A Dialog with Pudgy Penguins CEO Luca Netz

An interview as a part of DappRadar’s academic RugRats collection

Luca Netz is the CEO of Pudgy Penguins, an 8,888 NFT assortment of cherubic, “pudgy” penguins that embody love, empathy and compassion. Much like Advanced Apes, a rugged NFT undertaking which was rescued by Web3 chief, Daz3D and just lately relaunched as Combat Again Apes, we turned fascinated by Luca’s story as he swooped in to avoid wasting the Pudgy Penguins undertaking because it gave the impression to be headed for ‘Rug Territory’.

Luca turned CEO of Pudgy Penguins after a much-publicized bidding battle in early 2021, during which he purchased the underlying Pudgy Penguins IP for a cool $2.5 million. He assumed management of the undertaking from the unique founders after the Pudgy neighborhood referred to as for a change of possession, citing the founders’ lack of execution on their promised roadmap. Some have charged the unique founders as having executed a “rug,” though that moniker has been debated.

Since buying Pudgy Penguins, Luca has rolled out a string of initiatives so as to add worth to the neighborhood, together with a line of toys and a kids’s e-book incorporating the Pudgy Penguins IP. His in depth enterprise background and life experiences afford him the angle and drive to make Pudgy Penguins one of many premier NFT tasks.

Under is a dialog between Jen Farmer and Mike Cryptobull, neighborhood leads for Combat Again Apes and Luca, during which we requested him about his backstory and the way it influenced his choice to buy Pudgy Penguins, his perspective on among the challenges that plague Web3 founders, and his perspective on how these founders can correctly and successfully add worth to their neighborhood.

The Backstory

Combat Again Apes: Are you able to speak about your backstory and the way it coincided with the Pudgy Penguins buy? Why did you are feeling such as you had been the best individual to step in for that exact state of affairs?

Luca Netz: Yeah, so it’s a pair issues. Pudgy Penguins was my first PFP NFT that I ever purchased. I purchased them at a pair hundred bucks, offered them for a good revenue, after which purchased different NFTs-a few Bored Apes-with the income. I regarded again a 12 months later and was like, yeah, I made a couple of million {dollars} buying and selling NFTs, however it began with Pudgy. And so, from that perspective, I felt like I had some type of accountability in that sense. 

I feel that’s one reply, and the opposite is that; I grew up tremendous poor. I made my first couple million {dollars} after I was 19. I spotted that cash didn’t make me joyful. From there, I needed to discover my goal, and I spotted that what fulfilled me is making an impression. I felt like I might change the world with these pudgies. I knew as my enterprise developed inside the Pudgy Penguin ecosystem that it could push Web3 ahead, and I consider Web3 goes to assist extra individuals than something we’ve ever seen earlier than. And so I might play my position in shaping what I feel the world will seem like by moving into a path that I don’t suppose anyone’s going, however I feel it’s fully obligatory for NFTs to win long run.

FBA: Why did you determine to step into an already-founded undertaking versus beginning one thing from scratch?

LN: It’s attention-grabbing as a result of individuals had been like, nicely, you might have simply made thousands and thousands by beginning one thing from scratch, but it surely’s like- the worth was so good. Instantly after I purchased it, the worth elevated. On paper, okay, certain, it wasn’t money within the financial institution. However whoever let me purchase the factor for 2 and a half million needs to be ashamed of themselves. 

However I suppose extra importantly-you can’t replicate magic. Everyone within the NFT house tries, however Pudgy Penguins and the IP is magical irrespective of what number of methods you set it. You don’t commerce $200 million in NFT quantity with no utility, no management, and no actual roadmap. No, you commerce that a lot as a result of persons are impacted by the IP. And so I assumed, two and a half million was an inexpensive value to pay for one thing so magical. And in addition, the actually, actually arduous half was already done-which is the preliminary formation of that neighborhood. Lots of people can’t work out learn how to get that first group of tight-knit people. All I wanted to do was add gasoline to the hearth and develop it. 

FBA: Was there an enchantment to the narrative of with the ability to are available and salvage this magic that you just describe? 

LN: Yeah, that innocence, that pleasure that pudgies convey individuals was 100% value saving.

There was simply one thing about these penguins that once you have a look at them, they make you smile, they make you content. It sounds corny and unusual, however I feel the frequent consensus is that the feel and appear of them makes your day just a bit bit brighter, even when it’s a fraction of a %. And that’s the IP, proper, that has nothing to do with the NFT, that has nothing to do with Web3. And so if I publicize these items and get them on the market in other places on this planet, persons are hopefully going to expertise the identical factor that I do, and not directly, form, or kind, are going to really feel just a bit bit higher themselves.

The Acquisition

FBA: Can you are taking me by means of the acquisition course of? What was that have like?

LN: It was a long and hard course of as a result of a deal like that had by no means been carried out on the time. And there was no authorized case research to reference. And so it was actually lengthy and tedious, I feel might be what I keep in mind most. It was lengthy and it was tedious and it virtually didn’t occur.

FBA: Are you able to describe your expertise as a Web3 founder vs. your experiences in conventional tech areas?

LN: The important thing distinction to me is that Web3 requires a complete totally different stage of communication. As a result of you’ve individuals which might be shopping for as a result of they believe- they’re not shopping for to eat like they’re in Web2, the place you need to guarantee that the consumption of your product is environment friendly, and that the product is finished nicely. In Web3, they’re shopping for to consider in one thing greater, so management is totally important.

Including worth

FBA: In your individual phrases, what does it imply for a Web3 founder so as to add worth to their neighborhood?

LN: I feel there are a number of various kinds of “utility.” There’s transactional utility, which is making individuals cash. You recognize, value goes up. That may occur by means of an airdrop of a coin or NFT, you understand, it’s one thing that Yuga has carried out very well. Then you’ve firms like Disney, which is a grasp at emotional utility-how do you impression individuals in a manner that drives them to be emotionally connected to your product? In order that’s by means of content material, that’s by means of messaging, that’s by means of branding, and that’s by means of neighborhood. Emotional utility goes to Walmart, seeing a Pudgy Penguin toy on a shelf, and giving that to a buddy, household, niece, or nephew. Or making a bit of content material that makes any individual cry, or makes them smile, proper. Proper now, quite a lot of NFT merchandise have been specializing in the transactional facet of issues, which is an efficient playbook, but it surely solely works in a bull market-it doesn’t work in a bear market. It’s the emotional utility facet the place I feel Pudgy Penguins are actually going to excel.

FBA: Having mentioned that, your ground value has risen so much over the previous few months. How does that make you are feeling? I’m certain you’ve had a ton of optimistic suggestions from the neighborhood due to that. 

LN: It undoubtedly made me really feel good however the subject with the ground value is that the primary 4 months I used to be a slave to it. I cared for the sake of the holders, however I spotted that for me personally, I can’t let it get to me, both when it’s down or when it’s up. Don’t get me wrong-it’s a aim. The next ground value is a aim. It’s an aspiration. It’s one thing I’m chasing, however I’m not going to have fun each ground milestone. As a result of this thing- this Web3 sport is a psychological toughness sport. That is probably the most mentally taxing enterprise I’ve ever been part of. And so I’ve to be actually robust with how I maneuver in my head. And so on this respect, I’ve now discovered over the past couple months that on the finish of the day, I wish to get to a 100 ETH price-and possibly then I’ll bounce for pleasure. However I can’t bounce with pleasure at 10, 15, 20 ETH. Having mentioned that, certain, I perceive that the ground value going up made the neighborhood consider in me extra. You recognize, the pudgy neighborhood starting to consider has been one of many coolest elements about all of it. 

FBA: What’s your motivation for including “worth” to your holders?

LN: Some of the fulfilling issues I’ve carried out in life has been mentoring youngsters as I’ve got here alongside in my profession. I’m solely 24, however I get quite a lot of 18, 19, 20 12 months olds coming as much as me and asking for mentorship. And I like it – I really like the community impact of serving to individuals earn cash, and the way that interprets not just for fame, however for the alternatives that come your manner as that fame grows-it’s priceless. A majority of the cash I’ve made has been constructed off of relationships. There’s no higher method to construct a relationship than to convey worth to individuals. And so like one, it fulfills me, as a result of I simply know that some Pudgy holders aren’t all prosperous crypto whales. Like, take into consideration it-I’m on the driver’s seat of 4,600 individuals’s lives-that’s to not say they totally depend upon me, in fact, but when I do what I can do, I can change their lives even just a bit bit. Isn’t that cool? I’m pondering long-term here-there’s individuals who spent life-savings on their Pudgy Penguins. I didn’t inform them to try this however they did, and now I can’t allow them to down, you understand?

Unhealthy actors

FBA: Once you see individuals within the crypto and NFT house appearing in dangerous religion and messing up your plans, how do you take care of that? 

LN: Our mannequin just isn’t depending on what different persons are doing. I got here into this saying that I can’t construct a enterprise that’s depending on macro situations. All these dangerous actors fall into these macro situations I can’t management, you understand. Don’t get me mistaken, it sucks and undoubtedly hurts generally. However FTX doesn’t have an effect on whether or not our toys would possibly promote in Goal or Walmart. The pudgy model is larger than force-majeure occasions within the Ethereum world and crypto house as a complete. And so it’s actually a steadiness. 

FBA: This being your first expertise as a Web3 founder, do you suppose communities are too robust on their undertaking groups/founders?

LN: Throughout the board, sure. It’s a very robust enterprise. Like, a very robust enterprise. I come from a standard tech background, so for me after I’m constructing a model, it’s like- let’s simply go into my playbook of how I’ve constructed manufacturers up till this level. Lots of people on this house don’t have that type of expertise. They haven’t constructed 9-figure manufacturers earlier than, and so they’re identical to inventing issues as they go. However I imply, that’s why I purchased pudgies, as a result of I assumed I had an actual aggressive edge-I understand how to construct a model. It’s second nature to me. I ask, okay, how do I develop? How do I discover an angle or messaging that resonates? After which I simply lean into it. I’m going into all of my instruments that I’ve developed over the past six years. I feel that’s a core differentiator between me and these guys and gals who’ve by no means constructed manufacturers earlier than. 

So it’s attention-grabbing to say the least, however I do have empathy for founders. Extra so than I did earlier than.

The long run

FBA: What would you suggest to younger founders trying to construct and foster a happy neighborhood?

LN: I feel setting expectations is vital. Communities get mad at founders who set very clear expectations they don’t hit. If the man mentioned he’s not going to work on it, and you continue to purchased it and now you need him to work on it, the fuck are you pondering? But when the man mentioned I’m gonna construct the subsequent nice IP firm the world has ever seen, after which he’s in for 12 months and bounces, yeah, that’s fucked. You possibly can’t try this. If I’m an artist, if I’m Drifter Shoots, per say, and I’m doing a PFP assortment, like, there’s no promise of utility. I’m an artist-that’s my expectation. And that’s that commonplace. Proper? But when I’m saying I’m constructing the subsequent nice metaverse gaming firm, nicely then I higher ensure I give it the subsequent 5 years, you understand, and I construct that firm, and if I disappear anytime between now till then, I’ve damaged the usual. Simply inform individuals precisely what you’re going for. If there’s an trade of worth from individuals’s checking account to yours, then there’s an expectation that should be set.

FBA: What motivates you going ahead?

LN: I wish to construct one of many greatest IP firms the world has ever seen, and do it in Web3. And I really consider I can try this as a result of there’s no higher method to invade the hearts and minds of on a regular basis customers than with these cute Pudgy Penguins. Once you have a look at all of the IP within the house, who has a greater shot of reaching each demographic and persona. And I made this evaluation earlier than I purchased it. I mentioned, nicely, the worth prop is so massive and the alternatives are nonetheless so open. And so, in that respect, I feel we are able to actually, actually crush it.