Porsche launched its own NFT collection on January 23rd with 7,500 customizable NFTs of its famous 911 model. However, while many were watching the mint, a vocal part of the NFT community expected it to fail, mainly due to the high price. 0.911 ETH seemed to be too much of a stretch in the current market environment.
Porsche clearly expected more demand and was prepared to launch the mint in 4 “waves” (rounds of sales). However, only 1,345 NFTs were minted (which implies that 82% remained unsold). Some buyers started to panic and try to sell their Porsche NFTs immediately for a loss after realizing that the project will not sell out.
Time is of the essence
For the record, our proposed solution included:
- Pausing the mint of the current NFTs and reevaluating the project’s goals.
- Emphasizing the importance of community engagement through strong messaging on social media, and inviting open discussion on Discord.
- Starting a poll and discussion channel on Discord to involve the community in the project’s future direction.
- Offering a special reward for the 1,500 people who had already minted the NFTs, such as a different tier of NFTs or a special NFT reward, such as a Porsche sketch
- Not giving out additional free Porsche NFTs to prevent driving down prices on the secondary market.
- Dramatically reducing the supply of the collection to create a sense of exclusivity.
Too expensive, too many
Looking at the bigger picture, we identified three major reasons as to why the 911 drop was bound to fail.
Issue: The Discord server was closed for posts from the outset, stifling the most important aspect of the Web3 space: the ability for people to communicate and express their ideas and passion for the project. Discord is the main communication tool for most projects in the NFT space and serves a community hub.
Furthermore, the communication on Twitter was minimal, with almost no tweets about the project other than those from Porsche themselves. It seemed that were no engagement with the native NFT collectors’ community and thus the prospective buyers of the 911 NFTs.
Learning: Especially when a traditional brand is entering the Web3 space, it is essential to communicate regularly and frequently. The community will value that greatly. It is also paramount to encourage a healthy discussion about the project and be open to feedback from the community; it is, after all, what the web 3 spirit is all about.
Issue: Despite Porsche’s status as a luxury brand, and its desire to position itself as such in the world of digital collectible, the minting price of 0.911 is ambitious. In dollar terms that works out to around $1,400 per NFT, which is a steep ask in the current market climate, putting it out of reach for many fans and raising questions about the potential value for those who can.
Learning: It is wise to price your NFT collection in accordance with the current market sentiment. It is preferable to price too low and sell out quickly than to not mint out and be left with a PR disaster.
Issue: Similar to the price point, the collection size of 7,500 is optimistic in the current market conditions. Additionally, 7,500 seems to be an arbitrary number with no connection to the brand or the collection itself. Note that the price of 0.911 for example was connected to the brand. A smaller collection size like 911 Porsche 911 at 0.911 ETH would have told a more consistent story.
Learning: It is important to choose the collection size carefully. If in doubt, make the collection size smaller; it is always possible to launch subsequent collections if demand is high. Additionally, the collection size should have some sort of relevance to the project. As with any marketing endeavours, creating an engaging narrative and frequently communicating it is key.
In the meantime, Porsche put out a tweet outlining the journey for all holders which includes free physical collectibles, a private airdrop as well as involving the community in the future decision making around the project within their Discord community. That together with the dramatical cut in supply lead to a steep increase in demand of the Porsche NFTs.
At the time of writing this, the price for one 911 NFT is currently 1.95 ETH on OpenSea, the biggest NFT marketplace and thus has doubled up from the mint.
The main learning here is that although Porsche was off to a rocky start, It is never too late to turn a failure around. It is crucial to act fast and adjust the strategy according to the learnings and community sentiment. The key is to be transparent, open to feedback and to apply the learnings quickly.