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 true first movers, and what top auction awaits the world on November 21, 2021.
Steven Spielberg's film Ready Player One already provides a first glimpse of what the world of tomorrow could look like. In a world that is almost mainly digital, digital possessions are also becoming increasingly important. In the future, it is conceivable, for example, that people will be able to jet through the metaverse in their digital Porsche instead of buying cars physically. What is needed, therefore, is the courage to take risks, to develop new business models that have not existed before, and to throw industries into chaos. Carmelo has that courage, loves upheaval, and always wonders how to be at the forefront of a movement as a company. In September 2021, he put his crazy idea into action and launched NIFTEE, Europe's first digital auction house for NFTs, or digital artworks, around pop culture. In doing so, he has proven: Ideas are only crazy until you successfully implement them.
Find out exactly how Carmelo managed to enter the market as a first mover, why excessive planning can be a real innovation glutton, and why it doesn't always take startup competitions, pitch decks, and market analysis to find investors in our new episode, "King of NFT."
Detailed episode description:
Christian Underwood in conversation with Carmelo Lo Porto, CEO NIFTEE.
Professional background of Carmelo Lo Porto:
Carmelo Lo Porto is the CEO of the first European auction house NIFTEE for digital NFT art. He started in traditional business with an apprenticeship as an industrial clerk before realizing his first little dream in 2005 and founding his own label Antstreet Records, where he took his first entrepreneurial steps. Then 10 years ago he switched to the music management side with Ever Ever Music, accompanying young artists into the market. Among others, he also accompanied Nicole Cross, who was one of the first German musicians to gain strong popularity via Youtube. Today, the company is still trying to break new ground and market artists like Jolita and Broys via networks like TikTok.
NIFTEE kicked off 3 months ago, after Carmelo first took a closer look at NFTs in late 2020. The first auction took place at the end of September.
Explanation of NFT:
NFT may not yet be a household word to many people. Carmelo first explains to all listeners what NFT even means. NFTs are digital artworks that are verified via a blockchain and thus become unique. So it is a kind of certificate of authenticity that ensures that this NFT is really the original artwork. As a comparison to the analog art trade, you have to imagine that you are getting a real Leonardo da Vinci. On the back is your own name because you are the current owner. Further down, all the names of the previous owners are listed, which only exists with the original.
Value of digital art:
One question that I'm sure many listeners are asking is: Why does one actually want to have NFT?
But for Carmelo, why you 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 to have it. For example, why would you want to hang a canvas that has been painted by a random other person? This is always a subjective feeling and is related to an individual's love of art as well as the emotions associated with it. Furthermore, one naturally assumes that there is also a certain value behind art and that it can also be used as an investment product.
Carmelo has set high goals for himself with NIFTEE. He wants to depict there only the most precious moments and emotions of pop history and started accordingly with Cro and Kool Savas.
In September, 4 masks of Cro and the lyrics of King of Rap by Kool Savas were auctioned. For this occasion, Kool Savas burned his physical artwork and the original note to create a digital artwork. This process alone is already considered a work of art for Carmelo.
How much money you can make with digital art:
Of course, an auction house thrives on auctioning off works of art for a very reasonable price. Cro's masks turned over 50,000 euros, and Kool Savas' song lyrics even went for 150,000 euros over the digital counter. These examples are already a small glimpse into the future and show that NFTs have come to stay.
Pop culture artworks are not only musical in nature:
The auction of the most beautiful, greatest things in pop culture does not only refer to music. With Cro and Kool Savas, the field of hip-hop has been covered, but the heavy metal scene has also been covered with XXX Records. Comedians and motorsports are also elements Carmelo is working on. Here, too, emotions play a big role and there are great works of art that they want to represent.
What NIFTEE stands for:
NIFTEE has taken an approach to marketing where it sees itself very much as a filter. There are already a lot of NFT platforms, especially in the US, that rely on mass. With NIFTEE there is a very hard door, it sees itself as Sotheby's, not ebay.
Is NFT a new opportunity of 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. This would be like saying that when printing was invented, it was a new way to monetize thoughts. NFTs, however, open up a whole new world.
During Corona, Carmelo did indeed discover many new opportunities in the digital world. He, like many others, sat at home with his son, homeschooled and did home office. It was also the time when his son first got to play Fortnite and GTA online. That's when he realized how the future of commerce and digital goods was likely to evolve in a world that was becoming increasingly interconnected. The metaverse, that is, a universe that takes place on a purely digital level, will play more and more of a role. As an example, Carmelo cites 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, as a company you now have to ask yourself how you are going to be at the forefront of the movement. Carmelo wants to lead the way himself and play an active role, rather than just watching and complaining at the end that others have implemented it badly.
First mover approach:
With the invention of the Internet and streaming, at the latest, the music industry had to learn the hard way that new paths must be taken and that the pure sale of records, cassettes and CDs no longer has a future. Many companies are driving the principle of hope and think that things have always gone well so far. Carmelo sees it differently: "It has never gone well if you just hoped. Either you decide for yourself or time decides for you. If you decide to wait and see as an entrepreneur, then you may miss the most important connection and no longer be able to shape and co-determine things yourself. In the end, you have to work the way the industry dictates.
However, he said, 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 avenues 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's chaos in the industry, as is still the case with NFTs. When you can get involved and have a say in things, that's when it starts to get really interesting.
Courage to take risks when entering business models that do not yet exist:
Carmelo and his business partner Andreas Braun's (CTO) approach is strikingly different from any approach you might find at university or in textbooks. First and foremost, they looked at the American market and then very quickly realized that German artists who tried to place their NFTs in the U.S. went completely under. This gave rise to the idea of filtering, which they quickly sketched out, and within a couple of weeks they got investors by means of phone calls in their own network. After that, they immediately got started with development. Startup competitions, market analyses or pitch deck presentations in investor meetings were completely removed from the to-do list - you don't have time for that anyway if you want to be among the very first. There was no grand plan, no one spent half a year analyzing dangers; instead, the sails were set directly and it was off to the open sea. The whole process was a marathon at the speed of a sprint, so many things were decided in the process. So they managed to actually be the first movers, which fills Carmelo with pride. At the same time, it also shows that it is quite possible to build a company without filling 100 pages of market analysis of a market that didn't exist before.
What else is in NIFTEE's pipeline?
Together with the partners of 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, scanned in unprecedented quality as a 3-D model. In unprecedented quality means 13 - 16 terabytes (!) of data stored in the ice. NFT is the key to this. Later, it will be possible to drive around in the metaverse with this car. 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 everyone who still buys real cars.
DON'T MISS: When does the auction go live?
On 21.11.2021 there is a Porsche, digital, as NFT at NIFTEE!
Challenges - how competition helps to improve yourself more and more:
Carmelo feels that competition is always good and helpful, as it leads to questioning oneself and constantly reinventing oneself. If you want to be at the avant-garde and push technology to the limits, then it's all the better if competitors get in on the act. 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 also speculating on an increase in value. There is a lot of shift in the art market right now, as the conditions to buy gold or houses have changed negatively and some people have identified art as a safer investment. This development is expected to be the same for NFTs.
Dreams of the future: Where will we go in the next 3 - 10 years?
The film 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 possessions are also important. Carmelo even believes that digital possessions could become more important than purely physical possessions in the future. You can hang a piece of art in your living room, but you can share an NFT with the whole world.
Bottom line: 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 crazy, Carmelo did it anyway, and now it's not crazy anymore. If you have an idea that you believe in, then you should definitely start implementing it. Over-planning can be an innovation hog very quickly because you're often looking for reasons why something can't work. Instead, you should think solution-oriented and look for reasons why it can work. What is necessary, what must happen and what constellation must be there for the plan to work? Even if excessive planning inhibits innovation, it is essential to have a very good strategy. NIFTEE's strategy was strongly related to agile working. Making mistakes and learning from them has also been very important and also strengthens in 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 to react to it and you are out at 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 all of them, for this very reason, Carmelo thinks.