Last fall, Dale met Jeremy Vaughn of Rimark Technology. His startup had a platform for creating and managing social tokens built on blockchain. Jeremy had a background in music and was interested in how musicians could increase interaction with their audience directly. A lot of the current interactions were handled by ticketing companies, promoters or labels. The basic example is that the group of people who buy a ticket to a concert aren’t connected directly to the musician. The performer doesn’t get to follow up with the audience to tell them about a new release or some future event. A performer’s audience is the best way to promote (by word of mouth) the artist and their work, if they can communicate directly with them. How could the artist recognize and incentivize those who took such actions, which would help to build community?
A social token, used by an individual or brand, is a kind of gamification of the interactions that are most desired. (Here’s a Forbes article on how social tokens are used by creators.) Using Rimark, the musician can issue a social token to members of a community. What’s more, the social token can be exchanged within the community. We wondered how this insight could be applied to makers?
A Social Token for “Awards”
Our first use for a social token was focused on the Amazing Maker Awards. A social token could be used to reward people who registered to participate, as well as those who submitted a complete project and even those who were judged to have the best projects. A social token could recognize the value created by makers who participate. We could do this by integrating Rimark technology into our website, Make.co.
Once we had mapped out how we would distribute tokens to entrants in the Amazing Maker Awards, we thought we would give a small number of tokens for free to our subscribers and members. We sent out an email last week, explaining how they could go to Rimark, create a wallet and then we’d transfer an initial drop into their wallet. So far, we’ve had 700 people accept the token, so it’s off to a good start. We are exploring more use cases for our social token.
Why Not Use a Point System that Doesn’t Rely on Crypto?
One question we have had is why not use a point system that is not built on crypto. It’s true that systems for managing loyalty points exist. If you think of something like the Starsystem at Starbucks or the REI membership program, the company issues the points, determines their value, and also redeems them for its products. These are centralized systems, and the only flow is from the issuer to the customer and back. What’s different in using a social token is that these points can be exchanged within the community of people who use it. They can be gifted. This feature is not available yet but it should be rolled out in July.
Our goal is to promote the use of the social token and its circulation and use within the community. (If we gave out cash, instead of $MAKE, you could spend the cash but it wouldn’t circulate within the community.) Now we don’t know exactly how people might exchange it with each other, but that’s part of the experiment and what we would like to learn.
To say it another way, we didn’t want a point system that you could only use to buy our products. We wanted to create a social token as a means of gifting within the community.
How Much Is It Worth?
A social token, as a digital currency, has an initial value. Make provided that initial value by buying tokens on Rimark. (These are the $MAKE tokens we have gifted to subscribers.) We had to decide how much to invest in this system.
We decided to invest money that we’d otherwise spend on Facebook to promote our brand and subscription acquisition. (We do the same thing in direct mail.) It’s not a lot of money, a small bet on the future. We see that we are reinvesting our marketing dollars back in the community. To be honest, we don’t like giving money to Facebook.