Colony NFT Development Update
This blog post is a breakdown of where development for Colony is, how it got here, and where I think it needs to go.
In Summer 2021, I founded an NFT project called Colony, which became a rapid commercial success in the blockchain-gaming world — mainly due to timing. We launched a few months before the market became overwhelmingly saturated with similar projects, and somehow were able to sell-out 25,000 Colonists (our NFT avatars) for .025 ETH each within a span of 3 days, generating around $2.4M in Ethereum at the time.
Watching the project take off beyond my wildest expectations, and then attempting to build a massively-multiplayer online video game from scratch with zero prior game development experience, was a surreal life experience to say the least. Over the past 18 months, I've experienced many highs and lows, and I believe writing about it will help bring clarity to the situation.
THE CURRENT SITUATION
Currently, Colony, my NFT start-up, has run out of funds to continue developing our blockchain MMO Colony Online.
Also, to be clear, I am still as passionate and motivated to build the game as I was when I initially started the project, but without a budget to work with, there are fewer options.
HOW WE GOT HERE
Here is a rough timeline that lays out some important details regarding how Colony was started, along with the events that led to it's current situation.
- Making a video game was always a dream of mine growing up.
- In my childhood, I spent a lot of time playing Social MMOs (internet chat room games) like Toontown Online, GraalOnline, and Club Penguin.
- I initially learned about NFTs through my work as a freelance videographer in 2018 through a crypto social media start-up called Appics.
- I then worked as a freelance designer for a few years, primarily doing web design and graphic design for small businesses and start-ups.
- Over time, I developed a rough idea that NFTs could be integrated into online video games for better ownership of in-game items.
- I have always been interested in contemporary art, fashion, pop culture, and video games, which all began to slowly overlap into the NFT space throughout 2020.
- In the beginning of 2021, I began seeing news and headlines in the art world regarding NFT sales for enormous amounts of money. This piqued my interest.
- In March of 2021, as my first attempt at making an NFT product, I designed a prototype for a music NFT marketplace called "Songbase" with my brother-in-law, this didn't gain any momentum.
- In April-May 2021, people began hiring me to design and build their crypto/NFT websites.
- One of my clients' crypto projects took off and made millions of dollars, which inspired me to start Colony jokingly as a side project in May of 2021 as an idea for a simulation game where you could mine crypto on the moon with autonomous bobblehead NFT characters.
- From May-June 2021, I tried raising money for Colony from family and friends in my network but was getting very little interest from the people I pitched to.
- I met a few people on Discord who thought my idea for Colony was cool, so I went on a Discord call with one of them (Andy, who helped work on the Sims at EA Games) and we brainstormed for 4 hours straight. It was extremely productive and inspiring, and this became a regular thing from then on out.
- With continued brainstorming, the vision for Colony evolved very quickly. We decided it would also be an NFT-based Social MMO where people could chat, customize their NFT avatars, earn crypto through an interactive moon mining mini-game, and spend crypto on things like pets and cosmetics for their avatars. Similar to the games I played growing up.
- While exploring ideas, we saw Bored Ape Yacht Club blowing up, and we realized we could launch something similar with our avatars for Colony to get some initial traction. This was when we began working on our NFT avatar collection, Colonists.
- I set up the Discord, Twitter, Instagram, and Website for Colony. I also began pencil-sketching the base designs for the Colonists and plotting a go-to-market strategy for selling the NFTs.
- I incorporated Colony in July 2021, and went into debt to hire artists to help complete the art for the Colonists NFT collection and pay people to help us advertise the NFT avatars on social media.
- To pay everyone less upfront, I gave away 50% of the sales of the first NFT collection to early team members who helped get the NFT collection going, with low expectations of it actually selling out. 30% went to our lead smart-contract developer, 10% to the artists who helped create the Colonists, and 10% to people who helped with bizdev, marketing, and Discord moderating.
- In July 2021, the project began to grow organically on Twitter and got picked up by some big crypto influencers.
- While sharing content about our vision for the NFT MMO through our website, Discord, and Twitter, we were quickly becoming popular as one of the first NFT MMO Projects, and a fan base of tens of thousands of people began to form on social media.
- We finished the art and the development of the NFT smart contract in the last week of August 2021 and launched the NFT collection of 25,000 Colonists for .025 ETH each. They sold out in 3 days.
- I quickly realized my 50% ($1.2M) cut from the NFT sales was not enough to make a high-quality social MMO, so we attempted to raise an $8M round (which would have been enough resources to build the game) from VCs who reached out to us after our NFTs sold out.
- Every VC I talked to wanted to see a game demo first or a more well-thought-out plan for the monetization of the game, so I decided to hire this veteran game studio Andy knew, Stainless Games, to start development while using my cut to fund it.
- In October 2021, we began game development for Colony Online with Stainless Games, a UK-based game developer who's behind games like Magic the Gathering, Carmageddon, and more.
- While the game was in development, I began pitching to more VCs sharing our development progress, while also exploring other opportunities in the NFT space to generate revenue.
- We launched "trait re-rolling" which allowed owners of Colonists to re-roll specific traits on their NFT avatars for .01 ETH per re-roll, which was a novel concept at the time, and was well received by our community.
- Managers from the Lamborghini Estate, Young Thug, Jake Paul, and more began to reach out to me to help launch their NFT collections.
- I turned down working on a ton of NFT projects due to not having the time or not feeling fair about the % of revenue offered to me, and decided to allocate most of my focus to growing the scope of Colony while the demo was in development.
- The one project I did decide to help was an NFT project my friend co-founded called "Toriiscapes" which bombed pretty hard and taught me a ton of lessons.
- 4 Months and $600K+ later, we weren't making quick enough progress with Stainless Games, and the game development contract we signed was apparently a huge issue to VCs I was pitching to, mainly due to the nature of the contract being a "joint venture", which I did not know was an issue at the time I signed the contract.
- Every VC I talked to was not interested in investing in Colony with that game development contract in place, so I decided we needed to terminate the contract and take development in-house.
- I then hired a team of 14 independent contractors over the coming months, and also leased an office space in Downtown San Diego as an amenity for local talent.
- While transitioning to our new team, we updated the primary images for the Colonists NFTs from their original pixelated look to a new 3D art style, for free, which was well-received by our community and resulted in a significant boost in secondary sales on Opensea.
- During this time, to fund development, I was using the left over ETH I had made from the mint (which had depreciated in value), as well as some profits I had made from flipping a few Bored Ape Yacht Club NFTs.
- We built out a new fundraising strategy which included a token launch and additional NFT collections associated with Colony with the goal of selling items with future in-game playability.
- With the help of a securities attorney, two economists, and a stats major, we developed a Whitepaper for a rewards-based ERC-20 token for Colony called $GWAP with a staking mechanic where Colonists can earn the token passively for having a high score on a "drip leaderboard" (a rarity ranking for Colonists), and spend the token on new traits to increase their "drip score" to increase their standing on the chart. We also laid the initial groundwork for additional NFT collections like "Colony Kicks" (NFT Sneakers), Hoverboards (in-game mounts), and "Colony Cribs" (NFT Homes).
- This was around the time when the NFT market began to crash, and I was advised by my lawyer, team, and start-up advisors to hold off on the token, staking, and our other NFT collections until the market picked back up. Also, my attorney was slightly concerned about the legality of launching the token in the way we were planning, saying it may look like a security to regulators, and suggested we should probably raise money in the form of company equity rather than an ERC-20 token.
- We built a playable offline game demo within three months with our new in-house team, see the gameplay here. (Thankyou Joe, Tommy, Ryan, Bryan, Pinar, Anya, Daewoo, Joshua, Jin, Ren, Nic, Ben, Jake, Pinar, and Andy. You guys did a great job)
- I started pitching to VCs again, this time under a new name, NFTChat, which was intended to help us expand the vision for the product and business model in the pitch deck and show a fresh narrative to investors I had already pitched to in the past. We also let 10 community members play a private pre-alpha version of the game.
- The NFT market continued to crash significantly further, and investors I was pitching to were suggesting I lower our ask (the amount of money we were raising) in order to have better chances of securing a fundraising round. Our initial NFT sale had happened almost a year prior, and it did not appear that we had the right momentum to raise the money we needed. This would mean we would have to deliver less than what was listed on the current roadmap.
- VCs were becoming less confident in NFTs in general, so my fundraising run was getting infinitely harder with a much lower frequency of meetings getting scheduled with investors.
- As a way to try generating revenue without selling more tokens, we began to explore monetization strategies which included creating playable 3D avatars for other NFT projects and building custom metaverse chat worlds for brands within our game demo. We had minor demand for these services, but did not have the ability to make it profitable with our team.
- In September, our financial projections charted we would run out of money by November 2022 if we did not secure any funding, so I decided to lay off all of our contractors and pause game development until we had something locked in.
- I continued to pitch to investors while the team was no longer working full-time, but was now getting less interest than before. Meanwhile, the NFT and crypto markets were crashing even further.
- I explained the situation to my smart contract developer and one of my start-up advisors, and we hopped on a three-way zoom call to brainstorm solutions.
- My smart contract developer suggested we could generate some cashflows if we built a SAAS for the NFT space. His idea was to make a product which would help people discover upcoming NFTs, mint NFTs more safely, provide a security audit on smart contact interactions, and provide a discounted allowlist solution for projects.
- I designed the brand, pitch decks, and the user interface for an MVP for the product, and named it SafeMint. Our goal was to quickly build something useful for the NFT space, monetize it, and show that traction to investors.
- While working on the SafeMint MVP, I began to get constant messages from people in the Colony community asking me about progress on game development, so I rushed an announcement and posted a new roadmap which said the game development was paused, and included plans like a merch drop and customizable 2D avatars with an item shop, all of which were things we could do with our remaining budget.
- The announcement for the new direction was received horribly, and hundreds of our NFT holders on on Discord, Instagram, and Twitter began to label the project as a rug-pull, and many were accusing me of being a scammer who stole their money never had any intentions of building a game.
- I then paused work on Safemint, and spent most of my days manually handling accusations and conversing with community members who were upset, trying to get to the bottom of what people expected of me and where I should take the project with the position I was in.
- In November 2022, I decided to stop everything I was continuing to work on for Colony and start searching for ways to support myself outside of the project, because it became apparent pretty quickly that I couldn't fulfill the demands of the Colony community without having more resources first.
I left out a few important details, mainly due to privacy and respect to the other parties involved, but yea, that's the breakdown of where things are for Colony.
What started as something that seemed like a gateway to unlocking my childhood dream of developing a video game, turned into a situation where;
- I didn't plan things properly
- I overpaid for work
- I failed to raise additional funding
- I overworked myself and team members
- I overpromised to our community
- I fell short of the expectations I had set for myself and the project
As a 21 year old first-time business owner who was responsible for generating a couple million dollars in a couple days in a rapidly emerging technology bubble, I began to tread throughout my life in a mild delusion and think I had more figured out than I really did, which led to some costly mistakes, attracted the wrong type of people, and led to a deeply-flawed business operation which was a repellent for the investment and partners I needed to bring my vision to life.
Without getting into the weeds, I have learned a lot of lessons. Still, I am learning them daily, but internalizing the big ones has made me realize that there was no way my vision and expectation of making a commercially successful MMO video game in the world of NFTs was even remotely possible with the budget and timeline I orchestrated. I should have known this before I even started the project, but I didn't know any better, and neither did anyone around me at the time.
WHAT'S NEXT FOR COLONY?
Given everything that was stated above, I believe the next step for Colony includes finding the right development partners and branching off into less cost-intensive endeavors in the meantime to generate traction and revenue. This might take time, and I am okay with that. What matters most to me right now is building a business that is sustainable, and creating high quality products that have a lasting, positive impact on people.
My vision (and the community's expectation) for the project requires significant resources, which I estimate is around $10M+, to develop the entirety of the roadmap for the project. This includes the social MMO game, additional NFT collections, physical merchandise, 3D avatar files, full-body customizable NFT avatars, a hoverkart racing game, and more.
Outcomes for Colony I am not opposed to:
- Selling the IP to a more capable game developer
- Getting acqui-hired and restarting development under new leadership
- Going down a community-driven direction with open-sourced development
- Pausing everything until I make enough money to personally fund the project
- Pivoting to a new direction that is feasible with a smaller budget
Colony has a loyal fanbase and several months of documented progress for the development of our game. I have faith that everyone in our community who believes in the project will be able to rally behind a new direction, as long as it is strong, financially feasible, and can eventually manifest into an outcome which accomplishes many of the initial goals we had set for the project.
WHAT I AM DOING NOW
While exploring options for Colony, I am currently working as a freelance designer and consultant. My main focuses are branding, web design, graphic design, creative direction, and marketing.
I am also exploring a new medium, children's books, which I believe could be a great new starting point for myself as a creative, and also become a profitable business model that can eventually flourish into a vision similar to the initial plans I had for Colony. It's more affordable to create new IP in this format, and I am hoping it leads down a path where I can bootstrap the development of interactive media, physical merchandise, and online games in a way that makes sense from an immediate business perspective, and eventually fulfills the high-level vision I originally had for Colony.
This may surprise those familiar with my work, as most of my Colony's artwork and themes are not kid-friendly, but I've recently realized that much of the media and entertainment that has had a lasting impact on me throughout my life was primarily made for a younger audience.
Walt Disney and Dr. Seuss have both had a huge impact on my creative vision, and I think a lot of that could be traced back to the nostalgic feel of being exposed to their work at a young age. This is something I did not consider before launching Colony, but definitely impacts my thinking and the type of content I'd like to create moving forward.
My dream is to design worlds and products that positively impact people, push boundaries, and inspire the next generation of creators. Starting with kid-friendly, smaller projects could help me achieve this goal, although I am not set on anything yet. Just exploring ideas.
I believe the key to mass adoption of web3 and emerging technologies is to build products that are beneficial to the youth. The current web3 demographic is mostly older, but I think targeting younger users through blockchain-based applications may be a way to onboard the next generation.
I was initially drawn to NFTs because they allow for true digital ownership, which resonated with me after losing digital items and accounts in online games as a child when the servers were eventually shut down do to lack of profitability.
Creating products and experiences that have a clear benefit to the next generation, while utilizing blockchain technology to distribute more value to users, seems like a noble mission. I need to start somewhere small in order to gain traction again, and believe children's books might be a great starting point to generate revenue, create new characters and worlds, and bring my creative vision to life in a less cost-intensive way than video game development.
Also, there might be a way to bring blockchain technology and gamified products to the education system, which is something I have been thinking a lot about. I believe the traditional education system is deeply flawed, and I am hoping to somehow bring a positive change to it in my lifetime, but I realize I need to start small.
THANKS FOR READING
I enjoyed writing this blog post, and plan on writing more when it makes sense. If you'd like to follow my work moving forward, you can find me on social media through my links below. If you'd like to contact me personally, you can submit this form to get in touch.