6 ms·

Nike Acquires NFT Startup

44 points by omarfarooq 5y ago

carlosdp 5y ago
Nike is really good at acquisitions and collaborations, super excited to see what this grows into! Fwiw, RTFKT is more than an "NFT startup." Their core focus is digital apparel, including AR-based augmented sneaker tech and such. NFTs are just one of several technologies they are using.
SavantIdiot 5y ago
What does Nike see here? They aren't a bunch of dummies, as they pretty much invented modern marketing with a few other huge brands, so clearly someone up top sees something going on here with NFTs??
- thebean11 5y ago
  Top shots made a lot of money and basketball is a very big deal for Nike.
- hellomyguys 5y ago
  Nike will sell their clothing and shoes for games, metaverse experience, etc as NFTs. Doesn't seem that crazy.
- surge 5y ago
  Someone must have heard Kevin Rose postulating a possible use for NFT's on Tim Ferris's podcast. Basically one could reserve a spot Limited Edition sneakers as an NFT, then if they resold the NFT (hence the sneakers on the open market), the smart contract could give Nike a cut or fee as part of the token exchange, so they'd get a cut of third party markets and capture part of the real market value.
  - spyspy 5y ago
    That's brilliant actually. Basically a futures contract with Nike earning the principle and then commission on every secondary sale without ever even delivering a real product.
    - bpicolo 5y ago
      Though it does assume that people care about transfer of the token instead of the physical good.
      - surge 5y ago
        I should be clear, the token is the reservation to get the sneaker. Not the sneakers itself.
  - deleted 5y ago
    [deleted]
  - majou 5y ago
    This is the first time I'm hearing of a transfer-royalty. It looks like foundation.app's contracts give 10% to the original artist each time which is neat. Shame about the energy use.
    - SavantIdiot 5y ago
      Interestingly, this has been a problem in the art world for over half a century, especially as famous pieces change hands among the uber wealthy, and no-name artists' work is catapulted to mega-millions. Very often the artist is not compensated after the work is sold again in between individuals. This would be a great way to make sure the artist doesn't die poor while their work trades hands multiple times for 100's of millions.
    - nonameiguess 5y ago
      This sounds like bullshit. It's basically saying nobody ever gets to own anything. They only own a limited right to use that they can transfer, but in doing so they need to pay the original owner. We already have a means of artists and companies and what not profiting from secondary market activity. The next time they issue stock or sell a new painting, the price is higher than the last time. They don't need a cut every time everything they ever make resells. This just reduces the ability of anyone else down the line to profit and entrenches the power and wealth of original owners.
      - surge 5y ago
        In the case of the shoes, you'd be free to resale the shoes, its the reservation getting resold, kind of like ticket scalping. But your point still stands, it could be abused to where you own nothing.
- jimbob45 5y ago
  Even the most bearish of crypto-haters will likely admit that you can at least cover the costs of such an acquisition before the NFT fad passes. It would be irresponsible of them not to take the free flyer when it's offered to them.
- anm89 5y ago
  It makes sense with sneaker stuff. Sneakers are the physical good that most resembles nfts imo. You blow thousands of dollars esentially totally for the "clout". The physical use is secondary. NFTs are conceptually nonsense in most cases but if you just want to cash out by selling extra little add ons and you already have a willing market it kind of makes sense.
- phillipcarter 5y ago
  I don't think anyone knows. But I would say that a big, established company is completely orthogonal to making sound decisions about things. I've been baffled at how hype-driven c-suite types can be, and NFTs/etc. are a pretty great opiate for the c-suite these days. My guess is: they have a lot of money lying around, like most companies these days. Gotta spend it on something (other than employees, of course).
- majou 5y ago
  Nike getting into NFTs makes sense, people already see the shoes as financial investments. I just hope they bake in carbon offsets, it's my only real gripe with blockchains and NFTs; the ponzis and snakeoil will sort themselves out.
- mym1990 5y ago
  I think it is more or less a hedge. If NFTs fizzle out, Nike doesn't lose much. If NFTs do become a staple of society/the virtual world, they become one of the early adopters and gain massive advantages in advertising and understanding of the space.
- 2pEXgD0fZ5cF 5y ago
  > What does Nike see here? They aren't a bunch of dummies [...] clearly someone up top sees something going on here with NFTs? Assuming they don't: Buzzwords basically pay for themselves by driving up share prices and on top they generate free advertisement (as in this case). Couldn't an argument be made that these aspects are more than enough reason for Nike to pull something like this, even if they don't believe at any moment that there is any worth in something like NFTs. Things and technologies can generate money (or be useful for somebody) even if they are bull**.
  - alwayseasy 5y ago
    Your argument implies Nike would be parting ways with it's M&A strategy of buying businesses that have real tie-ins with their core. The stock is down since the announcement and underperforms the DJI.
- conradev 5y ago
  I am confused at how people don’t see it Sneakers are physical NFTs – StockX, the largest market for trading sneakers, did $1.8b in GMV last year. OpenSea, the largest market for trading NFTs, did $3.4b. Sneakers and NFTs are both worth way more than their input materials to the point that outsiders don’t get it It starts as a hobby, and if people are good enough at it, it can turn into a job etc
  - anm89 5y ago
    I don't agree that your premises add up to your conclusion. The fact that both are worth more than their inputs and have big markets doesnt necesarily mean that they pair together. Basically all manufactured goods meet this description. I agree there probably is a way to join them but you have to define what that is before arguing there is a value proposition.
- bostonsre 5y ago
  I wonder if they could embed an NFT that is exposed via bluetooth or similar inside of shoes. A user could have a virtual shoe closet and authenticating that a given user actually has the given shoe that they are selling on some new marketplace would be easy. Tying NFTs to real world goods that actually are scarce seems to make a lot more sense than trading limited edition virtual pictures.
  - SundialAI 5y ago
    I love this thinking. We are powering similar through the camera using VisionAI. It’s hard to verify unique ownership with mass produced products, and it doesn’t mean they couldn’t ship knock offs, but it adds a layer of connection from buyer => authentication. Biased obviously, but I think this physical/digital connection is an advance that will improve NFT utility.
sriram_sun 5y ago
"Founded in 2020"... ". This dedicated team leverages the latest in game engines, NFTs, blockchain authentication and augmented reality to create one of a kind virtual products and experiences." Wow! That's a lot of expertise required under one umbrella! I always have this question of how much does one need to know to be effective in any one of these fields? I'm thinking at least 10 years (which probably some members of the team already had prior to founding the company). Of course not sure what to make of NFT "experience" :).
- bsedlm 5y ago
  What I really want to know is *who* do you have to know (similarly who has to know you; or rather who do you and Nike executives both have to know) in order for this kind of acquisition to even happen
  - omarfarooq 5y ago
    For a hint on this, notice that the acquired company had Andreessen Horowitz as an investor in its seed round.
  - alwayseasy 5y ago
    Founders knew people at Nike and in fashion before the company was started.
- AlexanderDhoore 5y ago
  I suspect they mostly have expertise in technical marketing and PR. Also known as buzzword bingo.
  - alwayseasy 5y ago
    Pulling $100M in sales in their 2nd year probably is the expertise everyone looks for, rather than buzzwords.
angryasian 5y ago
Im sure they got it at a good price incase the hype is real and sticks around. One thing NIke is great at is marketing. To make a younger generation believe that Nike sneakers are "culture" is fantastic marketing.
jpalomaki 5y ago
My kids are already (occasionally) preferring virtual goods over physical ones. Having the right stuff in Fortnite and Movie Star Planet is the thing. It’s not hard to see big brands wanting to get a piece of that. And if VR/AR catches up, I would expect the market to expand.
- strict9 5y ago
  The divide between those who dislike or don't understand virtual goods and NFTs is very much along generational lines. Two of my nephews are into Fortnite and how they talk about the game, the economy, and v-bucks is fascinating. They don't care how about the underlying technology or how it works, only the end result. I suspect future relationships between brands and NFTs will work similarly--increased direct reach to customers and enhanced ownership and proof of attendance/souvenirs. But it'll appeal much more to the younger generation than the older generation.
  - blacksmith_tb 5y ago
    My kneejerk reaction is "throwing money away" but thinking about it a little more, most consumption in modern economies is for crap, but physical crap that clutters up your home, and then ends up in a landfill. Maybe virtual goods are the step towards not buying stuff you don't need.
  - choward 5y ago
    > The divide between those who dislike or don't understand virtual goods and NFTs is very much along generational lines. Virtual goods don't appeal to me but they make sense. It's the decentralization that makes no sense. It wouldn't solve any problems for Fortnite. > They don't care how about the underlying technology or how it works, only the end result. You just admitted that decentralization doesn't matter. V bucks are not a cryptocurrency. They work just fine centralized. Anyway, my point is that just because you think NFTs are absurd doesn't mean you think digital goods are.
    - almostkorean 5y ago
somethoughts 5y ago
I've always thought the sweet spot for NFTs/cryto is not these random coins run by random developers. The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. Nike would gift you some Nikecoin for every purchase of Nikes you buy. You can then gift Nikecoin to your friends or buy more Nikes with them. Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. Sort of like oil futures where most traders wouldn't know what to do with an actual barrel of oil. The benefits for Nike are that its sort of like arcade/casino virtual bux - loyal consumers disassociate Nike purchases from hard earned USD and spend more. Nike traders don't have to pay taxable gains until they convert to USD. And you lock-in money into the Nike ecosystem.
- choward 5y ago
  > The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. I don't see any problem NFTs solve that these loyalty problems don't. > Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. > At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? Why not just have the storage warehouse keep track of who owns what and allow ownership transfer? This reminds me of the people who store their alleged decentralized currency with a centralized bank.
  - somethoughts 5y ago
astlouis44 5y ago
Few people (especially developers here on HN) really understand how massive and disruptive the metaverse is going to be. It's going be a combination of a live, 3D social network, and an embodied, real-time immersive internet where your virtual identity becomes as valuable as your real life one. When billions of people are accessing it, whether it's through computers, mobile devices, or mixed reality hardware, how you express yourself will be at the very core of it all. Nike sees this, and wants to be well prepared for it.
- deleted 5y ago
  [deleted]

44 points by omarfarooq 5y ago

Nike is really good at acquisitions and collaborations, super excited to see what this grows into! Fwiw, RTFKT is more than an "NFT startup." Their core focus is digital apparel, including AR-based augmented sneaker tech and such. NFTs are just one of several technologies they are using.

SavantIdiot 5y ago

What does Nike see here? They aren't a bunch of dummies, as they pretty much invented modern marketing with a few other huge brands, so clearly someone up top sees something going on here with NFTs??

thebean11 5y ago
Top shots made a lot of money and basketball is a very big deal for Nike.
hellomyguys 5y ago
Nike will sell their clothing and shoes for games, metaverse experience, etc as NFTs. Doesn't seem that crazy.
surge 5y ago
Someone must have heard Kevin Rose postulating a possible use for NFT's on Tim Ferris's podcast. Basically one could reserve a spot Limited Edition sneakers as an NFT, then if they resold the NFT (hence the sneakers on the open market), the smart contract could give Nike a cut or fee as part of the token exchange, so they'd get a cut of third party markets and capture part of the real market value.
- spyspy 5y ago
  That's brilliant actually. Basically a futures contract with Nike earning the principle and then commission on every secondary sale without ever even delivering a real product.
  - bpicolo 5y ago
    Though it does assume that people care about transfer of the token instead of the physical good.
    - surge 5y ago
      I should be clear, the token is the reservation to get the sneaker. Not the sneakers itself.
- deleted 5y ago
  [deleted]
- majou 5y ago
  This is the first time I'm hearing of a transfer-royalty. It looks like foundation.app's contracts give 10% to the original artist each time which is neat. Shame about the energy use.
  - SavantIdiot 5y ago
    Interestingly, this has been a problem in the art world for over half a century, especially as famous pieces change hands among the uber wealthy, and no-name artists' work is catapulted to mega-millions. Very often the artist is not compensated after the work is sold again in between individuals. This would be a great way to make sure the artist doesn't die poor while their work trades hands multiple times for 100's of millions.
  - nonameiguess 5y ago
    This sounds like bullshit. It's basically saying nobody ever gets to own anything. They only own a limited right to use that they can transfer, but in doing so they need to pay the original owner. We already have a means of artists and companies and what not profiting from secondary market activity. The next time they issue stock or sell a new painting, the price is higher than the last time. They don't need a cut every time everything they ever make resells. This just reduces the ability of anyone else down the line to profit and entrenches the power and wealth of original owners.
    - surge 5y ago
      In the case of the shoes, you'd be free to resale the shoes, its the reservation getting resold, kind of like ticket scalping. But your point still stands, it could be abused to where you own nothing.
jimbob45 5y ago
Even the most bearish of crypto-haters will likely admit that you can at least cover the costs of such an acquisition before the NFT fad passes. It would be irresponsible of them not to take the free flyer when it's offered to them.
anm89 5y ago
It makes sense with sneaker stuff. Sneakers are the physical good that most resembles nfts imo. You blow thousands of dollars esentially totally for the "clout". The physical use is secondary. NFTs are conceptually nonsense in most cases but if you just want to cash out by selling extra little add ons and you already have a willing market it kind of makes sense.
phillipcarter 5y ago
I don't think anyone knows. But I would say that a big, established company is completely orthogonal to making sound decisions about things. I've been baffled at how hype-driven c-suite types can be, and NFTs/etc. are a pretty great opiate for the c-suite these days. My guess is: they have a lot of money lying around, like most companies these days. Gotta spend it on something (other than employees, of course).
majou 5y ago
Nike getting into NFTs makes sense, people already see the shoes as financial investments. I just hope they bake in carbon offsets, it's my only real gripe with blockchains and NFTs; the ponzis and snakeoil will sort themselves out.
mym1990 5y ago
I think it is more or less a hedge. If NFTs fizzle out, Nike doesn't lose much. If NFTs do become a staple of society/the virtual world, they become one of the early adopters and gain massive advantages in advertising and understanding of the space.
2pEXgD0fZ5cF 5y ago
> What does Nike see here? They aren't a bunch of dummies [...] clearly someone up top sees something going on here with NFTs? Assuming they don't: Buzzwords basically pay for themselves by driving up share prices and on top they generate free advertisement (as in this case). Couldn't an argument be made that these aspects are more than enough reason for Nike to pull something like this, even if they don't believe at any moment that there is any worth in something like NFTs. Things and technologies can generate money (or be useful for somebody) even if they are bull**.
- alwayseasy 5y ago
  Your argument implies Nike would be parting ways with it's M&A strategy of buying businesses that have real tie-ins with their core. The stock is down since the announcement and underperforms the DJI.
conradev 5y ago
I am confused at how people don’t see it Sneakers are physical NFTs – StockX, the largest market for trading sneakers, did $1.8b in GMV last year. OpenSea, the largest market for trading NFTs, did $3.4b. Sneakers and NFTs are both worth way more than their input materials to the point that outsiders don’t get it It starts as a hobby, and if people are good enough at it, it can turn into a job etc
- anm89 5y ago
  I don't agree that your premises add up to your conclusion. The fact that both are worth more than their inputs and have big markets doesnt necesarily mean that they pair together. Basically all manufactured goods meet this description. I agree there probably is a way to join them but you have to define what that is before arguing there is a value proposition.
bostonsre 5y ago
I wonder if they could embed an NFT that is exposed via bluetooth or similar inside of shoes. A user could have a virtual shoe closet and authenticating that a given user actually has the given shoe that they are selling on some new marketplace would be easy. Tying NFTs to real world goods that actually are scarce seems to make a lot more sense than trading limited edition virtual pictures.
- SundialAI 5y ago
  I love this thinking. We are powering similar through the camera using VisionAI. It’s hard to verify unique ownership with mass produced products, and it doesn’t mean they couldn’t ship knock offs, but it adds a layer of connection from buyer => authentication. Biased obviously, but I think this physical/digital connection is an advance that will improve NFT utility.

sriram_sun 5y ago

"Founded in 2020"... ". This dedicated team leverages the latest in game engines, NFTs, blockchain authentication and augmented reality to create one of a kind virtual products and experiences." Wow! That's a lot of expertise required under one umbrella! I always have this question of how much does one need to know to be effective in any one of these fields? I'm thinking at least 10 years (which probably some members of the team already had prior to founding the company). Of course not sure what to make of NFT "experience" :).

bsedlm 5y ago
What I really want to know is *who* do you have to know (similarly who has to know you; or rather who do you and Nike executives both have to know) in order for this kind of acquisition to even happen
- omarfarooq 5y ago
  For a hint on this, notice that the acquired company had Andreessen Horowitz as an investor in its seed round.
- alwayseasy 5y ago
  Founders knew people at Nike and in fashion before the company was started.
AlexanderDhoore 5y ago
I suspect they mostly have expertise in technical marketing and PR. Also known as buzzword bingo.
- alwayseasy 5y ago
  Pulling $100M in sales in their 2nd year probably is the expertise everyone looks for, rather than buzzwords.

angryasian 5y ago

Im sure they got it at a good price incase the hype is real and sticks around. One thing NIke is great at is marketing. To make a younger generation believe that Nike sneakers are "culture" is fantastic marketing.

jpalomaki 5y ago

My kids are already (occasionally) preferring virtual goods over physical ones. Having the right stuff in Fortnite and Movie Star Planet is the thing. It’s not hard to see big brands wanting to get a piece of that. And if VR/AR catches up, I would expect the market to expand.

strict9 5y ago
The divide between those who dislike or don't understand virtual goods and NFTs is very much along generational lines. Two of my nephews are into Fortnite and how they talk about the game, the economy, and v-bucks is fascinating. They don't care how about the underlying technology or how it works, only the end result. I suspect future relationships between brands and NFTs will work similarly--increased direct reach to customers and enhanced ownership and proof of attendance/souvenirs. But it'll appeal much more to the younger generation than the older generation.
- blacksmith_tb 5y ago
  My kneejerk reaction is "throwing money away" but thinking about it a little more, most consumption in modern economies is for crap, but physical crap that clutters up your home, and then ends up in a landfill. Maybe virtual goods are the step towards not buying stuff you don't need.
- choward 5y ago
  > The divide between those who dislike or don't understand virtual goods and NFTs is very much along generational lines. Virtual goods don't appeal to me but they make sense. It's the decentralization that makes no sense. It wouldn't solve any problems for Fortnite. > They don't care how about the underlying technology or how it works, only the end result. You just admitted that decentralization doesn't matter. V bucks are not a cryptocurrency. They work just fine centralized. Anyway, my point is that just because you think NFTs are absurd doesn't mean you think digital goods are.
  - almostkorean 5y ago

somethoughts 5y ago

I've always thought the sweet spot for NFTs/cryto is not these random coins run by random developers. The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. Nike would gift you some Nikecoin for every purchase of Nikes you buy. You can then gift Nikecoin to your friends or buy more Nikes with them. Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. Sort of like oil futures where most traders wouldn't know what to do with an actual barrel of oil. The benefits for Nike are that its sort of like arcade/casino virtual bux - loyal consumers disassociate Nike purchases from hard earned USD and spend more. Nike traders don't have to pay taxable gains until they convert to USD. And you lock-in money into the Nike ecosystem.

choward 5y ago
> The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. I don't see any problem NFTs solve that these loyalty problems don't. > Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. > At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? Why not just have the storage warehouse keep track of who owns what and allow ownership transfer? This reminds me of the people who store their alleged decentralized currency with a centralized bank.
- somethoughts 5y ago

astlouis44 5y ago

Few people (especially developers here on HN) really understand how massive and disruptive the metaverse is going to be. It's going be a combination of a live, 3D social network, and an embodied, real-time immersive internet where your virtual identity becomes as valuable as your real life one. When billions of people are accessing it, whether it's through computers, mobile devices, or mixed reality hardware, how you express yourself will be at the very core of it all. Nike sees this, and wants to be well prepared for it.

deleted 5y ago
[deleted]