Riding Unicorns

S3E13 - Ray Chohan, Co-Founder @ PatSnap

March 02, 2022 Riding Unicorns Season 3 Episode 13
Riding Unicorns
S3E13 - Ray Chohan, Co-Founder @ PatSnap
Show Notes Transcript

Ray Chohan is the co-founder of PatSnap, one of the global leaders in ​​connected innovation intelligence. With more than 800 individuals located across three continents, Ray and his team really are at the forefront of revolutionizing the innovation process. 

During the episode Ray reveals the motivation behind founding PatSnap and exactly what problem the company is trying to solve. From an operational perspective Ray was able to share some tips for fundraising, hiring and how to become an expert communicator. In closing Ray goes on to explain why he is hugely excited about web 3.0 and what value he thinks it will bring to our daily lives. 

Make sure to like and subscribe to the Riding Unicorns podcast to never miss an episode. Also don't forget to give Riding Unicorns a follow on Twitter and LinkedIn to keep on top of the latest developments.

James: [00:00:00] welcome to riding unicorns. The podcast about growth startups. On James Pringle and I'm a technology entrepreneur and investor and the founder of Pringle capital. My co-host is Hector Mason. Hector as a partner at B2B investor episode one ventures.

Our mission is to uncover what it takes to build a unicorn business.

For season three, we're speaking to some of the best founders, many from unicorn companies and asking them about their journey, operational insight, tips, and lessons they've learned along the way.

This week's episode is with Ray Chohan. Co founder and VP of new ventures at unicorn patsnap. PatSnap as the world's leading innovation intelligence platform. Patsnap is used by more than 10,000 customers, including Tesla, Dyson and PayPal. To access insights on markets, technology, competitive intelligence, and crucially patents.

Where is also a big [00:01:00] believer in web 3.0. So we covered that as well.

James: hi Ray. Welcome to riding unicorns.

Ray: Hi, James, looking forward to this.

James: It's all pleasure to have you on, so right. We start every episode for season three, with a simple question, but what does entrepreneurship mean to.

Ray: That's interesting. to me, it's having an abundant frame of reference, so I'll just unpack that further. So frame of reference is something we all probably grew up with. So my frame of reference growing up. In a blue collar household was more, my father was a postman. My mother was a seamstress and being from Indian descent, my frame of reference would have been, oh, work, hard study.

And maybe there's an opportunity to become a doctor, a lawyer, and maybe work in a law firm. So that was my frame of reference in my childhood and my teenage years. And I think entrepreneurship to me is [00:02:00] having an unlimited. Frame of reference where anything is potentially possible and just opening your mind up to any avenue and having the courage and the conviction that if you have that unlimited frame of reference, you can try to build anything.

And you don't have to be from said background to go into a certain industry or, build a business. Everything starts from somewhere. So it's very much that zero to one mindset. And just knowing that entrepreneurship is about connecting the dots. It's like having a mindset of there's unlimited Lego blocks in the world.

You just got to have the courage and desire to go out there in the world and, and make those markets build that product and the rest for us. So it's very much having the mindset of having an unlimited. Mental frame of reference.

Hector: that's really interesting in the market, of course, that you enter afterwards, [00:03:00] IP, which I'm sure to lots of our listeners is, a little esoteric and probably a lot of people don't understand, what the need is or what you might. Be solving. So I wonder if you could sort of explain in, some layman's terms, what the problem is that you guys are solving and why pat snap does exist.

Ray: Yeah, sure. So, IP is very much an esoteric term to most folks. And, and so that was our mission in our formative years. Can we demystify the asset class? So be. IP comes in a form factor of either a patent on a technology. or either a trademark, right? That those are typically the two big asset classes in the world of IP, or some people don't find a pattern and they prefer to just have a trade secret.

so that's the kind of the IP asset class. and prior to pat snap, it was esoteric characters. So most people assumed, okay, if you're at an organization or a university or a government lab, You've got to be a patent nerd to understand that and [00:04:00] try to unpack that and try analyzing that asset to then link it to the business for some form of value.

But what's interesting is even if you look at the S and P 500 as of last year,

90% of that market cap falls under intangible assets. So that can be in the form factor of company data, customer data, the software driven network effects, patents, trademarks, trade secrets, or just the tacit knowledge inside an organization.

 So as an asset class, it's huge. It embodies most of the public market cap of large companies and many private companies. So where we saw the opportunity, is They should be a Bloomberg for. There should be a pitch book for IP because Bloomberg done a great job in the world of finance and the investment markets to build out that terminal and unpack that data PitchBook have done an [00:05:00] amazing job to kind of democratize. Venture capital data company data to not only all the funds in the world, but I think many founders enjoy using that product.

And they've completely made that data abundant and very easy to use. So we felt there was a huge blue ocean to open up patent data to everyone. So you could be a CEO in a company, you have no background in IP and go, wow, I understand this analysis or know how to leverage it. So, that was. original idea to, can we build a business around that gap, an unmet need in the market?

James: I'm ready. What experiences had you had up to that point that had led you to that thesis and that viewpoint and to ultimately co-founding a busy.

Ray: Great question, James. It was really my prior also I was really blessed, James. I it's just luck. Really. I ended up at a wonderful business called data monitor in my Alicia must have been 21, 22. When I joined that organization, I was at the right [00:06:00] place at the right time. that business was very much what I.

Market research 1.0. So it was a, market research company similar to your gardeners, your foresters. I'm sure you've guys have probably used some of that content in the past. And that was a phenomenal business working across all the major verticals from life sciences to automotive, to FMCG, to ICT. And I was fortunate enough to have a great manager, a chap called Tony Pearson, who I've got a huge amount of respect for, and also work with some.

Amazing people. When I, when I look back now, I felt like I was in the class of 92, you know, famous Manchester, United a documentary where they all go. It was just a lucky class. We were all together. So I was surrounded by so many capable and competent people. Also people would really good values. And from that experience purely on the go-to market side.

So I spent eight wonderful years on the sales side. I was allowed to express [00:07:00] myself. They let me just basically off my leash because I was fortunate enough to have great mentors. And I really performed in that company on the business development side. So I was serving clients in life sciences, the automotive markets FMS.

All across the world, James and typically the buyers of that market intelligence would be sometimes R and D business development, CEOs, innovation managers, we sold to all different types of buyer personas. And then I think when you work in a business like that for that long, and you have so much fun, I just collected this huge Corpus.

Of knowledge of unmet needs over the years. And in your twenties, you just store them like fridge magnets on the back of your mind. Wow, that's an unmet need, or that's a gap there always see this pattern recognition of a customer asking for this capability. And at that time, the company I worked for didn't offer that.

So all of those unmet needs just stayed in the back of my mind for so many years. And I always had a dream one day to. Be part of a founding team at business starter [00:08:00] companies. So always felt that knowledge, which I was just in the back of my mind would be useful, uh, one day. So I've got a lot to thank to that business because they really allow me to room three, traveled the world, worked with so many different companies and I collected all of that knowledge.

So when I met the founder of pat snap, Jeff. I had something to bring to the table, right? Like we had the perfect marriage of where he's got phenomenal product engineering, machine learning capability as an entrepreneur. And what I brought to the table is the commerciality, the market knowledge, how to take something to market.

So it was this perfect marriage. And so it's that classic fit of that technical founder and, sales guy found a.

Hector: Fantastic to hear when, um, people find themselves in a company where, you know, the people that working for, where they're just supportive and, you know, the ability you into, the person you are today. But I wonder after that experience, what the first steps were with, building pat snap [00:09:00] and whether you were thinking at that stage.

About building a company worth a billion dollars now, and hopefully many more in the future. but what were those first steps and what foundations did you initially put down to build a huge business?

Ray: Yeah. So at that time I had no clue. Where we ended up one day with 1200 employees. I didn't even know what a unicorn was back in 2012. at that time it was, can we build something? Can we take it to market world people pay for it? It was that kind of first principles of. Wow. Someone's actually signing contracts and paying for this software for it's like laying little bricks initially, and each day is just a big win.

So when you get to your first 500 K an hour or. That million dollar mark. It's like the biggest moment ever. When were you initially building? And we basically started in my bachelor pad, but this was before I [00:10:00] was married with kids. We literally started in my apartment. I had no clue would end up building a large business with offices around the world.

Even back in 2012, Hector, I had. Base of the venture markets seed round a round, in the UK and I'm sure both of you gents, remember this pre 20 11 ish. There were no frames of reference. There is no dark trace or large UK based SAS company. I mean, look at hope and now absolutely crushing it.

back in 2011 and 2012, there weren't many venture backed software businesses in the UK. So. We were just kind of going with it. And this is where luck comes into it. Again, this is where there's lots of blessings in life about timing. It was actually 2012 and I'm sure you guys both remember that was the start of the bull market.

Wasn't it globally, really? Where so much money was being plowed into early stage growth stage businesses. So when we started building, it was really 2014 when we raised our a round rollout. Wow. [00:11:00] I think. Potentially build a large company here and that sort of venture capital is, and that's what it enables.

Or we can hire more people out the market size is bigger than ever. We can evolve the market size. So nothing was pre-planned in that way. It was just execute. Well, keep it simple, try building a good culture, hire great people. And then the rest of it.

James: Yeah, it's a really interesting thing to think about companies that evolve into unicorns rather than having it as a north star from day one. And that's part of why we do ride a unicorn to try and demystify it and show that there are different routes to building unicorns. talking of unicorn valuations.

I mean, you've raised over $350 million, according to Crunchbase from the likes of Sequoia, China, 10 cent SoftBank, and a number of others. what's your tip for founders when it comes to fundraising. How do things change from early rounds to later mega rounds that you've been.

Ray: Yeah, I couldn't agree. Well, this is where [00:12:00] again, there's blessings in this back in 2013, there wasn't this hype around unicorns and, and raising capital. So you could just crack on and focus on product engineering market customers. Trying to hire great people build out high performance culture. So a lot of that noise, thankfully, wasn't there where do feel for founders now who are starting say in the last two, three years as there is that pressure and that frame of reference using that word so many times.

Now there's a bunch of companies and the fun of just raised from they've got three unit unicorns in their portfolio already. I've got a lot to live up to. I mean, it's, Hector's, it's funny. We were at dinner in 2013 with our, one of our angel investors. And, another person connected to pat snap and Jeff was there.

My wife was there. We were just having dinner in London. I remember us toasting to a billion dollar valuation. I want wouldn't be toasted. I was like, wow, that seems crazy. Like, is that potentially possible? You always kind of obviously have that growth mindset, but [00:13:00] that number sounds so big back then.

Where now God, when you open up your LinkedIn in the morning, there's a unique unicorn. Being announced quite often now isn't it. So I think that was a big part of it as well. You raised a good point. We could just focus on the business and that's what really matters.

Hector: It's not, she really interesting to hear that, Think, it's very fashionable now, for founders to talk to VCs about how they are resolutely focused from the outset on building a billion pound business or multi-billion pound business. Perhaps a shame. And, you know, I think a lot of founders are probably overlooked for not having that, mentality or even just for not saying those words.

and so I think, people talking about building huge businesses from the outset is probably actually, or could be the cause of a lot of, founders, including underrepresented founders and all also. being overlooked and actually VCs should perhaps focus less on what these [00:14:00] founders are talking about and the words they're saying and focus underlying business.

Ray: I think with the capital markets now with so much dry powder, still out there, even during this correction, it's going back to first principles, just focus on building your business. So have all your energy focused on your day to day business, laying each brick at a time with care and diligence. So that's obviously the product side, enablement.

Recruitment. I mean, many of the times, I just tell people I'm a glorified recruiter. Like I'm a dumb. I've just been lucky, fortunate enough, good enough pitch. I can hire really smart people and they're joined the business. So it's like I'm partnering, but giants. And I learned, I mean, we've got a great leadership team and wonderful pat snappers all across the world.

So our job is really trying to excite people regarding the mission and get them to join the business and then giving them a framework, giving them a great incubator to [00:15:00] flourish and thrive. So I think with early-stage founders very much focused. On that. And then if someone does send you an email, which typically happens in the venture markets quite quickly now, because everyone's competing over deal flow, as you guys know, there's plenty of money out there.

I would say once you do get to that first stage meeting, actually, it's very different now. I think. If, you know, you're building something meaningful and you've got that early traction in terms of revenue and you're building a good team. I think now very different from when we were raising back in 20 12, 20 13 or 2014, in terms of early stage money, you should start discussing as a founding team.

Like what does a raise look like? What type of fund do you want to partner with? Cause that's key, right? Because it ends up being like a 10, 15 year marriage. So I think now I'd recommend founders, even though you're not raising right now, at least start having discussions and build some form of wire [00:16:00] frame of the types of funds you'd like to raise from.

And most importantly, the types of partners you want to work with and what's their longterm view. So I think it's actually really healthy, very early in the process too. Get the founding team and early employees aligned to that. And then if you do well, as you know, someone's going to drop you an email or a message on LinkedIn and say, Hey guys, how'd, you guys are doing well.

We'd love to plow a check into your business. So I think it's just discussing it and having a foundational understanding of what your role is. with somebody who's going to fund your business and know it's going to be a long-term marriage. So the key thing is make sure your values are aligned. You guys have a similar belief system.

We're really fortunate. I passed out, we've got awesome portfolio of investors and a fantastic board. So there's really great understanding in terms of the business side of things, the value side of things. So I think really double clicking on that and focusing on that is really helpful when you're trying to build a.

Hector: [00:17:00] You touched on something really interesting there, which was when you call yourself a glorified, recruits, because I think, well, I'm just going to ask you straight. You.

Ray: boy do. I mean that, jeez, I still recruit till this very day actor. Literally I was speaking to her recruiter yesterday morning, trying to win hearts and minds. Cause I know that recruit is really good and there's going to be a bunch of growth stage businesses, saying, can you please go with us and focus your attention and time with us?

So, oh God, it's constant actor where you're. For talent is brutal. So not only do you have to have a great business, but you have to really demonstrate in the market to high potential folks that come join us because of X, Y, and Zed. And God, I take interviews on a Saturday and Sunday. Sometimes the best people have hired them.

Heck from seeing them on the Sunday at 2:00 AM my wife's like, oh, let's do this. I'm like, honey, I've got, I've got to meet this person. They're only giving me time on the weekend.

Hector: Fascinating. I think cause people talk about different things it's [00:18:00] been cool speaking to a whole load of unicorn founders and some, say that their talent is efficient. Decision-making some would call themselves, great strategists. it sounds like you would say that your, your sort of spike is attracting great.

Ray: Yeah, I would say I've really enjoyed the talent attraction piece and also building. Energy and excitement and the business, and also then backing that excitement with actual results. So I've really enjoyed over the years, working on new products here at pet snap by may conquering new markets. Because every time you bring something new within a growth stage company, it's really interesting.

Hector, you can build a business with one product, but when you launch a new product, you will still have your existing team members. Are you sure? Like, is that going to work? I'm like, well, the first product work and what I've learned painfully is you're back to square one. Again, you've got to win hearts and minds.

You will get them on board on this new product or this new market, because they're [00:19:00] focusing on what you've done before. Right. And doing a great job. But when you want to continually innovate in a business, not only do you have to figure out that innovation, you've got to bring your existing team. And that's not easy.

So, it's constant pitching and recruiting and winning hearts and minds. it's never ending on that.

Hector: but yeah, I mean, you get to understand the, how, how you scale that globally, because, as people. In the business are so far, removed from you as a founder, how do you kind of ensure that the quality of all of the different departments and disciplines within the business, how do you ensure that quality stays high around the.


Ray: great question. Especially the way we're, we're so dispersed and we're quite unique as a business where we've got a phenomenal team in Asia, but also in north America and AMEA, I would say first your bench strength in terms of your senior leadership team and then your managers and your VPs, just try recruiting.

well where they. have got Those foundational skill sets And [00:20:00] then it's literally quadrupling down on communication Hector You have to over-communicate and be really clear crystal clear on your communication. So get paranoid about communication, Hector, literally double checking if everyone's on the same page, if there's any ambiguity.

I think the key part is alignment. And really quadrupling down on communication. everyone feels that sense of belonging. they're in franchised where they feel part of it. And also in this day and age, psychological safety, right when you're scaling fast. And so many things are happening at fast, you've got all these employees around the world, all probably going through challenges in their day to day.

So that's why you've got to really focus down on communication and do it well. Because then you can really enable that psychological safety and that environment to create that high performance culture, to allow people to express themselves and [00:21:00] execute against their respective goals.

James: Yeah, that's really, really interesting. I think Nigel from currency cloud and rails bank described it as sort of trying to get out of people's way, but also making sure everyone's on the same page. Really interesting as heck dimension. a lot of our guests have talked about hiring is such a critical component.

do you think there's almost like a talent cycle where there becomes a point where it's no longer in people's interest to be a founder because the market is so competitive that they can have the safety of a job, but be paid incredibly well. or with the high VC money. And valuations at the moment.

Is it a great time to be a founder? Like what do you see around that kind of cycle of how it will kind of spin through.

Ray: James. That's a brilliant question, especially now, right? With the abundance of capital we've had over the last decade and God even going into this, even though there was a correction, there's still being checks, being written every, every other day. on a macro level, I still see loads [00:22:00] of people who are super keen.

To be found us. So now the business has scaled up. I do get him involved in angel investing. So I get messages every other day on LinkedIn of super bright. They're like Jetta is these new age founders who are really keen on building a business. So I've not seen much of a fall off on that front, especially what's happening around web three.

We're now living at this, in this Renaissance, right, where we're really excited about this new paradigm where evolving too. So there's no fall off on that front. But to the second part of your question, it is actually really compelling being an early employee or. Someone senior at a early stage business or a growth stage business because, the opportunity to learn, grow, um, opportunity for stock options is really meaningful, right?

So I think those forces are at play as well. Right? Where you've got talented folks saying, listen, I don't need to be a founder of a business. I can just [00:23:00] join super early, even at the AB. And have a great experience and hopefully have a great outcome as well. So I think it, it struggles across both of those spares at the moment, but I don't see any of them falling up, falling off.

They're just actually.

Hector: I think that's. the differences that there are people who want to build basically, and you can be an operator, but it's never gonna, fail, true ownership in the way that a founder does. So I think that's my instinct on that question.

Ray: it's interesting that when I think a lot of operators. Do you feel that sense of ownership now? Because now they do get meaningful skin the game and they get that empowerment. And actually, I think they're really good. Founding teams just do empower them and give them that platform to express themselves.

So there's so many times at the row. Well, I'll just go to my team. I just answered a call. I'm like, how can I help you boss? It's this banter that we always have. I'm like, we're here to serve you like literally. [00:24:00] So be it basic blocking and tackling. I think now the modern day founders or founding teams have to live in service of their team to just enable them even help some of their early.

So it could be graduate employees. I still work with a lot of our junior employees are just starting their career because I think we now live in this environment. As I found founder, they can't be no airs and graces. You have to really get into the engine room, work at ground level. And that's how you get buy-in with this new generation.

I find if there's any smidgen of ivory tower type behavior, you've lost people. I think a lot of teams do fall in love with the business and the mission where they're like, wow, The founders are knee deep in the business. They're still closing deals. They're doing recruitment. they're helping with some basic blocking and tackling here and there because it seems like they just want to be involved.

So I think running a business like that, especially in the market right [00:25:00] now with talent, I think it's the healthy way forward. And in fact, it's actually really enjoyable because you feel really close to the pulse of the business and you feel really close to your culture and your.

Hector: Yeah, that's fantastic. So, so actually building a culture where, the ownership that your boys feel is probably as a result of the culture that, you guys develop, which is fantastic. definitely a good takeaway for listeners. we touched on it a little bit, but your role over the years has changed.

And, you know, obviously when you started out, it was, deeply. Operational, you know, getting things, moving, getting initial customers, initial employees, all of that. I've seen you're now head of ventures, I think is your actual title. Um, and I just wonder how, how your role has changed over the years and what, what it is that you sort of spend your time doing now, perhaps aside from just hiring great people.

So what does that new title really mean?

Ray: Yeah, that title. I don't even know what it really means to be fair with you. It's obviously we've raised a bunch of capital now, so there is potential for some small of [00:26:00] smaller acquisition, more partnerships where we've got a balance sheet where we can. Execute on something. It's the first time in our history where we have that opportunity.

So I do spend a small amount of my time, maybe speaking to certain businesses, which could be a great bolt-on or a tuck-in acquisition, or just exploring new opportunities where we could either invest in a company and bring them into our mothership. So our new ventures piece is supervised. But it's important because we now, what we've decided to do as a company is let's date, lots of really cool companies, which are really early in their phase.

We get to know them, they get to know us. And then as Pat's not grows, there's potentially an opportunity to work together in the future. So that new ventures role is very much me dating and meeting other compelling companies and saying, this is pat snap. If the timing isn't right now, maybe in two, three years.[00:27:00]

We could acquire the business or another form factor of a partnership, but outside of that, Hector, it still blocking and tackling. I still get on sales calls, demos. I mean, last year, especially Q1, we ran a special project where I was sponsoring a lot of our new logo acquisition. In EMEA and north America and sponsoring is a fancy word for just getting on the bloody sales call and helping that sales rep execute and win the contract.

So I find it still very much is in the weeds. So for example, this year, I'm spending a lot of time on recruitment than ramping those new hires. But in partnership with our phenomenal go-to market and just working on, my foundational skillset, which is sales fundamentally. So I'm just double clicking on that and, and focusing on that, really nothing too glamorous or exciting here, actor.

James: That that's great. It's clear that your kind of very strong [00:28:00] on the sales side and, it's another theme that we've heard from a lot of the founders we've spoken to from the unicorn companies. Ray, there's a, there's a video going around on social of Elon Musk, describing patents as a lottery ticket to a lawsuit.

Can you set the record straight on the value of IP and patents and maybe touch on why most companies probably shouldn't operate in the way that he does or Tesla.

Ray: He's one of my heroes. So I want to be very thoughtful with this. I mean, Tesla have adopted this. Open philosophy around their patterns, which is great because their mission is, sustainable energy and, uh, a multi planet scenario for society, which is phenomenal. but patents, especially for example, within life science, The key, especially when you're developing novel therapeutics or certain sectors.

So, patterns as an asset class, there is nuance by industry and [00:29:00] even in the automotive space to be fair, a lot of the big OEMs have a huge pad portfolio. James. So Ilan being the legend and the contrarian, he is, he always loves going against the grain and that's been a. Tesla's position, but, uh, I'm pretty confident.

They've got a lot of patents around their manufacturing process. I assure you so Elan loves doing what I call it an a rope, a dope where he signals one thing, but really behind the stage, he's got a huge IP portfolio around the manufacturing process, the real nitty gritty. So sometimes he says things publicly just to a.

Make you go down a direction. He's actually, that's why he's so smart. Right? Like, so I call it, he does a lot of, uh, Ilan is the master at head fakes. but just to also to give further context, James, I mean, we started off with patterns initially, but very swiftly, I would say 2015 onwards. If you go to the pat start made website, now [00:30:00] we made this quick evolution to more connected data.

So patents is just a small part of our story. Now it's a great data set, but we now connect patent data to market reports, scientific papers, journals, venture financing events. Other forms of unstructured data, it could be a social media post. So if you're the head of corporate ventures at Starlink, you'd use our platform to stitch all of that data together and just get one single view on a particular market from loads of different perspectives, not just patterns.

So in essence, our main mission is really helping R and D and innovation. And that's where the product is shaping towards. So you can see that say you can see the sales guy. I, I can't help myself. I just went into autopilot there, James. I apologize.

Hector: Well, I'm looking forward to the next bit in that case, because they're talking a bit on me, made me think about, his various posts, about crypto and web 3.0, and I know that you are, um, a web three evangelist. And [00:31:00] I wonder if, if you can just talk a bit about what got you excited about web three in the first place?

Ray: my wife thinks I'm nuts. I'm literally on weekends, locked in my study when I've got time on the weekend. And I'm literally probably same as you guys. Let's be real. We're going down that web three rabbit know James does some really good, uh, Pretty surveys on LinkedIn, which kind of make you click and go.

Yep. I believe in X, Y, and Z, but yet web three, I got first enticed with web three. I mean, it wasn't even called web three back in 20 16, 20 17. So it was initially. The smart contract world, Hector, which kind of made me lean in because conceptually I understood that technology and some of the unmet needs in the market.

So initially it would have been, I think, on a theory and back in the day where I thought, wow, that's a really meaningful project and I love the roadmap. I love what they're building. And obviously we had that crazy price action in 2017. I don't know if you guys remember where we had that first mini kind of hype cycle, but fundamentally now we've really [00:32:00] hunkered into building.

God has probably thousands of web three businesses out there right now building across various protocols. To me, what excites me about web three is it's what the internet always promise to be. Right. We get in the early nineties, what I called read only where websites were basically just like an online magazine, then 2004 ish with Facebook and MySpace, it was read right.

Upload your content and kind of interact. But I think the holy grail is raid right and own. When you start having ownership with digital assets and they can be scarce. This is going to unlock. I mean, it already has, but this is a hundred trillion dollar mark. In my opinion. That's why you're seeing so much capital and so much energy within that market.

I love that element of read right own and how it's [00:33:00] decentralized and how good you could be a kid with an avatar in an emerging country in say a nation in Africa and participate. If you're bright and hungry, you can get the upside without a middle man. taking you a share of your effort. So I just love the values of web three and I think the timing is perfect for that space to be exponential.

Hector: no, I completely agree. I think it takes a long time to sort of start getting your head around. why the hell do all these buzz words actually mean and thing, right. Decentralized kind of. So what, like what, what does that actually mean? But I think it's when you realize that. If you were in a decentralized world and all of the work, all of the things you do actually are not at the whim of an organization that is fallible, could end up being malign, may not end up fitting with your views or whatever.

that's really powerful. but I think the thing that a lot of people struggle with is just trying to understand. [00:34:00] What are the actual use cases like, because it is still in this really nice and phase where it's this big technology that promises so much, and I'm sure it probably feels like the internet felt sort of at its outset.

but I wonder if, you can think of any sort of use cases today, examples of how I guess blockchain, is used today in the real world, to bring value to society.

Ray: Yeah, sure. I'll pick the initial one. It's always a fun one. And if you look at history, it always starts there. Let's look at the creative industry, right. What's happening within music and art. Uh, we can see it with the revenue on open, see, which is God is off the charts to this month. I think they've smashed their record again this month.

I think they've done 3.4 billion in transaction volume. And what is it? The 18th of Jan. So if you just look at NFTs, NFTs to me are basically like a webpage back in the nineties. Who'd have thought a web page would turn into Airbnb or turn into slack, it's this brand [00:35:00] new technology primitive, which we can build on top of.

So if you look at the music market right now, historically it's absolutely brutal for creators and artists where most of the revenues, God, what, 90% of them go to all those middle. In that chain, be it the aggregator who distributes the music or the art, and then all the agents and all the middleman.

This is the first time in history where you could be a creator, spin up a song and post it on audience, which is like the Spotify of web three or royal.io, which is a, I think it's similar to Spotify or slightly nuance. And have a direct relationship with your fans and it could only be a hundred a hundred fans or a thousand fans.

There's that famous blog post by Chris Dickson from, I think he's had 16, a thousand true fans. But all of that attribution goes to the artist. It doesn't go to the labels. It [00:36:00] doesn't go to audience who are building that kind of hub together. It actually goes to the artists and what's really cool is then all that revenue goes to the artists.

And also as a fan of say, James Pringle, who say is a musician with insight jazz, because I'm a fan of James. If James starts scaling from his early years, I can benefit from James his upside. So if he becomes the next mega star, I actually have ownership in his brand because I was an early community member.

So as James scales, I scale with him like it's the ultimate partnership between an artist and their fans, where they sharing value. So as a fan of James, I'm posting my advocating his music and I actually will be a lifelong fan and I actually feel ownership. In a success. I think that mental model is revolutionary when creators already thinking, I care about my community and my fans are [00:37:00] invested with them.

They invested with me and that's what the blockchain printers. Enables just on the music side. And then all the other use cases active we could be at to like 10:00 PM tonight, smart contracts. that market is a trillion dollar, organization. There's a great company called chain-link, who are killing it in that market.

So music is just an obvious one, but even in MTS, I purchased my first at Ft and it should be two weeks ago what I recommend to all the listeners. Get involved, like get a Metta, mosque, buy some stuff. It doesn't have to be something which goes up. It's not about the praise action, grow food, the experience of having digital ownership.

Once you do that, you're like, you'll start appreciating having something which is digitally scan.

James: Yeah, it sounds like I need to dust off my saxophone or


Hector: I think that's quite right. I think once you started getting involved with it, because there is a, you know, a barrier to get over it. Getting a Metta mosque buying your first cryptocurrency, all of that, there is that barrier, but your [00:38:00] understanding of the whole thing just improves exponentially once you've, put your foot in.

but yeah, I think I totally agree. It's for me like the, the fundamental, exciting thing about blockchain is how you can, Manage incentives. So, so well, there's a whole new world of incentives out there basically. And you were talking about how fans, can be, you know, brought in and made a part of the success of, their favorite artists.

that kind of revenue mechanism, I guess, goes far outside just the music industry. So I think, yeah, really, really fast.

Ray: another primitive, which is amazing with blockchain. So you got me all pumped now just mentioning this base. I'm sorry guys, but there's this another fact that most of the protocols are open source, most of them. So what that enables. Unlimited composability. So if Hector, if you've built one product in a specific sector, I can view all your code and build on top of your product and fork it and build a net new [00:39:00] product.

So. The innovation rate because of the fact that the blockchain and most of them are open source aids, unlimited composability the innovation speed and the creativity is unprecedented. We've never had this pace in human history. That's why this is going to be a hundred trillion dollar asset class faster than we


Hector: Yeah, we're getting caught on this, but it's fun. it's the open source community on steroids in a way, you know, open source kind of made it halfway there, but then web three offers a whole lot more. It's not perfect for everything. Cause obviously it's less scalable and all that and source has its place.

But I do think of it as a sort of extension to, to open source in


Ray: So I'll just pause that. Cause we'll be here for ages talking about web threes. I love that


James: That's the moral of this podcast. well, Ray, it's been really great chatting to you. There's so much in there for, for founders to unpick and people that are interested in the [00:40:00] space to think about. so thank you so much for that. Uh, as always, we like to end these with, our dinner party guests game.

So if you were to have dinner with three people, it can be absolutely anyone who would they


Ray: Got this is a really good one. And James F with good permission, can I have four please? Cause there was one I didn't want to leave out.

James: For you, right? Of course.

Ray: Oh, thank you. So for me, obviously there's a famous fighter who I'll be a big fan of his name's George St. Pierre. He was a huge star in the UFC and the reason why I'm a huge fan of George is.

He was at the UFC when it was a startup, here's one of their first A-players and he really, um, opened up MMA to the masses where moms and dads, all age groups, all genders could actually get into MMA. And the fact that he was a great martial artist, but also a phenomenal role model. He's still a role model to me now he's retired now, but the way he continues to evolve himself, Outside of the ring around his [00:41:00] diet, his wellbeing, his mindset, he's now in the movie space.

he's his own mini entrepreneur. And also I'm a huge fight fan. So George St. Pierre was someone who always track as an inspirational figure. One of the chap. He's just an absolute machine in the world of SAS and pretty much the Michael Jordan right now of the spaces. Frank Slootman of snowflake he's recently published a book.

I highly recommend it. It's called AMP-IT-UP I think it came out yesterday. He's the CEO of snowflake and his mindset on building companies and his performance mindset. The way he runs the operating rhythm within an enterprise SAS business is just spectacular and his results are off the charts.

So I highly recommend his book. then Ben Horowitz. Who's one of my favorite investors. I think. Arneson Horowitz their investment thesis, how bullish they are. They were one of the first in 2009. If you [00:42:00] guys remember to really double down during that year, which was a recession, hence why they're so huge now, and they're doing it again with web three, they, one of the lead players leading the charge in web three.

So I think Ben Horowitz also bit mark. They're all. Two three steps ahead. And they're always willing to take that risk on new technological primitives, like the blockchain. So I just like bad style. And also as a VC, he's really down to earth. He's into rap music. He just seems like a cool dude to hang out with and down to earth.

And obviously you can't leave out Elon Musk. I mean, absolute legend. The fact that everything that he did. Is based around first principles. And again, he's the master of frame of reference. Like he grew up in South Africa and his frame of reference is like insane too. Like it's literally out of this world and he didn't really grow up with anyone, any leverage or any momentum with the spaces that he's in right now.

It's old because he's got. Insanely abundant frame of reference, where he actually truly believes. [00:43:00] If you understand the first principles of something you can make anything happen. So I think he's an inspiration to everyone I'm on


James: Yeah. Wow. Well, amazing diversity of guests, really, in terms of like different worlds that they're. Top of their game, I guess it comes down to those people that are really at the extremities of the space. so absolutely fascinating and some good tips in there for people to go and do some further research around with, Frank's book and Andreessen Horowitz as being a big investor, leaning into web three.

So, yeah, really, really interesting. And I'm sure it would be a good dinner. Be good to be a fly on the wall for that one. so thanks so much, Ray, it's been brilliant to hear your writing unicorn story and thank you so much again for that.

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