Hey Osmotics (does that even work?),
Welcome to the inaugural issue of Osmosis Weekly. If you're reading this, you are one of our very first 34 subscribers. Words cannot express how grateful I am you're here.
Now, fair warning – I'm still trying to figure out how these weekly newsletters will work, so please... your feedback is absolutely crucial. Please forward what's working (and not working) for you to firstname.lastname@example.org
Here's my current plan: I'll spend this section doing a little deep dive into a trending topic or a useful rabbit hole... then a few short summaries called "Worth Checking Out...", next -- some silly distractions (title is a work in progress)... and finally, a status update on our core offering, the book summaries, called Coming Soon(ish).
OK. Let's get straight into it.
Starting with a Nyan Cat gif which sold for $587,000
Yeah, that's right. We're going to start issue #1 with NFTs... non-fungible tokens.
What's the Yield Curve on Collective Hallucinations?
As you may already know... digital artists are getting filthy rich selling NFTs.
What are NFTs? Let's break it down quickly...
- Non-fungible means one-of-a-kind, irreplaceable.
- Token, or tokenization, is when you turn an asset (in this case, art) into a string-of-code you can buy-and-sell.
That "string-of-code" is on a blockchain... which means it's encrypted in a very secure way to keep records of all previous and current owners.
That last point is the most important – the great promise of bitcoin/blockchain/crypto... is with such a secure record of ownership... we can cut out the middleman. (The woke me wants to say middle-person??)
For example --
When you buy a house, you need lawyers holding money in escrow. When you buy stocks, you need a broker. When you buy art, you need an auction house.
Why is this important? Middle-people (sounds like a village of cute hobbits) take a cut of profit. Sometimes reasonable, sometimes not. What's more, they play gatekeepers. Bankers can deny loans. Bureaucrats can deny forms. Bouncers can deny underaged kids with fake IDs.
NFTs give power back to the artist. They can sell directly to their fanbase.
But wait –
Why Would Anyone Buy a NFT?
That's a great question. Because when Vignesh Sundaresan paid $69M to Beeple for The First 5,000 Days... he didn't even get the copyright.
A digital artist I was chatting with in a private Slack server asked the same question. Why would you buy a NFT?
It's art. Why do rich people buy art? Two reasons:
- Ego and bragging rights. Look at this scarce one-of-a-kind thing I bought.
- Investment ROI. Art has stable returns. But more importantly, back to ego... it's fun to brag about "discovering" an artist before they made it big.
To be honest... I couldn't care less about NFTs in this current context. I am not a speculative guy. I like safe and boring for investments.
What I am interested in however... is what all this means in a practical way once more people and more industries adopt NFTs.
Why NFTs Actually Matter
And for that, I must ask you to check out Scott Galloway's interview with Raoul Pal: Crypto, NFTs, and Blockchain ft. Raoul Pal
Here's the short of it...
Selling NFTs of a single piece of artwork is cool... but what if you sold a NFT as if it was a "share" of your output, like a corporation selling shares on the stock market?
For example – football clubs in Europe are currently selling NFTs to fans. Owning a NFT means you get to vote on certain team decisions. But ownership also means you can sell that token to other fans as the club's fortunes go up and down.
What about celebrities, artists and influencers?
Imagine a world where you could buy a "share" of Lady Gaga, or Tim Ferriss, or Naval Ravikant. Maybe that share gets you early access to albums... or exclusive access to writing... or a cut of royalties for book sales. But also - as their fame goes up or down, so does the price of your token.
The thing with NFTs is that they're basically a bundle of rights, plus a smart contract, stuck to a blockchain. You can literally do anything with it.
And Here's Where It Gets Cyberpunk...
One of Scott Galloway's recurring themes is the exponential cost of post-secondary education. Thirty years ago, getting a higher education was the ticket for upward mobility. It was accessible to anyone willing to put in the work.
Today, it's exorbitantly priced and inaccessible. Americans owe $1.53 trillion in student debt. You can watch the number go up here.
So, imagine a future where... instead of the student owing debt, the school gets equity in the student. That is, Stanford will give you a law degree, but they own NFTs of you... which means you owe them a percentage of your income... for the next ten years of your professional career... or even for life.
This can be seen as an equalizer... where Stanford won't just let rich kids in... and they can place bets on really smart (but poor) kids... or, if you're like me, you see this as really fucking dark.
Whether you like this or not though – it's coming.
Some people will see selling pieces of themselves to get ahead as no different from the countless hours you work at McDonald's to pay for college. Others will make bad deals and sell too large of a percentage of their income, too early, and regret their lifetime tax at fifty... or sixty... or seventy.
Short of it? NFTs need proper regulation if it moves in this direction. Otherwise, we're going to have a lot of stupid people selling NFTs of things they probably shouldn't be selling and regretting later. (Remember that time someone tattooed her forehead on eBay? Or am I aging myself?)
In a more recent episode of The Prof G. Show, (Future of Cities, Work, and Office Space — with Dror Poleg)... The idea came up that top tier cities like New York City, Miami and Los Angeles could sell NFTs as well.
You have a NFT for NYC? You're allowed to get a job, rent a place and get access to city services. Don't have one? You need to buy one off someone leaving NYC before you can move here. And yes, the price of that NFT is going up and down on some exchange somewhere.
What's more – if NYC needs to raise money for urgent problems... or simply "expand" their population... they can basically "issue" more NFTs.
Obviously, this isn't happening yet. But in the meantime – if you're an artist, you better jump on this hype-train to money-town. It ain't gonna last.
Here are Some NFT Resources
Here are some of the major platforms for buying and selling NFT art right now...
Which platform should you focus on? Clarke Read, who tracks NFT sales on his IG tells me:
If you want to get into one of the NFT art platforms, start sending in your applications now. All of em have long waitlists, and the platform you choose has a HUGE influence on how much your piece sells for. (A piece on Foundation will sell for 10x what it would sell for on OpenSea/Rarible…on MakersPlace, KnownOrigin, or SuperRare you get 2-5x what you’d get on Foundation…and if you get into NiftyGateway you can basically buy a house off a single drop even if your work is garbage). It’s truly a “100 true fans” sort of situation. Most of the biggest sales don’t have nearly the traffic you’d expect. I’m regularly seeing pieces go for 5-10ETH that were viewed dozens to maybe 100 times…suggesting they just found (or knew) somebody that really wanted the piece.
By the way, as of publication, one ethereum is going for $2,118.79.
And for the rest of us who can only draw stickmen? Start thinking about how you can use NFTs in your business. What can you give your most ardent and loyal customers?
Remember – it's not just lifetime income. It can be access - exclusive, early or limited. It can be a way to reward your superusers. It can be a way to influence their behavior. You can gamify the whole shebang.
ALSO – you don't have to issue all your NFTs right away. You can withhold a percentage and sell them for more as your company becomes more valuable.
This is coming, guys. Start preparing.
As Raoul Pal points out on the podcast... the digital asset economy is only $1.7T right now. The equity, bond and other financial instruments market is $300-500T. And tokenization is going eat it all up.
We are truly living in strange and interesting times. +
Worth Checking Out...
This week: 7-figure newsletters, how ConvertKit built to $28M ARR, and Suhail Doshi shares his biggest startup lessons.
How 7-Figure Newsletters Make Money
- You don't need a huge audience, just the right one: e.g. Ferrari Market Letter has ~5k names and makes $2M.
- Monetize a free newsletter when you have 2 of these 3 things: A large audience (80k+), high open rates (~20%) and/or readers willing to spend money.
- How to find advertisers for your newsletter: Go to websites like Crunchbase or Techcrunch and find companies that just got funded. (Psst... they have money.)
- What do advertisers want? Stats, obviously. They'll want to know your list size, open rates, CPM and CTR. Slide 27 gives you an idea how much they'd pay based on those numbers.
- Looks like NYT is slowly getting out of the advertising game. Check out slide 44. Subscriptions are up. Way up. As per the slide deck, subscriptions are stable recurring income. Advertising is constant sales.
How ConvertKit Built a $28M ARR Business
Nathan Barry, founder of ConvertKit, shared eight "tips and lessons" on how he built his business to $28M ARR in a tweet thread via Alex Lieberman. It's short. You should read it. Here are my three favorite ones:
- Nathan's team uses S'up, a Slack plug-in that matches groups of 3 at random to get on a Zoom catch-up.
- Cmd - Q : It means that an employee is going off of Slack to do deep work and doesn't want to be bothered for a little while.
- ConvertKit has an internal podcast where teammates interview each other to better understand their background, interests, habits, and then all employees can listen in once published.
ConvertKit is 100% remote (or as the VC folk like to call it, "fully distributed")... which means building that sense of team culture is exponentially harder. I've had clients where the siloing is a real problem. That's why I love the random matches and the internal podcast idea.
Hard Earned Lessons from Two Startups
- Be married to the problem, not the technology. If you're married to technology, you might easily give up due to stress induced by setbacks or boredom. Being married to the problem will motivate you to have the perseverance to continue through hard times or tedious work.
- End every conversation with an expert about your industry with: "Why do you think I am going to fail?" to lean into brutally understanding what you need to de-risk.
- I was ruthless about ensuring I had as much deep work time as possible. Live somewhere boring. Eliminate meetings. Don't meet investors if you're not raising. Build a rhythm each day that enables the largest chunk of hours to get great work done. Users will notice your pace.
- Occasionally someone you respect will give you unsolicited advice that may cut you down. First, absorb it. Later, try to put their advice in a way you would've wanted to give yourself. This removes the hurtful part allowing you to hear it in a way you can benefit from.
- Momentum is oxygen for a startup. Without momentum, you let fear, uncertainty, and doubt cause your demise.
I mean, you gotta wonder, is this confirmation bias... or am I pushing you to read my Deep Work book summary if you haven't yet?
Dumb Things to Share With Loved Ones
For those awkward silences when the TV isn't on...
- So... apparently, my government has a FAQ for Canada Geese: One of the questions is: "I am currently suffering damage due to Canada Geese. What can I do?" Wait. What?! Just how dangerous are these birds??? They've attacked 1,815 aircraft in the USA since 1990?! Really.
- The Verge reports: Amazon's Lord of the Rings TV series will cost $465M... for just the first season. And for kicks – I did some inflation-adjusted math for the original trilogy (1, 2, 3). It comes out to about $413M total in today's dollars.
- Google Earth now has time-lapse from 1984 onwards. Unless you're jonesing for some existential angst over our collective impact on the planet, you probably want to skip this one.
Coming Soon(ish)...Book summaries go through seven stages at Osmosis: Reading, Raw Notes, First Draft, Editor Review, Revisions, Gif Hunting, and Publishing. Here's a status report of what's in the queue...
- Breakthrough Advertising (1966) by Eugene Schwartz : 65% Raw Notes
- Trusted Advisor (1998) by David H. Maister : 0% Raw Notes
- The Hard Things About Hard Things (2014) by Ben Horowitz : 30% Read
To suggest books, write me at email@example.com
Osmosis+ members can vote on what books I should prioritize here.
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