A few weeks ago I wrote about a web3 project in the outdoors space. I had a lot of mixed feelings about what they were building. Last week, a major outdoors player entered the web3 space. Outside Interactive (the conglomerate of Outside Magazine OutsideTV, Gaia GPS, athleteReg, Peloton Magazine, Yoga Journal, SKI, BACKPACKER, Triathlete…basically most of outdoors-related media) recently announced a new NFT initiative.
“Welcome to Outside.io, the first outdoor and active lifestyle NFT Marketplace committed to promoting wellness, diversity, and sustainability with the help of blockchain technology.”
Here’s how it works:
- Outside is starting an NFT marketplace (and eventually a token, it sounds like) focused on selling Outside NFTs, and NFTs from their partners and and other outdoor creators.
- It’s important to note that they’re launching their *own marketplace*, a la Opensea, or Foundation, rather than launching NFT collections on an existing platform.
- Their inaugural NFT, the “Outerverse Passport” will go on sale for $300; every initial Passport holder will receive a 3-year Outside+ membership.
- They’re planning to mint 10-20 series of Outside-branded NFTs in 2022, in addition to 20 or more NFT series in partnership with well-known brands and creators. It’s unclear what exactly these will be or what the size of these drops will be.
- Here’s a link to their FAQ
My thoughts
My initial reaction was that someone at Outside saw the National Parks NFT project and said “Hey, I bet we could do something like that. We have a big audience and a bunch of relationships with brands already”.
My second reaction was, “Maybe rolling up all outdoor publications into a conglomerate on a single subscription isn't working out that great and you’re using web3 to make Outside+ feel new”.
My third reaction was “Maybe they’re hoping this gets enough traction and has enough web3 buzz words to drive new venture funding for Outside to extend their runway and buy time to figure things out”.
Community is hard
Community is the core of web3 success. National Parks NFT understood this. It was very clearly a web3-first project (with an outdoor theme). The organizers knew the space, were comfortable in discord, actively communicated with other projects, and were able to build a large community of web3/nft enthusiasts…who also liked the outdoors.
It seems like Outside is coming at this from a different direction. They’re trying to activate their *existing* community to build a walled garden NFT marketplace for outdoors-focused creators. It’s a far greater challenge to convert a non web3-native audience (which is most of the outdoor industry) to engage with a new marketplace. This also adds an additional hurdle of “explaining NFTs/crypto/blockchain” to your audience in order to succeed. Is the cross section of 'Outside readers" + "interested in web3" is big enough for this to work?
What is the goal here?
Some of these ‘features’ feel a bit like they’re tacked on and the real goal is just to acquire more Outside+ subscribers. Let’s look at the inaugural “Outerverse Passport” NFTs.
First off, listing the mint price in fiat currency (USD) is very odd. The Outerverse marketplace is being built on the Solana blockchain, so I would expect prices to be listed in SOL, not USD. While there are ways to purchase NFTs using fiat currency, it’s an extremely confusing choice to list the price in USD. It’s worth noting that 3 years of Outside+ normally costs…$300.
Secondly, an “additional non-transferable Outside+ membership” is also weird. Many projects treat your NFT as a digital membership card — one that only works if you currently own it. Projects like BAYC and others use wallet connection as a validation mechanism; you don’t get access to the community/membership unless you can prove you currently have the NFT in your wallet. Think of it like a login that can also be bought/sold/change in value. Granting a non-NFT-based subscription to the initial holder gives the impression that their goal is not to develop a robust network/community based off NFTs, but rather use the “hook” of an NFT mint to add Outside+ subscribers.
The question becomes, what is the value of the NFT to subsequent holders? If the membership is not attached to NFT ownership, it’s possible that a significant value of the NFT immediately disappears upon minting.
And then, there’s this (from the Outside.io Discord):
“"Limited edition" is primarily a reference to the limited window for the Passport sale. We have not set a numerical limit.”
”Outside+ members will have early access to purchase the Outerverse Passport, but the passport will be available for everyone to purchase.”
A key aspect of an NFT’s value is the *scarcity*. An NFT drop without scarcity is just…a regular membership, like Outside+. You also kinda *have* to set a numerical limit — the NFTs need to *exist* before they can be claimed. Maybe this is possible, but I’ve never seen an ‘unlimited’ NFT drop.
Enabling creators
A key question for me on is whether the Outerverse platform will be focused on enabling a wide creator community, or on high-profile creators and athletes with whom Outside (and ROAM Media, an influencer focused media platform that Outside purchased last year) already have relationships with. There’s nothing wrong with that, it would just help to clarify how they see the role of their marketplace.
Store of value
Like it or not, a key component of NFTs is how they will increase in value. Unfortunately, a significant number of people (most?) in web3 are *not* concerned with these things —or the whatever story/mission/etc is behind the project but primarily NFTs as an investment vehicle. While I’d like to believe projects can succeed on purely altruistic merits, I don’t believe that’s true right now.
What is the long term value for an investor in an Outside NFT? The walled garden marketplace means a smaller opportunity for distribution (compared to established players), and one-time benefits mean that the NFT has a low value in secondary sales.
The positives
Using Solana means that transactions are much more efficient. Solana does not have the computing impact of networks like Bitcoin or Ethereum right now. However, using Solana might have limitations — some of the things it sounds like they want to do aren’t supported as well on Solana vs. Ethereum. Also, this might be a solved problem on Ethereum by the time this marketplace launches this summer.
That said, 1 SOL does not equal 2 Google searches. 1 Solana *transaction* uses approximately the same energy as 2 Google searches.
20% of net revenue goes towards sustainability-focused nonprofits and DEI initiatives. That’s great, love to see it. I’d be interested in better understanding what exactly “net revenue” means in this context.
I don’t think anything about Outside.io is inherently “bad”. However, there are a lot of confusing choices.
What’s next?
Well, the Outerverse Passport NFT launches in ~2 months. This basically buys them some time to flesh things out a bit. It’s still unclear what exactly their ‘marketplace’ is going to be, who it will be for, and how they plan on executing their “real world benefits”.
Here’s are a few questions/suggestions I have in the meantime…in case anyone from Outside is reading this.
- Be more clear about what you’re building. I’m sure more detailed explanations are forthcoming, but there’s a lot of hand waving going on in the initial announcement.
- Building an NFT marketplace, even with a strong tech partner, is a big undertaking (and expensive, I assume). How do you expect to compete and maintain a marketplace feature set to be competitive with other companies that are 100% focused on web3?
- There’s a lot of technical complexity in some of the things you’re suggesting. How do you expect this engineering overhead to affect Outside’s existing operation and culture moving forward?
- Can you provide more transparency about what “drops” are coming, and how exactly they tie into “real world benefits”? Will these benefits be one-time claims (a la the Outside+ membership for Passport minters), and how does the use of NFTs uniquely enable these benefits?
- Will the marketplace be open to anyone who wants to mint their own NFTs, or will it focus on curated/approved creators?
- What is the fee/revenue breakdown for the sale of an NFT? Is Outside taking transaction fees? Does the 20% cut apply to *all* sales (including secondary sales), or is it 20% of Outside’s overall profits off the marketplace?
