Gary Vaynerchuk and Raoul Pal: The Turning Point of a New Era for Digital Assets

Gary Vaynerchuk and Raoul Pal: The Turning Point of a New Era for Digital Assets

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ASH BENNINGTON: If you love our crypto content or are looking to learn even more about crypto, be sure to check out and subscribe to our Youtube channel after this video dedicated to all things crypto. Find new videos every week. Be sure to check the link in the description. RAOUL PAL: Gary, fantastic to see on Real Vision. GARY VAYNERCHUK: Same, my friend, thank you. RAOUL PAL: There's a lot to talk about.

Firstly, just for some people, just a bit of your background would be fantastic. How you got to where you are now? And then we'll dig into what you're really up to now and where we're going. GARY VAYNERCHUK: Very classic Americana immigrant, Eastern European story. Family is from Belarus in the former Soviet Union.

We immigrated here in the late 1970s, December of 1978, right before 1979. Very tough first three, four or five years. Studio apartments in Queens, no cars, walking five miles to Kmart. Scrapping. My sister was born in the States the first year we were here.

So, it's just a very hard-core upbringing, East Coast, Queens, Dover, and then Edison, New Jersey in 1982, where I really started my American journey, I would say, lived there for the next eight years before I moved to another part of New Jersey. My dad, during that time went from being a stock boy in a liquor store to a store manager to eventually buying his own shop. I had very much discovered who I was in Edison, New Jersey, lemonade stands, baseball cards, shoveling snow, just incredibly intuitive to entrepreneurship, and selling and buying and working. It was as fun for me to work, shoveling snow and washing cars as it was to play, sledding, and playing football or baseball. So, I got into my teenage years.

I started working my dad's liquor store all the time because oldest son of a first-generation immigrant family as a merchant, fell in love with people collecting wine. That was a big breakthrough for me. That people actually collected wine the way I collected sports cards. And that started a 20-year passion of mine to build a large business for my parents.

I was incredibly affected by having a great mother and having a hard-working father. And I was just extremely grateful. And I wanted to give back. And I knew in my late teens, early 20s, that I was talented in business. I thought it.

I knew it. This is a very-- you know this, this was a very different era of the 1990s, 1980s. Entrepreneurship wasn't as accepted. This was the golden era of school and proper job. So, I had a lot of adversity from voices around me, teachers, other friends, parents. I was a DNF student and being told that I would never be anybody, that I was a loser.

RAOUL PAL: [?] credentials at that point. GARY VAYNERCHUK: That's right. RAOUL PAL: If you didn't have a degree or whatever, you were nobody. GARY VAYNERCHUK: That's right. And luckily, I had a mother who didn't make me feel that way. And that was enough, all the voices versus hers.

And I also had a real mission. I really, really wanted to accomplish what I'm grateful that I was able to which was have a substantial impact on my family's business. And I did that and built my dad's business from a $4 million to a $65 million a year business and then embarked on my own at 34. Family businesses don't pay super well.

So, I didn't really make a lot of money in my 20s and early 30s, which is why a lot of my content speaks about patience. I lived it. I really didn't have a lot of money. I made some very smart investments with the money I was able to save in those 13 years in Facebook, Twitter and Tumblr as early high-risk angel investments. Change the course of my career in a lot of ways. And then my brother was graduating college.

We wanted to do business together and we decided on a client service business which at that point, a lot of my smart friends including Mark Zuckerberg and others thought was not a good idea. It wasn't the highest way to make money. It wasn't starting a VC firm. It wasn't starting a company. But I was completely convinced that I wanted to build a communications death star as I called it.

I wanted to build what is today now VaynerX, a global Mexico City, Singapore, London, New York, LA over 1300 employee, multi-hundred million dollar a year revenue business that really gives me a foundation, VeeFriends which I'm sure we'll get into. Empathy Wines which was a substantial six to sevenfigure exit, depending on how the internet works. Resy, the restaurant app, nine-figure exit and-- so excuse me, Empathy, eight or nine-figure exit. So, really, I've built an infrastructure that I think is going to allow me to continue to grow and having a business at the size of VaynerX and that the profit that VaynerX keeps out as a baseline, as almost a sun, while I create a lot of satellite opportunities, where I developed talent, where I developed a totally different religion of marketing and attention arbitrage and contemporary communication. RAOUL PAL: You saw that early on, right? Social media and the power of it for marketing, the rise of the influencer.

You were super early in all of that, and had been very influential on other people, I think in that as well. GARY VAYNERCHUK: Yeah, if you read Cross-Sheet which I wrote in 2008 and came out in 2009, it's almost scary how right it is about what ended up happening with influencer marketing. It's very similar to- - I'm starting to populate some of my 2010, 2011 tweets about virtual goods. Farmville was enough for me to see to believe in NFTs. It took an entire full decade before I got much louder about it.

But I have incredibly- - and this is, I don't love using the word luck because I think it is then used as an excuse by people who don't want to put in the work. But there is no question I've been gifted lucky to be gifted with some uncanny understanding of consumer behavior. I just, my friend, if I told you how comfortable I am with guessing what people are going to do and how often that becomes true, it almost scares me.

Now, I don't think the guessing is really guessing, it's that-- RAOUL PAL: It's not. You put in your 10,000 hours, right? You're an expert. That's what you do. GARY VAYNERCHUK: And even with this NFT thing, I mean, I probably put in another 200 hours in December through the first-- Last month of 2020, in the first 100 days of 2021, I spent almost every hour I had on NFT research.

Going backwards to why did Larva Labs did what they did with Punks. What was going on in every Discord? Why CryptoKitties? What was happening with Flow? What are the other blockchains besides Ethereum? What's Ethereum been up to since I bought it in 2016? Like just really went back and did a lot of homework before I felt comfortable saying, you know what, I'm going to talk on this in a much more significant way and let's see where this takes us. RAOUL PAL: Now, so let's start your crypto journey first before we dig into all of this.

When did that start? You said you bought Ethereum-- when did you start getting aware of the space? And what did you think it meant then? And then how did that change as you start to see NFTs and the tokenization of everything. GARY VAYNERCHUK: It was a very, very, very-- now looking back. Very Gucci, very A-list, very Illuminati group of guys and gals that got together at South by Southwest back in 2011, 2012, 2013, 2014, 2015, 2016, 2017.

We called it the jam session. And Chris Sacca, Travis Kalanick, founder of Uber, Ashton Kutcher, Mark Cuban, Sophia Girlboss, and Josh, other people maybe not as crazy names, but MHG and Josh Elman and Aaron Batalion and on and on and on. And Aaron Batalion is the reason that I bought crypto so early. He was the former CTO of Living Social, but he's a true technologist. Like a real technical nerd. And in a jam session, geez, quite a long time ago, I listened and say, God damn word for two hours as they talked about Bitcoin.

That was first time I'd heard of it. And it was just so over my head for a couple reasons. Unlike you, my friend, even to this day, my ability, my knowledge, even my passion around currency and let's say financier and financial is quite low. It doesn't grip me.

It is not my deep passion or understanding. It doesn't come natural to me even like the concepts of central banking or trading currencies, it doesn't come natural to me. And I don't love it. But I was very fascinated by this concept of decentralized servers. It was so profound at the time. So, that happened.

I bought some, maybe six or seven coins. I can't explain how low it was. It was just nothing.

I forgot about it. I came back maybe a year or two later, maybe two years later, jam session again. And this time Aaron Batalion tells me about Ethereum, and that really caught my attention.

Because I remember thinking Bitcoin was really cool and amazing and obviously has gone on to become what it became. And I thought of it as like, okay, that needs to become a central brand like a Nike, like gold, like God, like school, like a diploma. That's a Harvard. That's a brand game. And if it wins that brand game, that's going to win.

And by the way, it went on to do that. Ethereum, I was like, oh building on top of it and like the scaling and it really had these almost like Apple versus Android feelings about it I remember thinking. Oh, Bitcoin can go on to being Apple.

And Ethereum could go on to being Android, like a layer for everything else. And so, I was very bullish on that and I bought a bunch of that. I remember right around that same time, my brother AJ and I got a bunch of Dogecoin for free or for100 of a cent.

And that was like a period of being hot on it. And then I would only check in when a tweet or an article for next two or three or four years caught my attention. I was very deep in my business.

I was very deep in content and social media arbitrage. It wasn't where I was spending my energy. CryptoKitties caught my attention later on.

And I was like that really in the same way that I'm very hot now, the same reason, I like oh, collectibles and trading-- RAOUL PAL: And I think what's really interesting about your story you is you didn't come at this from finance. You came with it seeing different stuff. And I think this is important because this is I think where the future lies. So CryptoKitties, you see that. You're a marketing guy, and you start to think? GARY VAYNERCHUK: And I start to think, I know why people will buy that.

If this becomes like Bitcoin, the difference between an NFT and let's say a currency is there's a social signaling and a need to communicate it that is by default. When you say to somebody, when you drive a Mercedes Benz or you wear a Rolex, or you wear a $4,000 pair of sneakers, you don't have to say something to say something. When you're sitting on $4 million or $40 million of Bitcoin, you have to say, hey, I have-- and I put you in a precarious spot. That's why cash is different than assets.

And I understood that and that came natural to me. RAOUL PAL: Because humans love social signaling. It's a core part of being human. GARY VAYNERCHUK: It's the corest.

Like to me, communication is what human beings are completely predicated on. It's why I bet the farm on social media, I knew, I knew there was no way we were going to let it be a fad. It's the same way that I know that NFTs will not be a fad.

Now, much like social, much like Internet 95 when I first got in and launched in 1996 and 1997, which was crazy early to launch a liquor stores website. This is my third cycle back to pattern recognition 10,000 hours.

My biggest concern is that I know 98%, maybe even 99% of the current projects of NFTs will be negative investments for the people that knew them as long-term investments. I think that it's not sustainable around supply and demand. And we haven't even seen the greatest intellectual properties enter the space properly.

We've not seen Pokémon go properly yet. We haven't seen Star Wars go properly yet. RAOUL PAL: Disney. Yeah, Disney.

GARY VAYNERCHUK: Disney go properly, right. And by the way, not to mention most sports, proper football a little bit was so rare and obviously, the NBA with Top Shot, but we still don't have the NFL. We have a baseball product on WAX, which is okay.

RAOUL PAL: Yeah. And in soccer, they've got a bit on Chili's and that Socios project. GARY VAYNERCHUK: But music. I mean, where's JC's first NFT or Elvis Presley? So, we are in the dawn, dawn, dawn of all of this, and people are spending a lot of money on tokens on intellectual property that has a very high-risk outcome. I've jumped into a couple of projects recently, more, more, because I just want to support more diversity in the NFT space. I'm really enjoying some of the female led projects, some of the minority led projects.

I think it's important to-- because collectively, I get incredible high, my friend, on the email of, hey, you showed me this world. Teaching someone how to fish has been my life. I enjoy it. And so, it's tough though with something this new. Because you're yelling at one thing, hey, this might be the big, big, big thing for next two decades, 99% of these things are going to fail, so what's the entry point? It's a very tricky game. RAOUL PAL: Yeah.

I mean, I totally agree. So, what gives you the bravery to jump and say, I'm going to try this out? Because that first step is the dangerous step because as you say, it's so nascent right now that you don't know where it's going to go. We've all got some ideas and we'll get into that. But why did you take the first step, and how? GARY VAYNERCHUK: Lack of fear. I think with VeeFriends, it was right before Valentine's Day, I remember.

So, it was a maybe the 13th or the 12th. And I just had that eureka moment. I felt at that point, I was ready. I knew enough. I knew exactly what I wanted to do.

Dutch auction on-chain, utility based heavily to hedge. The fact that I wanted to build a 40-year intellectual property, that I'm going to do cartoons of video games and sweatshirts and toys. I jumped in, because I knew I wasn't going to lose, and more importantly, much more importantly, I knew that I was willing to die before I would let the people that invested in it early on lose. I knew that I was willing to shut down everything. That if God forbid, I didn't see something or something was off, that I was willing to stake my entire reputation on the project.

And that is why I did it, because I knew that I would go to zero, have a far less fancy life to rest assure that the people that went in won. NICHOLAS CORREA: Sorry for interrupting your video, but I have a very important message to share. At Real Vision, we pride ourselves on providing the very best in-depth, expert analysis available to help you understand the complex world of finance, business, and the global economy.

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GARY VAYNERCHUK: -- go to zero, have a far less fancy life to rest assure that the people that went in won. RAOUL PAL: Because this is a key point that I've got with the space, is many people comes in NFT space to extract value. They think they've got a community. The first thing they do is that as opposed to having any utility or any community value proposition is take money out of the community.

And we saw that with like the Kings of Leon, and a few of these, suddenly collapses. Because what you've just done is take money from the community, give nothing in return, apart from giving one single person or product. And the idea is you have to build value. You have to build real meaningful community value for it to have true value. GARY VAYNERCHUK: That's right. I think that I was very comfortable with some of the cynicism from the OG NFT community when I announced it, or when I launched it, because I understood I didn't have the audacity to think that they should have spent 20 or 30 or 15 or 10 hours on who I am, what my track record was, how I've done things.

I'm stunned by people's anger. You're not entitled to people putting in that work. And I knew that it would take 5 hours, 10 hours, for somebody to really understand that over the last 15 years, all I've done is the reverse.

All I've done is giving more to my community than I've asked for in return which is an incredible formula for a-- RAOUL PAL: That's been your business model. GARY VAYNERCHUK: It's been my business. And it's been based on this concept of 51-49, I have always felt that I was talented at such a level that if I was able to get 49% of the value of any interaction, that I would have plenty. And so, it's an incredibly simplistic mindset.

But it's allowed me to have a far better reputation with anybody who's actually ever interacted with me than the perception. And that's what one can only hope for. Too many people walking around Earth right now who have good reputations on social media, but not with the people that actually interact with them. And I love what my reputation is with the people that interact with me. And I knew that I was going to bring that to the table. And I knew what is happening now, what's going to happen, which was 60 days, 100 days, 600 days, 1000 days later, one by one, the individuals that took a shit on me or a spit at it, if they have the humility, and if they were gracious, would come out and say, I've been incredibly flattered.

I'll say this, it means the world to me, when a stranger shits on me and says I'm the worst, I don't even hear it. But I'd be lying if I didn't say, and I don't get the accolades either. When people think I'm the greatest, I don't get high.

But I'd be lying if I didn't say, when somebody comes out and says, I thought you were a fraud, or this was a rug pull or a cash grab, or you were just another one of those. And I've had a little bit of time to look into this wow, or kudos or hat tip. It means a lot. It means a lot to win someone's respect who has a bad feeling towards you, and I enjoy that feeling. RAOUL PAL: And people have got to understand that you particularly put yourself out as the product. So, if you were to betray that, you've lost all trust and integrity, in which case, your brand goes to zero.

So, you're highly incentivized to absolutely make sure it goes as well as you possibly can. Nothing can all be guaranteed as a success. GARY VAYNERCHUK: The day before VeeFriends launched is I'm at the height of my financial life. And that is completely built on my reputation.

So, I think to your point, it's very clear to me that you have a good sense of this. I had everything to lose, but that was the best part because I knew what I said to you was true, there just was no outcome. If for some miraculous reason, 87 things went poorly that led to a shit show, might as well give everybody their money back. There's no outcome where my reputation doesn't trump my bank account.

RAOUL PAL: And that's not saying you think that the tokens can go up or down in value, but it means that you're there to guarantee the rug pull, this is not that, it doesn't go wrong. GARY VAYNERCHUK: Whatever the reverse in this space of a rug pull is, is exactly how I went into it, which was I was going to backstop it financially. If again, many things out of my control went horribly wrong that I couldn't have saw. I also know that I'm going to make Empathy Elephant and Patient Pig, and Entrepreneur Elf, literally commercial successes.

RAOUL PAL: Talk me through the vision. So, you create the characters, you create the NFTs, what are you going to do with all of this? Where is this going for you next phase? GARY VAYNERCHUK: I'm going to build Disney over the next 40 years. I'm going to make people care about my characters, whether it's through video game form, whether it's through book form, whether it's through iPhone game, whether through VR, whether through commercials, TV, brand deals, cereal, candy.

I am an incredibly well-positioned individual to do so because of the way my actual business-like works. RAOUL PAL: So, what you've essentially done is layout your store for a vision of the future to say, look, there's a great business opportunity here, I have to do this. People can get a share in the value of that network that you're going to create. And then you're going to go and create that.

And if it worked-- GARY VAYNERCHUK: That's right. This was the first time that people had an opportunity to invest in me in theory. And for me, what I really like, this is where NFTs really caught my attention. Let's say we're trucking along.

My intent is that these are original Disney sells. Let's start there, right? RAOUL PAL: Yeah. GARY VAYNERCHUK: There's no commercial rights. There's nothing else. These are Disney sells. The original drugs.

That's why I drew them. I wanted it to have to yield prominence like truth. These characters on my drawings will develop into things that are far more beautiful for film and television and merchandise. In 12 years, if I'm trucking along with this project, and I don't like the price of the tokens, I don't feel that my community has extracted enough value, that the rookie cards are just not worth as much as I had hoped for them, even though the enterprise is making hundreds of millions of dollars in these other activities and merchandise IP extraction. Well, I am in control. I can do a movie deal that has huge economics.

Finally, it hits. I have my big thing. And if I decide that I want to give 20% of the box office to my token holders, I can. And that power to support your community is extremely attractive to me, because I have the ability to make this community whole if I don't like where it's at.

Now, the lucky part is for me, is I did a lot of things well, and Jim and everybody at NFT42 deserves a lot of credit. I did a lot of listening. I'm very happy with Dutch Auction.

It allowed a lot of people to get in. I also like that I had a glitch with my MetaMask, and the gas fees look high. And because it was a Dutch Auction, a lot of things started tracking down. I also like the fact that the far majority of the people that actually bought it were people that I put into a discord months earlier, educated them on ETH, MetaMask, OpenSea.

So, what I have now is a stunning percentage of the people holding the tokens were non-crypto native individuals. I'm very proud, especially as I watch all of them now diversify and get into all these other projects. There's not a lot of people in 2021 who brought brand new people to the space. And I take a lot of pride in that.

I think that is really going to be my legacy over next 24 months between my public appearances, where my brand goes into different places, my impact of working with brands with Vayner NFT, my consultancy company. I have a lot of pride in this statement. I think I'll be at the top of the list of the humans that brought more people into the space, which inherently helps everyone. RAOUL PAL: When I look at this space, I think the biggest thing that's coming is community tokens overall. So, even when I look at Facebook Diem that's coming, people think it's a stablecoin, it's actually the world's biggest community token.

It go up and down in value of the value of the network. But that's where this is all going. You can coalesce massive groups of people with the community token. Share the economics and it drives network effects.

All they want to do is promote you and the product. GARY VAYNERCHUK: In theory, it's actually a very simplistic concept. If you decentralized, well, what's left? The humans that create the demand and the community that it supports.

So, for me, all those people who cashed in for a quick, this is why patience is the greatest gift. To me, my ability to run a marathon versus a sprint-- I mean, the sheer economics of the people that have already won on my play and I haven't even launched the three super conferences yet, and all the things I'm actually doing. Hopefully in three or four years, to your point, I fully agree with you.

Hopefully, in three or four or five years, when that becomes more obvious to everyone, my friend, and becomes more real. If I have a project under my belt that created extraordinary returns for the people that made that bet, it surely puts me in a very good spot to get to the next level of scale. And I fully believe that's what's going to happen. And I feel like the trust of sovereign nations to create currencies that happened long, long, long ago, will now happen around human individuals.

RAOUL PAL: Yeah, I totally agree. And around these communities. And I think it disrupts so many people. It takes out so many middlemen en route and puts that money back into the community and it just creates very powerful future economics all of this.

When everybody's incentives are aligned, that's extraordinary. What it's going to do for [?]? GARY VAYNERCHUK: It's extraordinary. What it requires is the people that start the movement, the IP, the music, the book, the recipe, whatever it is, it requires them to be able to create demand and LTV.

And so, I think one thing that a lot of artists need to be very careful of is this sounds tremendous. Everybody in the middle is getting cut out and I in my community get to have the economics. There is an incredible skill that is associated with actually building a community. There is a level of bringing such deep inherent value. And then by the way, and you know this, don't get confused by following count. If you're just extremely attractive and that's why you have 11 million followers on Instagram, that's not necessarily going to put you in a position to create an economy around yourself.

For me, I was very unique. I've spent the last decade creating free content that has impacted people to win mentally or financially, without very little ask in return. Creates a very different relationship than somebody who had-- if I had great abs and never had a shirt on and had a 10 of 10 face, that's a very different relationship. RAOUL PAL: That's right because it's not adding necessarily value. It's adding pleasure because somebody wants to see somebody quite good at.

GARY VAYNERCHUK: Yeah, and escapism is an incredible value proposition. I will tell you in my most stressed days, going to Netflix and watching standup comedy brings me incredible value. It really does.

I'm just not sure that I want to support Dave Chappelle's economy. By the way, I think Dave Chappelle is-- and the reason I use him as example, he might be one of the most thoughtful, bright comedians I've ever seen in my life. I just don't have a great sense of is he willing to put in the time to his community, create access, create a monster-monster relationship graph, know how to build intellectual property that is scales outside of him. Those are very, very, very, very different realities. RAOUL PAL: Because most people have a one-way relationship with that audience.

They push content out, and then get paid for it. That's it. GARY VAYNERCHUK: That's right. And don't forget what famous people are accustomed to.

They're accustomed to taking a big bag upfront. And then an organism in the middle is actually figuring out those economics of leveraging the upfront. What's been so great about my career is I've always done things for myself. But even when I play that role, let's say in my book life, I always know that I don't like my deal with my book publisher. But I've used it historically as an upfront cash flow model for me because I was pouring all my money back into building my businesses.

But today, as somebody who just finished their final book of their book deal, Harper Collins is going to have to come to me with a very aggressive offer to take me out of the equation of launching my next book as an NFT. I mean, because instead of them being my upfront money, I can easily-- NFTs are absolutely now the funding mechanism to projects. RAOUL PAL: Well, it gets rid of VCs essentially.

We at Real Vision, all the money we've ever raised Real Vision, about $60 million has only come from our members. We've never taken outside capital. GARY VAYNERCHUK: There's no reason to. RAOUL PAL: That's the power of community.

Now, if you tokenize, you have direct access to the capital of your community. GARY VAYNERCHUK: What I love about it too, and it was funny where my brain just went, I'll go there again because I don't think people talk about this. I love this idea of coming through for my community no matter what. Let me give an example.

This is very interesting actually. I have hated raising money my whole life. I've done it a couple times for a couple startups, and it's been the worst experience.

I don't like asking for money. So much so, that both times, Resy and Empathy. Resy, the restaurant episode to Amex and Empathy, the wine brand ETC that I sold to Constellation.

Both times I secretly had a bank account that had the entire capital raise sitting in cash. So, what I like about NFTs though is I would feel much more comfortable doing that. I'll tell you why. Once they own the token, I can work for them forever. I could fail on my book, on my restaurant, on my startup, and still come back and say, hey, if you still hold the Empathy Wine token, go connect in here and now you're getting 20% of my speaking fees in 2024.

Like I'm in control of always making good. So, I think people like myself, organizations like me, humans like me, actually are in a much better place. Because I never, ever felt great about raising capital, but selling an NFT that has a functionality to something I'm doing that even if that thing fails, my ability to come back and say I'm going to do this is an incredible, incredible opportunity. RAOUL PAL: Thus, the other thing that somebody brought up to me the other day is the fact that because it's on the blockchain, this stuff never dies. So, you're 90 years old and you're still owing value to those NFTs.

It's quite scary. GARY VAYNERCHUK: It's literally the best. I'll tell you. One of the things I'm most excited about, most excited about is the idea of buying some NFTs that launched today in 31 years. I've always talked about refurbishing old IP. What if Bored Ape Yacht Club doesn't make it? And let's say it's dormant for 20 years, no different than the 18 or happy days or Smurfs.

It's been so hot during this special year for NFTs that I bet you in 22 years, if I bought that up and refurbished it and reminded people of the great year of 2021, the way Toys work, the way Nostalgia works. It's the reason I'm buying up Curio cards. They're incredibly underpriced. In my opinion, for the ability to eventually and maybe something pops up because the archaeologists are still looking but as of this point, if that truly is the first NFT project, compare those prices to CryptoPunks, there's an incredible opportunity of that being in-- and by the way, that might be somebody in 11 years saying wait a minute, and they're the Madonna, they're the Michael Jordan, they're LeBron James. They're the whoever of that era saying wait a minute, Curio card is first, this is the coolest. I'm putting this on all my clothes.

I'm getting a tattoo. The Post Malone, [?] of that moment, or the Kardashians of that moment. That's amazing because that's the beauty of authenticity on the blockchain. RAOUL PAL: And also, the value of Nostalgia considering we just have the biggest age demographic of all time, the Millennials now, we've seen what the boomers did to anything versus their generation. These Millennials, this is their prime time.

They're earning their money. They've got a group of pop stars that they love, that they grew up in. All of this is going to be worth a fortune to them in future because it'd be the story of their lives.

GARY VAYNERCHUK: I think that's right. I think that you're also talking about Gen Z coming up the ranks where they only know about spending money to get a Fortnite skin, to get a Roblox upgrade, to get Madden points, to get NBA2k points. There isn't a 15-year-old or under in the world right now that doesn't understand the logic of Mom, Dad, give me your credit card. I would like to spend actual money to get these points in this environment where I have my social currency. I have my identity wrapped up in.

They would rather get $100 skin in that game than $100 pair of sneakers. They probably want both because they're kids. Once that hits scale, that was always my point about social media.

My point in 2012 to a lot of people was, you do understand there's an entire generation right now being affected, and they're going to be 24 years old, and they won't know any different. And that's where we're living now in 2021. We've got an entire generation of 24-year-olds who started with social media at 11, or 12, or 13. It's just their life.

NFTs are just the completely scaled version of video game and gaming dynamics that have completely and utterly penetrated everybody on earth under 15. So, they'll only live in this reality when they're 25. RAOUL PAL: So, that's the next question is you're obviously thinking and for the short period that I've known you, you're absolutely thinking about the metaverse as well, because that's where this is all going. How are you thinking of that? Because obviously, you are creating these characters, they're not going to live on a cinema screen, they're going to live in the metaverse. GARY VAYNERCHUK: That's right.

And I'm a big fan of both. I'm a big and versus an or guy. One thing for everybody who's listening because I know a lot of people can tune in given our two worlds. This concept of or is devastating. When you're long Bitcoin and you should be, but if you're spending most your time shitting on any alternative coin, that's bad energy spent. I'm watching all these people in NFTs singing Kumbaya, Kumbaya, but the second that somebody promotes an NFT that they're not a part of, they shit on it.

And it's so fascinating to me. RAOUL PAL: Wrong. It's just wrong. GARY VAYNERCHUK: It's wrong. It's a bad way to play. It doesn't work out in the end, nonetheless.

You're exactly right. And the way that I'm doing that, is I've done a couple of interviews in the metaverse. I'm spending time to time with Facebook.

I think Facebook is way out ahead. Talk about a potential underpriced arbitrage. RAOUL PAL: Yes, I've been talking about this forever, Facebook. GARY VAYNERCHUK: They're so far ahead.

And if you know who Andrew Bosworth, [?] who's leading the Oculus VRA. RAOUL PAL: You introduced me to him today, actually. GARY VAYNERCHUK: He's so talented. It's scary.

He's truly one of the few people I've met in business in 25 years that I would blindly bet on that gives me triple confidence. I've been looking at Facebook at $375 a share lately. And again, I told you earlier, I'm not that guy. I don't understand Wall Street.

I don't understand this. But knowing what they're up to there, I'm like, huh, they are so far ahead. They own Instagram, so they have this contemporary scaled machine. If they nailed their timing, it's going to be a windfall. So, you're right.

I've been spending, a ton of time with them. to give you a little exclusive, quite a bit about how VeeFriends shows up in that world and I'll be there two years early because the space is big. But what I'm really good at, and what I really do focus on is timing. So, when I say I'll be there two years early, I'll be flirting with it. I'm already having metaverse, Oculus, Decentraland, I'm already doing plenty of things. The thing that everybody saw for me in January of this year where I'm like ta-da, NFTs, that may be three years away, because I don't like to do that until I think that there is a scaled consumer event going on.

Why? Because if people jump in, when you're too early, you lose the most. And here's why. When you're too early, you're going to lose on the economics and the opportunity. And then the reason I say you lose the most is because then it really hurts three years later when it happens. I saw a kid tweet today.

He said, guys, I'm really mentally struggling. I had a $35,000 position on Axie Infinity three, four, six months ago, whatever he said, he goes, it's worth $1.3 million right now. And I'm a young kid with no money, I'm really hurting. And it hit me about timing. And really, this one's different, because social, when I was talking about social, it was about building brands, the most important thing in the world.

The problem with NF T's is you're talking about transactional money. So, the way that a sentence, maybe even a comment we make in here, the way that triggers really scares me, it makes me not want to talk. I'm very fearful of the platform that I have. And even though I say 98% are going to fail, and even though I say every day, please only put money into this that you can afford to lose. This is an extremely high-risk category right now for a million reasons, regulation, supply and demand issues, timing, we're in internet 95, 99, like it's early. Even though I say all these things, I know if I say hey, I like fame lady squad.

And these are really good art and I love more female projects, that potentially hundreds if not 1000s of people go and buy them blindly. Even though, please do your own homework, I'm always wrong. I say all these things ad nauseam, but people don't hear it. RAOUL PAL: I have the same issue.

And it's scaring me. I have to take it very responsibly to say, listen, I don't know. I think I know, and I've got a lot of experience. But I don't know.

I could be wrong, and I'm wrong a lot. Because people carry their hopes and dreams, particularly in a space like this, it's so new and moving so fast. People really want to be involved.

And I get that. But as you say, you got to do your own homework. GARY VAYNERCHUK: There's a way to be involved. There's an incredible way, it's called spend money that you can afford to lose.

I mean, WAX is an incredible blockchain with incredibly good nostalgic IP with very low costs, you don't have to go buy a $3,000 ETH launch token or $800. 0.35 as we saw with Stoner Cats, or even with VeeFriends was very expensive, because I attached what in essence is going to end up being $15 million worth of three-year events for me, so I really need to generate dollars. And there'll be more. I think as people dissect VeeFriends over the next three or four years, six to 12 months, I think more people will look at it and understand it. And I think you'll have more expensive NFT projects, because it's not just about the art.

Right now, you have a flooding of people that have copied Bored Ape Yacht Club's naming dynamics, and now you have Skinny Snail Thursday Club, and you have like, Extremely Happy Hamster Crew. And there's very little underneath other than we'll let you share in the economics. Well guess what, only 50% of something that's worth zero is zero.

99% of these people are not going to be able to make their IP mean something. RAOUL PAL: And what is bad about this space is everybody will lump everything in together. So, we know one of these big projects is going to go to zero, and they will go to you and say, see, Gary, it's all a bunch of shit. You're just calling people.

And this will be roaring big. GARY VAYNERCHUK: And I'll say, if I was making content in 1999 when I told everybody the internet was the most important thing that had ever happened in our lives, and the stock market collapse, and it was death on Wall Street and everybody who invested in shares went to zero, I would say okay, but guess what, Amazon's five bucks a share. I think you should buy it.

RAOUL PAL: Yeah, exactly right. Because when you look back on the [?] on NASDAQ back in 2000, it's still really dramatic. And now, looks like a little small bump on the road because what came after was-- GARY VAYNERCHUK: I think what keeps me calm at night, lets me put my head on my pillow is there is no way NFTs or-- by the way, the word NFT could change.

That's how early we are. We call social media Web 2.0. We called the internet the information superhighway. We used to say go to http:www.

I don't care what you call it. I can tell you right now that in 2039, people will use digital assets the way they used physical assets to communicate to each other and there's no doubt in my mind. RAOUL PAL: And physical assets will also be recorded on the blockchain as tokens as well. So, we can all buy a property together in Manhattan, that's a $50 million apartment and share it amongst 100 people. And all of this changes dramatically. GARY VAYNERCHUK: Your point there was funny, back to Aaron Batalion, his first point was leases, mortgages, like when he was explaining the smart contract, it just blew my mind.

I'm like, this is incredible. I don't think we've even begun to innovate. How about this? How about if you're lucky enough today to sit with an incredibly unusual property, like a home. Let's say you're an extremely wealthy person, and you have just a very unique home.

Well, I think you blockchain it and when you sell it, you put in a royalty that says you make 2% on every transaction of this home in perpetuity. RAOUL PAL: I've built a house here in Little Cayman, and maybe eventually-- GARY VAYNERCHUK: Why wouldn't you? I could tell you right now, if you decided to sell it, let's say we became friends over the next 15 years, and I wanted to buy it for some reason. When you're like, hey, by the way, there's a 1% royalty in the contract., it's not going to matter to me. But I'll tell you what's going to matter to, your great, great, great, great grandchildren when it changes hands for the fifth time, and for some reason, they get an 800,000 check in the mail or an $80,000 check in the mail. They're going to be awfully happy with great, great, great, great granddaddy figuring out why he understood the blockchain.

RAOUL PAL: The other thing I'm looking at is also IP rights. So, let's say you're a pop star, you've just started your career and to your community, you sell your first year's IP rights. You share with them, and they picked the song that they think is going to be a hit. There's going to be millions of people on TikTok trying to explode the content, getting it everywhere, because that's their job. GARY VAYNERCHUK: I couldn't agree more.

Early on back in December, January, early on six months ago, I was trying to explain it to friends. I was like, okay, I had one friend [?] into music. I said how do you like find new bands, and you love that, you take pride in it. And when they get big, you get upset and sold out. You're not going to be upset anymore. He goes, what do you mean? I go, let's play it out, let's say Nirvana decided to give up 20% of their IP in NFT form to fund them so they didn't have to sign a record deal.

Let's say today that you were one of those earliest fans in the Grunge movement in Seattle, and you bought some tokens. Let's say today, every day you wake up, and you look at your bank account, and Spotify because Teen Spirit is being streamed as many times as it is every day. And you own 0.3% of the royalty that they're getting, this is going to be the greatest revolution of people being able to support artists they love and actually make incredible economics for being right. RAOUL PAL: But also, it makes culture investment.

And it's also because of-- GARY VAYNERCHUK: Oh, by the way, let's stop there right now. I just want to make sure everybody who's listening, and obviously, if you're listening, at least half of you, because I'm sure I'll bring plenty of people, you're an incredibly handsome smart host here, just said the only thing that actually matters. And it's the reason I'm so in. The only thing I've ever understood is the stuff that's unseen.

The reason the black and white finance world never clicked for me is because I was the best at gray. And I understood it so well, that it just became my passion and my obsession. When our great host here says what he just said, and that's why I had to jump in. And there's a lot of ramifications about this, by the way. There's a whole counter to what we're about to say that will play out 20 years from now that will change the world in a way that you can't imagine.

The purity of culture has been incredible, because it wasn't economics between the end audience and the person, there was always something in between. But over the next 30 years, here's what will happen. First, in the first 10 to 15 years is what we just talked about. Culture will become financialized, value, community, brand, it will become more literal. The back half of that 30-year period, people will start to gain that and the purity of it will actually have an issue. And it'll be very interesting to watch what that actually manifests.

But let there be no confusion. That statement was the most important-- as much as I've been yapping, the tokenization of culture is exactly right. It's the only thing I've been thinking about the whole time and it's going to be a big fucking deal. RAOUL PAL: It really is. It's the biggest thing.

I've looked at this whole crypto space. I've been in it since 2012. And I've been excited about the whole thing.

And all of it is less exciting than this tokenization of culture, the NFT plus community stuff that's coming, plus the metaverse is like the biggest thing I've literally ever seen. GARY VAYNERCHUK: I think that's right. And I think I don't know if I have more respect for the OG or enthusiastic Bitcoin community when they get mad at me when I do podcasts, but I always say to them, please don't be mad. I'm genuinely, I'm actually complimenting.

I think it's so big that I'm just curious what sovereign nations are going to do. I don't know what to tell you. It's actually the greatest compliment. It's not an insult. I don't not get it.

I think I get it so much that I'm curious, because I think it's a big, big, big deal, and really cool. And I love that. But I do think that what is a far bigger conversation is the tokenization of the gray of society, which I think is a good trillion-dollar industry.

And I think we're in the pre-dawn of it. And I think the cat's out of the bag, and I think these next 30 years are going to be iconic. RAOUL PAL: And hopefully, we'll both be at the forefront of it. GARY VAYNERCHUK: And hopefully, for me, I'll be honest with you, I for a long time ago realized I was going to make all the money I ever wanted for myself.

Because the truth is the only number I ever had in my mind was $100,000 a year. I came from very humble beginnings. That was the only number that I really thought about. I definitely want to be at the forefront, but I want to bring the most people to the forefront, so it completely changes their lives.

And one of the reasons I chose this podcast out of all the ones that I got bombarded with is I really appreciate what I think you're doing for your community as well. And I understand how you navigate which is probably why you understand how I navigate. And I cheer for people like that. So, thank you for having me on. I hope this discussion helped some people, and this was fun.

RAOUL PAL: Yeah, thank you for coming as well. And look, I think this is really important for people to understand. What is going on is a big opportunity and it doesn't matter if you're rich or poor, everybody can participate. GARY VAYNERCHUK: Look at Axie, look at Bored Ape Yacht Club. These are things that were incredibly inexpensive. This is a transcending half decade in front of us around this with the potential of an 18-month winter within it, which is going to be an incredibly fun thing to watch for people who they have conviction and who doesn't.

And so, I just wish everybody great luck. But most importantly, do homework. Do not be influenced by me, him or anybody else. Do your homework, do your homework, rely on your strengths, make your own decisions and play with things that you can afford to lose. I think the opportunity is real as well.

Cheers. RAOUL PAL: Thank you, my friend. GARY VAYNERCHUK: Thank you, my friend. NICK CORREA: I hope you enjoyed this special episode of the Interview, the premier business and finance series in the world.

However, this is just the tip of the iceberg. For more in-depth content and expert analysis, visit the membership link in the description to unlock a week’s access for only one dollar. This dollar can change your life.

2021-08-15 05:19

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