This week’s show guest is entrepreneur Chris Snook who is the managing partner at Launch Haus and the chairman and founder of the World Tokenomic Forum. Chris is heavily involved in the blockchain/crypto space and is one of my go-to resources when I evaluate this side of the business. He shares a lot of his insights with us today about the space — what pitfalls we should be aware of and what exciting opportunities we should focus on going forward. He also tells us about his exciting new initiative that he just started called the World Tokenomic Forum and the impact that he aims to achieve. Let’s get on to the show.

Jay: Chris, thanks so much for joining us on the show, man. I’m excited to talk to you today.

Chris: I don’t think you’re as excited as I am to be on your show.

Jay: Well, let’s get right into it then. Chris, I know that your list of accomplishments is too long, so I can’t really do justice. So why don’t you give a brief introduction to our audience and tell us a little bit about the many things that you do.

Chris: I appreciate that. Hopefully whatever I’ve accomplished so far is just the beginning. I think I look at it a little differently because I’ve got the bumps and the bruises and the broken bones and the memories of those to kind of humbly say that we’re happy to still be in the game. I’m an entrepreneur at heart. I didn’t know I was going to be. I graduated college in ’98, and I didn’t grow up in an entrepreneurial family. I went to grad school because that was kind of the next thing you did. I think several people may have been on that plan and listening to this at some point. Essentially, what happened was I went and go more education and went out to see what I was worth in the market, and it wasn’t worth what I thought I would be worth. I didn’t have delusions of grandeur. I thought $75,000 a year was probably all the money in the world back then. So I didn’t have these massive ambitions.

But long story short, I essentially re-thought things, and I started to read some books. One thing led to the next, and I started my first company in 2000. Really didn’t know what I was doing. Call it tuition, but I spent about four years going half a million dollars in debt, never getting to revenue and learning very quickly that I was really crappy at this thing called building a business. But I also learned that I kind of had a taste for it and that it was something that I felt like I wanted to do and could do for the rest of my life, and that I just really needed to learn how to get good at it.

So if you fast-forward 19 years later — or whatever it’s been — I still feel like I’m 25, but I’ve got the wisdom of 19 years of doing this and having some wins along the way and certainly having some failures along the way as well. I think where we’re at is just one of the most exciting times that anybody listening to this will probably face in their lifetime. I feel fortunate to be alive right now. I feel fortunate to be in business. I feel fortunate to be able to work 19-hour days without getting tired, when I need to. I think the next decade is going to be one of the most exciting we’ve ever seen.

Jay: Absolutely. Thanks for the great intro, Chris. I have to agree with you there. I’m a couple of years younger than you but not that much younger, and there’s a lot of younger entrepreneurs coming up that actually don’t realize that, for earlier entrepreneurs, that’s the price you had to pay. Half a million dollars and four-plus many years of “wasting” or learning…that was entrepreneurship. That was normal. So the era that we’re living in right now, people don’t realize how lucky we are with the internet and how quickly we can start a business, try it, scale it, fail it, and then move on to the next one without even blinking an eye. It maybe costs a couple hundred bucks now. Whereas back in the day, like you said, it cost you hundreds of thousands of dollars, years, relationships, and this sort of thing.

Chris: I’ve heard you on other episodes. I’m a fan of the show. I’ve read your newsletter several times. I think there’s no replacement for pattern recognition. At the same time, there’s also no replacement for enthusiasm and youthful exuberance. I think what I wouldn’t be doing right now is worrying about whether I don’t have enough pattern recognition and I’m spoiled or whatever. I think I’d be focusing on my strengths. So if I was a young entrepreneur, I’d be grateful that I was youthful, exuberant, feeling bulletproof, and older people than I were telling me that this is an easier time to build a business or a cheaper way to fail than ever before. I would pay attention to that in the sense that I wouldn’t ignore it. I would log it for some future point in time where it might be valuable. But I would just run and realize that my advantages, my willingness, my speed, and my impenetrability… And if I was a little bit more seasoned, and I’d been through several exits and several failures — like I have — or several investments that didn’t work out or ones that did — like you have — then I’d be recognizing that youthful exuberance and energy and health is an asset, and so is pattern recognition. And that that’s a strength.

Because what I think we see right now, for those that are playing hard right now, is Internet 1.0 happened right when I was beginning. And it was kind of already at its peak hype cycle. So I started in 1999, and everyone knows what happened in 2001. And so if I was getting started today, like several of the people that we meet or along the way that we mentor, I would be thinking it’s 1999. And if I’m just getting started, and it’s my first rodeo, I better looked at what happened in 2001, and I better start asking people what I could do to prepare for that.

If I had pattern recognition, I would think where we are is 1995. I say that because, mentally, you can win in both scenarios. I think what I didn’t have the first time was pattern recognition. So I didn’t know what I didn’t know. I was terrible building businesses. I couldn’t recognize the shift. I just knew I wanted to do it. By the time 2.0 came around four, five years later, and you look at all the web 2.0 internet oligarchs that we have today, I was too broke and too in the middle of recovery to capitalize on that window.

Why I’m so aggressive, why I’m so happy, why I’m so excited right now is because I’m 19 years in. I know exactly what’s happening right now, and I’m not too broke; I’m not too tired; I’m right where I want to be to capitalize on this window and bring everyone who is coming with us along with me. But I’m also not romantic about it. I understand that winter is coming, and I know what that looks like. And I also know what’s on the other side of it.

I think, like a good investor, you start to recognize these cycles, and if I was young, I wouldn’t worry about it either, because there will probably be another window 15 to 10 years from now that opens up on top of it, and you’ll have the pattern recognition then, and you’ll have the experience and the credibility then to double down or go big. I think it’s just about patience and whether or not you’re built for this game or not.

Jay: 100%. I can’t wait to dive into where we are right now in the timeline and the ecosystem and the exciting things that we’re on the forefront of. Just before we do that, though, I just wanted to ask you a little bit about some of the ventures that you did work on in the past — maybe some of the failed ones or the successful ones and then leading up to, I guess, Launch Haus, which is your current gig, so to speak, in addition to some of the upcoming stuff that you’re working on.

Chris: Sure. The first couple of businesses were in and around the fitness and health arena. That’s kind of what I came out of. Some of them had a brick-and-mortar component. I am not a brick-and-mortar guy. I’m not a real fan of it. But that’s just me. I have friends that make lots of money in brick and mortar. It just wasn’t in my DNA. So those were just what I understood. I started where I had passion and influence and knowledge, and that was the exercise science world.

Then I quickly morphed into… When you’ve got to make half a million dollars back if you’re not going to go bankrupt, and you want to pay back your friends and family in full, you get really agnostic really quick about industry, and you start just following money. And so I kind of spent a lot of time between ’03 and ’05, when I got back to zero and had recaptured, going in and out of several different businesses. And it was beneficial because it was kind of like getting a Master’s dissertation in a myriad of different verticals, and it opened up my brain to think about certain industries without the myopic view of that industry.

So I dabbled in everything from middle market LBO analytics to wholesale and retail lending, because I was in Southern California at the time, so I don’t have to tell anybody on this call why that was a smart move for a little bit. I did debt consolidation because if you’re going to learn how to negotiate your debts effectively, why not sell it too? So I was very pragmatic and very agnostic, and I just focused on things where I could build relationships and make money and pay off debt and learn. So I kind of went agnostic.

Then in ’06, ’07, we invested in some information type businesses — information learning. We did some things like that. I decided I hated that business because I realized really quickly that the internet was going to make it very democratized for podcasts like this to give away better information for free, and I didn’t like businesses that I felt like were extracting people’s hopes and dreams through the forms of HELOCs and credit cards, selling them stuff they were never going to do.

So I didn’t stay in that very long, but I got exposed to every aspect of it, and I understood it in and out. And then I went bankrupt in ’08 on another investment that was kind of a brick-and-mortar/coaching concept in the fitness industry, and we took all our profits from one business and put it into the other business for about 18 months. And then the partner quit, filed BK, and we were left to handle about $2.7 million of institutional debt. So I wrote that off and took that one on the chin. In ’08, came out of that discharge a week before Lehman went in. And so what was interesting was I had already gone through what most people think was hell. Coming out of that, I realized I lost all the stuff; I bought more stuff; it’s really not the end of the world. I can still play.

’09 was interesting because everyone, as you know, was so rocked by the crisis. I was leaning forward and on my toes, and so I was able to insert and do some turnarounds and did performance-based equity deals and consult and, essentially, help turn around a couple of things or help save a couple of things and take a delta on how we improve their performance. It was in various different industries, so I won’t bore you with that. The bottom line was we stacked our chips up, and then we started to really think about what was next. And we had the vision to see that.

And we invested in a couple of content plays and a couple of mobile enterprise analytic technologies in 2010. All of those things failed with the exception of one, which exited this year for just under 50 million. So that really kind of bridged me — ’09 — into the technology world full bore. Ever since, we’re stayed in the digital and technology realm, as far as our investments or our businesses that we’ve built. So that’s kind of how we got to where Launch Haus is today.

So Launch Haus is our digital holding company family office. We hold assets that would fall under digital agency, consumer product, like ecommerce type plays. But then primarily now, we are heavily invested in blockchain application technologies and infrastructure plays. So that’s about 80% of our portfolio today and, moving forward, will probably continue to be.

Jay: Wow. That’s fascinating. Thank you for sharing that, Chris. That was such a very interesting journey, and the ups and the downs that you shared were just incredible. But I appreciate that, and I’m sure the audience listening in will appreciate it as well.

And somewhere along the way you had time to write a couple of books as well. So that’s pretty amazing.

Chris: The thing about books is that, back in ’06, I learned how, serendipitously, they’re really good business cards. And then I learned after that that I like to write and that sometimes, as we’ve figured things out… My first book that I wrote with my now wife was called Personal Trainers Burnout. Essentially, it was here’s how not to lose half a million dollars in the fitness business. That was the book, because I had done that. And so every book we’ve written all the way up till Digital Sense Now and then Rebooting Retail, which is coming out shortly, is really just basically hindsight and foresight. It’s kind of looking back and going, what did we do that worked? What did we do that didn’t work? And what’s the playbook that we can provide people and help them make sense of what they’re trying to do?

More recently, we’ve moved into digital transformation at large and what does it mean and how do you actually execute putting the customer at the center of your business. And that’s really what Digital Sense was about and the experience marketing framework, which is the real guts of that book, the takeaway of that book that any company can use to build their picture of what it means to have a customer-centric organization at their company.

Then Rebooting Retail is really about looking at an industry vertical and building on that and saying, we all know that there are sectors, like retail, that are struggling. But what is the business model of the future? What are the questions you need to ask? What are the new rules and the paradigms that are changing and fundamentally shifting in a way that people are going to consume and also where your profit centers are going to be? And so all these things are really just… As we’ve invested, as we’ve learned lessons, as we’ve made successes, and as we’ve had failures, how do we stay relevant as a source of trust or thought leadership to the market by just saying, “Here’s what we learned. Here’s what we think is going to happen next. We may be right on some of these things. We know we’re right on these ones because we’ve lost millions of dollars or made millions of dollars doing them. But here’s how you could apply it to yourself and customize it for you.”

It’s just a way to share that and stay relevant and get flowing around to speak at events where I meet important people like you.

Jay: Well, thanks for the compliment. I wish I could fill those shoes better than you make it out to be. Chris, I want to jump into crypto, which is where you say the majority of your attention is at. I know that you’re doing some exciting things in that space, including the World Tokenomic Forum and also Social Enterprise Fund.

Before we jump into that, I want to ask you about an overview of the space. For me as someone from a financial background — I was on Wall Street for many years, and I still work at a hedge fund now — it took me a long time to wrap my head around cryptocurrencies as an investment asset class, so to speak. Early on, I did some research on it, just because I’m a tech geek as well. So I was familiar with it, and I attempted to dabble in it 2012-ish. Then I kind of forgot about it until just recently. So last year, I was doing some research and the fundamental-investor side of me was resisting this crypto-craze that was happening, whereas the tech side of me was very excited about the future. So for listeners that are just seeing this whole hype out there — and you’re deep in the trenches of it — can you paint us a broad strokes picture of what’s going on in the space right now?

Chris: I’d like to. And I would never want to insult the intelligence of your listeners, because I know a lot of them are very sophisticated, and some of this might be old hat. But I do think that there’s one thing that your show is a great platform for and that I’d like to do as I do that, which is just level set people on some of this terminology, because I think one of the biggest challenges right now that all of us face — whether we’re investing, whether we’re entrepreneurs in the space, or anyone in between, regulators, even — is there is a bastardization of a lot of these terms.

So just to level set — again, I would open the conversation up to anyone who wanted to reach out and debate this or maybe take this offline and have a bigger discussion on whether these are right or not — let’s define some things. Let’s define blockchain first. What I hear a lot in the financial press — and I’m sure you do too — is a lot of people right now, current state of market, “Well, bitcoin, blah, blah, blah, but the underlying technology is interesting.” You’re hearing that almost as if they’re all copying each other’s talking points.

Jay: I think I’ve even said that before.

Chris: And I’m not going to say that all of them don’t know what that means, but I think a lot of them are copying that, and they’re being told to say, but I don’t really think they know what it is, if you asked them, “What is blockchain?”

So here’s what it is. Blockchain is a storage medium. Blockchain is a source of what we will call trustless truth. Blockchain is not — this is the important thing — blockchain is not an A.I. It is not a decision-ing tool. And since you’re a technology guy too, it’s not a compute-platform. And I think that’s key because a lot of people, when they say “blockchain” or whatever, they’re asking it, or they’re even pitching ICOs and whitepapers that are saying things that it isn’t. They’re saying it can do things that it doesn’t do. It’s a storage medium. That’s it.

So really, when you hear people saying, “blockchain’s efficacy in certain verticals isn’t valuable because it’s really just a crappier storage medium than what currently exists,” they’re wrong in one way, but they’re right in another way. They’re right if what they’re talking about is just blockchain by itself, slapped behind a firewall and replacing some other on-prem storage system or database solution. But they’re missing the whole point. Because what they don’t understand is they don’t understand what bitcoin is and what cryptocurrency is and what blockchain applications are. So we’ll get to that in a second.

But blockchain applications — so go up a level — blockchain, which is a storage medium… Blockchain applications are applications that turn this storage medium into something that is governed by business logic and rules — smart contracts, things like that. So when you talk about debits and credits and basically a distributed leger technology, you’re tracking debits, credits, and now you’re tracking what would be called tokens or smart contracts, which are containers that are stored, or can be stored, on a blockchain.

Again, just some vernacular. When we talk about currency — your audience is going to get this probably more than anybody else — but it is amazing to me — and I don’t know if you’ve seen this or not — how many people confuse currency with money. There is a fundamental difference. Currency is nothing more than a ledger balance. When we talk about fiat currency, the definition of fiat, as you know, is an arbitrary order or decree. So when we think about US dollars or yen or Singapore dollars or whatever currency we’re talking about that we think is money — because it’s paper, and we call it that — but when we say we believe in fiat currency or we do that, it’s arbitrary. It’s a decree. It could be printed ad nauseam, as we well know, and it’s backed by nothing. So it’s not real. The only thing that makes it real is that there is an army — in our case, the US side — that has a $700-billion-a-year budget that enforces that use of it. But otherwise, it’s basically worthless. It’s just the faith that it’s going to be transacted and accepted is what makes it valuable.

That’s an important thing because, basically, fiat currency is no different than cryptocurrency in one way, which is that it is a ledger balance, and it’s not real. Some of the crypto people get freaked out because when Jamie Dimon — I think he had a whole different angle; we’re not going to get into that. But when people say bitcoin is not real, they’re not lying. They’re also using semantics to enflame and kind of manipulate the markets and to piss people off on the crypto-for-life side and all that. But the reality is that, by the very definition of currency, currency is not real. You can’t invest in ledger balances. So it doesn’t matter whether I’m investing in US dollars… I can’t invest in US dollars any more than I can invest in bitcoin. I can speculate in cryptocurrency. I can speculate in fiat currency. But I can’t actually own a ledger balance. I can speculate that that’s going to go up or down.

So a speculator in crypto is what we call a hodler — someone who is holding. Again, I say this because a lot of the investors in here may have thought they were investing in cryptos. Be very clear, you are speculating, which is why the swings are so high and so rewarding, and they’re going to stay that way. Now, money is a store of value. So gold, silver, all these things that we know are real money, that for thousands of years have been stable… 4,000 years ago, an ounce of gold would buy you a formal men’s suit, and it would also buy you 3,000 loaves of bread. And an ounce of gold today, at whatever spot price is, will pretty much buy you a formal men’s suit and 3,000 loaves of bread. So there is a stability to gold.

Now ultimately, what might and probably will happen — whether it’s bitcoin that does it or not — is we will have a crypto that becomes a reserve digital currency. The question is out as to whether that will be a decentralized one like a bitcoin or one that is manipulated by…a special drawing rights one or some hybrid in between.

But, again, just to level set, I think the state of the market is confusion. You have hype, and you have confusion, which means you’re going to have a spectacular, glorious correction at some point. And there’s going to be people that make more money than has ever been made in the world off of that, and there’s going to be people who sell at the bottom and bought at the top and do whatever dumb investor/speculator has ever done in the history of mankind.

And I think the last piece I would say — and then I’ll take a breath because I know you want to ask a couple of questions or debate that — tokens. There’s a lot of confusion around tokens. And part of that is we call these things ICOs —  initial coin offerings. Really, they should be called “initial token offerings,” because what we’re selling is tokens. And tokens are bartered. Currencies are paid. That’s a big, simplified definition. But tokens were never meant to be used as currency any more than beer. If you come over, and you want to mow my lawn, I could pay my guy in beer the first, second, or third time, maybe, if it’s a favor. And he’ll accept a 12-pack for mowing my lawn. But if he’s going to do that every week, he wants dollars. He wants currency. And even if he accepts beer, what I can’t do is go to the state or the fed government and pay my taxes in beer.

So tokens are this contract way back in English Common Law. It’s an agreement for a value at a future date. It’s like a bearer bond. And so that’s the thing that has regulators and everybody so freaked out. When bitcoin first started, essentially it’s a digital bearer bond. It was so small, no one cared. Well, now it’s not small anymore. And so the reason why regulators and everybody else are there is that bearer bonds were relegated to a very small segment of the current asset class market and hard to move, but now you’ve got this whole new beast to tackle.

And so those are some of the things that I think we’re seeing and that people need to be thinking about as they evaluate these deals.

Jay: Absolutely. Thanks, Chris, to level set. I like that word. For the audience listening in, there’s a ton of free resources out there that you can start researching crypto on your own. There’s just too much to talk about in even a series of podcasts. And I know that we could talk forever on different ones, Chris. But thank you for the intro. I encourage everyone to do their own research. It’s funny because people see their peers jumping in and making all this money. Then they’ll jump in and do the same. And exactly like you said, regardless of what asset class you’re investing, if you don’t know what you’re doing and you just jump in because the guy next to you is doing it, then you’re bound to lose some money at some point.

What I’m actually more curious about is not specific around what coins and this sort of thing, because that’s not really what we do on this show. What I’m curious about is something that you alluded to before. You’ve been through tech 1.0 and tech 2.0. We are middle-ish, early days of blockchain/crypto 1.0, so to speak. And then you mentioned that you are positioned perfectly right now, and because you are able to see the patterns and you’ve been through this cycle before, and now you have knowledge and you have the wherewithal, you’ve set yourself up to take advantage of — and I assume you were alluding, to a certain degree, to what’s happening right now in this space… As someone that maybe not necessarily just wants to invest in the various tokens themselves, someone that wants to look at how is this whole thing going to play out five, ten years from now, where is the big money going to be made? Where are the Facebooks, the 2.0s of this revolution? And how can I get involved in that? Can you give us any sort of—

Chris: Yeah. That’s a good segue. I know you want to talk a little bit a World Tokenomic Forum, so I’ll try and weave this in. The idea is that we’re moving into the token economy. And so we know what a market economy is. The token economy is basically a market economy with digital contracts. That’s the laymen’s version of thinking about it. It’s the next evolution. What does that mean?

That means that now and also, you may have seen Venezuela today announced that they raised $730-some billion in their ICO. Now the point is, regardless of whether that works for them, fails for them, or is just a step in the right direction, what you’re going to see more and more and more is this tokenization, which basically just means a legally enforceable contract for delivery at a future date of a physical asset made digital. What you’re going to see is the tokenization of every real thing.

We’ve already seen this with music. We took something that used to be physical on a record, and then it was on a tape; then it was on a CD, and now it’s a download, and now it’s not even a download; it’s a stream. So none of this should shock us. We’ve been seeing this for several years.

The difference is now what’s happening is the systems of exchange and the mediums of exchange and the business models by which people exchange are being disrupted by a blockchain technology and foundational layer and application layer and then ultimately these consortiums that you’ll see.

So if I was an investor, what I’d realize is that it’s early days, but it’s also not. We’re in the protocol development layer of this kind of…call it blockchain 2.0 or whatever you want to call it. And then we’ll have blockchain 3.0. And so if you think about blockchain 2.0, it’s like, okay, this thing is here to stay. It hasn’t gotten killed. Bitcoin kind of proved that. It’s not going away, and now you’ve got thousands of alt coins and all this stuff. And regardless of how many of them actually last, the cat’s out of the bag.

We’ve gone from a currency system — regardless of how long the central bank system stays intact or whether it disappears, or whether there’s some hybrid in between — we’ve gone from a system now which was the best system we’ve ever had, that was enforced by guns and bombs, to a system that is enforced by code.

And the minute you have a system that could be enforced by code, you ask a couple of different questions. One, how do you secure that? How do you make sure it’s not hacked, because that could be a problem? But then once you’ve solved that, or once you get your head around that, then you start thinking, what opens up? What’s the possibilities of that?

And then you start to think, well, wait. There’s going to be a massive fragmentation phase. Just like when VHS first came out, there was Beta. And there was probably 15 others we never heard of. But before there was a standard, there was this battle to establish the standard. And we could debate whether or not Beta was better or VHS was better — or Apple or PC — the reality was, once there was a global standard, then an application explosion took off. And until there was a global standard, any of the application development that was happening was pretty speculative and highly risky because you didn’t know if you were going to be able to operate it on whatever the standard became.

So I think what’s great about this phase, if we just think about why these cycles have to happen, when you get hype, when you get massive entrance like we have right now into crypto, you get talent. And when talent enters a space, it doesn’t usually leave if that space has a future.

So what’s happening right now is the 40, 50 million, 60 million, $90 million raises that are happening, and all this stuff that’s happening — oversubscribing. What’s happening is it’s affording people the chance and justifying them to enter the space. And so the brighter and the best minds are now entering the space because of the gold rush. Some are going to leave, but, for the most part, once we get that standardization level, a lot of talent is going to stay, even if it means going to work for someone else.

And then, as those things take off and the application layers get built, those people who have been in the game and who have been part of that protocol layer development, will have certain insights and things, and they will go start the application layers.

So I don’t know who’s going to be the Facebook of the blockchain era. I don’t know who’s going to be that. What I do know is that all these internet oligarchs, that have been built on the current internet protocol and that own our identity, need to and will be and must be disrupted or must be part of disrupting themselves. Because they can, quite frankly, disrupt themselves and be a service to humanity and still make money.

But what we’re sitting on now is the opportunity for a more equitable prosperity that is driven by real economics and not debt. And so I think there’s going to be a lot of murkiness until those standards are going to be set. And as those standards get set, then it will be a lot easier, just like it was once AWS and some of these other things happened, to stand up the application layers. And then it will be a battle for attention in the application layer.

If I was investing right now, I’d be looking at infrastructure plays. I’d be looking at what governments need — whether they know they need it or not. I’d be looking at what banks need — whether they know they need it or not. I’d be looking at…

Quite frankly, we’re not talking about thousands of opportunities. We’re talking about a handful of protocol layers that are going to basically create the baseline. So you have NEO as one example on the Asian side. They’re basically the Chinese Ethereum. That’s a protocol layer. You have Ethereum. And so there’s going to be either one or two of those people that kind of become the protocol layer that all these others things get built on. I think the case for those is probably pretty strong. Again, I’m not making any advice, and I’m certainly not qualified to. I’m not. I’m just talking about pragmatics and about how you should be thinking about it.

If you’re reading stuff — call it the Uber of blockchain — you’ve got to remember that there was a Friendster and there was a Myspace, and there was 15 other ones. There was a Digg before there was Facebook. People invested in those, and if they hadn’t, we probably wouldn’t have Facebook today, because there wouldn’t have been enough people mowing down and taking the arrows that then allowed someone to come and execute and take to market. I think that’s part of your contribution as an investor, is when you lose, you’re enabling the next great invention.

Jay: That’s a good way of thinking of it.

Chris: But I think no one wants to hear that when they lose money. But I think at the end of the day, if you’re an investor, you’re not doing this once and done. You’re doing this because this is how you operate, so you have to take a long-term view. And you’ve got to realize that, if you’re in this space actively, you will probably the fund the Myspace of crypto, and you’ll probably fund the name-the-15-companies-that-don’t-exist-anymore of crypto. But it will also give you the foresight to then know when the Facebook has arrived, and you’ll be early on that one, and it won’t matter.

Jay: Right. 100%. I like the way that you’re frame working the outlook. I urge all investors or potential investors in the space to come up with their own framework, do your own research. Don’t listen to all the hype. At the end of the day, it’s your money that’s going in, so you’re responsible for it.

Chris, let’s shift gears slightly and talk about the World Tokenomic Forum. I know this is an exciting, somewhat new project that you’re working on. Tell us what’s that all about.

Chris: Well, it is exciting. It’s kind of like… At a fundamental level, we’re entrepreneurial in our DNA. There’s two ways to get a seat at the table. You can ask to be invited to the existing table, or you can build your own table. Call it the nature of a kid who grew up middle class in a neighborhood out of Trenton, New Jersey, and didn’t have a silver spoon and certainly didn’t have anybody in his family that ran businesses. I just have always said, if I can build a table, I guess that’s what I’ll start with. I didn’t have the connections to get invited to anybody’s table, and I certainly didn’t have the pedigree.

I think what’s interesting right now is that, whether we want to admit that or not, because of the sheer velocity of appreciation of cryptocurrencies at large and the sheer potential they still have ahead of them — because they’re still only somewhere around $5—, $600-billion market cap, collectively — whether we want to admit it or not, a new table is being formed rapidly.

So World Tokenomic Forum addresses that and really is providing a place and space to solve humanities biggest problems through meaningful discourse, competitive innovation, and high-value deal making.

What does that mean? That means that we understand no one ever gets exactly what they want. The central bankers of the world aren’t going to get what they want because it’s already too late. It’s already too far out of the bag. So they’re world as they know it is getting disrupted, and they’re having to adjust. They’re not happy out it, and they’re going to not just willfully walk away. They’re going to do what they need to do to stay in power because that’s what everyone does.

The libertarians, the anarchists, the people that love being anonymous and living on whatever island and acting like Ayn Rand — although I’m a fan of her books — they’re not going to get what they want either, because Atlantis doesn’t hold nine billion people, which is where this globe is heading, and it doesn’t serve humanity in a way where we have to get four billion people off of $2 a day. And we have to get the rest of the people that think they’re broke but living in a middle-class lifestyle funded by debt back to some level of sustainability. There is just bigger fish to fry than our ideology.

So I think what World Tokenomic Forum is creating and stands for is to build bridges and tear down walls between the decentralized and centralized economic institutions and factions to create a new economic order that works for all humanity, honors innovation, and secures sovereignty — both at the individual level as well as the institutional and country level. Get back to a place where, if we had an economic model that’s based on a tokenization of everything real made digital — future contracts, that type of thing — all of sudden, it becomes possible to create real prosperity and real liquidity. That creates, hopefully, investment opportunities, to create new opportunities for human beings, to do things that machines can’t yet do. And then it opens up opportunities for two and half billion people that are unbanked to, all of sudden, be able to, not only consume, but produce and distribute through their mobile phone, which they already have.

When you think about the possibility there, what does it look like for a world that, right now, has the GDP, across of it that it has, and yet 3 billion people of it don’t even participate. What happens when 3 billion people can participate, not just as producers and income earners but consumers. And what does the model need to be? We have the ability to do that.

So World Tokenomic Forum, the big vision is through collaboration and through discourse and healthy debate, to hold the space, to allow these multiple factions to come together, and to try and create a through-line to a better humanity and a better experience and a better economic system for everybody, powered by technology.

What are the initiatives we have — which I know you were alluding to earlier? How do we do that? It’s a membership-driven model. We don’t publicly announce that membership. We don’t sell it on our website. It’s much more like a Davos model in the sense of we hand-select members across four different categories. And we don’t do that to be elitist. We do that to actually be inclusionary and consider people that may not otherwise be considered in the current state of things. And yet, at the same time, we want to leverage the institution and the enterprise leaders because of their bandwidth or scale and their R&D to be able to say, how can we help you identify the emerging technologies you need, that you can’t build or buy, faster? And how do we help the startups of the world find first customers so that they get real traction? Because it’s one thing to raise $50 million. It’s another thing to create $50 million worth of revenue. $50 million raised will, at some point, run out. And $50 million in sustainable revenue that grows creates real utility in the world that allows more things to happen.

So how do we create a funnel and a pragmatic way that’s efficient to theme the investments that we make, as well as the investments that we discover, and then introduce those to those big-brother-big-sister buyers that help them ultimately get to scale, get acquired, or get the capital and the resources they need to grow up and become strong enough on their own. And so that’s the value prop for the members of the World Tokenomic Forum.

For startups, we’ve launched the Sandcastle Startups Challenge, which is happening right now. We were in Singapore. We’ve been all over the world the last six weeks. We’re wrapping up at SXSW in March. On March 15th, we’ll close the applications. We’ve got close to, I think, 400 right now. We’ll probably end up with about 600 or 700 application from startups around the world that are in blockchain technologies, and we are going to whittle that down to 64 teams that fit into one of five categories — cyber security, identity, payments, infrastructure, or social impact. Several fit in multiple, but, basically, they have to fit into at least one, naturally.

And we’ll pick 64 teams, and they will compete in kind of a March Madness-style tournament. And the winning 32 that come out of that first round will come all expenses paid, other than their airfare, but all expenses paid for three days down to our annual summit of members in Grand Cayman May 8th to the 10th. And then they will go head-to-head in a really fun, pitch/Q&A side-by-side, 10-minute-on-10-minute round, and we’ll whittle it down until we get a final four and then a grand champion. The grand champion, right now, is slate to win about a million dollars’ worth of exchange listings and other services and prizes. And the other teams will all win different things as well.

So we’re turning it into a competition, and then we’ll obviously be introducing those 64 teams to the relevant enterprises and governments and things like that where we think they might have value. But ultimately, there will be a winner. And so that’s Sandcastle.

And then the Sandcastle Social Enterprise Fund is where we hold the tokens that are in those companies and then also where we will place investments, when merited, into some of those as a double-down strategy. And then it’s a family office fund, and it’s got zero-limited partners. And so we announced last week that our version of social impact is, the more ROI we make, the more we give. So there’s a tiered structure that got published. But essentially, on the low end, 20% of the carry will go back into social impact enterprises and nonprofits that are creating economic entrepreneurial activity in regions around the world. We’re doing meaningful work in that regard. And then if we hit a billion dollars, we’ll give 40%. So basically, the better the fund does in liquidity and in ROI, the more we give, up to 40% of the carry. So that’s our spin on social impact investing.

Jay: That’s fantastic. You sent me that press release, which I’ll have linked up in the show notes. That’s such a cool initiative, Chris, that you’re working on. And the startup competition is actually extra fascinating to me. It’s almost like a TechCrunch/accelerator, if you will, almost, because you’re actually helping these startups and placing them or connecting them with the relevant industry organizations that they might be able to help or collaborate with in the future, which I think is awesome.

Chris: And they’re helping our enterprise, innovators, and DLT practice teams and VCs. And corporate VCs are loving it too because, again, it becomes another potential curator of deal flow that can be made relevant to them but also look through thousands of deals and try and whittle down some of the best teams and technologies. And so it’s a service on both ends of the value chain.

Jay: That’s awesome. As we look to wrap up here, Chris — it’s been a really awesome and engaging discussion that we’ve had, and thanks so much for all of the stories and knowledge and advice that you’ve dropped. I think that our listeners are going to really, really enjoy this episode.

I just have a last couple of questions. I always ask our seasoned entrepreneurs that come on for a piece of advice for startup founders, young guys and gals that are listening in — maybe specifically to the blockchain/crypto space right now. What piece of advice would you give these people, these young entrepreneurs looking to make their mark right now?

Chris: What I would challenge everybody to do, if you’re an entrepreneur — and if you’re an investor, I’d challenge you to look at this too this way — I would try and understand at the high level that when you take a storage medium that has forever lived behind the firewall in my business and in your business and in everybody else in our industry’s business, and you start to externalize that… You put that storage medium out in public. So you put it outside of your organization where now there’s a shared cost, there’s a thing… What should and what will happen when it’s done right, when it’s architected right, is whatever the blockchain technology is and whatever the efficacy of that is, it will reduce your correspondence time by a factor of 10,000 to 1. So it should drop three orders of magnitude. It should reduce your cost, therefore, at least two orders of magnitude — so 100 to 1.

And if it doesn’t — and I’m looking at an investment or reading a white paper — and I can’t clearly understand how this technology, whatever it is, is going to create two to three orders of magnitude different between my actual hard costs today and my actual correspondence — my time, my people costs — today, then I should not invest. And if I’m an entrepreneur and I’m belong that, I should go back to the drawing board until I have one that does. And here’s why.

Because just in the verticals that we’re doing — and I don’t say this for any other reason; we’re certainly not the only ones — we have technologies that are already doing that. So if you are a startup, what you need to be thinking about is, are we making a two to three order of magnitude different on cost of actual capital going out and time? And if we are, great. Let’s run like hell, and let’s get to market, and let’s do everything we can to get traction because we’ve got something real.

And if we’re not, then what you need to be careful of is getting too excited about your early returns, because somebody will invent one and come right behind you and take everybody away.

Again, as an investor, it’s just prudent. Ask the question — how do you reduce time 10,000 to 1? How do you reduce cost 100 to 1? Show me that, and I’m in. And that would be my only question to any technology that sat down with might and wanted my money.

Jay: That’s awesome. I think that’s really sound advice because a lot of people right now are missing the forest for the woods or whatever that saying is. And you’re absolutely right. The bottom line is it has to be impactful enough. Otherwise, the space is just too big, and there’s too many smart people in it right now that you’re just going to get lost.

Chris: I’ve got one more that’s a little bit more inspirational than that for the startup people. It’s the same way of saying something different. You guys can raise money right now — at least for however much longer this window lasts — easier than anybody else could in history. And so there’s two ways you can look at that. You can look at that as let’s go do t; that’s cool. Or you can go, “Wait a minute. What problem am I actually trying to solve?” Because I would try and influence startups or the people in that game right now listening to this, to say, “Just because I can raise the capital, what should I actually raise it for?”

You’ve never had a better chance to solve a real problem than you do right now. So if you’re going to go raise $50 million or a $100 million from people, please go and try to do the unsolvable. Please attempt. Please attempt. Go down with a glorious sword through your belly, if you need to, but please at least attempt to make a big effin’ difference. Because you’re going to look back at some point at this time in your life and in your career, and you’re going to either have regret or you’re going to have clarity and complete fulfillment, regardless of the outcome. And the only difference is going to be whether you played small or not and whether you took the easy road.

I’m going to encourage you that the joy is in the doing. It is not in the getting.

Jay: Yeah. That’s a great final little quote there. I think all entrepreneurs will understand that because it’s really the only thing that got you up each and every day. It’s not the amount in your bank account or this sort of thing. Once you’ve achieved your base level of hierarchy of needs, you need something bigger that drives you every day.

Chris, it’s been awesome catching up with you. What’s the best place that people can find you and follow you and learn a little bit more about what you’re working on?

Chris: Absolutely. @ChrisJSnook on all things social is a good place. LinkedIn and Twitter are preferred. Obviously, Telegram and all those things are out there too. And WorldTokenomicForum.com for anyone who is interested in the Sandcastle Startup Challenge or keeping in touch with us there. And then Launch Haus is our holding company, but you can put that in the show notes. It’s been a pleasure, man. I’m super honored. I think you’ve got an amazing platform. I really honored to have been able to be part of it. And thanks, everybody, for listening for 45 minutes or whatever it’s been.

Jay: Hey, thanks for the kind words, man. Appreciate it and looking forward to catching up soon, man.

Chris: Absolutely. Take care.

Jay: Alright. Take care.