During NFT NYC this past June, Reddit cofounder Alexis Ohanian made a surprise remote appearance to announce the latest company for which his VC firm 776 opened a lead round of funding–a company that he said would “set all kinds of standards” in what blockchain technology can do and has the potential to become a global entertainment brand. Given that Ohanian has been investing in the crypto space for more than a decade, that’s not a projection to take lightly.
Doodles counts NFT influencers and celebrities including Pranksy and DJ Steve Aoki as part of their community. (Ohanian himself owns “quite a few” that he says remind him of his five-year-old daughter, Olympia.) Pharrell Williams came on board as the company’s chief brand officer in June. And 776 recently announced it closed a $54.5 million raise, bringing Doodles to a $700 million valuation–not bad for an NFT project in a bear market.
“Doodles is strongly positioned to continue to define the NFT industry, onboard millions to the blockchain, and become one of the most inclusive, creative, joyful media brands in Web3 and beyond,” says Katelin Holloway, founding partner of 776. “Looking into the future of the Doodleverse, we see an incredible amount of potential well beyond NFTs.”
It’s what many NFT holders and creators are thinking about: how to elevate a digital image into something more than a flex on social media. Of course, the backdrop in that the race toward Hollywood and beyond has been grim with the NFT market still struggling to find its feet amid a shaky market. The Doodles team explains how they’re riding out wave of volatility to scale Doodles into a next-gen entertainment empire.
A colorful past
Doodles is the brainchild of cofounders Evan Keast, Jordan Castro, and Scott Martin. As Dapper Labs alumnae, Keast and Castro were key players in developing Cryptokitties, the company’s breakthrough 2018 game that allowed users to breed digital cats as NFTs. But at top of 2021, the two began imagining what their own NFT project would be–one that, as Keast puts it, would “expand the space” in a way that centered community with a collective treasury as well as a true sense of equity.
“Early 2021, there were tons of NFT projects coming out, but there wasn’t a lot of transparency,” says Keast in regards to token allocations and ensuring fair drops.
Equally important was finding a signature look for their collection.
Profile picture, or PFP, projects are key drivers of the NFT market by a landslide. According to NFT analytics platform NFTGo, the market cap for PFPs is $13.3 billion compared to collectibles, the second closest category, at just $3 billion.
Creating characters that could edge their way into a marketplace dominated by lethargic apes and pixelated punks was a tall task, and it fell to artist and animator Scott Martin.
Around the time Keast and Castro were batting around ideas, Keast had the chance to work with Martin while consulting for a Web3 company. Martin’s cartoonish character style with bold outlines, vibrant colors, and eyes that have trouble staying attached to faces had already earned him a decent following on social media as well as clients including Google, DropBox, and Adobe.
With NFT development company West Coast NFTs providing the technical infrastructure and Martin’s whimsical universe of humans, fire flames, pickles, and Popsicles, Doodles launched in October 2021 with 10,000 generative NFTs–and a little bit of controversy.
Locking in community, shutting out hype
About month before Doodles went live, the team temporarily closed its Discord at a little over 1,000 members. Critics accused the team of gatekeeping and FOMO-ramping. But most people saw it as what the founders intended: a way to lock in a solid community out of the gate.
“We were kind of annoyed at the amount of hype and noise that was in the space at the time,” Keast says. “Tons of speculative NFT drops were going on, artists or founders that seemingly came out of nowhere would do seven-figure drops and they wouldn’t actually continue working on the roadmap. So we wanted to try a different approach.”
After the first minting, which sold NFTs at relatively higher price at the time of 0.123 ETH to sure an initial treasury of 420 ETH, the Discord re-opened welcoming new members and Doodles rapidly began generating buzz as one of the next blue-chip projects; and as a PFP, it’s not hard to see why.
“With these PFPs, it’s all about the art–and there’s some questionable art out there,” says Yohann Calpu, chief marketing officer of NFT analytics platform CryptoSlam. “But with Doodles, I don’t think there’s a question. It’s definitely beautiful.”
With its childlike design and pastel colors, Doodles is visual cotton candy. Moreover, Martin believes Doodles’s success stems from having such approachable and playful characters because it makes it easier for people to identify with a Doodle.
“PFPs inherently are something that you want to identify with. And if it’s angry or negative or masculine or hyper detailed, it’s hard to feel good about tying your brand and your name to that sort of imagery,” Martin says.
To that point, Martin also notes how inclusivity was at the top of mind when creating his characters, which he feels has resonated with the community. “We wanted it to be inclusive, but not hit-you-over-the head inclusive,” he says. “Just that everything and anything can exist in this world–and it does.”
The Doodles team had the basics in place: a community treasury, the Doodlebank, where holders vote on certain aspects of the company such as creating official derivative projects Noodles and Pukenza, and an immediate roadmap for expanding the project with Space Doodles, a drop in February for holders of the original 10,000 NFTs to have a space-themed option for their Doodle.
However, for their long-term roadmap of becoming a global entertainment brand, the Doodles team needed a CEO with expertise in building IP. Enter Julian Holguin, the former president of Billboard who led the publication from a B2B trade to a more consumer-facing product.
Holguin was already thinking about an NFT project for Billboard when he met the Doodles team in early 2022 and did light consulting work for them. But his growing interest in the space and admiration for Doodles pushed him to take the full-time leap as CEO in May.
“There was already a lot of cash on the balance sheet and the opportunity to turn this into a fully fledged tech and media company was never more prevalent,” Holguin says.
To do so, Holguin is looking past the mass commoditization of tech around NFTs to focus on amplifying Doodles as brand.
“It’s not going be incredibly special to utilize blockchain technology or NFTs to create new experiences for your existing and potentially new customers,” he says. “What is special are the brands and storytellers. The same way creating a T-shirt is not necessarily special, but being Gucci is. The same way recording your voice on a track is not special, but being Kanye West is. That is what the Doodles team is to the NFT ecosystem.”
To ensure cohesive brand messaging, Doodles opted for NFT holders to have limited IP rights of their own, which may not jibe with everyone.
Yuga Labs set a high standard for NFT projects by releasing full IP rights to Bored Ape Yacht Club holders and, subsequently, CryptoPunks and Meebits following its acquisition of Larva Labs earlier this year. It’s a move that offers clear utility, something that’s becoming increasingly paramount as the NFT space has taken a nosedive over the past few months. However, the Doodles team is betting on long-term value for the brand and holders overall versus more immediate personal gains.
“We’re at such a delicate point in the evolution of a brand,” Holguin says. “We believe that us controlling the narrative around Doodles in the short term is the way to go because there’s a lot of brand activity that could be dilutive of the greater good of the project.”
There’s been talk of licensing Doodles from holders for, say, comic books, TV shows, and music videos–and the potential there, especially for the latter, could be on the horizon with the forthcoming Doodles album Doodles Records: Volume 1 produced by Pharrell.
But for now, the Doodles team is largely keeping their IP close to their chests. What that signals to Calpu, the executive from CryptoSlam, is Doodles gunning for a high-level partnership or even being acquired down the road.
“When a project limits the rights, it tells me that they see the potential in the brand to be with a legacy company,” he says. “And I don’t disagree with it at all. The creativity doesn’t need to be outsourced to the [Doodles] community because the creativity is quite strong within the team itself.”
It does seem as if Doodles has the right look and team to make good on their plans to create global entertainment brand. But it’s hard to ignore the dark cloud looming over their pastel wonderland: the NFT market is still very much tanking.
Clawing out of hibernation
An analysis from NFT media company BeInCrypto found global NFT sales volume reached an all-time low this year, dropping more than $4 billion. And Doodles hasn’t been immune as sales dipped by more than $100 million in June.
By Calpu’s estimation, the over-saturation and hype around collecting PFPs is giving way to more useful applications such as Ethereum Name Service (ENS) domains which house cryptocurrency addresses, decentralized websites, and so on. But there are PFPs that certainly have the potential to ride out the market downturn.
“You’re gonna go into their Discord and see communities still interacting and growing and meeting up and going to conferences,” Calpu says. “That’s usually the indicator of a quality project.”
And, according to Holloway from 776, the community around Doodles is one of the main reasons why they decided to back the company. “No Web3 company can survive without a strong community,” she says. “This team has been community-led from day one. Alexis and I know a thing or two about what a healthy, inclusive, and thriving community looks like.”
The Doodles community–and having 776 in their corner–is strong enough footing for Keast amid the shaky state of NFTs. He says the company is position to scale “well into the future” and they have every intention to continue to build regardless of the volatility.
“Everybody can really feel that turnaround coming,” adds Holguin. “Whether it’s in six months or 12 months, the real builders are going to be ready for when that moment happens. We haven’t slowed down at all.”