital creators, sneaker guy, and fashion marketing genius.
Real World NFT Use Case with Nike and A16Z
Teppei reveals the RTFKT NFT sneaker IRL. To watch the video, subscribe to our YouTube channel or scroll down for the interview video.
What NFT Projects Are you Excited About?
We talked about this company before called Jadu from Los Angeles, and they are trying to create a real Pokemon game in the real world combined with NFT and AR technologies. That’s an interesting project to pay close attention to.
Another one that you introduced me to is Divine Anarchy, combining Anime into the NFT world. It’s a really interesting effort to combine Anime into the games, and to create a new game mechanism.
One of the companies we invested in called High Rise, a fashion MMO targeting the younger female generation where the user can buy skins and any fashion items where they will have fashion shows every day. They are converting skins into NFTs and are launching a High Rise creator program.
What Does NFT Mean in Gaming?
The whole gaming world starting from Axie Infinity and Animoca Brands, there are so many companies trying to do NFTs into gaming. There are still some companies waiting from the sidelines but there will be a lot of big opportunities for artists, creators, and game studios to look into it.
Ivan: NFTs are taking on unique angles and not just art. They have utility beyond just being shown on a wall. From anime mechanics to blending fashion in the digital and world world, it’s a very exciting time.
Are NFTs a Good Investment Opportunity?
When I first saw Bitcoin in 2010 or 2011, I didn’t think it was going to be a big opportunity. I bought a few and sold them right after when Bitcoin was only around $300 or so. I lost a big fortune on the table. That was only one of my early big learning lessons.
When mobile gaming came out, most people thought it was just a tiny portion of the big gaming market. Now the mobile has become ⅓ of the gaming market. We and a lot of people missed this opportunity.
We didn’t want to miss any other new emerging platform. When we first learned about VR, we jumped on it and started investing. When we saw blockchain technology we started investing quickly too. Those lessons are actually pushing me to keep looking for new opportunities. What is happening right now is that technologies like VR, blockchain, NFTs, and metaverse are having a big historical moment that we will realize in hindsight.
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NFT Marketing Summary
Learn from Teppei Tsutsui as he shares how he first spotted RTFKT, the virtual shoe company recently acquired by NIKE. Learn what marketing techniques separate your project from others, and draw in an organic growing community for your NFT. Before you strategize on how to promote your NFT, you need to listen to this episode.
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So I see those account. I mean, that’s a trend. And so there, like visual, like creating the new, you know, like the G when you like, you know, the big brand in the digital world, I kind of, I thought that was really spot on. So I guess the, so that, to be honest, NFT & Blockchain comes afterward, it’s still the only thing that this contents like creating a base style, like fashion brown it’s really, it’s going to be an opportunity, but, and if the actually kind of allow them to create data, original contents, it could be, you know, like copying or like authenticate those contents. So we think like the NFT technology, I think the, there kind of like the rainforest, like a vision and also what that artifact can do out of the fact that Kim can do. So. Yeah. It’s, I don’t, I don’t really take credit. I guess the founder should take a credit just to blinging DDA, NFT technology into their vision. So, yeah, that’s a really interesting story.