Create, Collaborate & Celebrate in the Metaverse
Why We Invested in Lemonade Social
Summary
Benson Oak Ventures invests in start-ups based on a core thesis around Passionware - tools and platforms that enable anyone to start, grow and scale a business.
We believe there is a $60 trillion opportunity around new a category of “me-commerce” — economies that enable creators, brands, and individuals to become a business and earn a living. This “Web3 world” is a natural extension of consumer and SMB platforms, where typically a token acts as an orchestrator of the new economy, providing utility and shared ownership for contributors and investors alike.
We invest early — backing strong, passionate Founding teams who have strong product capabilities and skills to scale a community from early adopters to mass market usage. We are specifically targeting platforms that will leverage the potential of Web3 and make their offering seamless to use and appealing to a broad mass market. As with Web2, we love great UI/UX - which we consider even more important in decentralized platforms.
Lemonade Social - Metaverse Engagement and Monetization for Creators
Lemonade Social is a Web3 platform for creators and small businesses to engage and monetize communities at scale in a nascent market with immense growth potential.
There are over 50 million creators worldwide (and growing fast!). Today, in order to grow, engage with and monetize a user base, creators must rely on 3rd party middle-men taking large rents. Creators must use centralized platforms to distribute and maintain their offering, competing with all other creators. And then boost on Instagram for brand awareness, spend on Facebook to acquire users, sell tickets via Eventbrite and so on. Costs are huge, audience is limited and usually there is no real engagement with fans, who are the lifeblood of the creator economy.
⚠️ As a result, only about 2% of creators comprise 90% of the revenues — manifesting a dramatically underserved long tail.
The Lemonade team saw an opportunity to build a Web 3 platform that is user-owned with a minimal take rate so that revenues go almost entirely to the creators. They also aim to evolve this marketplace to a DAO - with shared ownership and incentives for all creators and users, orchestrated by a LEMON token
Lemonade Social combines relevant attributes of Zoom (video), Discord (chat), Shopify (digital commerce), and Eventbrite (tickets) all in one shared place where Creators can:
create digital events, Live shows, NFT drops
collaborate with other creators, and increase viewership through shared audiences and commerce revenues
celebrate in live virtual spaces, fireside chats, concerts, and parties with community networking.
💰 The platform enables the digital equivalent of Lemonade Stands - where one or multiple business owners/creators can easily spin up an event (own or co-hosted) and invite their communities to enjoy a fully digital ‘experience’. The result is increased brand awareness and user discovery, as well as direct engagement and digital commerce directly with fans — powered by this all-in-one platform that everyone can own.
Team and Product
Benson Oak Ventures is backing four experienced Founders who collectively have deep start-up experience, complementary skill sets, clear execution capabilities, and huge aspirations.
KC, Chris, Ispshita and Jakob relentlessly focus on execution, combining slick UI/UX with business development to onboard brands to the platform.
They received early assistance and incubation from Outlier Ventures, one of the top Web3 accelerators globally and great friends of Benson Oak - we are grateful to them for introducing the opportunity to us.
Product
🏦 A digital-first one-stop shop for all types of creators to host and co-host events and monetize and engage their audiences through pop-up shops, NFT sales, brand sponsors, and networking spaces.
Collaboration comes in many forms — multiple virtual stages with different co-hosts discussing a range of topics, spaces for artists to perform, and areas for pop-up stores where brands and indie creators can sell their real-world and digital goods (now even with NFTs providing shared royalties and revenue shares). Today over 90% of events are co-hostedmeaning each creator works with at least another 1 creator and in this way shares their audiences which grows the pie for everyone. This also removes the friction points for launching events and has a great flywheel effect:
You can see a combination of different “zones” that run at the same time where one could be an interview, a fireside chat, a panel, and an online artist show - with multiple different hosts coming together and pop-up shops selling real world and digital NFT items. All revenues are shared automatically through smart contracts with creators getting broader audiences and giving richer experiences
🔄 The creator comes to Lemonade—> brings another creator —> both gain exposure to larger audiences —> they provide a spotlight to other artists, performers, and commerce in a virtuous circle —> new creators are enlightened
Investing in Web3: 4 Questions Approach
As we outlined in our blog All About DAOs —
Web3 economies provide an open place for commerce - underpinned by shared ownership, all orchestrated by a common token.
Consumers derive benefit from the goods and services offered and the value accrues to the owner-creator not middle-men. There is no centralized take-rate charging “rent” for access, distribution, or services. By accruing all value to the owners, and sharing that value with promoters, curators, financiers, and contributors, the focus is not on maximizing rents but on economic activity and shared value.
The resulting network effects changes everything. With no “tax”, true value is paid by the consumer and earned by the provider and the economy grows - as a function of monetary value and more players entering the ecosystem no longer intimidated by high rents and taxes. Stakeholder value across the community accrues through sharing the benefits of the token.
🔑 The Lemonverse embodies this new type of economy — focused on bringing together creators, brands and fans with ways to collaborate and co-host events, grow communities and share revenues.
Let breakdown our four questions approach as the basis of our investment evaluation methodology and basis for the Benson Oak Conviction Index for future funding
Market Potential and Unlocked TAM
With an estimated 50 million creators, this $25B market is a fraction of the $5 trillion e-commerce market growing at over 20% a year. We see Lemonade as much more - it is an enabling element of me-commerce, combining disparate services into one platform.
As a digital commerce platform at the intersection of virtual events, NFTs, and video conferencing, Lemonade is creating a new market for business owners — unifying a fragmented experience for creators to generate content, engage and monetize their followers and audiences. NFTs alone are a major element of this market, with almost $25B of sales volume in 2021 and continued growth.
🍋 Lemonade is SMB passionware in the metaverse - an unlimited market TAM. Amidst the hype and bust/boom cycles, we see a world where every business - small, medium or large - will utilize NFTs as part of their core offering (in ways we cannot even imagine today). What people today call the “Metaverse” will simply be normal “business” for our kids.
Take-Rate Disruption
Fan engagement on social media is a 100% take rate with creators and influencers generating all of the content as well as driving distribution of others to find them. Other more direct platforms such as Patreon, Skillshare, and Substack are marketplaces with taking rates between 12% and 30%
Web2 is full of unicorn companies that are built on the hard labor of creators giving them a small commission on their efforts. Only large players can breakthrough in centralized platforms that control the distribution
💰 Lemonade specifically turns this business model on its head giving creators an upside in the platform's success as well as the numerous ways to monetize and grow. We see this as tapping into the long tail and potentially creating an enormous TAM.
Scaling the Community
The Lemomade team is highly experienced, with existing traction of 45,000 users, 1,900 creators and 60 brands generating hundreds of thousands dollars in revenues - via product sales, ticketing and donations - across a variety of verticals including crypto conferences and NFT creators.
From Web sites to Facebook pages to Twitter accounts to TikTok channels to Discord handles, there is a history of community engagement platforms going from small niche nice-to-have to massive must-have.
Your Lemonade stand (permanent, temporary, or co-hosted) can become the place to follow, stay up to date, and communicate. They achieve this by offering creator profile pages that include their NFT drops, previous content from live events, digital commerce, and even Discord chat capabilities. The goal is to create a growth loop powered by the common platform.
💡 The team will win as it transitions this type of platform from a passive utility (i.e. use when you think have a digital event) to a business framework - a destination for both creators and users. The DAO structure means the creator owns the platform and has upside in its success. Product features will then invite collaboration, engagement and a “grow the pie” model of monetization to onboard the next 50 million creators to Web 3 and the ownership economy.
The Token: Use Cases and Incentives
Lemonade is building towards a DAO (Decentralized Autonomous Organization) where the decision rights and revenues belong to the platform users - through the native Lemon token.
Lemons enables ownership, voting power, and unlocks product functionality around engagement and monetization. The platform takes a 1%-3% commission which goes into the DAO treasury as Lemons and is used to compensate token holders, invest in creators, and reward long-term token stakers.
Demand is created from the growing use of the key product and monetization features that will be enabled within the Lemon Tokens - such as participating users getting unlocks and access using Lemons.
🔄 As Lemonade grows the brand and in treasury value —> it becomes more attractive to creators and users alike —> they in turn use it for their own use cases —> Lemons are used by the platform (and provided to creators) to unlock more features, provide rewards and incentivize participation.
Final Thoughts
Digital events will key aspect of the coming metaverse. Every brand, business, and creator will need a digital place to engage with their users, acquire new ones and activate NFT experiences as part of both sales and customer engagement. This will provide basic business functions for SMB as well as untapped revenue streams.
🗣 Benson Oak Ventures believes there is a massive opportunity in building a Web3 platform in an era where everyone is a business and our belief that “your take rate is my opportunity”. We see an investment in Lemonade Social as the future platform for creators that unlocks new experiences and business models globally.