How did Pudgy Penguins go from a rug pull to selling $500k worth of toys?

Few NFT projects have had as many trials and tribulations as Pudgy Penguins, from sell-out mints to rug pulls to launching a best-selling toy on Amazon.

Here's the story 🧵

Pudgy Penguins launched in July 2021, in the middle of the NFT bull run, selling out in less than 20 mins.

So the NFT collection of 8,888 NFTs was off to a solid start.

The floor price quickly reached an all-time high of 2.49 ETH (worth around $7k at the time.)

However, a few months later, problems started to arise.

A Discord moderator claimed that he was underpaid and was bribed by the founding team to keep his mouth shut.

Then it was discovered that the project’s founders had emptied the Pudgy Penguins treasuring, resulting in the floor price dropping to 0.4 ETH.

Needless to say, the Penguins were in shambles.

Many thought that the project would never recover from this.

How Pudgy Penguins Have Turned the Tables

In the midst of all the scandals, Pudgy’s community stayed strong, searching for new leadership.

One of the NFT holders, Luca Netz, came to the rescue, buying the entire project and IP for 750 NFTs (over $2.5 million at the time.)

So who is this Luca Netz, and what did he do to turn the Penguins into a blue-chip NFT project?

Luca Schnetzler, known as Luca Netz in the NFT world, is a 24-year-old serial entrepreneur, and his background is beyond impressive.

He’s not of those “serial entrepreneur” gurus you see on the Internet.

While he comes from humble beginnings (growing up homeless, living in 30 guest bedrooms in 9 years), his “entrepreneurial resume” is stellar, including:

• Working at the start-up Ring Doorbell which sold for null billion to Amazon.

• Being the CEO of companies like La Gold Cartel (his jewelry store), Manners Holdings, and LPT Technologies.

• Launching a VC firm, Netz Capital investing in e-commerce companies.

Using his experience in e-commerce, Luca assembled a rock-solid advisory board featuring:

• Alex Svanevik - CEO of Nansen

• Sanjay Raghavan - Head of Web3 at Roofstock

• RJ Cilley - COO of SAKS Fifth Ave

• Jordan Sterlin - Partnerships at META

• Chet Kuchinad - CPO at Save The Children, Previously at Nike & Starbucks

• Bee Ngyuyen - General Partner Limited Ventures

• Jess Richardson - Head of Licensing at Hasbro

• Paolo Moreno - Adviser at SFX Ent & Fashion Nova

• Pentoshi - King of the Penguins

Pudgy Penguins also raised $9 million in seed funding from investors like:

• BigBrainVC

• Research Kronos

• CRIT Ventures

With that much experience and dry pounder, Luca started expanding the project’s IP.

The NFT project signed a deal with the Hollywood talent agency, WME, to help them expand the brand in TV shows, movies, and gaming.

The Penguins also doubled down on their social media strategy, reaching over 3 billion views on its official GIFs and 500k followers on Instagram.

Taking advantage of the social media views, and family-friendly IP, Pudgy launched their own toys - Pudgy Toys.

It’s the world’s first mass-market NFT product that’s licensed directly from its community.

The toys are not a cheap cash grab, though.

They’ve their own utility.

Buyers of the toy will get their own certificate that gives them a trait box featuring 4-6 traits.

Owners can trade or equip these traits to their own Forever Pudgy Penguin NFT.

Once the Forever Penguin is equipped with these traits, users can mint it on the blockchain as a dynamic NFT, which can be further customized.

The toy launch was a wild success, selling over 20,000 toys (worth over $500,000) on Amazon in the first two days.

So what are the lessons we can learn from Pudgy Penguins?

1. Play to your strengths

The NFT collection of cute Penguins has a natural kid and family-friendly appeal.

So the team used doubled down on it.

The project is sharing a ton of cute memes, wallpapers, stickers, and GIFs on social media, which helped them grow theirs following without spending any money on ads. ,

2. Go beyond web3

Instead of launching its 19th airdrop, the project decided to explore an entirely new market - toys.

Using Luca’s e-commerce experience, and Pudgy Penguins’ social media brand, the project’s dive into physical goods has been a wild success.

3. Think outside of the box

One quote by Luca Netz stands out:

“I look at the Pudgy Penguin like an influencer.”

If you look at the project’s social media channels, this rings true.

Pudgy Penguins has a strong presence on all social media platforms, especially on the visual ones (IG and Tik Tok), and frequently collaborates with other NFT projects like DeGods.

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