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The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy hosts Jess Sloss, the instigator of Seed Club.

Episode Highlights

The Delphi Podcast Host and GP of Delphi Ventures Tom Shaughnessy hosts Jess Sloss, the instigator of Seed Club. We discuss the creator economy, social tokens, Seed Club’s vision and much more!

We would like to thank Cosmos for making this podcast possible through their sponsorship! Cosmos is on a mission, link one million blockchains. Name brand projects like Terra, Band, Kava, and Secret use Cosmos and the Cosmos Hub to connect to every other chain in our network. The Cosmos Hub is the port city that delivers Inter-Blockchain Communication today. Learn more at cosmos.network.

Every Delphi Podcast is dropped first as an audio interview for Delphi Digital Subscribers. Our members also have access to full interview transcripts. Join today to get our interviews, first.

Show Notes:

(2:07) – First Question: Seed Club’s Elevator Pitch.

(3:18) – The Creator Economy.

(5:53) – Web 3.0 gig economy vs. Individual Creator.

(11:38) – Thoughts on artists releasing NFTs.

(17:58) – What BitClout got right / wrong about the creator economy.

(22:56) – Thoughts on the traditional value drivers vs. Web 3.0 native movement.

(25:56) – Seed Club’s most tangible value drivers.

(33:08) – Thoughts on speculation.

(36:26) – How does Jess scale his time given the number of creators that want to come to Seed Club.

(40:47) – What does Seed Club look like in a year from today.

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Disclosures: This podcast is strictly informational and educational and is not investment advice or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host may personally own tokens that are mentioned on the podcast. Lets Talk Bitcoin is a distribution partner for the Chain Reaction Podcast, and our current show features paid sponsorships which may be featured at the start, middle, and/or the end of the episode. These sponsorships are for informational purposes only and are not a solicitation to use any product, service or token. Delphi’s transparency page can be viewed
here

 Music Attribution:

  • Cosmos by From The Dust | https://soundcloud.com/ftdmusic
  • Music promoted by https://www.free-stock-music.com
  • Creative Commons Attribution 3.0 Unported License
  • https://creativecommons.org/licenses/by/3.0/deed.en_US


Interview Transcript 

Tom (00:02):

Hey, everyone. Welcome back to the podcast. I’m your host, Tom Shaughnessy. I help lead our podcasts and run Delphi Ventures. Today, I’m thrilled to have on Jess Sloss, who is the instigator of Seed Club. Jess, how’s it going?

Jess (00:15):

Hey, Tom. Great to be here, man.

Tom (00:17):

Jess, I feel like I’ve known you for a long time, but it really hasn’t been that long.

Jess (00:22):

Yeah. I mean, I guess it was three and a half crypto years ago that we talked, which is about a month and a half ago. Yeah, now, I feel like we have the requisite number of Telegram chats going. So, I think we’re buds.

Tom (00:37):

Once we’re over five chats, we’re best friends, or is it 10? I don’t know.

Jess (00:42):

It’s five in my life, but I’m particular.

Tom (00:45):

I’m good with that. Well, Jess, you’re working on something that’s extremely new to the space. I think it’s taking the space by storm. I don’t think anyone’s nailed it yet, but I think you guys are pretty much leading the charge to figure it out. What exactly is Seed Club?

Jess (01:01):

A great question. We described Seed Club as a social token incubator. Essentially, we are a group of people, set up as a DAO on the internet that are really trying to figure out how to bring tokenized communities, tokenized creators, help people who are trying to create value on the internet, capture and accelerate that value through using tokens. So, I think the term social token, personal token, brand token, community token, NFTs, all of those are some of the building blocks that we use.

Jess (01:32):

You’re right, it’s still so early. We very much feel like we’re at the beginning of the idea maze, but a lot more attention is coming into our little space recently. Our goal really is to help further these experiments to learn faster, share that learning. I think we see a world where at some point in the next decade, there will be billion dollar communities on the internet with a token at the core. We want to be a part of that.

Tom (02:00):

I feel like the whole idea of a creator economy gets thrown around a lot. I don’t exactly think anyone has a killer definition for what that is. There’s so many things to think there. We think through how our parents got jobs. We think through how we’re working today. How would you describe the creator economy?

Jess (02:18):

I think it’s one of those terms like community that really depends on the context you’re using it in. I think, Li Jin has done a great job at defining the passion economy, which I think is now another word for the creative economy. She really defines it as places where people can make money on the internet. So, how do you earn income in this new internet economy? Obviously, it’s exploded over the last few years, YouTubers and podcasters and direct to consumer brands and all these digital business models really becoming much more accessible to individuals. Folks who’ve been able to create communities or create authority and attention online are now able to really generate real revenue from it.

Jess (03:05):

I think what we’re really interested in and I think what crypto provides that’s somewhat unique to the broader trader economy is that ownership becomes key and core to the space. Whereas, if you’re building something on YouTube or on Substack, in many ways, you don’t own that audience, maybe Substack a little bit more than YouTube, but Instagram, TikTok, these are platforms on the audience’s platforms monetize those audiences. The ownership and the network is held by investors rather than the users of these platforms. I think crypto changes that.

Jess (03:38):

We’re really excited about ownership in communities and in platforms and in creative endeavors being getting captured by token holders. The creators themselves become commerce token holders. So, I think Li does a great job of even describing why this crypto creator economy is so exciting. It’s because while the creator economy helps you generate revenue online, we think crypto can help generate wealth. We believe wealth is driven through ownership. Traditionally, that’s through equity. I think tokens represent a much more nuanced and exciting way of capturing something similar.

Tom (04:16):

So, I just had on Kevin from Gitcoin. I’m pretty sure that episode is going to drop before this one, but we discussed how people work in the Web 3.0 economy where it’s not like LinkedIn where you go on. You get targeted for a long term job. You’re there for 30 years. Hopefully, you’ll retire with a pension. I mean, today, it’s jumping project to project, jumping into a Discord in the DAO, earning tokens, earning revenue, using your skills across a lot of projects and faster paced work environment. Would you consider that the creator economy or does somebody actually have to, say, own their own content and brand and platform? Is there a difference between, I guess, the Web 3.0 gig economy and then say, an individual creator?

Jess (04:59):

That’s a great question. Yeah, I think we still have the definitions that fail us in some degree. I think, in my mind, the creator economy is one where an individual is creating value digitally in some way and capturing that value. On a micro level, it could be just participating in a DAO and earning revenue there or I think more traditionally, it’s somebody’s building a personal brand or a service offering or micro-SaaS business and generating revenue that way, but I expect that we’re just going to see a lot more variability, a lot more gig work. I think maybe what’s different, again, back to the ownership ideas, the gig work in the Web 3.0 creator economy.

Jess (05:48):

It’s less Fiverr and earning small amounts of revenue or even larger amounts of revenue, but on a contract basis. It’s more that and having a stake in these projects that you’re creating. So, one of the projects that we’ve been involved in for a while is Forefront, which is the place to figure out what’s happening in the social token space, so Forefront DAO market. What Carlos is really focused on there is creating ways for community members to step up and contribute value to this website and to this newsletter and to the community events they run and allow folks to earn for creating that value.

Jess (06:24):

So, there’s Forefront rewards that drive a bunch of those interactions. I think it’s still really early and nobody there is earning full time wages to go build this product, but it’s like getting equity or stock options in a project that you’re casually contributing to and having some say in a governance process. I think that’s meaningfully different. Again, I think these are all really early stage projects and have to squint a little bit to see the scale and the opportunity here, but I think it exists.

Tom (06:56):

Makes a lot of sense. Yeah, I guess you would consider quasi-Web 2.0, Web 3.0 creator economy, I guess, to not be the full definition, right? Let’s say, I’m a popular YouTuber. I’m sharing that value flow with people. That’s still Web 2.0-ish, right?

Jess (07:15):

But to me, the thing that gets me excited about Web 3.0 is generating revenue on chain, right? So that’s why NFTs in my mind is so amazing, right? It’s this easy way to collectively make something or promote something, sell it, and for that revenue be captured by an address that are controlled by person, but more interesting in my mind is a community or a DAO. So, when I think about the Web 3.0 creator economy or Web 3.0 economy generally, you’re either on chain or you’re off chain. I think that we’ll see these parallel economies developed for the next little while.

Jess (07:50):

There’s still a lot of friction going between the two. But ultimately, the big opportunity, I think, for builders and for makers in the space is figuring out how to increase the ability of these communities to generate on chain revenue. So, we’re seeing that in early stages from platforms that are capturing streaming revenue on Spotify and representing that value on chain. I think we’re seeing that through NFT sales. We’ll see it through subscriptions. There’s a lot of growth that are going to happen here, but I think that distinction between on chain and off is at least in my mind, the defining characteristic.

Tom (08:27):

No, that’s a great characteristic to decide between Web 2.0 and Web 3.0 in the creator economy. I mean, it’s hard, because I guess people want to make sure that that value flow is not only being delivered on chain, but wherever the value is flowing from, I guess people are going to make sure look, that value flow is actually legitimately flowing to people. Because in Web 2.0, it’s really up to the user to share that I guess.

Jess (08:54):

Yeah. Well, I mean, look at the project called SongCamp, for example. It’s one that we’re pretty stoked to be a part of. Matthew has been pushing that forward for the last month or so. Essentially, SongCamp in my mind is what the Web 3.0 record label would look like, but a record label’s not the right way to define this type of organization in Web 3.0. It’s a community of people who come together, curate, and self-form into small writers groups, produce an audio tracks or some music. There’s a visual artist that gets paired up with these teams to create album art. They then do an auction. That auction that is done through Mirror and they’re reserve auctions. All the splits were very apparent and clear on the website.

Jess (09:40):

So, what you saw was this community forum, curate into small groups, collaborate to create something of value, then have full community effort put towards marketing and promoting and getting the word out about this auction. Having a successful auction, I think, generate over 10 ETH and then automatically seeing that revenue split between the artists, the visual artists and the SongCamp DAO or community itself. That’s all visible. You can see it on their Mirror page. I think that’s really what’s going to be required is we need to make it very…

Jess (10:15):

I also think it’s part of the appeal of the project was that it was so refreshing to see both such an effortless way of coming together to collaborate and create free of all the existing music industry BS that sounds like many people have to deal with, but then also to see the splits and the royalties just be so transparent. It was part of the magic. I think for these communities to really rock and roll, we need to have that transparency moving forward.

Tom (10:41):

No, that’s pretty cool. Just a question on that tangent, we’re seeing a lot of artists release NFTs and exclusive access and music and things on chain. That’s obviously helped drive the space forward from an exposure perspective. I guess the question for you is do you really expect a lot of artists to say, stick around and make good by what they’re releasing? I’m worried that some artists or some famous people are releasing to do a cash grab, where I don’t know if they totally realize that they have to provide for their communities for years or decades. Do you think people know that that’s what they’re signing up for?

Jess (11:24):

No, I don’t think people know that’s they’re signing up for, but I also think it doesn’t really matter. I think, we’re in this speculation and hype as part of any new technology and new innovation. I think crypto has thrived on that and suffered for that. I think we’ll see similar moves within NFTs and probably within social tokens. I do think it’s a core reason why I’m excited for the work we’re doing at Seed Club. What you’ll find is an artist or a manager or a community leader comes to speak with Seed Club. Our first move is to try to convince them not to do a token. It is a big thing. NFT is maybe a little bit easier. You can see that as more like a merch drop. It succeeds or it doesn’t. You can go do another one.

Jess (12:14):

Often, there isn’t a whole lot of embedded utility in these drops so far. So, it can be packaged fairly simply. But social tokens that represent access to the community or ownership in a community are a whole different story. So, I worry that the incentives from a lot of the platforms or tools or other organizations that are going to emerge in this space are really going to be focused on getting tokens out the door and earning a fee for doing that rather than trying to build long term value in these communities. So, we really say, “Okay, if you’re going to come and do a social token, our model is that we partner with you long term. We will be your diamond hand holders to your token, but also, we want to make sure that you have a long term almost infinite time horizon.”

Jess (12:58):

So, I think that the short term excitement in social tokens will be around these creator communities, so folks that have authority or celebrity that are going to come launch tokens, but the ones that last are ones that are really trying to build a community that has some broader purpose, where tokens are being used to facilitate some bigger value creation. I think the way I often describe it is Taylor Swift might come do a social token and it’ll probably be successful, but I would probably want to put my money into the Taylor Swift Fan Club.

Jess (13:28):

I could see a Taylor Swift DAO being a big collector and fighting for all the Taylor Swift NFTs and there being a real engaged community management team there and his having a much, much longer time horizon than a management company that’s associated with Taylor Swift today. So, we’re very bullish on community tokens specifically and those that represent value in a community. I think there will be creators that do a great job of delivering on that, but it’s much closer to launching a membership site. If anybody has launched a membership site, I think you guys know a thing or two about this. It’s a whole business in and of itself.

Jess (14:05):

That’s very different than just creating music or writing newsletters. It deserves a reverence. It’s actually probably more important than it has the intentionality around it, because people holding these tokens have financial capital at stake. So, it’s not just shutting off subscriptions one day and saying, “Okay, I’m done. We’re not running this community anymore.” It will exist forever. So, we take a bit of a different stance and say, “Please only launch a token if you really, really, really, really, really want to launch a token.”

Tom (14:35):

Now, I’m glad that your first order of business is to convince people not to, because you’re automatically switching the conversation to inherently make people prove why they need one. I really liked your comments on communities first people. Let’s take a research site. I mean, I could see that decentralizing over time, because you have the leaders, you have users, but eventually, you can incentivize people to produce and promote the content you’re looking for. Obviously, the other community members help curate that and craft it and driving forward and sharing the upside there. So, that’s actually a really cool distinction there.

Jess (15:13):

Yeah, I mean, I think the more time I spend exploring the space, the better my, I guess, definitions become. I think a helpful way to think about social tokens generally is to see social tokens as a big broad category and then a level down being personal tokens, brand tokens, and community tokens. I think there’s so much to be explored in what a personal token looks like and so much to be explored in what a brand token can be looked like. What we’re really focused on at Seed Club is in community tokens. When we look at that community token bucket, we can chuck it down another layer where we’ll have creator centric communities.

Jess (15:54):

A great example would be what RAC has done or what Portugal the Man has done, where the creator’s active engagement in creating value for that community is where most of the value comes from. I think there’s also communities just more generally, and the focus there is really on the community collaborating to create some value. While there may be a leader or leadership that exists, the value is many to many. This asset should be trying to create some broader outcome that drives value for that community beyond what, I think, could easily be seen as to somebody betting on the future success or popularity of a creator when you’re looking at a creator community or even more of a brand or a personal token.

Jess (16:36):

I think there’s huge business opportunities in all those categories. There’s a lot of excitement. We’re seeing a bunch of really cool tools that are bubbling up across the board, but our focus specifically is on community tokens, very interested in working with creators who have a long term mindset to launch tokens for their community. But my bet personally is that these native communities that are born with tokens in mind are going to become these large economic engines and major categories on the internet. Those are the ones that I’m most excited about shepherding forward.

Tom (17:09):

I love the focus, Jess. I mean, you’re a huge expert in the space. So, I want to get your candid take. I mean, I want to focus on some of the highest exposure events, because it’s what people could easily relate to. They’ve seen it. So, BitClout launched a couple weeks, months ago. For those who don’t know, it’s basically a way to, I guess, speculate on the value of a creator who comes online to claim their Twitter account. Basically, you could just buy tokens directly on a specific person. Obviously, I’m not telling anybody to do that. But Jess, what do you think BitClout got right about, I guess, “the creator economy,” and then what do you think they got completely wrong?

Jess (17:48):

I love that framing. I’m just so bullish generally on any new tools, tech, innovation in the space that I’m so passionate about. So, excited to see teams put forward products like BitClout. Also, it’s not that exciting to me generally, like I said, because I think about the value that we’re trying to create on the internet. I think what they got right was they made it really, really easy to spin up a token as an individual. So, as I said before, I think personal tokens are a big opportunity in the space. There’s a lot of regulatory challenges and practical challenges in launching those things.

Jess (18:25):

I think BitClout or a platform like BitClout is going to step in and fill the need for what is… People like to gamble. We like to speculate. Betting on the future value of a brand or an individual or community, I think, is a thing that people probably want. So, platforms are going to emerge to allow that to happen. So, I think, yeah, easy to donate a token. They obviously got a lot of hype and interest. I think for many people, BitClout equals social tokens, which good or bad, at least people are talking about social token, so stoked on that. What did I get wrong? I think the launch obviously was an issue.

Jess (19:04):

It’s tough to say, “I’m here to empower creators,” when creators feel like they’ve just been leveraged for launch hype, the fact that they didn’t have a choice as to whether they were on the BitClout platform or just the top 1,000 Twitter accounts were just there. I think there’s some issues around some of the tech and private keys being exposed. Obviously, it wasn’t super clear that if you put money into BitClout, that you can take it out. I know, there’s some teams working on that, but that’s still a limiting factor right now. But I think underlying it all, this idea of, “What is the business model that drives value for a creator coin or a social token?” It’s a big unanswered question right now across the space.

Jess (19:50):

Holding a token to get access is the driving template, but it’s not a subscription or a replacement for subscription revenue, right? You’re not actually generating revenue for social token projects. So, collectively, we need to figure out better ways of creating value at the community level. I think, BitClout, people speculating on the value of a creator coin doesn’t really create a whole lot of value for that creator.

Jess (20:17):

I mean, ultimately, that creator needs to sell tokens, which is essentially dumping on their fans to be able to represent that value. Again, that’s not an issue only with BitClout. That can be an issue across the board, but when you look at a social token through more of a tokenized community, where a bunch of the value of that token lives within the community and the community has a vote and a say and control over, which is what the vast majority of the projects we work on, they look more like DAOs and they look like creator stock markets. I think it changes the vibe quite a bit. There’s this community or collective ownership over a financial asset that collectively you’re using to try to grow the value of a brand or a community.

Jess (21:01):

So, I don’t see BitClout’s solving that problem yet. Also, more broadly, there’s going to be so many platforms that emerged, that tried to solve for the onboarding issue, making it easy for people to get into these communities or into these economies, let’s call them, but the trade-offs that are often being made, I think, are really short term minded. In my mind, we’re still so early and the big opportunity with most of these communities is to plug into the broader innovations that happen on the open web.

Jess (21:37):

So, communities plus DeFi or communities plus whatever is next. I worry that launching and building on other proprietary chain or sidechain that isn’t fully connected to the ETH ecosystem or to a multi-chain world are going to really limit a lot of the ways that these creators can create value moving forward. To me, we’re consulting with projects that have long term mindsets. Designing with optionality in mind is absolutely essential. It really does rule out a bunch of the media appealing short term options today.

Tom (22:15):

Damn, I love that. That makes a lot of sense, Jess. I guess one follow up question, let’s think a couple years down the line. We have regulations in place, people know what they’re doing, etcetera. So, just a fantasy type question here, but do you think that people will understand the value drivers of what they’re investing in? Let’s say I want to buy a creator coin in Elon Musk, right? Does that require me to go and review all of Tesla’s financials to really understand what he’s worth and their projections and how they’re going to do in the future, or do you think that this really is a Web 3.0 native movement where those traditional value drivers really don’t flow into, say, a creator coin or it really doesn’t matter as much?

Jess (23:03):

I love this idea that [inaudible 00:23:04] has been putting forward of investing as entertainment. I think that’s just the thing we all have to wrap our heads around. You can laugh at Dogecoins all you want. I mean, you probably don’t. You’re probably a big Dogecoin fan. I don’t know. I’m not in any Dogecoin Telegram groups.

Tom (23:18):

I’m skipping that one. I missed that one.

Jess (23:19):

Yeah, okay. Me too. But I think it’s a thing, right? So, this idea of being a DGen is a thing. Robinhood day trading is a thing. Gambling is a thing. I think it’s entertainment. I think there is a huge desire to be able to speculate or bet or trade on the perceived value of a brand or a personal brand or creator. I mean, I probably know of half a dozen projects that are coming out or soon that are really built around this idea of a creator stock market. So, I think that’s going to be a thing. I think, in speaking with the people who are being represented on these things, the fact they have a price associated with their names is the least appealing thing ever. Nobody wants to be traded like a ticker symbol on the NASDAQ really.

Jess (24:11):

So, I don’t think that’s where the most exciting value is going to be created. So, I think in the other side, where there’s folks that are trying to use their authority and credibility and fame to really create some value either in the community or various projects that, I think, will emerge in Web 3.0, I think some level of fundamentals are going to be important, at least I hope so. So, I think we see that in the DAO spaces, with deep DAO being able to explore. You can see the revenue on chain. We’ll probably see this coming out of DeFi first. I know the Friends with Benefits community is working on a lot of really interesting transparency tools that will start to showcase what’s actually driving this economy that they’re stewarding.

Jess (24:58):

So, I still think there will be probably a multiple or a narrative driven multiple speculation that exists in crypto. But my bet at least, with Seed Club is if Seed Club has a token in the future, that people are looking at the value that we’re creating on chain and at least bringing that into the calculation as far as what our organization is worth.

Tom (25:25):

I love that. Yeah. Now, the price tag is annoying. It feels like way too Web 2.0-ish in a way. It’s hard to track, I guess, but there’ll definitely be better ways moving forward. Jess, the annoying ass question I have to ask, I guess, when people come to Seed Club, what are the most tangible, I guess, value drivers that you see them implementing for their own tokens? I mean, the other question for you is does that even really matter? I mean, we’ve seen all crypto trades on meme and exposure and a bullish stance on a specific community or project. So, I’m not sure that it actually really matters. It’s not only a certain handful of people are trading crypto based on fundamentals. What would you say to those questions?

Jess (26:10):

I think memes are fundamentals. I don’t know how we represent that.

Tom (26:13):

That’s a good answer.

Jess (26:14):

I think that’s really important. So, I mean, we have very practically seen memes sell for hundreds of thousands of dollars, right? So, there is some fundamental value in there, maybe not. There are probably many people that would argue with my use of that word, specifically there, but I think it’s interesting to consider that at least. I think, again, early, early, early, I think that the template that’s really working right now is token gated access. So, hold tokens give me access to a community or a world. It’s just the simplest way to have a sense of ownership in a community, right?

Jess (26:52):

So, I hold 60 FWB tokens. I am therefore an owner and a member and now have an opportunity not only to consume, but also to participate in creating value in that community and hopefully earn some value in FWB as I move forward. So, I think what we’re really excited about is helping our communities stand up a real basic, lots of optionality moving forward token design and immediate utility. And then really, the hard work begins at that point, right? How do we actually engage the existing community or this new community around creating some value? I think so much of the opportunity is in collectively figuring that out today.

Jess (27:39):

So, on a week to week basis, we start to see new interesting ideas emerge. We see teams solidifying around them, pushing them forward, some of them working, some of them not working. Most of that is in and around either this token gated access to any type of different contents or experiences, offline or online. I think curation is also a really big one. So, I think we’ll start to see a lot more interesting staking functionalities. I think that what Nina’s done or what Ada has done with her Aave staking, I think, are really interesting. I expect what we’ll see is two token models emerge in a lot of these social token communities as well.

Jess (28:19):

And then I think more broadly, the time to DeFi, I’ve been using a line that I feel very clever for myself in using where, say that the next million or 100 million users into crypto are going to come from Coinye and not from Compound. I think I’m just trying to illustrate the idea that these communities have so much trust and authority and reach, especially if you’re talking about these larger creators, that they have the ability to introduce more complex topics to a much wider audience and have people give it a chance. We worked with Packy and Not Boring or with Colin and Samir on their YouTube channel. They do an NFT drop or an experiment.

Jess (28:58):

There’s tens of thousands or hundreds of thousands of people who trust these folks to introduce complex ideas to them. That’s, I think, key given where we’re at with onboarding and UX and just the general conceptual shifts that need to be made to understand crypto. So, I think that’s really where the longer term value will be had is okay, we have these economic engines. How are we leveraging the value that exists here today that sure happens to be captured by a token, but there’s further integrations or extensions or composability that’s, I think, going to unlock more of that value?

Tom (29:32):

Jess, how long do you think until we get to that point? When you’re someone that’s been around cryptos, you’ve seen, I guess, how long it can take, but also how fast new things can pop up and take the whole entire space by storm. Do you think this is something that’s six months out, six years out? What would you give on a timeline?

Jess (29:52):

I mean, I think there’s going to be meaningful progress in six months and outstanding progress in six years. I think six months, we will see an extremely large name come into the social token/DAO space. I think we’ll see some really innovative brands launch and do some interesting tie ins with DeFi that will start to hand out and show that the opportunity here.

Jess (30:17):

I think that the true economic shift that will be driven by tokenized communities being the natural evolution of how we coordinate economic activity on the internet, I think we’ll see over the next few years as better onboarding tools, regulation, all these things that I think our key and core to crypto’s growth will also be key and core to these tokenized communities growth. I said earlier, I truly believe we’ll see billion dollar tokenized communities. I think that’s a few years out, but man, I wouldn’t even dare to bet on that. I think there’s realistic scenarios in my mind, conversations that I know are ongoing that could make that happen in months and not years.

Tom (31:05):

That’s all aboard the hype train, right? It’s exciting.

Jess (31:08):

That’s actually a really great point. That hype train is actually… That’s my big fear in the space is that we get into hype train mode before we get into value creation mode. I think maybe that’s unavoidable, but one of the biggest challenges we have in creating new tokenized communities, especially given two weeks ago when the market was just hyped on hyped, is that the people who come into these communities are speculating. The risk is that the people who come into these communities are speculating rather than really wanting to be there either from a fan perspective or from a participation perspective.

Jess (31:46):

So, I think one of the counterintuitive things in social tokens right now is that the bigger creator’s not necessarily the better. The larger the audience you have, the more challenging the process of actually onboarding the right people into your community first, such that you have a good base and engine to grow from. So, we spent a lot of time thinking through strategies on how to do that and are working through on a couple projects right now. But to get to that billion dollar community, some of the onboarding and norming and making sure that there’s more of a culture of creating value than of just trying to participate in that value creation is going to be key.

Jess (32:30):

Maybe that’s the harder part to solve. I think there’s great products like what Brian is building with RabbitHole. I think, using NFTs and other on chain data as a way of highlighting your true fans, doing what RAC did and doing a retroactive drop to people who’ve supported him in the past through buying merch or Bandcamp songs, etcetera are great starts, but there’s still a lot of work to do.

Tom (32:53):

Makes a lot of sense. I mean, it’s hard to grow a space though without speculation, right? That’s why I guess I mentioned the BitClouts of the world and these famous artists dropping coins or NFTs. It’s very hard, I guess, but to your point, that shift from speculation to real value creation and value accrual, frankly, I don’t think it’s ever an easy process. I guess, there’s always a blow up or two along the way.

Jess (33:18):

Oh, for sure. I’m pro-speculation. I think there’s a difference between-

Siri (33:27):

Sorry, I didn’t quite catch that.

Jess (33:29):

Well, there’s Siri trying to chime in. What’s that?

Tom (33:32):

Poor Siri.

Jess (33:33):

Speculation, apparently, it’s a word that triggers things. Yeah, I think speculation is 100% necessary to grow this. I can’t remember who is tweeting it, but this idea of crypto being a casino and people seeing that as a negative, I think, is missing the point. I think so much of this new energy comes in, because it’s fun and hopefully profitable. People come in to speculate and they get wrecked and liquidated. A percentage of people stay around and become true believers. That’s how crypto’s grown. I expect that we something similar with these tokenized communities.

Jess (34:03):

I think that the difference is if the core product or part of the core product is the sense of belonging and identity and essentially showing up to a party, you don’t want that party just to be a whole bunch of people who are not interested and are only there for the money and are doing badger dances in the corner, where you really wanted to be hanging out with Bobby Hundreds and talking about a new streetwear, right? So, there’s a difference in speculators speculating on the future value of a product to raise the floor, to build a strong book value of the community. I think that’s a necessary role.

Jess (34:42):

In many ways, I think that’s a role that Seed Club will play as being a tastemaker in the space. Also, we need to be thoughtful about who is coming into these communities. Are they actually there to create value? I think you look at what Friends with Benefits is doing. That’s an example of this too, right? Where there is a gate, not only do you have to hold these tokens, but you have to get vetted before you come into the community. I think that’s really about trying to maintain the fundamental value that that product or project is offering.

Tom (35:11):

That’s a great answer, Jess. Yeah, full disclosure, I definitely own Friends with Benefits. I think that’s a really cool model. Even the verification on the Discord, when you own the tokens to even access is awesome, but the community itself on there is super cool.

Jess (35:29):

Yeah, I also own Friends with Benefits, disclosure. I think this is the way that Alex and Cooper and Trevor and the whole team over there is thinking about this next phase. If we look at social tokens, generally, there’s a lot to go from zero to one. Seed Club plays in zero to one and the one to five zone, I think. Friends with Benefits, Whale, Lads, the variety of communities that are out there have been around for months at this time are now trying to go from this nascent stage to growth into creating value.

Jess (36:03):

I think, watching what that team is doing and trying to unlock different ways of creating value is something that I think anybody who’s listening to this podcast should be paying attention to. So, being able to figure out that growth stage part of the social token project, I think, is huge and unexplored. I’m just super supportive of all the work they’re doing in that direction.

Tom (36:26):

Yeah, they’re a killer team. I love Cooper, all the things he’s building. Shout out to my boy. But Jess, switching gears to close out, I want to talk a bit more about Seed Club. You guys are token incubator. Your time is obviously limited as the expert here, right? How do you scale your time given just the sheer number of creators that want to come to Seed Club?

Jess (36:48):

Yeah, I mean, I think that’s the big question that we as a group are tackling. I think the answer right now is we get to be very picky in particular. I think that’s key both to building our brand and being a desirable place to come and work with and launch tokens with. The core value that we’ve brought to the table from day one is an outstanding network of collaborators and started with 12 in a Telegram group. We’ve just recently expanded to 60 folks. If you come and work with Seed Club, there pretty much isn’t a person or project that’s out of reach from within our collaborator group. So, that’s a fundamental value.

Jess (37:29):

I think, how we actually continue to deliver practical value for our projects, I think, is something I spent a lot of time thinking about. We have three core products. Our first is our accelerator product, where we’re bringing 10 to 15 teams or individuals or creators together for a six-week program, where we expose them to just the latest and greatest thinking in social tokens, bring our wonderful network of collaborators to the table to help shape these ideas, help them launch, provide access to tools, tech, token design, all that good stuff. They become part of our community, and we become long term partners with them. This quarter, we’re working with a handful of projects that we hope will be meaningful or more key products or projects in the space.

Jess (38:18):

So, scaling out more of a studio business is something that we’re exploring. I don’t know what scaling that looks like, not really the goal right now. The goal really is just to make sure we create some value there for them. And then lastly, we have our community ourselves. So, tokenize community, I think, is something that we’re exploring as well. That is really going to be the top of funnel, the place that if you’re a creator or a community leader and you’re trying to wrap your head around crypto, social crypto, Web 3.0, that’s the place where you can go live and find like-minded people who are on a similar path of exploring. So, that’s something we’re going to be putting up later this quarter. I’m really excited about it.

Jess (38:57):

The unique thing within Web 3.0 is that you can get your hands dirty. The way to learn is to jump in. So, we’re excited to run more cohort, mission-based experiences there that allow people to really learn and collaborate alongside other folks. So, if you zoom out, our mission at Seed Club is to create value for the Seed Club DAO through creating value for social token communities. I think that lives both in our community and then also through the number of projects that we help to launch. So, some of the interesting things that we’re working on, I think, are looking at ways to engage our community in both curating the type of projects that we’re working with.

Jess (39:35):

So, you can imagine some onboarding process that helps us recruit and also onboard new people into any of our core programs. We’re also struggling with the same challenges any DAO would have to deal with. How do we really lean into the value that our community can bring to the table? I think that’s an organizational design challenge, where we need to both be advancing our playbooks and knowing the best way to structure and launch and provide services or advice or insight to these projects, while also being able to scale that out operationally.

Jess (40:11):

I think, there’s a lot of great projects that are a few steps down that path from us that we’re able to look to. I think having empowered smaller groups that are under the Seed Club umbrella that are doing great work in other categories of our operation or different categories of the social crypto ecosystem, I think, are the way that we do that. If we’re successful at doing that, I don’t know, but I think we’re really well positioned to take a good stab at it.

Tom (40:41):

I love that strategy, Jess. Yeah, it’s a good problem to have, because you figure out what works, you scale it. I think the other thing is, I mean, you have so many creators that you have a really good pie to figure out the best ways to go about launching one, best ways to go about value accrual and creation. That’s just an exciting place to be at. I guess my last question for you is what exactly does Seed Club look like a year from today? Is this a DAO? Is this a collective? Is this Jess’ company? What does this look like long term?

Jess (41:15):

I mean, Seed Club is a DAO, has been a DAO. I think that’s a broad term. I think we’ve been a small group of people who’ve been coordinating around creating value together, of which I’ve been one and been a big energy towards or energy within. I think we expand that significantly. I think, over the next couple of weeks, we’re going to see that expand significantly as we brought in a host of new collaborators. Yeah, I think, the vision really is what does an internet native incubator look like? I think it’s one where it’s a community that has a shared financial asset at the core, a token that is used to incentivize the creation of value for our members and for our clients and projects.

Jess (42:03):

So, in many ways, I think, the Y Combinator of Web 3.0 is one. I think there will be many, but it’s one where there’s a token at the core. The successful projects that come through it become owners in the incubator itself and that there’s this big crowd of organized, effective, individual collaborators that are creating value out on the internet and earning that value and capturing that value in a shared token. So, I think a year from now, my hope is that we have made progress towards that end, where we have growing successful brand and presence out on the internet.

Jess (42:45):

We have a few really amazing example projects that are showing the full breadth of what’s currently possible within the social token space, that we’ve been a part of a whole bunch of really weird things that maybe worked, maybe didn’t work but were fun and useful experiments. That we have an organizational structure that makes it clear how people can come in and create value and be an owner, a member, and steward of this group that ultimately, I hope at some point, I can step back from and be an engine of good and value creation on the internet. I don’t think we get there until the last part in the year, but I think it is 100% the goal of the project to get to the point like that.

Tom (43:28):

I love that, Jess. I love the plan, and I love what you’re looking forward to. You’re the guy to do it. It’s funny, we’re talking about tokens. Meanwhile, if people want to get access to you, personally, they have to be in Seed Club. So, it’s a good way to abstract the potential of your own token away, I guess, in a way.

Jess (43:46):

Yeah, I mean, listen, I just want to create value in the space. We’ve worked with a number of projects that don’t have tokens, there’s no tokens in the Seed Club treasury, but we believe will be… I think as more larger creators come into the space, it’s our responsibility to be a good steward of that new attention.

Jess (44:09):

I think you can see, I’ll call out a few people like Soulja Boy or Lil Yachty going down the path of crypto. It makes me cringe and a little upset, because their platform directed in a way that actually is talking about, I think, the things that most of us are excited about in the crypto space would be such a huge benefit. So, anytime I see a creator that is like, “Hey, I’m interested in Web 3.0. I’m in there. I don’t care if there’s tokens associated with or not.” We have so much space to grow and so much opportunity ahead of us.

Jess (44:39):

So, yes, come be part of Seed Club. We want to launch these great projects, but also, our Discord is open. You do not need to hold a token to access our Discord. There’ll be a lot of fun stuff that we’ll be providing there. So, if there’s somebody listening to this that’s interested in the social token space, yes, I can’t talk to everybody, but seedclub.xyz. You will be able to find access to our Twitter and to our Discord. You’ll start to see a lot more content, a lot more experiences, a lot more education coming through that path. Our hope there is that we can extend our community and expand it there such that there’s an easy way to get to value quickly.

Tom (45:14):

I love that. Jess, I think I’m going to need you to drop your Calendly link so that everyone could take up all of your time and drive you crazy, but this has been extremely exciting, Jess. I really appreciate you coming on. Super excited to follow Seed Club. Frankly, I just can’t wait for this to get out and just to follow the entire social token movement.

Jess (45:33):

I always love your questions, Tom. It’s always so easy to talk to you. I appreciate you making me sound way smarter than I am. So, keep up the good work.

Tom (45:42):

Appreciate that, my dude. We’ll talk soon.

Jun 4, 2021 | 46 minutes | Chain Reaction

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