Real Vision x Sui: How Web3 Will Disrupt Every Business Model (ep. 3)

0:05It's a faster, cheaper world and it creates new ways of doing things. I genuinely think customer acquisition is the biggest use case for Web3-enabled experiences. You will be able to save costs and streamline operations and differentiate yourself from your competitors. You know it's coming. It's an unstoppable force. There'll be a network effect as more people start using it. You have to start somewhere. I'm Damien Horner, the co-founder of Real Vision, and I'm on a mission to explore Web3. In episode one in this series, we announced why Real Vision is moving into Web3. In episode two, we talked to other companies that have already made this move.

0:47Now, we want to dive into how you can think about the move into Web3 for your own company, whether you own it, work there, or you're an investor. A how-to guide for getting into Web3. I started with Raoul and the first thing I wanted to know was where to start that journey in terms of product or service offerings. So Raoul since we started this series about the transition to web3 we've had a tsunami of interest but also lots of questions people saying look I love what Real Vision are doing I love the fact they're working with SWE how do we do that how do we start on that journey so I guess the first question which is the one I'm getting asked most is what kind of businesses should be thinking about this kind of transition?

1:35So at the simplest level, payment systems. Okay. You know how painful it is, even when you're using Stripe and other things, to get your payments in, to get them quickly and efficiently. The velocity of capital takes ages for payments to get processed, all of this kind of stuff, and the costs of your bank doing it, or credit cards and all of this stuff. This is why Stripe bought a stable coin. This is why USDC Circle have just listed in the New York Stock Exchange that exploded in price. Why? Because this is an instant settlement of payments. So I can pay you instantaneously and you'll get it into your wallet within once.

2:11So if my business has anything to do with payments, which is every single business, it's relevant. And you're seeing it Visa, MasterCard, I mean, everybody is building on these rails. So that's just moving dollars around efficiently without the banking system getting in the way. because it's super slow to do and it's closed on weekends. All of that kind of stuff. Yes. So this makes it much more transparent and instantaneous settlement. So that in itself frees up capital in the system. It helps tons of businesses. So that's one way. The other way is let's say you've built this big community. Yeah.

2:43Well, part of this is who are your community? Who are these people? Old school used to be used to have to find them online, figure out what they were doing. New school is they have a wallet. You can identify them by what they do. the preferences they make, the choices they make, the actual actions they take online, because it's all recorded on blockchain. OK, so know your customer better. Get closer to your customer. Reward them. Build this lovely, symbiotic relationship. But the other issue is, is AI is coming. As you well know, AI is scaling super fast. Who the hell is a human? Is this a good actor or a bad actor?

3:17Well, blockchain allows you to have digital ID. So we can prove on chain who we are, wherever we go. So that means if you do have a community, let's say real vision, we can tell if somebody is an AI because they won't have a proof of who they are. So proof of humanhood is going to become incredibly important. Proof of humanhood. Yeah, incredibly important to everybody. Because it's on blockchain, it's a mutable, it means it's always there and it can't be changed. So people can't tamper with these things. They can't pretend to be you or me because we have the proof. So that's what blockchain does.

3:51And think about another thing. Almost every business now has some sort of online storage. Yes. Or even you as an individual. You're beholden to Amazon or Google, and who knows? Who knows what censorship comes from? They control your things, right? We're moving to a world where we want to control our things, our identity, our money, and our digital possessions. So that's how you can have decentralized storage. It exists because there's all of these validators confirming this storage but it's not under control of one person. Supply chains. When things move across, you can have them recorded in ways that means that you know exactly what has happened to the merchandise in its transit.

4:33Now that matters a lot to high-end fashion houses. You can put an RFID chip in them, and you know that that handbag is authenticated. Who owned it? And you can see the full pattern of who's ever owned that handbag. You can get provenance in luxury goods. But it also matters just any shipping. So already, the largest kind of agricultural commodity trading houses built on a blockchain back in 2018 or so. And what they're doing is, because they trade sugar, cocoa, coffee, all of this stuff amongst each other, they're actually putting it on-chain, including the letters of credit, the shipping things.

5:10So you can trade the whole thing. You can check it all instantaneously, because that's what NFTs do. They're basically contracts. So now you've got these digital contracts that are attached to the goods. And so, A, you know who's talked to it. Can't be tampered with, can't be changed. Has it been tampered with? And also, immediately when you buy them, you've got the shipping contract attached. You've got the whole thing. Yes. So suddenly, everything is recorded. What they're also doing is they're buying cocoa in Guyana. Yeah. And they're having to pay a subsidiary. They're just doing it with stable coins now.

5:41So they're not having to go through the bank. Because if you're a large multinational, you can move money super quick using stablecoins in regimes where they have capital controls or the banking system is not trustworthy or whatever. And you can do it like that. So it becomes super efficient use of capital internally within these giant corporations as well. Payment systems, community, cloud storage, shipping and supply chains. chains. All of these processes are going to be revolutionized by Web3. But many of you may still be worried that even with all those benefits within your grasp, it's kind of scary to change your business model and no one wants to throw out the baby with the bathwater.

6:29So here's what Jamil from SWE said about how to approach the move. I think there's lots of different ways to incorporate Web3 into the business and you can start small and you can figure out how to incorporate storage, transactions, payments, everything else over time. So are we saying I don't have to move all of my business into Web3? I can just carve out parts of what I do, like my payments or my loyalty scheme, for example? Yes, that's possible. And in fact, that's recommended. You don't want people to move everything over from web 2 to web 3 all at once the goal here is to find ways to either make things more efficient and streamline for businesses or find ways for them to grow their customer base or their revenue and so it's important to start small and pick the piece that will matter the most and just so i'm really clear here i can actually have some kind of hybrid model where i've got my existing business kind of in Web 2 world, but I can bolt on the Web 3 aspects that give me that efficiency and that speed that you're talking about.

7:33And they can work together. Yeah, exactly. And you see a lot of companies, especially established companies, doing that already. But if I make that move, let's say on the payment systems, does that mean all of my suppliers also have to move to a stablecoin model? Is there a kind of knock-on effect like that? No, you don't have to have everyone else move over. So you could use it where it makes the most sense, where you do see some efficiencies, where you can streamline. And you can continue to use other payment systems where that makes the most sense for you as well. It's not an all or nothing.

8:03That obviously is going to increase adoption. And I guess the more people that adopt it on that piecemeal basis, the more momentum it builds. Yeah, there'll be a network effect as more people start using it. But in order to get started, you don't need to replace your entire infrastructure. Have you ever wanted to trade Bitcoin but haven't dared try? With Plus500 Futures, you can trade crypto without the hassle of opening a wallet. With just a few clicks, you can register and start practicing with their free and unlimited demo. See a trading opportunity? You'll be able to trade it in just two clicks.

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9:18I found that advice from Jamil incredibly reassuring because it's clear that people can take advantage of the benefits of Web3 within a relatively plug-and-play approach. You can start by bolting Web3 access onto your existing Web2 infrastructure and have an instant impact without disrupting your current business model or tech stack. Now that is very compelling and relatively easy. But what if more than cost savings, security and efficiency, I want to use Web3 to go out there and grow my business. Is that possible? Oh my God, yes. Just listen to this from Lola at Mistin Labs. I found what she had to say absolutely fascinating.

10:10One of the biggest challenges that every business has, And this is the most bear resistant philosophy I have, right? Every business, if you are incredibly successful this year, next year, you have to do the same and better. And more. And so I think about the technology stack we have on Web3 actually has been the ideal technical stack for most businesses to address their funnel. So top of funnel, you have got to bring more people in at a lower cost with a higher conversion rate every single year. And that's a problem actually that everybody understands without talking about the tech. So now you talk about that problem.

10:47And over the last, let's say, 10 years, most companies have become addicted to advertising inside social platforms. And so you've got funnels that are highly dependent on information being shared in social media. You're relying on virality effects. You have this bias towards impressions. But did impressions lead to sales? There's a gap. um did i retarget the right person in such a way that i know a hundred percent this interest and this sale are linked and could i repeat it and actually there are massive issues with the way every business attributes their funnel development where webs free really starts to help you with that is number one it allows you to give a different value proposition to the audience and you know you may argue an nft is like why is it worth money actually i think the biggest opportunity is nfts that are not worth any money at all it's loyalty it's proof of attendance it's i was here and now you can target me because you know i 100 did this thing that allows you to have confidence that if you showed me something else i am the type of person you're looking for the wallet is the cookie and the wallet is public and it's transparent and you can connect it to multiple applications.

12:06Business to business growth becomes meaningful. I have a hat business, you have a shoe business. If I want to target your customers and you want to target mine, the way to do that traditionally is I've got to pay really expensive ads to try and find your customers. Or I can say, hey, I want to give a discount to everybody who's got a NFT in their wallet that says they bought a shoe from you. Would I spend about as much as I would on a Facebook campaign? Maybe not because I'm still not sure. But is there a higher chance of conversion because I'm targeting a behavior that I do know is higher value to me?

12:42I think yes. And where I think Web3 is going is businesses starting to understand that this concept of small footprints of your behavioral activity, not your name, not your home address, not your private data, just the things you did and engaged with online that becomes a higher intent signal for attracting you to something else and that's i think where businesses need to be thinking about their funnel development more as an engagement hook that they can rely on and sustainably invest in as opposed to hoping you catch the next viral meme which may or may not work and honestly if these platforms change their policies you're buggered anyway right so you can't rely on them next year in the year after and this is something that i can do while retaining a lot of my business in web 2 but i can add this process 100 i think what we're what we're seeing what i sometimes talk to businesses about is you're going to spend i don't know hundred thousand dollars this year on top of final advertising on social media how about you take 25 000 and you apply that to a strategy where you are targeting on-chain wallets and addresses and engagement and just see what happens.

13:52So how do I target the right wallets? There are vendors who are just early in doing that. So as a business, you'd be like, okay, show me my desired customer profile on-chain. Okay. There are a handful of companies that can do that, but there's opportunity for more. How do I make sure they do the thing that I want them to do? There's a handful of companies that can help you track that. But that traceability is inherent in Web3. It is not inherent in Web2. So even if you don't want to shift your entire marketing spend, you should be trying to experiment with some of it because I think what we're going to see is a transference.

14:26So if I think it's something like 35 cents in every dollar spent on digital advertising, I think the ROI on that 35 cents, my personal view is in the next five years, we'll see it's 10x when you integrate Web3 technologies, not completely replace when you integrate. And so we're just going to shift the spend. It's not new money. It's not completely massive investments. Yes, there might be short term investments in your capability stack, but your ROI gain, I think over the long term will be significantly better. And it feels like the key point here is marketing is so built upon the profile of the target audience knows who they are, where they live, as you say, but this is much more about the actual behavior.

15:08Yeah. This is what they do. Yeah. And I think where we went wrong with Web2 is actually all we ever cared about was your behavior. But we couldn't tell what your behavior was. We could only get these like signals of inference about what your behavior might have been. Yes. Right. And so because of that, we've built an advertising stack that uses personally identifiable data to understand what you might have done and what you might do next. I went to a concert. Every single person at that concert should receive a proof of attendance NFT in like a magic wallet. Every single brand that sponsored and advertised to you on the train station on the way in and thereafter should automatically say, hey, now I'm going to make sure that everybody who was in the stadium who I was targeting, who's now got an NFT in their wallet.

15:59I'm going to follow up with something that is directly targeting them because I know they were there. that is going to be way more effective than trying to find those people on Facebook. I don't want your email because your behavior is more useful. It's more actionable for me than your email is. I genuinely think customer acquisition is the biggest use case for Web3 enabled experiences and a tech stack in the future where you have your Web2 and you've got embedded ecosystems for targeting wallets, for giving people wallets, for connecting wallet behaviors to future strategies. those businesses are going to win.

16:37That is game-changing thinking and given how fast things are moving in this space it feels like very soon what Lola talks about there will be standard practice and then all of a sudden those businesses that are still trying to grow by catching people's attention online and hoping they might somehow fall into their audience profile that will just feel so wrong, incredibly blunt and unstrategic. It's basically throwing darts at a board and hoping something sticks. So taking all this into account, how does a company actually get into Web3? I wanted to know more about the nuts and bolts of the process.

17:26Okay, so let's imagine I've manage to persuade my team that we want to make this move into Web3. How do I actually start? Just the logistics of it. So once you've decided what it is you want to do in Web3, there's a few different options, like doing anything, any sort of tech build out. You can go to an existing vendor that might provide that as a service. That's what you want to do. Something like accepting payments or making payments should be very easy to find vendors who do that. Perhaps your vendors you're already using for Web2 have that as an option. You see companies like Stripe and others getting into this space, having offerings across Web2 and Web3.

18:03In some cases, you won't even need to change who you're working with. In other cases, if you want to do something more custom, you could either build it in-house or you could find an agency to help build something for you. And if I've got a team of Web2 developers, is that a completely different skill set to Web3? Do I need different developers or is it a mix and match kind of model? It's definitely a mix and match kind of model. On the Web3 side, for smart contracts, there's a certain type of developer that can build the smart contracts for you. If you're using the Move programming language, which is designed for use with SWE, it's very easy for Web2 developers to pick that up.

18:41For everything else that you're building in Web3, you still need a front end. You still need to think about the user experience. You'll still need to figure out all those other things. And that's all Web2 skill set. Okay. Is this a really long process? and perhaps more importantly for some people, is it a really expensive process? That's the great part is that it doesn't take that much time to get these things up and running and it doesn't have to be very expensive either. The ecosystem has matured quite a bit. There are a lot of things that might have been difficult to do in the past or cumbersome to do in the past that are now much easier today.

19:12So for example, using the Enoki product from Mists and Labs, you're able to have a seamless sign-on. So you don't have to have users creating wallets or thinking about seed phrases or anything like that. They could simply log in with their social credentials. You can take that product, for example, off the shelf, apply it to your business. Now you don't need to worry about the design-in piece, the wallets, gas fees, and things like that. All that gets abstracted away from the user and it can get abstracted away from your team. And that all gets handled. So actually, this doesn't sound as scary as I first thought.

19:47Our team came from Web2 and has built products that have touched billions of people. And so we think a lot about the user interface, making it easy for companies, for developers, for everyone to build something on top of SWE, and for the end users, ultimately, who are benefiting from having this technology, making it easy for them to engage, making it value-add for them. OK, this doesn't feel so hard. And now we've heard lots of reasons why a business should explore the move into Web3. But at the end of the day, most of us report to gatekeepers, be they our bosses, our shareholders, the CFO or the board.

20:30So before ending this episode, I wanted to know how to pitch the idea of Web3 to those stakeholders. OK, I'm fully bought into this and I want my business to move into Web3. I'm probably going to do it in stages like you say. How do I pitch this to the stakeholders around me? How do I pitch this to my board? Yeah, well, your board will probably care about one of two things, increasing revenues or reducing costs. Ultimately, it's growing the business. And so it only makes sense to do this if you think it's going to grow the business. And I think that's the best pitch to the board, is that you will be able to save costs and streamline operations, for example with the lower cost payments or lower cost infrastructure and at the same time you'll have the opportunity to grow your business to find build community around your business retain your users better bring in new users that can come in for a better experience and differentiate yourself from your competitors so web3 is one way that you can achieve both of those goals and i think that that should sound like a pretty compelling proposition for the board yeah absolutely Absolutely.

21:39Saving money, making money is always going to go down well with the board. OK, what about my suppliers? How do I pitch it to my suppliers? Yeah, well, your suppliers similarly will also care about a couple of things. I want to make sure they're getting paid. They're getting paid on time. They're getting paid the right amount. They're not losing money due to foreign exchange or anything like that. So that's one way to pitch it to your suppliers. The other way, if you're not going the payments route, is people care a lot about where their products come from. And so you see companies that are trying to put their entire supply chain on the blockchain.

22:08so that it's transparent and it's traceable and people can see where their products are made. That could present an opportunity for your suppliers, as an example, to get more visibility into the work that they do that goes into the end product. And provenance and authenticity and all of those other aspects that are becoming increasingly important, I guess. Exactly. Users are starting to care more about those things. And so if you're a supplier, maybe you want to be more visible there and have others see that you're a part of a larger product. So actually, it's not just my business that will benefit, the suppliers themselves may also benefit.

22:40Yeah, the suppliers will benefit as well. Okay. What about my user base? What's the story to them? Yeah, in many cases, it's best if they don't notice. Everything just is more streamlined and maybe everything's sort of under the radar. Seamless sign-in transactions just happen. Users don't have to worry about the sort of crypto element of it. And it's just a better user experience. In other cases, it will matter. for them to notice. For example, for users to own their own data. So that way the users know that what they're contributing to your product, to your ecosystem can be owned by them. So that's an example where you would want the users to know and be very transparent about it and have that actually be a benefit, a feature of the product.

23:24So depending on your product and your user base, you can go either way. In this episode, we've looked at how you can make the transition to Web3 yourself. We've heard about the best applications to focus on when starting the process. How to build slowly and in stages. What to look for in a blockchain partner. And how to pitch a move to Web3 to your various stakeholders. Next time, in the final episode in this series, we look to the future and where Web3 might go next. But before then, I'll leave you with a closing word from each of our guests. Are we at that point where businesses should really actively start thinking about this?

24:10Today, you see very large companies exploring stablecoins, exploring adding loyalty programs, exploring other ways to get into Web3. Multinationals like Amazon and Walmart were in the headlines recently for exploring stablecoins. So I would take the lead from those large companies. If they're already thinking about this and that news is public, then you should too. I think you have to start somewhere. That's the only way. There is no safe bet. There's a really good book called Dealers of Lightning, which documents the sort of 40 year history of Silicon Valley. And at the foundation and core of that is Xerox, the photocopier company.

24:48It's always been the photocopier company. without xerox and some of the u.s military we wouldn't have the internet as we know it we wouldn't have ethernet we wouldn't have mice we wouldn't have color screens we wouldn't have adobe we wouldn't have the extremes that apple has gone through but xerox themselves never benefited from any of that and the reason they never benefited is because it was always too risky at the time that they invented the thing to then pull into the market with that thing and they did not have the bravery and they didn't have the infrastructure to optimize for the better outcome so instead of becoming like the technological equivalent of unilever that reinvents itself every 10 years they stayed a photocopier company and i think if you're innovating in web3 you've got to be able to be more like the people who walked into xerox's labs in silicon valley spoke to the engineers hired them gave them better opportunities invested in their startups when they got frustrated and left you've got to be more like that which is there's a chance of failure but you're optimizing for an outcome that you believe is greater xerox's biggest mistake was that it wasn't willing to take the risk and now it's not part of that narrative that we talk about in terms of internet giants when without xerox and xerox park we wouldn't have any of that tech it's very similar with ai which is why i lumped them together and many people yeah you know it's coming it's an unstoppable force it's inevitable.

26:15Right. Because in the end, everybody's going there and everyone's going to have the efficiencies. So first mover advantage is you get to experiment, you get to learn, and what you get to do is lock in the value that it creates ahead of everybody else. You're not competing with everybody. And don't be scared of failing. You can do it with a small number of customers or whatever you're doing it for or something in the supply chain. You can just test it and that's okay. You don't need to say, well, we're going to convert a whole business to Web3 because the board's going to tell you to fuck on. Yes.

26:45But when you say, I'm just going to try this, they'll say, yeah, sure, that sounds a good idea. And then you prove it out. That transition, blockchain web free, that kind of nexus is a really, really important thing. So the real risk isn't making the move. The risk is not making the move. Well, because it's definitely coming. I mean, because governments are telling you it's coming. They want it to happen. They want it because it creates efficiencies. It's a faster, cheaper world and it creates new ways of doing things. So the tsunami that you talked about before is actually that wave of everybody moving to blockchain technology.

27:35you obviously enjoyed the episode because you're here with me at the end but listen don't forget to go to realvision.com forward slash join and grab a free membership it's an incredible community packed with alpha, great investment ideas, and the research that you need to help you unfuck your future. So get started now. Go to realvision.com forward slash join.