CASE: Porsche's BIG Mistake
The final take on what went wrong.
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It seems everyone and their grandmother has had a take on the recent Porsche collection drop. I’ll go over the biggest mistakes in order to extract the key lessons for the future.
For those not following the NFT markets, Porsche went from being one of the more hyped NFT collections of 2023 to a flop in one day.
So what went wrong?
Numbers
Before we dive into the mistakes, let’s briefly examine the collection numbers.
Price Performance
While the floor price has increased to around 2.43 ETH from the 0.911 ETH mint price, it has done so in large part because Porsche cut the supply from the initial 7500 to 2363 (minting only 31.5% of its initial supply).
Had they minted the original supply of 7500 the floor price (based on market cap) would now be 0.77 ETH or 15% under the mint price.
Mint Revenue
Porsche managed to make around $3.5M from primary sales. It had planned to make $11.2M.
While this sounds like a lot, it’s just 0.009% of their 2021 revenue and we have to remember that the bigger part of revenues comes from secondary royalties.
That’s why improving community sentiment by learning from their mistakes is vital.
The Good
On the face of it, Porsche seemed to integrate well into the Web3 culture.
It referenced Ethereum on social media. Used the Ethereum currency Ξ and the term “eth” for Ethereum in its Twitter handle.
It utilized POAPs as a mint access mechanism, similar to legitimate Web3 projects like Admit One.
It emphasized community and co-creation, like several top projects.
The Bad
However, behind a facade (deliberate or not), like with so many previous projects, we saw the Web2 engine operate behind the scenes. Here are the mistakes and what we can learn from them.
Mistake 1: Bad Pre-Mint Organization
Lack of organic engagement with the community. Discord was used for official announcements and users couldn’t interact with nor give their input to the team. Moreover, people complained about how none of their questions were being answered by the team. Meanwhile calling it a community project gave it a pretty disingenuous look. We see that 45,000+ Twitter following barely matters if the project doesn’t stand on a strong base. Transparency is key.
Some people were mad that the mint didn’t attract the core “Web2” Porsche enthusiasts. Well, not a lot of effort was put into introducing this to Porsche’s core customers. For instance, no Instagram posts were made pre or post-mint. The mint clearly targeted the Web3 community (separate Twitter was a strong indicator as well) yet it failed to play by Web3 “rules”.
Minting in waves was an interesting idea, but poorly executed. It was done in part to avoid gas wars and in part to give bigger fans the potential to mint meaningful three-figured NFTs (e.g. #666 just sold for 10 ETH). Yet, it felt more like this was done to avoid their servers crashing than anything else. A 7-hour window on a Monday between 9 AM – 4 PM EST is a pretty tough ask. Instead, they could’ve extended the mint window to at least, say, 24 hours. Registering on Porsche’s website, holding a partner NFT and a Porsche POAP just to miss the mint due to work, doesn’t leave a good taste in one’s mouth.
Opensea
Mistake 2: Overestimating demand
0.911 ETH per NFT with a supply of 7500 in a bear market is a big ask, even for a brand like Porsche. Porsche’s initial idea (supply of 7500) was to price the entire collection at ~$11.2M and become the third largest market cap single collection Web2 project after Adidas and Tiffany & Co. The problem is that Adidas was minted in a bull market and is one of the most universal brands in the world, while Tiffany & Co. partnered with one of the wealthiest segments of Web3, CryptoPunk owners, and is the definition of luxury.
Porsche’s roadmap looks decent (although reminiscent of the 2021 NFT projects), however, it’s pretty ambiguous and buzzwordy. While there definitely could be value down the line via exclusive access, they should’ve focused on communicating a strong core offering. For instance, minters of the Tiffany & Co. pendants knew exactly what to expect and what they’d receive in return. It also played into a pre-existing product-market fit of showing off one’s status via PFPs.
The art of the NFT art didn’t have much artistic standalone value. It wasn’t outside the box or an interesting partnership. In fact, it seemed like a relatively standard 2021esque 3D design.
Porsche
Mistake 3: “Cutting” Supply Without Cutting Supply
In line with saying one thing but doing another, Porsche’s communication about cutting supply should’ve been more concrete. On the 24th of January, they announced they’d be cutting the supply. Usually, such announcements are effective immediately or are posted after the fact. Hence people were confused which warranted another official post a few hours later. The supply was cut around 17 hours later after the original announcement. Was this done to maximize revenue? Not sure, but highly likely. In any case, highly unusual behavior from the team.
Our holders have spoken. We’re going to cut our supply and stop the mint to move forward with creating the best experience for an exclusive community. More info in the next hours.
The highlighted sections indicate the moment between the first and the second tweet. Both volume and average price spiked as people expected the price to be cut immediately.
Takeaway
Porsche as a brand has valuable intellectual property, brand recognition and access that could make it a highly successful NFT project. Hopefully, the beginning of the project wasn’t an indication of what’s to come. It’s up to the team to correct it.
The purpose of this post is not to tear the project apart but to learn together as a community. After all, Web2 brand successes in the space bring good attention and increased adoption.
While it isn’t productive for projects to listen to all people, they should listen to the right ones. Ironically had they done that, they would’ve gained $7.7M more from their mint and likely higher secondary royalties due to the anchoring effect of the mint price :D
Thanks for Reading!
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I focus on the cross-section of NFTs, crypto and fashion:
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