Braintrust - Adam Jackson
[00:00:00] Web3,, I mean, it's, it's the most exciting trend. I think I've ever been a part of in, in technology. And I came up, , in the web one days I was in college building websites and e-commerce shopping carts and things like that. Web 3 , Is, um, is the programmable web, it? It's, it's programmable incentives and it's permissionless.
[00:00:30] Right? So, , it completely changes the business model of the web. So, so if web one was just sort of, Hey, buy this thing on eBay and web two was, you know, connect drivers and riders or connect buyers and sellers. Um, but you know, the, the corporation in the middle is going to essentially be at war with its users, right?
[00:00:51] I mean, you see this in the gig economy at scale, right? I mean, the drivers on Uber and Lyft would do anything to get away from those networks. Um, the dashers on door dash, the people who bring the food, you know, are, are consistently taken advantage of by door dash. Um, because they're, they have misaligned incentives, right?
[00:01:12] It's just a bad model. It can't, it can't, it just can't win it can't sound sustainable. And to boot these companies don't even generate cash most of the time, which is totally insane. And so web three is the opposite. All of, all of those things, it, um, replaces the for-profit extranionary middleman with software and replace it and takes all that value that used to be extracted by the web two middleman, and simply gives it back to the supply and the demand.
[00:01:41] Today I am pleased to have Adam Jackson. Adam Jackson is a programmer who has started several companies. Today, we will talk about web three, decentralizing the web and his latest project. The braintrust. Brain trust is a site for freelancers to offer their services like Fiverr. However, it is owned by the users and not by a company looking to maximize profit at the expense of the users.
[00:02:09] Let me read to you what it says on Adam's LinkedIn profile. Quote, don't give up on an idea that you believe is good, even if you're told a hundred times that it's bad one. Here's why when Gabrielle Luna Ostaseski and I were trying to secure funding for Braintrust three years ago, we got laughed out of every VC office in the bay.
[00:02:29] Nobody thought a user owned talent network. Like brain trust would be worthwhile. And yet here brain trust is three years. Here we are brain trust, three years later with a global community of 700,000, 22 million in revenue in just the last 18 months. A hundred of the fortune 500 of the fortune, 1000, his clients, 20 plus press articles in the past month alone and contributors from 140 plus countries.
[00:02:59] So things are worth the grind. Adam will tell us how it works and then the conversation will develop
[00:03:04] Into what can be decentralized on the net and how to get there. Welcome
[00:03:08] Hey, thanks for having me. Appreciate it.
[00:03:11] basically, can you first explain to us what brain trust is? what
[00:03:14] it does a little bit, its current size its current job
[00:03:17] Yeah. Absolutely. Brain trust is a user
[00:03:20] owned, decentralized talent
[00:03:22] now. It connects technical talent with typically big companies that need them, uh, for, for either short-term or long-term ongoing gigs projects. so the type of talent we have our software engineers, designers, developers, uh, uh, dev ops, backend engineers, product managers, and project managers basically, would need to build a large enterprise software application or a mobile app or a data warehouse. And we have clients like Goldman Sachs, Nike, Nestle Porsche, a city that, you know, basically have an insatiable demand for this type of talent. Right? All of these companies are expected to sort of innovate like tech companies, but they're unable to attract this talent full time.
[00:04:14] Um, and so brain trust connects to the. Uh, part two parties and allows them to transact. Um, but it does so that, so that in and of itself is not a novel concept. what is novel is are the ownership and control structure, of brain trust. So brain trust is? a decentralized talent network built on the Ethereum blockchain.
[00:04:36] Um, there is no profit seeking corporation in the. Trying to extract as much value from each transaction as possible. Instead, the network is owned and controlled by its users. Primarily the talent that make their living on the platform and, uh, control is, uh, exercise through our token, the brand trust token, and, um, and what that allows.
[00:05:00] So when, when a network or marketplace is owned by the users who make their living on it. You can then dramatically change the fee structure. So instead of a for-profit marketplace, like, you know, name, your name, any web to marketplace, you know, Upwork or Fiverr or any of the other ones, um, their job is to extract the largest fee possible from their users that creates
[00:05:26] misaligned incentives, erodes network effects, encourages disintermediated. The opposite is true on brain trust because when you're owned and controlled by your own talent, you have an incentive to charge a smallest fee as possible. So brain trusts fee network or fee schedule is 0% rake from the talent and a flat 10% fee to the clients.
[00:05:49] And, uh, and so when you drop those fees, you actually increase. Larger more interesting ongoing projects and, um, and no disintermediation. So folks can really like make a great living on brain trust and clients get access to all the, you know, unfettered access to all the talent they need.
[00:06:10] Yeah, because in fact,looking at brain trust, the, the average job
[00:06:15] size or value. In other words, the amount that a
[00:06:17] company like Porsche, whatever is paying the freelancer is quite high. What did the
[00:06:21] average value.
[00:06:22] Yes. So I'm looking at
[00:06:23] our, uh, public dashboard that is just about to launch. In fact, probably by The time you publish this episode, this page will be live. Uh, it's addresses info.app dot used brain trust.com. We may, we may come up with a shorter URL for that at some point. But, um, average project size I'm looking at right now is $76,959.
[00:06:47] And the average.
[00:06:48] project duration is 253 days.
[00:06:50] And is this
[00:06:51] only for programmers , I mean for software people or who are
[00:06:56] Yeah. Today it's for professionals who
[00:07:00] Who work in the software industry. So, so that could be engineers, but it can also be designers like visual graphical UX designers could also be product managers, people who write specs and talk to users and could also be project managers, PMPs, you know, that that's sort of keep projects moving smoothly.
[00:07:19] Those are um, you know, it's only, you know, five or six types of talent right now, but it's, uh, it's a, so it's a narrow. Very deep category. It outsourcing is something like 1.5 trillion per year, globally.
[00:07:32] I was quite surprised when I found out that, you know, how, how big the average job size is. And so therefore how that, that for me is a credit to seriousness
[00:07:41] and this of the platform, because the seriousness of the, of the
[00:07:44] two parties interacting on the platform.
[00:07:47] Yeah, by, by
[00:07:48] contrast the average job size on.
[00:07:52] Which is not really a competitor, right? I mean, outwork as sort of a different business, but you can find programmers and designers there. Um, but they're, they're usually very small jobs in the, in the fees on Upwork are much, much higher. And So that, prevents larger and more ongoing projects from hitting Upworker fiber.
[00:08:06] But their average job size went up or went public. According to their was around $500. I've actually read it's closer to $200 now. Um, and so in five are probably similar. So, you know, just, just a totally different type of network here where people come and can get real jobs, you know, real and make real money.
[00:08:27] Right. These, this is like, Hey, quit your full-time job kind of stuff.
[00:08:30] , absolutely. So, can you tell us a little bit about the role of Ethereum and the platform at it? Purely just a set of putting together a set of smart
[00:08:39] contracts to take out of the middleman.
[00:08:41] Or is there more to it than that? Is there a governance token or.
[00:08:45] Yeah. So we're built on Ethereum, the brain trust.
[00:08:49] Is an ERC 20, so pretty standard token. It's a primary use case right now is for governance So it's one token one vote. Um, we actually forked, uh, the compound governor alpha, uh, governance system because it works really well and it's, you know, audited and very secure.
[00:09:07] It's the same way.Uniswap and others run. Um, there's also other features for the token. You can, um, earn it and redeem it in something called the brain trust academy, which is a community run project. It's not affiliated with the core team that has. Um, but it's, you know, it's a, it's an academy where people can learn more about crypto, learn, learn more about the brain trust ecosystem, and also up-skill, uh, their, their skills so they can earn more money.
[00:09:37] Um, and then there's also, uh, currently in, in development and is sort of being hotly debated on the governance channels and our discord are, um, uh, staking mechanisms for the token. So, um, imagine. Uh, you know, so zooming out like tea tokens, I think are useful for unsticking parts of your flywheel, right?
[00:09:59] All marketplaces have, have a stroke or.
[00:10:01] all successful marketplaces, have a strong flywheel spinning. And the way I see utility tokens are they can be used to incentivize unsticking that flywheel. So. Um, for instance, you know, it takes a while it takes some effort to set up a profile if you're a talent member.
[00:10:18] So, um, you'll, you'll earn tokens when you successfully get a hundred percent profile complete. Um, if you want to stand out in a competitive bidding environment, You'll be able to stake some tokens along with your bid and those essentially go into escrow. And if you're a bad actor, if you know, show the job, you'll actually lose those tokens that the client will retain them.
[00:10:40] Uh, and vice versa. If the client is, um, you know, for in, a talent shortage, as we often are, and the client is looking to attract more qualified proposals from talent. Well, it takes time to put a nice proposal together. So there's a feature called job staking and development.That just passed on, on our governance channel, actually that, um, will involve, uh, awarding tokens to, uh, qualified applicants who take the time to propose on a job, but maybe don't get it because the client didn't make a hire.
[00:11:12] And so, you know, these are all friction points in two-sided marketplaces, and it's a great opportunity for a token to help alleviate that friction.
[00:11:20] There's the role of alleviating friction as you say, and getting the flywheel going .Is there also like in a sort of incentive because there's going to be a diminishing supply of tokens or the, a little bit like Bitcoin inflation of it is going to decrease over time. Or I'm sort of trying to get an idea as to if I was a user of this, I would also
[00:11:41] like want to speculate that I'm going to make money with this token over time, because, because this platform is going to gain, users and, and,
[00:11:51] and therefore owning the
[00:11:52] token is somehow going to make me more money. Is that, is there some sort of
[00:11:57] mechanism like that.
[00:11:57] Well, it's not designed that. So it's an important point that the token is not designed to be. Returned mechanism or, you know, something like the, the point of the token Is not that, it goes up in value. The, the point of the token is represents control of the network through the voting system and to get more jobs.
[00:12:16] Right. But with things like bid staking, um, of course anyone can speculate on anything, right? like you can buy a baseball card or a golf club and hope it goes up in value. And, you know, uh, you know, obviously that that's a, uh, a prevalent use case in crypto. Um, but the brain trust token, isn't, isn't designed that way.
[00:12:34] It's not, you know, it's not a security, it's a utility token. Um, and it's meant, it's meant to, you know, it's, it's given away to users who contribute to the network. So you primarily, the primary way to get the token is to refer talent onboard town. Uh, refer clients, onboard clients, dozens of other things you can do to help build the network.
[00:12:56] You earn tokens for that
[00:12:57] and then you use the tokens basically to advance your freelancing career. Right? Get more jobs.
[00:13:03] All right, because I'll a little bit, what was behind my question is.Now let's move into web three, because web three for me is a little bit the idea of decentralization and giving more power back to people who are using the web and taking it out of the hands of a few centralized parties. And that's difficult to do when I always think that you can sort of do it if you incentivize people to do it financially.
[00:13:27] So that's a little bit of an idea I want to explore, but
[00:13:31] because just a little bit about your background, you you've been a software developer for, for
[00:13:37] five years
[00:13:38] whole life since I was
[00:13:40] So, how would you define web three.
[00:13:43] Yeah. Web3 I mean, it's, it's the most exciting trend. I think I've ever been a part of in, in technology. And I came up, you know, in the web one days I was in college building websites and e-commerce shopping carts and things like that. Um, web 3 Is, um, is the programmable web, it's it? It's, it's programmable incentives and it's permissionless.
[00:14:08] Right? So, um, it completely changes the business model of the web. So, if web one was just sort of, Hey, buy this thing on eBay and web two was, you know, connect drivers and riders or connect buyers and sellers. Um, but you know, the, the corporation in the middle is going to essentially be at war with its users, right?
[00:14:30] I mean, you see this in the gig economy at scale, right? I mean, the drivers on Uber and Lyft would do anything to get away from those networks. Um, the dashers on Door Dash, the people who bring the food, you know, are, are consistently taken advantage of by Door Dash. Um, because they're, they have misaligned incentives, right?
[00:14:50] It's just a bad model. It can't, it can't, it just can't win it can't sound sustainable. And to boot these companies don't even generate cash most of the time, which is totally insane. And so web three is the opposite. All of, all of those things, it, um, replaces The for-profit extranionary middleman with software and replace it and takes all that value that used to be extracted by the web two middleman, and simply gives it back to the supply and the demand.
[00:15:20] And so what you get is a far more efficient network, right? So you get to price discovery more quickly. In fact, like if you look at our new, um, public dashboard, that that is just coming out, you'll be able to see. Fully transparent and global market rates for dozens and dozens of this, actually probably hundreds of skills, um, you know, Rust and Go and Big Query and Informatica, and it shows what the hourly rates are on a daily basis.
[00:15:50] Totally transparent. Right. And no other web2 no web2 marketplace would expose that data. It's proprietary when web.
[00:15:58] The data is yours. It lives in the open. You users can take it with them. There's no wall walled garden around it. And, um, users aren't being extracted from right. The, the fees are minimal.
[00:16:10] The fees are just meant to, to, to cover breakeven. And so you'll see this web three architecture, um, bleed through many other models. It's a highly disruptive. Or network model power by enabled by this new technology called blockchain.
[00:16:29] Yeah, that's it. I'm sort of wondering if. We just replaced the company with a bunch of smart contracts and some software that's
[00:16:38] coordinating itself on a blockchain.
[00:16:40] Do you think that's always going to be enough to get people to
[00:16:42] move over to that platform
[00:16:44] the the smart
[00:16:45] Or do we, do you think we need
[00:16:47] more than
[00:16:48] there's a lot. I think there's a lot more to it, right?
[00:16:50] Like, you know, you, you, and you can write a smart contract and, you know, code is law quote unquote, but that?
[00:16:56] doesn't mean anyone's going to use it right yet you have to get the Val props, the value proposition. Right.
[00:17:02] And you got to get the incentive mechanisms. Right. And that's the hard part, right? I always kind of joke about, you know, web three, like the tech is not the hard part, like the, the layer, one people, the cryptographers, you know, the brilliant people who created these layer ones and layer twos. They did the hard technical work.
[00:17:21] Web three layer three, not that hard, technically very challenging from an incentive standpoint. So you can get, um, you, you, you need to be able to bring people to the table. You need to pull them away from whatever it is you're disrupting. So in brain, I'll just use branches as an example, because it's the network I'm closest to, um, the brain trust isn't competing with Fiverr or Upwork it's, it's competing with staffing firms.
[00:17:48] Consult big consulting firms and, um, full-time work. Right? So we have a lot of folks joining brain trusts that are, that don't want to be full-time W2 employees anymore. They want the freedom of working. We're stochastically, right? When they want, where they want, they don't want to go to an office. They want to set their own rates and keep as much, keep a hundred percent of that rate and, um, and then pick and choose their clients.
[00:18:17] Right. And so it's the ultimate like web web three in this case enables that freedom for talent. And then on the client side, it's a no.
[00:18:25] brainer, right? It's like, oh, all these people you couldn't hire full time. They're here on brain trust. And, um, and you're not paying, you know, you're paying a measly 10% fee to access them.
[00:18:36] So, so, so you've got to get the value propositions, right. For both sides. And then. Th the part two is the incentive mechanism. So how do you grow right? The, the old, the old way of growing. If you're web two is you raise hundreds of millions or billions of dollars in venture capital. You use that money to subsidize one or both sides of the marketplace.
[00:18:58] i.e. giving away dollars for 75 cents. You do that to build the quiddity on your marketplace. And if you're lucky enough to break orbit, You know, you come out the other end with basically a big investor own network. That's probably operating at negative gross margins. Um, and that's where your incentive misalignment kicks in.
[00:19:17] The opposite is true for, for Web 3, you raise minimal money. You give ownership and control via the token out to your users who are, who are building the network for you. So instead of having billions of dollars in venture capital, you have maybe tens of millions. And instead of having thousands of employees, you know, racked up in some expensive office in San Francisco, you have a global network of contributors who are doing that work for you, inviting the talent or inviting the supply, curating the supply, inviting the demand, onboarding the demand.
[00:19:53] And those are so web two web three could not be more different. They are almost inversions of each other.
[00:19:59] Yeah, exactly. Well, that's what I think is still very interesting about web three is, is this, um, as you say, realigning of incentives, which will lead to new business models, and we're not, in my opinion, we're still in the early stages playing around with what works. On the one hand, I like very much your
[00:20:17] project, because as we've seen, you've had a lot of very good growth, so you've got something right. And on top of that, it's not just $20 contracts, they're big contracts. So that's why I'm trying to find out what business models you think will work and what won't work. Because on the one hand, I think you, you started of course user interface and user experience is very important.
[00:20:39] So on the one hand, I think you started off with some VC funding to do. The base work of developing a great user interface and so on and developing the consumer base. And then you, you flipped it over into a token owned, a system, or it tells a little bit about the Genesis and how you've developed it
[00:20:58] you've got from
[00:20:58] 0.0 to
[00:20:59] Yeah, this is a, it's a it's a great question because the way we
[00:21:02] did it at brain trust is actually a little different than a lot of projects. So a lot of projects we'll start with smart, everything on smart contracts, everything on chain, and basically decentralized from day one, um, which is. You know, admirable and cool.
[00:21:18] It's really cool to watch. Um, the issue is when you decentralize from day one, it's, it's sort of hard to um, coordinate, right? It's hard. You, you sort of to get something from zero to one. I, I w I would argue, you know, centralization is probably key to it's certainly easier. Um, and, and so what we did was, was sort of different.
[00:21:38] Um, it was, you know, I started one of our core teams called freelance labs, and then other core teams. It developers around the world sort of took interest and kind of joined us. So we had this little coalition of folks that, you know, felt like a regular startup, cause we were all sort of working together and it was, you know, we were built.
[00:21:57] We decided to build the marketplace off-chain first, right. Get the clients. Our Porsche was our first big client then Nestle and recruit the talent.
[00:22:05] how did you get. Sorry to cut you off. How did you get them? Because I that's, what I find is either, how did you get Nestle or, uh, you know, the, the, employer as a client and how did you get the
[00:22:15] right programmer? Who's going to get paid for his service. How did you initially get them? That's
[00:22:19] Yeah, that's key. I
[00:22:20] Zero to one on a two-sided
[00:22:22] marketplace is the hardest damn thing in the world. I don't know anything harder. Um, but two-sided web enabled marketplaces are also the most valuable things in the world. And so it's, it's what I've been doing. Life it's, it's sort of, it's been my whole career, um, as an entrepreneur.
[00:22:37] And so it's just good old, you know, H how do you aggregate supply and demand anything? It's you do it the hard way, right? You, you go door to door. Um, I mean, my co-founder Gab and I have sort of the old guys in the space. We have, we have large networks. Um, so first couple of clients kind of came from our networks or, or our investors.
[00:22:56] That's another, it's another good reason to raise money from professional investors. Venture capitalists is they typically have phenomenal networks. I mean, are the firm that, that co-led the two firms that co-led our, our series A last year Acme ventures in Los Angeles and then, uh, blockchain capital in New York phenomenal network.
[00:23:16] So, so they helped quite a bit in driving, uh, demand. And then on the supply side, you know, I'm an engineer, I've been a freelancer my whole life as well, kind of on and off. And so I recruited a bunch of people in the community that I know, and then they recruited, you know, maybe I got the first hundred and then.
[00:23:33] They've got the next thousand and you know, it's all word of mouth really. And we were doing it all off chain. We were just using a fake kind of test token to sort of, you know, as a placeholder. And then, you know, we built the network up over a year and a half and, you know, COVID, the lockdown ended up being a giant tailwind for this model.
[00:23:52] You know, remote engineering teams became the new normal instead of a nice to have, which I would argue. They probably were before. COVID. And then, and so that was a big tailwind. And, um, and then, you know, on September 1st we just kind of flipped the switch and, and, uh, the, the token was minted on main net and, um, you know it just plugged into, uh, an already pretty strong, uh, and fast spinning flywheel on the marketplace.
[00:24:20] all right. So it was, it was a hard ground worker at the beginning on both sides, trying to get the employee and trying to get the freelancers because they understand the freelancer is one, a little bit more freedom and independence. So if they get paid well on a site, through a site like brain trust, they're going to use it.
[00:24:36] Cause I personally, I'm always interested in this web three, but I always think that the still the two big hurdles are, well, you have to have a great UI. And it has to be easy to use, and who's going to do that the best, usually a centralized company doing it for profit, but I'm still relatively confident that, uh, you know, de-centralized projects will quickly have a great UI.
[00:24:59] So I'm not too worried about that. And the other thing often with centralized projects is that they give you a great UI for free because they're taking your data. And I always think the only way you're going to get people off of centralized free product with great UI. Is okay. A good UI, but that we can develop and somehow they have to think they can make money off of it.
[00:25:22] Uh, and so that's why I'm always interested in how we sort of incentivize them. So I was always wondering if in your opinion, they'll make money off it simply because there's a little bit more money to go
[00:25:35] around because we've taken out the
[00:25:36] middleman or if we still need to add in something more to it than that.
[00:25:41] Well, it's, it's a great question. It's, it's certainly a
[00:25:45] topic that is being experimented on rapidly, right? There's lots of different, uh, experience being run around People earning essentially interest on their tokens, staking rewards, things like that. Um, the brain trusts that work doesn't have any features like that currently.
[00:26:01] Um, but it's decentralized and it's community controlled. So, you know, who knows what the future will hold, but I would argue in a two-sided marketplace that, um, typically suffers from very high rakes or high markups. Um, talent are very excited to break free from those high rakes and keep a hundred percent of their hourly rate.
[00:26:22] And so that sort of. You know, net new disruptive fee structure, um, is enabled by a token, a tokenized network. Right? And so it doesn't, I don't think it matters as much, you know, that the token like rapidly appreciates in price. It, it matters more that these folks control this tent, these talent members control the network where they make their living.
[00:26:44] Right. It's like it's got governance. Like it's a funny thing, right? People many people will scoff at the idea of, of governance because you know, they're like, well, who votes there? Their Facebook shares. Right? Nobody. And it wouldn't matter because only one person's Facebook shares, votes matters there. And, and so it's, you know, it is not a democracy.
[00:27:06] It's not like the interests of the users are not relevant in most web to companies. Um, and but if you make your living on a web on a web enabled. You care quite a lot about the rules, right? Governance does matter. I mean, I'll give you an example. You remember, in 2019 Door Dash rolled out a tipping feature where consumers could tip their Dasher through the app.
[00:27:29] Well, door dash in 2019, this was covered by the New York times, decided to keep all of those tips and book them as revenue to the. Theft, right. I mean, it's just theft. And now through their terms of service, they can do whatever they want. Right. Cause you know, but like imagine on a network like brain trust or any other web through user controlled network that would have to be put to vote and the users would have to vote to have someone steal their money.
[00:27:54] Right. And so obviously the users would vote in their own interests and things would remain fair. Incentives would remain aligned. So web three in enabling. People to make and keep more of the value that.
[00:28:07] they create in the world.
[00:28:08] I hope you're right, because on the one hand, I'm always going to be cynical and say, People say they want something and they only, but they don't do it. They're only motivated by short-term profit. But on the other hand, when you speak to people about, uh, privacy or, uh, yeah, privacy and anonymity on the internet, you see they're more and more willing to make sacrifices to get it.
[00:28:28] So meaning, there are other levers to people. Short-term money. So, uh, as you say, people having the impression that a little bit more in control of their life, and they're not sort of like getting screwed by the central agency, whoever that is, whether it's
[00:28:43] Facebook or, or door dash, that
[00:28:45] ends up being a motivating factor for people.
[00:28:48] So, um, I'm happy to see if works with,
[00:28:50] Well, I mean, let me be
[00:28:52] like the motivator, I, I believe strongly in financial incentives, very strongly. I don't, I actually, I actually may take a contrarian view on the data and privacy thing. I don't, I don't think people.
[00:29:04] give a shit about privacy not one bit, especially not the younger generation. And So, the, I, you know, th th the short-term financial incentive for, for using a web three network, like brain trust is you keep all your money, right?
[00:29:15] There's no, there's no rake but that, that there's no better. Short-term financial incentive there. um, same with, you know, decentralized creator networks, right? That, that don't, you know, don't have some big rake being taken out of every sale they make, um, decentralized social networks. I think our bullshit, I don't think it will ever work.
[00:29:34] I don't think no one cares about, you know, oh, Facebook has my photos or Facebook serving ads to me because I liked something or Google, you.
[00:29:43] know, Google maps knows where I go. So they better tailor ads to me. Oh my I'm my privacy is So invaded. No one gives a shit about that. So I don't see web three making any dent there at all.
[00:29:54] okay. So that's a perfect lead into my
[00:29:56] next question. Web three is best for what types of applications.
[00:30:00] Um, I'm sorry, I missed the, can you repeat the last part of the question.
[00:30:03] Yeah. In your opinion, web three, what, what are the, the proper applications that will work well on
[00:30:09] what three? What are the, was it good for.
[00:30:11] Marketplaces if you think about the, the internet can be, can be broken into, you know, several different buckets, right? There's um, Social networks, which are advertising driven. And then there's marketplaces where you buy and sell things. Web three will completely transform every web2 marketplace.
[00:30:36] It is completely inevitable. There will be. Tokenize driver owned networks that deliver food packages and people there will be. And the Uber's and door dashes of the world will, will either tokenize themselves or be replaced or both. Um, but the idea of like a user own Twitter or a user on Facebook, it just makes no sense.
[00:30:59] okay. And for curated content, I think I heard you say once that you don't really believe in that either as a web three application, curated content, meaning like when you go on your YouTube, , they know what you're interested in based on what you've looked at in the past. And they're always like giving you.
[00:31:16] The suggesting to
[00:31:17] you videos that are going to be right up your
[00:31:19] alley because they know what you're interested in that web three doesn't really have an application there either. Do you
[00:31:24] No. So this part I actually
[00:31:25] think is, is a little more interesting. , it's the, the, long-term, there's a couple of things here in play here, so there's, there's sort of long tail content. Right. So all these amazing kind of smaller publishers that publish super high quality stuff. I was just talking to Camilla on the defiant podcast about this.
[00:31:43] , it was, it was, uh, it was a really interesting conversation. Um, media control and censorship, is that massive problem in the United States? I think it's, it's never been a bigger problem than it is now, you know, on YouTube. Like if you listen to like Pompe, Liano he like, he's being deep platformed on YouTube because he talks about crypto too much.
[00:32:07] Right? Like you have to be so careful. About what you say on YouTube because they are so trigger happy there and will, and there they are. So sensory centuries. And so I think user owned media. Platforms are great idea. And there's so many things that can come out of that, right? You can build tokens that, uh, power, loyalty programs, referral programs.
[00:32:31] There you can, you can have NFTs for, uh, they're creating the creator economy. Um, you can NFT individual episodes, get, get communities, um, you know, special access to the creators that they love. Um, but this whole idea. You know, the news networks, I mean, it's been proven over and over that left or right.
[00:32:52] CNN, MSNBC, Fox, CBS, NBC they're they're absolute deception machines. Right. And so, so much of what they produce is just patently false. And then you have Twitter flagging tweets that, you know, the left wing people at Twitter think are offensive. Same at YouTube that the censorship ,in Western media is breathtaking and that is absolutely low hanging fruit for user owned media platforms.
[00:33:19] I think that's super cool.
[00:33:22] Yeah, but that's why I hope you're right. But let me ask you the following question user on media platforms. Most of the. The content on there is curated. And it's going to be curated by basically in AI and automated, uh, you know, artificial intelligence. That's usually a relatively simple program looking at what you like.
[00:33:40] And then it's suggesting to you similar stuff. If it's an AI, if it's curated content
[00:33:46] and therefore it's probably basically run by
[00:33:48] some sort of AI, can it be de-centralized or by nature? Does it have to be centralized?
[00:33:53] Yeah, because this is a great question. I I've heard.
[00:33:56] I've heard. I think peer Thiel will say like, you know, on the far left end of the spectrum, everything is AI and you basically have you know, the Chinese communist party, right? Every it's it's it's essentially digital fascism on the other side is, is complete user owned.
[00:34:10] Right? Everything is, is owned by the users.
[00:34:12] Yeah, but then you'll get poor content.
[00:34:14] nobody's curating it for you.
[00:34:16] not, I don't buy that construct.
[00:34:18] I don't think those things are mutually exclusive. Um, AI AI is a lot simpler than it sounds right there. They're largely open source algorithms that, you know, take in BA user behavior data and spit out.
[00:34:33] What they think you're going to want. Right. It's not that hard, right on YouTube. Like my kids get ahold of my YouTube account and they start watching like, you know, weirdos building rafts out of cardboard boxes and they, and they get two hours of that in like, my feed is screwed. Right. All this stuff I want to watch is gone because it's feeding me garbage for six year olds.
[00:34:56] And so it's not that hard. Right. I think, I think. Most of these algorithms, you know, can and will be open sourced and implemented over a layer of user owned data, decentralized data. And then as the consumer, you. could just pick the algo you want, right. You pick the lens, everyone wants curation, right?
[00:35:13] Like an uncurated web is, is a, I'm sure a scary and devastating place. And so curation and, and user own media are not mutually exclusive.
[00:35:24] so you're optimistic here. You think on the one hand, the underlying data that goes into an AI program can be decentralized. And you think that the user can or will be able to choose, like which AI curation
[00:35:37] software he's using.
[00:35:38] To produce , the, the data that's being presented to them. You think
[00:35:41] you're, you're
[00:35:42] Absolutely. And I also think there'll be able To choose to either
[00:35:46] pay for that or, um, or be served ads.. Right. Like, I mean, Twitter, like so many people want a paid version of Twitter, just get rid of the ads. And Twitter is like, No,
[00:35:58] way. Right. That would kill our, it would kill our revenue. Well, these are for, these are anachronistic for-profit corporations, right?
[00:36:04] That always put the pitch, the incentives of the corporation against the, the incentives of the user. Not always. Right, but, but like in instances like this, certainly. Yes. And so web 3 alleviates that misalignment of incentives. Right. And so I, you can envision a world where, um, all the data is sort of open.
[00:36:27] I can see exactly how an algorithm is training itself on me, and I can pick it. I can pick and pay for a,
[00:36:34] And I'm going to cut
[00:36:35] you off right away. Most people are not going to do that, even though I liked you. I like where you're
[00:36:40] how many people pay for YouTube premium?
[00:36:43] I don't know. I do know I do a lot
[00:36:45] or a little, or what do
[00:36:46] people pay for you to.
[00:36:49] In 2020, the popular social platform, YouTube counted roughly 20 million paying users. So that's not to your
[00:36:57] point. Oh, now here we go. September. 2 20 21, YouTube has 50 million paying premium users that that's not nothing. Right. That's, that's a little, that's smaller than Spotify, but, um, it's not nothing. So it th the idea that people won't pay for good curation is just, it's not true.
[00:37:15] People will, and there's no on YouTube. There's no like copyrighted content there. Right? It's you, you're just, you, you pay to get rid of the ads and you pay for a little better curation. Um, unlike Spotify where you're actually paying most of what you're paying goes to the labels, right? Not the case on YouTube.
[00:37:30] So the, so the fact that YouTube premium has 50 million subscribers completely proves it. That what I'm describing is, is likely to occur.
[00:37:37] where I certainly agree with you is that if you asked people: you can get the free version and you have to look at the ads or you can pay and get rid of the ads. And then people decide, and there are some things for which I'm willing to pay without the ads. And there are other things that have less value for me, for which I'm not willing to pay.
[00:37:57] And I would say that overall, if you look at the amount of money I spend on sub stack subscriptions and things like that, basically where I'm paying the creator directly. And I want to get rid of the ads. It's probably a higher amount than I've ever paid for in the past. So I agree with you. People will pay directly the content creator and they'll get rid of the ad.
[00:38:20] And in the end they will, they will choose and they're willing to
[00:38:22] pay for it. So on that one, I'm certainly a well I'm optimistic. And I agree with
[00:38:27] Yeah. I, you know, I
[00:38:28] we agreed that
[00:38:29] like the long tail of, of internet of creators is so breathtaking. Isn't it? Like, I just remember like 5, 10, 15 years ago, all you had was like the. Right. And you would just pay Comcast and you were force fed, whatever those corrupt networks were. We're putting out all the bullshit most of the time. and now I can pay $5 a month for Glenn Greenwald, who is one of the great investigative journalists of our time. Right. He's, he's an absolute genius. And whether I agree with him or not on everything, it. doesn't matter. I get to support him. Right. And that that's incredible. And for So many other creators, and you know, we're seeing this with the NFT explosion.
[00:39:09] And so it's, it's just amazing to be able to choose. And then on the other side with ads, look, I'm with you. I don't pay for everything. I mean, ads like on Instagram, I'm not a huge Instagram user, but you should see the amount of stuff I've bought through Instagram. Like those guys are good. They know what I need.
[00:39:27] Right. And I buy stuff through Instagram ads. It's totally nuts, but they do a good job, you. know? So, there's, there's plenty of room for both models. I think.
[00:39:35] So what steps, what an immediate
[00:39:37] steps to it. You think we still need to
[00:39:38] get to a more pervasive web3?
[00:39:40] you know, um, yeah, it's a great question is we're so early here, you know, I like to say we're in the first sending out. I'm not sure where through the national Anthem yet apologies to your European viewers for the baseball reference. Uh, but, but you know, what, what we need is we need real businesses. That deliver real value to people moving on to web three.
[00:40:04] Right? And that was the whole reason we incubated brain trust out of this, this hedge fund I helped start called Cambrian is this started as a token economic model. How do we realign incentives between freelancers and clients? In a way that, you know, takes all that fat margin and gives it back. Right? And so we, we, we picked tech freelancers to start with, because it was the easiest thing, but we need more marketplace entrepreneurs stepping away from web two and stepping into web three, building, building real businesses, though, like I said, the hard part of web three is not the.
[00:40:41] It's the incentives. And so it's a natural progression, right? I think we'll see gen, you know, every year more entrepreneurs leave the old boring SAS world and come over to web three.
[00:40:53] , I agree. That's why I want to have you on, because you've had success because for me it's, as you say, it's all the question of incentives. And new business models right in the construction. Right? Not the. A lot of web three, you might say is just like an insurance company. That's a mutual or like a cooperative, meaning to be a shareholder.
[00:41:16] You have to be a user. You can't be a shareholder if you're not the user. So it's the cooperative or it's the mutual that charges its users, for example, a premium for an insurance company. But we don't charge too much in any excess profit. We either give it back to the. Who's also a shareholder in the form of a dividend, or we lower the price of the premium of the insurance company or anything like that.
[00:41:37] So you could say web three is just a form of a mutual or cooperative. And I say yes, but it can be a lot more powerful. And you have to get the incentives. Right. And you can mix it in there. Things like, uh, well, like token sort of incentives and that's, as you say, we're in the first innings, not usually say we're not even in the first any and, uh, but I I'm convinced like you with going to develop into.
[00:42:04] Uh, many useful applications and, uh, that's why I wonder still which ones are the best, but, uh, okay. Yours is one of them. And as you say, user on social media will be good and, and certainly users want to pay creators directly. I see a lot of that as well, so we'll see. Okay. Thank you very much for this conversation.
[00:42:23] Let me wrap it up with a few
[00:42:25] rapid fire questions. best book you've ever read or most important.
[00:42:28] Oh man. Um, I should've been better prepared for this. uh,
[00:42:33] there's there's so, so, so many.
[00:42:35] Um, so, I'll give like a tactical answer. So, there's a book called venture deals by Brad Feld. , I think it's been updated two or three times. And that is if you're a young entrepreneur just starting out, or if you're a seasoned entrepreneur and you don't feel like you have a good grip on how venture capital works, uh, read this book, it is like the behind the scenes book on how I think the subtitle is like how to be smarter than your lawyer on venture capital.
[00:43:03] And that, that does not oversell it one bit. It is a phenomenal book. Um, another one. Uh, an old favorite, the sovereign individual, um, is, uh, is sort of an interesting, it's written like 20 years ago, but it's, it's sort of an interesting breakdown of how, um, you know, crypto it's before crypto even existed, but it's basically how, like, you know, individuals, you know, sort of taking control of their own finances and, and data and resources.
[00:43:32] We'll, we'll start to challenge nation states. That's another great read.
[00:43:38] okay. And an individual, uh, either dead or alive that you admire a lot. And why do you admire him or her.
[00:43:46] Jack Dorsey hands down for me, um, for a lot of reasons, but the most compelling thing about Jack Dorsey to me is he's one of the great web two pioneers and, um, You know, just an unbelievable operator, entrepreneur thinker, intellectual, who also understands that web three will completely overturn everything he's done in his career. you know, he's, he's just super honest, intellectually about that. And I really respect
[00:44:16] So do you think you can decentralize Twitter? do you think you can decentralize
[00:44:19] the centralized
[00:44:20] organization or do you think you just have to
[00:44:22] scrap it
[00:44:22] No, I think Mo
[00:44:23] more abstractly, right? He
[00:44:24] he's, he's, uh, he's an ardent Bitcoin
[00:44:28] member of the community. Um, you know, he's, he's done so much to, to create on-ramps for Bitcoin, for the, for people all over the world, to the square cash app and other things. Um, no, I think he knows damn well, Twitter's not going anywhere.
[00:44:40] It's certainly not going to be decentralized, but he's even put up bounties, right. For people to create a decentralized Twitter. I think he would move to it. If someone figured it out. Um, but I think the network effects of Twitter in particular are too strong.
[00:44:54] What's the famous book there where you disrupt herself, um, innovator's dilemma. So he has no problem with destroying his own business to recreate a new businesses, which you're saying he could destroy this Twitter and reconstruct the decentralized in a decentralized way. He would have no problem with what you're suggesting.
[00:45:10] Okay. That's fine. And, uh, I don't know, one more rapid fire question. We could ask it something like lighter, like a favorite.
[00:45:22] You can give several, yeah.
[00:45:26] Casino With, uh, with the Deniro
[00:45:29] um, uh, the, the little guy Pesci. Yeah. It was done by a Martin
[00:45:34] Scorsese, I
[00:45:34] It's just, it's a timeless favorite.
[00:45:37] Adam, it was a pleasure to speak to you working. Let me put in the show notes, where can people find out either like more about you
[00:45:42] or more about
[00:45:43] Yeah, sure. I'm on Twitter
[00:45:45] at Adam Jackson,
[00:45:46] S F and then brain trust is on Twitter at use brain trust?
[00:45:53] or just go to brain trust.com.
[00:45:54] All right, great. It was a pleasure to speak to you, Adam, and, uh, I hope follow your project and we'll see a web three develops and, uh, maybe we'll come up with
[00:46:04] some more, some other interesting
[00:46:05] projects on what three. It was a pleasure to speak to
[00:46:08] you, Adam. Thank you.
[00:46:08] a pleasure to be here. Really, really appreciate the conversation.
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