Brent
Desi Velikova: [00:00:00] You don't have to be cryp to believer to think that blockchain will underpin the future of any technology. From FinTech, Health and legal to marketing, sports, and entertainment experts agree that the future will be tokenized. To discuss the topic in more detail, I invited Brent Annells.
Chief Marketing officer of Smart Token Labs who shared with me the endless opportunities of tokenization and what kind of open loyalty projects are already happening that we should be aware of with Facebook and Uber and his resume.
You don't want to miss his perspective on how blockchain will completely transform the way you engage with your audience. Enjoy this episode and don't forget to subscribe to our channels wherever you are watching listening.
Welcome to the product show. Insightful interviews with founders and tech leaders sharing how they hack product growth.
[00:01:00]
Desi Velikova: Hello, Brent. It's a pleasure to have you on the podcast. You are the Chief Marketing Officer of Smart Token Labs a company offering an area of products aiming to simplify the process of tokenization for developers and brands. Can you explain, in simple terms what tokenization is and why you believe it'll underpin the future of tech?
Brent Annells:
Yeah. Thank you very much for having me on the show. Dessi I'd love to answer that question. We, at Smart Token Labs, we've had a vision of tokenization delivering a fully integrated web. We've had that vision for the last five to six years since we started in 2017. And what we mean by that is essentially an integrated web that delivers better experiences for consumers and delivers greater efficiency for businesses.
And it's based on web services. It's based on composability being bought to web services, and it's a fundamentally different view of tokenization than probably most people have held to this date. Most people think about tokens as assets, and they [00:02:00] think about them as collectibles or currencies. We think of tokens as applications, and we think of them as the integration points of the next web.
Desi Velikova:
Amazing. Can you give me a few real world examples of project that are already happening, something you've been working on, or probably not necessarily related to Smart Token Labs, just to help us visualize this concept.
Brent Annells:
Sure. Look we did our first advanced tokenization use case back in 2018 where we tokenized event tickets and enabled you to access as a V I P at the 2018 FIFA World Cup.
We tokenized your ticket and you could enter the stadium and you could scan it at the gate. We did a car ownership. Token, a smart token for that represented your car ownership in 2020. So we did a lot of experimentation with these types of use cases more, more recently we've been deploying in areas related to loyalty, membership, and sports.
And so for example, we've delivered smart tokens. As integration points around event experiences, [00:03:00] specifically in the web three ecosystem. So we've delivered a thing called Permissionless Perks, which we delivered that at devcon six in Bogota with 6,000 Ethereum developers in attendance.
So it's the world's largest Ethereum developer event. And we enabled the Ethereum Foundation that, that was the organizer of the event to issue a smart token, which represented your ticket ownership. And that ticket has. A series of data related to a data point. So it shows that you're one of 6,000 of attendees.
You're an advanced Ethereum developer. You're in Bogota and you're attending this event, which is a high ticket price event. And we were able to stand up around that ticket. The attendees got this ticket, which they were able to secure via an email as opposed to minting. And they're able to use that ticket to unlock a range of.
Offers and experiences that were provided to them by third parties that weren't directly involved in the event. But they could offer it to them based on this token as an integration point. So things like localized business services venture capitalists [00:04:00] would do priority reviews of your business pitch because they knew that you were an Ethereum developer.
There were events on the ground that were side events from the event itself. So it created this integration point around the entire event experience with the token unlocks a whole series of things for the participants. There is something else that many brands are really excited about.
Desi Velikova:
And this is the opportunity of using tokenization for loyalty programs, what's been referred to as open loyalty programs. How are Web three loyalty programs different from traditional web. Traditional loyalty programs that we've been seeing in the last 20 years, even more. What is difference
I have the feeling that sometimes brands tend to plug in this n f T digital token element without really the need to do it. So what's the difference?
Brent Annells:
Yeah, look, it's a very good question and it's a very interesting topic area. And I think if you start with the problem in loyalty, the problem in loyalty is probably best represented by the data point that 77% of [00:05:00] transactional loyalty programs fail within two years.
And I think we all know that our loyalty program that's offered to us by our airline or our telco or our bank, has a bunch of these ancillary sort of, Offers and rewards. I get free coffees, I get discounted sandwiches, I get maybe a movie ticket, and it's just not really that meaningful to me.
And so this is a fundamental problem that loyalty problems ha, that loyalty programs have. And I think the big push in loyalty is it's how do you deliver utility? To your participants that's relevant to, to what you as a brand is doing. So for example, if you're a travel company, a travel brand, say you're an airline, there's a, your customers have a travel experience.
And the airline ticket and the flight is a part of that travel experience. And our vision of open loyalty is basically giving an airline company [00:06:00] the ability to issue a smart token, which represents the airline ticket that someone holds and a piece, a series of data points around that, where they're traveling to, where they're left from, where they're going to, what time they're traveling, maybe the status of their travel, whether they're a premium travel or an economy travel, and then giving them the ability to use that token, the user, the customer, to take that copen token that's been issued by the airline.
And then take it out to a whole series of web services providers and integrate into those services that they offer, whether it's hotel booking or car rentals, or city-based attractions or insurance providers. And by carrying the token into those services, they get more personalized experiences, they get better experiences, they get less friction in experiences related to the entire travel experience, and that's our view.
Of the step change that tokenization represents. It's not necessarily about NFTs. It's not necessarily about tokenizing points and making them composable. [00:07:00] We think it's about bringing a utility to the event experience, the travel experience, the home ownership experience, the fandom experience and integrating into all these related things that you do and making it easier for end users.
Desi Velikova:
Amazing. Yeah, so it's a bit like treating the consumer, not as my client, not as my user, but looking at people or the consumers of many brands. So how can we, as companies and brands be a bit more connected? To help people have better experiences. And it sounds like really impressive. It's really exciting.
But there is a BUT, which is, we are still in this phase of, it's coming one day. So how far are we from this reality?
Brent Annells:
I think we're getting closer and closer. And I think a big part of that is, our approach to tokenization is to bring tokenization into web two.
And to make these large scale experiences that happen today with web true [00:08:00] enterprises, automotive manufacturers, telcos, banks, travel companies all the service providers around that, and the customers to make those experiences better. And In doing that, one of the bridges that you need to cross is you need to make it easier.
So you can, we Smart tokens technology that we use enables you to tokenize things like an airline ticket and hold it as either an off chain or an on chain token. And an off chain token means basically a cryptographic proof against, for example, an airline ticket. And certain data points in an airline ticket can be issued to you and linked to it as an attestation linked to an email address.
So suddenly the user has a cryptographic proof. I can use that as an integration point to unlock services from third party providers, which makes the integration much easier between the ticket issuer and the third party provider. A range of issues related to database integration and privacy. It makes all that easier.
But people can access it. The aperture is suddenly all of my customers can do that. That, [00:09:00] not just the ones who have a web three wallet or just the ones who know how to mint an N F T. So the stepping stone into this, we believe is both on chain and off chain tokens, the ability to participate in these experiences, in it makes sense to, to be on chain for certain types of things if you want be able to trade.
The, if you wanna be able to trade the token, if you if it's got a monetary value, that type of thing. But if it's an integration point, it doesn't necessarily have to be on chain. So opening up the aperture, making it easier, then we are starting to move into use cases, which can become much more mainstream, much faster.
So I don't really need to understand whether that's happening on chain or what's the technology behind it. I just need to experience it to feel the benefit and to understand it. Yeah, that's exactly right. We. Yeah. Which industries do you think will be the first to witness mass adoption?
You mentioned the travel industry, there are huge opportunities in front of sports as well. Where do you see the first wave of adoption? [00:10:00] I think the sort of intersection between loyalty, membership, sports, entertainment, And maybe creators. I think it's that bucket, because I think if you take sports as an example you basically have a fan of a sport or a code, a fan of baseball or a fan of cricket, and you have.
The code and you have the teams, and you have the players that they love and they want to, and they wanna be close to. And then you have all of the ecosystem of sponsors and commercial partners around that. So you have this natural network around it, and basically it's this continuous, there's a real business problem there.
It operates at multiple levels, so you need. The code needs more people to get closer to the game and be more part of the overall experience. The code needs to deliver better r o i to the sponsors and the commercial partners of the game. The fans want to get closer to the experience and be recognized and rewarded for being [00:11:00] fans.
So you've got this sort of natural ecosystem that's already operating and by bringing tokenization into that you can deliver real world. Benefits to the fan experience that also offer benefits to the code or the players and the third party sponsors. So I can give you a really quick example of that if you like.
We we recently did a project called Catch Max, and it's a digital membership program for one of the, one of the biggest top five cricket players in the world. His name's Glen Maxwell, and so he's a, he's an Australian cricket player. Very famous. Cricket, if you're not familiar with cricket it's similar to baseball, that sort of level.
It's a massive game in the continent in India, in, in parts of Europe and certainly in Asia-Pac. And so we created a digital membership program for fans. Of Glen Maxwell and it was called Catch max. And we issued a token as part of the membership. And the membership, [00:12:00] not unlike a lot of other membership programs, it unlocks these very specific fan experiences and rewards and offers.
The token itself and as part of signing up for the membership, you get to a little bit like an N F T. You get to create your own bespoke membership pastor. There's all these different backgrounds and all these different pictures and you can customize it. So it's really your membership card represents.
Glen Maxwell in the way that you want to see him on your card. You can go through all of that process and you can create a card and you create an off chain token, which is a cryptographic proof of your membership via that's attached to your email address and lives in your browser. And then there's a whole collection of sponsors and ecosystem players.
So sponsors really bespoke cricket sponsors like Asics and Cook Barrel, who do the shoes and do the bats. So for fans of Cricket of Glen Maxwell that are cricket players that want that stuff, they're getting very bespoke discounted offers from those cricket headline cricket sponsors.
They're also getting. [00:13:00] Things like stream discounted streaming offers on cricket via sports streaming services where they'll give you a discounted opportunity to stream cricket into your home. There's offers from the code related to game day attendance, which are discounted tickets and priority proceeding and things like that, which recognize you.
And then finally, there's just, there's brand sponsors of the game, like K F C, that are doing very bespoke things. So you've created this this way for fans to get closer to the game, to the code, more involved in it, closer the, to the player they love. They've got a token. They can mint it online if they wish to, so they can convert it to an N F T, but they don't need to.
And that's an example of, I think we're gonna see a lot more of that. And there's already a bunch of that happening in the US with with M B L and that sort of thing. Where, that intersection between membership and sports and you're really activating a network, a commercial network around the fandom experience in sports where all parties are winning.
Desi Velikova:
Yeah, absolutely. And there is so much more transparency for sponsors to kind finally understand [00:14:00] who do they engage with is their message actually reaching fans.
Brent Annells:
Exactly. So it's that quintessential problem in sponsorship, it's closed loop, r o i. How do I prove that? Most sponsorships operate at the brand level, at an awareness level, and it's hard.
To quantify the commercial return that you get as a sponsor. It's an age old problem. It's always, it existed. It's never gone away. Every sport, every code, every star player that's doing sponsorship deals needs a way to try and close the loop for the sponsors and tokenization by basically creating a token and giving it to the fan.
And then the fan can go directly to the sponsor to have an experience with this token. And the fan is taking their the really important part about tokenization in this instance is, The fan is taking these proofs to these third party sponsors and choosing to share those proofs with them. I am a fan of cricket.
I am a fan of Glen Maxwell. I am posting regularly, I am attending [00:15:00] games. And as those, data points are being shared progressively, then they can get more personalized offers or rewards from these sponsors. And you're closing the loop for everybody, right? Amazing. How. Did you choose the fans, the members that could participate and get access to these tokens?
Or was it open to everyone? It was open to everyone. So it's a paid membership. Okay. We, we took it to market with, it's really interesting. So Glen Maxwell has 10 million followers on social media and build up over a long period of time, but. A, as is usually the case when you try and activate those fans on social media, you get far less than 1% organic reach when he does posts to them.
So what was happening as part of this membership program is we were bringing them into Discord and they were doing fan watching parties. So they were actually doing, when game day was happening, they were all coming together and Glen's. Coach and his manager were coming and like moderating these, interactive sessions with true fans of Glen.
Glen was doing one on [00:16:00] was doing amass into this Discord community directly. And so fans were getting this opportunity to directly interact with him. So over, over a period of a couple of months, we built that Discord community up to I think five or 6,000 members that became the nucleus of this really turbocharged fan base.
And then basically we launched the membership pass and within seven days we 16,000 passes were generated by his fans. And that was in a, we did a pre-launch period for seven days where that was, we gave them the pass for free and it's now just converted to the paid pass. In, in web three terms onboarding 16,000 pass holders in seven days is, it's a more material number and what, is they're super fans, so they're massive lovers of Glen and they're massive lovers of the code and they're super high value too to sponsors.
Desi Velikova
Yeah. I think The challenge for me from what you're saying is how do you educate people about Web three, about the opportunities using [00:17:00] NFTs and digital tokens to get access to Glen in this case? So you have this really from where I stand, this really narrow target audience that is between the intersection.
It is in the intersection between Cricket fans and people into web 3. From my experience, it's very difficult to get people excited about Web three and NFTs if they already don't know what this is about. Did you have this learning curve with this project or did you manage to engage people outside of the Web three space?
Because the acquisition journey or the onboarding was so seamless that they didn't really realize there was a token behind it.
Brent Annells:
Exactly right. So our view, if you go back to the very beginning and our vision around tokenization, this idea of the integrated web and the i, this idea of composable services around experiences that create better user experiences.
So there was no mention, there were no, there was no mention of web three, there was no mention of tokenization. There was just the ability for so we [00:18:00] specifically targeted just cricket lovers and we did, there was no intersection with web three. So we we just went to them and said, if you're a fan, you can join this Discord and if you can create this customized digital pass.
It was just a fun experience to do online. And then they have got an off chain token that's generated based on the, when they sign up it's issued against their email address and it's stored in their browser, and that's, Possible for them to find out. It's explained on the site, but none of them need to find that out.
All they know is when they turn up at the Asex site and once they've issued it, once they've created a pass and they turn up at the Asex site, or they turn up on the K F C promotional page, or they turn up on the cooker bar site for a to get a cricket bat, suddenly they've got like a surprise and delight experience.
They're recognized instantaneously as a Glen Maxwell fan and a member of Catch Maxs, and they're given these personalized. So that's like the, a really basic example of this composability and services around a fan [00:19:00] experience that's enabled by tokenization and it's, this is a real technology innovation.
These sorts of, all of the things that I'm describing. If there's a web two developer on the listening to the podcast he'll be shouting already, or he or she'll probably be shouting already, say, I can do that already. I don't need to do tokenization. And you can. But it's cumbersome and it's costly and it takes time, and you have all of these privacy issues and you have all these database integration issues.
So what tokenization does is it makes it much, much easier for the fan to get issued a token. To have these things and then to go out and integrate with all these services and get these personalized benefits without the same integration burden or the privacy sharing risks that currently exist.
So you're just gonna see more and more of this. So we are very much starting in this intersection between loyalty and sports and membership and fandom. But when you start to move into airlines, And the travel experience. British Air Airline, British Airlines was [00:20:00] known for 25 years as the world's favorite airline.
And just like every other airline, they wanna own the end-to-end travel experience for their customers. And the best way that they can do that and create more loyal customers that spend more with them and choose them as their first franchise every time, is to create amazing utility around all of the travel experiences that consumer has.
And that's what tokenization is gonna unlock and deliver, we believe. Other than the lack of understanding and knowledge from. People and from companies generally, what do you think are other factors that are slowing down growth? And we are still this in experimentation stage?
I think it, it's just the complexity of the tech. So it's, what I, the examples that I'm providing the integrated web, seamless user experiences, removing friction. Better efficiency, plug and play type stuff. That sounds like the [00:21:00] diametrically opposed to the web three experience that most people have with a web and private keys sorry, with a a wallet and private keys and minting and getting their wallets hacked.
So I, I think the the challenge in web three has been to, as with all new technology phases, it can't be explained. It needs to be experienced and the experience needs to be better than what you're currently doing. And so I think we really see tokenization as bringing Web three technology to solve existing problems around user experience in web two at scale.
And it will be seamless for the end user. So then when you're solving real problems, Or creating amazing experiences. It just flows. But the, but the challenge at this point has been, lots of experiments. Defi 1.0, defi 2.0, initially currencies, and then it was collectibles and, then it was like soul bound tokens and identity and it's just, it's all very tech heavy and it hasn't, we haven't set a lot of examples breaking out into these mainstream areas, but I think we're really [00:22:00] on the cusp of that now.
Desi Velikova:
Full composibility and interoperability is an aspect that's definitely delaying adoption a little bit simply because I still can't use my tokens across platforms and runs. But another aspect, Which I think it's more problematic is governance and regulation. I'm personally very enthusiastic about tokenization of real estate about the opportunity to use smart contract for transfer of.
Ownership or even to own a piece of property or pieces of properties as an investment. The opportunities are limitless really. But the problem is if the token or contract is somehow compromised, who do I go to? Who's going to help me? There is no consumer protection wall at the moment that can assist me, and that's a huge problem.
On the other hand the core principle of blockchain is to remove the middlemen which [00:23:00] makes things a little bit tricky. Can we try and describe the perfect balance between decentralization and having some sort of, Protection in compliance with the laws and regulations. What do you think is the ideal scenario?
Brent Annells:
I think it's I mean I think there's a few elements to that in terms of the perfect scenario. So obviously what you're referring to largely is the securitization side of things, and it's basically tokens as assets. And when you're in the space of tokens as assets and it's anonymous while it's holding the assets and it's unclear.
Regulatory environment in the US for example, around whether it's a security or whether it's a commodity, that needs to be solved by regulators to give consumers confidence. And it, and I think Web Three has just had this experience. There's been a lot of innovation and a lot of experimentation and, you can say that the the experiment is out on peer-to-peer money, peer-to-peer money, alternative digital source of currency, Bitcoin, it's.
Job's done.[00:24:00] So we've had this transformative way for people to exchange money, peer to peer. There's more questions around the sort of broader securitization stuff, which I don't have a strong point of view on other than, the market will find the right level, and you're seeing that already around the world.
I think what's happened in the US. With the SS s C action over the last sort of, just the last month or two, it seems to have really galvanized the space. You've got Hong Kong firing on all cylinders. You've got a 16 Z heading off to London. You've got Dubai, there's all these other regions around the world o with welcome arms opening crypto, and then you're starting to see the us with some big players like Coinbase, really taking on the mantle of getting it's what everyone's been asking for a long time. So I think that's gonna, it's gonna run its own race. It's gonna find its own level, and it and it will just become clearer in the quite near term, I believe, for us and our view of tokenization, our view of the tokenized web.
Tokens as integration points. We don't really we are trying to solve a [00:25:00] mainstream web two set of problems around integration and better services and better experiences and greater business efficiency. And I think, you know what, we'll be doing that in parallel and lock stack with some of the oth other asset staff.
But we, Tokens as applications, as game changing applications that are, that users control and they carry their own data and they use that to exchange for personalized services. We think that's a super exciting area and we actually think in that space we are going to help compliance rather than cause more challenges because you're going to basically, token issuers like an airline or an automotive company or a Department of Motor Vehicles that issue a token to an end user.
They're giving them the data and they're giving the user the ability to then go and connect with third party services and choose to disclose whatever data they choose to disclose in order to get personalized services. So you are actually doing this end run around the whole. Personally identifiable in information p i barrier to these types of integrations.
So [00:26:00] we, we think it's gonna, it's gonna make it's gonna deliver greater compliance and greater regulatory benefits than the other way around.
Desi Velikova:
What are the countries and geographies that are paving the way for web three at the moment, especially from regulation point of view? So it's definitely not the UK and US unfortunately.
Brent Annells:
No, it's not the certainly not the us. I think the UK seems to be heading that way a little bit, but But it's very clear that Dubai, I'm not an expert, so I'll just caveat on, I just have a, I have a perspective that's not an expert perspective, but it would certainly seem that, Asia for quite a while now has been leading the way.
Markets like Korea in particular, just huge crypto adoption. Bit of a hiccup with with Don Quan, but but I think they've got, that people can participate, freely in crypto, in currencies, in, in. Assets and with a lot more certainty than in other markets.
You're obviously seeing Hong Kong really stand up as and open the [00:27:00] doors to, and saying we are gonna have a crypto friendly environment here. And that they they seem to be making very rapid strides in that regard. Dubai has had, had the shingle out for over a year. I see. I do. Every week I'm seeing more and more crypto companies go to Dubai because they're creating a really stable regulatory environment.
So I think, as those markets and regions continue to cr provide real certainty and the innovation goes there, then I think you will rapidly, you will see the US and Europe and the UK catch up because they'll have to, otherwise the innovation's just gonna live somewhere else. Yeah, no, absolutely.
Desi Velikova:
Even when we had the N F T wave n F T wave, the craziness back then quite a lot of projects were coming from Australia as well, at least projects we were following. What was it there that was providing this conditions for the space to thrive? Was it just organic interest or was it something else supporting it?
Brent Annells:
It's a good question. I don't know. I've done a lot of startups myself and [00:28:00] I'm Australian and and I've worked on a lot of startups in Australia, but also, in the US and in Europe. And I don't know, I think we've got a sort of entrepreneurial spirit in in Australia.
There's some really good university programs like U T S and I think there's just a lot of a lot of. A lot of innovators in Australia that don't take no for an answer and just want to go out there and and compete on the world stage. I think it's, I think it's that entrepreneurial culture that's behind it as much as any form of specific government regulation.
Desi Velikova:
Yeah, no, that makes sense. So I want to touch base on something else. Prior to Smart Token Labs you held senior marketing roles at Facebook where you are head of brand and Uber, where you are a director of strategic partnerships. How does marketing in the Web three domain differ from your previous experiences?
Are you doing things differently now?
Brent Annells:
Yes and no. My, my perspective is that through, I've been through waves one, two, and three of the internet since [00:29:00] 1999, doing startups and doing marketing and business development and partnerships and It's always completely different but also just completely the same.
So some of the fundamentals remain the same. You have to find a single you, you need to work out what problem you're solving, and you need a single-minded value proposition. And you need to be able to deliver, your story in a elevator pitch, a 32nd version, and then a long version of 90 seconds.
And you need to be, you need to be able to land that with the diverse range of stakeholders, whether that's in an ad or whether that's up on stage or in a podcast. If you can't do that, then you're going to fail with whatever marketing and partnership and business development work you do, so that always remains true.
The channels continuously change. I think you would see. I've worked in some large advertising agencies as well, and we, I've been through the cycles of. Back in 2000 it was all about personalization and one-to-one and c r [00:30:00] m and if you didn't understand personalization and one-to-one marketing right then you were a broadcast marketer and you just didn't get it and you were gonna fail.
And then I. There was early stages of social media and influencers, and then there was this whole idea of earned media versus paid me organic and earned and paid. And if you weren't on the pointy edge of earned and organic media, then you were gonna fail. And fast forward to Web three and, according to every Web three marketer community is now.
Totally redefined. And your community members are going to define your brand and if you don't let them own and shape your brand, then you are gonna fail. And so none of those things have ever proved to be absolutely true. They're all experiments in innovation, in new ways of doing things, and there's always lots of lessons.
And, it's, I love watching brands innovate in the web three space. I love seeing what Nike and Hugo Boss. And Adidas and Time Magazine [00:31:00] and you name it. I just think it's fantastic watching them innovate. But net it always comes back to where's the material business impact coming from?
And so with whether it's, exactly. I remember running ads on Second Life back in 2008 for a major bank in Australia. And the question always comes back when people innovate in these new areas. At some point, once the experimentation window's over, the business is looking out, is it Dr, is it driving commercial?
Materially significant commercial outcomes for me. And if it's not, they move on. So I think, I. Marketing's the same as it's always been. It's super difficult. It's really complicated. There's lots of channels. It's hard to prove. R o i Some of the fundamentals always remain the true.
You have to find, you have to be single-minded and you have to make big betts and you have to stick with them. And lots of different betts can work is my experience. The things I did at Uber are completely different to what I did at Facebook and a completely different to what I'm doing in some of these startups.
But they're all based on similar principles. Exactly. A
Desi Velikova
t the end of the day, [00:32:00] it all goes back to what's the value of your product and how do you communicate this value to users and partners. Yep. I'm so glad that the speculative face of the web three space is almost gone. We all knew that was going to be a trend that will disappear, and we're probably past this times now.
On that note is education, this kind of bridging the gap between web two and web three that we've been talking for a while still part of your role at the moment in our previous conversation you mentioned, If it's too complex, it's too complex, right? So it's very hard to educate and sell at the same time, simply because if there is no natural demand or a need for something, it's very hard to convince people, oh, you really need that you really should try it. What is your experience with this?
Brent Annells:
Yeah, it's exactly what you said. So it's impossible to [00:33:00] both educate and sell at the same time. With new technology, you can't explain. It needs to be experienced. I've been through every variation of you can go all the way back to the, to, to the internet as and, analogy based marketing, like the information Super Highway.
When you first heard the information Super Highway to describe what the internet was, it was just utterly meaningless. I had no idea what that meant. It wasn't until I got on a computer and I plugged it into the socket in the wall and a webpage opened and my mind was blown. It's no different with mobile apps, I couldn't have imagined a marketplace experience like Airbnb or Uber on a, in my hand, on my mobile phone when the app store first launched, and I could play Angry Birds on a phone.
It so trying to bridge into and I so my whole default is it's pointless. I hate doing it. I try and avoid doing it at [00:34:00] all costs. 'cause I really don't believe in it. And yet here I am, I find myself, having to try and paint forward. Use cases to explain new technology.
I do it on LinkedIn. I've done it on LinkedIn quite a bit. The last six to 12 months. I've been posting quite a lot on some of this new stuff, and I really enjoyed doing it. I also hate it at the same time because inevitable when I'm posting I'm going to get two, two streams back at me.
People who believe in tokenization are excited by the prospect of it and people who hate it and just really want to tell you that they hate it and that you are, and that you are stupid. And so what do they hate about it? Oh, I think it, I think with everything, I think so. On one hand it's massively overhyped, and so with every new technology wave, it's massively overhyped by a whole bunch of people.
And the people who are, the really early innovators and early adopters that overhype things. I. Always can't help themselves but criticize the previous wave and say, you are all stupid because you don't get it. [00:35:00] So the natural consequences of that is that there's a whole bunch of built up angst and tension and negativity amongst the established guard, towards anyone who says anything about this new tech.
So I, I understand it. So it's it, and it's never, it's always the same in the, Internet one, two, and three. It's always been the same. So it just is what it is. Net you're better off. You could never explain to someone tap and go with a credit card in store, right As you could never do a LinkedIn post on that and convince people that that is gonna be transformative for them in terms of their shopping experience.
'cause they're all gonna say, I go to the store already and I put my credit card in and I enter four digit pin and I walk out. What's the problem? What are you solving for? And you used to go to the store and hang in cash. Yeah, that's right. That was even faster. Yeah, it was perfectly fine. So why this tap and go?
Thing's [00:36:00] ridiculous. You got, you guys are, it's ridiculous. But today, if you go into a store, And somebody asked you to put your credit card in and choose and tell me what account it is, is it debit, credit, savings, or check? And I'm like I don't know. And if they ask me to enter my pin, I just have a complete conniption because it's basically 12 seconds of my life that I'm not gonna get back now because I have to stop and pause and enter in the pin.
And this removing friction. In these sorts of things. It's just like getting out of an Uber and not having to do the transaction with the taxi driver. If you get in a taxi, Today, at the end of the trip, if you have to pay, it's just that last 15 or 30 seconds is just it's like your fingernails on a chalkboard, but you can't explain that to people in advance and they're not gonna believe you that it's gonna be transformative.
Exactly. It's all, I think all new tech is has the sim similar issues. So I and I, I, I. I feel very empathetic to both sides of the ledger. I [00:37:00] feel very empathetic to people who are at the pointy edge of the new vanguard of New Tech, trying to pioneer the way and copying a lot of criticism, and equally I feel for the, for the established guard who are being told that they're no longer relevant, they don't get it, they're out of touch. Everything that they've always done is stupid, 'cause that's not true either.
Desi Velikova
Yeah, no, it's really sad to witness these negative vibes around the space. It's completely unnecessary. I get where it's coming from. Many people got burned. It was really ugly at some point, but we should probably. Be a bit more, let people innovate a little bit more and see what happens instead of trying to shut every new thing that appears on the market.
Brent Annells:
And crypto's got its specific problem got its own specific thing. Which it's money, so you innovating around particularly, the defi stuff. Experiments within experiments. Staking inside, pooling inside staking based on.
God knows what, [00:38:00] and so you know, you it's and all the rug pools and all that sort of stuff. So it's when it's, you're at the pointy edge of innovation and there's people's money at risk and there isn't, and it's unregulated environment. It's totally understandable that a lot of people out there have a very negative perspective on the space.
I totally understand that. But hopefully, as you said, we are moving outta the wild speculation phase. The, the next wave's coming, it's gonna solve more material business problems and hopefully we'll get a very different experience this time around. What do you think is going to be the next big wave in Web three?
I would probably say tokens is the integration point of the next web. That's my guess. I'm not surprised here. Yeah. I, yeah, I look I think I don't, apart from that, I don't I dunno. I think we're gonna continue to see you'll still see innovation in and around, the incentive part of.
Cryptocurrencies, the [00:39:00] incentives and governments and new times, new ways of mobilizing people. I think, we're right on the cusp of some amazing things happening around community mobilization of people around, really important things that governments aren't stepping up to the plate on because of the nature of how.
Politics works and election cycles work. They can't tackle these long-term problems around mental health or environment. And you see these crypto projects and these DAOs springing up where they're using token ons to incentivize people to, Make carbon credits too expensive for polluters to use them.
And there's an economic model where you can invest in tar in carbon credits and generate a financial return for yourself, but you're pricing carbon credits outta the market for the world's polluters. Those types of things. I think. They got caught in the previous wave, I think, and I hope that we start to see, lots of that happening.
DAOs within cities, mobilizing people to tackle, contribute to and tackle things like. Homelessness and [00:40:00] poverty and some of these really big societal issues where people care, but it's really hard for 'em to do anything. And I think blockchain centralization the actual use of cryptocurrencies and these new incentives and governments models pave the way to a lot of innovation in those areas.
So I'm excited about that.
Desi Velikova:
It was an absolute pleasure to have this chat with you, Brent. Where can people find you if they want to connect with you?
Brent Anneals
They can check out our project on https://www.smartlayer.network/ that's launching in the next week. And I'm personally at just at LinkedIn as Brent Annells
Desi Velikova: [00:00:00] You don't have to be cryp to believer to think that blockchain will underpin the future of any technology. From FinTech, Health and legal to marketing, sports, and entertainment experts agree that the future will be tokenized. To discuss the topic in more detail, I invited Brent Annells.
Chief Marketing officer of Smart Token Labs who shared with me the endless opportunities of tokenization and what kind of open loyalty projects are already happening that we should be aware of with Facebook and Uber and his resume.
You don't want to miss his perspective on how blockchain will completely transform the way you engage with your audience. Enjoy this episode and don't forget to subscribe to our channels wherever you are watching listening.
Welcome to the product show. Insightful interviews with founders and tech leaders sharing how they hack product growth.
[00:01:00]
Desi Velikova: Hello, Brent. It's a pleasure to have you on the podcast. You are the Chief Marketing Officer of Smart Token Labs a company offering an area of products aiming to simplify the process of tokenization for developers and brands. Can you explain, in simple terms what tokenization is and why you believe it'll underpin the future of tech?
Brent Annells:
Yeah. Thank you very much for having me on the show. Dessi I'd love to answer that question. We, at Smart Token Labs, we've had a vision of tokenization delivering a fully integrated web. We've had that vision for the last five to six years since we started in 2017. And what we mean by that is essentially an integrated web that delivers better experiences for consumers and delivers greater efficiency for businesses.
And it's based on web services. It's based on composability being bought to web services, and it's a fundamentally different view of tokenization than probably most people have held to this date. Most people think about tokens as assets, and they [00:02:00] think about them as collectibles or currencies. We think of tokens as applications, and we think of them as the integration points of the next web.
Desi Velikova:
Amazing. Can you give me a few real world examples of project that are already happening, something you've been working on, or probably not necessarily related to Smart Token Labs, just to help us visualize this concept.
Brent Annells:
Sure. Look we did our first advanced tokenization use case back in 2018 where we tokenized event tickets and enabled you to access as a V I P at the 2018 FIFA World Cup.
We tokenized your ticket and you could enter the stadium and you could scan it at the gate. We did a car ownership. Token, a smart token for that represented your car ownership in 2020. So we did a lot of experimentation with these types of use cases more, more recently we've been deploying in areas related to loyalty, membership, and sports.
And so for example, we've delivered smart tokens. As integration points around event experiences, [00:03:00] specifically in the web three ecosystem. So we've delivered a thing called Permissionless Perks, which we delivered that at devcon six in Bogota with 6,000 Ethereum developers in attendance.
So it's the world's largest Ethereum developer event. And we enabled the Ethereum Foundation that, that was the organizer of the event to issue a smart token, which represented your ticket ownership. And that ticket has. A series of data related to a data point. So it shows that you're one of 6,000 of attendees.
You're an advanced Ethereum developer. You're in Bogota and you're attending this event, which is a high ticket price event. And we were able to stand up around that ticket. The attendees got this ticket, which they were able to secure via an email as opposed to minting. And they're able to use that ticket to unlock a range of.
Offers and experiences that were provided to them by third parties that weren't directly involved in the event. But they could offer it to them based on this token as an integration point. So things like localized business services venture capitalists [00:04:00] would do priority reviews of your business pitch because they knew that you were an Ethereum developer.
There were events on the ground that were side events from the event itself. So it created this integration point around the entire event experience with the token unlocks a whole series of things for the participants. There is something else that many brands are really excited about.
Desi Velikova:
And this is the opportunity of using tokenization for loyalty programs, what's been referred to as open loyalty programs. How are Web three loyalty programs different from traditional web. Traditional loyalty programs that we've been seeing in the last 20 years, even more. What is difference
I have the feeling that sometimes brands tend to plug in this n f T digital token element without really the need to do it. So what's the difference?
Brent Annells:
Yeah, look, it's a very good question and it's a very interesting topic area. And I think if you start with the problem in loyalty, the problem in loyalty is probably best represented by the data point that 77% of [00:05:00] transactional loyalty programs fail within two years.
And I think we all know that our loyalty program that's offered to us by our airline or our telco or our bank, has a bunch of these ancillary sort of, Offers and rewards. I get free coffees, I get discounted sandwiches, I get maybe a movie ticket, and it's just not really that meaningful to me.
And so this is a fundamental problem that loyalty problems ha, that loyalty programs have. And I think the big push in loyalty is it's how do you deliver utility? To your participants that's relevant to, to what you as a brand is doing. So for example, if you're a travel company, a travel brand, say you're an airline, there's a, your customers have a travel experience.
And the airline ticket and the flight is a part of that travel experience. And our vision of open loyalty is basically giving an airline company [00:06:00] the ability to issue a smart token, which represents the airline ticket that someone holds and a piece, a series of data points around that, where they're traveling to, where they're left from, where they're going to, what time they're traveling, maybe the status of their travel, whether they're a premium travel or an economy travel, and then giving them the ability to use that token, the user, the customer, to take that copen token that's been issued by the airline.
And then take it out to a whole series of web services providers and integrate into those services that they offer, whether it's hotel booking or car rentals, or city-based attractions or insurance providers. And by carrying the token into those services, they get more personalized experiences, they get better experiences, they get less friction in experiences related to the entire travel experience, and that's our view.
Of the step change that tokenization represents. It's not necessarily about NFTs. It's not necessarily about tokenizing points and making them composable. [00:07:00] We think it's about bringing a utility to the event experience, the travel experience, the home ownership experience, the fandom experience and integrating into all these related things that you do and making it easier for end users.
Desi Velikova:
Amazing. Yeah, so it's a bit like treating the consumer, not as my client, not as my user, but looking at people or the consumers of many brands. So how can we, as companies and brands be a bit more connected? To help people have better experiences. And it sounds like really impressive. It's really exciting.
But there is a BUT, which is, we are still in this phase of, it's coming one day. So how far are we from this reality?
Brent Annells:
I think we're getting closer and closer. And I think a big part of that is, our approach to tokenization is to bring tokenization into web two.
And to make these large scale experiences that happen today with web true [00:08:00] enterprises, automotive manufacturers, telcos, banks, travel companies all the service providers around that, and the customers to make those experiences better. And In doing that, one of the bridges that you need to cross is you need to make it easier.
So you can, we Smart tokens technology that we use enables you to tokenize things like an airline ticket and hold it as either an off chain or an on chain token. And an off chain token means basically a cryptographic proof against, for example, an airline ticket. And certain data points in an airline ticket can be issued to you and linked to it as an attestation linked to an email address.
So suddenly the user has a cryptographic proof. I can use that as an integration point to unlock services from third party providers, which makes the integration much easier between the ticket issuer and the third party provider. A range of issues related to database integration and privacy. It makes all that easier.
But people can access it. The aperture is suddenly all of my customers can do that. That, [00:09:00] not just the ones who have a web three wallet or just the ones who know how to mint an N F T. So the stepping stone into this, we believe is both on chain and off chain tokens, the ability to participate in these experiences, in it makes sense to, to be on chain for certain types of things if you want be able to trade.
The, if you wanna be able to trade the token, if you if it's got a monetary value, that type of thing. But if it's an integration point, it doesn't necessarily have to be on chain. So opening up the aperture, making it easier, then we are starting to move into use cases, which can become much more mainstream, much faster.
So I don't really need to understand whether that's happening on chain or what's the technology behind it. I just need to experience it to feel the benefit and to understand it. Yeah, that's exactly right. We. Yeah. Which industries do you think will be the first to witness mass adoption?
You mentioned the travel industry, there are huge opportunities in front of sports as well. Where do you see the first wave of adoption? [00:10:00] I think the sort of intersection between loyalty, membership, sports, entertainment, And maybe creators. I think it's that bucket, because I think if you take sports as an example you basically have a fan of a sport or a code, a fan of baseball or a fan of cricket, and you have.
The code and you have the teams, and you have the players that they love and they want to, and they wanna be close to. And then you have all of the ecosystem of sponsors and commercial partners around that. So you have this natural network around it, and basically it's this continuous, there's a real business problem there.
It operates at multiple levels, so you need. The code needs more people to get closer to the game and be more part of the overall experience. The code needs to deliver better r o i to the sponsors and the commercial partners of the game. The fans want to get closer to the experience and be recognized and rewarded for being [00:11:00] fans.
So you've got this sort of natural ecosystem that's already operating and by bringing tokenization into that you can deliver real world. Benefits to the fan experience that also offer benefits to the code or the players and the third party sponsors. So I can give you a really quick example of that if you like.
We we recently did a project called Catch Max, and it's a digital membership program for one of the, one of the biggest top five cricket players in the world. His name's Glen Maxwell, and so he's a, he's an Australian cricket player. Very famous. Cricket, if you're not familiar with cricket it's similar to baseball, that sort of level.
It's a massive game in the continent in India, in, in parts of Europe and certainly in Asia-Pac. And so we created a digital membership program for fans. Of Glen Maxwell and it was called Catch max. And we issued a token as part of the membership. And the membership, [00:12:00] not unlike a lot of other membership programs, it unlocks these very specific fan experiences and rewards and offers.
The token itself and as part of signing up for the membership, you get to a little bit like an N F T. You get to create your own bespoke membership pastor. There's all these different backgrounds and all these different pictures and you can customize it. So it's really your membership card represents.
Glen Maxwell in the way that you want to see him on your card. You can go through all of that process and you can create a card and you create an off chain token, which is a cryptographic proof of your membership via that's attached to your email address and lives in your browser. And then there's a whole collection of sponsors and ecosystem players.
So sponsors really bespoke cricket sponsors like Asics and Cook Barrel, who do the shoes and do the bats. So for fans of Cricket of Glen Maxwell that are cricket players that want that stuff, they're getting very bespoke discounted offers from those cricket headline cricket sponsors.
They're also getting. [00:13:00] Things like stream discounted streaming offers on cricket via sports streaming services where they'll give you a discounted opportunity to stream cricket into your home. There's offers from the code related to game day attendance, which are discounted tickets and priority proceeding and things like that, which recognize you.
And then finally, there's just, there's brand sponsors of the game, like K F C, that are doing very bespoke things. So you've created this this way for fans to get closer to the game, to the code, more involved in it, closer the, to the player they love. They've got a token. They can mint it online if they wish to, so they can convert it to an N F T, but they don't need to.
And that's an example of, I think we're gonna see a lot more of that. And there's already a bunch of that happening in the US with with M B L and that sort of thing. Where, that intersection between membership and sports and you're really activating a network, a commercial network around the fandom experience in sports where all parties are winning.
Desi Velikova:
Yeah, absolutely. And there is so much more transparency for sponsors to kind finally understand [00:14:00] who do they engage with is their message actually reaching fans.
Brent Annells:
Exactly. So it's that quintessential problem in sponsorship, it's closed loop, r o i. How do I prove that? Most sponsorships operate at the brand level, at an awareness level, and it's hard.
To quantify the commercial return that you get as a sponsor. It's an age old problem. It's always, it existed. It's never gone away. Every sport, every code, every star player that's doing sponsorship deals needs a way to try and close the loop for the sponsors and tokenization by basically creating a token and giving it to the fan.
And then the fan can go directly to the sponsor to have an experience with this token. And the fan is taking their the really important part about tokenization in this instance is, The fan is taking these proofs to these third party sponsors and choosing to share those proofs with them. I am a fan of cricket.
I am a fan of Glen Maxwell. I am posting regularly, I am attending [00:15:00] games. And as those, data points are being shared progressively, then they can get more personalized offers or rewards from these sponsors. And you're closing the loop for everybody, right? Amazing. How. Did you choose the fans, the members that could participate and get access to these tokens?
Or was it open to everyone? It was open to everyone. So it's a paid membership. Okay. We, we took it to market with, it's really interesting. So Glen Maxwell has 10 million followers on social media and build up over a long period of time, but. A, as is usually the case when you try and activate those fans on social media, you get far less than 1% organic reach when he does posts to them.
So what was happening as part of this membership program is we were bringing them into Discord and they were doing fan watching parties. So they were actually doing, when game day was happening, they were all coming together and Glen's. Coach and his manager were coming and like moderating these, interactive sessions with true fans of Glen.
Glen was doing one on [00:16:00] was doing amass into this Discord community directly. And so fans were getting this opportunity to directly interact with him. So over, over a period of a couple of months, we built that Discord community up to I think five or 6,000 members that became the nucleus of this really turbocharged fan base.
And then basically we launched the membership pass and within seven days we 16,000 passes were generated by his fans. And that was in a, we did a pre-launch period for seven days where that was, we gave them the pass for free and it's now just converted to the paid pass. In, in web three terms onboarding 16,000 pass holders in seven days is, it's a more material number and what, is they're super fans, so they're massive lovers of Glen and they're massive lovers of the code and they're super high value too to sponsors.
Desi Velikova
Yeah. I think The challenge for me from what you're saying is how do you educate people about Web three, about the opportunities using [00:17:00] NFTs and digital tokens to get access to Glen in this case? So you have this really from where I stand, this really narrow target audience that is between the intersection.
It is in the intersection between Cricket fans and people into web 3. From my experience, it's very difficult to get people excited about Web three and NFTs if they already don't know what this is about. Did you have this learning curve with this project or did you manage to engage people outside of the Web three space?
Because the acquisition journey or the onboarding was so seamless that they didn't really realize there was a token behind it.
Brent Annells:
Exactly right. So our view, if you go back to the very beginning and our vision around tokenization, this idea of the integrated web and the i, this idea of composable services around experiences that create better user experiences.
So there was no mention, there were no, there was no mention of web three, there was no mention of tokenization. There was just the ability for so we [00:18:00] specifically targeted just cricket lovers and we did, there was no intersection with web three. So we we just went to them and said, if you're a fan, you can join this Discord and if you can create this customized digital pass.
It was just a fun experience to do online. And then they have got an off chain token that's generated based on the, when they sign up it's issued against their email address and it's stored in their browser, and that's, Possible for them to find out. It's explained on the site, but none of them need to find that out.
All they know is when they turn up at the Asex site and once they've issued it, once they've created a pass and they turn up at the Asex site, or they turn up on the K F C promotional page, or they turn up on the cooker bar site for a to get a cricket bat, suddenly they've got like a surprise and delight experience.
They're recognized instantaneously as a Glen Maxwell fan and a member of Catch Maxs, and they're given these personalized. So that's like the, a really basic example of this composability and services around a fan [00:19:00] experience that's enabled by tokenization and it's, this is a real technology innovation.
These sorts of, all of the things that I'm describing. If there's a web two developer on the listening to the podcast he'll be shouting already, or he or she'll probably be shouting already, say, I can do that already. I don't need to do tokenization. And you can. But it's cumbersome and it's costly and it takes time, and you have all of these privacy issues and you have all these database integration issues.
So what tokenization does is it makes it much, much easier for the fan to get issued a token. To have these things and then to go out and integrate with all these services and get these personalized benefits without the same integration burden or the privacy sharing risks that currently exist.
So you're just gonna see more and more of this. So we are very much starting in this intersection between loyalty and sports and membership and fandom. But when you start to move into airlines, And the travel experience. British Air Airline, British Airlines was [00:20:00] known for 25 years as the world's favorite airline.
And just like every other airline, they wanna own the end-to-end travel experience for their customers. And the best way that they can do that and create more loyal customers that spend more with them and choose them as their first franchise every time, is to create amazing utility around all of the travel experiences that consumer has.
And that's what tokenization is gonna unlock and deliver, we believe. Other than the lack of understanding and knowledge from. People and from companies generally, what do you think are other factors that are slowing down growth? And we are still this in experimentation stage?
I think it, it's just the complexity of the tech. So it's, what I, the examples that I'm providing the integrated web, seamless user experiences, removing friction. Better efficiency, plug and play type stuff. That sounds like the [00:21:00] diametrically opposed to the web three experience that most people have with a web and private keys sorry, with a a wallet and private keys and minting and getting their wallets hacked.
So I, I think the the challenge in web three has been to, as with all new technology phases, it can't be explained. It needs to be experienced and the experience needs to be better than what you're currently doing. And so I think we really see tokenization as bringing Web three technology to solve existing problems around user experience in web two at scale.
And it will be seamless for the end user. So then when you're solving real problems, Or creating amazing experiences. It just flows. But the, but the challenge at this point has been, lots of experiments. Defi 1.0, defi 2.0, initially currencies, and then it was collectibles and, then it was like soul bound tokens and identity and it's just, it's all very tech heavy and it hasn't, we haven't set a lot of examples breaking out into these mainstream areas, but I think we're really [00:22:00] on the cusp of that now.
Desi Velikova:
Full composibility and interoperability is an aspect that's definitely delaying adoption a little bit simply because I still can't use my tokens across platforms and runs. But another aspect, Which I think it's more problematic is governance and regulation. I'm personally very enthusiastic about tokenization of real estate about the opportunity to use smart contract for transfer of.
Ownership or even to own a piece of property or pieces of properties as an investment. The opportunities are limitless really. But the problem is if the token or contract is somehow compromised, who do I go to? Who's going to help me? There is no consumer protection wall at the moment that can assist me, and that's a huge problem.
On the other hand the core principle of blockchain is to remove the middlemen which [00:23:00] makes things a little bit tricky. Can we try and describe the perfect balance between decentralization and having some sort of, Protection in compliance with the laws and regulations. What do you think is the ideal scenario?
Brent Annells:
I think it's I mean I think there's a few elements to that in terms of the perfect scenario. So obviously what you're referring to largely is the securitization side of things, and it's basically tokens as assets. And when you're in the space of tokens as assets and it's anonymous while it's holding the assets and it's unclear.
Regulatory environment in the US for example, around whether it's a security or whether it's a commodity, that needs to be solved by regulators to give consumers confidence. And it, and I think Web Three has just had this experience. There's been a lot of innovation and a lot of experimentation and, you can say that the the experiment is out on peer-to-peer money, peer-to-peer money, alternative digital source of currency, Bitcoin, it's.
Job's done.[00:24:00] So we've had this transformative way for people to exchange money, peer to peer. There's more questions around the sort of broader securitization stuff, which I don't have a strong point of view on other than, the market will find the right level, and you're seeing that already around the world.
I think what's happened in the US. With the SS s C action over the last sort of, just the last month or two, it seems to have really galvanized the space. You've got Hong Kong firing on all cylinders. You've got a 16 Z heading off to London. You've got Dubai, there's all these other regions around the world o with welcome arms opening crypto, and then you're starting to see the us with some big players like Coinbase, really taking on the mantle of getting it's what everyone's been asking for a long time. So I think that's gonna, it's gonna run its own race. It's gonna find its own level, and it and it will just become clearer in the quite near term, I believe, for us and our view of tokenization, our view of the tokenized web.
Tokens as integration points. We don't really we are trying to solve a [00:25:00] mainstream web two set of problems around integration and better services and better experiences and greater business efficiency. And I think, you know what, we'll be doing that in parallel and lock stack with some of the oth other asset staff.
But we, Tokens as applications, as game changing applications that are, that users control and they carry their own data and they use that to exchange for personalized services. We think that's a super exciting area and we actually think in that space we are going to help compliance rather than cause more challenges because you're going to basically, token issuers like an airline or an automotive company or a Department of Motor Vehicles that issue a token to an end user.
They're giving them the data and they're giving the user the ability to then go and connect with third party services and choose to disclose whatever data they choose to disclose in order to get personalized services. So you are actually doing this end run around the whole. Personally identifiable in information p i barrier to these types of integrations.
So [00:26:00] we, we think it's gonna, it's gonna make it's gonna deliver greater compliance and greater regulatory benefits than the other way around.
Desi Velikova:
What are the countries and geographies that are paving the way for web three at the moment, especially from regulation point of view? So it's definitely not the UK and US unfortunately.
Brent Annells:
No, it's not the certainly not the us. I think the UK seems to be heading that way a little bit, but But it's very clear that Dubai, I'm not an expert, so I'll just caveat on, I just have a, I have a perspective that's not an expert perspective, but it would certainly seem that, Asia for quite a while now has been leading the way.
Markets like Korea in particular, just huge crypto adoption. Bit of a hiccup with with Don Quan, but but I think they've got, that people can participate, freely in crypto, in currencies, in, in. Assets and with a lot more certainty than in other markets.
You're obviously seeing Hong Kong really stand up as and open the [00:27:00] doors to, and saying we are gonna have a crypto friendly environment here. And that they they seem to be making very rapid strides in that regard. Dubai has had, had the shingle out for over a year. I see. I do. Every week I'm seeing more and more crypto companies go to Dubai because they're creating a really stable regulatory environment.
So I think, as those markets and regions continue to cr provide real certainty and the innovation goes there, then I think you will rapidly, you will see the US and Europe and the UK catch up because they'll have to, otherwise the innovation's just gonna live somewhere else. Yeah, no, absolutely.
Desi Velikova:
Even when we had the N F T wave n F T wave, the craziness back then quite a lot of projects were coming from Australia as well, at least projects we were following. What was it there that was providing this conditions for the space to thrive? Was it just organic interest or was it something else supporting it?
Brent Annells:
It's a good question. I don't know. I've done a lot of startups myself and [00:28:00] I'm Australian and and I've worked on a lot of startups in Australia, but also, in the US and in Europe. And I don't know, I think we've got a sort of entrepreneurial spirit in in Australia.
There's some really good university programs like U T S and I think there's just a lot of a lot of. A lot of innovators in Australia that don't take no for an answer and just want to go out there and and compete on the world stage. I think it's, I think it's that entrepreneurial culture that's behind it as much as any form of specific government regulation.
Desi Velikova:
Yeah, no, that makes sense. So I want to touch base on something else. Prior to Smart Token Labs you held senior marketing roles at Facebook where you are head of brand and Uber, where you are a director of strategic partnerships. How does marketing in the Web three domain differ from your previous experiences?
Are you doing things differently now?
Brent Annells:
Yes and no. My, my perspective is that through, I've been through waves one, two, and three of the internet since [00:29:00] 1999, doing startups and doing marketing and business development and partnerships and It's always completely different but also just completely the same.
So some of the fundamentals remain the same. You have to find a single you, you need to work out what problem you're solving, and you need a single-minded value proposition. And you need to be able to deliver, your story in a elevator pitch, a 32nd version, and then a long version of 90 seconds.
And you need to be, you need to be able to land that with the diverse range of stakeholders, whether that's in an ad or whether that's up on stage or in a podcast. If you can't do that, then you're going to fail with whatever marketing and partnership and business development work you do, so that always remains true.
The channels continuously change. I think you would see. I've worked in some large advertising agencies as well, and we, I've been through the cycles of. Back in 2000 it was all about personalization and one-to-one and c r [00:30:00] m and if you didn't understand personalization and one-to-one marketing right then you were a broadcast marketer and you just didn't get it and you were gonna fail.
And then I. There was early stages of social media and influencers, and then there was this whole idea of earned media versus paid me organic and earned and paid. And if you weren't on the pointy edge of earned and organic media, then you were gonna fail. And fast forward to Web three and, according to every Web three marketer community is now.
Totally redefined. And your community members are going to define your brand and if you don't let them own and shape your brand, then you are gonna fail. And so none of those things have ever proved to be absolutely true. They're all experiments in innovation, in new ways of doing things, and there's always lots of lessons.
And, it's, I love watching brands innovate in the web three space. I love seeing what Nike and Hugo Boss. And Adidas and Time Magazine [00:31:00] and you name it. I just think it's fantastic watching them innovate. But net it always comes back to where's the material business impact coming from?
And so with whether it's, exactly. I remember running ads on Second Life back in 2008 for a major bank in Australia. And the question always comes back when people innovate in these new areas. At some point, once the experimentation window's over, the business is looking out, is it Dr, is it driving commercial?
Materially significant commercial outcomes for me. And if it's not, they move on. So I think, I. Marketing's the same as it's always been. It's super difficult. It's really complicated. There's lots of channels. It's hard to prove. R o i Some of the fundamentals always remain the true.
You have to find, you have to be single-minded and you have to make big betts and you have to stick with them. And lots of different betts can work is my experience. The things I did at Uber are completely different to what I did at Facebook and a completely different to what I'm doing in some of these startups.
But they're all based on similar principles. Exactly. A
Desi Velikova
t the end of the day, [00:32:00] it all goes back to what's the value of your product and how do you communicate this value to users and partners. Yep. I'm so glad that the speculative face of the web three space is almost gone. We all knew that was going to be a trend that will disappear, and we're probably past this times now.
On that note is education, this kind of bridging the gap between web two and web three that we've been talking for a while still part of your role at the moment in our previous conversation you mentioned, If it's too complex, it's too complex, right? So it's very hard to educate and sell at the same time, simply because if there is no natural demand or a need for something, it's very hard to convince people, oh, you really need that you really should try it. What is your experience with this?
Brent Annells:
Yeah, it's exactly what you said. So it's impossible to [00:33:00] both educate and sell at the same time. With new technology, you can't explain. It needs to be experienced. I've been through every variation of you can go all the way back to the, to, to the internet as and, analogy based marketing, like the information Super Highway.
When you first heard the information Super Highway to describe what the internet was, it was just utterly meaningless. I had no idea what that meant. It wasn't until I got on a computer and I plugged it into the socket in the wall and a webpage opened and my mind was blown. It's no different with mobile apps, I couldn't have imagined a marketplace experience like Airbnb or Uber on a, in my hand, on my mobile phone when the app store first launched, and I could play Angry Birds on a phone.
It so trying to bridge into and I so my whole default is it's pointless. I hate doing it. I try and avoid doing it at [00:34:00] all costs. 'cause I really don't believe in it. And yet here I am, I find myself, having to try and paint forward. Use cases to explain new technology.
I do it on LinkedIn. I've done it on LinkedIn quite a bit. The last six to 12 months. I've been posting quite a lot on some of this new stuff, and I really enjoyed doing it. I also hate it at the same time because inevitable when I'm posting I'm going to get two, two streams back at me.
People who believe in tokenization are excited by the prospect of it and people who hate it and just really want to tell you that they hate it and that you are, and that you are stupid. And so what do they hate about it? Oh, I think it, I think with everything, I think so. On one hand it's massively overhyped, and so with every new technology wave, it's massively overhyped by a whole bunch of people.
And the people who are, the really early innovators and early adopters that overhype things. I. Always can't help themselves but criticize the previous wave and say, you are all stupid because you don't get it. [00:35:00] So the natural consequences of that is that there's a whole bunch of built up angst and tension and negativity amongst the established guard, towards anyone who says anything about this new tech.
So I, I understand it. So it's it, and it's never, it's always the same in the, Internet one, two, and three. It's always been the same. So it just is what it is. Net you're better off. You could never explain to someone tap and go with a credit card in store, right As you could never do a LinkedIn post on that and convince people that that is gonna be transformative for them in terms of their shopping experience.
'cause they're all gonna say, I go to the store already and I put my credit card in and I enter four digit pin and I walk out. What's the problem? What are you solving for? And you used to go to the store and hang in cash. Yeah, that's right. That was even faster. Yeah, it was perfectly fine. So why this tap and go?
Thing's [00:36:00] ridiculous. You got, you guys are, it's ridiculous. But today, if you go into a store, And somebody asked you to put your credit card in and choose and tell me what account it is, is it debit, credit, savings, or check? And I'm like I don't know. And if they ask me to enter my pin, I just have a complete conniption because it's basically 12 seconds of my life that I'm not gonna get back now because I have to stop and pause and enter in the pin.
And this removing friction. In these sorts of things. It's just like getting out of an Uber and not having to do the transaction with the taxi driver. If you get in a taxi, Today, at the end of the trip, if you have to pay, it's just that last 15 or 30 seconds is just it's like your fingernails on a chalkboard, but you can't explain that to people in advance and they're not gonna believe you that it's gonna be transformative.
Exactly. It's all, I think all new tech is has the sim similar issues. So I and I, I, I. I feel very empathetic to both sides of the ledger. I [00:37:00] feel very empathetic to people who are at the pointy edge of the new vanguard of New Tech, trying to pioneer the way and copying a lot of criticism, and equally I feel for the, for the established guard who are being told that they're no longer relevant, they don't get it, they're out of touch. Everything that they've always done is stupid, 'cause that's not true either.
Desi Velikova
Yeah, no, it's really sad to witness these negative vibes around the space. It's completely unnecessary. I get where it's coming from. Many people got burned. It was really ugly at some point, but we should probably. Be a bit more, let people innovate a little bit more and see what happens instead of trying to shut every new thing that appears on the market.
Brent Annells:
And crypto's got its specific problem got its own specific thing. Which it's money, so you innovating around particularly, the defi stuff. Experiments within experiments. Staking inside, pooling inside staking based on.
God knows what, [00:38:00] and so you know, you it's and all the rug pools and all that sort of stuff. So it's when it's, you're at the pointy edge of innovation and there's people's money at risk and there isn't, and it's unregulated environment. It's totally understandable that a lot of people out there have a very negative perspective on the space.
I totally understand that. But hopefully, as you said, we are moving outta the wild speculation phase. The, the next wave's coming, it's gonna solve more material business problems and hopefully we'll get a very different experience this time around. What do you think is going to be the next big wave in Web three?
I would probably say tokens is the integration point of the next web. That's my guess. I'm not surprised here. Yeah. I, yeah, I look I think I don't, apart from that, I don't I dunno. I think we're gonna continue to see you'll still see innovation in and around, the incentive part of.
Cryptocurrencies, the [00:39:00] incentives and governments and new times, new ways of mobilizing people. I think, we're right on the cusp of some amazing things happening around community mobilization of people around, really important things that governments aren't stepping up to the plate on because of the nature of how.
Politics works and election cycles work. They can't tackle these long-term problems around mental health or environment. And you see these crypto projects and these DAOs springing up where they're using token ons to incentivize people to, Make carbon credits too expensive for polluters to use them.
And there's an economic model where you can invest in tar in carbon credits and generate a financial return for yourself, but you're pricing carbon credits outta the market for the world's polluters. Those types of things. I think. They got caught in the previous wave, I think, and I hope that we start to see, lots of that happening.
DAOs within cities, mobilizing people to tackle, contribute to and tackle things like. Homelessness and [00:40:00] poverty and some of these really big societal issues where people care, but it's really hard for 'em to do anything. And I think blockchain centralization the actual use of cryptocurrencies and these new incentives and governments models pave the way to a lot of innovation in those areas.
So I'm excited about that.
Desi Velikova:
It was an absolute pleasure to have this chat with you, Brent. Where can people find you if they want to connect with you?
Brent Anneals
They can check out our project on https://www.smartlayer.network/ that's launching in the next week. And I'm personally at just at LinkedIn as Brent Annells
