The 5 Key Factors of NBA Top Shot’s Success
Blockchains and NFTs can be very powerful technologies, but the utility of blockchain applications will determine whether or not a particular blockchain will stand the test of time. NBA Top Shot by the Dapper Labs team is a famous example of a successful product that continues to provide value for its token holders.
NBA Top Shot is a collectibles game where you can buy NBA “moments” in the form of NFTs on the Flow blockchain. These tokens give the holders special perks to NBA experiences. According to CoinDesk, the marketplace has done over 700 million sales within 8 months since its launch in October of 2020. Thousands of NFT projects have launched in the blockchain space, but Top Shot has achieved unparalleled success due to 5 key factors:
(1) Incentive through games
Firstly, the Top Shot team understands how to bring people into the blockchain ecosystem, which is one of the main obstacles for blockchain companies trying to put out a product. Blockchain is part of an entire paradigm shift that can have a steep learning curve. Games provide an incentive for people to learn about blockchain technology, without making the main task to learn about blockchain. When users can interact with the product, their curiosity to understand the marketplace naturally grows. We’ve seen this in the past with the come up of Apple products, such as the iPod. Angry birds, doodle jump, and restaurant story popularized having a handheld device and led to an explosion in development of other games and applications. Top Shot allows you to own a scene of NBA history without having to worry about the details of the underlying technology. Simply focussing on collecting the moment that you want to own is easy to understand and easy to do.
(2) User experience — payments and wallets
Many other NFT marketplace platforms require ETH as payment, creating a hurdle for its users. Users must learn how to create a wallet, buy ETH at a price they are comfortable paying, understand gas fees, wrap their minds around how the Ethereum blockchain works, and keep themselves safe from scammers. Instead of getting customers to create new habits and learn about wallets, the Top Shot team built the marketplace to take credit card payments. Leveraging existing consumer behaviour is the fastest way to grow the customer base. Wallets, public and private keys, seed phrases, and self-custody are concepts that can be roadblocks for customers who are not crypto enthusiasts. Allowing consumers to use a payment method they understand and are comfortable with, bypasses the usual approach of having to change consumer behaviour before they’ve seen what the product has to offer. Putting out a product that does not require in-depth blockchain knowledge, allowed Top Shot to appeal to a wider audience.
(3) Focussing on the collectibles
Decentralization has become a buzzword in the blockchain space. Many blockchain companies emphasize that their product is built on a distributed ledger, without realizing that the statement means nothing to a high percentage of the global population. The Top Shot interface does not go into detail about the inner workings of blockchain technology or the importance of decentralization because these details aren’t relevant to many consumers. Consumers want two things: to get what they want and to get it fast. The right amount of abstraction will bring customers into the blockchain ecosystem.
(4) The NBA brings years of consumer loyalty to Top Shot
One of the things every business has to worry about is getting customers. Dapper Lab’s partnership with the NBA allows them to leverage existing customer loyalty and emotional connections to the players while building the Top Shot brand. As a blockchain company, dealing with new technology can be difficult to navigate. By partnering with the NBA, a brand that many fans have a heavy emotional investment in, Top Shot positioned themselves to build a product that was able to generate a massive amount of cash flow in record time. Customer acquisition cost is low and that allows Dapper Labs to focus on building out the technical infrastructure instead of advertising.
(5) NFT ownership and data collection create positive feedback loops between customers and the NBA franchise
An NFT token that can be tracked allows the NBA to gather more data about their fans and individual preferences, improving how the franchise can provide value to their fanbase. The NBA season just started and users who own Top Shot moments are discovering special perks like getting a tour of the arena, a shopping spree at the pro store, meet and greets, etc. As humans, we love feeling like we are part of a community and Top Shot moments allow people to have exclusive access. When token holders receive a VIP NBA experience through an NFT, the Top Shot brand is associated with positive feelings, further strengthening their brand image. As fans enjoy their perks, the franchise can analyze NFT trading, spending habits of token holders, and how their consumers want to interact with the sport and the teams in a way they’ve never been able to before.
The success of Top Shot is just the beginning of what is possible in the blockchain space. Although there are many bottlenecks and scalability issues to navigate in Web 3, the use cases of NFTs are certainly expanding rapidly. As the ecosystem matures, it will be exciting to see which projects continuously innovate, penetrate culture, and stay relevant in society.
