An Inside Look at Starbucks’ Web3 Journey with Adam Brotman

27:13Yeah, I love talking to you about this stuff, Derek. So because you're right, that's a great question. So I left out something important, which is community. And that community comes from this, I think, comes from this feeling that you're part of a process, part of a game, part of a hobby that other people are also part of and find fun and interesting. And they want to talk about it. So if you think about a lot of what happens with Web3, go all the way back. I'm going to answer your question by going all the way back to when Andy and I first got started in the space. Like we started before it got hyped up, we started buying NFTs and being a part of these little NFT communities.

27:57And before all the hype and all the other crap took over, it was just pure fun. It was just like it wasn't about speculation. It was just about like, oh, this is cool. Again, it reminded me of collecting baseball cards or collecting stamps or collecting sneakers. It was about just the fun of it. And yeah, I, but part of the fun of collecting and being a part of a community of other people that happened to care about collecting the same thing I was collecting was that I owned the thing I was collecting. Like, in fact, I don't think it's called collecting if you don't own it. I don't even know if that term applies if you don't possess and own the things.

28:36But how do you possess and own something that's digital? It's hard. It's hard to get your head around it. It's hard technically. And that was the fun part of the blockchain. Like blockchain, I'm not saying blockchain is the only way you can own something and possess it digitally. Maybe there's some other way you can do it. But it's the easiest way that I know of. And there was a lot of other people using blockchain to do that. So it worked in terms of collecting digital assets. And so you go all the way back now to Odyssey. If you're playing this Starbucks loyalty game and it involves a form of digital collectibles that also you can earn along with your points, along with your cool prizes and rewards, well, that felt like a community.

29:26That felt like an extra layer of fun that comes with that sense of ownership of collecting and sort of discovering, oh, I wonder if I'm going to get this one. I wonder who else has that one. I wonder what else I can get. And I want to see what you have. I want to show you what I have. And so Starbucks actually created a Discord for Odyssey and essentially created a real community around this. And if you ask Starbucks today, I think they would say that one of the best things that's come out of this whole thing, besides a, you know, relationship driving, business driving, fun game layer on top of their loyalty program, is that because it involves digital collectibles, and now because of that involves community that wants to talk about it and is sharing their experiences and connecting with one another on the Discord, like they've created community too.

30:11So they've got community, they've got storytelling, they've got digital collectibles, they've created a game layer, they've tied it all into their base program, which allows them to basically, you know, accomplish business goals and get consumer insights in the whole process. So it's created this ecosystem, but it's, you know, if you don't have a digital collectible part of it, it's harder for, I think, to create community because that's sort of that thing that turns it into that like passion project, not just a loyalty project. there's definitely something intrinsically human about the the sense of belonging and identity that comes along with ownership and it's very difficult to decouple those and it's very difficult to fake that in any other way um and one of the i think one of the interesting things that in previous conversations that we've talked about because you mentioned nifty gateway and and custodial wallet which i'd love to come back to the wallet topic as well but the marketplace is quite an important part of that as well isn't it because if if i have a certain number of things like firstly there's a very practical thing if i don't have all the ones i want to complete a collection and complete a quest like i might have missed the window so like i might need to go find somebody who doesn't want it to go to go get it but you've talked a little bit about the importance of being able to put a financial value on something in order to create the actual human realization that I actually own this thing, right?

31:40Like, how could I, how could I sell or trade something that I don't own? But, you know, on the, from the outside, it also looks a bit like, well, marketplace is kind of financialized behavior. So, so talk, talk a little bit about like, you know, you said it wasn't about the speculation. It's not about the financialized behavior and, and, and, you know, and collecting and flipping and hyping and pumping. It's really more about the community and the ownership side. So talk about the role of the marketplace in this and why that was such an important decision. Yeah, that's right. Because Starbucks has done a really nice job on Odyssey of making it so that the value you get from owning these stamps, either you got them for free because you completed a journey, or if you bought one, you got a bunch of points that are going to give you essentially like equal value on your prize or whatever they call it, the benefit selection criteria.

32:31Like they've done a nice job of being like, look, if you play this game and have fun, it doesn't matter what these stamps are worth. They've done a nice job of building a program that does not require or rely in any way on sort of speculation. However, to your question, you know, when I, I'm going to, I'm going to embarrass myself a little bit, but when I, you know, when I used to collect coins and baseball cards and stamps when I was a kid, I would go, this is, I'm dating myself, definitely pre-internet. I would go down to the little shop next to my house, in the little commercial area next to my house.

33:08And that's where I would look in the window and see what else was there and how much things were worth. And I would look at my little book of my cards and my stamps and my coins. And I would just want to – I'd be intrigued to know something was worth something. You said it was making that emotional and intellectual connection both to the fact that these things that I own and were collecting were really mine. and they might have had some value. And I never really sold them. I may have traded some and sold some, but I mostly bought from that little shop and sort of did research. And so the purpose of the marketplace, in my opinion, and why it was so important to build it into the Odyssey experience was so that you could have that first for a lot of non-Web3 natives that were going to play this game and are playing this game.

33:58they could go, oh, you're kidding. Like this little stamp I got that I think is fun and cool. Like maybe they thought of it as like a badge from Foursquare back in the day is how they related to it. But they're like, no, wait, I actually see there's this built-in marketplace and I see I can, it's worth$20 or something. Like, like, like just making that connection was remind, it's almost like when I used to go down to the little shop down the street from me and I could see like my rookie baseball card was worth$3 and I bought it for 50 cents with the bubblegum pack. And I was like, Oh, that's cool.

34:29Like it just made the connection in my head and made me feel like the thing I was that I really own something. So it, I think it was an important part for, we talked about, we can talk about wallets too. I think it was an important part to sort of show off the fun of collecting a digital collectible or digital asset was that there was a little built in little shop there that you could sort of sell or buy or, you know, check. And as long as you didn't need the price to go up or didn't care about it, then like I used to do when I was a kid, then that's great. And that kind of completed the circle of like, great, I've got this thing.

35:05I've earned it. Now, in most of Web3 and blockchain, as you know, you mostly have to be a little bit technically proficient. You have to know how to use a wallet. And the average person can get spooked off by having to like learn what a crypto wallet even is or have to learn anything about blockchain so with odyssey it was important to sort of do everything i just said but make it as simple and easy to use as buying something on amazon or buying something at the store down the street right so it was like so we were like how do you do that well that's Nifty gateway came in because Nifty had been a leader forever, you know, for years in the space, making it really easy for people to just use like a credit card to buy an NFT and they would hold the NFT in a wallet for you with your account.

36:00So you never had to learn anything about crypto wallets or anything about cryptocurrencies. But what was great about Nifty is that they were this great, you could almost call them like Web 2.5. They were this great company for understanding and believing in the Web 3 ethos and then blockchain and then the power of like self-sovereignty and interoperability and all the benefits that come from cryptocurrencies and blockchain in general, but without forcing that on you in order to be able to have the fun and joy of collecting a digital piece of art or a collectible. So what they did is they would hold it for you in this thing called the custodial wallet and let you use your credit card.

36:39But if you wanted to, you could transfer it out into your own crypto wallet and vice versa. So they were this really neat, almost gateway, hence the name, I guess, to like Web3 for normal people like myself when I got into the space. And so we thought they'd be a great partner to come in and allow for the wallet functionality and the marketplace functionality that was necessary for Odyssey, it made sense to bring them in and have them sort of, you know, build a kind of a white label version of their product right into the Odyssey app. I mean, I think it's really interesting what you say. I mean, obviously, any of the other practitioners out there, if you're watching this and you've come across this challenge of, you know, what comes first, the chicken or the egg?

37:30Because if you really want to own something, then any Web3 or blockchain purist will tell you it's got to be in your wallet, right? If it's in somebody else's wallet, like technically Nifty Gateway has an asset for you in a wallet they hold for you. Technically, it's not yours. But for 99 % of people, that's just one step, which is the head scratcher, right? Compared to the experience that you can get out of it. And there's always the possibility, like you say, to transfer out. And it's not usually that easy to do that. I think one question that I have is, you know, have you seen people do that?

38:03Like, what does it tell you about the behaviors of the people who actually are part of the program now? Right. Because you've got, you know, one big thing most brands have been kind of grappling with, especially anybody who stepped in and sort of 2021 and 2022 is a lot of the things that were done in a very Web3 native way have addressed an audience of Web3 natives. and on the other side over here there's like a bajillion consumers yeah who are still kind of sitting on the sidelines and you're now doing a lot to kind of entertain and engage this subset some of whom really do kind of give a deep shit about your brand and some of whom never did but we're kind of more in it for the for the uh you know the the financial opportunity so if you address them in the way they know how which is kind of a little bit more purist you really address the people that you're trying to address and it's clear that starbucks made the trade-off here to say we've got to make it easy but i wonder if there have been people who have been like oh you know a little bit like the reddit story right like you know who who kind of actually just was messing with a snoo and then realized oh my god i've got an nft and i could you know this this is something i can push into another wallet and maybe sell on another marketplace what have you observed yeah i mean it's uh you know this is and anybody can go on to like open c and see this or you know this is all public information which is like there have been a fair number of people that have moved their uh odyssey stamps onto their own wallet um but but i don't know and it's interesting is like you know how many of them and i also have to be careful what i say because i can't say stuff that's going on that's confidential that you know insights that starbucks has learned that i might be privy to.

39:41But what I can tell you is that, like, of course, you know, there's been lots of instances of people that were not knowledgeable or involved in Web3 at all that did go, oh, this is interesting. I can, this is a great way for me to learn more and sort of, you know, be curious and experiment with some of the stuff. So there's been some of that. There's also been a lot of Web3 natives that are in the program that, of course, have done that. And then, you know, a lot of people that don't so it's um it's it was sort of a we hoped it would be sort of a goldilocks approach or a compromise or whatever you want to call it um and it's gone well so far so we're really you know we're really pleased and you can see um you know it continues to grow and they're still in beta but they uh the program continues to grow and um you know it seems i think everybody seems to be pretty pleased with it and look you know just do the disclaimer anytime you need to because were we're used to that right yeah um but one one of the things that you know certainly while i was out back at adidas and one of the things that we talked to brands um and ip holders a lot about as one of the reasons why the digital asset hey we talked about a few things you know the firstly the sentiment of ownership which just brings to get a different degree of togetherness and community which you can now co-create with and start to generate some some value with but there's another big aspect of the of the of the digital asset side of things and doing things on a blockchain which is this is on open rails so if you've got if you've got digital assets coming from a brand's ecosystem and a partner of that brand whether it's another brand or an athlete or a sponsor or whatever it might be wants to address or create a benefit for those people you now have this thing which is portable using these open blockchain rails and say okay you got a key from from adidas you now get a preferential access to you know beyonce's concert tickets through ticketmaster or whatever right right and you're seeing that happen with these token gated experiences like you know on spotify um shopify now has that ingrained stuff um and so the brand partnerships aspect seems to be one of the most powerful sides of the story although maybe still a little early for people to kind of super get their heads around but to be able to really do that you've got to take the asset with you at some point right like you have to be able to take your key and then put it in another door which may not be you know inside the same um custodial ecosystem created by an ift gateway for example right so so if there is an intention down the line that the most loyal loyal starbucks consumers may also have benefits outside what what do you think what do you think that setup potentially like means for that is that is that an obstacle is it even something which is under consideration?

42:22Is it just we cross that bridge when we get there? What are your thoughts on that? That's a great question. Well, first of all, the question isn't whether you can still do it with the custodial solution because you can. It's just you're doing it in a Web2 way. So what you can do, for example, is now you basically have – I'm going to nerd out here technically just to answer your question. So you've got – if I own an asset but it's being held for me in a custodial wallet, a digital asset in a custodial wallet, the custodial wallet company, in this case Nifty or a combination of Nifty and Starbucks, they can – it's associated with an account.

43:06By definition, in order to pull off a custodial digital asset solution, your asset is associated with an account versus an individual wallet, right? Because it's in an omnibus or in a broader wallet. So then it's not hard to say, okay, anyone that owns – they still know who owns the asset. They can still asset gate or token gate interoperability, but it requires a Web2 solution to do it. You got to basically use an API of some sort or some way to know, okay, does Adam own this asset? Okay, I can go look and find out. I'm just not looking in Adam's wallet. I'm looking in this general wallet associated with an account.

43:48So you can still do it. The beauty, to your point, of true, real, blockchain-based, Web3-based, self-sovereign ownership of a digital asset is that you can more easily do interoperability and token gating and things like that. You don't need an API. You don't need a dev team to do it. It's, it's, it is built into the ecosystem itself or the platform itself. So you can still do it. You can still do it. It's very much in the consideration set. And one of the, you know, the interoperability, the ability to say, okay, everyone who's got, I mean, one of the cool things about web three, it's almost like the game, it's almost a gamified part of web three, which is that like, cause unlike when I, when I used to collect baseball cards, there was no way for that shop on the corner or the major league baseball or anybody to know exactly who owned their cards and be able to like do fun things with that not just token gate but just to airdrop these stuff right to basically say hey and and to basically create like rules and have fun with it say well if you have you know if you have these three players in your cards i'm going to give you a fourth one for free well back in my childhood that required me going down to the store and someone probably with like a notepad, you know, checking if I had certain things, but you can do that all so easily on the blockchain and it's all open and it's all transparent and it's all, it doesn't require development resources.

45:16So I think that's one of the cool things about Web3. The problem, and maybe I'm just bringing up something you're going to bring up in a second. The problem though, is that it's still really hard for the average person to get their head around digital asset ownership. But more importantly than that, to like think about what it means to self-custody stuff. Now, it's, by the way, I think there's a magic to self-custody. I love doing it. I think I encourage people to not be afraid of it. And there is a truth to not your keys, not your crypto like saying. However, there's a reason why a lot, a lot of people use Coinbase to buy Bitcoin or Ethereum, right?

46:00as opposed to using a wallet. I think those people believe they own it, but they're not self-sovereignty owning it. And there is a real reason that you should really think hard about the benefits of self-sovereignty. But what it comes with is like a really complicated user experience still, in my opinion. We have not as an industry or as a sector cracked the code on that. So that's why there's trade-offs here. And I think when brands are thinking about the space, they got to think about why am I doing this like I want to create a better relationship with my customers I want to create it's storytelling and community and gamification and web3 can be really helpful in those ways but um it doesn't matter if nobody can use it so or the average person can use it so that's sort of the challenge I think that we're still everybody's still kind of working their way through and now you see a lot of um experiences where it's you know you can you know connect with your wallet or you log in create an account and log in and we'll do it the other way for you so that there's you know you get to kind of pick your pick your own adventure with respect to custody um which i think is uh you know certainly in some of the experiences that i've been i've been taking a look at more recently is reducing that barrier and getting a lot more people involved um which is not a bad segue because you know now we talk about starbucks and in being in Starbucks Odyssey being in beta it's definitely one of the most mature programs out there by now like you said you know things are getting exponential and like a year is like a really long time in in this space um let's maybe have a start thinking about what might lie ahead here right like you gave us a bit of a picture of like all the different journeys the different ways this can be gamified um the different combinations of journeys which might unlock the next thing you know it's like you're almost constantly evolving this always on game that you were talking about in the very beginning right which is quite a different skill set to you know running running a basic loyalty program or making and selling coffee right like there's a now there's now this kind of like there's quite an operation to keep that level of engagement going it's like almost starbucks in a way is becoming an entertainment business in this narrow narrow aspect how how do you think about like the scaling of this um with respect to you know starbucks i don't know how many millions of members there are on the rewards program but it must be millions yeah to get from this data to like to those do you think that do you ever expect that it'll be the majority of starbucks customers that would be engaging with something like that and if not like what what's an interesting scale and how does the sort of the operation behind it um uh how how how How big does this need to be for it to become something which just like lives on forever and becomes the new normal?

48:51It's a great question. And I think, you know, kudos to Starbucks. I think they're willing, they've always been willing to experiment and learn. I mean, when we built a mobile app, we had no idea. You know, we built a loyalty program and a mobile app that now accounts for, I think it's approximately 60 % of their business. It goes across loyalty in the U.S. And it's something like it's over 30 million active loyalty members in the U.S. So it's now when we built it, I remember when it was like, oh, my God, it's one percent of transactions. Like we were like high fiving about one percent. So, you know, and there was no way, like, it was all about, like, delighting the customer, giving them, you know, having a, having a, building a better relationship with the customers or thinking about, like, how can you engage with a customer in a way that they're going to get something out of it, it's going to make them feel closer to you.

49:46And you get to basically tell stories and have a relationship with the customer that you wouldn't be able to through some kind of transaction, you know, more typical transactional nature. So at the time, we were innovating on things like mobile payment, points-based loyalty program, mobile ordering. We were doing all that. But that felt magical compared to I walk into a car and I swipe a plastic credit card, and I don't get any points, and I have to wait in line. And so to go back to your question, like, then we evolved to mobile ordering and mobile payment and a digital loyalty program, earn and burn loyalty program that became the majority of Starbucks customer transactions.

50:30Like, how do you go the next level? And so Odyssey is an example. It's not – maybe it is the answer forever, but it's an example of building upon that. So think about it. But Odyssey is built on the Starbucks loyalty login credentials, right? They didn't have to do anything new to incorporate purchases and gamifying purchases and storytelling around purchases into their experience because you already have the login. It could know where you bought something and what you bought. And so that was not just beneficial to Starbucks. It was beneficial to the customer. So for example, Starbucks Odyssey, the latest journey they just released just now is called Going Places.

51:11Okay. So the first activity in the Going Places journey is called the Community Challenge. And basically what it says is like, you know, you need to visit three different Starbucks stores. Okay. Just three different ones in the time period. And then what it does is it's like plotting where everyone in the entire Odyssey community of participants is going. And if you get to 8 ,000 different stores in the US visited in a certain amount of time, there'll be an extra bonus unlocked on top of the journey stamp you're going to get. And it's being tracked live in the app. I think they're up to 6 ,772 out of 8 ,000, and the journey's only been live for a few days now.

51:56So it's fun. And everybody in the Discord on the community side is saying, oh, this is amazing, right? Like we're close to the goal. And it's like this community activity that involves buying Starbucks at different places. It's fun. There's another part of that same journey that's called an in-store expedition. You're going to go on a virtual treasure hunt at a Starbucks store near you. You grab your phone. There's going to be a VR. I haven't done that part yet. I think it's going to be like a VR access or something like so, or maybe an AR, excuse me, access to the experience. So now you've got like augmented reality complementing like a whole community of all these people trying to unlock a special prize by going to as many Starbucks as they can.

52:41And it's all being tracked live. I mean, all of that's happening on a loyalty program. And guess what? People are buying coffee, enjoying their coffee and getting their normal Starbucks stars for doing it the whole time. So where can it go? It just can go anywhere, right? You can create games, you can create community, you can create storytelling. It's all built, it's building on the system itself. And in the meantime, you're earning these digital collectibles and you're having community. And, you know, so I think to answer your question about how big does it need to be? I don't think it needs to be, you know, everybody and loyalty for this to be a success.

53:21I mean, there's going to be business success. There's going to be consumer insights that are going to happen no matter how many people participate in it. But, you know, Starbucks, like I mentioned, they have this history of doing games and things for their loyalty members. And they don't get everybody to participate, but they get a lot. You know, they get a lot of people to participate. So I don't think it, I think if I was trying to make this, turn this into a sort of a lesson, so to speak, for other businesses, I would say, like, be willing to experiment, be willing to build on what you've done.

53:54Not everything has to move the needle on day one for you to learn, because eventually one of those things is going to turn into something that's really going to move the needle for you. And that's a huge corporate innovation lesson for anybody, because, you know, we're talking about Web3, but we could have been talking about social media, you know, back in the early 2000s. That's right. Or we could have been talking about actually websites and e-commerce, you know, a little bit before that. That's right. And the same thing would apply, right? Attitudinally, the same thing applies. I think there's something very interesting about what you said about this latest challenge, which is, you know, once you've got more than one channel and these digital assets involved, there are ways to almost, you know, create a game, which is a little bit like, well, who are we?

54:37Where are we? this community of people who rally around this thing. And, you know, Oh man, like we've, we've only got 1 ,228. Mentally with the tech can't resist it. Whatever it is. Stores have to get, where are they all? Right. And now we've got people like, you know, pimping out the story in like, you know, Virginia, whatever. That's happening on the discord. Yeah. People are comparing notes to be like, we're, and they're creating Google sheets on their own and trying to figure out those 1200 that haven't happened. And, and they're sleuthing it out hey do you know someone near there like tell them to go and you know join the program and get them on the beta yeah yeah exactly no i think i think that's i think that's fantastic and you know when i asked a question about how big does it need to be i'll confess it's a little loaded and and the reason is you know like and and i've i've seen a few different stages of of of my career certainly at adidas which is when there is sort of very high engagement, high co-creation, high touch experiences that you create for people.

55:39That, you know, there's always a temptation when you sort of look at the business as like, you know, what we're trying to achieve as a global organization, that something should move the needle. But actually, there's a wisdom in sort of taking a bit more of that kind of Pareto view of things, which is, there's a certain fraction of your audience here, who are going to disproportionately advocate for your brand, right? And not just advocate for them. Actually, the headroom on the lifetime value of that audience is probably a lot higher than trying to get somebody down at the fringe to spend more with you or to advocate for you.

56:14So like actually focusing on how does this, you know, top five to 15%, let's say, I'd love to hear, you know, other practitioners about sort of where they kind of see that ballpark, you know, it might be one to five or five to 15 depending on your industry right um but those are the ones where you know lifetime value there's real kind of um value to be created and there's and that headroom between the available cultural capital and emotional capital that people are ready to invest with you sorry siri's siri's telling me i'm taking too long to explain this yeah but she doesn't get it which is a bad sign this is a bad sign like i think i think there's a wisdom in saying don't worry about how big it is at the beginning but there's one thing which i think differentiates what you've done with starbucks um relative to most of the other brands that have entered into the space which is which is the build on top of the existing loyalty program right like when you see brands entering into the space and sort of doing you know a drop or a collection or an avatar a pfp thing or whatever outside of their core loyalty base now you've got an audience over here yeah and you've got your main audience over here yeah and the next question is well what's the overlap and how do i scale this thing yeah because now i need to try and figure out you know so you see what adidas did like adidas basically said you know what like there are specific products for these for this special group of members here yeah bring your token to the confirmed app and you get special access to only buy this product and it's a way of almost signposting you know what if there are different ways of engaging with a brand that earn you different tokens there are special you know basically products that you can buy or experiences that you can access by having this thing and then you're like oh well you know what that's kind of what our overall membership program is meant to be about anyway like why don't we take that learning and build it into the core mechanics of how it works but you did that from the outset and i think that means you get to find out without having to smash that many eggs right you just get to sort of keep exploring and see what the penetration of this program could possibly become.

58:20I think that's right. I mean, it's sort of to maybe even segue into some of the stuff that Forum 3 is doing next. We've really been building on those lessons. So first of all, I'll say when you were just talking about the importance of these sort of super fans or these core customers and the importance of also not innovating so far outside the core of your platform and outside the core of those super fans that you lose the opportunity to, I think, learn the most valuable lesson. So I think about sneaker heads and I think about Adidas and Nike. And I don't know the story like you do. I haven't been in that industry.

59:02I'm a newbie collector. But I can only imagine that that was probably happening in an authentic way from a core group of customers that probably were the best customers of those brands. And then it became so important to Adidas and Nike's culture and business now. But there was a time where it was probably just some super, really passionate collectors that were doing things. And then the company sort of looked at that and learned and sort of were willing to experiment and sort of bring that out. And I don't know that industry like you do, but I could only imagine. And what I'll say, one of the biggest lessons that we learned at Forum 3 by doing everything we've done is I keep coming back to these same words, you know, community, gamification, storytelling, empowerment, participation, emotional over transactional.

59:58These are all the themes that we keep coming back to. And when AI came on the scene big time, I'm talking about generative AI, these large language models, chat GPT. When Odyssey got launched by Starbucks in December of last year, it was basically the same day, almost to the day. It was like a week away from when chat GPT went public and went live. And we were like, wow, this is really interesting because particularly with some of these tools like MidJourney and Dolly and Stable Diffusion, these generative AI tools that allowed people to create art or create images or create videos or create ChatGPT or some of these other large language models that can create, you know, I'll call it business.

1:00:52plans they can create songs and and books and so we're like wow this is like this incredible democratized code yeah code like code is a big part of it they can create games so think about odyssey there's i'm describing it i'm describing a product that has all these different facets to it a big part of that what's happening in odyssey is like little mini journeys and experiences They're all code-based or digital. And so with the rise of generative AI for being, frankly, this incredible transformational and democratizing creation tool, we at Form 3 were like, whoa. Because right away, just like we did with Web 3 and Metaverse, we were like, this is really interesting.

1:01:37We have been talking about AI, but until ChatPBT came along, it wasn't as democratizing as we saw it. We're like, well, you just type in some words and incredible stuff comes out. And so we started thinking about, well, could you use AI as a brand to create community co-creation experiences, which we think are, you know, kind of almost obvious in a way. If you're thinking about things the way, Tarek, that you and I do, you're like, oh, well, geez, all of a sudden your consumer can create code. Your consumer can create art. Your consumer can create like all these things they couldn't have created before.

1:02:20And if they're a brand fan, what does that mean? We don't know. We want to explore that. So we've at Form 3, we've created this thing called Hive 3 that's going to launch this fall. And it's essentially going to be on the face of it, it's an AI competitive league for AI creators to compete against briefs. So we'll say either a real brand or we'll do a mock brand brief and say, okay, community of creators, almost like an eSport and say, all right, you're going to create, you know, the contest is to see who can create the best whatever this week. And then we have judges, we have prizes. And the idea is to build a community and of these AI creators in this league setting, but very much involve brands in it in terms of both the contests themselves, but also some of the services that we would be able to provide to brands on the back of such a cool platform and community.

1:03:23I mean, I love the idea. And by the way, I mean, that's a it's a great segue because, you know, you talked about the same themes of, you know, community gamification, participation. And we started this whole conversation talking about Web3 as one of the emerging technologies to do that. and this convergence of web 3 metaverse and ai and kind of just seeing that like okay you know blockchain rails are kind of some rails here but these these adjacent technologies only actually amplify the you know the core north star which is about that deeper connection between you know people and brands ultimately um and so question for you is what firstly congrats all the announcement very much looking forward to uh maybe even competing on one of these briefs just to see if i how my ai chops look on this stuff so um do you also see then is there a dot joining like if you sort of think about the the the things that you've learned through um through starbucks and i do want to ask you a question about you know if you could go back and advise yourself so we'll come back to that but we're on this on this uh on this narrative arc right now is there actually a web 3 or blockchain element that kind of underpins what you're thinking about with respect to hive 3 um you know like having a digital carrier for the creations for example which i know that there's all sorts of territories around intellectual property and all that kind of jazz when it comes to to that kind of thing um but is there is there a connection there beyond the um the the high level you know gamification and participation in community piece where blockchain supports what hive three is yeah we we believe there will be i mean we're we we thought You can imagine, we had many long conversations about, do we launch Hive 3?

1:05:07And by the way, for anyone listening, you can go to Hive 3, Hive the number 3.ai to learn more. But Hive 3.ai, we had a lot of long conversations about, do we want to have some of the rewards that you can win for competing and participating, be digital collectibles? Because that's very much embedded into the Odyssey process. process. And we're big believers in it, of course. And we decided to take a beat on that for launch because we didn't want to do too many things all at first. We wanted to make sure we could have something that was engaging and interesting and fun for these AI creators, this league concept, and make sure that it worked well and they were enjoying it and they were learning and winning and having fun, that we had a place for brands to come into it and take advantage and participate.

1:06:02But we very much, of course, think that there will be a gradual but definite infusion of multiple blockchain related things. So there's both digital assets that we think that you could win that are either coming from us or coming from the brands. And then, and then of course it could eventually form like our own version of a multi brand loyalty program, kind of across the backend of what we're doing. So, but that's, we're like, whoa, that's just going to confuse everybody if we do that to start. So let's take a chill. Let's launch something that's fun and interesting and makes sense and is beneficial to both the AI creators and hopefully to the brands that we're involved with, and then bring the, the web three and even the metaverse in.

1:06:53I mean, when you look at with Apple's announcement of, I think it's called like the Quest Pro or something, but like, no, it's not Vision Pro. I'm mixing the Oculus one with the Apple one. Sorry, the Apple new like, you know, AR, VR goggles. Like, we're like, yeah, we look at that and say, that's amazing. And yes, like, you know, as much as it kind of is a little bit dystopian to think about. I think this idea of a lot of people are going to want to experience a lot of their digital connections through an AR, VR experience. It's why metaverse has been an important thing for Forum 3. We absolutely think that's a trend that's just going to keep happening.

1:07:41And so could some of the competitions involve creating things for a metaverse? Could you actually create a metaverse world as part of the competition so like it's not just creating art or creating a campaign or creating an app or a game like it's ai creation ai powered creation very much infuses into blockchain and and and metaverse and then how do you sort of uh own uh potentially some of the things that get created and who owns it and how do you use it and blockchain is gonna have a big role to play in all that, but we got to build it one step at a time. And that is a whole other series of episodes when it comes to where that will head.

1:08:26But I think it's a fascinating turn that you've taken with what you've learned because, and this is a belief that we share that the role of the emerging tech is really to create those direct, meaningful, valuable connections between people and brands. And they're not mutually exclusive at the end of the day they're probably more mutually reinforcing and exponential i think israel would say if he was sitting on this uh sitting on this uh uh this podcast with us um and so that's like you know everybody watch this space it was hive hive3 hiv3.ai right i think was the was the site go check it out um and look let's let's use that as kind of a segue into our wrap up of this thing because we've taken a little look forwards about what you're working on with forum three i got two questions i like to ask everybody um as we kind of come to the close which is really like one look back and one look forward on the look back side because my hope certainly is that amongst the audience here we've got a bunch of people who are either extremely curious um or actually active inside companies thinking about what all of this stuff means for them right so some of the best lessons are if you could go back to you know forum three and starbucks 12 months ago, 18 months ago, and give yourself a piece of advice about, yeah, you're on the right track, definitely do that.

1:09:44Or you know what? Think twice about doing that. What would that advice be?

1:09:53I mean, there's been a lot of lessons learned. So it's funny because you think back and you're like, oh, what were those lessons? I mean, I feel really proud of what Starbucks has done here. And so there's no obvious ones. I mean, there's little like technical ones that you could have cleaned up. And if anything, I think just sort of probably touting the vision a little bit earlier and a little bit louder. Because I think they've done a great job of it now. I think that's one lesson learned was like explain like some of the journeys that are coming and explain what's happening because it was so new.

1:10:36And I think they've done a great job of that. So I think one lesson learned I would tell myself is just like the more that we could talk, we at Forum 3 or Starbucks could talk about, you know, why they're doing this and the community benefits of it and sort of how it can shape up. I think it's something that early on, you know, everybody was a little tentative and, you know, it's worked out well. And I think we could have done that a little more.

1:11:11I also think you can't, in hindsight, and again, hindsight 2020, I don't think you can understate just how important it is to sort of bring the consumers along that don't know about or care about digital asset ownership. But don't let that discourage you because we've seen that once people sort of get into it, have never been a part of it, they love it. And the same reason all of us that are into digital asset ownership and blockchain and Web3 and we believe in it, like, I mean, outside of speculation, there's still a magic to it. And there's still a lot of power to the ethos of it. And, you know, you got to be patient.

1:11:51You got to get through that. And I think we've all been through some pretty rough seas in the last six months of the last year of, you know, the space being in such a tough spot from a narrative perspective. but it doesn't change the fact of what got us excited about it in the first place. And I feel like that's something I would have said back to, to be like, don't forget, like, you know, the magic is still there, which is the name of your company, right? Like magic and science, I think. Right. So science, magic. That's right. That's right. Well, well remembered. And actually I think, you know, you've dropped a couple of gems here, which again, I think they speak more to the corporate innovation ethos, which is, courage is part of the ingredients for success, as is a little tenacity along with some agility.

1:12:39But having that fertile ground that we talked about at the very beginning of this episode, very strong top-down support, strong fabric of trust, commitment to engagement and loyalty to the highest degree already, just put the wind in the sails to get you through those rough seas, if I'm going to build on your poetry here a little bit, Adam. Well put. So, and, you know, if I may, I'll just hammer home from a pattern spotting perspective is that I think one of the lessons around, you know, building on the loyalty program that you have, I think for some companies that find it extremely hard because, you know, it's so ingrained in the infrastructure and, you know, it's one of the things that you don't mess with.

1:13:20it's almost like an industrial machine so experimenting with it may seem like a very risky thing but there are certainly advantages of building on that database of consumers you've already got because now you don't have to bridge between this little audience you've built over here and your mainstream consumer and i'm sure there are some brands out there that are envious of that journey um and by the way you mentioned about the the adidas journey um there'll be another episode just to sort of plug this one there'll be another episode with vladislav lazarov of adidas you know retracing the steps um up until the time i was still there and then everything since then so all of those lessons learned are also going to be packed into another fantastic episode of adventures in crypto for for you adam and for the rest of our audience oh good i i yeah i can't wait to watch i i i mean i learn so much every time i listen to you terek and and raul and so i i can't wait to tune into that yeah there's there'll be four episodes actually in total so Thank you so much for being one of ours.

1:14:17My last question, we're going to dream now. Between 12 and 36 months from now, what's your kind of, I don't want to say prediction, but what's your hope or ambition for this space of blockchain AI and emerging tech? What do you really want to see in that timeframe? Well, first of all, I think it's worth, there's a word we use at Form 3 a lot, which is this word responsible. Like we, I feel like appropriately, there's a lot of talk right now about what is, what does responsible look like when it comes to taking advantage of these technologies, particularly AI, but obviously blockchain and metaverse.

1:14:56Like, I think there are a lot of pitfalls and landmines and concerns in this space. And I'm not going to end on a downer, I promise. The reason I'm saying that is because when I think about the next 36 months, it's kind of like we were just talking about. I hope there's a way that a lot of us, I'm talking about society, mainstream, can understand that this stuff is happening. So how do we take advantage of it, but also at the same time realize that people can get hurt? bad things can happen, but it doesn't mean that you just sort of sweep it under the rug and pretend it's not happening. So we talk a lot about like, we're really keen on figuring out what does it mean to responsibly use AI for image creation or video creation or otherwise.

1:15:53And there's a lot of reasons that have to be concerned about that, but it doesn't mean we're not experimenting with it and thinking about it and trying to find ways that are brand safe. my guess is that brands right now, when they look at blockchain, when they look at AI, when they look at metaverse, they're like, wow, I kind of know I need to get smart in this area. I kind of know that's where the puck is going, but I'm tentative because I either don't understand it or there's legal concerns or there's ethical concerns or there's media narratives. And I just kind of hope that we can all sort of keep our wits about us and, you know, have an open mind on both sides to be, to recognize the pitfalls and the realities of what's, what, what are the watchouts and what are the problems, but at the same time, like understand that genie's out of the bottle on this stuff.

1:16:48So we need to, we need to sort of talk about it and figure out ways to do it. And I, in working with brands, what's great in a way is that brands provide a good bar because, you know, brands are conservative and brands are appropriately careful. And, and so if you can do things that are brand safe, I think, or try to anyways, in general, that kind of is a nice bar to try to hit, which is like, you know, get your hands dirty, experiment, but do it in a way where, you know, you're trying to be as responsible as possible. So that's my hope is that we go from this, I'll call it sort of polarizing state of affairs to one where people are recognizing that it's happening.

1:17:33So let's figure out how to do it in a way that's the most responsible, in a way that's the most fun and beneficial. I think that's a fantastic thought to finish this out on, actually. And I'm sure that's in the minds of a lot of the people watching this and a lot of people who are trying to figure this out, you know, whether it's from marketing or finance or digital innovation or just at the C-suite, that, you know, a little courage and open mindedness here is definitely going to be one of the things which gets you where you need to go. So, Adam, I think what's left to say now is thank you for sharing, you know, your story in a lot of depth here and really helping our audience to try and understand, you know, what it's taken to bring, you know, for Starbucks to bring Odyssey along with your support and Forum 3 to where it is today.

1:18:24And also to zoom out a little bit on how these emerging technologies kind of amplify each other in the vision that you have. So very much appreciate the time, the honesty, and you have a very entertaining way of telling the story too. So thank you so much for being with us. Thanks for having me. It's always great to talk to you, man. Until next time, and everybody on watching this or listening to this, stand by for more episodes of Adventures in Crypto, looking at Web3 and Brands with me, Tarik Nzlawi. And Adam, just quickly, where do people find you? uh at adam rotman on twitter i'm on linkedin and like i mentioned uh check us out at hive3.ai perfect thank you so much again for joining us and have a great day what's up revolutionaries thanks for tuning in for more content like this head over to realvision.com and get unfiltered access to the very best brightest and biggest names in finance