Animal Spirits Podcast - NFTs

Episode Date: March 26, 2022

On today's show we speak with Audiograph's Quinn Stearns about start-ups, founding a company, creating communities for podcasts and why we made Animal Spirits NFTs.   Find complete shownotes on our blogs...  Ben Carlson’s A Wealth of Common Sense  Michael Batnick’s The Irrelevant Investor  Like us on Facebook  And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.    Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's wealth management. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Clients of Rithold's wealth management may maintain position. and the securities discussed in this podcast. On today's show, we are joined by Quinn Stearns from Audiograph. And what we're going to talk about today is the relationship, the lovely, budding, beautiful relationship that we've developed over the past six to nine months. When did you email us, Quinn? I think I emailed end of August of 2021, I think. Okay.

So I can't do the math. I can't do the math with months. But the bottom line is that Quinn emailed us with an idea for a business. And ultimately, where we are with Quinn and the team at Audiograph is Ben and I are advisors and shareholders. And we worked with them on creating this NFT project for our fans. And we're going to get to all of that. But why don't we rewind and start at the beginning?

So, Quinn, the last 12 months, one of the biggest themes, at least in 2021, has been the great resignation. This idea of people leaving very comfortable jobs with Bright Futures to go do their own thing. And you and Andrew and Josh were part of it. So who are you guys and tell us what that was like? Absolutely. So we were all software engineers in Silicon Valley doing pretty radically different things. But there was definitely this common thread.

Like you said, very comfortable existences. I mean, I think all of us loved our jobs on a certain level. You're supposed to say not to brag. I thought you were a listener. Oh boy. I got to introduce that in my repertoire for sure for this. We were really in a great position. But I think with all that being comfortable in that position, it gives you a sense of security to jump off and do something that you think is going to be really important. And I think that when the pandemic started, that a lot of people in similar circumstances to us tapped into that. For me personally, I was inevitably going to become a founder. It was something that I had been planning on since I started my first job in tech. And it was only a matter of timing. And then the pandemic happened and everybody sort of started making these decisions. And it felt like it was the right time for us.

Is that a proximity thing for you? You see it's so many other people doing it that you know in Silicon Valley that are doing that. You say like, look, they all did this. Why shouldn't I? Sure. I think for me, it's almost like at least once I started seeing. a few people doing it, I really wanted to be one of the early ones. I didn't want to let everybody else quit before me and then follow everybody into entrepreneurship. So I think it was important

to try and jump off and build something. And for me, it's about building something. It's not, I don't know, trying to have a little fun during the pandemic or something. How did you view the risk reward of that? Because you're giving up a good job. You probably had a decent salary. You had benefits. You had security. How do you do that calculus of, I've always wanted to do this. I know I'm going to be a founder. Like, when is the, right time to do this? Sure. So I think that on a certain level, the downside is pretty well controlled because I have a software engineer skill set. The job market is very, very friendly for me. And I'm very grateful for that. I think that I'm always going to have the opportunity to jump back

into that existence. And so you can just kind of think about if you found a company, there's going to be some disastrous financial outcome. You're going to go to zero. But the cushion waiting on the other side, if you start off with a decent skill set, is pretty promising. And on top of that, founding is the best way to invest in yourself. You're never going to go through a faster period of learning and learn more every single day than when you fail as frequently as when you're founding. So I think there's a lot of downside management. You're creating a lot of value in the rest of your career just by going through this process. And then there's this massive upside where if you manage to create something that's really special to a lot of people, you're going to get some

incredible rewards. So where was the original idea? Andrew lives like eight feet away from you. So I imagine you guys are like Silicon Valley. That's what I picture. The show Silicon Valley, you guys all live together. Quinn is Richard Hendricks and I guess Andrew is Dinesh. Oh, God. I'm not thrilled about that comparison. I don't think Andrew would be, but we'll take it. But you guys are living the dream as far as you guys all live together and you sit there and you code all day. work and do your startup, right? Yeah. Oh, yeah. And like just going and building stuff with the people you enjoy hanging out with is such an amazing experience. Actually, let's just say that you're living too good. This morning, we messaged you at, I don't know, 830, probably 530 local time and you were

still sleeping apparently? It took a while to get back to us. Yeah, yeah, yeah. I sleep in a little bit these days. Michael runs a tight ship. I'm an early riser in tech world. I'm up and at them by 730 or so. Oh, wait, I'm Bachman. Yeah, there you go. I don't know that you're Bachman. Michael, I'm sorry, you're Russ Hanamon. You're Russ Hanamon, and that's that. Ben can be Bachman. So where did the idea come from? So the idea was what? And tell us how that actually happened. When I originally started building, I left my job with a former colleague to build a podcast player. And that was what we started with. So can we build a podcast player? Just big fans of podcast. And let's see if we can improve this experience. But why? I mean, Apple has a,

pretty locked down. Overcast is pretty okay. What were you trying to solve for? For us, I think that it's always revolved around this idea that podcast content is sort of the best long form content in the world. It's the best way to learn about deep topics and gain deep knowledge. But the experience on the listener side is sort of limited. Limited. It's a limited experience. You plug in it to Apple music and you maybe hop in the car and listen for a couple hours. There's not much to do after that. And it's much worse from the podcaster side where if you generate all of this value in the world, your best bet is to open source it, try and get massive distribution. And maybe you only do okay on the advertising side. So all along there's sort of been this underlying knowledge that there's

been missing value on the podcaster side. We wanted to solve that at first by building a player that would let listeners have a deeper experience of the podcast, the super fans. And so was that an idea that you guys kicked around for like a couple months and then you were like, all right, it's time to get serious? Or was it like a light bulb idea where you were like, oh, wow, we're going to do this. Like that exactly happened. I think that always with these ideas, you go back and describe it as this fully formed thing that just emerged overnight. But a hundred percent of the time, at least in my experience, it's about having some intuition and then running experiments over and over and over again. Let's build some tiny fraction of a podcast

player, show it to all of our friends, and see if they like it or not. And from that process emerges sort of the more fully formed notion. And what we wanted to do was build a podcast player that had really great support for clipping and made it easy for listeners to share. And there were a lot of obstacles in doing that. And what we found increasingly was that this problem is much, much more painful for podcasters themselves. So, Quinn, like, for example, if I'm listening to Patrick O'Shaunisey and he's on with

Gavin Baker. It's a great podcast. And I wanted to clip something that Gavin or Patrick said that was insightful. I would have to go to maybe Patrick's website. And he actually has a website so I could find the transcript. But for most podcasts, I don't have a transcript. I would have to like literally rewind, type, rewind again, because I missed a word, and then share that with the link to the podcast. What you're describing, the idea that arrived in our inbox, I think. I can't remember what the first email was. But it was basically like, what if there was a way for your audience to easily grab a clip of the podcast and share it on Twitter. That was like the original seed. By the time we started talking to you guys, that was the feature that was at the centerpiece

of our product. We wanted to make it really easy for podcasters to do that and for podcasters to bring that feature to their biggest super fans. I want to highlight the text. I get an audio clip with the video, all the stuff. And it's just dead simple to get it. I think that was the foot in the door for you guys. I can't remember whenever we had our first conversation, but you said, listen, who's doing your transcripts now? And we'd had a bunch of people ask over time. We want transcripts of the pod just to look stuff up or go back to stuff and find things and not have to ask you. And so we didn't have one at the time. And you said, let us do that. And then let us show you how to these clips. And you guys showed us your website.

And it looked very good. And it was visually. And I think that was the thing from Michael like, all right, let's give these guys a shot. What they built here looks good. Let's keep the conversation going. And you guys said, we'll do your transcript. And let's go from there. I think that's how the relationship got started with us. That's definitely how I remember it. We spent a lot of time building. I think the most important thing in this game is just being able to execute. And definitely, we were really excited when that paid off with you guys. Anyone who's seen our show notes has seen a link to audiograph for our transcript every week. I think the first time we did a Zoom with you guys, it was you, Josh and Andrew. Were you the three, you sitting on a bed next to each other?

Like, were you sitting on the couch. It was like a couch. It was like a twin mattress. Yeah. It might have looked like a dorm room. It wasn't a dorm room. It was our living room. Josh looked like he just woke up. We probably all just woke up. When we have these conversations, the initial ones, we do good cop, bad cop. Michael is the bad cop. I'm the good cop. He's the one who's constantly trying to poke holes. And I think he might have been pretty harsh on your guys' idea the first time, correct?

Yeah. And Michael is still the bad cop. Oh, yeah. You definitely just. But wait a minute. In my defense, we were very, first of all, we love you, Quinn and the guys. but we thought the product itself was very cool. But like there was a lot of challenges as far as could this be a business, getting people off of their podcast app. Ben still uses the Apple Boomer podcast. It's really difficult.

People have inertia there. And so what we saw was a really, really cool product that wasn't ever going to be a business. And so I guess the five of us went back and forth like kind of a lot. And we were just not budging on the fact that we didn't see a future at the current iteration. On our end, we're hearing that feedback and pretending that we love the product, but in the back end, we're executing as quickly as we can to come up with some awesome new stuff. I think we made a few introductions for you guys as far as like you were looking to raise some money. And the feedback was pretty consistent with what I had told you, not to brag.

And so one day you said, all right, I've got an idea. And the idea was NFTs for podcast. Well, it wasn't, no, no, no. It wasn't NFTs for podcasts. It was Web 3 for podcasts and I said, all right, now you're talking. Let's talk. By the way, before you get into what this is, Michael called me on like a Friday night at like 7 p.m. I was driving up state. And he said, holy shit. Quinn unlocked it. I got to tell you this. And he told me the idea. And I said, okay, that's it. And it made sense to me. So go ahead. So Quinn, I was driving upstate. You were in cozy San Francisco, waking up at one in the afternoon. And so we spoke for,

however long it was, and we were kicking around some pretty half-baked ideas. How do listeners grow with their favorite podcast? So, for example, if I was one of the first 100 listeners of the rewatchables when it was just a little nothing property, and now it's huge and they've monetized it, could we create some sort of listen to earn, which again, sounds ridiculous, but it's sort of analogous to the Axe and Infinity like play to earn, is there something, something, something where the consumers can benefit alongside the growth of the podcast. So it is a big, audacious, half-baked idea, but where are we today? I think that the nugget of insight there that's most important

is that as a listener, it's nice to be able to share a clip and create a clip, but it's actually adding a ton of value to the podcast if you're getting the word out there. And so if we're trying to build these community features where people can engage with the content and sort of add value to the content, make it more participative, then they should be exposed to the upside of that as well. So it was always in the back of our heads that Web3 features. Sure it was. No, no. But I think that what we would have said at any point during the development of the company is that podcasting monetization is going to explode with Web3 tools specifically. But we were going to wait around for the infrastructure to get there. And I think what we realized at that time is that

growing the community alongside the web three features is where you're going to add the most value to the ecosystem. If you can produce this incentive for people to do the most high value type of listing habits and let them be rewarded for it, that's sort of the most valuable thing. So what we really want to do is turn listeners into stakeholders in a show. And I do want to make sure to clarify that with this current animal spirits experiment, our top goal is to create an awesome community. We want to have people enjoy participating and we want to give money to charity. We're not looking for like to create massive, massive returns on this first token or anything like that. This is about giving back. We're not trying to have Michael and Ben sell out or

anything like that. But over the long term, we do want to make a community token for podcasters where listeners can benefit in the success of a show and they can participate in making the show. The community aspect made sense to me. I have not been, what is it, red pilled or blue? blue-pilled, and NFTs like Michael has. Red-pilled? Okay. So I took the easy way out, and I didn't take the red pill. And I understand it. It just didn't resonate with me.

But when you showed us how you can take the NFT, and I've said this on the podcast a few times, I think the next step, it has to have some utility to it. Like, if a celebrity sells an NFT, and it's just a picture, and it doesn't give you any utility, that's why people are losing all their money on these. But the idea of using it to unlock something on the internet, where you can then be part of this community and like the Kevin Kelly 1,000 True Fans thing, which is actually how many we're going to sell, I guess, where you have those fans that want to have a little something extra. They want more interaction with their favorite podcast hosts. They want to talk

with people who are talking about the same topics they are or sharing and filling it. And you kind of said, where do people go to talk about your podcast? And you said, well, there's some YouTube comments and there's some Twitter comments and there's emails and it's all kind of dispersed all around. But what if we had one place where people could go? People want to have that. And then now they have this. And the NFT is the ability to unlock that. That to me was the light ball moment. Okay, this makes a lot of sense. Yeah, and that's really what we're aiming for. Yeah, to me, like I'm not an NFT investor at all. I'm not trying to go speculate on any of these crazy art projects. To me, why NFTs are exciting at the end of the day is all of the ways that they can unlock really cool utility around the internet. And I think that what people in general should be excited about with NFTs is where they go in terms of enabling access to premium features and letting you have a closer relationship with your favorite piece of content. Before we get to like, the technology, and I definitely want to talk to you about the blockchain and building.

The original goal, I think, of Audiograph, was to help creators better monetize their audience because making money in podcasting is very difficult. I'm going to guess whatever. Power laws exist and like everywhere else, right? Yeah, I mean, like even more so than anywhere else. So the original idea was helping podcasters monetize their audience. Then it shifted to Web 3, whereas, all right, we're going to use these, some sort of tokenomics to help incentivize listeners become stakeholders.

in some way, which we're still sort of, I guess, kicking around ideas on how that's going to actually work. Let's get to the building of the NFTs and you working on the blockchain because you are not a, is it a cryptographer or a cryptologist, whatever? You're a traditional software engineer. So how is the experience shifting from what you were used to doing to working on blockchain's been like? And how did you like learn all of that stuff in a pretty short period a time. I'm very much a web 2 developer. I love the internet. I read a lot of JavaScript. Does the audience know what JavaScript is? I mean, part of it. Okay, cool, cool. Yeah. I'm a JavaScript guy. I don't drink coffee, Quinn. I don't, doesn't make sense to me. And Quinn, talking to your

mic, geez. Oh, okay. Sorry, so sorry. So I think that I developed a lot of skills back in the web two era, I suppose. And the act of building things in Web 3 is honestly, very similar. It's not a radically different coding experience or anything like that. The skills transfer over really, really nicely. The things that are easy and the things that are hard are extremely different in Web3. And Michael, when I initially was sort of playing around with this stuff, I described to you the experience of like going to blockchain for the first time as magical. And it really was, and is just monumentally cool how easy. certain problems become that were incredibly difficult on the Web 2 side. In particular, I think the

light bulb moment for me is the idea, if I want to have some art in our audiograph app, if I create that art as an NFT on the blockchain, I can go to a million other websites. And OpenC is, of course, the biggest one. But when I go trade NFTs, I do it on a site called NFTrade. Anywhere I go, I'm going to be able to see that asset and trade it. In Web 2 world, as a developer, I'm going to have to build every single one of those integrations. If I want to create something and have it be available to trade on like eBay, I'm going to have to learn some arcane API. In Web3 world, it is really just a snap of a finger, which is really powerful, really cool, and it feels awesome as a developer. How did we land on which blockchain we're

using? I don't even know what we're using. How'd that go? So we're on Polygon. And there are a lot of awesome blockchain projects. Polygon isn't even necessarily my favorite, but I think it's got really solid technology, and it's got a couple of key advantages. First off is the low gas fees. So if you sort of follow blockchain at all, you know that Michael and Ben themselves, I think you had quite a bit of pain with the Ethereum gas fees. Then Polygon, what it aims to solve is sort of offering up the same functionality as Ethereum, but with ultra low gas prices. And then on top of that, NFTs minted on Polygon are available on OpenC, which is the number one NFT trading platform. So it sort of comes down to what other properties have integrations.

Those are the two big reasons. We want to make sure that people's NFTs are sort of tradable on the biggest platforms and that they don't have to pay an arm and a leg just to get them. So I will say as we were going through this process with you, this happened way quicker than we thought, credit to you guys. The speed at which you guys were able to move, I don't know if this is all credit to you and I'm going to give it to you anyway or a combination of the three of you and the blockchain being able to facilitate things being done quicker. But the way that this came together was I think

me, Ben, Sean Duncan and John sat down and we brainstormed. Like what are these NFTs? What do we want them to look like? So we created, I can't remember what the number was, 25 different images of us and there's a bunch of different versions behind that. We had to decide what do we want this to be able to do. And so what we settled on was a few things. One, using Riverside, people have the ability to via audio graph, which can prove ownership of the NFT, can log on to Riverside, and they can actually listen to Ben and I do one live recording a month. Riverside is just a little bit of pressure. Software where we record our podcast every week.

Yeah, a little pressure, a little pressure. We're going to give them access to a Discord, which you guys are going to help us with because we don't know what we're doing there. They're going to be able to send us one question a month, which we could respond via video. And, oh, this is neat. You guys were able to somehow pull up our Google Docs, which is the show. show notes that Ben and I use every week. And so we were excited to do that with you guys. And it came together pretty quickly. And what we wanted to do with the proceeds is give them all to

charity. So we reached out to No Kid Hungry and spoke with them. And as a matter of fact, they accept ETH, which is phenomenal because their address is now going directly into the wallet. And so we don't have to have the, God forbid, moment where we get all the ETH and then transferred it and then somehow it gets lost or whatever. So let's talk about what that process looks like, Quinn. We are currently in the process of getting that set up. So right now, the contract is owned by an audiograph Ethereum address. And the way we want to handle this is by going right back to Web3 tools. So our aim is to set up a contract that will automatically take the proceeds of the drop and deposit them in the No Kid Hungry wallet. So that's so that No Kid Hungry doesn't have to go and set up

the NFT sale themselves, but the proceeds will all go directly to them anyway. So the idea. Just so we're being clear, I don't know what, I guess the line should be tricky here. When we say all the proceeds, so people have to pay for the gas fee, which you're telling me is a nominal, it's a small dollar amount. Yeah, pennies or less than pennies. Okay, so if they pay 0.1, which at this point in time is around 300 bucks, if they pay 0.1 for one of our NFTs, literally that full point one doesn't go to audiograph or to Michael

or Ben. it goes directly into No Kid Hungry's address or wallet. Exactly. Yeah. So No Kid Hungry will get 0.1Eth exactly for all the tokens you buy, no gas fees. You may have to pay more than 0.1 eth and gas on the initial transaction, but they'll receive a hundred. And it's worth noting that there's been plenty of back and forth between audiograph and No Kid Hungry to make sure that this process is going to be smooth. It's going to make sense. Quinn, you said they might pay more than 0.1. You mean total. The gas sounds like to be 0.1. Oh, no, no. The gas will be, yeah.

Okay. denominated in lots of zeros before the first number. All right, so I'm not above begging. I was asking pretty vociferously on the last podcast, but please, if you have got an ounce of goodness from our show and you think that, I don't know, we've made you laugh, smile, taught you something, please consider doing this for the kids. Food prices are out of control. So please, it would mean like just so much to us.

I think this one got on our radar from Tyrone Ross. This is like ending childhood hunger in America. basically. Yes. So, Quinn, for people that a lot of our listeners have literally never bought an NFT and might not even know where to begin, even if we include the link in the show notes, how can we facilitate to make this as easy as possible for, say, my dad, for example, who doesn't even know what Bitcoin is? You might have to put me in touch with your dad. Actually, I would love to test our token onboarding flow with him just to make sure it's easy for it. I'm going to put in touch with my dad, too, because if our dads can do it, I think anyone can do it, probably.

Because I am tech support from my parents every time I go home. I'm in. We'd be happy to work with them. One of our big goals here, we don't want to just sell these to a bunch of savvy crypto investors. We want to select for big fans of animal spirits. And if you're a big fan and you don't have any experience, we want to make it as simple as possible for you.

So we're going to have a one-page crypto onboarding. The goal is that you don't have to go anywhere else. You're going to be able to set up a wallet. Get your first gas and mince your first NFT. it won't be a magical animal spirits NFT, just something to get you started. And at the end of that process, you're going to be ready to buy this NFT. That's the onboarding process we have in place. We're going to have text chat. What if somebody doesn't have any ETH to buy this with? Then what? In terms of actually purchasing the NFT, we're going to be listing these on OpenC. You're going to

be able to pay with your debit card. If you go to our OpenC page for the drop, no need to purchase ETH ahead of time. You will need a crypto wallet to hold the NFT. But if you've never traded crypto before or anything like that, the process is going to be as easy as possible. You're not going to need any new crazy tools or to make any huge purchases of Eith. All right. So the drop. The mint is actually a week from today we're recording this on Wednesday, March 23rd. The mint is going to be on 330. So what does that exactly mean? That's when they can buy it. And then the follow-up question is right now it'll be randomly generated. So at what point can they like refresh their metadata, which is a whole other thing that might

need some handholding in order to see what the image actually is. So just to kind of like set up a little timeline here, in terms of minting the NFTs, the tokens have already been minted and exist, but the public sale hasn't opened yet. So the next big step is the public sale where listeners will be able to come and purchase their NFTs. That is going to be the March 30th date. So we're going to do it. As soon as the Animal Spirits episode, that day launches, we'll have another announcement.

and at the same time the episode publishes, we're going to open the public sale. So that's when people can purchase the token. As Michael mentioned, right now, we've got some fun placeholder art. You can't see what your token actually is going to be when you buy it. And after the public sale closes and we finalized the donation to No Kid Hungry and we announced what we were able to raise, we're going to unveil the art to the public and people can access their token benefits. Well, Quinn, now we might have some issues.

because what if it's a flop? And on the first day, we only sell 70. How long are we going to keep this open for? So that's when the listeners come into play. Hopefully we don't let it just be 70. I think right now we're going to try and keep it open for a maximum of two weeks. And we may have to cut something here. Two weeks. That sounds like a long time. Two weeks is a long time. We can do five days. We also should mention that we had some college students reach out and say, hey, I'm a broke college student. I probably can't afford this. So we're going to give away 50 of these to college students for free, basically the first 50 that sign up and verify with a dot edu email address? That's going to be a big part of what we're doing as well.

Which I see it's right here on the sign up page too if you scroll down. All right, Quinn, what do we miss? So a big one, and I hate to be sort of a buzzkill. Oh boy. Oh, boy. Yeah, I know. So what we have not mentioned is how long the NFT lasts for in terms of accessing the benefits. So you get the NFT forever, but unfortunately can't put Michael and Ben on the hook till the end of time to keep giving out these benefits. So right now, it's a 12-month term on this NFT. So you're going to be able to access all of these benefits. It's like a mission impossible

thing. It explodes at the end. Exactly. But you do get to keep the NFT. It's not going to explode. Michael, we're signing up for some work here. We're going to be on the Discord channel. We're going to be answering questions. We've got a lot going on here. I think we're going to answer some questions after the live episodes as well. The hard part is done for me. It works in your hands now. Well, listen, it's for the kids. So please, again, please can consider helping them out. It would really mean the world to all of us. And I think the other thing about this is we wanted to show proof of concept that this sort of community thing could work on NFTs had some value here to provide access to something like this. And we think that there's

going to be other iterations in the future of different ways you can use these and do something in the future. So this is our first testing ground for it, basically. But there's a lot of other things we can do with this in the future, hopefully. Any final words, Quinn? No, I really appreciate you guys having me on the show. On our end, we're really, really excited to launch this. And I hope a few listeners who were maybe a bit apprehensive about getting started with crypto are willing to come out and do this for a good cause and take part in what we're building. I think you could call yourself an NFT collector if you buy one of these. You can put that in your LinkedIn profile. Web3 Native. You guys have been amazing partners. So thank you for doing this. We're super excited to continue to

help spread your message. So all right, Animal SpiritsPod at gmail.com. Again, hit the link to get an Animal Spirits NFT and we will see you next time. Thank you.