The Opportunities NFTs Present
Last updated
Last updated
During a gold rush, you don't want to mine gold. You want to sell picks and shovels. This allows you to capitalize on the trend without having to take on unnecessary risks. Regardless of what happens to the price of individual NFTs, one thing is for certain – digital collectibles are going mainstream. There are legitimate long-term "pick and shovel" opportunities for those who are paying attention and in-the-know.
Heritage Auctions sells over $800 million in physical collectibles per year. Through this signal, we'll draw on different aspects of their business model to show emerging NFT-related opportunities like:
Niche Auction Houses: Heritage Auctions is not the biggest auction house in the world. Others like Sotheby's, Christie's, and eBay do far more business. But they are the largest in a narrow field -- collectibles. Heritage founders Jim Halperin and Steve Ivy were both collectors and built their business around this niche. In the NFT world, there are already a few giants jockeying for control over the generalist domain. OpenSea is widely considered the eBay of NFT art, while Nifty Gateway (owned by the Winklevoss Twins) is thought of as a higher-end marketplace. There are a lot of opportunities to cater to niche interests within this market; the key is to tap into niches you already know well. Tools like Pixura allow you to quickly build a no-code NFT marketplace to test concepts, offering greater usability.
Valuation and Appraisal: Art is a $60 billion per year industry, with it being an increasingly common feature in the investment portfolios of venture capitalists and high-net-worth individuals. Companies like Masterworks even make it possible to own fractional shares of blue-chip art. If the value of NFTs hold, we could see similar demands among institutional and retail investors mirroring the current art market. Heritage Auctions employs 100+ expert appraisers, each of whom must have:
Five years experience in the field
Membership in an appraisal society
United States Standard of Professional Appraisal Practice (USPAP) certification
There could be an opportunity to develop similar professional communities and certification programs around NFT appraisal.
The American Society for Appraisers charges $545 per year for membership and over $1,000 for different valuation training, generating approximately $6 million in yearly revenues according to their 2019 tax filings. They also have a job board, which offers additional revenue potential.
NFT Displays: One glaring issue facing the world of NFTs is that there aren't many easy ways to show off your digital art yet.Some companies, like Infinite Objects and Netgear, offer digital frames, but on a recent episode of My First Million, Shaan Puri suggested there was still plenty of room for new entrants that are targeting NFT collectors specifically. "I think that you could sell $300-$400 frames," he said, "I think that you could probably sell $5 million of them in a month… Easily. Because people need a way to display these."
