The underlying technology that makes NFTs possible (blockchains + smart contracts) continues to prove useful in a widening array of applications.
It’s fascinating to watch NFTs become integrated into business models that strive to turn customers into communities and Day One is yet another example of a company to do this.
I had the chance to interview Andrew Hutton, the co-founder of Day One, a community-focused virtual school for entrepreneurs in diverse stages and interests, about their approach of incorporating NFTs as part of their public crowdfunding campaign and beyond.
Andrew co-founded Day One after working on the build side of a venture studio, advising entrepreneurs to help them start and grow their businesses. During that time, he worked with hundreds of founders and became fascinated by the process of what it took to go from nothing to something in business.
After 3 years of this work, Andrew began thinking about his next step and realized that in Venture Capital, it’s very much a 1 in 100 or even 1 in 1,000 chance of investment and support, so he decided that he wanted to build a “spiritually and fundamentally similar place for entrepreneurs to get resources, community, coaching, guidance and learning that [founders] would get from a VC, but democratize the process.”
You can check out upcoming Day One tracks here.
Democratizing Day One Ownership With a Regulated CrowdFund
Andrew and his team bootstrapped the first 18 months of Day One to validate their hypothesis that there was a need for their product and then raised their first institutional round toward the end of 2021.
With their first formal fundraising round complete, they began to experiment with their business model and offerings.
To date, Day One has launched 8 different tracks, focusing on various parts of the entrepreneur's journey, with an emphasis on emerging industries (web3 is one of them), and is now expanding with partners who have deep expertise that can help people build better businesses.
One of their early partnerships is with a familiar name, Gary Vaynerchuk (also an early investor), that will bring in expertise from Gary’s leadership team to help the group within the track “learn the VaynerX approach to business and entrepreneurship and get into things like how to scale, lead with empathy, etc”.
And as Day One’s business model has progressed, Andrew and the team have kicked off another fundraising round, but this time, anyone can get involved.
Day One launched a regulated equity crowdfunding campaign through Republic.com open to anyone who invests a minimum of $150.
And yes, this investment does give you equity in Day One via a SAFE agreement.
As part of this crowdfund, Day One offers perks to those who invest more in their company, including discounted access to tracks and the Day One Collective, an NFT membership card.
Creating Ambassadors with Incentives Through NFTs
“The first foundational owners of this NFT will also be owners of Day One.” — Andrew Hutton
The Day One team had been considering a web3 strategy for at least a year and wanted to be thoughtful about the approach. They had a track record of delivering utility to a community through their established product, but saw how effective web3 was at creating and sustaining communities.
The Day One Collective will consist of 505 NFTs initially, and the first wave of NFTS will be given to those who invest $2,000 or more in the company, which creates a scenario that rewards equity holders with a tradeable asset, that also grants access to an exclusive community.
Typically, when you purchase equity in a business, you have to wait for a liquidity event (E.g. the business is sold) to recoup your investment and take your profit.
But introducing an NFT to equity holders offers an asset that is immediately tradeable and tied to the value Day One brings to its holders.
Andrew explained that it is a unique concept, because most NFTs are not owned by equity holders of the specific project or company.
This scenario offers the best of both worlds — investors do not have to wait years for an exit of their investment that’s largely out of their control.
They can sell their NFT anytime they please, while still retaining their equity ownership in Day One.
This creates a strong incentive for those crowdfund investors and NFT holders to be active ambassadors of Day One:
“When you have the NFT, it incentivizes you to make the community you’re apart of strong and market it. That’s huge for us as a business. It makes sense fundamentally, but we have to be really thoughtful about it.” — Andrew H.
Andrew went on to explain that the benefits of holding the NFT will evolve over time, but it will act as a membership pass to a highly curated, high-touch community of entrepreneurs.
And within that community, holders will have opportunities to get insider access to Day One fellows with opportunities to invest in the companies they launch and be part of the ecosystem of investors, mentors, advisors and founders.
He also added:
“One other thing we are excited about is that if and when we raise funds either through royalties or subsequent token sales, the funds could be pointed back to scholarships, capital, or seeding the next generation of founders.” — Andrew H.
The goal is to use NFTs to create a group of people connected around Day One’s vision of helping entrepreneurs to build better businesses to pool their intelligence, connections and capital to create a winning ecosystem.
The Day One approach to web3 and NFTs is vastly different than most current NFT projects.
They delivered utility through their product for nearly 2 years first, before issuing an NFT.
And now, they are allowing crowdfunded owners of Day One to be a part of the exclusive NFT experience.
Day One will not be reliant on secondary NFT sales to sustain the utility provided back to holders, instead, they have a proven, revenue-generating product as a foundation.
So if someone believes in the Day One business model, they now have the ability to become an equity holder and NFT holder with a reliance on a proven product.
Author’s Note: I have been part of Day One for four months as an entrepreneur and can attest to the community, coursework, knowledge sharing and support that’s helped me to grow my own business.