Building Web3-Enabled Commerce Engines with Novel CEO Roger Beaman
Roger Beaman is the co-founder and CEO of Novel, the Shopify-friendly platform that enables brands and creators to
experience all that Web3 has to offer without writing a single line of
code.
We sat down with Roger for a primer on blockchain functionality, the core
e-commerce use cases for NFTs, and the ideal entry points for established
brands looking to make their first move into Web3. Roger dives deep
on:
Dual NFT use cases: engagement and evangelism
Leveraging creative partners to ramp demand
The nexus of web3 and subscriptions
“They say you make your own luck; we started Novel with the long-term bet that NFTs were where blockchain would find product-market fit with mainstream consumers. This vision materialized in only a few short months, and we were perfectly positioned to be part of it. Our initial talks had brands asking if Web3 would ever be relevant for their customers. The belief we share with them today is that it’s a matter of ‘when’ not ‘if’ and for many brands, the answer is now.”
Breaking Down the Buzz: Data, Miners, Gas, and Novel
What’s a blockchain anyway?
As Roger puts it, a blockchain is a database (think complex Excel
spreadsheet) that doesn’t belong to any individual or group. As a result, no
one user can override or alter that source of record, affirming its
trustworthiness.
The independence and reliability of blockchains lent itself to the early
use case as a simple database for financial accounts, and thus
cryptocurrencies were born. It was Ethereum, the leading open-source
blockchain and crypto giant, that led the move to store more than bank
accounts in blockchains.
Gas Price Woes
At present, tending to Ethereum requires a full-time maintenance team,
commonly referred to as miners. These miners can be viewed as decentralized
Amazon Web Services (AWS) for blockchains, as Roger describes them. Whenever
anyone purchases an NFT, these miners must facilitate updating the
blockchain with this information.
This computation, known as “gas” is incredibly expensive, and as implemented today makes the Ethereum blockchain unscalable.
A single NFT drop generates immense demand — there are thousands of
simultaneous purchase attempts when the drop begins. This can drive the gas
price up to thousands of dollars. In e-commerce terms, gas can be thought of
as shipping costs. This would be like paying $3,000 in shipping for
something that might only cost $200.
That Buzz Though
One might suspect that this and other seemingly absurd barriers to entry
would render the market for NFTs infeasible. The opposite seems true: “NFT”
was the word of the year for 2021 and at present, the top three NFT collections alone have a combined market cap of over $7.76bn.
And, the Novel team believes that once the barriers on the supply and
demand side are eliminated, the market for NFTs could increase by orders of
magnitude.
A Novel Approach
Novel was born out of the realization that without these barriers, Web3’s
trajectory into the mainstream will be dramatically accelerated. The Novel
team thought through each barrier on the customer side, leading to the
following design decisions:
Build on the robust e-commerce ecosystem provided by Shopify
Use Polygon to eliminate gas fees but maintain use of an open blockchain and OpenSea compatibility for the secondary market (unlike Flow).
Leverage technology to make creating a crypto wallet as simple as logging into any website using Google.
“Crypto fans understand the nuances of purchasing NFTs, but they reasonably dumbfound newcomers. Our job at Novel is to deliver a frictionless experience to the everyday consumer while maintaining consistency with the decentralized ethos valued by those who brought crypto to where it is today.”
Bringing NFTs to Shopify: Meeting Customers Where They Are
Shopify is known for powering DTC household names and venture-backed
companies, but its mission has always been to provide best-in-class tools
for all segments of the market.
It is simply the best platform for anyone selling anything.
An exciting implication for Novel is that Shopify is the merchandising
platform of choice for the largest TikTok and Instagram influencers, who are
a meaningful portion of Novel’s target market.
Novel’s customers to date reflect this and are split 50-50 between brands and influencers.
Another cohort that has been inbounding are companies such as FabFitFun who
are not on Shopify today but considering Shopify as part of their plans and
may have this move catalyzed by Novel.
Roger saw other web3 platforms attempting to build commerce engines, but
his prior experience founding a company in the Shopify ecosystem convinced
him to build on Shopify rather than against Shopify.
“Shopify has an incredibly collaborative and diverse ecosystem of brands and agencies. Their crypto team reached out to us proactively and have been great partners in establishing a shared vision for bringing Web3 to their platform. We believe the winning move is to build on Shopify, not against Shopify.”
Dual Use Cases: Engagement & Evangelism
According to Roger, Novel’s customers are looking to offer unique, tailored
experiences for passionate members of their existing communities and get
them excited about evangelizing the brand.
The financial mechanisms of the NFT marketplace create a seamless partnership between a brand and its customers.
For the owners of a brand’s NFT, it is a financial asset that they want to
appreciate in value. They are directly rewarded for contributing to the
brand’s image and the communal experience around owning the brand’s
NFT.
For the brand, every time an NFT is bought on the secondary market, a
portion of that transaction flows back to the brand. This means brands are
incentivized to continually improve community experiences and generate
loyalty among their most engaged audience members through exclusive perks,
such as invite-only AMAs, drops, and other events.
This dynamic spurs a mutually beneficial flow between brand and user base.
By owning an NFT as a financial asset, the customer stakes a financial
interest in the health of its company.
Leveraging Creative Partners to Ramp Demand
Brands and creators who want to launch collections can leverage the Novel platform for the creation, sale, and feature set of their NFTs.
While Novel presents customers with the best tooling available to execute
their vision, they also bring agencies such as Hawke Media and Sharma Brands
to serve as creative partners in tailoring their Web3 experience.
“We knew there was demand at the intersection of Web3 and DTC, but frankly we’ve been blown away. Within 24 hours of launch, we received 120+ sign-ups, including three Fortune 500 brands.”
Web3 Meets Subscriptions
Roger previously founded a company in the Shopify subscription billing
space and was excited about collaborations with companies such as
Skio.
