Transcript 0:00 [gentle music] Hey, everyone. Welcome back to the Sport in Crypto podcast. 0:14 In this episode, I'm once again doing a live panel recording at Sports Blockchain Summit, which I mentioned is our flagship mini conference, which we do a couple of times a year. 0:27 We've done one in New York and London so far as Sport in Crypto, and they've been a super great thing to do. People really enjoy them, and we're gonna do a bunch more of them in twenty twenty-six. 0:38 And so without further ado, I was joined on a panel with Sunil Singhvi, who's the head of partnerships at Courtyard.io, who you will know I have written about a bunch, and we've done an interview with their CEO in season two of the Sport in Crypto podcast. 0:56 This was really, really great because Sunil has awesome experience across major brands such as, uh, Meta and Twitter, pre-IPO Twitter, but also has worked on the agency side in sports and has also worked on the pure Web3 side working at Trillatech, who are the tech foundation business behind Tezos, and also worked as the, uh, chief business officer at Rarible, who are an NFT marketplace. 1:25 So his insights are super unique and awesome and, uh, hopefully you guys enjoy this episode. Without further ado, handing over to, I guess, myself and Sunil. Hey, everyone. Thanks for your patience. 1:37 Welcome to our last panel. Uh, I'm joined by Sunil Singhvi, who's the head of partnerships at Courtyard. Sunil, tell us a bit about yourself. You have fans in the crowd. Oh, fans in the room. [claps] Uh, hello. 1:48 Uh, uh, uh, my name just got introduced. So I'm Sunil Singhvi. I'm the, the head of partnerships at Courtyard.io. And, um, I have trod the Web3 path for a number of years. 1:57 So if I go all the way back a million years, uh, I worked as a, as a producer at the BBC. 2:02 Uh, then I was at a talent agency for a long period of time, and then I spent a decade at the big social networks of, uh, Twitter and Instagram, um, which was incredible. Like an unbelievable opportunity. 2:13 I was at a pre-IPO Twitter. I was at, uh, an Instagram that had completely plateaued, that was at five hundred million users and just couldn't get past it. 2:21 And I was there from five hundred million all the way up to the point where they announced, which I got to do actually, uh, announced a billion monthly active users. So, so, so I've been on these big rocket ships. 2:30 And at the point in time, and I think someone, Max sort of kindly referred to it as a little bit of a bubble earlier. 2:36 At the point where Web3 was really coming into form was the point that I lost a bit of faith and confidence in those companies to seize the opportunity of what came next. 2:46 So, uh, I left Instagram to go and work at an NFT marketplace, Rarible, um, really on the basis that I believe creator rights and creator royalties are really, really important, that I don't think any creator should ever be detached from the work that they created. 3:01 Now, fast-forward a few years and that has slipped away, and I'm sad. And it's one of my, uh, my big bugbears with Web3 is that we had a chance and we lost it. 3:10 Uh, but I, I spent a period of time at, uh, Rarible as a NFT marketplace, and then I, uh, left to work for IMG as part of the Seven Digital team, where I did a stint as a, as a sort of consultant helping some of the, uh, the best, you know, leagues and teams around the world think about how Web3 could work for them. 3:28 Before taking a role at, uh, Trillatech, which is the, um, basically the in-house marketing adoption team for Tezos, uh, where I got to work with Max and Dan for McLaren. 3:37 I got to, uh, help the Manchester United team launch, I think, some of the best stuff that's happened in sports and Web3 before more recently, in the last six months, moving to Courtyard.io. And that is the journey. 3:50 That's a f- a long journey. [laughs] Uh, before we get into the Courtyard side of things- And I'm only twenty-one, which is amazing. You look old for that. Um... [laughs] That wasn't what I was fishing for. 4:02 [laughs] Um, you've been at the other side of the table from the, the rights holders, and I'd, I'd love for you to just give us a, a quick whirlwind overview of your experience on that side, both, you know, Rarible and when you were at Tezos as well. 4:16 Yeah. So I think the, the Rarible experience and, and Rarible was, you know, a relatively small marketplace that at one point rivaled OpenSea and then sort of fell by the wayside. God bless them. 4:26 Um, the challenge for an organization like that was just getting the head space from the rights holders. 4:31 So we were coming in and, and I thought your question earlier about, like, what makes a good pitch is really important, is we were pitching to rights holders, "We can do this, we can do this, we can do this." 4:40 And the answer always was, "Well, how much are you gonna pay us to do it?" And that killed every conversation because we were a small business. 4:47 And our view as a small business was, "Well, we're providing you an opportunity to, to market yourself. 4:53 We're providing you an opportunity to make revenue where we take two and a half percent and you take all the rest, but you want us to pay you for that opportunity to make you money?" 5:02 So you think it's, it's weird to pay someone to do services for them? Yeah, I think it is. 5:08 I f- [laughs] And then, and then obviously I went to Trillatech, and Trillatech had made a really bold decision that they were gonna go all in on sports, and they'd spent a bunch of money with Red Bull, uh, a bunch of money with a US OTT sports business called Flow Sports. 5:22 So we were the face of, uh, midget car racing for a while. It's worth YouTube-ing that. Um, but also McLaren and Manchester United. Or maybe not. Yeah. No, no. It's... I mean, it's, the cars are small, not the people. 5:33 Um, the [laughs] the bit that was really hard is that I, I came in and, um, no one had really thought through what a four-year cycle had looked like. 5:44 So we were [laughs] some of the people in the room will be frowning at me for saying this, but, but really I inherited projects that had not been fully thought out to the tune of multi-millions of dollars. 5:56 So the ROI questions that came up earlier of like, "Sunil, can you prove the ROI on this?" "Nope."I can't. There's absolutely no way I could show you the ROI on millions and millions of dollars. 6:08 And the conversations became very, very difficult. 6:11 And when, as a, as an organization, when we started making that switch of we're going from being a brand that will sponsor you to a partner who will provide a service for you, it became incredibly, incredibly difficult. 6:26 Like, those conversations were... 6:28 You know, going back to our, our first panel of the day, those conversations were, like, people in the sports industry, and, and respect to everyone in the room, but people looked at me like I'd gone mad, where I was like, "But, but can you find me any other example of anywhere in the world where people would pay you to provide a service that you make 100% of the money on? 6:46 Like, I'm not even asking you for money, but you're asking me to pay you to be the sponsor. And by the way, you can't show me any attribution. 6:56 You can't show me that there's gonna be any uplift, but you want multi-millions of dollars." And that pitch just became very, very difficult to stomach for both sides, right? 7:07 It became embarrassing for rights holders to be like, "Oh, we value our brand-new challenger sport at $5 million. We haven't launched yet in the UK." "What? $5 million for drone racing?" Real example. 7:22 Um, so I think, I think it just became incredibly hard, and I think Web3 and blockchain companies got into a really bad space where 7:30 we were the cash machine for a period of time, and that blurred whether we were useful or not. And, you know, uh, Max, very diplomatic, very well media trained. You know, he sort of answered in that last question. 7:43 You've moved from one organization to another and, and it's really partly because Web3 has not been able to prove to an organization that is commercially minded, can we deliver two million from Web3 audiences, or five million, or 10 million, whatever number you want. 7:59 Can we deliver millions of dollars from Web3 audiences without the Web3 partner writing a massive check? And that, my friends, is still yet to be proven. That is still the challenge. Go prove it, folks. Yeah [laughs]. 8:12 Like, can you do it? And, uh, and like I, I think about that number, and we, and we'll call it five million. 8:17 If your organization needs five million right now, you're probably going to ask a wallet provider, a chain, a foundation. You're gonna ask them for five million, and anything you make on top of it is great. 8:28 Until we get to a point where there is five million that is coming from the audience via the Web3 channels, 8:36 until that happens, I think it will always be a battle for the likes of Mark and, and Max to, to get the air space inside the building. 8:43 'Cause really, what the top level organization needs to know is, where is my money coming from? And actually, if it comes from Tezos, that's great. 8:52 If it comes from, you know, some random wallet that might not be here in three years' time, as long as they've written the check, we're kind of okay with it. 8:59 And that's the challenge for this room is that Web3 offers this, this incredible opportunity to understand our invisible fan. 9:07 But we have to take the companies on that journey to understand the invisible fan, to unlock them, to monetize them in order so as we don't have to have a year chasing a sort of mythical Web3 partner with an unlimited fund. 9:22 That sounds more negative than I wanted it to be. But that's the truth. And on that note- [laughs]... let's all go home. [laughs] Um- But, but that's, but that's the opportunity, right, that we're in... 9:29 I think we're in the transition period, right, where the massive checks don't exist anymore, unless you guys are better salespeople than I think you are, uh, or better rights holders than I think you are. 9:38 So the big checks are gone, so we're now in the transition, right? We're now in the transition where we have to make money from those Web3 audiences, or we have to drive engagement. 9:45 We have to do interesting things so that we can show to the businesses and we can show to the fans this journey is really, really exciting, which is kind of where I got to at the end of my Tezos journey, uh, and why I joined Courtyard. 9:58 Which you're gonna explain- [laughs]... to everyone here because I think American audiences are much more familiar with Courtyard, and we've written a lot about them. 10:05 And I think they're one of the biggest success stories in the kinda cross-section between blockchain and culture, and they've built an, an astounding business. So why don't you- Yeah... take it away and explain. 10:15 We, we'll, we'll do a quick show of hands. How many people in the room know courtyard.io and have used it? Okay, that's not- How many people know about it if you hadn't read it on my newsletter? God, we're, we're... 10:25 I mean, we're both doing a plug here. This side of the room's better. This... I'm just gonna talk to this side of the room. Um, so Courtyard [laughs] look at the opportunity here. 10:34 Um, courtyard.io is a, is, is a collectibles platform, and we are a physical collectibles platform. 10:41 Every single item that we deal with is a physical item that we have a digital experience built on top of, and that's really, really important to me. 10:50 So, so I've worked on incredible campaigns with McLaren and Manchester United, and those digital campaigns were incredibly successful at getting fans excited and getting people into the journey. But ultimately, 11:01 we weren't able, because we'd run out of time really, I think, we weren't able to answer the question, why does someone care about the digital item? 11:09 And there's lots of great ideas about, you know, provenance and, you know, I was part of the co-creation and all of this stuff, which is, I think, really true. 11:18 But we are still in a transition period, and I think audiences will get there. And they will get to a point where they value the digital in the same way that they value the physical, but we're not there yet. 11:29 So Courtyard's business model, very simple. We run a physical vault in Delaware where you can vault your collectibles with us, so they are physical sports cards, sports trading cards, Pokémon cards, comic books. 11:41 You can ship them to our vault, and we will secure and insure them for you. Very simple, real warehouse business. On top of that, using blockchain technology, we've built a peer-to-peer marketplace, 11:54 but the difference here is that everyone knows that every single item has been checked. Everything has been authenticated. 12:00 You can look at it on chain to check the provenance of it to say, "Is this the exact item that I want to buy?"So we're building trust, and we're using blockchain to build trust. 12:10 Now, sadly, a lot of Web3 projects don't scream trust. We have been the victims of some bad actors. So for us, blockchain is a way of reinforcing trust, which is actually quite different to the way we think about it. 12:24 A lot of times we're like, "Oh, we don't wanna be noisy about NFTs. We don't wanna be noisy about blockchain because people think it's a scam." 12:30 People write it's a Ponzi scheme in the comments, not really knowing what that word even means. 12:35 So actually, blockchain for us built trust, and that's one of the things that the Polygon team has helped us with, is having that level of trust. The marketplace is, is a fine business. 12:44 The vaulting piece is a fine business. Not exciting for this room. 12:48 The bit that is exciting for this room, on top of that, building some of the, the real-world experiences of young audiences and some of the Web3 experiences, we built a mystery product business on top of it. 13:01 So inside, uh, Courtyard.io, if you go to the front page, you will find a number of different vending machines. Every single vending machine has a buy-in price, so Pokémon or sports, $25. 13:14 You put $25 into the vending machine, and you can pay on credit card, Apple Pay, whatever you wanna do, or USDC on Polygon. 13:22 You put $25 in, and it spits you out a real physical graded, authenticated collectible every single time. And then you get to make a choice, which is brilliant for the audience, right? 13:34 The audience has a choice because normally what happens is you get your digital item and you go, "I don't know what to do now." Whereas on Courtyard, you get a choice. Number one, do you love it? 13:45 If so, you can keep it in our vault for free. If you really love it, we'll ship it to your house. No problem. $6, we'll ship it straight to your house. And by the way, I think it's breaking news. 13:55 We're about to get rid of the shipping fees. So if you want it, we'll send it to you for free. It will just arrive. 14:01 A little Pokémon card, a sports trading card, a comic book will arrive to your house with a little note that says, "Thanks from Courtyard." If you're not that keen on it, you can sell it fee-free in our marketplace. 14:12 And if you imagine you take your card, you know, you, you find a piece of sports memorabilia and you go and sell it on eBay or whatnot or Vinted, you've lost 15% already, and that's banking on you finding a buyer and finding somebody that wants to pay you market rate. 14:26 You're already down to 85%. We've got a fee-free marketplace. The bit that I think blew up Courtyard as a business is that we brought in a now industry standard 90% buyback offer instantly. 14:39 So you put $50 into the machine. Your card comes out, and it can have any value from 25 up to $1,600 on a $50 spend. If you get a $500 card, we are offering you $450 instantly, and you've got seven days to decide. 14:57 So you're not under a time pressure. If you don't love that card, $450 that goes straight into your account, which at any point you can cash out. It's not in currency. 15:07 It's not weird coins or diamonds or anything that the audience goes, "I don't know what this is." You can cash out, and obviously you have to do KYC, and you have to be checked and all those things, which is appropriate. 15:17 But you can cash out any point. So, uh, we started with Pokémon. We added sports. Sports took a little bit of a lead. Pokémon, which I'm sure most of you will know, has exploded as a cultural force. Um, 15:28 we have been sitting around about $40 million worth of business every single month for the last six months. In September, we had a bumper month with, uh, the National Card Show and the launch of our app. 15:40 We did $80 million. And that's a combination of the buy-ins from the various vending machines and the payouts to, to the audience. 15:49 And our business model is really simple, which I think is really important for a lot of the Web3 things we talk about is, can I explain the business model so that people go, "Oh, this doesn't feel like a scam. 15:59 This feels..." We make 10%. That's our business model. We buy at 90%, we sell at 100%, and somebody pulls an item on Courtyard every 12 seconds on average. So the key to business is- [laughs]... 16:14 if you can buy 10 pounds for nine- [laughs]... you're gonna make loads of money. Um, a couple of other things that I wanted to add. I think you've explained it unbelievably well. 16:23 But if you just think about the process of buying a piece of memorabilia in any market, you have a load of friction points, right? So you have a, a maker-taker fee. You have the trust elements. 16:38 You have to trust the third party. Uh, you have to hope that it gets to you on time and not stolen, unscathed. 16:45 And then you have to hope that when you open the box or the whatever it may be that you've bought, that it's the real thing that you bought and it's not fake or it's not been misadvertised, right? 16:56 You lose a lot of that process with a, with a system like this and basically only because of blockchain. Yeah. And I think that, that vaulting part is fascinating for, for international audiences, right? 17:07 You know, when we talk about the, the invisible fan, part of the reason that fan is invisible is because our teams focus on domestic markets. Naturally, you know, the, the whole team is based in the UK. 17:16 The whole team is based in the US. You focus on the domestic market. 17:19 If you're a fan in Singapore who loves Pokémon and actually you go, "Well, I'm not gonna ship individual cards because it would cost me $62 every time I send a card. Actually, I can vault them at Courtyard for free. 17:33 I can use the vending machine any time I want, day and night. And when the time is right, I'll ship five of them back to me for $60." 17:40 And that's cool because it's trustworthy, and the blockchain element of it means at any point I can just see, ah, right. It's there. I know what it is. I know the provenance of it. I'm gonna go and get it when I want. 17:51 And the thing is on top of that, if you think about these things as assets, right? 17:58 It's quite weird to have an asset that can only be traded a certain amount of times in a given time period because you physically need it to go from A to B.Right? 18:09 And these things are becoming cultural assets that people place a lot of value on. 18:14 And so the fact that you can have a, a real market, these things can change hands from an ownership perspective 20 times in a day versus 20 times in a year, obviously there is that kind of aspect of financializing something cultural. 18:28 But I think it's also really an incredible unlock from, from your business. Yeah. And I think that, you know, especially for younger audiences, ownership might be much more temporary than we're used to. 18:39 You know, there might be a case of, you know, growing up, you know, I, I think, "Oh gosh, I'm gonna buy a Thierry Henry shirt. I'm gonna hold onto it forever." 18:45 There might be a more faddish, faster-moving audience that say, "Actually, I don't want all of this stuff in my house all the time." 18:52 Uh, and you know, one of the things that we get from customers, which I think is really, is really fun, is actually the vault stops somebody being grumpy in the house that they're getting 50 packages a month of Pokemon cards. 19:02 They can sort of slightly mask the fact that they're trading as much. But fans want to play quickly. 19:10 I met with some of our biggest users recently, and I asked them, "You know, what's the thing that we could do to improve our business for you?" And the question they h- the, the response they had was speed. 19:19 "I want to be able to use this product faster and faster and faster." 19:23 And one of the challenges we've had, you know, with the, the, the sort of blockchain structure is working with Polygon to get our speed of transactions down faster and faster and faster, so that if you want to play quickly, you can play quickly. 19:35 So I think that that notion of what is ownership, and ownership being a much more temporary thing than a permanent, I think is really interesting for young audiences. 19:44 And then in terms of how-- Because I think I get a lot of people being like, "Can you introduce me to Courtyard?" And I'm like, "For what?" 19:50 [laughs] Uh, because t- typically they, they think big, new, hot brand doing well is gonna, as you said, cut a, cut us a check. No. [laughs] But, but you obviously have this interesting piece where 20:04 you have really big distribution. 20:06 You could do something with an IP or someone that has an audience that could increase your distribution, but the current IP is actually not that valuable to you because you're just buying assets from the market. 20:18 You're-- I think Courtyard are the, the biggest buyers of Pokemon and sports cards on the planet on a weekly basis. So when you're speaking to brands, what are you optimizing for? Yeah. 20:29 And we are really early at the start of that journey, right? I'm the first person to, to have the title Head of Partnerships at Courtyard. We've been in the role a couple of months. 20:37 We've spoken to a number of different rights holders and IP holders, and all of them have said, "Would you like to put your logo on our sleeve?" No, 'cause nobody knows what it is. 20:45 Like when we ask this group of people, who are very educated group of people, not many of you knew who we were. So me putting my logo on a- Not many before Sporting Crypto either. 20:53 [laughs] Uh, and not a lot of, um, not a lot of people are going to come just because it says courtyard.io. 20:59 A lot of them are probably gonna try and use their Marriott Bonvoy points with us, uh, thinking that we are, we are a hotel chain. 21:05 And, and that's my big fear actually, that we drive Courtyard's hotel business, uh, by sponsoring the Philadelphia Eagles, which is a bad ROI for us. 21:14 Um, so for me, the bit that, the bit that I am very, very excited, and I will talk to anyone about this, we haven't got a co-owned vending machine pack experience. We haven't got one. 21:29 At the moment, we own absolutely everything. So we own the Pokemon machine. We own the sports machine, the basketball, the comic machine. We own all the inventory. We bought all the inventory ourselves. 21:40 We run all the technology. And we would love to work with very, very smart people to say, "What would it look like if we owned it together?" So if we took one of you guys as IP owners or rights holders and we said, 21:52 "What's the dream inventory? Like, what is the small trading card or the small item that we could build all the way up to the once in a lifetime experience? 22:03 How would we create a fair market value offering on it so the audience knows?" And then how would we say to them, "Oh, we've got a capsule collection with this incredible sports brand. Let's launch it in here." 22:14 Let's give the fans a chance to every single time they spend $25, they know they're gonna get something from their favorite brand that is, exactly to your point, that is trustworthy, authentic, that's a fun experience to play, and by the way, if you don't love it, is redeemable instantly. 22:34 So for me, the conversations for Courtyard that we want to have are who is a bright-thinking rights holder who's willing to break the rules, who wants to understand the invisible fan and says, um, "Actually, Sunil, I can help you fill a vending machine. 22:51 I can help you with the 5,000 items, and we can work together about how the money, you know, flows back into your organization." But how do we surprise and delight our audience on an ongoing basis? 23:02 How do we build a mystery pack product for a football team or a F1 team or a tennis organization where we go, "Actually, any time, day or night, the audience can come and play. They can come and experience something. 23:17 They can talk about what they've won, what they've uncovered." And by the way, what your value is, is actually a personal thing layered on top of it, right? So the story I tell, I'm a limited basketball fan. 23:29 I'm a basketball fan because I lived in San Francisco, and the Golden State Warriors were incredible at the time I lived there. 23:34 The first time I played the basketball machine on Courtyard, I got a Spike Lee trading card that I had never seen in my life. It's worth much less than the money I paid. I paid $50. It's worth about $27. 23:47 I kept it because I loved it. I'd never seen it before. Could I have gone to eBay and bought it cheaper? Maybe. 23:54 But I had it, and that to me is something that I don't think anyone in the sports world has ever really thought about. We're driving people to acquire something for the first time. 24:04 Our new race jersey, our helmets, our new capsule collection with Corteiz, whoever it is, we're driving people to acquire.The Courtyard experience is the other way. You discover it, you already own it, 24:19 and now you're making a decision, do I want to sell it or do I want to keep it? That is completely different psychology to everything else that's out there. 24:28 Your customer's first experience with this brand-new product is ownership. That to me is such a wild opportunity of just changing the way that we feel about stuff. Oh, I've got this thing. Wow, that's fun. 24:41 I've never seen it before. I've discovered it, which is really different to, here is the eighty-seventh legacy brand partnership that Arsenal are gonna do this season. I can't afford any more. 24:51 And you and I are buying all of them. [laughs] I can't afford any more. 24:55 But the difference between, oh, actually I've used, and I dunno if there's anyone from Arsenal in the room, but I've used an Arsenal-themed vending machine where actually everything that I get is connected with the brand, where I go, "Oh, I've actually never seen that. 25:08 That's actually cool. I'm gonna keep it." Definitely cuts through the noise. Has anyone got any questions? I mean, firstly, congrats. Sounds like an amazing gig and you're having a lot of fun with it. 25:18 And I think in terms of what the kinds of things that you say you're open to, the collector culture piece, the, the gamification of that, like the, the fact that you said that we've got fine businesses, but sticking the randomization on it on top was the, was the really big blowout point. 25:31 And what you're looking for feels very, very natural. I mean, there's a big parallel between what StockX did a few years ago and what Courtyard is doing now by backing the digital with the physical. 25:43 They just had the warehouse business first and they were like, "Why do we have to keep shipping these sneakers around? Let's just let people trade NFTs." And then Nike shut them down, right? 25:52 But that feels like a very fruitful space because that crossover between where there is already physical scarcity, like in that, in that fashion world, um, in the, um, you know, collectible figures and all this kind of stuff. 26:04 Why don't you think that's actually something that could move very, very quickly? 26:07 Like, there's a very natural behavior which already exists for like dropping apparel, footwear, like accessories, capsules, looking for that inventory, like the F1 authentic stuff, which, you know, people would really, really covet. 26:19 What could possibly be in the way of that model not taking off? Because a gamified experience on the front of something which is already there is a very, very natural fit. So, so what do you anticipate to be the barrier? 26:30 We started with Pokemon. We added sports. We added comics in June. We will probably add other categories coming this year. And, and, and Nico, the co-founder mentioned on sporting crypto 26:40 coins are very much in our, in our thinking and there are other categories that we will probably expand into pretty quickly. Um, the limits to where we can go are based on a couple of things. 26:52 One, we are a startup, so we have to really prioritize things that are gonna grow our business. And growing our business right now for us is less about revenue because we do okay. 27:04 We're a profitable business at this point in our career, which is kind of wild 'cause we are very new and we are really, really focused on how do we bring more users into the experience. 27:12 'Cause more users into the experience is gonna help everyone that comes afterwards. The biggest barrier for this room is people thinking that we are gonna write them a massive check. That's the blocker. 27:23 Because if we wanna have a conversation about working with any sports organization in the world and what we can do together, the biggest barrier is not on the Courtyard side. 27:32 It's on the rights holder saying, "Yes, but we have now invented a category, which is the official mystery pack brand sponsor client, and it's a four-year deal. And by the way, you get two tickets to a game in Moldova." 27:47 Like that's the blocker. The blocker is if you think we are a business that will pay you millions of dollars to put our brand with no attribution and no data behind it, we're not. 27:59 If you are a business that says actually we could build something that's ultimately very, very cool for our audience and drive revenue from day one, then we are open for business. 28:12 I was gonna say firstly that's fascinating, uh, like insight that you've given and thanks to Tariq as well, 'cause I literally put myself through uni based on the money I made on Adidas Confirmed and stuff like that. 28:21 I would almost align with what you said earlier about the, the consumer, the younger consumer is someone who wants to trade these things much faster. 28:27 I've been someone who spent countless amounts of money on whatnot, going into fanatic stores, opening these packs, selling the, the outcome of that. 28:33 You know, when you talk about the, the innovation and, and the where the room is for innovation, do you perceive it to be like a use case type of thing? 28:42 Like what could we do with these physical or digital assets that then inflates the value of them and, and causes like a more circular economy of the trading? Do you think that it's a almost a use case based scenario? 28:54 If someone comes up with a great use case for it, then where these digital assets or, or you know, the physical assets as well are actually able to be transacted within an ecosystem to, to fuel it? 29:06 Yeah, I think for us, we view fair market value as a number that is generated by the mass market. So we don't look to inflate it, we don't look to drive it in any way. 29:17 And actually I broadly don't think we should have a part in that. 29:21 Our numbers on the website, so when we offer the buyback, that should be reflected on data that comes from eBay and whatnot and Heritage Auctions and wherever these items are sold. 29:30 So, so I view Courtyard as a gamified shopping experience, a gamified discovery experience, and that's where I get really excited. 29:38 What I am not bullish about in any way is that Courtyard will have an effect on the price of Pikachu cards or a Mbappé rookie card. Like I don't think we should have any part in that at all. 29:49 We should merely reflect what the prices are out in the wider world. Where I think it becomes interesting is actually, and that notion of gamified shopping. 29:58 If you know the example that we often use for sort of super mainstream of where this could go in the future is if you don't know anything about a particular category, say for example, five years down the line we've got wine on Courtyard. 30:12 You go, "I don't know anything about wine, but I'd love to buy my first piece." For you to go and buyA crate of wine takes a ton of research. It takes you knowing who's a scammer, who's not a scammer. 30:25 It's trying to understand fair market value. 30:27 But if we can build trust with the audience that we've done that homework for you, and you can buy a crate from us, and we've authenticated it, we've checked the fair market value, we can give you a redemption and liquidity if you don't like what you get. 30:41 I think we can build people's opportunities to learn and discover about categories and niches and things that they wouldn't get into. So for me, the first basketball card I bought was on Courtyard. 30:54 The first Pokémon card I bought was physically at a show, and I got burnt on it. I overpaid. And when I got it back, I was like, "Guys, look, I got this Charizard." And they're like, "How much did you pay?" 31:05 I was like, "Six hundred dollars." They're like, "It's worth three hundred." And I was like, "Shit, I could have just bought this on Courtyard and I would have understood it." And I think that's where we wanna get to. 31:13 Being a trustworthy, and that's where the blockchain part of it comes into, trustworthy, authentic place where you're dealt with fairly, that gives you a chance to discover and a chance to get yourself out of it if you don't get what you're after, which I think is really, really important. 31:27 So we shouldn't affect the market. We should just reflect what's happening in the market. Pokémon is an unbelievable force right now. Will it be an unbelievable force forever? Don't know. But we are open to expansion. 31:39 So sports, comics, uh, coins next, and maybe a rights holder in this room will be part of growing that business. Hi, Sunil. I'm Jeffrey from the ID@X Gaming Accelerator. Uh, thank you for coming today. 31:52 Really enjoyed what you've had to say. My question is around, uh, the packs you're selling and the fact that, you know, you are paying for the pack. 32:00 You're not certain what is gonna be inside of it, and then you receive something of value on the other side. You know, a parable would be made to it being a slot machine. 32:08 And are you concerned at all about being perceived as offering gambling products? Yeah. So I think that, that is, is a good conversation. So on the Courtyard website and inside our app, we display the odds at all times. 32:21 So we show you exactly what the chances are and the probabilities are of getting a, getting a higher card and a smaller card. Because of a bunch of subtleties in different regions, we are not gambling perceived. 32:33 Regulation may change over time. We may have to revisit those conversations as time goes on. But right now, the job that we have is just fairness and transparency with the industry and with the consumers. 32:44 So any consumer that comes, number one, we ask that you're over eighteen. Number two, we display the odds visibly for you to say, "This is what you get." 32:53 The thing that I think is fascinating about the Courtyard model is, and, and I mentioned it earlier, is if you play the fifty dollar machine or the twenty-five dollar machine, we make no money on the pack price, which is really different to the slot machine. 33:08 The slot machine, they take your money every single time, and they spit out according to whatever probability they want. We make no money on that. 33:15 So the expected value, if you spent a thousand dollars on Courtyard, the expected value is a thousand dollars worth of cards, and we keep to that. 33:23 The expected value is really, really important to us that we deliver to the audience. That does mean that sometimes you get lower and sometimes you get higher, but that's really important. 33:31 Where we make our money is that ten percent, and that helps to keep us as far away from gambling as we can internally. 33:39 So we think about what is the right thing to offer the audience to drive really great opportunities for them to get items and to generate the, the buyback for them as well. 33:48 So it is a question that we will keep thinking about. It is a question that we will-- that will keep coming up, um, and it's one that we have to be v-very cognizant of, is how do we drive the right behaviors? 33:58 I worked for a long time at Instagram, where they were fixated about time spent on the platform, and it led them to make really, really bad decisions, like decisions that ultimately hurt a generation of young people because they just trained the algorithm to get you to spend all your time on it. 34:13 For us, having a product that 34:17 is focused on joy and discovery and liquidity is the really, really important bit to stop us getting into a position where you start making business decisions of like, "How do we get people to spend more money? 34:28 How do we get people to spend more money?" It's very much about how do we position ourselves as a discovery platform, because that will drive more usage than just milking the same audience over and over again. 34:39 How did you attract, like, your early users that maybe weren't crypto users? Did you ever go and, like, do a big marketing campaign or, like, how was that? Yeah. So, so our early users were crypto users very much. 34:53 Like, Courtyard has existed in a number of different phases before it got to this phase. So there was a set of crypto users. Like I said, when we launched, Pokémon was the first thing, then sports. 35:02 Sports was bigger than Pokémon. 35:05 And actually, the Pokémon business blew up really because of social and vir-virality of us posting clips of people opening packs and feeling the absolute joy and losing their minds over the cards they'd got and the opportunity. 35:20 So it was very much a, a, a viral piece. 35:23 At the National Card Show, which is the biggest sports card show in, in the US in Chicago this year, and, and at New York Comic Con, uh, two weeks ago, we did what I can only describe as one of the best things I've ever done in the workplace. 35:35 So we did the vending machine live. So we had a really big comical red button that you got to queue. 35:42 You come up to the front, you hit the button on, it's a massive screen, bigger than this screen, that, that shows you what you've won, and then we physically put it in people's hands. Very, very expensive experiential. 35:54 [laughs] Um, we gave away a free graded item every thirty seconds for four consecutive days. I was on the mic for four days. 36:04 I personally fist bumped and handed a card to eighteen hundred people, and my colleague, another eighteen hundred people, but it was joyous. 36:12 And that marketing helped drive a huge number of app downloads and has driven a bunch of, you know, new first-time buyers and GMV from that. For us, demoing the product is vital. Absolutely vital. 36:25 And I said to Pep before we started, it was crazy. I should have-- We should have done it here. I should have pulled a pack live. But really, once you see it and you get your first one and you go, "Oh, that's fun. 36:33 Let me have another go." Like it is a really, really fun experience. 36:36 And I think a lot of Web3 experiences were built on, well, you know, how do we get the mint to mint out really fast, or how do we drive up a million downloads and forgot to actually go, "But is it fun?" 36:47 If you're a Pokémon collector or you're a sports card collector or coins or hopefully, you know, one of your fans, is it fun? And, and Max talked about this for the Mc- the, the McLaren project. 36:58 Is twenty-three of twenty-three fun? And it was fun because you sat and you pored over all the Easter eggs and all the little nuggets of information that only McLaren could have done for you. So it was fun. 37:09 So for us, discoverability, fun, the joy of the experience are vital, because if we don't have those, you know, it could be a very, very boring financial product. 37:19 We have to just really make sure for, for the growth of the business and the marketing, is it fun? Can anyone get involved? What are the barriers to entry? How does blockchain make it transparent or authentic? 37:30 How do we prevent some of the challenges for a collector? Is this a real item? Is it gonna turn up damaged? Is it ever gonna turn up? Like, all of those things. So how do we make it great for a collector? 37:41 How do we make it fun for someone who's maybe not a full-blown collector, but wants to have a go? And how do we keep doing the right things by the audience, which is helping them enjoy the hobby more? 37:53 A nice note to leave it off. Uh, thank you very much, Sunil. Round of applause. [audience applauding] [upbeat music]
