Friends With Benefits

Authors: Greg Bresnitz, Paul Tao, Zach Tetreault, Alex Zhang

Summary

This proposal is to decide as a community on whether or not we host and produce FWB FEST 2023 this August 10 - 13, 2023.

It outlines a vision for how FWB FEST cements itself as the recurring annual gathering point for our community, along with a business model, budget request, and a review of FWB FEST 2022 and last year’s P&L.

Background – FWBFEST22

On August 10-12, 2022, the FWB community hosted FWB FEST 2022, a three-day festival and conference that brought our digital city to life roughly 500 members from the FWB community together in one place for the first time.

The venue was the Idyllwild Arts Academy, an 80-acre arts campus in the mountains of Idyllwild, California. We utilized the existing lecture halls for discourse and talks, amphitheaters for musical performances, and the surrounding woods and campus grounds for workshops, outdoor recreation, and experiences.

The event, which featured performances and talks from James Blake, Pussy Riot’s Nadya Tolokonnikova, Oneohtrix Point Never, JPEG Mafia, Telefon Tel Aviv, Uniswap founder Hayden Adams, and Other Internet’s Toby Shorin, drove significant public engagement on social media and drew coverage from major media publications. Headlines ranged from “Inside ‘crypto Woodstock,’ where technologists plot a utopian future” (The Washington Post) to “FWB FEST proved that the blockchain doesn’t have to be boring” (The Face) to “A Weekend in the Woods With Crypto’s Cool Kids” (Elle).

You can view a video recap of the festival here.

Festival P&L

Historically, few festivals break even during their first year, although most of them are hesitant to make that public. This is especially true for festivals as small and intimate as FWB FEST, which is why our goal for year one was to establish a core event for FWB that we could build upon in the future.

FWB FEST 2022 generated roughly $569,712 in revenue, from sources ranging from ticket sales to partnerships. Expenses for the event were roughly $1,013,415 with a majority going toward talent and production. The event was also conceived, planned, and announced under completely different crypto market conditions, with tickets going on sale in Q4 of 2021, right as the market began to crater. Tickets were also sold in ETH, with ETH’s price dropping significantly since the point of sale. Ultimately, FWB FEST 2022 ended up costing the DAO’s treasury around $443,702.

FEST P&L
Revenue
Sponsorships	$ 205,000
Ticket Sales	$ 363,362
Merch Sales	$ 1,350
Total Revenue	$ 569,712
Expenses
CA Sales Tax	$ 22,501
Talent	$ 329,730
Production/Operations	$ 246,459
Marketing	$ 28,337
F&B	$ 192,634
Admin/Staff	$ 187,753
$FWB Payment to Speakers	$ 6,000
Total Expenses	$ 1,013,415
Net Loss	$ (443,702)

Notes: Talent: Musical talent, speaking talent, artist hospitality, artist relations team Production/Operations: Venue fee, backline, signage, restrooms, credentials, medics, vans, waste management, A/V, backline, radios, gas, etc. Marketing: Photos, videos, PR F&B: Meals, snacks, bars Admin/staff: Insurance, security, general operations personnel

As a first-year festival, we accomplished a lot. But we also have a lot of room for improvement. Based on community feedback both public and private, we have developed an overarching strategy for FWB FEST 2023 and identified a number of steps we can take to increase profitability and deliver the most value to members of our community. The following outline is not exhaustive and is meant to be a jumping off point for community discussion. We are using this feedback session to take in suggestions from DAO members so we can continue to refine it.

Vision: FWB FEST 2023 and Beyond

FWB FEST 2022 made us realize the importance that a routine mass gathering plays in our community. If FWB’s future is to act as a new kind of social network, we believe FWB FEST has the potential to be our flagship event as a community and our north star — a time and place where we can come together to celebrate the community’s latest achievements and communicate our aspirations.

For FWB FEST to realize this vision and for this to be a viable and sustainable operation, we believe there are a number of values we must hold true. Operating indie, micro-festivals is challenging, but by abiding by the below principles, we believe we have a path forward.

1. Community-driven programming
2. Financially accessible attendance
3. Decentralized participation
4. Break-Even Financials

Strategy: FWB FEST 23

Business Model

FWB FEST 2023 will make a few primary adjustments from 2022 that will allow it to become more sustainable while fostering the same quality of experience.

1) Increase community programming & Decrease booked talent

One of the biggest draws for FWB FEST 2022 was the community itself. Rather than running from stage to stage to catch every performance or talk, a lot of attendees voiced an interest in more down time with other attendees.

Simultaneously, we plan to double down on community driven discussions and talks, which were a huge hit at FWB FEST 2022. These in-the-round sessions hosted in the library by community members created a more informal setting that often led to a higher sense of engagement and discourse.

We will find more robust ways to drive community programming using a submission-based format as well as creating more impromptu community moments at the festival. This creates the opportunity to reduce cost from outside higher priced talent and focus those budgets on more decentralized programming, ultimately reducing programming costs by nearly 40%.

2) Shift food and beverage to à la carte

One of the easier ways to cut costs to the DAO is to streamline the food program. While last year was epic, no other festivals take on the burden of feeding attendees. Moving forward, we will adhere to the standard festival model, with simple affordable options, with the exception of Thursday when food will be free to all FWB Day attendees (see below).

3) Shifts tickets to fiat & stable coin

To reduce the impact of market dynamics on the FEST P&L, pricing tickets in fiat and stablecoin will make financial planning easier while incurring less transaction costs in paying vendors and talent.

Additionally, this allows us to sell tickets to prospective FWB members as well as friends & family of FWB members.

FWB members will be able to purchase tickets for $399 and non-members will be able to purchase for $499.

4) Add an FWB day only for members, denominated in $FWB

In addition to our Friday-Sunday schedule, we will be adding a bonus day of programming on Thursday that only community members can attend through a separate ticket, about the future of FWB. This FWB early access day will allow for members to have early on-site arrival as well as create a dedicated space to connect with other OG members as well as discuss the future of the FWB DAO. Programming will include discussions led by contributors, major initiatives and projects in the works, a Town Hall, and more. Tickets for this early access day will be only available for FWB members, at an additional $FWB price.

5) Create a clear way to transact in $FWB token

In order to create more on-site utility for the FWB token, we will be creating an FWB flea-market where community members can sell wares to each other, denominated in both $FWB and FIAT. FWB will charge vendor fees in $FWB.

Key Takeaways & Improvements

With this strategy in mind, we will be applying our learnings from FWB FEST 2022 to implement the following improvements in 2023:

Ticket sales

1. Tickets will be sold with a 5-month lead time at minimum.
2. Capacity will be increased to 1000 tickets, compared to 500 in 2022, which will help with profitability due to largely stable production and operation costs.
3. Tickets will be priced in USD, USDC, and ETH, creating multiple purchasing options for more accessible entry.
4. We will introduce premium tickets that include housing, including RV housing options for people who want to stay on-site.
5. We will launch an early arrival day (Thursday), exclusive for FWB members and priced in $FWB, allowing for early check-in, community-focused conversation, and entertainment.
6. We will explore on-campus housing at the dorms as a potential lower-cost option.

Budget

7. Budget to be shared with community before FEST, along with contingency plans that will be put up to vote
8. We will lower overall musical talent budget and costs by 25 percent, through decreasing volume of acts and implementing more community programming
9. Like at FWB FEST 2022, food and beverage will be complementary on Thursday, but for sale on Friday and Saturday

Marketing

10. Better communicate that this is a destination festival in advance, so attendees have time to make plans

Opportunities for community involvement

11. Build more thorough pipeline for all FWB members to contribute music and educational programming
12. Create opportunities for FWB members to assist with on-site production or facilitation in exchange for a FEST ticket
13. Create a “Community Flea Market” that allows community members to sell products to each other

2023 Festival P&L

We project higher revenue in 2023, due to increased capacity, increased partnership interest (due to increased attendance as well as heavy press and social presence from year 1), and adjusted models for food & beverage and merchandise.

Tickets will be $399 for members, $499 for non-members. Members who want to attend early access day on August 10th can purchase separate tickets in $FWB.

Below are three potential P&Ls based on three different ticket sales benchmarks: 1000 tickets, 1500 tickets, and 2000 tickets.

Projected FEST P&L - 1000 tix
Revenue
Sponsorships	$ 350,000
Ticket Sales (1000)	$ 503,980
F&B, Merch Sales	$ 25,000
Total Revenue	$ 878,980
Expenses
CA Sales Tax	$ 50,000
Talent	$ 200,000
Production/Operations	$ 385,000
Marketing	$ 30,000
F&B	$ 20,000
Admin/Staff	$ 130,000
Total Expenses	$815,000
Projected Net Profit	$ 63,980
Projected FEST P&L - 1500 tix
Revenue
Sponsorships	$ 350,000
Ticket Sales (1500)	$ 713,480
F&B, Merch Sales	$ 37,500
Total Revenue	$ 1,100,980
Expenses
CA Sales Tax	$ 50,000
Talent	$ 225,000
Production/Operations	$ 385,000
Marketing	$ 30,000
F&B	$ 20,000
Admin/Staff	$ 130,000
Total Expenses	$840,000
Projected Net Profit	$ 285,980
Projected FEST P&L - 2000 tix
Revenue
Sponsorships	$ 350,000
Ticket Sales (2000)	$ 580,000
F&B, Merch Sales	$ 50,000
Total Revenue	$ 1,337,980
Expenses
CA Sales Tax	$ 50,000
Talent	$ 225,000
Production/Operations	$ 385,000
Marketing	$ 30,000
F&B	$ 20,000
Admin/Staff	$ 130,000
Total Expenses	$840,000
Projected Net Profit	$ 522,980

Timeline & Marketing Schedule

Go-To-Market Strategy

Our goal is to use our community and marketing assets from last year to build real demand around FEST as the “web3 cultural event of the year.” Our multi-pronged marketing approach will include press, owned social channels, Discord, FWBApp, and partner communities. In addition to our own network, we will be leveraging our connections in the wider world of music and web3, so that we have number of like-minded communities helping us spread the word from the moment tickets go on sale.

Timeline

Conclusion

FWB FEST 2022 showed us the power that a routine mass gathering can play inside of the FWB ecosystem. It was revitalizing for the community, created a stronger sense of purpose for members and contributors alike, and contextualized FWB as being beyond “a crypto Discord”.

The capacity to evolve FWB FEST into a sustainable experience that brings us together once a year, despite a member’s level of engagement digitally, feels important and the opportunity for FWB FEST to drive FWB’s expansion into cultural markets is sizable.

This being said, we do not propose this lightly: events are a massive draw on resources, in terms of time, money, and personnel. Especially in a bear market, we cannot guarantee that FEST will do well financially, and there is a possibility that it could cut into our treasury.

We feel confident that despite the potential downside, the upside far outweighs the negative. Still, this is a major decision for the DAO, and one we must collectively agree upon as a group. The writers of this proposal invite members of FWB to voice their opinions and concerns, so we can address each of them constructively and together. Our goal is to open up the process and level up FEST so that each participant can feel proud of what we have accomplished.