Forgotten Runes | Part 2 | Flywheels
Magic Machine is patiently laying the groundwork for supply-side flywheels that will, in time, translate into supercharged growth.
In the following, we'll dig deeper into the business model that FRWC is brewing, focusing on the supply side.
TL;DR: It is following in the steps of the greatest businesses of all time. Patiently laying the groundwork for supply-side flywheels that will, in time, translate into supercharged growth.
Scale Economies Shared Intro
What is the #1 business model for long-term growth?
Nick Sleep and Qais Zakaria of the Nomad Investment Partnership believed they had identified it in the early 2000s: Scale Economies Shared (a supply-side-flywheel).
Based on their fund's performance (18% annualized returns from 2001-2014) and the long-term strength of practitioners like Ford, Costco, The New York Times, and Amazon, I'm inclined to believe they were on to something.
Scale Economies Shared (SES) businesses are those that:
1. Benefit from economies of scale
2. Have leaders who zealously share those benefits with customers (not just shareholders), through:
- lowered prices
- improved offerings at consistent prices
While forgoing short-term profit maximization, they benefit by building deep customer relationships, rooted in trust, that turn into word-of-mouth growth engines over time.
1. Economies of Scale ✅
External (non-specific to FRWC)
To varying extents, all NFT projects inherently:
- Have economies of scale in distribution as they are selling, and/or earning royalties from, digital goods.
- Benefit from the changes in behavior that occur when customers become owners (ie. more likely to evangelize).
Internal (specific to FRWC)
FRWC has unique advantages in content creation and marketing given its' community's demonstrated propensity to create and share “cult content”.
After just over a year, cult-content has already included:
- 4,000+ Book of Lore entries
- Derivative NFT collections (Forgotten Babies, Forgotten Punks, WizardNouns, and The Barron Court)
- Merch (Moron Global and Slime Lab)
- Card and board games
2. Leadership that Zealously Reinvests into its Customers ✅
At this stage, by “customers” I'm referring to the owners of FRWC NFTs (co-owners and co-creators of the franchise’ IP) who represent the "supply-side" of the nacient fantacy content franchise.
FRWC has been relentlessly reinvesting back into this group - sparking creativity, delivering delight, and building trust. Clear examples include:
- Approaches to NFT distribution
- NFT utility expansion
- Communication
Note: as media expressions of the IP like the upcoming TV series, MMOPRG, merch, and comic book reach a broader audience in the coming years, “customers” will start to include non-NFT-owning consumers of the IP as well. Growth on the pure-demand-side should attract more and more talented creators to the supply-side… spinning the flywheel.
Approaches to NFT distribution
Every NFT mint event has leveraged unique technical mechanics coupled with delightfully entertaining user journeys (examples: Souls and Warriors).
Note: When only around half of the Warrior's collection had been sold (two weeks after the mint opened) the team made the non-greedy decision to airdrop the un-minted Warriors to existing holders for free so that new lore could be written.
Beyond the planned mint events, the team has also delivered multiple surprise airdrops (free) of new storytelling items to token holders. Examples include The Sacred Flame and Forgotten Ponies.
NFT Utility Expansion
Beyond use as a social media profile picture, or a ticket to a party in NYC, FRWC NFTs are consistently being updated as fully animated metaverse-ready avatars.
Early investment by the team allowed it to be first to market with 2D walk cycles for all 10K wizards and is on track to do the same with 3D rigs.
These are highly technical, expensive, and time intensive to build, yet are provided for free to token holders so that they can navigate open metas like Worldwide Web 3 as their FRWC character.
Communication
Despite the team being anon, they have displayed an unrivaled degree of accountability and transparency.
Most NFT project teams, if reachable at all, will hold monthly AMAs on Twitter and be somewhat responsive on Discord.
The FRWC team has held weekly 1-hour Twitter spaces (aka Wizard Wednesdays) without fail for over a year. The team shares updates, Runiverse metanarratives, and highlights community contributions.
Note: Elf read every community discord message and responded to all questions for the first year of the project's life prior to bringing on Jitcy.
In Summary...
1. These “over-the-top” choices were all expensive in the short-term, but have been instrumental in fortifying community trust and sparking creativity.
2. Trust fortified ➡️ loyalty
3. Creativity sparked ➡️ supply-side growth
3. Cult content growth ➡️ demand-side growth ➡️ supply-side growth
4. Cult expansion provides more capital for Magic Machine (company behind FRWC) to reinvest into the community…
the flywheel turns.