Artists! How To Really Build Utility Into Your NFTs

ARTISTS! THE REAL WAY TO BUILD UTILITY INTO YOUR NFTs

One of the most common questions I see coming from artists is “How do I build utility into my NFTs?”. I think we need to have an honest talk about “utility”.

First, what is utility? When people talk about an NFT’s utility, they’re probably talking about whatever “extras” come with it. This can literally be anything, but commonly refers to perks such as club memberships, rights (IP), video game tie-ins, additional content, etc. At the most advanced levels, the “utilities” might even include things like staking a crypto-asset, or return compensation (again, most likely a crypto asset of some kind). Of course, these advanced “utilities” are necessarily connected to an NFT that is either some sort of business investment, or itself is some sort of financial product. For that reason, those kinds of utilities are beyond the scope of this article, and beyond the scope of what most independent artists are trying to accomplish.

In most cases, you can classify NFTs one of two ways: An “art” NFT, or an “business investment” NFT. Art NFTs are primarily an artist selling art, while a business/investment NFT is tied to some business venture, probably a start-up of some sort. The former is basically priced based on the reputation of the artist, while the latter’s performance is based on the success of the business or community it represents.

They are very different things, and are valued by the buyer for completely different reasons. Think of it like this; you might have two businesses in the same town, both of which sell “products”. One business is an insurance agency, and they might sell you an insurance policy which you hold in the form of a contract (a piece of paper). The other business, an art gallery, sells artistic illustrations (also a piece of paper) as their product. Both businesses are ultimately selling you a piece of paper… but for very different reasons. I feel that NFTs are a lot like this example, except people forget the context in which the “piece of paper” is being sold. Different things have different values, and for completely different reasons. It’s important to remember this, rather than think “all pieces of paper” need to be treated with the same sets of rules.

You may hear people say “people don’t buy NFTs based on the art alone”. That’s demonstrably ridiculous, and let me explain why. First off, humans have valued art for its aesthetic (and only it’s aesthetic) for as long as we’ve been humans. Historically, art is valued by its aesthetic and needs no “utility” beyond that. Cave paintings didn’t come with real cattle. The Mona Lisa didn’t have any utilities other than hanging on a wall. Yet, art has been valued for its aesthetic since the beginning of time. It’s also worth noting that Beeple, the guy who sold one NFT for $69 million dollars, is “just an artist” who sells art with no real utility to speak of.

People have always bought art purely because of the way it makes them feel. That’s what powerful, unique art does- it makes you feel a certain way! Not every piece of content has this effect- and that’s why we highly value such pieces. Not everyone is capable of making art at the professional level, just like not everyone is capable of being a professional athlete.
You have to understand that people value different things. Some people value tangible, physical goods. Other people value experiences over material objects. And many others, for all of human history, have valued art just because it looks good. In other words, people (usually) value visual art because of the way it looks, and nothing more. Similarly, people value music for the way it sounds. The art (or music) is something you either value, or you don’t. If you don’t like the way a piece of art looks, you aren’t going to suddenly change your mind because the artist is giving you more of something you don’t like. More likely, you’ll instead get annoyed and not give that artist a second consideration.

Remember: Your art IS the utility. When you write and record a song that makes the listener feel down to the bottom of their soul… that is the utility. When your visual art makes the same kind of impact, and can instantly open a viewer’s heart to feelings of joy, amazement, fear, or nostalgia… then that is the utility. If your art is meaningful to other people, that is the utility. If people find aesthetic value in your art, that’s really all you need. When your art has true meaning to the buyer… that is the utility.

Here’s a thought… Instead of saying an NFT should have “utility”, are we really asking if it has “value”? I understand that NFTs are still a new thing, and there’s a learning curve for new buyers. However… my feeling is that the actual “utility” of your NFT should be apparent. If your NFT has a true use (utility) beyond its pure aesthetic (art), then whatever that is, it should fulfill an actual real-world demand. The value proposition (to the buyer) should be obvious and interesting to them. In my opinion, it’s not really enough to think of an NFT in terms of “what is it’s utility”… instead think “what is it’s value” (to the customer).

If people look at your art and like it enough to want it on their wall, or in their phone, or in their OpenSea collection… then there you go. Your art IS the utility! If your art isn’t quite that appealing, then perhaps you need to develop your skills further. Also, if your (non art) NFT’s utility is appealing enough to make people want to take advantage of your offer… then congratulations. You have created a successful product that people can actually use (utility!). Likewise, if the “utility” is something a bit more subjective (like a club membership), then you still have to make it appealing. Nobody wants to join a community that doesn’t offer them something up front. It needs to be enticing for a unique and special reason.

Speaking of that, it’s important to know that sometimes, just being truly “unique” is enough of a draw. This is obvious for art, but don’t forget that it goes for any sort of NFT. If your non-art NFT is offering something that nobody else is offering, and that the market legitimately wants… then you’ve got a gold mine. I say this is worth mentioning because there are definitely a lot of NFT creators out there who are NOT trying to be original or creative, and are really not offering anything new or unique. When offering something on a public market, you really have to ask yourself… if an NFT is not unique, or is viewed as a “knockoff”… and similar products are widely available (even for free)… then where is its value coming from?

Let’s return to how artists can build value into an NFT. A lot of people will recommend adding on unlockable bonus content. Stuff like; videos, music, merch, poems, stories, etc. That’s a fine idea (actually, I do that for most of my NFTs), but as someone who does it, I can also tell you it’s not something you should put all your focus on.

There’s nothing wrong with any of that… But IMO that’s all “toy in the cereal box” kind of stuff. While it’s all good, and will definitely add some value, it’s mostly going to add value for people who already like you…. it’s all secondary (and not really very important) when compared with the actual art you’re selling as an NFT.

Let me give you an example; If I like a certain musician and buy their music- it’s because I like their music. It’s most likely NOT because I like musicians “extras”, like artwork, or merch. The same goes for visual artists; I like their artwork. If (for example) a painter also happens to be a musician, that’s great… but it’s probably not going to influence my liking of a particular art piece by them. I know there’s some cross-over with a lot of artists, but really think about it- How many times did you ever enjoy a song for any reason other than how the song sounds? When have you ever enjoyed a book, for any other reason than the words printed on its pages? The bottom line is, the front-facing “thing” that you’re selling as the actual NFT being listed… that is the thing that people are going to see first, and judge accordingly. If the buyer isn’t interested right there, upon first impression, then whatever “bonus content” you’ve added probably won’t matter much.

So how do you “add utility” to your art? Here’s the breakdown:
* Your art needs to create intense emotions in it’s audience. It has to have MEANING to them. Meaning is utility. Emotions are utility. Aesthetic value is utility.
* Your NFT needs to be unique. Art or not, if it’s something exciting that the audience has legitimately never seen before in their lives, that is also something of value
* Your NFT needs to fill a demand, solve a problem, or otherwise offer a VALUE proposition to the buyer.