The Startup Voyage - Web3 Business Growth
The Startup Journey podcast is dedicated to spotlighting the journeys and insights of Web2 and Web3 tech founders and investors.
Guests of The Startup Voyage podcast join a world of industry leaders, startup visionaries, and seasoned investors who share valuable lessons, stories, and advice to inspire and empower a global community of tech founders.
We take a journalistic / reality show concept to ignite conversations that empower the next generation of disruptors.
Join us as we dive deep into the dynamic world of technology, unraveling success stories, industry trends, and game-changing innovations.
The Startup Voyage - Web3 Business Growth
The Harsh Realities of Raising Capital in Web3 with Robert Capodieci
Unlock the mysteries of Web 3 funding with blockchain sage Robert Capodietti as we venture into the heart of capital raising for the next iteration of the internet. Our discussion peels back the layers of investor strategies, due diligence, and the art of valuation in a realm where technology meets skepticism. Whether you're a fledgling startup or a seasoned investor, Robert's experience with SimFly, a pioneering play-to-earn flight simulator, showcases the innovative approach to creating ethical token ecosystems that resonate with niche markets and defy the status quo.
Gone are the days of investing based on charm alone; we dissect the cautionary tale of charisma-ridden investments and the rise and fall of figures like Sam Bankman-Fried, underscoring the importance of aligning interests and conducting thorough due diligence. Discover the subtle cues that reveal a founder's long-term commitment and learn how to sift through technology buzzwords to unearth projects with real substance and potential. Dive into the nuanced dynamics between investors and startups, where the symbiotic relationship can lead to unprecedented growth or serve as a bedrock for failure.
As we wrap up our exploration, we scrutinize the intersection of blockchain and AI investments, where expertise and experience reign supreme. Robert and I tackle the critical need for discerning genuine skill in a world awash with jargon and lofty promises. From the significance of code auditing to navigating the pitfalls of financial scams, this conversation is an essential guide for anyone looking to confidently step into the revolutionary waters of Web 3.0 and tech investing with eyes wide open and a fortified understanding of the complexities at play.
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The Startup Journey podcast is dedicated to spotlighting the journeys and insights of tech founders and investors shaping Web3. Guests of The Startup Voyage podcast join a world of industry leaders, startup visionaries, and seasoned investors who share valuable lessons, stories, and advice to inspire and empower a global community of tech founders.
We take a journalistic / reality show concept to ignite conversations that empower the next generation of disruptors. Join us as we dive deep into the dynamic world of technology, unraveling success stories, industry trends, and game-changing innovations.
Hello, welcome everyone. Here's another podcast episode on the startup voyage, and today we are talking about funding for Web 3 companies. I've titled this episode Funding Unveiled the Harsh Realities of Raising Capital in Web 3, which it has been in this very, very long crypto winter. In this episode, we dive deep into some of the challenges in the Web 3 space, and the industry itself continues to be booming with innovation and promise, also harbors its share of harsh truths when it comes to raising capital. We'll break down these realities into three key areas people, process and technology, from the human elements influencing investment decisions to the intricate processes behind funding and the technological hurdles unique to Web 3. This episode aims to shed light on what it really takes to secure financing backing in this rapidly evolving landscape. So, whether you're an aspiring entrepreneur, a seasoned investor or simply curious about Web 3 funding, this episode promises to provide valuable insights in real world wisdom.
Speaker 1:Today we have a guest Robert Capodietti, cto of multiple projects in a blockchain evangelist Renowned for his strategic vision and technology, he's mastered driving corporate technical direction and delivering results. His expertise spans strategic planning, business intelligence and team leadership, with a deep focus on blockchain technology and decentralization. As a trusted partner in C-level decision-making. Roberto is dedicated to innovation and process improvement, and the reason why I'm having him here today is because he himself has gone through the arduous decision-making of whether or not to fundraise, and he's got a lot of stories to share with us that will be valuable to my audience. So, robert, thank you for joining our show.
Speaker 2:Hey, thank you for having me. It's a pleasure.
Speaker 1:Yes, yes, so I guess I just get started. Maybe you can give a little bit back about your recent project, that how I found you, about SimFly and maybe a little bit background of how that started.
Speaker 2:Sure, yeah, as you introduced me very beautiful introduction, actually, Thank you. I am into this world of Web3 blockchain decentralization since the early early days. I wrote the first white paper in 2013, 2014, about the use of blockchain for document management for trade finance. So it's been evolving and I had gone through a lot of experience. Actually, I was doing sabbatical years sabbatical years that I take there was just mentoring startups where I met these four people that this idea for this project for fly simulators Honestly, when they told me the idea, I thought it was banks or something will never work.
Speaker 2:It's been for me a huge lesson actually following them. Now I'm 20% owner of the company and I am actively working with them. In this play-tweard there is ethical, which is strange because usually play-tweardness is not almost to Ponzi scheme or spam. Unfortunately, and in fact that's exactly one of the points where raising funds for projects that they have that are attached to some aspect of Web3, like it can be NFTs, tokens or other things it can become difficult because of the reputation the unfortunate reputation that outside the world of Web3 itself this sort of project have raised. So it is a double challenge. So for Web3 project, promoting and finding funds inside the Web3 community is easy.
Speaker 2:But outside. When you bring the technology outside the world, the people here token NFT, blockchain a lot, just run away and don't want to be associated. It's a strange planet.
Speaker 1:Okay, so this is what I'm showing on the screen right now. This is SimFly, so it's not real flying, it's through a flight simulator. Maybe you can explain, sort of like, how it's gamified. I understand there's different missions that you can take and increase your level within this gaming, and how do you earn?
Speaker 2:Absolutely. This is a very interesting aspect and the decision that I made of participating in this project, even though it's a delicate topic. For example, I've been into blockchain since really day zero and I never did an ICO and people came to me why Because I never found them ethically sustainable. There is a lot of things I don't want to be confusing that, in this case, play2earn have the doubt that people put is like you cannot take out of a box more than you put inside the box. So the first thought that comes is like when you have a container, that can be a gaming experience where people earn, where you find the funds to pay the people to earn, if not from people entering the system. So that's why it is a very easy conclusion to jump to, to say that these are Ponzi scheme, which a lot are, in fact, in the case of.
Speaker 2:SimFly. The beautiful thing is that the public and the target is a very particular kind of target. So it's a niche which is people playing, not playing people using fly simulators. It's not a game. It's not a play because you cannot just sit and do one game until game over, because if you don't, know, all the small technicality of aviation, you can not actually fly right.
Speaker 2:So, it already limits the capacity to earn a token by having experience, having some time, years of experience in this field and knowing exactly how to move things, which means it's not something that you can put about to somebody moving the mouse very fast to earn tokens. It's not such thing. It's really a job that requires competence, which makes a limitation on who can create tokens. Tokens are minted based on the people flying an airplane, you know, like if a pilot is getting a salary and giving these economical layer where people can earn enough to buy an airport and with an airport you can have a pasir income. Every time somebody lands or take off, you can earn some token as well, with all the gamification of collecting experience points to increase the level of your asset, etc.
Speaker 2:So the technology of Web 3, where NFTs are representing their sets, is actually a huge plus because give the freedom of people to take their asset, resell them in the open market or if somebody else built another platform where SYNFLY asset is accepted, they can actually shift in. You can say you have a pilot license, you're a captain. They can be a shop with the sales graphic cards for people with a fly simulator where you can prove that you're a captain in SYNFLY, you get a discount. So the freeing asset from a game so that people can use them everywhere is a huge advantage of the technology, right? So the big revolution of blockchain is to create uniqueness in a digital asset. So I could have an MP3 file and make 10 copies I don't know which is the original, but I can now make 10 copies of my Bitcoin because it will be worth it. So the use of the technology is actually improving a lot of the experience, but at the same time, it brings with it a reputation for people that is now in the field that don't know the things.
Speaker 2:That scares people. It scares investors.
Speaker 2:That are not in the Web 3 world, so it's a really two-sided aspect when I married this sort of technology.
Speaker 1:Yeah, so SYNFLY itself, I think you did. At one point you were mentioned that you were considering going out to fundraise, right, what do you think the like you just said, sometimes when investors don't understand something, they get a little bit scared about it. What do you think the investors' mindsets are when they're considering funding a Web 3 project compared to a traditional tech startup? Is there a difference?
Speaker 2:Yeah, absolutely, because I cannot blame people for staying away from something that has been several times mentioned inside the scams From the actual crypto exchanges. We had exceptional cases of the X and so on from a wrong algorithm, the Theraluna, and in other Web 3 projects. I've been so fortunate I had a company for consulting school blockchain zoo. Somebody did the crypto zoo and was a scam, and now this zoo world is being kind of there. So if people think I am associated with, I'm not absolutely. It's just a similar name, but in fact the thing is so strong that they can have this sort of repercussion. We've been blessed in a way, because we failed.
Speaker 2:We were really searching for an angel investor to put a little money to help us with the marketing and that this would have given a big chunk of the company. We failed to find it and you know, fantastic, because the company is making like 10 times the money that we were searching and we didn't have to give away anything. Too bad for people that refused them because they lost an opportunity. But would they?
Speaker 2:know In fact, at the end, every investor should invest on the people more than the project, because the people are what you trust. But there is a big trouble that a lot of people are very sweet talker. They sell themselves very well and at the end of the day they don't bring the products.
Speaker 1:Yeah, just like Sam Bakeman Fried, right, he is a very good talker, he sold a lot of people and he was almost like the legitimate guy in crypto and everyone thought and trusted him, right? So I guess that's the point. Do you think it's changed a little bit? Because maybe investors are maybe spending a little more time doing due diligence or is maybe in the past, they're very chasing after deals and they don't do due diligence, do enough, and then they just start putting their money in yeah, I lost quite some money as well, putting 100,000 here, 200,000 there in projects that end up not being delivered.
Speaker 2:People buy themselves a house with money and would they know what they can do Now I spend enough more money to sue them or go after them. That's why probably organized investors are more prepared than they provide one, which I suggest everybody not to like, unless it's family and friends. And analyze the use case of the project Web 3 or not. Does it make sense who people adopted, what are the opportunities? Would you as an investor use this thing? And also, is the person doing the project really need the money? Because if I'm making a project and I have the money to invest, why and I believe in the project why would I ask money outside? I put my own money. I will make more return at the end of the day.
Speaker 2:So there are a lot of questions that people should ask them. So why they're searching for an investor? What is the gap they need to? You know, am I strategic in the investment I provide money by? Provide also connection to, so where is the return I can give? So the technology in the use case are absolutely something to analyze. I see a lot of projects that don't have any use case, just a cool idea, but we have no problem to solve and those are very risky.
Speaker 1:Right, right, right. So I'm sure if we really looked at every single project, we can categorize them in different approaches strategically. So I can imagine someone has a great idea. They socialize it. It seems like something that would be attractive to the market or solving some problem. The founder then goes out and says I'm going to get some angel funding, puts a pitch deck together. Maybe doesn't so much believe that it can happen, or they have their own money. Probably they don't want to risk it, so they go out and get you know money out. So I think that what are the misconceptions like when an entrepreneur starts a business, for whatever reason, and they're facing investors? What is the expectations that they get in return? Because, like you said, they take a lot of the percentage of the company.
Speaker 2:I have a friend that actually started something amazing I'm not going to do names, but and he started getting rounds and rounds and rounds and at the end of the things the company was huge but the guy had the less than 1% left for himself. So at that point he is no more motivated. So the investor side I had a discussion in Dubai it isn't really the flu just for this to support the project. This person was giving money but they wanted to have like 90% of the project.
Speaker 2:So at the end of the day, I was like look, which is the motivation I have, me and partners, to work on something that is not ours anymore. So you need to keep the person motivated so you can invest, but you need to be sure that this person has all the reason to make this thing a success in multiple ways. There is something to lose, there is something to gain and that's the motivation there to stay there, because greed usually brings to failure on both sides.
Speaker 1:Right, right, right. I guess in your experience you had mentioned so you've mentioned before about investing in projects like. So investors themselves Is there a specific bias that they might have towards looking at a Web 3 project Like is there already some misconceptions about Web 3 projects or what it means to be a Web 3 project? Do you think there's still confusion in the investor community?
Speaker 2:I do believe that pretty much a lot of magic words are misleading and people may have confusion in terms of is blockchain is going to work? I remember when websites where you know a long time ago you know everybody need to have one else you know like, so there was strange investment. I think that there is a sometimes wave of investment towards things that do not make much sense in a way.
Speaker 2:So, as an investor, I know that the cost. That's why there is these strange things. Angels investor have the most difficult work because you need to do the diligence in some way. There is no basis to do the diligence on Second round investors that they have in front of a company that already has to analyze that this is something consistent that is valid and work. So the risk is less, strangely enough, right.
Speaker 2:So in the moment that somebody is approached, they need to keep the cool. You know. Don't get excited because the other person on the other side is excited. Don't fall for the homo. They say that you're missing out because oh, something, I'm going to lose this opportunity, things like this. You know, I have a podcast where I talk about the financial scam, how people fall for financial scams, and it's all always based on rush. They want to rush people to take decision without leaving the time to think. If, when you invest, you fall into mechanics, however, into rush invest because only three days left, only you know, probably leave it because there is a danger that you know you don't think well enough, you don't do your analysis, so it's better to let it so.
Speaker 1:Is that? Is it a best practice? If someone is going asking for money and if they're pressuring you to hurry make a decision and say, oh, I've got you know 10 other investors and you know the first one in gets to know the best deal, I guess that's a red flag.
Speaker 2:Yeah, that's correct. You know there is no such thing, right. If somebody really has the opportunity, open the doors to all of them. So it's really no such thing like how you miss the opportunity and if it is good luck to you, meaning that there is must be pondered very, very well. Yeah, I've been surprised how, and also for an investor is important to ask yourself am I ready to support to the end this thing? Meaning is just one token one time and good luck or not?
Speaker 2:I'm going to be there monitoring what's going on, pushing the people to do the things, ask information and when I see that they should add some little money to make sure something succeed, I'm ready to do so without falling into the fear of keep adding money as I lose the money that I put in before, which is, you know, the classic casino slot machine. That's right, people. And so there are these, these aspects on term, on terms of what is the business that I am financing about. The real question is something is really something useful? I am surprised, really surprised, how people go after things that doesn't say anything, a lot of big words that don't have an actual practical solution, rather than going to the farmer that doesn't speak very well, you know, in the language that has, but has a very good point. You know, I put a plant and I sell it because they needed to eat. You know like which is a guaranteed sort of business in terms of technology and what three.
Speaker 2:There are things that are necessary. There are things that are not necessary. Right, so a game is not necessary is an additional. That's why the reasons in fly seems not a good opportunity for an investor, because do you know somebody playing with fly simulator? Nobody knows. Because these people don't have a social life. But at the same time is a fantastic target because these people spend the money. Because a computer powerful enough to run a price simulator is a very expensive computer. There is always to buy new stuff and new accessories. So people spend tens of thousands of dollars on their instrument to do this, which means that when they get into a game they ask $50. Those are nothing.
Speaker 2:Okay, so it's not like asking $50 to somebody that spend them in a month to survive, you know, like.
Speaker 2:So it's really an analysis who are the people that purchase the service or purchase the solution, and which is the profile of these people? You know, which is the power of the business, and so it's interesting. Microsoft celebrated one year ago the million active pilots on their fly simulator, the million people that is there spending every week or several hours on this activity, and so this is a target that is very beautiful for a niche, right, but it's harder for an investor to think that we've been lucky about that, but it's hard for an investor to understand the opportunity. Right is difficult. So when somebody starts with a business, with a debt that he wants to be financed, wants to be invested, it should study something that is easy to understand and straightforward for an investor. So generalistic knowledge, common sense, would approve it. When somebody does something because they want to make a good and because they know specifically, then you know forget about investors or you know it's going to be difficult to find them, in my opinion.
Speaker 1:All right. So from I spoke with one investor before who was saying that when they look at projects, they sometimes are there's a gap in knowledge, for sure and understanding. You know you can't just say blockchain, well, what are you solving with the use of blockchain? So, and also, if they're looking at the code, they don't. They don't even know what they're looking for. So he was asking me oh, do I know someone that can do code audit and kind of help verify part of the due diligence? I guess, in that respect, in that knowledge gap in you as a CTO, how do you? What would your definition be for a project that claims to be a Web3 project? Like, what characteristics make it a Web3 project?
Speaker 2:That's a very good question because the definition is so wide that they pretty much have everything. But one thing you said before is very important to underline they think calling a consultant to validate something, it can save you a lot of money and a lot of time. I've been doing this as a person consulting to validate that the project was good, there was something behind the piece of paper for the you know claim, and this really is very important. Now for the definition of Web3, that's a very complex aspect. I think in general, we are moving in the era of information technology. We come out of the industrial era, we enter in the era of information. We went from digitizing analog content, from transmitting it online, to actually selling services in this world. I do believe that what Web was as a key basic definition was in a passive way. I have HTML it was hyperlink, test markup, language right which allow me to go from a website that is talking about various things and mention a tree. There is a link and I go to a website where they talk about history a lot.
Speaker 2:Now, in this paradigm, I can be anybody, doesn't matter. I go through the web without my identity following me. Web3 is pretty much the same thing, but my identity follows me wherever I go and my accessory, my assets, follow me wherever I go, being them compatible or not. This is the key difference between the before and the after. And to have my identity following me wherever I go, I need an underlying technology and an underlying platform, which can be blockchain, to support the uniqueness.
Speaker 2:Blockchain revolution is, as I was saying before, having a unique asset in the digital world. I cannot make the copy of the Bitcoin. I cannot make the copy of my identity in the same way, and I cannot make the copy of my assets. If I sell them, they don't belong to me anymore. So this is when I visit a website that can be three-dimensional virtual reality, but can be just my website, where I bring my identity with me and it's the same that I use somewhere else, no different username and password for each website. This is Web3, in my opinion, so it's the possibility to decentralize, distribute, maintain a key element along all the places I visit. That's my vision, my understanding of Web3. It can be metaverse, it can be now, it can be crypto, it doesn't really matter.
Speaker 1:Right, right, right, Okay. Well, I want to go back to the whole point of auditing the code of a project for investors to validate it. I think the most important part also especially with all the hacks that have happened in this industry is code security audit, and I think I spoke to somebody in the space where they had got some quotes for an audit and it was like $40,000. It's quite expensive. So I think a lot of businesses don't want to put out that money, but it is very important. So what do you think is the best place to go for an audit like this?
Speaker 2:Chargeability I'm talking honestly If you think in the year, I think the word. We have a calendar before Jesus Christ and after Jesus Christ. I think we need to another one before and after the church If it is close to the pandemic, as well as the idea.
Speaker 2:I think there's a company that we're doing audits as a service for others. Smart contract is the biggest auditing thing because smart contract even though we talk about generic code auditing for security, for sure, they publish smart contracts they end up failing. The DAO is the first big example, right? Yes, we may remember that company was doing auditing for third parties. Can you imagine in their own code that fails? So what is the guarantee that somebody is a beauty market that you put in your website? They say we've been audited by, because if he says it is good, it's good.
Speaker 2:Truth is that humans fail and every code that is at zero day, things need to be updated. Smart contract were condemned to the fact to be mutable, right? Because if you can change the smart contract, then what's the point to have a smart contract put everything in the central server? In fact, I don't like people. So because we can change them, the trust that needs to be on the person at this point put in a central server. Anyways, I do believe that it's important to see the architecture, see the logic and but the flow specific on some library that people use to make a code. Those are close to impossible because they're given as good. If I can discover all those vulnerabilities and I am multimillionaire in today's because you know I will be selling them online or warning people to fix their code. So that, architecture wise, the analysis is very important. Logical protocol wise, absolutely to be done. Code wise, to a certain extent, but it's impossible to guarantee that something is immune from attacks, right.
Speaker 2:In the term of blockchain, there is an interesting aspect. A blockchain is made by many nodes in a peer to peer network, so the first thing to see is that every node has not to be identical to all the other, because if there is a vulnerability, you take down the full. So it's important that a protocol is implemented in many different way by different teams and it's compatible because of the protocol. But there are many different versions of the software. So if one has a vulnerability, you can take down a piece of the network, which is not a big deal, but you don't take down the full network. So that's when people go in layer one. This is a very, very, very important aspect to consider. Yeah, yeah.
Speaker 1:Well, there's a lot of new layer ones being built, and also layer two. How does investor decide which ones? I mean? I see a lot of projects supporting multiple different chains.
Speaker 2:Yeah, blockchain that you use can be people that one from the other is it doesn't matter. The investor shouldn't really care about an amazing idea. It's going to make million. I use the blockchain. I don't like it. I don't think that's the case, that's just. It's like to say I don't know to make an analysis of the blockchain.
Speaker 2:I don't know like to make an analogy. I would not buy a house, but don't buy because the color of the walls inside are not the color I like. You know I can paint it over. That's not a big deal. What is important is the use case why these things should be selling, why people should use it. That's important. That behind there is polygon or Ethereum, but the fees are twice in Ethereum we do our own. That's a really bad. You fix those things, so it's probably probably can be fixed without major issue, unless we're talking about an angel investor in a startup project. The project is being important. That's my opinion.
Speaker 1:Okay. So when it comes to just on the same theme of like building the tech for a project, how do the complexities of the technical side of Web3 projects impact the ability to attract investors? Because you know, like you said, if they don't understand, do they only invest because maybe their friends in the industry have also invested. Do you think these complexities make it harder to attract investors?
Speaker 2:Well, as an investor, if I want to go down the level of asking questions about technology, I will need to understand first the objective of the project. But in general terms, I want the team to use languages, libraries and systems that are very widely known so, in case a developer drops out, a new one comes in and can take over easily. Because the worst thing is customized code, customized systems that only three people know when you know in the case you know people can be blackmailed by the developer because this goes away, we need to start from zero. So it's important. As an investor, I want to assure that my money are used to build redundancy in terms of developers developing team. I want to make sure that things are stable and can get to delivery and not just you know, a one-man show. You know that's an important thing.
Speaker 1:So do you believe just a thought that I had With all the projects that were funded in 2022, in one year or 20, how many of those projects do you think have, like, some quality code?
Speaker 2:I was thinking your question was with all the projects that have been found in 2022. How many Ferrari, lamborghini have been sold?
Speaker 1:That's another question too.
Speaker 2:Yeah, well, you know, that's something interesting because the code one more time, unfortunately, I say it is and I get the night that when I say it you can have crappy code. But if you deliver something, you are delivering it. Even then you fix the code later. What is more important is always the same thing. It's something I'm making, something that people want is what I'm making, shaped on what people tell me they want. Because then the code underneath I think the ideal project to build something with tape and stuff attached when it's mature it has enough money to restart from zero with experience done and code the perfect piece of software. Because it's impossible unless if I have the million dollar on the side, I can really work in steps. I have no rushing delivering and I can really do the analysis, all the architecture, all the market research etc. And comes out with a good product. But in reality it is happening very rarely unless you're a big corporation. So what you do? You have little resources. You do what is simple. Unfortunately, also, programming language, where you have a lot of developers, are those simple.
Speaker 2:Programming language Means that there are high level means that they consume a lot of resources. Hardly somebody start making their Web 3 service coding in C Piled for the server. Right, everybody use a goal, a plan, a Python Rust. Rust is already a little better in terms of consumption of processors, but there are a lot of languages that are easy and there are a lot of people Remember when there was this wave of Ruby on rail everybody Ruby on rail. It was really super high level.
Speaker 2:So the idea is that that doesn't matter at the beginning. So, starting with the proof of concept, with MVP, all the process to go even to a product that is delivered, build it that is stable, but maybe the code is crap on the server. You need a very big server. Facebook, I think, when it started and it exploded immediately, super well, was coded in PHP and they had a full building, full of server. Then has been recorded and in just three server in one room was running the same amount of things. Right, but probably they needed to go to the part in order to optimize the code. So the investment to make good code cannot be done at day zero unless there is a lot of money and there is no rush in delivering. So that's the manner. So I guess yeah, yeah.
Speaker 1:So that goes back to the whole challenge, then, or the harsh truth about fundraising. So if you're after investors who are looking for investors, look, they wanna know their time frame on when they can exit. Exactly Right, some can last longer than others and some are willing to wait longer than others, but even in the crazy times with the ICOs I mean after that I've met a lot of investors who are looking for projects, who are planning a token generation event. Why? Because they know they can cash out quickly in a matter of time. They don't, and speed to market is important. It's not speed to revenue, it's just speed to realize their profits.
Speaker 2:So those are Ponzi schemes for you. If you think about it, the definition of it, you know, like pay the first with the money of the seconds, because really that's what it is. I'm allergic to those things. I mean, surely it's easy way to make money if you know that the person organizing a very good pre-sale and then nice, good pump and then big pump and then somebody pays for it, I find it unethical, honestly, and actually un-moral. Yesterday the conversation with the lawyer that told me the difference between ethical and moral Ethical means to comply with the law. So maybe something is ethical but it's no moral to the lawyer. So the correct definition is a moral and in his terms probably those things are a good opportunity.
Speaker 2:I know that people that want to make money doesn't look in the face of anybody, but I want to go sleep in the night with my heart to the sets. I never damage anybody, right? So in those terms the kind of investment probably are good. But I will never be the one suggesting methodologies or other things. I stay away from those things. So those talking events, drops and things, if it's advertisement, yes, if it's really a money movement, I mean I never did it for a good reason. Not that I don't know how to do it, you know, I don't know why they did it, but it's something that I don't want. I believe in a good product that can generate good revenue because people is happy to pay for it. Look at something like I had no doubt to give $20 a month to charge a PT, because my advantage in working, speeding up processes, getting document ready in a flash is, if they ask me $100 a month, I give them. If they ask me $200 a month, I'm gonna start saying I live in Indonesia as a criteria. I can pay for the money, but charge a PT is much better than a secretary in those terms. So you know, when you have an offering of something that people really use and they come addicted to it because really is important for them, that's not discussion about investing.
Speaker 2:In my opinion, web three, no, web three. The technology is behind things. That's really a matter, and you know there is, and I think it's correct. There was a guy with the cellphone and I asked him there is internet? And he says no, and then I see he's doing Facebook in his cell phone. So you're doing Facebook. There is no. This is Facebook. It's no internet, right, because people don't know what there is behind what they are using, they shouldn't even care at the end. You know. So I mean culturally you should know and care, but in a certain term, when you use your home banking from yourself, do you know the server architecture that is behind? What guarantees your security? You trust the bank. Do they do the things properly?
Speaker 2:So if a project use blockchain rather than centralized server makes a difference for me as a final user. I want to use the advantage of what the service has been given to me. That's what need to be analyzed. That behind the blockchain is a fancy, nice terms to sell more Okay, but it's not really the key of why a project is going to be successful, right? Actually, blockchain is a pain in the butt because you need to save your private keys. You know it's very complex to manage compared to just the classic SSO or login in a website. So it's to be considered by an investor not to fall for this fascinating underground that is behind the service. That's relatively important. It's what the user want and what the company is selling. The third keys, in my opinion.
Speaker 1:Good point. Hey Robert, I'm going to pause for one second. I think I someone at my door and I just want to make sure it's a delivery or something like that.
Speaker 2:Sorry about that. Go ahead, robert, right back.
Speaker 1:We can edit that out.
Speaker 2:Yes, sorry, Also my wife ringing my phone earlier.
Speaker 1:Sorry, no worries about that. No worries about that. Okay, yeah, so All right. So then, look, I think that's we're talking about fundraising in Web 3, and I believe even today, what's still happening is because liquidity is so tight and I don't think that cheap money is going to be there. Obviously it's going to knock like it was in the past. So there's still people out there doing token launches or some IDO, and I ask these people, why are you doing it? Well, they can access the capital if they can. It's a choice and I guess, to your point, morally, they don't care about where the money comes from all the retail investors, just as long as they secure the capital to do whatever they need to do to survive.
Speaker 2:And To buy that Lamborghini, as we were saying.
Speaker 1:Exactly right. So I guess the behaviors of these investors, the retail investors as well, they're all part of the whole game. I think it's no secret that a large part of the population, they are investing in these projects. Why? Because they want that 5X in a week, whatever it is right, and it's still happening. Do you think it'll ever stop?
Speaker 2:As I was saying, I do this podcast on people falling for financial scam when somebody calls you and say, hey, you want something, or the desire of dreaming that something can happen immediately when you also see it happening. That's why people keep buying scratch lottery or lottery tickets At the same time I'm not saying now that everything is a bad thing Usually the last one to lose. I think that this wave of what was the ICO, this token launch of any sort, is on the phasing, closing end and people should realize that unless they really are close to the project and can be there at the beginning, there are little chances that things go the way. And after all, for this on the other side, on the startup side, if somebody has a project that can sell finance, so just come out with them and start selling this base or collect some promise. Like, if I want to open a cafe, I can pre-sell coffee cards and coffee for half the price and I sell 1000 and I can finance my coffee opening, but not because these people are going to do a bump and dump on my coffee cards. Because there is an actual final use on this, Then there's a path to do and it's also a slow growth bringing more stability in the long term.
Speaker 2:Something that grows fast in one month easily falls down in a month. Something that took a year to establish is the level. It can take big hit and remain at level for longer. So it's more a better foundation, more stability. So on the side of an investor, when you arrive to a point, an investor can be interested, Say, look, we're cash positive, we're cashing in $20,000 a month, which is not big. But with these recovered expenses Now, if we can have half a million, we probably can employ two people more. We can put the advertisement and if you make sense, why not? What is loing me from getting more customers? I have these blocks so that it will take them months. With some money it can take five and I can share that revenue with somebody else. I catch the moment as the kind of investment that makes more sense.
Speaker 1:Yeah, well, tell me about your story then. This is a great segue into that. You were faced on a decision should we raise money and try to find ways to build revenue? So tell your story, yeah.
Speaker 2:Practically. I met these four guys. They had some money because they sold one part of another business that they had. They've been so unfortunate to give this. They were thinking that one consulting company from a company that I'm not going to mention, but not their own, would actually build everything for them In general. In good faith, they sent almost all the money that they had to these people.
Speaker 2:These people disappeared, never delivered. Actually, they dragged it for months of making these people waste even more time. So when I arrived in mentoring them, they were broke with the idea. That was confused. They wanted to do something that was not really correct. They self-financed in terms that they all worked their butt off sorry for the French but without paying themselves a salary, which is an investment, because if I had money, I would give myself 3,000 euro a month or 3,000 dollar a month, whatever it is, and working without getting debt. But working means full time every day, at hours or more, even including weekends sometimes. This is a way to invest not money, but equivalent of money, right, what money could purchase could buy, and this went to the point that we were I mean, I put to get my side. I put also money into this company, which immediately got to cover the couple of expenses there were. In one year of work. This was something built and ready to be delivered.
Speaker 2:But the tension was so high because money were not there and that's why we would start searching for an investor to help and put some advertisement out, because we had no idea. How much are we worth? We don't know, you don't know. You can just come out with the idea number. But at this point we failed because we didn't find an investor, because we were not beautiful for an investor, I guess. But guess what? We opened our shop for assets one day, planning to start the sale of 50% discount to you know people that invest in you at the day zero. They are really people you need to treat very well because they trust your project, because there is nothing there yet, right One week later, the opening. But the same day that we opened, the same day, in a few hours, $10,000 came in in sales. People that didn't even wait one week to go and we started with several hundred people that already follow us because we share about the project when we were building it.
Speaker 2:Now we have 8,000 people registered to our website and we launched the first stable version of the first some things at the first of January this year. So we've been covered. But I can sit in front of the email and see new order, new order, new order. They really arrive, not even one minute after the other, and with this money we've been able to put five people at work with us, we can be able to build more stable things and, thank God, we didn't have to give away anything of the shares of the company. So obviously tomorrow comes somebody and wants to invest. We're never going to say no, but we want to understand very well and the ticket is going to be way bigger than it was when we had a question mark on top of our hand. Now we have something that is worth already a lot. Meaning, even if we do an exit today, somebody wants to buy the whole company. We're going to go walking home very happy because the value just for the money that it generates today and the potential of tomorrow are incredible.
Speaker 1:Sure, sure, and I guess that's the whole point. When you can start showing revenue, you can ask for a lot more money but give up less of your company potentially right. So I think that's a huge benefit. But right now you guys are doing well, so that's great. I must be a tough decision at some point because you want to grow the company fast as well.
Speaker 2:Yeah, the model we're using can be applied to many other things. So we have opened the door between ourselves to when this is established and stable, to start and doing the same thing with the old experience. We are on something else. Personally, I have nothing to do with Placimulator in my life as of today. If I sit in front of Placimulator, I have no idea what to touch right and therefore the technology, all the web-tree aspect, but nonetheless I don't see my life with this business in the long term.
Speaker 2:I'm expected to be a shareholder and I'm so sure that this thing is going to generate a lot of revenue. I believe that this will be something that I share with any startup. If you start making good money, put the right people at the right place. Don't think you are the best CEO in the world For sure. There is a professional person that can cover their role the CTO. Put some professionals in the right key position. Trust them. When people are professional, they won't go to the CTO. They get paid well, they do their job and then they can grow the company for you. You stay on the board. You give the vision, the direction, and leave it to somebody else the action. To get to the direction. One thing that is established and money is enough. I think a lot of companies went down because the same kid that did the startup was also the CEO. These things that became too big and that's not a good idea in my opinion. Right right.
Speaker 1:I guess if we summarize a lot of the topics or questions that I had asked you in our conversation, I believe we can simply say that Web3 is no different than many other industries in a sense that the human behavior of greed always exists. I don't think it will ever go away. There might not be ICOs, but there will still be some token generation or airdrop that's going to draw people in, which will entice people to put their money out there. It probably still happens today. Real estate properties there's probably many stories of new developments invest here and then those development companies run away. Multilevel marketing products there's a lot of different stuff for fast money. Why do you think that is what is this obsession with? Fast money, fast life, buy things faster.
Speaker 2:Who doesn't want that right? Who doesn't want?
Speaker 1:that.
Speaker 2:Unfortunately, and sometimes it's people that really put their life savings into things. If an investment is a risky thing, always you invest. The business can go well or bad. That's not something. You cannot pretend the money back if the business goes well, because that's a loan, it's not an investment. But people should never do something that put the risk of their own well-being. Never invest more than you can lose and if it goes well, better. But it is risky.
Speaker 1:I think that is the summary of investments in general. So I think, of course, you're not going to want to put all your life savings into something because you're going to need it just in case the investment falls through. So, yeah, never invest more than you can afford to lose is what I think.
Speaker 2:I've been hearing a lot and people yeah, it worked more in Web 3, more the loan blocks and things, because it moved faster, like with the real estate plan, you lose your money in three years yeah.
Speaker 1:You lose your money in three days.
Speaker 2:But the concept is identical. So reputation of the people you're investing to, that's the key things. How many successes were in the past, how much this person is establishing this industry? I'm really planning to do this database like sort of LinkedIn, but with proven fact. Like you claim to be an expert of whatever, Show me that in the past 10 years you've been working this thing. Now, today, everybody's an AI expert.
Speaker 1:Everybody became an expert.
Speaker 2:Show me the seven years ago you were working with AI, then I can trust you. If you became an AI expert only six months ago, then, thank you very much, I don't trust you. So it's important to look who you're investing to. Don't fall for sweet words. You know, like beautiful talking, beautiful promises, but look at facts, and this is apply everywhere. Web 3 even more, because things move faster.
Speaker 1:Yes, that's the perfect way to summarize it, robert. All right. Well, that's our time on this episode. Thank you so much and congratulations on earning revenue. Hey, so that concludes this episode of the Startup Voyage Podcast. I would like to thank all of you for listening to this episode, and I'd really appreciate it if you leave any type of comments that you'd like to share, because it helps to feedback on how I deliver these podcasts.
