#11 The NFT hype: Learn everything you need to know about NFTs and how to shake up markets as a first mover in 22 minutes

Christian Underwood in conversation with Carmelo Lo Porto, CEO of NIFTEE.

In this episode, we talk to Carmelo Lo Porto about NFT art auctions, what strategy it takes to start a business that doesn't yet exist, why German rappers in particular are real first movers and which top auction awaits the world on November 21, 2021.

Steven Spielberg's film Ready Player One already gives us a first glimpse of what the world of tomorrow could look like. In a world that is almost entirely digital, digital ownership is also becoming increasingly important. In the future, for example, it will be conceivable to drive through the metaverse in a digital Porsche instead of buying physical cars. What is therefore needed is the courage to take risks, to develop new business models that have never existed before and to throw industries into chaos. Carmelo has this courage, loves upheaval and always asks himself how a company can put itself at the forefront of a movement. In September 2021, he put his crazy idea into practice and founded NIFTEE, Europe's first digital auction house for NFTs, i.e. digital works of art, related to pop culture. He has proven it: Ideas are only crazy until you implement them successfully.

Find out exactly how Carmelo managed to enter the market as a first mover, why excessive planning can be a real innovation killer and why it doesn't always take start-up competitions, pitch decks and market analyses to find investors in our new episode "King of NFT".

Detailed episode description:

Christian Underwood in conversation with Carmelo Lo Porto, CEO NIFTEE.

Carmelo Lo Porto's professional background:Carmelo Lo Porto is the CEO of NIFTEE, the first European auction house for digital NFT art. He started out in the traditional business with an apprenticeship as an industrial clerk before realizing his first small dream in 2005 and founding his own label Antstreet Records, where he took his first entrepreneurial steps. Ten years ago, he then switched to the music management side with Ever Ever Music and accompanies young artists into the market. Among others, he also accompanied Nicole Cross, who was one of the first German musicians to become widely known via YouTube. Even today, the company is always trying to break new ground and market artists such as Jolita and Broys via networks such as TikTok.

NIFTEE was launched 3 months ago, after Carmelo first started looking into NFTs at the end of 2020. The first auction took place at the end of September.

Explanation of NFT:

Not many people may be familiar with NFT. Carmelo starts by explaining to everyone in the audience what NFT actually means. NFTs are digital works of art that are verified via a blockchain and are therefore unique. It is therefore a kind of certificate of authenticity that ensures that this NFT really is the original work of art. As a comparison to the analog art trade, you have to imagine that you are getting a real Leonardo da Vinci. Your name is on the back because you are the current owner. All the names of the previous owners are listed below, which is only the case with the original.

The value of digital art:

One question that many listeners are sure to ask is: Why do people actually want to own NFTs? For Carmelo, however, why people want to own a work of art is not a question of physical or digital art. When it comes to art, it's always a question of why you want it. For example, why would you want to hang up a canvas that has been painted by someone else? This is always a subjective feeling and has to do with an individual's love of art and the emotions associated with it. Furthermore, people naturally assume that there is a certain value behind art and that it can also be used as an investment product.

Carmelo has set himself high goals with NIFTEE. He only wants to depict the most valuable moments and emotions in pop history and has started accordingly with Cro and Kool Savas. In September, 4 masks by Cro and the lyrics to King of Rap by Kool Savas were auctioned off. For the occasion, Kool Savas burned his physical artwork and the original note to create a digital work of art. Carmelo considers this process alone to be a work of art.

How much money you can earn with digital art:

Of course, an auction house thrives on auctioning off works of art for a very reasonable price. Cro's masks sold for 50,000 euros, while Kool Savas' song lyrics even went for 150,000 euros over the digital counter. These examples are a glimpse into the future and show that NFTs are here to stay.

Works of art in pop culture are not only of a musical nature:

The auction of the best and greatest things in pop culture is not just about music. The hip-hop sector has been covered with Cro and Kool Savas, but the heavy metal scene has also been covered with XXX Records. Comedians and motor sports are also elements that Carmelo is working on. Emotions play a big role here too and there are great works of art that they want to portray.

What NIFTEE stands for:

NIFTEE has adopted an approach to marketing in which it sees itself very much as a filter. There are already many NFT platforms, especially in the USA, that focus on mass. NIFTEE has a very hard door, it sees itself as Sotheby's, not ebay.

Is NFT a new opportunity for monetization for musicians and artists - especially after the difficult time of the corona crisis?

It is difficult to see the mere aspect of monetization as a new opportunity. It would be like saying when the printing press was invented that it was a new way to monetize thought. But NFTs open up a whole new world.

During Corona, Carmelo has indeed discovered many new opportunities in the digital world. Like many others, he sat at home with his son, homeschooled and worked from home. It was also the time when his son was allowed to play Fortnite and GTA online for the first time. It was then that he realized how the future of retail and digital goods is likely to develop in a world that is becoming increasingly interconnected. The metaverse, i.e. a universe that takes place on a purely digital level, will play an increasingly important role. Carmelo cites the example of Facebook, which recently renamed itself Meta and is currently working on its own metaverse in Europe with the help of many developers.

With all the digital possibilities that the future holds, companies must now ask themselves how they can be at the forefront of the movement. Carmelo wants to follow the path himself and play an active role, instead of just looking on and complaining at the end that others have implemented it badly.

First mover approach:

With the invention of the internet and streaming, the music industry has had to learn the hard way that new paths must be taken and that there is no future in simply selling records, cassettes and CDs. Many companies follow the principle of hope and think that things have always gone well so far. Carmelo sees it differently: "Things have never really gone well when you've just hoped. You either decide for yourself or time decides for you. If, as an entrepreneur, you decide to wait and see, you may miss the most important connection and no longer be able to help shape and determine things yourself. In the end, you have to work the way the industry has dictated.

However, the music industry has always managed to reinvent itself and prove itself as a very liquid industry - not only in the transition to streaming, but also in terms of new monetization channels such as other types of brand collaborations in hip-hop, for example Capital Bra's iced tea.

Carmelo is a huge fan of exactly this kind of upheaval. He loves it when there is chaos in the industry, as is currently the case with NFTs. When you can get involved and have a say in things yourself, that's when it really starts to get interesting.

Courage to take risks when entering business models that do not yet exist:

The approach of Carmelo and his business partner Andreas Braun (CTO) is strikingly different from any approach you might find at university or in textbooks. First of all, they looked at the American market and then quickly realized that German artists who tried to place their NFTs in the USA were completely lost. This gave rise to the idea of filtering, which they quickly sketched out, and within a few weeks they were able to find investors by making phone calls within their own network. They then got straight down to work on development. Start-up competitions, market analyses or pitch deck presentations at investor meetings were completely removed from the to-do list - you don't have time for that anyway if you want to be one of the very first. There was no grand plan, no one spent half a year analyzing risks, instead the sails were set straight away and we set sail for the open sea. The whole process was a marathon at the speed of a sprint, so many things were only decided during the process. This is how they managed to actually be the first movers, which fills Carmelo with pride. At the same time, however, it also shows that it is perfectly possible to build a company without filling 100 pages with market analysis of a market that didn't even exist before.

What else is in the NIFTEE pipeline?

Together with its partners at Glowing Gears, NIFTEE has launched the first Motorsport Drop from Team Manthey. The object is the Porsche that won the 24-hour race at the Nürburgring and was scanned as a 3D model in unprecedented quality. Unprecedented quality means 13 - 16 terabytes (!) of data stored in the ice. NFT is the key to this. It will also be possible to drive around the metaverse in this car later on. This shows that we are still at the very beginning of what will be technically possible in the future. Accordingly, the value of such an NFT will increase significantly when the metaverse is actually available. A digital car is therefore an absolute must-have for anyone who still buys cars in real life.

DON'T MISS: When will the auction go live? On 21.11.2021 there will be a Porsche, digital, as NFT at NIFTEE!

Challenges - how competition helps you to improve yourself:

Carmelo believes that competition is always good and helpful, as it leads you to question yourself and constantly reinvent yourself. If you want to be in the avant-garde and push technology to the limits of what's possible, then it's all the better when competitors join in. Doing the same thing over and over again for 20 years will not produce innovation.

Customer perspective: Are NFTs only bought by crazy digital nerds?

The answer is: no. Many customers already recognize the value of NFTs and are speculating on an increase in value. There is currently a lot of shift in the art market as the conditions for buying gold or houses have changed negatively and some people have identified art as a safer investment. This development is also expected for NFTs.

Dreams of the future: Where should we go in the next 3 - 10 years?

The movie Ready Player One by Steven Spielberg already gives a good insight into how the world could develop. We live in a world that is almost mainly digital. In a digital world, digital ownership is also important. Carmelo even believes that digital possessions could become more important than purely physical possessions in the future. You can hang a work of art in your living room, but you can share an NFT with the whole world.

Conclusion: What is Carmelo's advice for dealing with crazy ideas?

Crazy ideas are only crazy until they are implemented. Six months ago, the idea of an auction house for NFTs was still crazy, Carmelo did it anyway and now it's no longer crazy. If you have an idea that you believe in, then you should definitely start implementing it. Excessive planning can very quickly eat away at innovation because you're often looking for reasons why something can't work. Instead, you should think in a solution-oriented way and look for reasons why it can work. What is necessary, what has to happen and what constellation has to be in place for the plan to work? Even if excessive planning inhibits innovation, a very good strategy is essential. NIFTEE's strategy was strongly related to agile working. Making mistakes and learning from them has also been very important and strengthens personal development. The worst thing that can happen to you is not to make mistakes. If you then make a single mistake, you have never learned how to react to it and you are out with the first mistake. Experiential knowledge in the decision-making process means that you no longer question yourself.

Napoleon won all the first battles and then lost them all for this very reason, Carmelo thinks.