Why Resy Founder is Building in Crypto | Ben & Li

Transcript

this episode is brought to you by toku if you are planning to launch a token already have a live token are granting employees or contractors investing token Awards or just trying to figure out how to take care of taxable token events for your team from easy to use token Grant award templates through tracking vesting to managing tax withholdings make it simple today with toku all right everyone welcome back to another episode of Empire we have Lee uh from variant joining us once again been on the show again then we have Ben lenthal from Blackbird uh First Time guest here Ben and Lee welcome to the show thanks yeah thanks so much for having us yeah uh Ben is funny so I was uh talking to my wife this morning and I

was like yeah this guy Ben lenthal is coming on the Pod we started resi and eer and she's like can he get us a reservation at at uh at teresi so I'm wondering my first question to you is how many times does that happen to you yeah quite a lot I mean one way to think about my career is I've just been optimized for access to uh the best restaurants the whole way through sounds pretty fun that sounds great um well guys I think the the I want I think the best place to start here is actually not with Blackbird um so Ben for for folks who don't know started uh both resi and eer and is now uh recently raised I think it was 24 million from some folks including Lee and variant to go build black Blackbird to go help the

restaurant industry move forward but before getting into that um I'd love to just hear both of your takes on like what has happened in consumer not even consumer crypto but just consumer the last several years because when I think about uh like investing and like what venture has allocated to B2B SAS like B2B SAS all the way through and now it's starting to be AI um and Lee you've been investing in in consumer for a while I think since 2015 or 2016 I'd love to it feels like to me as this Outsider that nothing really that interesting has actually happened in consumer but I'd love to get your take on what the last several years of consumer have really looked like sure um yeah I think one pretty prevalent point of view is that consumer

consumer software at least has kind of reached the end of the road like kind of the end of civilization if you know that book we're at the end of civilization for Consumer software startups because we have um a convergence of different factors like a we have all the scaled Network effects companies that have reached you know world scale and so they have the most powerful Network effects that you could you could have by including basically the entire world's population on them on those platforms and so it's really difficult for startups to be able to compete if they're building a new network um and secondly I I think the other factor is that we also haven't gotten a new

Computing platform or a new medium in some time um and so you could sort of trace the history of consumer startup in a and map it against different Computing platforms from the internet to then high-speed um internet on desktop to then mobile to then Broadband mobile and each of them corresponds to like a different set of new startups that were able to be successful against the incumbents and that new platform shift just hasn't happened for a while and and for a time being like these these new platform shifts happen in quick succession and sort of trained us to think oh there's like new opportunities for startups all the time because for

the past um probably 20 years or so there were until you know now we've reached the end of the road so to speak yeah and so um I think consumer is yeah potentially in this kind of like stasis where if you look back and think about what are all the major consumer companies that we've gotten in the last decade since like 2013 um you would be hardpressed to like think of any pure software businesses that rely on network effects I think snap was really the last one Snapchat and then we got Tik Tock obviously but Tik Tok is kind of an aberration where it was already sort of in existence in

China and they poured a billion dollars literally a billion dollars into user acquisition in the US to jump that Network and and that's something that a startup just can't replicate um so yeah on the pure consumer software side um a lot of people would say like there's just no innovation left like it's all incremental like everything that we're seeing is really incremental uh and I would pause it and I think the reason why Ben and I are in crypto is because we think crypto is actually the new Computing platform on which you could build new innovations that incumbents can't just co-opt or can't graft onto their existing networks um and I think crypto we could talk

about like all of the new possibilities that it offers for Consumer Builders and for Consumer applications um but yeah I think that's where we are we've gotten a lot of new feature innovation in the past few years in consumer software we've gotten new features like live audio and and new ways to connect with friends but we haven't really we haven't seen that feature Innovation play out and actually create massive Standalone businesses that have been successful so why don't we go there Ben or Lee if you want to talk about how crypto unlocks uh new possibilities um and the skeptic listener might say well you know consumer is really rooted on kind of very primitive kind of psychological

kind of needs and behaviors and you know why is crypto all of a sudden going to change that fundamental route if you will um but yeah I'm curious to get both of your's perspective on this new unlock if you will I'm happy to take a step and then yeah Ben feel free to chime in so uh I think like the the fundamental new thing that we think crypto offers is ownership it's user ownership in the digital realm um you know prior to crypto you couldn't actually own things digitally you could sort of semi- own things in a platform defined way in in like a company's database they could say like you own some number of points or whatever items

in a game but you didn't have this um kind of neutral platform that defined property rights for every user for every asset and so we think that's the that's the SE what of crypto and our thesis as a firm at variant is that we invest in products and networks that make ownership a keystone of the user experience so ownership as a keystone of the user experience what does that mean um that means products and networks where ownership manifests in different ways and transform the user experience and offer new experiences to users from what we've seen before um the range of what that looks like can vary on the

lighter side of the spectrum I think products like um Twitter's profile picture feature where you can upload your nft as a as a profile picture and use that to sort of display your identity that's kind of lightly um using ownership as a as an element of the product experience but for further on that spectrum of How Deeply ownership can shape the user experience you get to products like um I think you get to products like Blackbird where your actual loyalty points your your loyalty card with a certain Merchant with a restaurant is represented on chain and down the line it could be composable potentially with other applications with

um other Merchants as well um and then I think an instantiation of this idea that really helps to paint the picture um is like entirely new social networks that are platform L that out exist outside of the confines of any any given closed platform where the social network itself is predicated on ownership shared ownership so examples of this might be like FWB um where all the users all the members are token holders of FWB or other Dows or nft communities or token communities where um the community itself doesn't just exist on one single

platform it it sort of um manifests in this platform way and so I think that is like the furthest expression of what it means for ownership to be a keystone of the user experience um but in general like yeah zooming out we think that's the so what that crypto offers and obviously the design space is super broad for Translating that into an actual product and we're really excited to see builders use ownership in a way to actually satisfy different human needs um ranging from like delivering community and a sense of belonging through ownership to helping people earn through ownership I think that's that's been the pillar that most products have

relied on so far in crypto helping people to speculate using ownership and and sort of fulfill financial needs but we think we can go far beyond that and deliver on other human needs through ownership yeah yeah I I think I mean I think that's spot on and I to think to take a half step back and chime in a little bit on the question of kind of innovation and then how that ties to crypto I think to me one observation is that uh generally you know you see exciting moments of innovation happen certainly in consumer when entrepreneurs and engineers and creative people have new toys to play with and I think one answer to why we sort of feel like maybe

there hasn't been a ton of um Innovation is that there really haven't been that many new toys to play with and the toys that exist are these really large scale things um you know like the Google the apparatus of Google isn't arguably a toy that Google has to play with and can drive tons of kind of creativity and consumer Innovation but it's at the level of Google uh you know similar similar Dynamics at snap meta Twitter um Etc but what I think then is exciting about crypto is it is actually a new toy um and it is something that changes how we think about a lot of things um I think

ownership is for sure Central to uh to what sort of to how we think about the evolution of of consumer products that are powered by crypto I think about it as ownership and I and to me and Le and I have discussed this a little I think ownership is is a spectrum um and it's important to understand what kind of ownership we're talking about in the context of any particular consumer application in some cases and obviously there's real headwinds in the US around this this kind of ownership but in some cases we're talking about sort of actual Equity style ownership which is clearly problematic in a lot of ways

for the foreseeable future uh most notably it's just not going to be allowed to happen in the US but also ownership to me is control empowerment um the ability to drive outcomes um and so I think in that context what's to come and what's happening now is super exciting because um because you are sort of seeing a whole range of products emerge now where these ideas are Central to the consumer experience um and and they're driving tons and tons of excitement and growth and adoption I mean certainly how we think about that at Blackbird is around you know I think two well I'll say the biggest thing is

ownership of your identity um which is like arguably sort of a little bit to the side a skew of the kind of ownership we're talking about if in some you know we're not talking about ownership or Blackbird but but I do think it's even broader because we're saying at Blackbird like when you tap tap in using one of our NFC chips you're turning over information to the restaurant that's information you own you know I say this over and over again but the idea that before Blackbird as a consumer you didn't own your own dining history is insanity you can't walk into a restaurant and tell them where you've been unless you want to hand them a slip of paper right so like it's clearly that's your information it's clearly an example of of ownership um um and for us

part of the Blackbird uh opportunity is Shifting the Dynamics and giving in this case consumers uh a little bit more control control I think of course obviously as we go on like when we talk about ownership and and so much as it being about control of outcomes you know as we see the ecosystem around fly developing as we see the ecosystem around the platform overall developing the idea that it becomes open and permission L and that a group of restaurants can can decide to come together and design their own uh loyalty offerings or entire third party that we never saw cing decides to use fly as a means of of attracting customers that's incredibly exciting but

I think um that's the key thing it's it's a new toy and that's why everyone's having so much fun with it and and I the last thing I'll say and I'll stop talking for a second is just I also think you're sort of seeing some of the some of the Insight around around what's happening in the crypto Community I think it's actually trickling out to other parts of the ecosystem sort of let's in for the sake of Simplicity say the sort of web two um ecosystem of Technology because you're definitely seeing some of the sort of ideas that are fundamental to a web3 philosophy showing up in non web3 contexts yeah is it fair I'm curious um how you think

about where the state of crypto is and why you decide to kind of come in now um a lot of times it's been a struggle we talk about poor user experience in terms of onboarding and ease of use I mean the internet had this problem too at the beginning so like you know when you think about going and building Blackbird versus maybe adding features to something like resi that already exists you could layer on nfts you have distribution already why kind of go through this exercise and particularly why now I'm curious why why you think right now is a good moment um where still so many people are reluctant and don't want to go through key management or you know on boarding and jumping

through a lot of Hoops yeah I mean I think we know now enough about crypto to be dangerous but it's still very very early days which makes it exciting uh you know we don't have to make some of the mistakes that the very very early pioneers made you know five and even 10 years ago but um it's still brand new to 99% of people who interact with it so that makes it really exciting yeah I would also point out for for Blackbird what's really cool if you try out the experience is that there's like different levels of um onboarding that you can do as a user you don't people don't get thrown in the deep end there's a progressive onboarding

experience that they can go through that for I think probably some users don't even realize that there's crypto under the hood I I signed up I'm I'm I've got the app here I there's no crypto aspect there's no exactly yeah yeah so I think like for the first time ever um and this probably just happened in the last year or so like infrastructure has gotten to the point where we can abstract things such that crypto is really just this enabling technology it's not the reason why people are downloading an application and trying it and using it it is it is an enabler but the reason they're there is something else it's it's for the restaurant it's for their loyalty to collect these loyalty points or whatever

um and I often say like crypto in consumer crypto crypto should be the how it's not the why and I think Blackbird is an example of this and and I think it's really powerful now that that is newly possible for application developers so if I'm if I'm tying together what both of you guys are saying here it sounds like kind of where we're at today 2023 the last seven years in consumer there was wasn't really too much that happened because we had kind of reached this like apex of the network effects and all these big social platforms already had billions of users and it was really tough to compete against them they already were like almost maxed out their Network effects and it was very very very tough to compete with them um and now today crypto unlocks this kind of new

competition right Lee I've heard you talk about new users new Computing platforms and new business models um Ben when you look at Blackbird I mean s asked that question to kind of tee this conversation up about like why crypto but I'd love maybe we could go a little deeper into Blackbird like what is the actual problem that you're solving maybe not for consumers right now but actually for for the restaurant industry I'd be very curious to hear that we think restaurants need a new set of identity rails we think restaurants have no good ways of connecting with their customers and they don't know how to think about retention acquisition engagement um the sort of fundamental of actually customer acquisition in any other business context and it's one of

the things that keeps restaurant subscale and and so we think this is the opportunity is to is to think about connectivity between consumers and restaurants in an entirely New Way such that such that the average consumer is connecting much more often with the average restaurant and over time uh restaurants become much better at understanding who their customers are making sure that the best ones keep coming back um that's the fundamental thing that we're doing as as we build that and it unlocks opportunities around on and around those rails I think it's going to be incredibly exciting but that's how to think about fundamentally what we're doing so why couldn't resi

build this like why you founded resi why couldn't resi do this just with web two rails um I think resi could do some of this I think resi actually does do a version of this I think our observation is you know there's a new opportunity you know I've always said like the technology stack of restaurants it has to be uh agile and it has to be sort of customizable so I think you're going to see lots of restaurants layering Blackbird on top of resi um you know I think first of all resi is driven is keyed off of a reservation so there's some limits to how reservations can ultimately sort of inform connectivity

um but also you know I think resi's a a larger Scale company now thinking about other larger scale um near-term opportunities so hopefully we can work with them to help them think about you know connectivity and loyalty so uh we've been talking about a lot of abstract stuff uh let's just walk through the user experience like what do a consumer see and do when they sign up for blackb is what I'm Dy to know so by large the first time a consumer interacts with Blackbird it's at a restaurant you're going to see one of our NFC chips you're going to tap it and we're going to issue you a membership card at that restaurant on the Fly um it is an nft we don't make particularly a

big deal of that because the consumer at that point frankly doesn't care but the experience is you tap in um you get a membership at that restaurant and now you're directly connected with the restaurant you can message them through our platform they know who you are um and now uh as time goes on you know various things happen by by virtue by by the by virtue of the fact that you have this this connection with restaurant um you're going to continue to explore restaurants you're going to continue to tap in and in the Blackbird consumer app you kind of develop a a wallet worth of membership cards and it then becomes incumbent Upon Us Blackbird to make sure you're surfacing and seeing the right

cards at the right time so that um you know Discovery becomes magical right like I don't think I don't think that you as a consumer need to have an unlimited number of choices I think as a consumer the right way to pick a restaurant is to understand um okay where am I where are the interesting opportunities and which restaurant wants to see me the most um and so that's sort of how you think how you should think about it as a consumer is it's a platform to unlock magic as you explore the world of restaurants yeah I've said before nfts are like the perfect cookie how do you think about privacy in this identity unlock a lot of people might be sensitive to that certain jurisdictions

like Europe might be sensitive to that so yeah so um this all comes down to how we think about architecture and how we think about what goes where uh what's on chain what's not on chain uh where onchain is it so we've we think we've come up up with um an architecture that allows us to keep core pii uh offchain um but represent the activity of the platform down to the individual check-in onchain so that um it can be a high high signal high value high

integrity data set frankly uh Ledger of activity if you will in terms of the restaurant industry but there's no question in order for Blackbird to be to scale and I think this applies to any broad consumer platform uh P can't be on chain that's that's that is maybe a pipe dream of an earlier sort of moment in time for crypto but there's no way that works and walk us through the value ad for the restaurants it's this sort of becomes their CRM and some capacity customer acquisition costs like what is the and what what kind of receptivity have you been getting what what kind of restaurants are on boarded

now yeah I you could think about it as sort of a passive CRM meaning it's a CRM that builds without the restaurant having to do much by way of maintaining it you know the way crms work in a restaurant right now is somebody makes a reservation uh they they show up in your in your CRM in a resi or an open table and then in order to sort of contextualize that guess you have to start adding information to the to the guest profile right um and restaurants good restaurants tend to add things like what they like to eat or you know what's their spouse's name or do they like table 23 so that's all well and good in an extremely high-touch Hospitality context but our perspective is the

better way to think about CRM and restaurants is to kind of do the work for the restaurant so when we say passive we mean that every time somebody checks in whether that person's in your database or or not uh and assuming they've opted into sharing obviously you get first name last name email phone number Home zip code and birthday uh and dining history right so you've got a ton of information right out of the gate as a restaurant to understand who that guest is um that's really the core of the value problem so that instead of this being this very very bespoke labor intensive process of understanding who your guests are we're essentially giving you that information on the Fly

um the reception's been really great so far it's been really exciting you know loyalty is a new muscle for restaurants um not for Starbucks not for sweet green you know not for pfchangs but for the average Neighborhood Restaurant loyalty is a new muscle so you know there's certainly been a lot of collaboration a lot of sort of um a lot of a dialogue that Blackbird engage that has with the restaurant to make sure that the implementation goes well um so we're we're we're very very Hands-On at this stage of our existence existence and at this stage of um uh where the industry is but and we obviously expect that to be we expect over time restaurants to sort of pick up some of these things on

their own but but the reception's been great um and I think restaurants really excited about what they're seeing it unlock are they skeptical of you know getting insights into their competitors you know there two pizza chains all of a sudden you have you see the end of of the user well you can understand if he's going to another Pizza chain across the street and then there's like price Wars and all this kind of stuff like is that something that is possible I mean the answer is sometimes yes but we tell restaurants that's an absurd thing to be worried about you know they're going to go to the pizza place across the street whether you like it or not you either win them over or you don't uh and it doesn't M it's not going to be about who

has you know more information on their screen it's GNA be about where is the better experience where does that customer get more love and the the Loyalty point system how does it actually work is it transferable is it um you know different programs and um so every time you every time you engage with Blackbird as a user as a consumer you earn points uh and those points become redeemable for things at restaurants that's the sort of core the core of it um restaurants of course have an opportunity to configure programming so that you know if they want to send you a welcome cocktail on the third visit that's also you know something that we

support from a sort of configuration standpoint but um as time as we're learning more and more I would say our our belief increasingly is that you know the the ecosystem of points the earn and burn dynamics of the points um is what's going to be at the core of the um rewards experience and I guess last question on this is um these points so of course if if you have Starbucks you know that you can use the points within Starbucks yeah what you're saying now is you have these Blackboard points that if you're going to other coffee shops those points are transferable and kind of universal which is always a drawback of web to loyalty programs is that they're very much constrained to the the the partners that

they decide and now that is Shifting over to the consumer and you have much more consumer preference yeah I think the rest I think in fact the independent restaurant industry needs the scale of the whole the whole population of restaurants to make those points compelling to make them actually valuable to make them actually a a currency to acquire customers yeah I don't think any restaurant could do points on their own I want to perhaps get your thoughts on as a builder coming into the space now what are some of the things that you've observed um that are kind of tradeoffs or current like limitations that you can't do um you know for everyone that you know maybe an infrastructure Builder might be thinking

about these challenges but you're sitting on top of more of a consumer layer which the criticism has been we've over invested in infrastructure and underinvested in consumer applications I think that might be shifting but I'm curious the challenges that you've encountered now that you're building in web 3 um I I think it's be the challenge it's not CH I think about it as an opportunity but the circumstance is that um the infrastructure is in its early in its early days I mean a lot of the technology a lot of the stack that we're building that we're putting together in order to make Blackbird work you know when in a web 2 context when resi

was when resi was being built um almost 10 years ago now like the the things in that technology stack were like AWS and twillo and srid and really mature big infrastructure providers um now the infrastructure partners that we have are also you know series a stage series B stage startups so it's just it's just a lot newer you know there's just sort of like there's just sort of like you know it's a bunch of it's it's a it's a bunch of upstarts all doing the thing together which to me is an opportunity like our guys at privy um you know who are who are helping us with

wallet infrastructure I talk to Henry all the time like he's going you know we're comparing notes not just on how should this thing be built but also you know we're comparing notes on fundraising we're comparing notes on you know how to think about building companies and and I think that's really exciting I think that's an opportunity it allows us to be much closer to our infrastructure Partners to have the kinds of relationships with infrastructure partners that are are very important and and frankly impossible when you think about you know some of the very large scale infrastructure components uh in a web two world this episode is brought to you by toku toku makes implementing Global token compensation and incentive Awards simple with toku you get unmatched tax

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attention from regulators and governments toku makes this simple for leading teams across the space protocol Labs dydx Foundation Mina Foundation hyera nosis safe getcoin and a lot more reach out to toku at to.com ire or click the link in the description Lee do you get more excited about investing in the front end of consumer or kind of the back end like these tools like privie well we invest in the full range of it so variant invests in the full stack of crypto even even down to lowlevel infrastructure and new layer one so um yeah all all of it everything yeah but

personally I mean as someone who spent my entire career in consumer startups I used to be a consumer product manager before I became an investor and I was building apps in the early App Store days um I have a soft spot for the application layer and I think it's yeah it's just really fun to spend time there have you thought much about what what sansy and Ben were just talking about like could could you see loyalty being this kind of quotes around this killer use case for crypto um definitely so I I think a bit of context is like when I first met Ben um uh yeah I I kind of had this prepared mind because 10 years ago I was working on this Universal loyalty program um

through an app that was based in Silicon Valley a startup that I was working at called shopkick shopkick was building a universal loyalty program for retailers like physical Nationwide retailers like Macy's and Best Buy and the idea was we could unite them all under one sort of umbrella loyalty program and create a network that would be more powerful than any individual retailer it's like you know the the sum is greater than the parts sort of thing um and so we introduced our own loyalty program called Kicks we were trying to go to all these retailers sign Partnerships get them to adop this program and we had this mobile app that would track users location and actually detect them inside

of the store um to reward them with kicks whenever they went to a partner retailer so this was kind of like black bird but in a different industry without the crypto part in like 2013 back when location detection was not all that accurate and people's cell signals were not that good um so we had a lot of obstacles um but you know that priming was there in my mind where I thought there was this potential to create a more Universal loyalty program um and kind of enable like users to get rewarded for their holistic Behavior not just their behavior at one particular Merchant or one particular location um that was one element that made me

really excited when I met Blackbird the second element um that I had in my prepared mind was you know over the time that i' had been an investor um I started investing in consumer in 2016 at andreon um and initially spent four years as a web 2 investor before I started investing in crypto and during that entire time that I had been investing in consumer I recognized that there were a lot of businesses a lot of networks that should exist that couldn't really exist because of a fundamental business model challenge or challenge with scaling the network like the cold start problem was too difficult or kind

of insurmountable unless you know you had a billion dollar injection from from um bite bite dance or something like that and so there were like a whole class of networks that I felt like should exist in the world they would create a lot of value for users but they just couldn't get off the ground because they didn't have the resources or maybe they didn't have the right business model to make that Network work at scale and one one class of these networks I always thought was local networks like local local Discovery local social networks anything that needed hyper local density in order for this network to actually have utility for users and local networks are notoriously difficult to start because you need so much density for this thing to have any value

and so you need to do user acquisition but very targeted and you need to basically blanket you know a certain density um in order to to jump start this app um and it was just really Capital intensive to do that and then once you did manage to maybe scale a local network like for instance for square then the business model incentives you had at scale kind of diverge with your user interests where the use the the business model was usually based on advertising and the merchants that are able to spend a lot of budget on ad advertising are not really the merchants that you want to discover as a user so um like all of these problems were kind of swirling in my mind and I was thinking

about like how could crypto be leveraged to solve this issue of jump starting and monetizing a local network in a different way um and so anyways all of those factors combined made me really interested in Blackbird and I've also forgotten your initial question that led me here well I guess uh I want to you know some of listeners are not crypto natives and our skeptic so I want to play devil's advocate here like why might not why why might this not work often times everyone thinks that we should decentralize everything and the reality is there's very few use cases that should be decentralized like transferring large

sums of money and custody a non-sovereign store value is highly valuable um but consumer I've always felt like in 2017 said let's decentralize Airbnb in Uber and the reality is well that doesn't so far it's kind of nice to have a centralized entity that you can call customer support if things go wrong and you know we get excited about this technology um but I think in consumer not all things probably should be in a web like at least now or ever so I'm yeah I guess I'm just kind of curious to get that take and like resi could do this right you and then the

user because what you're saying is the user acquisition right now people might not even care that they're using crypto and resi is like a independent layer hovering above all these restaurants it is kind of a you're trusting resi and the same way that you're trusting block producers to like settle your data and store it it's still a trust assumption so at the end of the day a skeptic might say I don't really understand why this needs to be in web 3 like just go home you know just pack up your and go you sound like somebody who should work at a very very large company oh well I've been a cryptonator since 2012 but I I just I can hold two different conflicting thoughts my like I'm just a skeptic or playing that role in this podcast I

guess well my rebuttal we're both ready to jump down s let's go you know my rebuttal to that is like note that when I said what interests me about crypto and its intersection with consumer I didn't say decentralization I said ownership which is a different thing and decentralization decentralization is important at the Bas layer to enable that ownership to even have value for people to view what they're owning as legitimate but at the application layer I don't think that the value proposition is decentralization of governance or control or things like that I think it's

ownership it's digital ownership meaning ownership of assets that are valuable to the US sir um so that's my response I'll just I think I had another thought but I for well Ben I think wants to say something but you could big smile coming through Ben I want to hand it over to you because you could own I guess I guess people what I'm trying to say is you users are not perhaps very sophisticated on understanding this Nuance of what ownership means look I have um an answer for you that might not be very satisfying but I think you know the idea of Entrepreneurship is you do things that other people could do but you execute

better and you think about things more creatively and you sort of find ways to create magical products that's what happens when when when startups are successful that's sort of what you're seeing ultimately and so uh a lot of companies could do this toast could do this they've tried uh resi could do this Open Table could do this um uh you know it's about a particular feel for the opportunity and either we'll get it right or we won't you know um but I don't think I don't think your question is with respect a particularly good one because I think you always are sort of looking at when you're looking at when you're staring at an innovation opportunity there's always going to be

incumbents who could be doing it um but it turns out they don't you know and it turns out um maybe we out execute them you know I think there's no question that there is a very high degree of difficulty to what we're doing that's the nature of um that's the nature of the of of a startup um we have to out execute everyone we have to out execute our upstart competitors we have to out execute resi we have to out execute toast but um but we see a path and that's why we're here um and I think that there is a Tailwind provided by web 3 and crypto some of it is an infrastructure Tailwind in so much as some of these things are cheaper to build and will go faster faster thanks

to the blockchain like the various you know ledgering services that we need to make this work some of it is about empowering consumers uh some of it about is just I think to go back to something we started with just the excitement of something new um and you know we'll see we'll find out do those things add up to um to success or are we ultimately going to be you know some really good thought starters thought starter sort of fod for for larger companies to figure out some stuff time what up how much um is payments a part of the thesis here which is you could use a stable coin and and that is frictionless like even just

splitting the bill like certain solutions that are high friction points to check out and if you roll it in we're very very bullish on what um what opportunities we have in payments for sure can we can we talk about the fly token Ben can you walk us through that decision and Lee I also want to I don't know if you're you you're able to share the progressive ownership piece that hasn't dropped yet but maybe we can tie these two conversations together um what what should we talk about specifically on fly you guys didn't have to do a token you didn't have to do like fly token um I'd be curious like why you're doing a token and then also just um like how you think about I don't know doing a token in the right way because a lot of people have

done it I'd say in the not right way we talk about tokenomics and doing it the right way on a literally a daily basis it is uh very hard and and and we obviously believe it's very very important to get it right um I think that the real answer to be honest is that it future proofs what we're doing um I think that in this regulatory environment fly looks a lot like good oldfashioned loyalty points um and we'll have to to see how that works as time goes on but I think at a minimum what we are going to be able to do with it is open it up and make it permissionless

and make it so that anyone can come in and use it um it's in it's incumbent upon us to create a ton of utility and a ton of value uh in the fly ecosystem and that involves us being thoughtful about you know Redemption and and sort of spending power on platform and third part Partners we bring into the ecosystem um but once we do those things and it's valuable you know it's it's if you want to go and use Mr Point mxm points uh as a way of driving consumer Behavior you got to go and make a deal with AMX you got to go buy those point you got to go buy five billion points from AMX you get to you're Delta

Airlines and you got to go buy five billion points right so we are very excited about a future state ofly where you can just do that you can buy the points um on some version of an open market you can set up your own program um you know we're also going to explore over time what ownership means in the context of fly what controls what levers um does it make sense for us to uh essentially turn over to token holders um but I think I think one one sort of characteristic of the crypto ecosystem frankly is um I think a lot of a lot of crypto natives

tend to be focused on the sort of Here and Now opportunity like it's all about like you know we have people who are harvesting fly to get the absolute maximum number of fly points because they're waiting for our Ico that Ico ain't coming anytime soon right but um you know we got to be on a little bit of a long we're on a longer Road here than maybe you know some of the some of the previous generation of token projects were um but that's how we're thinking about it I mean we're going to be very patient we're focusing on utility and value and it's a token because it future proofs the project will you be able to take off platform

yeah I was gonna ask that um the answer is someday yes uh but also not any day soon today the only the you can only earn the token actually we're burning we're in uh a very early stage test for burning points you can redeem points at uh if you're in New York at antons and at U Nats on Bank you can redeem points for Desserts and Drinks okay so it's a sort of a close that up to to another 10 or so restaurants uh so it's a closed economy uh because the challenge uh a lot of projects I've stumbled upon is um like stripping or trying to push away the speculative use use cases of of a token

where you might prop up the the price of fly might just go up the Wazoo and then that really hurts the consumer experience but sounds like that's not an issue for you guys because it's closed it's closed for the time being you know we're discussing you know opening it up and making it tradable uh you know do we basically dock you half of your fly if you if you take it out into the open market you know do we is there is there a model where we can create the right sort of balance of incentives and disincentives to make sure that the price stays where we needed to but we're in dis you know to I want we are we want to be very transparent about how this is developing these are these are the daily

conversations here and we haven't made any decisions about what it's going to look like yeah I guess before we transition in your choice of Building on Base um on this point alone when you think about ownership and the is it is the nft like I'm trying to think of the attack vectors because crypto is a very adversarial environment anything that could be gained there's constantly people that are trying to you know out smart you if you will and uh could you transfer the nft to other people um is it non-transferable and how do you think about kind of potentially this attack Vector where people might yeah um I don't think we've said this publicly yet but our plan on this around this

question is uh you're going to have two black br wallets you're going to have a wallet uh for your nfts and you're not going to have much control about what goes in and out of that wallet we're going to sort of run that for you and the smart contract is not going to allow you to take those out of the Blackbird ecosystem and then things like fly uh and perhaps someday a stablecoin will be in a separate wallet where you have a lot more control um so those nfts uh I hate to disappoint some people who are excited about trading them uh those nfts for the foreseeable future are are going to be pretty locked we don't think I guess we don't think there's two things one is uh we

think the pii problems there are way way way too um substantial to sort of make those things tradable and two is we don't think restaurants are there in terms of identities being tradeable this is something that Lee and I have talked about several times because in in I think I don't want to put words in your mouth Le but I think in a in a sort of pure in a pure web three sense there is there is a case to be made for making them transferable but um for us so far practically speaking we don't we don't see a path Lee what do you think you also agree um yeah I actually have come to sort of agree with that

approach yeah I I I think IL liquidity can be a feature not a bug yeah so yeah arguably a lot of the negative outcomes we've seen in the past few years in terms of applications that temporarily had product Market fit or at least temporarily grew a lot and then crashed subsequently where due to having too much liquidity in the system so I actually think constraining that can be really healthy Ben do you um do you think of Blackboard as more of a restaurant app or a check-in app where you can get rewards like I could I could see you checking in at hotels or gyms or salons or music festivals or your favorite

artists like how how do you how do you think about the Blackbird in three or five or seven years from now um we're focusing on restaurants for now for sure I think the vertical focus makes a lot of sense for us but who knows you know I mean certainly if we get this right and uh we figure it out in our restaurants there's a ton of other categories we can go and explore yeah awesome um maybe we can wrap with one last question for you Lee which is uh you kind of you and varant kind of planted your flag in the consumer crypto thesis um and have been at that for for a couple of years I'd say there's a lot of skepticism in the consumer crypto area right now but it's start you're starting to see the friend Tech or Blackbird and starting to see these

small things kind of pop up um what are you most optimistic about in consumer crypto as we look into 2024 I don't think people have been skeptical about consumer crypto I think if anything it's been opposite where people are really optimistic about it and keep hoping and waiting for something to work and really want it to succeed because ultimately I think everyone in crypto acknowledges that we need applications to actually be successful for any of this to take off um so that sort of addresses the the framing of that question but to your actual question itself um what am I excited about I'm really excited about Builders just treating crypto as the enabling

technology and not the primary reason for someone to use something so going back to that phrase of crypto should be the how it's not the why um I'm really yeah I I would be really excited to meet more Founders building with that philosophy in mind treating crypto as the how not treating it as the why and using crypto to improve on certain categories or use cases where is a real real human need Beyond speculation um so yeah that's I think uh sufficiently high level as to Encompass everything well the beauty about this is that you you can you can only farm so

much right because you can only go to so many restaurants I mean you could overeat but that's not going to happen so unlike yield farming there's a human limitation one would hope you'd be surprised you'd be guys actually maybe as as we wrap up Ben what's like the craziest thing that you saw on resi whether it's like from a user perspective from restaurants like I'm just kind of curious I mean there's a lot of crazy stuff that goes on I'll give you two uh one is just how well it's all about people how emotional people are about restaurants you just can't you don't you can't underestimate how deeply

people feel about restaurants both in terms of how they're treated and in terms of access the the the the number one this is a like a f inside of resi we there's it's no longer um open because I think they've changed it but the Tiffany bluebox Cafe um on 57th Street was a pretty early resi customer and every day they released their tables I think it was at noon and this was before the restaurant bots that are now running things took over um PE they would release their

tables and like at 12:01 the emails would start coming from people who did not get a table at the Blue Cafe and they were so angry I mean just beside themselves with like anger and sadness and confusion like how can you not be letting me into the blue box cafe I mean we never we had never seen anything did you ever think about making it a market because so I brought up theresia at the very top of this like I it's actually real we have friends coming in from Chicago they want to eat it either theresia or Carbone and they're like can we just buy a

reservation or something so I found this app called appointment Trader I'm pretty sure it's a scam um but like I was thinking like why doesn't resi just have a native marketplace where I could someone could sell me the reservation for a couple hundred bucks or something you ever doing that you know in terms of the history of resi this is resi 1.0 we were just we were selling premium reservations I didn't know that and um you you probably didn't know because it didn't last that long it wasn't it wasn't palatable in in 2015 2014 we when we first started doing it but um times have certainly changed I mean you know now appointment Trader there's a whole s

slew of these apps um and by the way to this sort of earlier question about why doesn't resi do this this is exactly the kind of thing that resi's thinking about doing now you know like this is this is what resi's focused on like really nailing um how reservations should work and I I actually think um you know I'm no longer involved except this kind kind of a cheerleader and occasional advisor but I absolutely think resi should be thinking about this should be creating this Marketplace because then at least it's a first party and the restaurants can you know benefit from the sales all of the all of the selling that's happening now is happening in sort of a gray Market where you know yeah scalpers are are are sort of roaming around um

but there's an appetite for it no question about it I don't know that there's that many restaurants really where works I think that that's sort of the limiting factor in terms of the business opportunity I just don't think there's that many restaurants in the world that have the kind of scarcity to command a real premium for reservations but you know for the like half a percent of all restaurants where there is why not yeah there's this like I almost call it a violent market for these for res I think I think Doria is playing off that too or I saw another one called resx pop up but yeah I think it's a I think there's something there so people feel very very strongly that they should be allowed to go wherever they want to go

yeah well this is a great chat I would recommend folks uh what is it Blackbird doxyz um I think you can also can you just go to the App Store and download the app as well certainly go to the App Store yeah just search Blackbird cool folks should check it out Lee Ben thank you guys both so much thanks thank you thanks so much [Music] guys [Music]