Digital Social Hour - The Ultimate Collectible Revolution: Are You Missing Out? | Josh Luber DSH #891

Episode Date: November 15, 2024

Are you ready for the ultimate collectible revolution? 🚀 Join us on the Digital Social Hour with Sean Kelly as we dive into the fascinating world of collectibles with Josh Luber, the mastermind behind StockX and now Ghost R! This episode is packed with valuable insights on the evolution of collectible toys, trading cards, and the art of deal-making. Discover how grading and scarcity drive value, and why collectibles are more than just nostalgic treasures. 🤯 Don't miss out on this engaging conversation filled with insider secrets and expert advice. Watch now and subscribe for more eye-opening stories on the Digital Social Hour with Sean Kelly! 📺 Hit that subscribe button and stay tuned for more exclusive content. Join the conversation and find out if you're missing out on the next big thing in collectibles! 💥 #sportscards #baseballcards #hockeycards #investinginsportscards #footballcards CHAPTERS: 00:00 - Intro 00:33 - What is Ghost 01:40 - BetterHelp Sponsorship 04:58 - Prolific Card Breakers 09:12 - StockX Collectibles Expansion 10:36 - Junk Wax Era Explained 12:16 - Most Expensive Purchase 13:37 - Market Bubble Analysis 15:22 - Understanding Cryptopunks 16:44 - NFTs Overview 17:04 - GOAT's Transparency Practices 21:40 - StockX Growth Journey 24:10 - Predicting StockX Growth 27:30 - StockX Founding Story 32:55 - Leaving StockX Experience 34:05 - Launching Fanatics Collectibles 35:40 - FTX Collectibles Surge 37:09 - Fanatics Monopoly in Collectibles 38:00 - Michael Rubin Negotiation Skills 38:54 - Billionaire Aspirations 39:57 - Finding Next Drops APPLY TO BE ON THE PODCAST: https://www.digitalsocialhour.com/application BUSINESS INQUIRIES/SPONSORS: [e-mail] GUEST: Josh Luber https://www.instagram.com/joshluber/ https://www.instagram.com/_ghostwrite_/ https://www.ghostwrite.com/ SPONSORS: BetterHelp: https://www.betterhelp.com/DSH LISTEN ON: Apple Podcasts: https://podcasts.apple.com/us/podcast/digital-social-hour/id1676846015 Spotify: https://open.spotify.com/show/5Jn7LXarRlI8Hc0GtTn759 Sean Kelly Instagram: https://www.instagram.com/seanmikekelly/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Say it. All right. Let's save Christmas. There it is. Only in theaters November 15th. So privileged to sit next to him and watch that happen. It's not to be hyperbolic, right? But like you can't appreciate how good

of a basketball player LeBron is until you sit on the floor next to him and see how big he is and see how he moves and all that. And it's kind of the same thing. Like I can't explain to you how good of a deal player LeBron is until you sit on the floor next to him and see how big he is and see how he moves and all that. And it's kind of the same thing. Like I can't explain to you how good of a deal maker he is except that I sat next to him for a year and watched it and was just impressed every single day. All right guys, digital social hour with Josh Luber

here today with a new company. Thanks for coming on man. It's gonna be a fun one. Thanks for having me. Yeah, so explain what's going on here. They look like bear bricks right? This is the best part. Now you have a company where I can actually put it on the table right here. You know we started stockX I can't put the whole marketplace in front of the table so. If you're familiar with bear bricks, bear bricks are the longest running

most successful collectible toy franchise. Ghostrite is an evolution of bear brick. Ghosts like bears. There is no face, there is no gender, right? It's a blank canvas. It can be whatever you want it to be. We had a release last week that it was an NBA basketball. Same three sizes as Bearbrick, which is 2 inches, 11 inches is kind of the standard and then the big one. But the new one coming out is a WNBA set. And I actually brought a couple of them, including, since we're in Vegas, Asia Wilson, lost to one of those aces.

So this will be a big deal. This is the new one coming out. But short version is it's Evolution of Bearbrick. It's a collectible toy company. After running other much larger businesses, now I get to create a brand and create a product. And so that's fun. I love it.

Sounds like you're in your creative element. Hell yeah. Let's go. I'm a big Funko Pop collector, so you might have a new addiction for me to look at now. Hell yeah, we could level you up from Funko pop a little bit. Funko is like wide and large, and not a whole lot of super valuable Funkos yet.

So it's good. But Funko, every single IP you could ever imagine. They do have a lot of, yeah, a lot of. That's my only qualm with it. So many of them. So is there a specific category that you collect? Because you can't collect them all. I I started off just broad but now I just collect the rare ones so I won't collect the commons yeah cuz there's just too

many my whole wall in my media room there's 500 Funko's yeah and so you're keeping them in the box you're I keep them in the box graded by PSA you know PSA grades fun I didn't know they graded them now no I have them in the box but I don't take them out because they lose value. Totally. Well, so like, this is a really relevant part of this conversation, right? Which is, if you look at, you know,

StockX, the company I created after that, which is Finanix Collectibles, which is trading card business, Collectible Toys, Funko, Ghostripe, these are all the exact same thing, right? They're all products that are supply and demand based. They're collectors and resell value and scarcity and condition.

And for trading cards, PSA, which is leading a grading company for trading cards, completely changed the way the value that we value trading cards. And they're trying to do that for collectible toys. PSA grades Funko Pop. So if you have one that's really valuable, you can send it to PSA. They will encapsulate it and then send it back.

Now, the condition of a Funko Pop that's in a box is kind of, it's not really debatable. It's not like trading cards where you have that. But anyway, so there's another company called AFA, which specializes just in collectible toys. They really do more like Star Wars, G.I. Joe, He-Man, all the like, you know vintage toys and actually so for Ghost Right, we have a partnership with a FA. So like if you get a rare ghost

So like this is actually an angel Reese rookie ghost. It actually excels like an R on her chest and then the B variant So there's like, you know, there's like a gold version number to 10 and a chrome version number 5 It's just like trading cards So if you pull a rare, you know The angel Reese one of one rookie ghost or the Caitlin Clark one of one, you can actually have it sent to AFA to be graded in the same way like if you pull a Wemby rookie out of a pack of tops, you can send it to PSA

to have it graded. So like that intersection of grading and collectability, like that's the key to all of this. That's what makes it fun, yeah, when you can search for the rare ones. So these you buy and it comes randomly and then people see what they get. Yeah, well, so all the releases so far

have been 11 inch versions, super limited. We sell direct on Ghostry, but coming in December, this is the first blind box set. So you will buy a case that has 12 ghosts in it. They're all individually boxed and you don't know who you're gonna get, right? It's just like trading cards. And most of them are the base, which is a number to 800.

So it's on the bottom exactly how many. But then you could maybe get the rare chase elements. You can get the gold one that's number to 10 or the one of one that's fire, right? So, I mean, this is exactly the way the trading cards work, right? I mean, it's just, it's a lotto. You're hoping you get the really rare card.

And in fact, most of the way that we will sell this one is actually through all the top trading card breakers. So backer breaks and blaze and David has all the people that break trading cards will break ghostwrite WNBA because again like everyone's just going to try to get those big hits and the biggest hit will be the Caitlin Clark one of one rookie ghost. That'll be the best of the best. We'll see what that goes for. Is it 50 grand is it 100 grand i don't know but i think it's gonna be a lot let's go yeah those card breakers are different this episode bet mgm authorized gaming partner of the nba has your back all season long from tip-off to the final buzzer you're always taking care of with the sportsbook born in vegas that's

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Visit betterhelp.com slash dsh to get 10% off your first month. That's betterhelp, H-E-L-P, dot com slash DSH. Check them out now. Man. Hell yeah. All day, every day. Yeah, I mean they're 24-7. Crushing it too.

They're the probably only people more prolific than you are on camera. They're on camera more than me, yeah. Not many people could say that. I don't know. I'm friends with a couple of them. Charlotte, the DAP Sports. Those are my guys. I film at their studio in LA.

Daps are one of the, there are 10 people, 10 breakers that are breaking for us for the release and Daps is one of them. I love it, yeah. Great people over there. Shout out to Matt. Oh yeah. Yeah, collectibles is a good thing because it's nostalgic.

For me, Funko's bring back a lot of memories. That's right. And I feel just like so passionate about collecting stuff like that. That's right. Well, you just like so passionate about collecting stuff like that. That's right Well, you're a little bit younger than me So like that's exactly like Funko because they're so wide and if something you can find exactly what is like nostalgic to you Yeah, right a lot of this and trading cards and collectible toys like so I'm 46 We have this this generation gap that's happening right now where we all grew up

You know with Michael Jordan with Michael Jordan as the center of the universe. We all wanted Air Jordans. None of us could afford Air Jordans and our mom wouldn't buy Air Jordans. As soon as we got some money, we all have the exact same story. So now we're sort of moving beyond that and you have, for example, you being able to collect Funkos. And so now we get to create the products for the next generation.

So that's kind of the evolution of collectibles. Absolutely. I've seen you say on another show actually that comic books and old video games have been going up. Yeah. Yeah. Look, I mean, all this happened, you know, during the pandemic and a lot of things went up in value that, uh, that came back down in value, but, um, like anything, you know, um, uh, value scarcity and, um, you know, there's a grading company for both of those. Uh, there's a grading company for comic books. The leading is CSG. Uh and there's a grading company for both of those. There's a grading company for comic books,

the leading is CSG, there's a grading company for video games, the leading is called Wata, W-A-T-A, and same thing, I forget what the exact number is, but the best graded Super Mario one, I think so, for like 1.1, 1.2 million dollars. Yeah, same thing, it's like super rare, only a few are in the highest condition. It's, you know, it's graded and by PSA,

the trading card company bought WADA, right? As they figure out how to grade more things and do it. So same thing. They all fit in the same category. Yeah, PSA has been buying a few companies, right? A few grading companies. Yeah, they got their hand on everything. Yeah, they bought SGC,

which was kind of the number three trading company. And so yeah, they're a very well-run company. And the grading part is really kind of the standard that sets all of this. It allows us to buy and sell collectibles to each other, like we were buying and selling stocks or any sort of asset. Because before, I'm selling you some rare baseball card, I want to sell you my Mickey Mantle 1952 Top Storkie,

you would have to look at it, inspect it, figure out, is it real, has it been cut, and then we would argue over the condition and the value. Now, PSA grades it, it's a PSA5, Mantle 52 Top's PSA5's a PSA5, you don't even have to see it. You just say, hey, we know the PSA's fours go for X, PSA sixes go for Y, so PSA fives are Z, and that's a price. So that's really why all this grew,

because it just seemed so easy for people to buy and sell because it was graded, because it was standardized. Absolutely, yeah. Grading changed the game. When you were at StockX, were they selling collectibles yet, or was that a newer thing? Yeah, so when we started StockX, obviously, we started with just sneakers. We then were always looking for what other products to put on the site. We added watches and handbags next, then

streetwear and then collectible toys in like mid 2018. So we started StockX in beginning of February 2016. So actually it was almost two years before we added and frankly we should have added it earlier But overnight as soon as we added toys to stock X which started with cause And bear brick overnight we became the largest sellers of cause and bear brick because it was just a very fragmented market There wasn't a place where you could get it, right? So anyway, you know now I think stock X is still the leader for for all those guys Wow And now they're doing sports cards and action figures.

A&W is now serving Pred Organic coffee. And you can get a $1 small coffee, a $2 small latte, or like me, a $1 small coffee and a $2 small latte. Available now until November 24th in Ontario only. Woohoo! Beers and toys, right? So interesting. Yeah, I never realized how big the collectible market was until I got into trading cards. Pokemon and sports, basketball.

Pokemon, perfect example, right? Little before my time, or excuse me, a little after my time, but sort of right, probably in your generation. And yeah, Pokemon cards also extremely valuable. Man, if I could go back in time and keep those. I had a lot of good ones, dude. You never got into those?

Nope. It was just like, it was a timing thing, right? It was like, I was already in college, and we sort of all put our cards away for a little bit where we thought we were growing up, and then we get back and become kids again. What was hot for you when you were kids? Was it sports cards?

Yeah, so in 1991, I started high school. So it was like 1980, I started collecting 1984. So, you know, it's that like six years before high school, right, where, you know, you're super into cards and you know, you're not into girls, you're not into partying, you're not, you know, and, you know, and that coincided with what we call the junk wax era for trading cards, where the whole trading card market just blew up in like

the late 80s, early 90s. And then come like 92, 93, people understood that there was so much supply, and then the whole market crashed. And so that era was very much sort of, of course, so for me, it was like Ken Griffey Jr. rookie, 1989 upper deck, like that was like the card of the card. Everyone my age had or still has a Ken Griffey Jr. 1989 upper deck. That's the card. Wow.

So he was like super common. So even though he was one of the best players of all time, the card wasn't worth a lot. So that's the point. So that card, which was basically the most valuable card at the time, is basically worth today the same thing that it was worth in 1990. And that's because there were so many,

it's actually the most graded card in all of PSA. I think there's something like, I don't know, 50,000 copies that have been graded. But if you have a PSA 10, which is the highest condition, which is a little bit more rare, which is the highest condition, which is a little bit more rare because it's the highest condition, that's still today's worth maybe about 1,000, 1,500 hours. But you can buy just an ungraded one for 20 bucks.

Yeah, that makes sense. What's the most you spent on a collectible? A lot, a lot. Five figures, six figures? Six figures. Damn. six figures, not seven figures. We all live through the craziness of twenty and twenty one and the run up after the pandemic and and valuations were just absolutely crazy. And

so you know, the the car that I spent the most on is actually, I think, still worth if not that much, probably close to it, which was it's one of the rarest Pele rookies. OK. It's a Pele rookie, and it's in PSA 8, which is extremely, the car's from 1962. But yeah, it was a lot.

So you're a soccer fan. Yeah. So that's it. I'm not. I just thought that was a really great deal, considering all the other stuff that was going crazy in value. I wanted to try to when I was if I was going to make a really, really big purchase, I wanted it to be like the most solid thing I can think of. And it was a PSA eight. And I think there's only like three PSA nines, which means there's only three car three versions of that car that are better in the whole world.

And I just figured just the scarcity and Pele being who he is and everything else. So that was a unique experience. But I also I don't regret it. But yeah, probably not time to sell it. Those years were crazy. I remember when Jordan rookies were going for what, half a million?

Well, what happened was we can all look back now. The peak of the peak, I forget the exact month, but there was an auction on Goltons Auctions where two 1986 FLIR Jordan rookies, PSA 10, sold for $720,000 each on the same day. And that, everybody just started saying, what the fuck? Like, this is just crazy. And that was like the saying what the fuck like that like this is just crazy and And and that was like the peak of the whole market

But you know it wasn't just collectibles a lot of times and it you know wasn't by the way It wasn't just NFTs. It wasn't just crypto You know it was the whole economy that did that and all of the valuations of all of our companies went up And so then everybody had more money and so we're paying more money for things. You know at StockX the last public round valuation of StockX was 3.9 billion. Wow. But there were private rounds that happened you know way higher than that during the run-up and again that's just a function of the macro economy and so it's kind of all relative but you know we're obviously're obviously never seeing that again. That's always crazy.

That bubble was not Silicon Valley bubble. Companies were raising money pre-revenue, hundreds of millions. Yeah. Yeah, I mean, it's probably a good thing in the long run. You can only even inflate stuff so long. Totally. I mean, it has to go back to the norm, and so that's fine.

We all wish we could have sold more at the time rather than bought, but that's also us. Especially me, man. I had a lot of crypto, a lot of good NFTs, a lot of trading cards. Well, right now, if you're holding, Bitcoin's been on a run in the last two days. Yeah, Bitcoin's been great with the new presidency.

I saw that coming, actually. I think it would have went the other way if Kamala got elected. Well, right. That was the thing, right? It was like it was either going to 80 or 60. Yeah. Are you big in crypto?

I have a little bit. I certainly wouldn't say I'm big. But during that run up, I try to diversify out of just, um, you know, being an entrepreneur and having, you know, two companies that have both been multi-billion dollar companies, a lot of my personal net worth is still locked up in equity. Just very, you know, uh, imbalanced. So, so I do own some crypto not a lot mainly just Bitcoin and Ethereum and and I actually own a crypto punk which I'm not happy if one of the maybe the only NFT that is as persistent so did you get in at the

right time on that one I got in a good time not as early as a lot of people okay but I'm actually I have one punk myself and then I'm part of a fund with a few people some of whom you probably know yeah and then I'm part of a fund with a few people Some of whom you probably know. Yeah and and I'm very fortunate that there's somebody sort of leading that who has been into punk since day one and and so it's kind of fun to sort of like watch the The last message and see, you know, it's just an extraordinary thing. Yeah, but yeah crypto punks They almost hit half a mil right? Yeah. Yeah. I remember Board Apes were approaching half a million dollars at one point too.

And Board Apes are almost zero now, which is, you know. I got a Mew and Ape, I never got a Board one. I would have been down bad if I got a Board Ape. Yeah, yeah. Well, it also depends on when you bought it. True. Yeah, I guess if you got it at the start, then you're still up.

Yeah. But now they're down, what, 80, 90% from the all-time high? Yeah. NFTs in general, what? Right, right. And, you know, that 90 percent from the time high. Yeah, and if T's in general what right right and yeah That's fine collectibles to yeah, so it wasn't down a lot But you have things you know that this is why things like pay the workies or or Mickey Mano or these things that are so limited and

Payles pay lay and like it's it's not this isn't just a random, you know, right if T or image you created So so that's the goal with Ghost, right? You're trying to take the more exclusive route. Yeah. And to be extremely intentional about how we create collectibles, which is, for example, every ghost has on the bottom exactly how many exist of that. So this one is numbered out of 800. So there's 800 base and that level of transparency doesn't really exist

in any form of commerce. There are certain things that are small and limited, but imagine if every Funko that was created, you knew exactly how many existed, and you could flip over a common one and actually see that there were, I don't know, 200,000 made, 500,000, who knows? Like it's gotta be massive, right?

That would significantly impact the perception of value if you're like, oh, this is one of a million. 100%. That's why I like the Funko sodas a little more, because it actually does show the, I think it does show the total amount of them. And the Funko sodas when you open the can? Yeah, the canned ones.

Got it. But yeah, you're right though. Who knows how many pops are out there? It could be millions. And you know what? That's OK. Funko is this sort of hybrid. They are a collectible company. Some, as you know, are worth money. there could be millions. You've got to appeal to both, right? This is why Nike has been so good for so long. Nike has almost perfected that N minus one strategy.

They want to make as many shoes as they can possibly make, but still make one less than demand. So they still sell out, and people still go to and resell them on StockX or camp out for them. Right. And it's a hard thing to do, because you can't know what demand is. Demand's a forecast, it's a projection off of last year.

But that's what Nike's been doing for the, the entire hype economy is all that. It's supply and demand, Econ 101 at its most basic, and it's trying to figure out how do we make something really cool and people want it but not make so many that it becomes worthless. Yeah, yeah, it's a game.

And I think that they made the right partnerships with the players and the athletes too. Exactly, right? Because they drive real demand. If have somebody like we're talking about cards Pele Mickey Mantle You know Nike's has been with you know, Kanye and Drake and Travis Scott, right? There's real demand around Travis Scott You don't have to artificially create demand by saying something's limited or or no like people really do want to buy stuff that Travis Scott puts out. And we think of it as two halves of demand. There's real demand that people would buy

regardless of how scarce it is. And then we call this sneakerhead demand. You can call it whatever you want, but the other side of it, which is people want something only because it's scarce or only because it's valuable. And it's somewhat cyclical because the more valuable it gets then the more people want it. But it's the idea that hey even if this wasn't scarce, what is the true demand that's part of it? And when you have somebody like Kanye or Travis Scott or Nike at the center of it or the NBA,

there's just real true demand that exists underneath it. And so that's kind of the intersection and how those brands think about doing it. Yeah, well, Kanye pulled off with Yeezy was awesome. The watch, man. It's sad to see how it ended, but how it began and how it grew was incredible. You know, at one point between Kanye and Virgil, they probably accounted for 70% of the dollars sold on StockX.

Whoa. Some extraordinary number because they were so prolific, they touched so many products, the value of those were so high and you know obviously today both of those people are no longer making products and for different reasons but and that was sort of the peak of the hype economy which didn't necessarily coincide with the the peak in 21 and the bubble we've been talking about. But you had this moment that was happening

between 2016 to 2019, where sneakers were becoming so mainstream, where I heard you guys talking earlier about where to buy shoes here in Vegas. Urban Necessities is kind of maybe the most well-known consignment shop, resell shop for your really high value stuff, but you guys named four other spots

that I'm sure are great also. And that just like that mainstreamification of sneakers, that didn't exist in 2014, 2015. And so as it grew, it was on the backs of Kanye and Virgil and the brands doing that. Yeah, and now StockX is probably the number one place for sneakers in the world, right? Yeah, what happened was, as we were growing,

we got to figure out how do you grow the business? And so we already talked about adding other categories. So we quickly added watches, handbags, clothing, et cetera. But then how do you sell more products to the same people? And so I don't know the numbers anymore. I left StockX four years ago. I don't have access to the numbers, but I Think more shoes on stock X are sold at either retail or less than retail than at some really high

You know thousand dollar shoe that is the the hype that is the the the marketing But really it's you can go to Foot Locker and buy a pair of shoes for 100 bucks Maybe that same shoes on stock X for 95 or 105 or whatever it is. Right. It's just now you can buy all shoes there. And what's happened is, you know, the sneaker market, people always ask me the first question that sneaker has asked, like, well, are sneakers going to come back? You know, it's kind of like it's kind of dead right now. Are we in a sneaker recession?

And and what happened was, you know, you'veX, and then there's another company called Goat, which also is very good, started at the same time. And then you have a lot of these consignment shops. We all made it so that if Nike releases a new pair of Jordans, and maybe you want to buy a pair of shoes that week, well, you could go to Nike.com and buy that pair of Jordans, or you could go to StockX or Goat

and buy every shoe that's ever released ever. So now all of a sudden that demand gets spread out so that Jordan doesn't sell out because they're not competing against the six other releases that were happening that day or that week the way it used to be pre-internet pre-StockX. Now you're competing with every shoe that's ever released including every other Jordan that's ever released. So to some extent, StockX and Goat, and we have hurt ourselves. We've cannibalized our own market. And so we're kind of at this very like stasis where market's not growing a lot,

but it's still really big and there's still a lot being bought and sold. Right, that's crazy. Yeah, I will say, because I've sneaker shopped in person and then compared the price of the StockX, almost every time it was cheaper on StockX, to be honest. And a lot of times is that that store

is also cross listing the products on StockX, Goat, eBay, et cetera, because they just have to. Their job is to sell product and how many people can walk into that store a day? I don't know, 100, 1,000? How many people go to StockX? 30 million a month? How many people go to Goat?

How many people go to eBay,, 30 million a month, how many people go to Go, how many people go to eBay, 300 million a month. So those stores are cross-listening across as well. Did you predict that growth at StockX? Because you were there early, man, number four, right? Well, so technically my number was number five. Oh, five. But I was the founder and CEO.

We started that company, it was, Dan Gilbert had a small team of four other people that were working on this idea. And then I was running a sneaker blog called Campless, which was like a sneaker price guide. And so they reached out and they ended up acquiring Campless and then we joined forces. And so those guys were technically there before me. So we have employee numbers. All four of them

are number one and then I'm number five. There is actually no number two, three and four. Oh, got it. Which is a fun sort of side note. But we, from a prediction standpoint, no. You can't possibly have imagined what would happen. All we really understood was that we were making it easier for people to buy and sell shoes. And so that had to lead to some growth, but like, no way. We also, there's so much luck in all these companies, right? We started working on StockX before Kanye signed to Adidas.

So we didn't even know what was gonna happen. And then it happens to be that we launched StockX basically the same month that Yeezy launches. Like what kind of, like just extro, and then a year later, then Virgil and the 10 and all the stuff that happens with Nike. So these things were all happening together and we helped grow it, but it was just really amazing know, we're just fortunate to have fallen into that right time right place

But you were prepared for it Yeah, you had the infrastructure set up because that probably wasn't an easy task to integrate all those easy Right. Well, yeah, in fact in the beginning, you know, a lot of it was was pulling in sales from eBay You know eBay was the largest marketplace for resale sneakers by far before StockX and Goat. And so in the beginning, a lot of the hack was being able to see what was being sold on eBay. And in StockX, there is no, you don't see the buyer seller.

It's anonymous. All you see is the number, which is like, hey, I want to buy this pair of shoes. There's an ask, which are listening for sale. Say the ask is, I don't know, $500. So you see it's $500. And that's tied to an actual seller on the other end of that store or whoever. But you don't know who that is. You don't care. All you care about is do I want to buy this shoe at $500 or not? And so in the beginning, we would have asks that were actually tied to eBay listings. So if you bought a pair of shoes, bought that ask on StockX for $500,

we would then turn it on, go buy it from eBay, bring it into StockX, authenticate it, make sure it's the right shoe, and then we would ship it to you. We put a StockX tag on it, clean up the box, etc. So you would have no idea that that happened. Wow. And you don't care. You are happy to pay the price that you're willing to pay for it. But in the beginning, these were the things that we would do

to hack together that infrastructure because a marketplace is, this is the oldest problem in the history of the internet, right, chicken and the egg. Buyers need sellers, sellers need buyers. And so in the beginning, every marketplace has to figure out ways to hack together some liquidity, some size to be able to grow.

Eventually, you stop doing that, eventually you stop doing it. But in the beginning, those are the things you do. Crazy, so you were dropshipping at first. Yeah. And this was back then before it blew up. Yeah. Wow. So that's because you probably didn't have the money

to carry inventory. So that was out of the question. For sure, we didn't want to. We considered it. We considered, would that be a good use of product? Because it was so important that if we could get a potential buyer to come to StockX, that they click on a couple pages that they don't see, you know, zero listings. If they see zero shoes for sale, they go to two pages, they go to three pages, and There's nothing available for those three. It feels like the site's dead and they're never coming back So we considered everything in the beginning

But yeah buying shoes was was one fortunately we didn't have to do and really the eBay hack really helped a lot to not have To do absolutely and shoes are tricky because there's so many sizes So you're about to stock up on every size from 5 to 12 or whatever. Yeah. Yeah. Yeah. Would have been a nightmare. Yeah. No way. And then you guys, were you the first company to authenticate shoes and stuff like that? You know, consignment shops had been authenticating shoes for a long time. And so you have like Flight Club, which is kind of the OG consignment shop. And we started right around the same time this company called Goat. Goat launched about eight months ahead of us and then there's a company

called Stadium Goods which is a somewhat like a consignment shop that's based in New York and so all three of us were authenticating shoes and so that was a big value that's added. Someone knows they're never gonna get a fake pair of shoes, and that's important. But authentication is kind of the red herring. It's really just the ante to play. The real business at StockX is what we call a single product page.

So what that means is, let's say you go to eBay and you look for whatever pair of shoes, Air Jordan, three black cement. You will get 1,000 listings, three black cement, you will get a thousand listings. And then you've decided by from this one or that one or that one, but you get a stock X and one pair of Jordan, three black cement, there's one page for it.

And every bid and every ask is right there. So that's what creates the efficiency. That's what creates the transparency. That is the whole business. And in order to have a single product page, you have to be able to have a standardized product, which means you have to sell off a stock photo, which means that you don't see a picture

of the actual shoe you're gonna get. So the only way to do that is one, to sell only brand new shoes, and two, for us to authenticate it. We couldn't risk that what you're gonna get is not what you think you're gonna get. And so it really is the Annie to play. But if you're a 14-o kid and you've saved up all your money to buy a pair of Yeezys or Jordans, like knowing you're

not going to get a fake shoe is pretty important. So yeah, like a lot of these things, Uber and Lyft starting at the same time, you know, DraftKings and FanDuel, you know, us and Goat and SameGoods all started at the same time. We were all authenticating. We were all on a single product page. That era just happened to be, which is a unique thing when you look back at a lot of startups that are successful, usually have this sort of duopoly of two people

doing it at the same time. That is interesting. You guys probably push each other, though, in a way, right? That's right. And you're always comparing yourself against each other and looking at it. StockX is way bigger brand name. in a way, right? That's right. And you're always comparing yourself against each other and looking at it.

StockX is way bigger brand name and on the ground. But I don't know the numbers anymore, but I'm fairly certain that in terms of actual sneaker sales, StockX and Coda are pretty close. Let's just even say they're the same. Everything else that StockX has done in terms of brand and having people like Eminem and Mark Wahlberg and Drake is on the cap table and doing activations with them.

And everything we've done is just the difference in brand. But the single product page, that's why we are basically the same in sneakers. And that's what everyone else missed. That's what eBay has missed. And even though eBay now authenticates sneakers, they have not even come close to catching up to StockX or Goat because again,

it's not a single product page. So it's still just very hard to figure out what you want to buy. It just creates, anytime there's more friction in the purchase process, it leads to less sales. I mean, it's super complicated on eBay. You got to see who the seller is, see how many reviews they have,

sometimes message them before. Yeah, look through different pictures. Is this why is this picture this way? You know, why is there a cat in the picture? I mean, like the quality control, the trust isn't there like it is on StockX. Did you kind of model that after Amazon's two two-click checkout? So it's a really good question because in the beginning we had what was this, what you would think of as like a two-click checkout, which but what was happening was So it's a really good question because in the beginning, you would think of as like a two-click checkout, but what was happening was people were expecting the confirmation page.

They're like, because you already have the credit card info, you have their address, you have everything else. So if there's an ask there, someone's selling this shoe for $400 and say, I want to buy it, click, right? We were like, the sale's done, right? And people shoe for $400, and say, I want to buy it, click, right? We were stuck, like the sale's done, right? And people are like, oh, like, and so we actually ended up

adding a step in between so they would feel more like traditional e-commerce, just because, you know, that was what people were. It was too easy for people at the time. Yeah. Yeah, Amazon changed the game with that. Yeah. Yeah, two click checkout.

I mean, it doesn't even feel like you bought something with Amazon. That's right. But they've also taught us that over the years. And so now we understand that, we use it, and it was just a different thing. Nice. How tough was it walking away four years ago?

Is that the toughest decision you've had to make? No, it took me about a year to realize that just because I started the company doesn't mean I can't leave. And I left because I had a new business that I wanted to pursue, which was Finax Collectibles, which is the trading car business that we created. But it was still super sad leaving. I still broke down in tears on the last like all company Zoom. It was during the pandemic. I left in September of 2020. You know, cause that was, that was the first big company

that was so tied to me personally. And so it was, it was hard to get to that place. It took a long time. When I finally left, it was great. And it felt so good to be on the other side and now starting a company and being that, but yeah, it's a unique experience for anyone to go through that. No, I see that. Cause your identity was probably tied to that company.

Like you were probably the same. Yeah. Right. That's how a lot of founders are. Yeah. And I mean, literally even today, walking through the on course, someone stopped me, they're like, Oh, you the X stock guy. Wow.

I'm like stock expert. I haven't heard that one. I know. I hadn't heard that either. That's funny, man. Yeah. Talk to me about that transition to fanatics collectibles In

We talked about we're sort of always looking for what other products might make sense to put on stock X and so in 2018 we started looking at trading cards. I started buying trading cards again myself. I bought cards as a kid and You know the trading card market, at least to me, it was starting to be clear that it was gonna grow, that all of us coming back into the market who all collected cards as kids. And so I was trying to figure out how to build a trading card business within StockX.

And I thought the best opportunity was to go after the licenses, to actually manufacture the cards, which isn't what StockX does, StockX is a marketplace. And so once you sort of got to a place that it wasn't really the right thing to do within StockX, I actually left and I was partnering with a different company to fund me going after the licenses.

And we worked together about two months and they said, hey listen, you should probably be working with Michael Rubin, not us. Michael Rubin and Fanatics have all the licenses, they're interested in trading cards you guys should meet. He and I sat in a room together for six hours on the Tuesday before Thanksgiving of 2020. Wow.

And just had a complete, just the two of us, just all out everything about trading cards. And we left that room with, you know, I all out everything about trading cards. And we left that room with, you know, I had this idea about how and why we should get the licenses and how we could grow the business. And he already had all the relationships with all the leagues and the players associations, the people that you need to make trading cards. And so we left that at the end of 2020. And then we spent all of 2021 having very private conversations with all of the leagues and the players to try to convince them to give us the licenses out from under the incumbents. Trading cards have been made

by Top since 1952. There's a company called Panini that had been making basketball and football cards and look it was my idea, it was my vision, it was my plan but it was 99% 99%, his relationship with everyone. And they gave us the licenses. And we come out of that year, 2021, and we raised money at a $10 billion valuation. Wow. And there was one employee of the company, it was just me.

There was no company, it was me and all the licenses. And of course, obviously then, we had to go run the company. We then used that leverage to buy tops. And then their whole team came in. And then over the course of the first half of 2022, we built that team and then to everyone to run that business. But StockX was a rocket ship.

It was zero to a billion in three years and hit eight billion at one point. FactsFactors was zero to 10 billion in one year. It was nuts. It was crazy by every metric. And it was really a fantastic thing to be a part of. And unlike StockX, it was way easier to walk away. I knew from the beginning,

if this thing ever gets as big as we think it could be, no problem, that's not me, I don't want to try to run a $10 billion company. And Rubin was on board with that as well. And so, I left two years into it, a year and a half, and most of that was just getting the licenses. So yeah, it was crazy shit. Yeah, they seem to have a little monopoly going on now

with the trading card space, right? They figured out, and I say they, I mean Ruben said, hey, we have the best relationships with the leagues and players. What are all the businesses that we should be in around that? Their core business, apparel, headwear, jerseys, trading cards, betting and gaming, events. You know, I don't know if you saw Fanatics Fest in New York

a couple months ago. That was a function of them saying to all their partners, all their licensees, hey, let's all create the Comic Con of sports and do that because again of those relationships. So yeah, they're a monster. Ruben's one of the best networkers I've ever seen. I've never met him, but just his white out parties, his Super Bowl parties. I mean, he knows everyone.

It's impressive. It is extraordinary. And you know, I want to say having sitting next to him for a year in negotiating, because he is so prominent socially, I think people miss or ignore the fact that he is such a good negotiator. He is such a good deal maker.

And I was so privileged to sit next to him and watch that happen. It's not to be hyperbolic, right? But like you can't appreciate how good of a basketball player LeBron is until you sit on the floor next to him and see how big he is and see how he moves and all that. And it's kind of the same thing. Like I can't explain to you how good of a dealmaker he is, except that I sat next to him for a year and watched it and it was just impressed every single day. And the rest of that stuff comes with it.

But yeah, that's his true superpower. Yeah, I'm sure you picked up some really cool things being around him for that time. Is becoming a billionaire a goal of yours, like liquid-wise? No, I don't think that matters as much as being able to just create businesses. The last two companies I started, StockX and Financial Collectibles,

both of which I had a billionaire co-founder as a partner. And now I get to create a business where I'm the majority funding it, but I get to work with exactly who I want to work with. It's me, there's only 10 other people, all 10 of them people that I worked with before at either StockX orphan act levels or both and

And that's the the true win and now we'll see if we can build this company and make it big I think I have a pretty good idea of how to grow this and what to do but Money comes money comes. That's okay. But but really like being able to create because Business is just people like it's, who do you show up every day and hang out with every day? You hang out with people you work with more than your family. So that's the true win.

And yeah. That's true. You gotta enjoy it, man. That's cool to be in that position. Well, dude, where can people find out about the next drop and everything? Ghostrite.com or Ghostrite on Instagram. But December 10th is the big WNBA release.

This will, obviously I'm biased, but this is going to be a big deal. This is collectible toys as trading cards with WNBA after this historic season with Caitlin Clark and injuries and just this, you know, unbelievable change in women's basketball. So yeah. Nice. I'll grab a pack and open it on my Instagram, man.

Let's do it. All right guys, check out the links below. See you next time.