Nike and the new laws of Web 3 brand building

Hi everyone,

Welcome to Issue #9 of Sports 3.0!

As always, a big thank you to all the recent subscribers from the past week, and if you're new here join hundreds of smart, sports industry innovators by subscribing below 👇

Stay tuned for some exciting news coming up over the next couple of weeks regarding plans to grow the Sports 3.0 ecosystem!

And with that, onto todays newsletter....

The new laws of Web 3 brand building

The meaning of Web 3 is ingrained with Blockchain fundamentals, the Metaverse, VR, AR and expansion of decentralisation.

However, explore the world of Web 3 and you will find it's also a mindset, based on trust, creativity and a passion for innovation and future thinking.

This means that for brands entering the Web 3 space, whether that be through forays into the 'Metaverse', Digital Asset collections or tokens, it actually requires a new way of thinking.

And one of the best examples of Web 3 brand building to date has been RTFKT, now owned by Nike.

Today we breakdown the new laws and standards of building brand in this new world set by RTFKT that you need to know.

Nike and the new laws of Web 3 brand building

As you expect, Nike have been first movers when it comes to dipping their toes into Web 3.

They patented 'Cryptokicks' back in 2019, whilst also experimenting with Jordan brand skins within Fortnite and more recently branded Nike environments within Roblox.

However their biggest bet on Web 3 and the Metaverse came with their acquisition of digital sportswear brand RTFKT in December 2021.

Nike President and CEO, John Donahoe said at the time: "This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture,”

As masters of brand, it's clear Nike very much saw the acquisition of RTFKT as a cheat code to stay at the forefront of popular culture, trends and creativity across the digital landscape.

Regular readers of the newsletter have probably seen me mention RTFKT a number of times. I'm a big fan.

Here is the TL;DR on RTFKT:

• Formed in 2020 by Benoit Pagotto, Chris Le and Steven Vasilev

• Their intent was to become the "Supreme for the digital age"

• Born out of a love for fashion and gaming they realised sneakers transferred perfectly into the digital world

• Their first drop, a collab with NFT artist Fewocious sold out in 7 minutes, generating $3.2m

• They launched their first avatar NFT collection, Clone X, in November 2021

• The acquisition with Nike followed soon after in December 2021

• They have continued to be a Web 3 powerhouse through an intelligent ecosystem build

In my view, RTFKT have nailed the recipe of the new era of brand building, and I believe there are 3 laws at play that any sports brand, athlete or rights-holder should be paying attention to in Web 3 👇

1) Community

RTFKT take their Community seriously.

In fact in a recent interview founder Benoit Pagotto said “We actually forbid the word ‘consumer.’ And sometimes we need to tell Nike, ‘No, no, we don’t use that word."

Brilliant.

In sports I think this is often something that brands and rights-holders proclaim to do on stage at conferences, but I'd love to see more genuine true life examples.

In the same interview he went onto refer to the community as "active collectors, artists, and co-creators".

The above is really important on marketing terms, and quite unique.

Rather than profile their audience, he is describing behaviours that he is manifesting amongst the community.

"Active Collectors" over passive speculators & "Artists and co-creators" over one way transactions.

With this intent, not only do RTFKT have a community with scale at over 1 million followers across Twitter, Instagram and Discord, but more importantly they have nurtured a highly creative and engaged community - formed at the intersection of a love for innovation, art and the joy of co-creation.

These are lessons we can take into sports when it comes to fandom.

This element goes further than words. RTFKT are sure to regularly reward and empower their community.

They have done a brilliant job of rewarding being part of the RTFKT ecosystem, particularly to their earliest holders.

The below image shows the 'airdropped' rewards those holding the initial RTFKT x Jeff Staple Meta Pigeon collaboration received.

Essentially Meta Pigeon NFT owners were gifted the additional NFTs that ensured they were part of building out of the future of the RTFKT ecosystem.

{Although i'm intentionally avoiding talking about the value of RTFKT NFTs in this article as it misses the overall point, I should point out that community members given these rewards were effectively given over $35k for free if they chose to sell the main assets 🥵}

2) Fan Empowerment? Just do it

This week, RTFKT announced two huge updates to the owners of their Clone X avatar project, which are unprecedented in the non Web 3 world.

Firstly, they released 3D files of their avatars which owners can unlock on the website and use in tools such as Blender to bring their avatars to life.

A post on Benoit Pagotto's LinkedIN referred to this being a "core differentiator of RTFKT and Web3 Native brands: treating your audience as creators and not passive customers, let them create and add value to the Ecosystem you’re building, together."

I LOVE THIS.

Put blockchain and web 3 aside for a second. I think we can have more of this mentality within sports. Imagine we genuinely empowered our fans and gave them the tools to be a force of support and creativity.

UGC gets banded around in case studies and conferences, but when was the last time we actually provided the tools for fans to unleash their creative capabilities!

RTFKT recognise that "Any 15 year old today has been growing up the past 10 years building worlds in Minecraft, and that there are thousands of creators around the world learning 3D / Blender on Youtube".

They are providing the ingredients and allowing fans to come up with the recipes.

RTFKT have actually significantly invested in their community to present them this opportunity.

It doesn't stop with just giving the community the 3D files.

They have created guides and specific Twitter & Discord channels to help navigate beginners and more experienced members of the community alike.

For example this video showing owners how to set up their Clones as Snap Filters

Their ambition doesn't stop there - this is what they are expecting their community will do 👇

They are not only levelling up the RTFKT brand, but levelling up skills of their community members!

And if you want to see some of the experiments their community has made over the past week, just search #RTFKTcreators on Twitter.

Secondly, they announced that owners had full commercial rights usage.

This means if you own a Clone X you can use commercialise it if you wish, for no additional fee.

Again a very Web 3 mindset play, where you empower your audience, owners and fans to be part of the success.

Below is a what they are actively encouraging 👇

• Create derivatives / Mint Fan art NFT

• Make Merch

• Vtubing / Modeling

• Make music / videos

• Make a brand / business

• The Limit is your imagination (Although they do stipulate nothing illegal and nothing using the mother RTFKT brand as listed in a commercialisation agreement)

I have to say, well done Nike in allowing RTFKT to stay true to the Web 3 way - it would have been very easy for them to bring down the corporate hammer on this type of activity.

3) Experimentation

The final law of Web 3 brand building is experimentation.

And of course, this is no stranger to Nike, we all know the story of Bill Bowerman and his Waffle Iron.

RTFKT's approach to experimentation is simple, it's part of their DNA.

"If we think of something and we think it’s great and want to mint it and release it, we can do that in three days. Whereas a traditional brand is working on a 12 to 18 to 24-month timeline. You can stay very connected to the culture that we follow every day. Once we have an idea, or if we see something bubbling in the community, if we want to act on it and release it, we can." Benoit Pagotto, RTFKT founder.

If you are entering the Web 3 world, this is what you are up against.

As many sports NFT or token collections have found, this shouldn't be a 'set it and see' mentality. Experimentation and speed of execution comes when you are in tune with and aligned with your community, as per the RTFKT template!

4 - BONUS) Collaboration

Ok I know I said there were 3 laws but this one is more fluid and may not apply to everyone, all of the time.

Although not critical to Web 3 brand building, collaboration is increasingly seen as an important tool and has been for RTFKT.

Almost every major collection RTFKT has launched has been in collaboration with other parties:

• Their first collection was with 18 year old aspiring artist Fewocious

• Their next drop was a collaboration with 18 different artists for their Space Drip collection

• Followed by renowned sneaker designer Jeff Staple

• For their hero avatar collection they partnered with legendary Japanese artist Takashi Murakami

• And now as part of the Nike family, they collaborated with the Swoosh itself for the recent Cryptokicks launch of the RTFKT Nike Dunk Genesis

Collaboration isn't just a nice to have for RTFKT, it's a key cornerstone to their brand strategy.

This allows them to leverage the community of other creators and create network effects around their brand.

Whilst this isn't unique particularly in the world of fashion, and of course is something we have seen more in sports with PSG x Jordan and Juventus x Adidas x Palace collabs, it's important to note opportunities for Sports and exploring collaboration are vast.

A dose of reality

I'm well aware the above can sound scary, and even unrealistic for many rights-holders, athletes and brands. Pace of change may not feel that imminent or a risk to you.

Blockchain tech may not change the world in the way people expect, however it is the Web 3 mindset for me that we should be prepared to adapt within sports.

It may not be for everyone. It requires bravery and deep confidence and understanding of fans, but rewards await the winners as we talk to a new generation of fans.

That's all for this week!

As always, if you enjoyed this insight please feel free to share with like minded friends and colleagues.

P.S use the buttons below to vote for your feedback on today's issue. It helps tell me which Sports 3.0 content is useful to you 👇