Over the past year, interest in Non-Fungible Tokens has plunged. Many on Twitter argue this is a good thing; that the concept was a scam all along. Others claim that the technology remains revolutionary and will one day be the biggest thing in the world. They blame external factors and bad actors for the current market depression.
I care little for either side; they’re probably both right, as is often the case. At the end of the day, NFTs exist, and they don’t seem to be disappearing. The technology was first adopted by web3 companies, who never really seemed to be able to differentiate business from scams. It was then over-taken by large multi-national companies, who are by their nature dull and unimaginative.
The shine having seemingly worn off, now is the right time to have a serious, honest discussion about how to view and use NFTs within your business. But first…

1. Do YOU need an NFT strategy?

Despite what some parts of the “industry” says, not everyone needs to have an NFT strategy. This is not an industrial revolution or a “new internet”. Before jumping in, it’s important to ask the following :
If the answer to all of these questions is no… go outside, build something real, make a name for yourself and then start thinking about NFTs. Chances are, at that point, you won’t need them anymore.
A lot of entrepreneurs have made two mistakes over the past two years. First, they tried to assert that NFTs have self-sustaining value. They do not: digital assets are inherently contextual. Secondly, and more importantly… by their very nature, most centralized companies do not NEED to use NFTs. If I need to explain why, you shouldn’t be messing with cryptography.

2. Defining NFTs’ Value proposition

You don’t create digital tokens purely to make money. You create tokens because they add value to existing and/or potential customers. Which in turn give you money. Here’s how organizations and creators can use NFTs to leverage existing content and interact with their customers.
Develop new offerings
Due to the digital nature of NFTs, the line between different types of offerings is blurred. This is a sign of the times.
These examples show the incredibly dull way traditional actors see the world… We shouldn’t let them gain more power in this space. There are so m+any cooler things you can do with NFTs.
Create new forms of value
The concept of potential new value is fascinating, as the below can be mixed and matched as needed. There are a lot of innovative ways to interact with customers there.
None of the above is mutually exclusive. This is not to say that your NFTs need to do it all — this is a mistake we see too often.
Improve customer relationship
All of the above ensures customers are :
Drive long-term value
If everything goes well, NFTs are a path to :

3. Going deeper : building an NFT business model canvas

I’ve long bemoaned the way the business model canvas is taught in business schools. Too rigid, no interconnections, no focus on ecosystems…So I don’t use it. What I’ve created instead are a set of questions that one might instead ask as they build a case to bring NFTs to the attention of a boss or partner. You’re welcome.
Consumers
Business case
Go-to-Market
Brand Experience
Partnerships
Talent
These questions are in no way exhaustive, but they should put you on the right path. You’ll need to be on it, because planning is the easy part. Execution is where it gets hard… and fun.

4. Launch, run & coordination

Beyond the big plans and fancy marketing announcements, real work is needed for any project, whether on the blockchain or not. Below is a list of things to work on to ensure a sound NFT strategy and vision, as well as a successful implementation and roll-out.
Strategy & innovation
Marketing
Business Units
Technology
Finance
Legal

5. Planning for risks

The world of NFTs is new and exciting. Just like the new girl in high school. And just like the new girl in high school, NFTs are dangerous. Damn it Jessica, my leg still hurts when it rains. Though NFTs can create a significant amount of value, they can also be net value-destroyers if risks are ignored.
For the brand
NFTs offer new mechanisms to present a brand and engage with consumers. Accordingly, they can hurt a company’s image, reputation, and legacy if done improperly. NFT offerings should be executed with the same level of rigor that a new product launch entails; quick cash grabs may damage consumer trust in the long term.
For instance, proof-of-work solutions to validate NFTs’ authenticity require significant energy cost. Brands looking to be perceived as ‘green’ should consider this in their blockchain selection process.
Scams, Hacks, Fraud and Theft
NFTs offer authentication, provenance, and title to ensure the proper rights management of assets. But fraud is common in this market — counterfeits have always existed, and always will. Fraudsters may mint an NFT relating to a work that is not their own and without the creator’s permission. Additionally, various hacking schemes exist to steal NFTs from their rightful owners. Not to speak of social engineering scams, or outright cyber-attacks.
These risks can be mitigated by purchasing NFTs from reputable creators, undertaking the proper due diligence of an asset’s provenance on a secondary market, and storing assets in secure wallets. This will probably never be enough, and strong contingency plans also need to be in place.
Ownership rights / rights transfer
The purchaser of an NFT owns the token. But owning an NFT does not equate to owning the underlying IP itself. Often these rights remain with the creator of the NFT. In order to preserve these rights and maintain transparency, legal contracts need to be constructed in the real world. These conditions would also need to be carried over to secondary markets and rights transfers.
Technology, however, is as much an art as it is a science. If the contracts are forever airtight, future innovation may be stifled. It is sometimes better to become a meme and be paid for it in free marketing than to sue a pre-school for IP “theft”.
Technological risk
Any NFTs released on a permissionless chain are subject to the technology risks posed by that chain. If a network goes down, (*cough* Solana *cough*), your NFT assets may be at best useless, and at worse the source of lawsuits. Yet, centralized chains can be at risk of hacking as well.
There is no right answer, only a thin line on which we must walk the best we can.
Regulatory risks
NFTs are a relatively new asset class. As such, much of the legal and regulatory framework surrounding them is still under development. This should not stop organizations looking to offer NFTs from enforcing existing regulations through KYC, AML, CFT tools.
Regulatory considerations around how NFTs could be regulated in the future (i.e., as a security) will soon present additional challenges. Best be as ready as possible today.
Loss or Damage
An NFT can occasionally be tied to an underlying asset or access to a physical experience. However, the NFT and the underlying asset it represents are separate. While the NFT will contain information about its link to the underlying asset and its holder, should the underlying asset be destroyed, lost, stolen, or the event halted, the NFT itself could be rendered worthless. It is important to have contingency plans in place for such an event
This article highlights but a speck of the efforts necessary to bring a new technology to the mainstream of an organization not specifically built around it. And, as I mention throughout, all these efforts may be for naught — the technology needs to improve, the laws need to catch up… and a new vision of “value” needs to emerge. I have nothing but respect for whoever earnestly wishes to hold the NFT banner within a non-web3 company.
Good luck out there.