Nov 13, 2024
From Homeless to $15M: The High School Dropout Who Built Pudgy Penguins
An interview with Luca Netz, Founder of Pudgy Penguins
Founder Focused
At 16, most teenagers are worried about prom dates and college applications. Luca Netz was dropping out of high school to become an entrepreneur—and it paid off spectacularly.
Today, Netz is the CEO of Igloo Inc., the company behind Pudgy Penguins—the world's second-best performing NFT project that has transcended crypto to become a mainstream phenomenon. With toys in every Walmart and Target across America, 1.5 million units sold in just 12 months grossing over $15 million, and 50-60 million daily views across social platforms, Pudgy Penguins proves that Web3 brands can break into the physical world.
In this candid interview, Netz reveals how childhood instability and a pivotal YouTube video at age 15 shaped his unconventional path to success. From underground rap shows in South Central LA to packing boxes at Ring (before its $1B Amazon acquisition) to cracking the code on influencer marketing, **his story challenges everything we think we know about education, entrepreneurship, and the future of digital ownership**.
Watch the full interview now on EO's YouTube channel! Below is the complete transcription of the interview. Minor edits have been made for clarity and readability.
Key Highlights:
"What's the benefit of college? Probably the two biggest things you get from college is the public classes of like mentors and entrepreneurs and alum coming and teaching the students and then the network that you get from the actual students that are going to that college."
"When I dropped out of high school, I kind of came to the conclusion that I had to get an education somehow, but every single one of those alumni speeches where entrepreneurs. And alumni from Stanford and Harvard, all of them are recorded and put on YouTube."
"The most impactful piece of advice that one of these YouTube videos taught me was, 'don't be the victim and stop feeling sorry for yourself.'"
"I'm Luca Netz, and I'm the CEO of Igloo Inc. It holds Pudgy Penguins, which is an IP brand that has been incubated and started within Web 3 of the last 2.5 years. It's the best performing NFT in the market."
"When I dropped out of high school, I kind of came to the conclusion that I had to get an education somehow, but every single one of those alumni speeches where entrepreneurs. And alumni from Stanford and Harvard, all of them are recorded and put on YouTube."
"The most impactful piece of advice that one of these YouTube videos taught me was, 'don't be the victim and stop feeling sorry for yourself.'"
"I'm Luca Netz, and I'm the CEO of Igloo Inc. It holds Pudgy Penguins, which is an IP brand that has been incubated and started within Web 3 of the last 2.5 years. It's the best performing NFT in the market."
From Homeless to Hopeful: The Making of an Entrepreneur
Can you tell us about your background and what led you to entrepreneurship?
Luca Netz: I think growing up it was pretty tough. It was me and my mom and my brother, and my mom was a single mom just really bouncing around house to house, guest bedroom to guest bedroom for about 10 years. It was about 14 different places in 10 years, all over Europe, all over America, making friends for 6 months, new schools, new people. It wasn't easy.
I think in the early years it kind of felt normal, but as I began to get a little bit older, it became increasingly clear. Mom was always having nervous breakdowns and stressing out. Never had the nicest clothes. I was always kind of felt like the misanthrope within the group of kids and people around me.
When she decided to have kids with my dad, she thought like, hey, I'm going to play the motherly role. And unfortunately when he decided to leave and kind of veer in his own world, that put her in a really interesting position where she didn't go to school and develop professional skills. She had two kids and ultimately when he left, she was kind of left in crypto we'd say holding the bag.
I think in the early years it kind of felt normal, but as I began to get a little bit older, it became increasingly clear. Mom was always having nervous breakdowns and stressing out. Never had the nicest clothes. I was always kind of felt like the misanthrope within the group of kids and people around me.
When she decided to have kids with my dad, she thought like, hey, I'm going to play the motherly role. And unfortunately when he decided to leave and kind of veer in his own world, that put her in a really interesting position where she didn't go to school and develop professional skills. She had two kids and ultimately when he left, she was kind of left in crypto we'd say holding the bag.
What was the breaking point that made you decide to drop out of high school?
Luca Netz: When I was 16, my mom started Airbnbing our small apartment and so ultimately it went from a home to a hostel as a young man old enough to work in America that really drove me to a new brink of pressure and stress in which I decided I just needed to take initiative.
Now I wanted to go to school and I wanted to go to college for business. But I knew I was going into debt to get the degree and so it seemed really counterintuitive for a businessman to go into debt to get a business degree. And so I realized that that probably also wasn't in my future as well as it doesn't seem like a good business decision. And so at 16 I dropped out of school.
Now I wanted to go to school and I wanted to go to college for business. But I knew I was going into debt to get the degree and so it seemed really counterintuitive for a businessman to go into debt to get a business degree. And so I realized that that probably also wasn't in my future as well as it doesn't seem like a good business decision. And so at 16 I dropped out of school.
The YouTube University That Changed Everything
How did you educate yourself after dropping out?
Luca Netz: When I dropped out of high school, I kind of came to the conclusion that I had to get an education somehow. I actually talked to somebody who I really respected that was really successful in the real world, and I said, What's the benefit of college?
And he said the two biggest things you get from college is the public classes of like mentors and entrepreneurs and alum coming and teaching the students and then the network that you get from the actual students that are going to that college. So I was like, well, you know I can't really supplement for the network part, but every single one of those alumni speeches where entrepreneurs and alumni from Stanford and Harvard, all of them are recorded and put on YouTube and so I spent a lot of time just listening to those people.
And he said the two biggest things you get from college is the public classes of like mentors and entrepreneurs and alum coming and teaching the students and then the network that you get from the actual students that are going to that college. So I was like, well, you know I can't really supplement for the network part, but every single one of those alumni speeches where entrepreneurs and alumni from Stanford and Harvard, all of them are recorded and put on YouTube and so I spent a lot of time just listening to those people.
What was the most impactful piece of advice you received?
Luca Netz: The most impactful piece of advice that one of these YouTube videos taught me was, I forget the entrepreneur, but he was speaking and a guy had asked him, what would you tell other entrepreneurs as you know some of the most important pieces of advice for them to succeed, and the first thing he said was, don't be the victim and stop feeling sorry for yourself.
And I was about 15 years old at the time and I was peak feeling sorry for myself. Mind you, 15 years old, you know, basically 10 years ago. Instagram was a thing. I'm seeing all these people, you know, flex and flaunt. I was really depressed at 15 and I was feeling so sorry for myself and asking, you know, the universe why me, why this, why that.
Once I heard that, it really clicked for me in a meaningful way and probably the most impactful thing from a mindset perspective was that shift. At 15, I stopped feeling sorry for myself. I realized that I was pretty much old enough to go and make something happen, and that's when my whole life changed.
And I was about 15 years old at the time and I was peak feeling sorry for myself. Mind you, 15 years old, you know, basically 10 years ago. Instagram was a thing. I'm seeing all these people, you know, flex and flaunt. I was really depressed at 15 and I was feeling so sorry for myself and asking, you know, the universe why me, why this, why that.
Once I heard that, it really clicked for me in a meaningful way and probably the most impactful thing from a mindset perspective was that shift. At 15, I stopped feeling sorry for myself. I realized that I was pretty much old enough to go and make something happen, and that's when my whole life changed.
From Underground Shows to Amazon's Doorstep
What were your first entrepreneurial ventures?
Luca Netz: I decided to kind of pursue an entrepreneurial endeavor in throwing underground rap and hip hop shows in South Central Los Angeles. I did that really well and profitably for a while, but I ended up getting arrested too many times for these illegal events.
I decided to get a job. I took 100 resumes. I went up and down Fairfax and Melrose and handed them out, and then took my behind to Tech Row in Santa Monica, and thankfully I got a job at a tech startup at the time, which was a pretty small one called Ring Doorbell.
I was one of their early employees, like 1st 20 or 25 employees. I was packing boxes for them, and ultimately I did that for about a year and a half, and I basically saw that business go from 25 employees to 500, 600 by the time I left, and they were getting ready to start to sell to Amazon, which they ultimately did for a billion dollars.
I decided to get a job. I took 100 resumes. I went up and down Fairfax and Melrose and handed them out, and then took my behind to Tech Row in Santa Monica, and thankfully I got a job at a tech startup at the time, which was a pretty small one called Ring Doorbell.
I was one of their early employees, like 1st 20 or 25 employees. I was packing boxes for them, and ultimately I did that for about a year and a half, and I basically saw that business go from 25 employees to 500, 600 by the time I left, and they were getting ready to start to sell to Amazon, which they ultimately did for a billion dollars.
How did your experience at Ring inspire your next move?
Luca Netz: During that time, it really motivated me to be a digital entrepreneur. I had learned this concept of e-commerce and Shopify. And how easy that that platform had made actually being able to sell things online and one thing led to another, and I decided to start a jewelry business which took off pretty quickly.
So if you've ever done an e-commerce store before, it gives you notifications and it makes this like money sound. And so when I first started getting like my first couple $100 a day, I used to take pots and pans throughout the house every time I heard the cha ching, and I used to bang them together and then I used to get sales like every minute so I couldn't do it anymore, but it took 2 years. I dropped out of high school to make my first million dollars.
So if you've ever done an e-commerce store before, it gives you notifications and it makes this like money sound. And so when I first started getting like my first couple $100 a day, I used to take pots and pans throughout the house every time I heard the cha ching, and I used to bang them together and then I used to get sales like every minute so I couldn't do it anymore, but it took 2 years. I dropped out of high school to make my first million dollars.
Cracking the Influencer Code: $0 to $2.5M in Six Months
How did you scale your jewelry business so rapidly?
Luca Netz: It scaled up pretty quickly. I had kind of cracked a code around influencer marketing. I mean, I was probably one of the earlier pioneers around influencer, specifically like Instagram marketing that I think most people weren't doing. And once I cracked the code, I scaled it as quickly as I could and I was able to basically go from $0 to $2.5 million in revenue in 6 months, and I was clocking in 60% margins, and it was a pretty good life.
Finding Magic in the Metaverse: The Pudgy Penguin Bet
How did you discover NFTs and what drew you to Pudgy Penguins?
Luca Netz: I think naturally, I had some friends in 2017 who were really big into crypto. 2016, they started to take off, and so I've been familiar with Bitcoin and some of these other coins for a while, but once my friend told me about NFTs, I got really excited, so I started to buy and collect a lot of NFTs.
I started to fall in love because it's actually like fulfills like a maybe a childhood trauma void that I kind of had in the back of my mind, which was growing up I had nothing. So once I started to have money, I started to collect like cool things like things that I thought were interesting that you'd kind of present at show and tell.
So NFTs are interesting because the unit basis of the token, because they're non-fungible tokens, NFTs, they're small amounts and so in Pudgy penguin's case, there's only 8,888 pudgy penguins. Demand is created by who can resonate with that character and how far that character can go, and I thought pudgy penguins address was the most universal IP of the bunch and could reach the most amount of people and resonate with the most amount of people.
I started to fall in love because it's actually like fulfills like a maybe a childhood trauma void that I kind of had in the back of my mind, which was growing up I had nothing. So once I started to have money, I started to collect like cool things like things that I thought were interesting that you'd kind of present at show and tell.
So NFTs are interesting because the unit basis of the token, because they're non-fungible tokens, NFTs, they're small amounts and so in Pudgy penguin's case, there's only 8,888 pudgy penguins. Demand is created by who can resonate with that character and how far that character can go, and I thought pudgy penguins address was the most universal IP of the bunch and could reach the most amount of people and resonate with the most amount of people.
What made you decide to acquire the brand rather than just collect it?
Luca Netz: I bought a ton of them. I bought them for like 20, 30, 100 bucks each, but unfortunately the founders at the time were 18 and 19 year olds, didn't really build the business the way that it should have been built. And so rather than like complaining, I decided that I thought that the opportunity and the market potential in this industry was huge.
I believe that digital collectibles are going to dominate a huge percentage of the market cap of just the collectible business in general, and today, right now, I think the difference between physical and digital collectibles is about 99 to 1%. If the collectible market cap in general for all collectibles around the world is $500 billion only 1% of that market cap is in digital collectibles, and the other 99% is physical collectibles.
However, digital collectibles have a slew of pros that physical collectibles do not. There's no inauthenticity issues. There's no spoofing issues. There's no friction when buying or selling. There's a slew of things that I think make collecting digitally significantly better than physical.
I believe that digital collectibles are going to dominate a huge percentage of the market cap of just the collectible business in general, and today, right now, I think the difference between physical and digital collectibles is about 99 to 1%. If the collectible market cap in general for all collectibles around the world is $500 billion only 1% of that market cap is in digital collectibles, and the other 99% is physical collectibles.
However, digital collectibles have a slew of pros that physical collectibles do not. There's no inauthenticity issues. There's no spoofing issues. There's no friction when buying or selling. There's a slew of things that I think make collecting digitally significantly better than physical.
The $2.5 Million Gamble That Paid Off
What was your thesis when you bought Pudgy Penguins?
Luca Netz: When you look at that gap of 99 to 1 and you look at all of those pros, you realize that that gap is going to close. And that the couple of companies that lead the charge in closing those gaps, I think are going to be worth tens of billions of dollars.
Looking through that lens and understanding, I think the market potential and then looking at the competitors and the businesses at the time that were supposedly trying to lead that charge, I looked at them and I thought to myself, well, I don't think these people know how to run a business, and I think I can do a better job than all of them.
So to prove that thesis, we bought the brand 2.5 years ago for $2.5 million and we've been trying to prove out that thesis ever since. So far it's worked out according to plan. We've sold 1.5 million toys in 12 months.
Looking through that lens and understanding, I think the market potential and then looking at the competitors and the businesses at the time that were supposedly trying to lead that charge, I looked at them and I thought to myself, well, I don't think these people know how to run a business, and I think I can do a better job than all of them.
So to prove that thesis, we bought the brand 2.5 years ago for $2.5 million and we've been trying to prove out that thesis ever since. So far it's worked out according to plan. We've sold 1.5 million toys in 12 months.
What makes Pudgy Penguins special as an IP?
Luca Netz: The penguin is ultimately the magical piece in all of this. I think there's only so many IPs in the world that have that, and just naturally when I closed my eyes and I saw those penguins for the first time, I smiled, I felt good. And when you have an emotional, visceral reaction to a character the first time you see it, that's not to be ignored. That's once in a lifetime magic that needs to be harnessed.
The Walmart Revolution: Bridging Digital and Physical
How did you make the leap from NFTs to physical toys in major retailers?
Luca Netz: Crypto has to be for everyone. That doesn't just mean, you know, men and women and you know, different ethnic and professional backgrounds, it also means the younger generation, and I think toys played a huge part in that, in being able to reach certain audiences and speak to audiences in a way that they're familiar.
Every toy that we sell actually comes with a birth certificate. On that birth certificate there's a QR code. People scan that QR code. They sign up to Pudgy World, they input an email and a password, they're given a custody crypto wallet, and then they're able to redeem 3 to 5 NFTs through a payless gas experience that basically gets them on chain collecting NFTs for nothing short of a $5 purchase of a toy.
Every toy that we sell actually comes with a birth certificate. On that birth certificate there's a QR code. People scan that QR code. They sign up to Pudgy World, they input an email and a password, they're given a custody crypto wallet, and then they're able to redeem 3 to 5 NFTs through a payless gas experience that basically gets them on chain collecting NFTs for nothing short of a $5 purchase of a toy.
What's the impact of this model on user adoption?
Luca Netz: When you think about it, you know, we've sold 1.5 million toys, we have hundreds of thousands of QR code scans, we've onboarded hundreds of thousands of people on chain leveraging this mechanism and this Trojan horse that is the pudgy toy and ultimately getting them familiar with what it is to be a part of this digital collectible universe.
I think it's one of the most beautiful stories ever told in terms of how you're reinventing the relationship between brand and consumer into branding participant, meaning if you're an NFT holder and you're first edition collector, you can actually have the opportunity to turn your NFT into a physical product that the company will then push and distribute to Walmart and Target, and you will get a licensing fee for that.
I think it's one of the most beautiful stories ever told in terms of how you're reinventing the relationship between brand and consumer into branding participant, meaning if you're an NFT holder and you're first edition collector, you can actually have the opportunity to turn your NFT into a physical product that the company will then push and distribute to Walmart and Target, and you will get a licensing fee for that.
The Consumer Crypto Revolution
What's your perspective on the future of consumer crypto?
Luca Netz: I think the problem with the crypto industry is too many people are trying to force things down people's throats instead of meeting consumers where they are. And if you just keep issuing more supply, you're not creating enough demand. Ultimately you have these ups and these monster downs. We haven't issued any NFTs and we have no plan on issuing any NFTs.
I think for us, more than just a place to make money or to lose money, it's a place that empowers basic human rights and takes this idea of physical ownership and translates it in the digital world, which I think is going to be more important than people think here very shortly.
I think for us, more than just a place to make money or to lose money, it's a place that empowers basic human rights and takes this idea of physical ownership and translates it in the digital world, which I think is going to be more important than people think here very shortly.
Where do you see crypto heading - and what's at stake?
Luca Netz: Now I'm of the guidance that I think consumer crypto is the final frontier and the most important frontier for cryptos that crypto has ever seen, at least in its life cycle. I believe this because I think if we don't break through to a consumer quickly, or at least in the next couple of years, that there's a ceiling is going to be set on crypto.
So there's really two paths that I think crypto can go. It can be digital gold. It can be programmable money. I think that ceiling is probably somewhere between 10 and $15 trillion which I think is still great. We have a lot further to go. However, there's another thesis, and that thesis is blockchains are the next iterations of economies, and those economies are going to be able to be built on the internet, and that ceiling, I think, is 90, 100, 120 trillion.
And to get there, you actually have to have breakthrough use cases and you have to have that fast. The problem is that so much of the everyday consumer who's familiar with crypto is conditioned to believe that it's a safe haven for the casino degenerates and it's a place to either make or lose money, but rather than just saying it's so much more than that, we have to prove it's so much more than that.
So there's really two paths that I think crypto can go. It can be digital gold. It can be programmable money. I think that ceiling is probably somewhere between 10 and $15 trillion which I think is still great. We have a lot further to go. However, there's another thesis, and that thesis is blockchains are the next iterations of economies, and those economies are going to be able to be built on the internet, and that ceiling, I think, is 90, 100, 120 trillion.
And to get there, you actually have to have breakthrough use cases and you have to have that fast. The problem is that so much of the everyday consumer who's familiar with crypto is conditioned to believe that it's a safe haven for the casino degenerates and it's a place to either make or lose money, but rather than just saying it's so much more than that, we have to prove it's so much more than that.
Building the Consumer Chain of Tomorrow
What's next for Pudgy Penguins and your vision for Web3?
Luca Netz: For the last two years, pudgy penguins and the igloo has been the face of that consumer crypto revolution, and I think very few people have done or even come close to what we've been able to do from a consumer adoption perspective. But now it's time to take it up a notch further.
We needed a blockchain. We ended up acquiring one as of recent, led by an amazing developer that goes by Cygar, who's, I think one of the most well respected developers in crypto. Now we're building the consumer chain that ultimately I think is going to power the next generation of viral consumer applications that we've yet to see in crypto.
I think it's time for us to grow our ecosystem in a way where other people can build and do the things that Pudgy Penguins has done and be able to get the support from us and the guidance and the mentorship, as well as the tooling necessary for them to really achieve that success and achieve those goals.
We needed a blockchain. We ended up acquiring one as of recent, led by an amazing developer that goes by Cygar, who's, I think one of the most well respected developers in crypto. Now we're building the consumer chain that ultimately I think is going to power the next generation of viral consumer applications that we've yet to see in crypto.
I think it's time for us to grow our ecosystem in a way where other people can build and do the things that Pudgy Penguins has done and be able to get the support from us and the guidance and the mentorship, as well as the tooling necessary for them to really achieve that success and achieve those goals.
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