Why Web3 Is Only Getting Bigger with Tareq Nazlawy

28:40How's other people dealing with that? Because this Web3 world is still clunky. So you might know everywhere on chain all of your consumers are. You just can't bloody speak to them. Yeah, I mean, that's definitely something that's come up. I mean, of the different approaches you've got, you know, the Lacoste and the Adidas approaches of Web3 forward that have kind of taken a bit more of a native approach to connection there. And, you know, Starbucks and Karate Combat, I think it's pretty much like, you know, you have an account and, you know, you communicate the way that normal people expect to be communicated with, like such as email, for example.

29:17And certainly I think things that projects which are born more in that native way, you now have to find ways to kind of have people sort of opt in to communication. I think Nike is another great example of what they've done with.swoosh, which just makes it kind of, feel a little bit more like having a nike plus account you know at the end of the day and communicating in normal ways and that is just becoming i think half of the course like a lot of technology providers loyalty players and the like now have um really sort of capitalized on on things like account abstraction to take away a lot of that complexity from the user experience and so i do anticipate um that we'll start to just see um more normal ux when it comes to onboarding and the use of this medium really becomes something which is you know the web people like to use is obfuscated behind the scenes and when you think about like what lacoste and adidas especially now are sort of thinking about how to do it is okay i've got this web3 native community over here of a few thousand people which is by the way really good in terms of community participation co-creation sort of keeping the brand on the map as an innovative brand as well but somehow both of these brands are going to need to figure out you know what does this really mean for the other bajillion consumers that we have over here and how are we going to start um scaling and i think for sure um brands who are sort of coming into the space or ips that are coming into the space are probably more thinking about nowadays like i'm not trying to appeal to a web3 native audience i'm trying to figure out how do i make a core experience for my core customer or consumer better.

30:57And, you know, I think Adidas, for example, like, you know, in the interview of Vlad, we went into things like the token gated drop that they did in the confirmed app, something we both worked on, which kind of starts to point towards the fact that if you are a holder of this particular item, this particular digital asset, there is now a, you know, a gated, protected bot-free commerce experience for scarce product for you right they've also just done something with bathing ape as well that with the forum which was it looks super dope actually the whole thing is twinned with nfc as well only 100 units but there was certainly a an aspect which favored token holders in gaining access to that and it starts to point to how how this technology can be used to solve just a normal problem which is with hype streetwear demand exceeds supply people make bots to try and like, you know, blast the system with orders and hack it so that they can resell that item on a secondary market for profit, ultimately.

31:58And to prevent people from getting the product, you actually really care about the product. So it starts to point towards the fact that this medium has other broad-based applications other than just, you know, the Web3 native application of it. And certainly that's something which was both on Ben's mind and on and on Vlad's mic. It feels like I'm just shooting the breeze about stuff that we've not talked about, but just listening to you, it just seems obvious that all of these brands need their own wallet, which is their mobile app. So if you think of what Ticketmaster, so everyone's sold one part of the equation and I don't think they're all putting it together.

32:38So Ticketmaster forced everybody to have a Web3 wallet. So you don't even know it's Web3, you don't care, just get this JPEG dropped into your thing, it's on-chain. Fabulous. The others, and they've scaled, but don't have the engagement. The others have got this massive engagement, but it's small scale. And what we're talking about is how do you leverage that further? Well, it's to not be Web3 native, but still have the ethos of that that one group is doing. We use the scale of the other one. It just feels like if I had an Adidas app with the wallet embedded and it automatically notices that I'm a token holder and then it'll ping me and say, hey, you've got rights to this room where you can buy stuff in advance or hey, you've got other things or you can be part of a group that helps us develop new products.

33:28That's a bloody cool experience. And now you've collapsed that relationship down and abstracted away Web3 entirely. I think I share that hypothesis as well like I remember jamming with Vlad about you know sort of

33:46it's probably not going to be MetaLast and I think like when you look at actually Adam talked about this a fair bit as well because I asked him the question the architecture for the Starbucks thing is is that the wallet is the Omnibus wallet and that's which I think is part of Nifty Gateway's ecosystem them. And when you create a wallet there, as I understand it, then all of your assets there, they're actually totally retrievable by you. But most people just don't want to do that. Most people don't want to transfer things out into their own wallet and list them on OpenSea. And there is basically a contained marketplace now, which is very important, by the way, because the only idea, the only way you can give people the feeling that they genuinely owning something and that that engagement actually has value is for there to be a financial value of that thing on a marketplace.

34:35It's just secondary. It's not primary. But the fact that you're a fan of Starbucks or a consumer of Starbucks means I don't really most of the time want to or expect to leave the Starbucks ecosystem. So it's kind of fine to have the assets within the garden of the wall garden of Starbucks and Nifty Gateway and the Omnibus wallet. But at some point, it kind of does make sense to allow people to have those assets in another wallet if they want to, because it's possible that in a permissionless fashion, somebody else might want to create a benefit for a holder of that token in their ecosystem. And to do that, you need to be able to carry that thing with you, right?

35:15And go unlock this other door that somebody has created for you. And I think that's going to be one of the things which kind of characterizes exploration in the next couple of years is how do you kind of, instead of it sort of just thinking like a walled garden, how do you show people that there's a door to this walled garden? And you can take these things outside as well. And that may have value for you outside, not just inside. You know, we're having a behind the closed doors conversation here, just because it's just fascinating. If it feels like there's an opportunity to talk with Keith Grossman and what they're doing at BoomPay to develop a brand wallet experience that embeds on the apps because it solves so many problems because then you can talk to people directly because you can have in-app messaging.

35:59People can hold their assets and, as you said, they can then transfer them to their ledger or whatever they want to do with them or sell them or do whatever. You can create a marketplace. Adidas can have their own marketplace within their app and I could flip on my NFT to you because you want to buy it. It feels like that's a big breakthrough that hasn't yet happened for brands because they have controlled experience. Yeah, I think the idea of sort of like integrating the Web3 Rails into the normal touch points, the normal membership ecosystems, the way that rewards are accumulated and the rest of that.

36:32I think that's absolutely right. I mean, Keith and his team, I certainly like working on that. I know that they were just recently, for example, working together on the Bathing Ape drop as well. And they are also not the only ones. I think the idea of being able to provide white label services that bring digital assets into your brand loyalty and membership experience is there. I think the real challenge is like, I think for a lot of brands, it probably feels to some extent a bit like open heart surgery to really start to think about how these things can fully integrate into all of the existing enterprise architecture, which is there.

37:08um but you know what like i think this would be a great twitter space conversation for us to have with with the likes of vlad and benjamin and and adam as well because the sort of the why isn't that happening question i think is one that is one that i think actually would be great to have an open dialogue i love the idea of getting everybody together on this spaces because it feels that different people have solved different parts right it feels that flow and the NBA top shots. That was something we learned from. We've learned from what Ticketmaster are doing. We've learned from what Adidas are doing.

37:41We've learned from what the fashion companies are doing. And it feels like they're not all talking together. And if you've got everybody together, there's a way forward in all of this for everybody that everybody's searching for. You know, and that was what I, my takeaway from the conversations you were having and the conversations that you and I have ongoing is that there is a big unlock. There's experimentation going everywhere. People are finding certain degrees of success, but the big moment, there's still some things in the way. Absolutely. And do you know what? One of that there definitely are.

38:16So let's, I mean, let's set that up. I know, I mean, in the background, we're working on trying to get everybody together to do a spaces. Uh, so watch this space for, for that, where we get the four, the four on and more, more people in our sort of friends and family network to have that i would love to get the ticketmaster guys on there let's see if we can go i'll i'll sort of i'll check out whether brendan and chris tweed can as well can can can join that because i think that would be that would be fascinating and i think their project talks about them a lot more on the way down yeah yeah i think nobody knows what they're doing i think i've talked about it a lot and nobody's aware still and i think they're talking to these other brands all together if there's something interesting in that.

38:56I really like this because if people watching this may not be that interested in brands and how they enter the space and how it works, but this is where scale is going to come from. Scale, the use of blockchain technologies is going to be driven by two things. One is the financial world going onto blockchain rails, and the other is brand world going onto blockchain rails that consumes everything anything in the middle is small fry and and that's why you know i've started two businesses in that space one is exponential age asset management for the bring the institutions on board and the other is science magic studios because these two things will be what takes it from 300 425 million wallets to 4 billion wallets yeah i think i i think honestly i think that's absolutely right when i sort of think about what my hypothesis would be about some of things which are more in the way, let's say.

39:50It's about finding the shortest path to demonstrate that value, right? And a couple of things matter here because there are companies which have a core business behind all of this innovation going, right? So, you know, even a company, for example, the size of an Adidas or a Starbucks or a Lacoste, this is still very much experimentation territory. And most of the management attention, 90 % of it or more is usually spent on trying to figure out how to optimize. And so each different company, and actually we have a nice spectrum on the people we spoke to, all of them have created, let's call it a fertile environment to go explore and innovate these things.

40:32But the expectations of pace are that this will not be an overnight change and it doesn't need to necessarily be an overnight change in order for them to sort of meet what their corporate objectives are, right? Adidas was a bit more like a... is wrong. That's what I'm getting from this conversation. That hypothesis that it doesn't go fast is because they're approaching it only in one way. When we've seen Ticketmaster go the other way and they've got 30 million, but they lack the engagement of Adidas and Lacoste, right? That's what I think is missing here. The understanding, this is not a small niche play that makes you look cool in front of your shareholders or in front of your consumers.

41:12it's actually massive brand play and it's already happening you're just not aware of it because you're approaching like an nft native and somewhere between those two is something much much bigger i think it is but you know like as a as a sort of corporate innovation practitioner in the past what i would say is this which is i think there are to a certain degree there are some let's call it like laws of physics of corporate innovation and the rate of adoption of new technologies like if you go back and have a look at uh websites you go back and you have a look at social media and now you have a look at this and e-commerce they were all slow right that i i think comparing you know you're a you're a macro thinker right so you're joining the dots like of all of the possibilities and thinking as you know it's very clear and obvious that we should be kind of going straight there and there will be people who are bolder than others on that journey for sure but there's a certain like let's call it inertia which is required like the entire management structure of these companies isn't necessarily lined up around making this happen, even though it's very, very clear that for most brands and IPs, having a direct and valuable connection with their consumers is very, very important.

42:23There's still a certain just laws of physics around getting thousands of people in an enterprise architecture to sort of follow suit with that. And I think there will be people who are faster and people who are slower in making that happen. And usually I think you kind of see, especially for something like this, I'm sure that right now there'll be, there's a lot of building going on and certain pioneer brands are really leaning into it. And I'm sure in the next cycle, what we'll soon find is that the early majority of brands are, you know, just jump on to the proven use cases of how that works, because there doesn't need to be a question or a discussion now in the most senior rooms in the company about, is this the most important thing for us right now?

43:03I'm not so sure about this NFT Web3 stuff. regulatory environments and the rest of it, there are plenty of reasons for brands to be relatively cautious right now. But, you know, I mean, clearly you and I have both placed bets that this is coming and it's really a question of when and not if. And if there's some convening power to create that kind of network of learnings from different angles of, you know, who solved which problems, that certainly those practitioners getting together is only going to help accelerate that whole journey. Sounds like a Science Magic Studios offsite to me as well. Just because...

43:36I think everybody is really smart in solving problems here. You know, and even in conversations we've had with VATM, they've solved another set of problems for brands and given them the opportunities to get into the Metaverse plus Web3 space. There's a lot of these connections that you and I have been having over the last year or so, but it feels that we're very close to the moment. Yeah, I definitely think so too. I mean, my sort of view on this, again, like sort of we're talking about brands and IP. So like I sort of come at this from the lens of not just a Web3 believer, but also a corporate innovation practitioner.

44:14And this is all about what is the available victory today? What is the use case which has to be done today where it's obvious to the brand, it's obvious to the consumer, or it's obvious to the fan about why this is better than it was before. Right. and it's not super difficult to do it's not going to be something that like i really have to sort of sell my entire c-suite on a completely new sort of paradigm and ethos almost you know in a sort of purist or cult-like manner which sometimes you get that you know in in the whole web3 space and it's biting off the right size of thing at the right time with the right partners which is the key recipe for success in my view.

45:00And as you get enough of those going on, right, and everything starts to become clearer and more obvious to the others. It's interesting because I'm following the two journeys of my hypothesis. One is the financial world. One is the brand world. They're both exactly the same stage. It's fascinating talking to you, talking to all of the asset managers. They're all the same stage, which is we've done the work, we know it's interesting. We don't want to do more, but I don't want to pull the trigger until I see validation. And validation is either success from somebody else or price goes up. It becomes buzzy and then therefore they feel like they can lean into buzz because don't forget fashion brands and sports teams, they need attention.

45:47There's no point doing something that doesn't garner attention for them. And if they're not peak attention, then there's other things they can do with attention. So right now, for example, if we look at Miami and Messi, well, peak attention now is selling tickets, selling merch, getting that going, getting the US football going. So it builds on itself because Web3 land is lackluster right now. as web three land comes up and you've got the groundswell of miami and messi and everything else okay it now opens out into the opportunity so it's a matter of they're all the same it's a matter of price they all come at the same time yeah i think actually um who was it that said this um really really well it was it was it was benjamin from the cost because i'm gonna ask him like you know why did you decide to look at speakers you know all four of the guys by the way, had a very different background when it comes to Web3.

46:45Like Benjamin, who's VP of consumer experience, brand and consumer experience globally, he wasn't charged with like, I need you to come up with a Web3 strategy. He's charged with basically acquiring, engaging and retaining and delighting the cost consumers and premiumizing the brand, which is part of their strategy. And the way he described it was like, you know, look, there was marketing before there was Web3. We were always trying to get people's attention. We were always trying to have a closer connection. We've always been trying to premiumize the brand. And here is just a new medium which helps us to do that.

47:24And it's not necessarily about a new audience or about a new technology, but working with early adopters helps to show the possibilities of where this can really go. And that, I think, is the right attitude. And the same is true, by the way, on the other tranche, which we talked about, which is fandom. Fans don't give a flying shit whether there's a bull market or a bear market. I don't love my team more when Bitcoin is at 70k or 20k. It just doesn't make a difference to me. And actually, the whole idea that Web3 matters to fans is just ridiculous. like if I have a better fan experience because my my fandom is being recognized because the more I'm a fan the more I get access to the stuff that I love even things whether they're free or or what I pay for and they're a new media for me to express my identity in light of my fandom then you know fuck yeah I want that right like what whatever the market cycle is which is probably why I would say that's the sector that's the area where that I'm I'm absolutely most bullish on is the one that is staring us right in the face you know anything where there is a serialized moment in culture whether it's sports whether it's music whether it's tv i really think there's a lot to be um to go after i always give this example is you know i have still friend on my wall my brochure my um program from live aid and my ticket right because it was a special moment in time where i I was one of the 200 ,000 people that was at one of those live events out of a global audience of, I think it was 2 billion people.

49:02And that's bragging rights for me. It's a special moment in time that I was part of global culture. And that's worth more to me than it might be worth if I sold it. I don't know how much it's worth if I sell it. Probably not a lot. To me, literally, I could never part with it because that was a big part. And that's something I think is incredibly powerful, as you suggest. That's 100%. And actually that idea, what you just described to me there is also something which I think is one of the learnings from brand activity in this space as well about what matters at what point in time. Because if somebody's a fan and they're paying their dues as a fan or as a regular week in, week out, then you just got to recognize them for that.

49:45Because at the end of the day, you don't necessarily want people to be sort of like trading these things. That's not necessarily, you know, that's not really the model, especially in any cases like secondary markets for digital assets in any case are kind of just non-existent right now with like royalties just pretty much kind of being pushed down to zero in the marketplace world. This is really about the direct connection between fan and brand or consumer or IP and almost collecting that and building up that equity to create a direct channel where new experiences and products can be born. And there's not necessarily a very heavily financialized aspect to the asset itself.

50:27That is secondary. You know, at Adidas, we used to talk about things called, when it came to things like consumer engagement, in terms of love and money, right? Like, if you want to build a deep relationship with the consumer that's valuable, you've got to start with a love. The money will follow at the end of the day. And I think some of these use cases, which, you know, tap a little bit more into what you're just describing there, which is, I'm here, I turned up, I'm watching, or I'm at the event, like something to take home from that, which I can then build up over time is, is, is something which deepens emotional connection, which later you can monetize.

51:02I mean, because if you think about it, if people step back and look at, let's say formula one, which is your favorite, but most people don't get to formula one races. So they sit and watch it on TV of which the licensing rights have been sold by formula one themselves, of which they split it down to the teams. You're getting monetized by adverts for that experience. and you might be having your friends around and having beers and or it might be super early in the morning because it's the other time zone you're having breakfast with your mates or inappropriately early beer as you're watching the game all of this you are not connected to the driver you are not connected to the team you're not connected to formula one you are connected to a television and it's that element that works across entertainment music all of they all suffer the same problem is the monetization event is outside of the actual it's it's in between the consumer and the and the brand or the star or the team or whatever yeah but i think i think actually that's right i mean in the case of formula one they happen to have done some cool stuff with their ott direct to subscriber media which most teams and leagues you know nba have done something similar mlb have done something similar so that they are starting to monetize with subscriptions but certainly it does feel like you know i i haven't missed a race in five years i certainly don't feel like i'm being recognized for that i've been to one in real life um and just this year but i like there's there's there's i've missed a race in five years and i would love to be able to flex that fandom and right now you know although formula one knows plenty about me there's there's that all of that headroom is being the only person who knows that is the tv company on the streaming because they know that Tarek is paying for his football fit.

52:43That's the only relationship you have. For most people who are through third-party broadcasters, yeah. I mean, as I say, some of these IPs are doing direct-to-fans streaming. OTT is a big battleground as well right now. Just in the world of sports media, forget Web3 for a minute. But most people will be watching on Sky or on whatever they're subscribed to as opposed to a director league or a director team subscription. and you know formula one is kind of a special case because it's it's it's it's it is the league and it's also the media company and it's the franchise kind of kind of all in one but for teams this is a this is quite a big deal right and actually quite a few formula one teams instead have started to experiment in this area uh mclaren being one of those red bull have just announced also that they're doing um direct to fan race connectables um and at manchester united as well with Tezos, their blockchain partner, have started to do matchday connectables.

53:37It seems as though there's sort of 25 ,000, 30 ,000 people claiming, which is a very small fraction of their overall global fan base. So people are starting to sort of cotton on to the idea that I actually have got cultural capital and ritual that I'm not quite tapping into to maximize the value of this connection I have with my fans. But the formula hasn't quite been totally cracked yet. And I do think that in that particular use case, the answer is going to be on the tip of our tongues and sort of coming back to why haven't we all just gone there straight away? I think it's all to do with getting just the right use case and just the right envelope, just the right brands and IPs and just the right technology partners and players.

54:18And you need to combine sort of the strategy and the creative and the technology all together, really, to sort of maximize the punch that you can make with this. I'm feeling pretty good about what we're going to see in the next six to 12 months on this which and you'll start to see people follow suit starbucks nike reddit have kind of been the kind of big champions of showing what the possibilities are amazing another one like ticketmaster and starbucks it's off the radar screen because it's not speculative stuff really but they've really done astonishing jobs yeah and all of them have taken um this approach of just make the just make it really about what people already want to do you know which is to participate in the things that they really care about and, um, and make that experience more emotional, better, and introduce some degree of co-creation, you know, with Nike, with dot swoosh, it's sort of quite clear that the intention of this whole platform is to, you know, co-create together with, with, with their brand fans.

55:13Um, in the case of Reddit, you know, assembling these snooze together was a key part of the experience before they even announced that I think was, was, was NFTs and what they later did with the NFL and releasing avatars associated with the NFL. It's really just tapping into what people love. And there's a certain degree of like, I can participate and watch this, but then there's also a premiumization angle in all three of those. So I do think that it's going to be on the tip of our tongue and we're starting to see more and more things. And I would place my bets on luxury and fashion and extension of product, which is really more about new ways to flex, new ways to drive, to create scarcity and story.

55:51And on the other side, this kind of collectible fandom or engage to earn type model. And I think, you know, when we've been sort of like bagging our heads against the wall for the last year or so about how to make this understandable, those two certainly seem to shine through as the playgrounds. Taryn, fascinating conversation. It's just great learning. As I said, people may not realize how important this is, but the whole space, all of Web3 rests on this being sold. So it's a big journey you're going on. Where can people find you online if they want to engage? so I'm on Twitter at Tarek Nuslawi on Twitter LinkedIn is also good for me at ScienceMagic XYZ on Twitter for ScienceMagic and then ScienceMagicStudios.xyz those are the four places you can find out more about me and ScienceMagic Studios and what we do and yeah watch this space I'm really looking forward to getting that crew together for a Twitter space as well because that'll be another way to participate I think a brand discussion will be super interesting So let's swap notes on that as well.

56:55Listen, Tarek, amazing. We keep taking this journey together and we'll keep checking in as we go. Until next time, Raoul. And thank you again for the opportunity. It was a real pleasure to be your stand-in. And hopefully all your fans were not disappointed with me standing in for you for the month of August. No, I think they were learning a lot. Thank you, my friend. Take it easy. So that was a fascinating free-range conversation with Tarek. and it was him and I kind of shooting the shit on some of this stuff because we know there's a big soul that is coming and it's getting closer as I was talking about the component parts are being put in place and we can see it from everybody but it's not yet come together and I think that coming together is the thing that we're waiting for and all working on and I think when it happens it's another Cambrian explosion for this space and I think it's getting closer and closer by the day All we need is slightly more favorable conditions and somebody to have a breakthrough.

57:56And let's hope that that breakthrough comes soon.

58:04What'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.