Let's Get Phygital: The Mistakes Brands Make in Web3

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0:43That's S-Q-U-A-R-E dot com slash G-O slash R-E-A-L-V-I-S-I-O-N. Rick Rule is a favorite in the Real Vision community. If you'd like to meet up with Rick and get a master class from the master himself, you'll want to head to the Rick Rule Symposium on Natural Resource Investing in Florida, July 23rd to the 27th. You'll get access to industry insiders, elite bullion dealers, gold council members and uranium pros. Just head over to realvision.com forward slash Rick.

1:35It's Web3 Wednesdays on Crypto Daily Briefing. And thank you for spending some time with me on this learning journey today. I'm Elaine Lee, your friendly crypto host and producer. Before we introduce our guest today, I have something special to talk to you about. Now, unless you have been living under a rock in the RV ecosystem, you know RV 2.0 is coming. If not, go and watch Raoul's past, present, and future of Real Vision video. It's a great one and a cracker, and some of you feature in it. Now, let's see what some of you have to say, because the community is the beating heartbeat of what we do at Real Vision, even before the world of Web3 existed or was even a thing.

2:16So I'd like to go through and take a look at some of your cheeky little comments, and I picked out a few. Let's go over. Take a look at what Brent K said. He goes, wow, I'm really excited for the new platform and features. Thanks for taking the time to explain. And I really enjoyed the bloopers at the end of the video. We're all human after all. And then we go to Alison A. I know exactly who Alison is. She joins me every Friday at Dejan Happy Hour or definitely a Twitter friend that goes backwards and forwards because she's in our community. She goes, this is really exciting. So much opportunity.

2:49Thank you. And then we have POTUS. Oh, wait, hold on a second. Not POTUS. Pontus, I beg your pardon, I'll be a big deal if POTUS is leaving a comment on the RV website. He goes to the RV team, don't fuck this up. You are actually offering value and not the bullshit value that most offers are online are projecting. Heart emoji. Keep it up. I wish I could afford high membership, but I hope you don't forget us guys on the essential level. Heart emoji, heart emoji. Now, here's why this matters to you when we talk about pricing and different tiers at Real vision prices at real vision like a lot of other things in our economy are about to go up if you're already a real vision member you can lock in your current membership at up to 50 off or you can try a higher level membership at discounted prices before july the 24th here's where you need to go to check it out you go on to www.realvision.com level up and again it's realvision.com forward slash level up in the words of Sierra.

3:50Now, we are asked to talk about our favorite feature on the new RV 2.0. And I figured out what it is. Now, my favorite feature as a journalist is definitely the data tab on the left hand side. Now, not only it takes me to the overview of the charts, and I know how you love your charts, you chart wizards, and provide a news feed, take a look at that. And when I go to the search bar and type in a topic or a name, so like here I've put Solana the second tab is the news tab and it provides a wonderful overview to the headlines of the day and I love that all right now back to full screen me let's go on to today's show joining me today is Calvin Chan he is the founder and CEO of Legitimate Calvin welcome to the show and thanks for hanging out with me excellent it's great to be here awesome all right So I got to get to it.

4:40It's a buzzword at the moment. Fidgetal. I know it's right up your alley and that's what your company is focused on doing exactly with that between Web 2 and Web 3 and all that good stuff with brands. But explain to me the concept of just what a fidgetal ecosystem is. Yeah. No, I'm so glad you asked because that word obviously is really, really blowing up in popularity, especially in fashion. right um digital stands for uh physical and digital uh it's a little combination of the two words and excuse me as an industry i think uh people have been trying to figure out what term to use for a while and and you know some people might not like it some people might love the word digital regardless it's here to stay the hashtags are trending linkedin all the influencers are talking about it it's word three calvin we just show up our new names all day every day Yeah.

5:34And, you know, I think the main thing is it manifests itself in different forms. It isn't necessarily just legitimate or legitimate isn't just digital, right? Digital can be a combination of things like in-person activations, you know, real life events, gatherings. But specifically for what we do at Legitimate is we help brands connect physical products to unique digital experiences. Yeah, that's really important because that communication and that level of comms is something so important at the moment. And you really have to work with the right people to nail it down. So I think I want to say to you, I hope you're patient with everyone along the way.

6:11Yeah, and I hope everybody's patient with us along the way too. It's really, really new territory, super uncharted. I mean, it took us a while to kind of land on adopting the word fidgetal, but we're there. We're meeting our people there. I have a song for it now, Kelvin, in my head every time I go, let's get digital, digital. It works, right? It works. You know what's funny, Lynn, is I actually gave a talk at a conference a couple of months ago and the name of my talk was Let's Get Digital. Oh, yeah. I love that. So, yeah. So, I mean, when I'm on my Twitter timeline, I see a lot of digital goods and I certainly want my greedy little hands on some of these goods as well.

6:47But how can Web3 and blockchain-based digital identities facilitate direct interaction with customers and provide more of a personalized and curated experience? I think let's extrapolate the blockchain side away from, you know, all the hype and buzzwords around things like NFTs or tokens or all of that, right? Because fundamentally what you're looking at is two things. It's a distributed transparent ledger that everybody can obviously see the data program and, you know, contribute to. But the second thing is, I think what's probably more valuable than anything else here is the standardization of how protocols operate.

7:25And what this means is that, you know, if we're building on, you know, blockchain technology, it actually enables other projects, other sort of ecosystems to add value to that in a super seamless way. And you're seeing this play out. I mean, Web2, you know, we had this domination of what a lot of VCs and investors like to, they always like to ask, what's your moat, right? Like, how do you retain your customers? And as a sort of consequence of that, you're seeing the rise of companies like Zapier now, where Zapier has to exist to connect all these different systems together. Zapier is not necessary in one-three because we've all sort of established these standardized protocols, these transparent ledgers that, you know, if we're building on a certain technology, right, a certain EIP or ERC, other people can add value to that.

8:13And that's the power of the ecosystem. Oh, wow. I didn't even think about it on that term in the terms of the tech behind it as well. So, you know, some brands have really struggled with entering the Web3 space. They maybe try it, doesn't work out. They'll have another go at it. People get a bit confused. People give up on it because, you know, simply some of it just looks like cash grab opportunities. And some of the entry points are way too high as well for a normal person or for anything to mess with such brand new technologies. I mean, how do brands resolve this? Is it partnering up with an existing NFT collection that's already got so many loyal fans out there?

8:50You know, people say whatever project is out there is dead. But, you know, when you meet them in real life under a same umbrella, the chemistry is magical. And that's what Web3 is trying to do or definitely bringing in. So do you build community first or do you partner up with an existing collection out there? What's your take on that? It's so interesting because there are so many parallels that can be drawn. I mean, the technology is new, but fundamentally speaking, you're talking about human nature. You're talking about, you know, emotional marketing at the end of the day. And, you know, I think Bobby Hundreds, you know, wrote in his book, he said something like, before NFTs and before blockchain, we had Streetwear.

9:34And for the longest time, luxury brands, you know, couldn't figure out how to, like, capture that segment of audience. and every time they tried, they would get some sort of pushback from their original audience. And as you've seen over the last 10, 15 years, like luxury and streetwear have very much so kind of met at the end of the road. And now they're more or less anonymous. I mean, you have Pharrell, LV, you have all these other like existing, you know, luxury brands tapping into streetwear aesthetic lifestyle. And you could sort of see the same thing happening with NFTs and the concept of Web3 as well, where now you're seeing a lot of streetwear brands trying to tap into the Web3 communities and whatnot.

10:18And I think it really comes down to authenticity. And I'm speaking from, obviously, as legitimate, we focus on digitally provable authenticity, but I'm actually speaking about authenticity right now from a more emotional level, right? Is the brand staying true to their core audience? Are they actually considering what brings value to their core audience? Are they leaving their core audience in the dirt just to capture, like you said, this quick cash grab? And for a lot of brands that don't have the resources, don't have the education, don't have in-house teams, they don't actually know how to do that.

10:57Let's use Nike as an example. Nike did a great job. Just for what it's worth, I'm not talking about Nike. But a lot of brands look to Nike and they go, oh, how can we do something similar? We want to do a dot swoosh. We want to do an artifact. We want to do, you know, a 10K PFP project. But that like what they've failed to understand is Nike has 10X, 20X the resources to actually, you know, contribute and also learn. And I think what's really interesting about what Nike did with dot swoosh is they brought in their existing community into, you know, this new space, taught them about it. And now, you know, as we're seeing across a lot of other companies they don't even call it blockchain they don't call it nfts like they call it they drop all that verbiage dot swoosh is digitally collectible air force ones and other sneakers right yeah and i think that's i think the term yeah digital collect collectible is so important so key and when you mention like streetwear their fan base is a whole nother league of its own you know when there's a new drop you see you know just people queuing up for the latest drop for the brand that they're so loyal to.

12:02So being able to put like the digital aspect for it, for like a proof of identification, for traceability, for tradability. Yeah, it's quite a fascinating space to actually learn about. Yeah, and to wrap it up, I think it's just, you can't chase what everybody else has been doing, right? Ultimately, I think, especially, I can speak with a lot of confidence right now for a brand rolling out any PFD collection, any NFT collection right now. it's it's so beyond sort of what people are talking about at least in a general sense we we in the crypto space obviously have a very fine-tuned sort of channel for news and engagement and sometimes we've failed to realize that beyond us right like a lot of so small we're so small the total crypto market cap i think maybe it's just over a little bit a trillion i mean what apple is worth as a company is probably triple the size of that yeah and and yeah ultimately we can't just be shoving this technology down consumers throats right it needs to be it needs to provide value it needs to be able to stand on its own aside from speculation which i think is is more or less sort of that that barrier here yeah you're so right okay well let's talk a little bit about Legitimate Tech, which is your company.

13:19What are you trying to solve over there? What are you building? Are there examples that you can tell me about what you've been working on? Why are you crazy enough to be a Web3 founder? Go through what you've been up to over at Legitimate. Yeah, I think the story goes back way, way, way back. I've been into streetwear as a kid, as a teenager, kind of grew back into it in my young adult career. Oh, you're one of the cool kids. I bet you own a loop somewhere. Yeah, maybe if you go back in my timeline far enough, you can figure out what I hold. Hey! Careful, visionaries are really smart and they can do this.

13:58Yikes, yikes. Uh-oh, here we go. But I sort of fell into the crypto rabbit hole in 2017. I joined a startup called AirSwap. We built one of the first on-chain crypto assets SWOT protocols at the time. And eventually we were acquired by consensus. The reason why I talk about that is because during that time, we actually focused on a little experiment. We were thinking about tokenizing real assets. And we were working with some smaller firms and companies to tokenize real estate. Obviously, that didn't pan out. We decided to shut that down very, very quickly. And we didn't even really do anything with it, primarily because of the uncertainties with the regulation back then, obviously.

14:39But that actually got my head thinking. I was like, hey, this concept of backing real world assets, super cool. And actually one of the most valuable use cases of blockchain technology, especially at a time where everybody was talking about how it'd be great for things like supply chain, retracking, authenticity. Nobody was actually doing it. And I sort of, you know, in my head, I've been thinking about that for a while. I was like, hey, you know, streetwear and luxury, the counterfeit market's like a$500 billion plus industry, right? Like, But ultimately, and this was back in 2019, ultimately, if we could leverage this technology to help consumers prove that what they buy is real, that could be very, very valuable for the industry.

15:17So that's actually how I got started with Legitimate, hence the name Legitimate. And along the way, what we realized is actually, you know, the authenticity aspect, that's just the baseline. That's just sort of like a binary. Is it authentic? Is it not authentic? What we've created has opened the doors for us to commoditize a lot of the technology that we are talking about in the NFT blockchain and Web3 space. Things like token gated access, community building, exclusive benefits. You know, all these things that people are talking about. Hey, if you buy this PFP, you'll get all these things. People already do that.

15:54They buy physical products with expectations of like buying into a brand. They want to buy into the narrative. They want to buy into the brand storytelling. And when we realized that it kind of opened the doors, you know, to more than just authenticity, we started focusing a lot on storytelling, customer engagement. Yes, because I think proof of ownership is well, proof of authenticity is one thing. But proof of ownership is also something very dear and near that a consumer has to feel before they make such a purchase, especially with luxury items that cost a little bit more. You know, I have a friend who is like really young professional poker player, an influencer for one of the biggest soccer teams in the UK.

16:35And he was like, Elaine, I don't get this NFT thing. I don't hold any crypto, but I do have an NFT of my Breitling. And I'm like, what are you talking about? But he's like, the fact that I can prove it in a digital sense and never lose my receipt is already a winning streak for him. And that's how he's done. And obviously, what is that saying? A rising tide lifts all ships. Like, you know, with Breitling, what they're doing, amazing. I think that really set the tone. They have, their third tab on their screen is about digital collectibles. Right. And no, nothing about Breitling, but I do know that in the watch box, they pass out a little card or some sort of serial number that allows you to prove sort of the authenticity, if you will, right?

17:22And it was really, really good to kind of see this movement, especially in the corporate luxury space that people are paying attention to this type of technology. What we're doing is taking it one step further, right? Instead of just a serial number, instead of just a QR code, we actually have custom encoded NFC tags that are capable of remitting digital signatures. and we can actually verify those digital signatures, similar as how you would verify a wallet signature, right? Yeah. I literally want to sit next to you and be like, show me how it's done. Yeah, well, here they are. Show me, show me.

18:01Grab me one of those and let me see. So go for it. Tell me about your recent drop. It's a mix with, and excuse me if I'm not cool enough for this stuff, but Roc Nation and Puma mixtape collection sneakers. Look at those bad boys. Yeah, give it a little twirl, give it a little 360. Steve will do the little. And there's the tag itself. Lovely. How do you get the information from it? Do you scan it? How does it work? Yeah. So you take any mobile phone. And well, it's kind of hard to do it. I'm sorry. But you bring the phone close to the tag. Yeah. And a pop-up shows up right there. Right. And as you open it, it pulls up a digital experience that allows you to log in with email.

18:47And after doing so, it actually unlocks a unique experience that's catered for you. So Puma worked with Roc Nation specifically on this collection. They call it the evolution of the mixtape. It's to celebrate the 50th anniversary of hip hop, which is this summer. And what Roc Nation did is they actually created a mixtape of some of their up and coming artists, you know, recently signed talent, never before heard of tracks. So there are 14 tracks in total. And these tracks are going to be distributed exclusively through this experience for the first two months. So if you want to listen to the tracks before they're released to the general public, you have to get your hands on these shoes.

19:26You scan them. The tracks are releasing, you know, four tracks per week, I think, if I'm not mistaken. It might be a little different. But beyond the tracks, too, there's exclusive content, music videos, behind-the-scenes access. This truly is, I mean, like everything that, not to bring it back to crypto, but like everything that people talk about, you know, token gated access, stuff like that. This is it in a fully mainstream. This is the first mainstream distribution of a digital product that has this level of engagement. Nice. So, like, you know, I know Aloe, the yoga brand, is doing something.

20:01I know Dior has released the shoe B3. I'm trying to be cool and remember the name of the shoe. I don't know what it's called. You know, Vuitton is in there, Prada as well. They really, we'll get to a little bit of this conversation and talking about how brands need definitely a digital collectible strategy, a Web3 strategy, as we would call it, people in crypto, but digital collectible strategy to the mass audience, you know, and just for all of those people, this is not something small because I'm assuming a lot of meetings that have gone down for you to actually make this happen because Roc Nation is ultimately one of the, you know, most well-known entertainment brands founded by Jay-Z who looks after artists like Alicia Keys and Lil Uzi.

20:44And you're really testing me. Give me another big artist name. DJ Khaled's on there. Oh, you know, all we do is win. There you go. Excellent. So that's wonderful. I mean, how long did that take? Just from the top of your head. We launched on Friday. We launched last Friday. So these shoes were installed on Friday, and I finally had a chance. Is it sold out? How many over the – is it sold out? So most of the Puma stores, the brick-and-mortar stores, are sold out of most of the colorways and sizes. I mean, these are on GOAT and StockX already, selling for like 3X, the retail price. So that's a huge win for everybody involved, I think.

21:24I do know that Puma's getting more shipped to the distribution center. So there's going to be a restock soon, I believe, on the Foot Locker side. But Puma, it's still obviously direct from the brand. I think they're still on stuff. That being said, I had a chance to take a breather on Saturday and look back, do a little bit of like, you know, just recentering. And I looked at my old emails. The first email between us and Puma is 2019. Oh, that makes me feel cool. Well done, you. Take a screen grab and mint that. And yeah, no, anything pink and pretty, you slide into my DMs and you let me know whatever you're building out there.

22:01How much are they going for? or are they a ridiculous price range? What's that? Sorry. How much are the Pumas that are sitting next to you? Oh, they retail for$130. So it's super accessible to everyday consumers, especially relative to today's market environment. So compared to other shoes, I mean, like the Dior, not even saying, I'm not saying Dior and Puma like exist in the same playing field, but the Dior is, for example, selling for like several thousand dollars. Obviously you saw the Louis Vuitton NFT drop or whatever, selling for like 15 ETH or something crazy. I think, you know, like we said, this is not an NFT.

22:39This is a mainstream sneaker release that has a unique digital experience tied to it that will introduce tens of thousands of people to what's possible in the digital space. Yeah. No, that's good. So, okay. So that's interesting. Loved how you showed me how that process works And yeah, that really gives great leverage for a mass audience to join in. And I'm all game for that. Well, which brings me to sort of asking you, like, Web3 is still very clunky and complicated. You know, why do you think there is a miscommunication there? And how will it get better? Because, you know, for sometimes someone like me talking to you, I mean, I didn't have access to a shoot.

23:28And if I knew about this, I would 100 % went in just to play like, I mean, 130 is probably my, well, I am going to say it. 130 is probably what I'd spent on gas fees, right? So 130 to actually get the shoe easy, usable, actually like from the process A to B and not connecting any wallets is hallelujah, amen. Why is it so clunky and complicated? How do we make it better? I mean, like, let's take this aside. Let's take this experience aside, right? Like Puma and Mark Nation aside, we've worked with tons of other brands, shooter brands. I mean, I'm wearing an ambush shirt that we powered right here with Bright Moments that we did like a couple months ago.

24:07And from day one, like we had a very, very clear, you know, thesis is that the future of Web3 is that there's no mention of Web3. Right. And that's super, super overarching. But really what it boils down to is like thinking about it from a mainstream consumer's perspective. Right. It's like, okay, great. ETH gas fees. Right. doing minting NFT, doing any sort of on-chain transaction, you're looking at anywhere from $20 to$30 at the cheapest for just a simple, simple transaction. So for something like that, it's we designed the experience around the fact that consumers should not have to worry about things like gas fees, about things like wallets, about things like transactions.

24:46And as we approach a world where there are so many other L1s, so many other L2s out there that people can choose from, you know that's another barrier that like most consumers will not even have the mental like patience to like deal with right imagine telling a customer first you have to download metamask then you have to go in and add a custom right yeah and we abstract all that away so consumers don't have to pay gas they don't have to pay transactions i mean like at the end of the day we're building on blockchain technology. And I think the key here, and I know I want to get hit on this by Twitter and all that, but it's a spectrum to decentralization, right?

25:30Ultimately, at the end of the day, I believe that, sure, if you're storing tens of millions of dollars in crypto assets, maybe get a cold wallet, maybe have a multi-sig that you secure with your most trusted family and friends. But if we're talking about consumer retail and what works in stores and what works to people like, you know, my parents or anybody who might not even know what Web3 is, you know, that's about meeting them halfway and building sort of user experiences that are, you know, super functional and seamless for them in a way that is similar to kind of what they're used to, but also slowly educating them on what's possible.

26:14Yes. Yes. I mean, usability, both for slam on the table, usability, usability, usability. It's all about that. And, you know, just from looking at the trainer as friends over the pond like to call them, you know, it's just, if I had that on my feet, I would literally, it would be my main party trick. I would literally be going to everyone and be like, scare my shoe, scare my shoe. What's crazy is we actually rolled out this, I mean, not for Puma, but we rolled out this feature for another brand that we worked with where people who buy the products can actually then distribute further digital collectibles, sort of like a proof of meeting type of thing.

26:53Like, hey, Elaine's wearing this T-shirt. You know, this is a proof that you matter. And the actual user engagement that we've been seeing from something like that has been off the charts. I mean, like. How many? It was a small run. So we did 50 t-shirts as a pilot for this brand. We saw over the course of a week, 500 different collectibles being distributed. So that's like a 10x, like 10 times the actual original sort of launch. And this was in Japan with a Japanese project. We saw people like showed these things to their friends all over Japan. And then eventually even got to Singapore and like Korea and like parts of like Europe and everything.

27:33How big is your team? pretty small we're very mean so we're we're a team of um six total right now nice lean mean keep them keen i like that uh okay just gonna go over to the viewer questions and by the way put down your questions in the chat we'll ask the best ones on air remember real vision members take priority which means we look at the platform first before we hit youtube and whatever you are vomiting out there on twitter we will pick it up if you have any questions and if you are not a Real Vision member yet. Go to realvision.com forward slash crypto to sign up. It is free and will remain so.

28:14This is where you're able to watch the latest Raoul Pal's Adventures in Crypto before anyone else. A new episode premieres every Friday. So Calvin, there is a point in the show where I do have to hit up some questions from the public. Is it okay if I go through them? Let's do it. Awesome. One from my favorite community member who's on the Daily Briefing, who shows up every day, Ralph, hello. I think you're watching it over in New Jersey somewhere. On the RV website, he's asking you, what are some of the brands on the cutting edge with this? Yeah, I think we can break it down, Ralph, to sort of, let's talk about Fidgetal really quick and what brands are doing to that extent.