Rtfkt is designed with an “ecosystem” mindset akin to Apple’s, meaning that products and perks are created to work in concert. Those who owned a Clone were airdropped Mnlths, and its products can be worn by Clones, and so on. “Because you have all the elements, you don’t want to drift away from it,” Pham says. “It is your digital identity and the 3D avatars and the items they can wear.”
Opening the platform to developers is also similar to the Apple strategy, Pagotto points out, and was informed by the founders’ backgrounds. Le, who lives in Salt Lake City, worked in entertainment and gaming making music videos and skins. Vasilev, based in Miami, worked on social media pages for streetwear brands before creating a sneaker customisation business. And Paris-based Pogotto worked in luxury, before becoming CMO of esports company Fnatic. They met when Pogotto approached them to turn a skin into a shoe. They quit their day jobs in October 2020 when their digital sneakers began selling for six figures.
Forging demand
For all its inclusion, the price of admission into the Rtfkt ecosystem might have more in common with luxury than with Nike. A Clone will run you at least 11 ETH, or more than $13,000. “It is still a couple thousand dollars on a digital artefact. To me that tradeoff is not realistic enough yet to spend a couple thousand dollars, versus, you know, rent,” says Pham. The progressive nature of NFT projects, meaning that early collectors get access to future drops, also means that new fans have a higher threshold of participation, she adds.
Vasilev says that Rtkft is working to onboard new people, but every drop still has a scarcity model. And every item doesn’t start high — the Metapigeons started at $1 in May of last year. (The resale value of the pigeon is now in the thousands.) While Rtfkt gets some revenue from the resale market, it doesn’t set those higher prices. “If an item sells for $100,000 on the secondary market, we are not making $100,000,” Pagotto says. “One of our collectors and supporters makes the money.
People always say you need your first 100 customers, then 1,000. Our first hundred customers are now millionaires. We made people millionaires,” Pagotto says, due to the dramatic rise in resale prices. Growth in terms of customers is likely to be an ongoing metric of success. “With every new drop, we are thinking about how to onboard new people,” he admits. “But, it’s an interesting position that is very luxury, because we have more demand than we have to offer.”
Expect more physical-plus-digital drops linked to NFTs and NFC chips, especially in the sneakerverse, which has been an early adopter of digital fashion. Competitors include Cult & Rain and a new luxury brand from Gmoney, in addition to expansions from incumbents Adidas and Puma.
Aside from teasers and speculation on Twitter and Discord, Pagotto can’t share details about plans for later this year. He can offer that it will continue to invite people to change the way they think of a sneaker, and will play on the idea of multiple skins to embellish a single primary form. “You have a base, just like a base character, and you change the look with skins. We will focus on the base and we developed a cool material, but I can’t talk about it now. When you see it, you understand it came from a digital world first.”
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