Pudgy Penguins Path to Legacy Brand & IP Powerhouse | Luca Netz

Transcript

at the bottom of my funnel is my 888 first edition pudgy penguin ethereum nfts that is the first edition and the origin story of my entire company and my entire business it is the asset that gives you utility and access that no other asset in our business gives you it is the asset that allows you to monetize and be a part of the growth right because every product and every piece of content that we make we actually license the nft from the from the collection and make products out of that and so you can make monies on royalties that is the nucleus and we're all value in my opinion has to accrue uh if this is really going to win

this episode is brought to you by synthetics the liquidity layer for D5 derivatives with synthetics V3 any protocol can now tap into synthetics liquidity to bootstrap derivatives markets you'll hear more about synthetics later in the show this episode is brought to you by carbon carbon is a new Dex on ethereum that makes concentrated liquidity super easy with carbon LPS can now automate your liquidity strategy with custom on-chain limit and range orders all from a beautiful UI check out carbon today for unprecedented control over your liquidity welcome back to another episode of Empire uh we are here with Luca I hope

you guys are watching this one on YouTube because Luca's looking uh as ridiculous and decked out as possible today so Luca man you uh you got your bull market your bull market fit on today huh dude I'm proliferating man I'm proliferating well we got a little nouns we got a little penguins I love it we usually don't talk about people's background going go in in uh in these conversations but I was doing a little research for this episode you got a pretty wild story man like high school dropout uh packing boxes at ring the like doorbell company early days get asked to like jump up onto the engineering team it sounded like maybe you can just like I don't know maybe we could start there with with just your early days and the early story and like how you kind of turned into who you are today if that

works for you yeah in hindsight it definitely is a cool story I didn't really realize it until I started speaking it in web 3 and then everyone's like dude the story's pretty badass I was like oh [ __ ] I didn't even realize it but the story is kind of badass um the 60-second version is group homeless with my mom for 10 years 14 different places bouncing around guest bedroom and guest bedroom couch to couch we weren't homeless like pushing a cart but we didn't really have our own home and whoever would take us in and let us stay for an extended period of time was kind of uh we were Nomads to say the least uh we settled down when I was a teenager in Los Angeles uh went to Fairfax High School went to a couple different high schools actually it was a

bad kid super skateboarder you know degenerate just smoking weed with my friends way too young to be smoking weed skateboarding doing the whole spiel um then I went to Fairfax dropped out of Fairfax mom was still struggling to pay the bills a couple really big moments that led me to that decision I won't dive into it but I was old enough to work and so I decided to join the workforce I took 100 resumes went up and down Fairfax and Melrose handing them out didn't find any luck took my tail to uh Tech Road Santa Monica I went to the shittiest office on the row which if you know Tech row and you know Santa Monica you know ring doorbell's first office was very much that it was a shack

amongst uh a bunch of Titans and Giants and amazing buildings and it had this little rinky eating Shack that they had going on I got a job packing boxes I was one of their first people backpacking boxes one of their early employees saw that business basically go from idea or new iteration from doorbot to ring and just saw that thing basically scale from a group of 20 25 of us to a thousand people 500 people by the time I left I started my first direct-to-consumer business when I was 18 sold that business for quite a bit of money when I was 19 that kind of put me on the Paradigm of like hey life-changing money and then I started a couple companies all of which were

really successful notable big wins was I was the CMO Von Dutch brought them back uh pretty much from the dead which was a big moment in 2020 and then was the CMO and biggest investor at the time for a company called gel Blaster which ended up being North America's fastest growing toy company uh and honestly just a complete Nerf killer and so that led me and gave me the confidence to come into pudgy Penguins uh and we're trying to go three for three here there we go I love it man all right so take us back to April 2022 because I I you know I kind of followed the Pudgies the pudgy story from like early days and it was uh it was in shambles I would call it I think that's a fair thing to say and you came in in April 2022 I I think it's fair to

say pudgy Penguins felt kind of dead in the water as a project and you bought them for I think it was 750 eth at the time which roughly yeah exactly so what what uh what gave you that conviction to buy penguins at for two and a half million bucks I think what does that even mean by the way to buy do you buy that you're buying the company there was no company so we bought a bunch of assets like 60 different assets even some of the previous teams is social media accounts so anything and everything under the sun this wasn't a you know there hadn't been a deal like this that had been done before so it's kind of historic in its own right so there really was no case law or deal to kind of reference we kind of constructed it which is one of the

reasons why it took a little bit longer than I wanted to I think we got the bid accepted in December and didn't go through until April uh so it was a it was a rough ride to kind of get the deal done to say the least you know why I think if you believe in nfts and you believe in digital collectibles and you're me then it seemed like an obvious purchase I thought two and a half million dollars was incredibly cheap figuring the business had netted seven million dollars in six months prior so if you just do the math on like a PE multiple or like a traditional act position it was like an obvious acquisition s had done seven million revenue or to the bottom line uh seven million dollars profit all said and done after all expenses give or take there really was

no expenses in their business prior to that I mean they had a couple employees but they pretty much were just taking revenue and dividing it amongst themselves with their respective percentages and breaking bread that way um so you know seven million dollars call it seven and a half million dollars gross seven million dollars net in six months you buy that you buy that business for two and a half million dollars because it's a distressed asset I actually was ready to pay seven and a half that was my top offer I just hit him with my first low ball which was two and a half and they took it um why I think if you look under the hood and if you believe in nfts and you believe in pfps and you believe them to be the future of Ip and the future of Brands which I think there's a really

strong argument that they are than two and a half million dollars for a pudgy penguin which basically if you really understand and what makes an nft project successful there's certain ingredients and Pudgy Penguins had all of those ingredients had a die-hard community had an affluent Community right like there's people who own pudgy Penguins who you could never buy you could never fundraise and get these people on board or pay them to buy your project they just either in it or they're not the IP was clearly magical right people were buying the pudgy penguin not because of any future utility or because there was tokens coming or some sort of ponzinomic North Star they were buying it because they loved the Penguin and people loved the penguin the penguin personally made me feel something I don't know what it was

but there was a phenomenon that every time I scrolled through my Open Sea the penguin always made me feel even just one percent better and I started to notice that and identify that and I thought that was magic you either have it or you don't and then you kind of just put all of these things like the historical significance right one of the first early pfp projects probably the leader in cute IP on the blockchain which q2p is the total addressable has the highest Tam out of any of the IPS in the space you look at the fact that it was printed in the New York Times all over CNBC on this The Today Show and all of these like major news networks that's two and a half million dollars in marketing alone and brand awareness alone right you just like add all the pieces together and the facets together

and you're just like dude you know seven and a half million dollars was more than I was was the max that I could afford but yeah I probably would have paid 15 for it if I had more money and so uh two and a half is the offer they took I thought it was a screaming deal I thought anybody who I thought everybody was in the space at the time that was building in the space that had the money to buy it that didn't miss out on a generational opportunity because it was a no-brainer acquisition if you really understood it and uh we basically took over the business April 2022 no money in the bank bootstrapped it for about the first 12 months raised around and uh I think we've put on a master class in nft brand building and what it means to be

the next iteration of Ip in the world leveraging and technology and uh web3 Community nice man did you buy it uh I don't know if this is too personal of a question to ask but did you raise the run first then you bought it do you buy it with cash did you get better we bought it with our own money so I I had the majority but then the other people on the sea level suite uh basically all put their money put their own money I have a story went was the opportunity came I made a couple phone calls I had a couple big wins under my belt prior so people when I call people with an opportunity they tend to listen and I basically said I think this is a generational once in a lifetime opportunity I want you to buy in the business has no money so I won't be able

to pay you a salary but I want you to stop everything that you're doing and just devote your life to this thankfully every single person that I spoke to and had that conversation with said they wanted in uh and it's been a wild ride ever since but for the first nine months nobody on the c-level team was getting paid they all were working for free and they actually spent hundreds of thousands of dollars of their own money to be in the position to work for free for this company to build this brand which is like a few people understand that story and like ever thought we were going to fail has like another thing coming yeah yeah yeah um man that's funny so the backstory of this episode I don't know if I told you this but uh so Mike you did this uh like

road to permissionless like Twitter spaces with uh the bankless guys and then I wasn't able to make it but Mike the other blockworks co-founder and uh you know Mike's about his like bearish on some of these like basically bear not bearish nfts but bearish nft business models as you can possibly get um and I think it comes from some personal experience that we've had and uh he gets off that thing gives me a call he goes man this Luca guy just red pilled me is basically as hard as hard as I've ever been red paled on uh not just nfts but the but but you know penguins and and the business Behind These so maybe we can get into the business model of nfts and really just the business model of of Pudgies uh so what what was the business model of Pudgies before you acquired them and

what is like the how are you changing that and yeah maybe we could start with that yeah I think the business model prior was hey create hype uh tell a narrative hope people believe that narrative meant a collection make an exorbitant amount of money for little to no effort on royalties and uh make and pray that your Ford price goes higher so you can release a secondary collection and make even more money and hope that collection goes in the money and then you can do a third collection and hopefully if God is on your side and the and the market is on your side you could come out of there with 100 million bucks you know being relatively an amateur in entrepreneurship I think was probably the business model before um I think so the beer model is mints

and royalties basically that's that's been the business model Vincent wrong yeah just just make digital things it's a very simple and easy business model uh made a lot of people really wealthy who probably wouldn't have made that wealth any other way but I think it's since transition the bear Market has humbled that business model I knew coming into this that I needed to make real money in the real world just uh my my tip for entrepreneurs listening you know to be a good entrepreneur is to control your own destiny when you're making a business that's dependent on outside variables you can't control I.E ethereum royalties or ethereum volatility then you do not control your own destiny and you don't really have a business and so I knew this I look at royalties as ebitda patterns kind of the cherry on top the thing that makes your books look good at

the end of the year that kind of covers your margin maybe you know some allows you to take a little more risk right but it is not the core Revenue driver and it is not the thing that's going to take you where you need to be and so very early on we knew we needed to create real products we needed to transcend outside of this Eco chamber and outside of this ecosystem and uh the first step for that looking at the pudgy penguin IP and coming from you know the toy business right before in gel Blaster I was like well toys plushies Collectibles you know high-end figurines is kind of the first direction that we're going and so that was our approach I think that model allows a lot of flexibility and adds a huge safety net for our collectors the the biggest blue chip

killer in the nft space has been diluting Supply when there's not enough demand and so very much like a physical product you know why as a one-of-one Picasso worth 10 million dollars versus a Picasso print of 250 worth 10 000 because one is 250 and then another is the original and one of one the same principle applies these digital products and actually I think hyper replies because the it's so transparent and you and the liquidity is migrates in so many different tides that you can see pretty early on if something's going to go puts or not and so this dependency on minting and making new collections was either derived from two things one greed which you can't really control people are going to be greedy or second the

inability to make money elsewhere and needing to sustain the business and knowing the only way to make money was through mints because they had been rewarded for that behavior in the past they continue to do it which ultimately crushes the entire business and so you know when people think toys well how does toys make sense well I would argue it gives me the safety net to actually build a long-term digital collectible that will crew real value because I'm not diluting my digital Supply with endless mints because I'm self-sustaining and then I would also argue that it grows my top of the funnel it creates more emotional attachment between holder and family and friend it creates more Awareness on different shelves on your favorite retailers and on commercials and AD spots that you obvious you otherwise wouldn't have done

if you just sold a digital collectible all day and then just gives us a better moat to actually succeed long term the nature of our deal was very much positioned for long-term thinking because we bought this thing for two and a half million bucks it's not like I can just jump ship a year later and go on to the next thing you know no matter how much money I have two and a half million dollars is no small amount and and you got it and you commit it to something and I really put my reputation on the line on this one and so all things considered that's kind of our business model with our toys obviously the the the depth of what we want to do is a lot bigger and grander than that but that was really our first step coming into this was how do we become

self-sustaining how do we control our destiny and how do we ultimately you know create products and experiences that people love that other people can enjoy without having to pay you know ten thousand dollars for an internet jpeg hmm all right so once you make that decision to get into the into the toy business which obviously it sounds like you're pretty familiar with that business I feel like there's one a decision that had to be made which is do we sell toys to the to the world do we become a toy company or do we basically sell do what has kind of existed which is like we'll give our existing community uh almost like token token walled toys we give it away for free and that drives the price of these of these Pudgies higher or do we get into the toy

business and just sell toys like a normal toy company and Pudgies because toys are proliferating around the world but the value of pudges gets higher how do you think about like how did you think about that decision yeah I think I think just proliferation how I look at it is just like a funnel right so at the bottom of my funnel is my 888 first edition pudgy penguin ethereum nfts that is the first edition and the origin story of my entire company and my entire business it is the asset that gives you utility and access that no other asset in our business gives you it is the asset that allows you to monetize and be a part of the growth right because every product and every piece of

content that we make we actually license the nft from the from the collection and make products out of that and so you can make monies on royalties right like that is the nucleus and we're all value in my opinion has to accrue uh if this is really going to win and so when you're thinking about proliferation and expanding right really what I need to focus on is this top of the funnel right because the broader this top of the funnel the more people that love this pudgy penguin character the more people that you know wake up and enjoy the product or the content every single day the more people that are familiar with it right when the tides of the nft narrative and fomo kick back in because

the nft markets very cyclical uh is very cycle oriented the same way that you know a coin Market is or the stock market is when that cycle comes back and people are starting to collect nfts they're probably going to migrate to the one that they're most familiar with or the one that's proven themselves the one that is tangible and the one that feels real and then by that time I plan to have the most followers and the most views and the most Impressions the most retail sales and the best Partnerships in the best collaborations when that time comes and then you just become the obvious first choice because you've you've done it you've proliferated and so my my job right now is just how do I create product and content that people love and how to just grow that top of the funnel I'm not selling them on nfts

right now I'm not selling them on web3 I'm really selling them on a cute iconic prolific pudgy penguin character which I believe is the best penguin ever drawn people love penguins people love arctic animals we will be the face for that and that's really where I'm going and we're really a brand for young people you know middle aged people and older people like it's a a complete nucleus of like do you believe in this ethos do you believe in this vision of a character that's here to make you smile to make you feel good do you want to support that because that character supports you and I think ultimately it trickles down in the first edition the the nft is a better collectible right it is better than a Pokemon card it is better than anything

out there and so if you can even capture ten percent or fifteen percent or twenty percent of the awareness of a Pokemon per se I would argue the first edition nfts because of the non-factor of inauthenticity issues the non-factor of spoofing the complete Clarity on quantity and Rarity the no friction of buying and selling which is the nature of the nft I would argue that all you need is ten percent of the awareness that Pokemon has for your first editions which in this case is our pudgy penguin nft to be worth more than first edition Pokemon cards because the the scalability of the nft just removes all the all the friction right it just makes it so much more tradable sorry for the monologue but I hope that Pain's a pretty clear picture

it does paint a clear picture and as you're uh monologuing there I actually looked when I left I just realized this I swear to you I did not set this up I have not many things on my desk I do have this cute little penguin logo uh Lego though and the reason I have is because penguins are [ __ ] cute so and this is this is the thing this is an interesting one I hate to interrupt but people like when you're just looking at like okay why does this matter people love penguins do not underestimate the love for certain animals people love penguins this thing is so cute there's a penguin skating around it's got little skates on it's a cute thing and so what's the top of the funnel or go ahead go ahead and you fact check it but this is the best they've made Penguins ugly

historically why I don't know penguins are cute this is the cutest penguin ever made and I can tell you this is somebody's went through all the penguin IPS the top of the funnel for me is touch points views Impressions and followers that's how I quantify it right like we have five we have six billion views on our giphy Right Touch point one we get you know 50 million accounts reaching our Instagram every single month touchpoint two we get five million accounts reaching our Twitter every single month touch point three I'm in you know at the end of the year I'll be in 5 000 retail stores around the country touch point four if I just get to Seven touch points then I am a legitimate brand and if I if they love the product and I can do it consistently then I'm on the on the path to being a

legacy brand right and so for me it's just top of the funnel is just knowing and loving right when you think penguin do you think pudgy Penguins right if I can if I can accomplish that I've won uh it's easier said than done though again it's like if it was so easy to do it'd be done but you know we're in we're working in that direction and slowly but surely getting there uh you guys have I had I had I don't follow you guys you guys have 683 000 followers on Instagram this is nuts I would I encourage people to pull this up spreading Good Vibes and positivity wait so these videos are these pictures oh these are I see what you're going for these are cute and these go these go viral outside of just wow this one got 15 000 likes this is nuts

that's crazy so the easily not wow 48 000 likes that's that's not so you guys are reaching a damn this video got 109 000 likes I haven't seen this I should have researched this before so you guys are reaching a completely non-crypto audience with this basically this is like you're a toy brand selling toys you're building a big top funnel yeah it's just the character right it's just like how do you get the the pudgy penguin to transcend and the video after the one with a hundred and thousand nine thousand likes is a million likes right and so like how do you really just again just create a character yeah yeah how do you create a character that people love and they know and they identify and resonate with and then as long as you

have that familiarity you can push them in any direction that they want but the problem is with nfts today is everyone's trying to force them into a crypto blockchain web 3 nft narrative what people don't really understand is crypto blockchain nfts web three that's the back end it is not the front end it is not the selling point it is the biggest mistake out of all of these major web three crypto blockchain oriented Brands is everybody's trying to sell them the front end as if it's it's really just a back end it's not a front end and so you know that's the play that I'm taking right like what people don't know just to give you some uh context you know because I think this is really important

you know every toy that we sell comes with a birth certificate and on that birth certificate there's a QR code and on that QR code it basically allows you to sign up via an email and a password to create your own pudgy World account and that pudgy World account basically is a custody wallet solution that you basically stand up via an email and a password when you redeem the code that you were given after you sign up from your purchase of your ten dollar toy you unlock a trait box that gives you four nfts via gasless experience for free that's how I onboard people I onboard people by selling ten dollar toys that has a QR code and a birth certificate that points you to make a blockchain wallet without you knowing and giving you your first nft in digital collectible at zero cost to you you we

cover the gas and all of a sudden you're having fun you're digitally collecting but you don't even know it's an nft and slowly but surely you're becoming familiar with the habits of what it is to digitally collect which is no different than you know collecting fortnite skins or you know attachments on your gun in Call of Duty and just programming them to be familiar with these type of behaviors and this type of flow and so like people are like well why is your toy such a big deal why was it so meaningful well dude I'm not only bringing nftip to the real world right because this character that you see on your screen is actually an nft that is owned by one of our holders and every time one of this toy sells he gets a royalty in perpetuity that gets paid out

annually so not only are we telling the story of nftip and the story of web 3 brand building which is really what that relationship is we're also telling the story of bringing nft technology to the hands of everyday people because when somebody walks down the shelf of your favorite retail store this quarter four and they pick up a pudgy penguin and they follow the steps and the instructions in the Box they will have a blockchain wallet within five minutes of them opening up this toy and that's NASA adoption that's proliferation that's pushing the boundaries that's a forward-facing consumer product that's the difference between us and what everybody else is doing everybody's looking inwards and we're looking outwards and that's why I'm so passionate that we are going to win and that we are going to be the number one because I think nobody else is really

doing it they were doing it look man you got the confidence that's for sure I like it um how much have you studied club uh Club Club Penguin remember that game yeah I've talked to uh that I've talked to the founders multiple times now they had a nice leg sitting there 350 million bucks or something with another 300 of them 700 okay yeah um so that was interesting wait uh who who bought who bought Club Penguin I think it was Disney who bought Club Penguin Disney right so what you got I mean what you guys are building here is basically just an IP house and you monetize in a bunch of different ways and the way that IP houses today monetized in a bunch of different ways is that right correct yeah well not a toy business or I'm not an

nft business or not any specific business I'm an IP business I live and die by the awareness of my character my character is not relevant I'm not relevant my character is relevant I'm relevant I'm printing money 10 different ways just to give you an idea you know an IP company is really the broadest version of what these character Brands can be you know some I've never understood why an nft company would call themselves a gaming company or or whatever because in reality IP encompasses all of it I can have the next Club Penguin I can have the next happy feat I can have you know all of the things that everybody else does and it all Fender falls under the same category which is IP yeah how do you think about um uh licensing IP movies films commercials I'm sure there's other stuff that goes into licensing how do

you think about that yeah I think uh from our end a huge a huge case study that we want to prove is how do you democratize IP and I think that democratization for us is how do you turn the relationship between brand and consumer to Brandon participant right right now when Disney uh ships a new IP the relationship between the person who's consuming that is very much the relationship between brand and consumer when pudgy Penguins releases you know in this case pudgy Penguins is our Flagship IP you know when we go and build and create movies and and stories and toys and products the brand and participant relationship comes into play because every piece of product every

piece of content everything that we make we actually license from the holder to actually use that character and the thought process is well we have 888 pudgy penguin characters that have minted on the blockchain why am I going to go and draw a bunch of different characters and keep all that value to myself at the end of the day I'm going to win if my community rally behinds me and if they rally behind me what is that incentive model that keeps us you know aligned by the hip and I think that that value accrual when you think about like what does the nft holder really want well the elephant in the room is the nft holder wants monetary gain to pretend that they don't uh is a Fool's error and the same reason why you might buy a sports card majority of people buying sports cars today just want to flip it

for more money and so that's okay that's an okay behavior and I understand that but how do you create a monetary value accrual funnel that is not ponzinomics I.E creating nfts at a thin air or tokens that are thin air and just dropping it into people's wallets because that's not sustainable nor is that really real in my opinion it can be done once or twice or three times but over the course of 20 years how many new imaginary things are going to airdrop into people's wallets how are you really going to sustain monetary value accrual I think the answer to that is licensing every time I make a toy I can go give somebody a percentage of that toy every time it sells and I can take their character out and I think the the the the hit I'll take on the mark margin will supersede the extra marketing and

Hyper galvanization around that narrative to kind of push the brand even further and so licensing to me is the ultimate solution for web 3 nft projects and community and the best way to accrue value and provide utility for your community unequivocally I've thought of this long and hard and the only legitimate way to do it is through licensing and then on the flip side licensing for me from as a pudgy penguin business owner I mean being in the IP business licensing is the business that I'm in you look at Pokemon and Hello Kitty they make billions of dollars a year look at their books they're making all of that money from licensing they are not making that money making or incubating anything themselves sure they might do one or two products sure but you know that money is just throwing your stuff and collecting a check I feel

like different projects like Doodles and nouns and stuff have played around with different licensing models like there's the model of um like very I haven't followed it too closely but I think nouns like anyone can take their noun and do anything with it then there's like Doodles where it's like if you do something under 100 I don't I'm gonna botch this fact but like under 100K something happens over 100k something else happens how do you think about like Bottoms Up like decentralized licensing and like will like if I own a pudgy can I do anything with it can I do anything up to a certain dollar amount with it do we have to split the dollars there how does that work yeah it's a pretty interesting it's it's a an agreement that we spend a lot of time going under uh you know for me ownership is really

monetization like what is it to really own something I think is like kind of like a vague term in in again I wouldn't expect you to follow up with this but there's there's a lot of interesting court cases going on right now where there's a lot of conjecture to kind of remove that conjecture I just made it pretty simple look we are a brand for everybody so you can do what you want with your penguin as long as it's not harmful sexist racist or something weird right we have a brand to protect and you know I'm definitely not going to allow you to do some explicit video using a pudgy penguin to you know cause harm to anybody that's like just not our ethos so I do have the right to control that and I do have in our agreement there's a 500 000 a year cap but I told the

community that it's really a placebo for anybody who's a genuine holder and really put in place so that a Big Brand isn't circumvent doing a deal with me I.E you know if there's a 500 cap on my pudgy penguin Starbucks is not going to go buy a pudgy penguin and circumvent me like they're just going to you know work with me because you know if they're not in the business of 500 Grand being a meaningful needle mover but I told the community look at the end of the day I've extended that license every single time somebody's asked that I've known has been a part of this community uh like in a real in a real non-like extraction trying to use the IP way and uh like somebody came to me for a burger joint and said hey like I don't wanna I'm not gonna do this if I can only make

a half a million dollars doing it or I have to split the money I'm like dude sign this we set up the agreement five minutes later signed on your way go make as much money on that pudgy penguin Burger Joint as you want nice I think I'm in the business of making money and being sustainable and so I think I don't really believe in the whole like complete free-for-all I think there's too much risk when there's a free-for-all yeah Society just human humans in general having done well in this whole free-for-all people think they want a free-for-all but you actually don't like Law and Order or some sort of boundaries I think I've been really healthy uh for the human race for a very long time and this like complete just nonchalant do whatever you want whenever you want however you want I actually think it doesn't work the way

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synthetics.io forward slash perps you can also hop into the Discord server and reach out to the team directly all right so take me back to this toy drop when so you guys launched what are they called plushies I think they are yeah plushies Collectibles mystery igloos we launched a couple skews you can buy it on Amazon I was looking at these I got I might snag one of these um how how uh how much money did you guys make from this a million dollars in the first couple days just under not bad not bad can you can you share other findings like so you guys bought it for two and a half it was doing seven seven and a half grow seven net roughly like how do you think you guys are tough market for nfts in 2023 like how do you think you're gonna do

this year next year yeah so we uh we bought the business for two and a half million dollars April 4th of 2022. if you look at April 4th 2022 it literally was picotop like that day was literally the top 3 400 eth is when I exchanged it it was down only ever since we went hit lows as low as 8.50 and uh first year in Revenue we did about 1.8 this year we're on track to do six and a half seven um with half of that coming from uh physical products and and self-sustaining and so like you know our burn is less than that and so hopefully we'll have a profitable year and a really down bear market and that's great if I can just keep doubling Revenue

every year we'll be in a good spot that's great man I mean it's been impressive you uh what what was the price of uh what was the floor price of Pudgies when you when you bought them 0.75 what's that now like three and a half four yeah dudes yeah not bad man in this market um what's the team look like is it dude is it content creators like how do you how do you build a team around this yeah it's it's a it's a bit it's a [ __ ] of a business because there's so many layers like yeah you know keep in mind just that Instagram alone there's people who do that that type of Instagram stuff and that's like their whole life business just so you know like there's like eight businesses within one um so thankfully the way that I

assembled it was very Avenger style I knew I was coming into a tall task and I knew but I knew the upside was there and I knew I needed the best so I basically took the best six people I've ever worked with in my life and I basically said hey I want you guys to be a part of this you're not going to make any money I need you to invest some but the valuation is so cheap we should be able to beat it within 12 to 18 months time and it should be a huge home run slam dunk and they all said yes but I I all of these guys and gals that are on this team at least like the managers and the c-level group I've all worked with for many years in the past and we've all crushed it together so this is like not

like this is not like new startup like this is very much I've taken big wins especially with our chief creative officer Peter who really is like my my uh were like a dynamic duo my Ying to my yang I mean we've got like three or four nine figure wins in terms of like things we were able to like do nine figures a year with uh and so he he and I really have an amazing Groove we have just a complete stacked team 40 now we're growing pretty fast Burns getting a little high but I want to be aggressive right now like now is the time for me where it's like I'm just everyone's blowing up just making mistakes left and right have no clue really what they're doing and so this is where I just want to take all the attention and grow the fastest and grow the fastest yeah

so it's interesting so there's like so block Works media and information platform we have like two sides of the business media and the research and analytics side of the business and there's probably there's there's like several analytics and research Platforms in crypto and there's several media companies there's probably like one or two in each of those buckets that I think are doing a good job and like five or six that I'm like enough with enough time this won't go well for you guys probably when you look at the nft space like you know I think everyone knows the big names like who do you look at and you're like oh I actually really respect what you guys are doing you're going at a differently and but I you know but I respect what you're doing foreign yeah without like just shoot without

[ __ ] on people because I'll just tell you the truth dude there's only five projects I would ever put my like no one because I know I've seen I know what's behind all the curtains what are the projects yeah I can't I can't I can't do it I can't I can't do it because it would just it would it would automatically like alienate people but I will say there's five projects that are worth putting your money behind two of them don't need have any Founders running it with the exception of crypto punks crypto puns being an obvious one and the rest are completely going to zero I can tell you unequivocally I'll tell you the person I have the most respect for in the space

and the person that I think does the best job as Frank from D Gods I think if it's not myself it's him and then Yuga I think you could just I have my own resume like I'm super Yuga board 8 Maxi just to be clear um I I'm I'm afraid of Hugo's supply and demand thing and the gaming and how it really is going to tie in I think it's the right business decision for their business I don't know how it is from an nft collecting standpoint uh we'll see it vague but Yugo obviously we don't even need to talk about them because they're at the top of the totem pole and until we do any better than really I can't say [ __ ] uh but if it's not Yuga it's Frank and so to me I I see as me Frank them and then I have you know two

other picks that would be pretty obvious if you're familiar with the space but I don't want to tell them because then you'll know everybody else sucks so it's funny so I went so I uh I'm gonna tie the story back to Frank in a second so I went to um Barclays this weekend and uh Ice Cube started a new basketball league called uh it's called Big Three and I go so I show up to this league it's it's funny League it's all 3v3 basketball first to 50 wins they've got like four point shots and [ __ ] and uh you know it's like Jason Richardson's out there shooting threes Gilbert Arenas is out there it's like a bunch of 40 45 year old retired NBA players but I'm I'm I'm out there on the like the kind of Courtside VIP like owners area or whatever because like

someone I know would invest in one of the companies or something and uh I'll look around there's probably 100 people in this area 70 of them were wearing D God shirts it was wild yeah it's like D God's Army showed up at this thing so they're they're out and about um why Frank just curious just I mean you guys are about storytellers yeah you can just know who really gets it and understands it who's a complete critical thinker I mean dude you'd be surprised a lot of these guys are so freaking checked out and so no critical thinking no execution no innovation trying to redo things that the other guys are doing no self thought like Frank is a leader he's a Hyper Elite

marketer he is a Hyper Elite brand guy people don't know this like his eye for design is unlike is I only know one person like it and sorry it's Peter but like this guy is incredibly impressive on his design side and they just got the team to do it and some people just get it some people just really really [ __ ] get it and this is the space where it's not about your resume it's not about your experience whether you get it or not how many like this whole the web three spacings have stopped falling for it but if they're from Google or Facebook or Disney or Warner like don't let that sell you because that is like that does doesn't mean anything here it means nothing you either have a finger on the pulse and you understand culture or you don't

Frank understands culture one of the reasons why I think we do so well because we understand culture right like and and obviously we can innovate and we can execute and same with him but most of these people are just like have no finger on the pole so as what's cool what's hot what's hip what's trending you know like this is like complete like buzzards like in the desert with like not a carcass inside so it's unequivocally hit he I'm telling you if it's not me it's him I promise like I I obviously I'm gonna put myself because that's the person I am I think of myself as the [ __ ] Michael Jordan like that's how I wake up every morning so I always say that I think I'm the best but honestly that's my guy and I have so much respect and honestly I'm

not here if it wasn't for him because he totally expanded my horizons and got me to think the right way because I wasn't thinking the right way in the beginning here interesting um you mentioned uh Pudgie's V like V1 basically are well you guys ever lie I know you've been kind of roasting these other things that just drop a bunch of things but I could see that strategy making sense for you in the future not as like a money grab but as a way to kind of unlock more IP and things like that will you guys launch anything else on chain yeah I mean I I think totally it's just a supply and demand war in it right like we're in the midst of a bear you'd have to be cuckoo for Cocoa Puffs if you're minting anything or adding any digital extra Supply in the bear

seriously it doesn't matter who you are even yoga I think a major of the yuga's downturn Recently is because like dude stop unlocking more nfts right now keep the liquidity centralized just like a pretty obvious thing to understand uh I think uh I think yeah there's totally introduction for new characters just Supply demand has to outweigh Supply and I have to have clearly more demand than I have Supply and and you know minting I'm not [ __ ] on minting minting is a great Revenue model it's a great moment to introduce new characters and new story and appeal to new audiences right but it's just about supply and demand are you ready for it is the market ready for it right and and how can you also innovate there I think the same like 20 000 collection ten thousand collection

if if when I start introducing new characters I'm gonna do it a lot differently than it's ever been done nice man um let's look at the future a little bit what are you excited about the next uh six months back half of the year yeah yeah dude I think uh before the year's over or you'll you'll remember it based on what I tell you today but I think I have one of the all-time great moments and announcements for the nft space that's ever happened you know me being an avid collector and being so involved in the space I just looked back at what I know I'm gonna announce you know in quarter four and I think to myself has there been a more meaningful announcement in nft and uh you'd be surprised but I think I I think there's very few if any

um and so I'm really excited for that I'm excited for a thing that we've been working for a long time on called project overpass I think project overpass solves one of web3's biggest problems and that problem is licensing at scale on chain we were the first major project to license IP from our holders and I was wondering why until we did it and then when we did it I understood why because it's a huge pain in the ass it is not easy to do it takes week if not months to get the deals done but there should be a web 3 native way to do this and we solved this with project overpass so hopefully uh really excited to get the licensing platform the licensing platform that you guys built basically got it yeah so it's going to be available to our community at first and then we'll open it up to

other communities and kind of will be our gift to the nft space and kind of solve a lot of utility problems for a lot of projects because to be frank I think that's the purest most kosher most above-board form of utility you can possibly do for between holder and brand is hey I'm building a brand I'm making products I'm making content let me pay you for the right to use your your character in these assets it's pretty obvious a completely above board no one can question that in any shapewear form so uh yeah I'm excited for that those two things before the year's over nice man you tweeted uh two weeks ago pudgy penguin says one of the biggest announcements in the history of web 3

coming Q4 you just mentioned mentioned it can you share anything about it uh I probably can't because I want to keep it fun but I think I'll make a deal with you I'll make a deal with you right now I will buy I don't own any pudges I will buy a pudgy right now if you share some info on it uh let's see what I can do I think I think it's really about um I think it's proliferation and my thesis personified I think when I make this announcement everything I talked about with you on this podcast will be undeniable I think I think it's not going to be like oh he's he's doing it or he's on the right path I think when you see that moment you'll be like holy [ __ ] this 25 year old in Southern

Florida really [ __ ] did it and outdid dudes twice my age with twice 10 times a reputation that I have you know and I [ __ ] did it I think that's what you're gonna think when you see it nice man all right I'm still buying a pudgy anyways I'm gonna buy this thing um uh are you guys gonna raise any more money what's the what do you think the future like financing for the business looks like yeah maybe probably I'm not in the business of raising money just to raise rounds so like one thing I won't do is like I'm not going to raise valuations just to like in a bull market we could probably raise it a billion dollar evaluation right if by the like if we continue on the trajectory that we're

going and the bull market rages better than the one before it like it's probably a clear path but I don't want to raise just to have that my ego stroke like I only want to raise to have a purpose and honestly right like I'm a firm believer that you got to be a little uncomfortable to win you got to be a little hungry I I look I look at some of these projects I'm like why are you failing like why you have so much money and probably the reason why they're failing is because they have so much money and it's just like you're paying yourself a crazy salary you know so many so much excess heads and employees in the workforce like no [ __ ] you're probably just kicking back at your office for four hours with a pina colada like the though you don't you

would never admit it like I could understand why you would do that so I just want to stay hungry and I'm not here to I'm here to you know like if there's yeah I I don't know I don't know I I think the goal is to not right like the goal is the goal in a perfect world is I take this thing all the way through and we ride this thing as a legacy business and this round of financing that we took in was it but if there's a real path to grow and we're really hitting things on a nail and there's there's a moment to make you know uh to bring in more cash to the business I think there's too many variables for me to tell you in a perfect world the answer would be no though yeah all right man what do I I'm

looking at these pudges here what's uh what's a how do I buy these Pudgies what's a good trait to get how do I what's that what's happening it's the gold skin and the eye skin man show us what the block works bankroll is made of the gold skin and the ice skin all right give me something yeah you know the the ethos with the Penguins we have a motto or a tagline and it is I am my penguin my penguin is me pick a penguin that you resonate with that you identify with right the one that you could be like this is me and that's really the thing with the Penguins it's not like you man I'm looking through these I like these things this is funny they're good they're round they have the Contour bias if you're familiar with the universal principles of design like there's definitely like

there's something magical it's actually people underestimate this Frank puts a huge emphasis there's a science to a good pfp they don't just happen like there's a real science to them and Pudgy Penguins also checks off a lot of those boxes for the science of what makes a good pfb um interesting all right man anything else that we missed no dude but this is a badass interview thanks for having me yeah appreciate it pumped uh to see what you guys do I'm actually gonna snag one of these penguins so this will be uh I gotta find one that kind of looks like me yeah anyways man it's a pleasure appreciate you coming on appreciate the time as always and uh I will I'm sure uh you'll be back on here at some point soon so I appreciate it and dude continue the great work and thanks for

having me I know you didn't have to so I appreciate it thanks foreign [Music]