Full transcript: Joonatan Lintala on London Real
2:54 This is London Real. I am Brian Rose. My guest today is… This is London Real. I am Brian Rose.
3:06 My guest today is Yunatan Lintala, the investor, business leader and Web3 entrepreneur. You are the founder and CEO of Favor, the decentralized Web3 platform that is revolutionizing the concept of social media. Favor uses a unique share-to-earn model that takes the best aspects of mainstream social media with the added benefit of true ownership and control, while incentivizing users via access to the largest Web3 social graphs of Lens and CyberConnect.
3:33 Before founding Favor, you spent nearly a decade in Web2 advertising at both Google and a leading Facebook marketing partner, but now have set your sights on building a more ethical future for social media. Amen to that. You believe that decentralization, ownership and privacy must be the cornerstones of the evolving digital landscape as we transition to a new era of Web3 technology. Your mission is to democratize and decentralize social media, putting users first by delivering the most relevant feed through incentivized curation and digital reputation.
4:08 Yunatan, welcome to London Real. Thank you. Very glad to be here. Great to have you. I just want to start by saying that Favor is one of our portfolio companies here at London Real Ventures, the world’s first media-powered investment firm where our mission is to transform the world by investing in cutting-edge Web3 and AI companies while giving our partners marketing exposure across the London Real media platforms and academies.
4:31 We heighten awareness, create customers and build communities by leveraging our global audience and extensive network. We are super excited to be a partner with you and Favor on this journey. So let’s jump in. What’s wrong with our current Web2 social media and how is Favor going to change all that? Yeah, where to start.
4:53 So as you mentioned in the intro, I spent kind of 10 years looking at how to sell cities made in Web2 at Google and then on the Facebook and Pinterest advertising side. And what always made me kind of very uneasy is kind of the power imbalance of things. So like as a user, you have no way to give your informed consent on anything. So essentially like Facebook tracks your every move. They track your GPS to report to Best Buy if you went to their store and track every single product you look at in every single e-commerce store out there.
5:24 And most people have no idea that’s even happening and never kind of have in an informed way consented to that. And then at the same time, all of those billions of ad revenue are flowing directly into the company’s bank accounts. And at the same time, the creators are nowadays actually the ones who are driving the audience there. So it’s people who are professionally creating content day in, day out. So it’s the same like Netflix would commission series and they pocket all the subscription fees.
5:52 And then the series is like, well, you got exposure. Like you can maybe do some product placement inside your series. And that’s just like not a fair way to do it. Plus then obviously the whole like not actually owning any of your assets. So it was completely fine when like Facebook started as like network with your friends at the high school campus or a college campus.
6:13 But then in the next 10, 15 years, it’s kind of become a much, much bigger part of our social lives and lives in general. So like elections are won and lost on social media. Many people’s livelihoods are on social media. And for I think the majority of us, the majority of our social life is actually not online instead of offline. So you’re no longer taking the phone number off people and calling them.
6:35 You’re sending them a message on one of the web to social applications and kind of staying in touch with people in that way. So kind of the importance of it has been growing on so many different kind of ways. And then at the same time, the model has stayed super centralized where the users are in no way stakeholders. And the company’s incentives are basically just to maximize engagement and impressions of advertising at any cost, which then also leads to, for example, the algorithms being geared towards kind of contradiction, addiction, controversy, and all of these things that then end up actually kind of making all the wrong things viral and also being quite easy to abuse if you actually are a bad actor.
7:20 You want to be destabilizing other countries government, for example. All you need to do is figure out how to abuse the Twitter feed or do some Cambridge Analytica data on targeting the people you want to be changing their minds. Wow. That’s a few other things. Man, I just saw how the sausage was made in there and it’s a little ugly.
7:39 So when you’re that close to these social media companies, you really get to see all of that. It must be a little dark or put a bad taste in your mouth to see everybody just kind of being used. They don’t know they’re being used. They’re being manipulated the whole time. It must not be fun after a while.
7:55 Yeah. And I don’t think anybody’s doing it to be evil. Even Google is still trying not to be evil, but it’s pretty far from trying to be good actively. And I think that’s the problem. The status quo is sort of one where people just accept that, okay, this is a good business model.
8:12 We’re not doing anything illegal and that’s enough. And nobody’s kind of trying to figure out, okay, we actually have a huge responsibility for the society because of the power that has kind of become vested into social media. So like, yeah, I always felt like this is probably definitely not making the world any better and might actually even be making it a bit worse. So then after a while, I figured like now I need to start doing something of my own where I feel I’m actually doing something good for the world.
8:45 Like I don’t want to spend my decades in kind of just making things worse. Right. And making more money for Google and Facebook, right? Well, this is quite current for us because a month ago, I think today, we were deplatformed from YouTube. So that was 12 years of my life, 14,000 videos, over 400 million views, over 1,000 interviews with some of the greatest people on the planet.
9:10 2.3 million people around the world wanted to keep receiving my content. Those were my subscribers and I wanted to create content for them. But a centralized organization came in and said, all of it’s gone and you can no longer can talk to each other. And of course, we’re not going to share you any information. So we’ve been completely removed.
9:29 And so we’re quite living the dangers of a Web2 ecosystem. And there’s no appeal. There’s no talk. There’s no way to talk. There’s just like not even a conversation to be had.
9:41 And so we are living proof of the dangers of Web2 from all these aspects, not to mention no longer can we communicate with people. We had been demonetized three years earlier, so that had already happened. So again, they had already been taking even more revenue. But we’re really living this. And so that’s why we’re really excited to help you build favor because this is literally crucial for us and it’s really important.
10:06 And it’s important for so many people, but we are a use case. And that’s really kind of, I think, the thing that if people are building their entire kind of careers and livelihoods on essentially a rented platform where you have no ownership, no claim over, like you can have 100 million followers and then you tweet one wrong thing or you make one video that YouTube doesn’t agree to. And then all of a sudden, like the entire connection between people is gone.
10:37 And not only is that obviously unfair to the creator, but it’s very unfair to those 2.3 million people who chose to actively follow you. Like, I do agree with Elon, like I disagree with a lot of things, but I do agree with the kind of freedom of speech doesn’t equal freedom of reach where like you shouldn’t be promoting things that might be harmful. But then it’s also like sort of a line to cross where you decide that these people are no longer allowed to communicate with each other where these are the people who actually gave that informed consent by hitting the subscribe button.
11:12 They’ve seen the videos and if they disagree, they can go and unsubscribe. But they’re the ones who remained and subscribed and wanted to see the content. And there’s obviously like in democracies, there are legal bodies who decide like this should not be published, this is illegal. But is YouTube the one who should be deciding that these people are no longer allowed to communicate with each other? We own this relationship, therefore we should take that relationship away because we didn’t agree with something in a video.
11:39 Yeah, and it goes really deep. We actually just premiered our latest documentary film called We Will Not Be Silenced that kind of talks about and shows behind the scenes me having conversations with YouTube about this whole piece. And with the Twitter files coming out, I mean you can go deep on this concept because, you know, it was April 6th of 2020 when we had our first video taken down and I was like, wait a second, the First Amendment should protect me.
12:03 And they said, no, this is a private company, you have to abide by their community guidelines. Then I found out their community guidelines were so subjective that I was basically kind of in a kangaroo court and they could just say, no, no, no, you intended something or that was a hate speech, what does that mean? And so they were this court and they’re like, if you want your First Amendment, then go talk to the government. Later I found out with the Twitter files that the government was actually going to those platforms and coercing them.
12:30 So the government was saying, no, we can’t do this. But they were actually violating my rights to go do this. And in the European Union, it’s Article 11 of the chapter on human rights. So it’s this really frustrating situation right now where rights are being abused and I do believe that freedom of speech has always helped us come up with the best ideas and conversations. So this is a really important issue that I would argue most people have no idea it’s going on because they’re using these WebT social apps.
12:59 They’re busy in their lives. They don’t know that people are being taken off of them and they don’t know what’s happening. So it’s a real issue here. Yeah. I’m glad you’re tackling it.
13:08 Yeah. So they also think that the world is what their social feed is showing them, which is obviously not the case. And that’s one of the dangers that I didn’t actually add in the list is that like the algorithms essentially are curating your world based on your previous preferences. So then that means that the extremists become more extreme on both sides. Like we can see the kind of like the liberal extreme is like just as bad as the other side.
13:35 Like extremists on every front are problematic. So then what happens is like these are just like pushing those like extremes to be more and more extreme because it becomes an echo chamber even inside that like same algorithm world where nobody can ever have those real discussions with somebody with opposing data points because they’re never kind of shown to each other anymore. Yeah. Yeah. You’re right.
13:57 Very dangerous. If you take someone off the platform, they go find their own ecosystem and then now those ideas aren’t challenged and that can become very dangerous. Yeah. But like you said, even intra-platform, everyone’s got your own feeds and algorithms that again charge you and get a reaction out of you on a regular basis. So you’re building all these pods, these cells, if you will, of these extreme communities and no one’s talking.
14:19 Yeah. You know, whereas if you got everybody in a room and you had a conversation, you would find these are humans. They want the same things that you do. They want to live their lives. They want to raise their families.
14:29 They’re not aliens. They probably grew up like you. They just have a different point of view. If you actually had a conversation, you might realize you agree on more than you think you do. But right now, social is amplifying the opposite of that.
14:42 It’s kind of crazy. It’s very dangerous. Yeah. And that’s kind of the thing that like sort of people still haven’t realized that prohibition has never worked in any front. Like we’re seeing it in crypto right now.
14:54 Like most of the scams are happening because U.S. and the other countries don’t have proper regulation where you can have a properly licensed platform. Like FTX should have been properly licensed and governed in the U.S. instead of the Bahamas. But with prohibition in crypto, it means that people are putting their money in the Bahamas.
15:13 Same thing here if you’re essentially prohibiting people from expressing their more extreme opinions, then they’re going to be going to another platform to express those. And then you create those like complete echo chambers where like if you kind of deplatform people from the mainstream platforms, then they are no longer getting any of that mainstream kind of counterpoints or that mainstream information. And everything they’re getting might be like conspiracy driven even to a point where then people who just had one differing opinion end up actually like going very extreme.
15:49 So it’s actually way more dangerous to kind of try to battle like opposing opinions by trying to push them away because then you’re just making them worse. Yeah. Instead of trying to tackle them with like, okay, let’s figure out how can we have a civilized conversation about this? Yeah, prohibition of anything is always what always means that a lot of people take advantage of that situation. And then yeah, bad things happen, illegal things happen, and then it gets abused and then sometimes prohibition is stopped sometimes.
16:19 But yeah, we’re seeing the same thing here. How do you go about building this Web3 social community? Because you work for these big brands. They really work on, you know, on having critical mass, right? That’s kind of how these things survive.
16:34 And so to start from scratch is challenging. This Web3 perspective is also maybe a challenge as well. But ultimately, it looks like the solution. But for someone in Web2 that might not understand Web3, how is that ultimately the solution? I know you had a great quote and maybe I’ll start it with this.
16:50 You said that some people come up to you and say, oh, are you going to be the next Zuckerberg? And you said, my mission is to ensure nobody will become the next Zuckerberg. It’s an interesting statement. Yeah. And I think that’s kind of like what one of the also key growth drivers, I believe, for Web3 is going to be the fact that once we get to a point where we have kind of a big enough shared social graph in the background, like we’re building on the lens protocol.
17:14 And that one essentially allows anybody to build on that same social graph. And that means that all of a sudden you might have 100 or 1,000 teams around the world building novel user experiences for their target audiences on that same shared social graph. What is a social graph? Yeah. Because that’s a concept that gets thrown around in Web3 social.
17:36 But a lot of people don’t know what that is. So what is that? Yeah, it’s a very good question. And it’s kind of like one of those jargon terms that I’d love to avoid, but I haven’t found a better term for yet. So in a way, the social graph is kind of the map of all of the social relations and connections.
17:50 So I follow this person. I subscribe to that person. This is what I posted. This is where I engaged. Sort of fairly similar to social network, but social network is also being used to describe, for example, Facebook as a platform.
18:05 So social graph is kind of that part of Facebook that they keep under lock and key where they explain who are your followers. Or in YouTube, the social graph was your 2.3 million followers who now have been wiped out because they were kind of on the YouTube servers, whereas in lens, that social graph is put on chain. And even if I would strongly disagree with someone, I am not able to destroy that social graph because I have no control over it. Even Stani as the CEO and founder of lens doesn’t have the control to go and destroy somebody’s social graph out of there.
18:40 What obviously can be done is restrict the reach. So there are ways to like flag like, okay, this profile is doing something really bad. You probably shouldn’t want to show it, but like you cannot like take it away. And there’s always ways to kind of connect with those users. So me as a case study, this is important.
18:58 So my social graph on YouTube would have been 2.3 million followers, all of my content, maybe the comments and the views and everybody who had maybe even watched a video in the social graph that I guess it’s technically mine. And that would always be mine in a Web 3 protocol. Now, if I did something bad in the future, something like a lens or a favor could say, well, Brian, we’re not going to necessarily on our platform allow you to use that social graph as much as you want to, but it’s still yours.
19:26 And if you want to take it, you could take it with you or somewhere else and do what you want with it. Is that an idea of what a social graph is? Yeah, it’s sort of like, I think email is a fairly good analogy to that from the kind of traditional web world. So if you have, I think there was like a pretty good analogy in one of the Tim Ferriss podcasts about like Tim saying that he’s kind of email list is he’s NFTs. Yeah.
19:52 So they’re the ones that he is able to kind of own. And that’s the connection that he has with his audience that no podcasting platform can take away from him. But obviously email is a terrible way to reach people nowadays. Like your inbox is going to be overflowing with everything. But I think the kind of Web 3 connection is going to be similar to that where it’s a kind of shared protocol that nobody controls.
20:14 So like obviously Gmail, if they put you into the spam filter, that’s going to limit your reach quite a bit. But even Google cannot tell you that you can no longer email these people. Right. And you can always email them from a different address. And like you retain that control.
20:28 Yeah. And Web 3 is kind of in general, I see that like crypto wallets are going to be the next generation of email because it’s just going to be like allowing this sort of like shared protocol of connecting between people in different ways and nobody can kind of take that connection away. And we just need to make it as easy for people to use and understand as they do email. But yeah, I think I’m going all over the place with the answer. Oh, I think it’s a good answer.
20:56 And again, the emails are really good base, especially people that are new to this. We’ve actually been building our email list for 10 years. So because we knew we needed this and an email is kind of like an NFT. It’s fairly closely associated with your identity. And you can always make a connection and it’s platform agnostic and it’s based on a protocol that’s again not controlled or owned by a company.
21:17 So that’s a good example. Imagine if we could all have that in our social media platforms and you’re building kind of an equivalent but a much more advanced version of that. And so you’re using these social graphs. You mentioned Lens. Should we talk about Lens right now?
21:33 We’ve had Stani on the show to talk about Aave about two years ago, but he started building this Lens protocol recently. What is it? How do you use it? And how does it relate to Web3 Social? Yeah, so Lens is like we see that’s kind of the most potential protocol right now to kind of be the building block of Web3 Social because in order to have that on-chain social graph somebody has to figure out how to actually build it in a scalable way.
22:01 And like Stani obviously has been very successful on the Aave side where kind of their not your keys, not your crypto approach has actually helped Aave survive through all of these like centralized exchanges crashing and ragging people because when you decentralize things then you cannot do that. It’s all written in the contracts and like there’s no room for like human greed and error that kind of destroyed a lot of the other stuff and now he’s kind of replicating that for social. So not your keys, not your content is one of the slogans that Lens has been using where again kind of if like that social graph is written into the smart contracts and you don’t kind of apply filtering in those smart contracts and things like that then you kind of have that sort of unopinionated baseline of content and then every social app like Favour can actually build on top of that and we can choose which part of that content we want to be showing, which ones we don’t want to be showing and that’s actually like one of the key things for us.
23:04 So when we started building Favour from like a Web3 perspective about two years ago the first big problem was that like sure we can make our own NFT profiles, it’s not super tricky but the thing is if we have an NFT profile that only works inside Favour it’s like we give everybody a key but we can change the locks any day. So again you’re renting, you’re not actually owning anything because you owning a key to something that’s not actually yours and only works in one place is not really owning. So the first thing we had to do was find a partner where we can essentially relinquish control of people’s social graphs and that’s kind of what Lens allowed us to do.
23:48 So from day one when Lens went May last year we were the first app on Lens and we’ve since been able to onboard a lot of people. Yesterday onwards actually our level 3 and 4 users in the app are able to meet their Lens profiles that have been kind of very hard to get until now so we’re able to onboard more and more of our audience but that was kind of like another I think was a Chris Dixon quote about like can’t be evil is way better than don’t be evil. That’s kind of what we’re ensuring like from day one if we give away control of people’s follows, people’s content and everything they do on the social it means that whatever we build today or in the future if we build it the wrong way if we don’t treat our audience well they can go to any of the other dozens of applications that run on that same social graph so that means that the user really is a stakeholder at kind of the front and center of the entire equation and then the only way for anyone to succeed in that kind of setup is that they have to treat the users right and obviously right is a very relative definition and people have different preferences, different ones, different needs that means that also the ecosystem will be decentralized so some people want a safe space app where everything that’s potentially disturbing is going to be removed, some people want the absolute opposite where they don’t want anybody else deciding what they should be seeing and what they shouldn’t be
25:17 Seeing. Some people want to be somewhere in the middle and these may be the same app they may be different apps but the core part is that they can all run on the same social graph and that’s kind of what lens is doing in the background. The kind of very brief explanation of the technology is that your profile is built on the NFT and now with the new NFT standards that profile can actually then own the follow NFTs of people. So in your case for example if London Real was built on lens then every time somebody hits the subscribe button they get your follow NFT that their lens profile is holding and these are ones that you can index, they’re kind of publicly available so even if let’s say some day you and me get into a big fight and I decide to deplatform you from favor I can never do you any actual harm because you have that connection between your audience and you based on those follow NFTs that they’ve been getting that are being held in their profile NFT that’s being held in their wallet that they own and they control and that way there’s always another platform or like people can build their own platforms like London Real TV could be running based on those same 2.3 million subscriptions who would instantly be available there in all of their history, all of their commentary would be there had all this been kind of web 3 instead of web 2 but now in the kind of previous siloed world then you kind of have to start from scratch in every single
26:51 New silo that you enter. So that’s kind of like lens in a nutshell. And talk about NFTs because when most people hear those three letters they have a lot of different thoughts and feelings maybe it’s an ape, maybe it’s worth 98 percent less than it used to be, I don’t believe in that, I don’t know what it is but an NFT just means a non-fungible token and it can mean so many things. In this case I think you’re referring to something that’s a unique identifier of someone in this case or something, I minted an NFT on the lens protocol to prove that I was a unique person and now on favor I have that NFT right? So maybe you can talk a little bit about what that is because it’s really important because NFTs are here to stay for a lot of reasons because they are unique and it’s completely different than say speculative NFTs.
27:47 Yeah, that’s I think like I do hope that the next kind of bull run or whatever the growth is going to be in the future is not going to be any more fueled by speculation. Like sort of the aha moment for me was realizing that actually like take away all the hype all the monkey pictures and all of the stuff that people have been doing on the NFT front and you realize it’s for the first time kind of a universal standard for online ownership of assets that is not governed by governments or any centralized corporate bodies but it’s actually built in a way where an NFT is an NFT and no centralized party can go and take it away from you and no centralized party can tell you that no you cannot use it this way or that way and when you think about it that way like sure the first use case was essentially art so a lot of cartoon monkeys where obviously like well board apes have been building an amazing community around it and there’s a lot of like really cool examples of what you can do with art but in the background it’s all just kind of a new way to have an ownership certificate and like I’m not an NFT collector myself but how I’m usually explaining to non-crypto folks the point of NFTs is that if you look at Banksy every Banksy has a series of prints that’s 50 or 100 and Banksy has a best control authority which is a company he owns that authenticates which prints are real Banksy prints. They’re still prints they come out of a printer he hasn’t even signed
29:27 Most of those he’s never actually physically touched those prints and you can make that same print at home pretty much if you have a nice quality printer but the fact that he’s best control authority has given it the stamp of approval means it’s worth £100,000 and that’s NFTs in the physical world so the fact that you have that stamp that this is a genuine board ape if you’re able to build a Banksy-like kind of following and fandom around whatever you’re doing then it can be worth £100,000 but just like with art in general that valuation is very subjective and it’s based on like do people see value in it what NFTs do is it’s kind of a global way of authenticating that this is the real deal this is not a fake ape this is not something that I printed yesterday or this is not a right click and save so that’s kind of NFTs overall and then that technology can obviously be also used to show that okay this is my social profile it’s not one that somebody created yesterday as a fake profile and then also that means that you can take the social profile of yours you can have it in your own wallet you can connect it to different places and anybody can identify you based on that without anybody kind of being the intermediary or the gatekeeper in between those and I think kind of long term we see that kind of the way we’re building favor is sort of like a wallet based social network where lens is kind of at the core of it because you get all the basics like posting
31:05 And following and profiles and such that are kind of necessary for an actual kind of social media app but then on top of that let’s say you are a board ape NFT holder that can be one of the communities you belong into and we can introduce other board ape holders to you automatically based on that sort of piece of your social graph being in your wallet or you went to an event you minted a POAP which is a proof of attendance protocol so essentially kind of a badge of attending an event then we can bring you together with the others who went to that event whereas in Web2 that would have happened and let’s say Luma that’s popular for event organization nowadays and the only one who knows who went to that event is Luma the best thing you can ever get out of there like if we wanted to match all the Luma attendance we would have to try to get in touch with Luma and try to negotiate a deal like could you guys please share an API and even if they do they can decide to close that API at any given moment like Twitter and Reddit did yeah yeah I want to get into that API this is a great point and you mentioned we hung out in Singapore and you mentioned you just came from Korea Blockchain Week and you were like a K-pop star has a concert anybody there can mint an NFT if they’re in favor you can put them all into a sub community where even during the concert or afterwards they’re now all connected with each other and they have proof
32:25 Of attendance because they minted the NFT so it can’t be faked you know we had a movie premiere on Tuesday night 200 people you know they were just raving fans of the movie they all wanted to continue the conversation but we’re throwing them out of the hotel at midnight and imagine if they had a social set up right away where the next day or that night on favor they can all be connected first of all they would find probably some of their best friends in that room because they were drawn to us drawn to the community drawn to make the trip they continue the conversations and they could probably really make some very close physical social connections you can’t really do that anywhere else that’s what I love the possibilities of this kind of I guess that’s like a mini social graph or overlapped a bunch of social graphs to create and the really cool part of that is that obvious is like we can do it on favor but anybody can do it anywhere after that so we’re not kind of forcing people like let’s scan this favor badge as a proof of attending this event but it’s one where let’s scan this kind of universally applicable badge of attendance and that way like if you want to kind of reward them on your platform you can do so so everybody who signs in and connects a wallet that has one of those badges where they attended your physical events can get some exclusive content or whatever else perks is based on that and it’s just kind of like the amount of innovation that
33:49 Can be built on top of that is endless and if you think about like what consumers who understand nothing about the technology and don’t really care about decentralization or any of the stuff we’ve talked about so far if you think about like would they rather have their data in a way where they can use it everywhere or would they rather have to start from scratch every time so when they join a new social platform obviously like Threads was growing really fast for the week that it was growing because people came in with their Instagram social graph so you wouldn’t have to start from scratch you have all the same people you’ve already followed and know coming in there but in Web3 that would kind of apply to everything so let’s say you’ve been doing your restaurant check-ins in Foursquare they’re now stuck in Foursquare that nobody’s using anymore and they’re no value to you but if you had done your restaurant check-ins with a pop-up style on chain asset then anybody who’s building a new restaurant recommendation app anywhere in the world today could take all of that data and you plug it in and you have your recommendations ready for you based on that history so if we just get to a point where all the kind of data points you gather are actually usable by others and don’t belong to a centralized party we can just build so many cool things around that.
35:13 Is my NFT like a dynamic NFT that gets like updated with my followers and social graph? Is that how that works or is that just kind of written into the lens protocol or is it a little more complicated? On the lens side kind of they are sort of just related to each other so kind of their database shows that like the follows are then kind of owned by that NFT but it’s like a graph on the blockchain immutable that just shows all of that connections and then if I have that NFT then I own that graph The overall challenge of dynamic NFTs is that usually that means that the dynamic part is actually web2 so there’s a lot of NFT collections where your character can evolve but the only way for the character to evolve is that they change the image that’s being hosted on their centralized server so then it kind of gets a bit less permissionless and a bit less kind of decentralized.
36:09 So this is really interesting and really exciting You mentioned threads really quick here I’m just curious to get your take on threads because threads was Facebook’s attempt to compete with Twitter I’m pretty sure it was kind of like a text focused social network and they allowed I think any meta account but probably mainly Instagram to bring your social graph over there to see if they could take Twitter out and the first couple days everyone was talking about it and then a week later nobody was talking about it. What do you learn from that as the CEO of a social media company? I think that was a very good learning in the sense that hyper growth means nothing unless it’s sustainable analysis unless you’re able to retain the users and obviously Facebook has the market power to get anybody to try anything once just by the sheer convenience of oh now I can use my Instagram account on this new app and let’s see if it’s any good and the thing is like I don’t think they brought anything new to the table so essentially it’s the same people you follow on Instagram who make pretty much the same post that they do on Instagram except that it’s only maybe 10% of those people you have on Instagram who made something and then most of the threads that I saw were like brands congratulating each other in a very cringy way it’s the social media managers of brands who jump in there first and try to get there grew on in the new platforms so it kind of got very cringy
37:49 Very fast and I think the other good learning was Clubhouse a while back for them I think one of the challenges obviously kind of like after the Covid restrictions eased up then there was less often interest in having kind of virtual discussions instead of real discussions but also the fact that when you grow really fast you don’t have the time to iterate and improve on things like the discovery mechanisms spam detection, hate speech detection and then you can pretty quickly get into a lot of trouble that can then just as quickly as the people came in they might be going out because they see that all the stuff in their feed is from China and they have no idea what’s going on because they didn’t have time to build recommendations into it so for us we’ve been actually very happy to grow in a kind of very linear way for the last year and a half where we keep growing every week but we grow in a stable manner and we see that there’s not really any real way to do a sustainable hockey stick growth in Web3 at this point because there’s just not enough people in Web3 yet but we have enough people to learn and build something that if we get something that they love we’ll get something that the rest of the world will like enough to actually want to try and continue using so it’s obviously really hard to get fast growth but it’s even harder to retain that long term and like another example would be Be Real which is kind of also or has been growing quite fast
39:27 But I think they will be also hitting sort of a glass ceiling pretty quickly in the sense that when you are kind of a one trick pony it’s very easy for you to grow with like a simple thing like once every day you’re being notified to take a picture and then you can share it with your friends and that works to a certain extent but you can’t really kind of like if you start building beyond that then you kind of lose the charm of that like one thing being the thing and that one thing probably won’t be super interesting for people for a decade whereas like Instagram has been able to build like the entire ecosystem that keeps you coming back day in day out so there’s a lot of learnings from like all of the kind of successes and failures of the web2 platforms as well as the web3 platforms that came before us and obviously we’ve been kind of like studying those very closely and trying to figure out like what do we think went wrong in each case or what have been the drivers of growth for those that have been succeeding and what can we actually replicate while we’re talking about web2 let’s talk about Twitter because Elon bought that what a year and a half ago or so and we’ve seen him make a lot of changes to it we’ve seen him re-platform certain accounts we’ve seen him de-platform other accounts we’ve seen him change the name to X we’ve seen him allude to crypto payments in the future and maybe micro payments he has now started to pay
40:57 Creators I think yes he has and added features like video etc what do you see that Elon’s doing right what is he doing wrong is Elon gonna build a web3 social app is he gonna build one that does payments and a lot of things that you want to build or not I think so far like he’s been very much all over the place kind of trying everything and like essentially he’s treating a very large established company as a small startup where like when you’re a small startup you can try and iterate very quickly but he’s kind of rocking the boat maybe a bit too much his daily active users are up right all time high they’re sane they’re profitable soon they’re sane they’re saying that at the same time like their ad revenue is down still over 50% and hasn’t been recuperating anywhere because the platform is too volatile and especially the big U.S.
41:55 Advertisers are extremely careful about their brand safety so the moment you kind of re-platform people that they see as unsafe for their brand they will not dare to come back and like anyway the ad revenue is in that model still huge share so I don’t think the like Twitter or like Twitter blue or x blue whatever it’s called now I don’t think it will be enough to cover kind of the loss of advertising revenue but overall I think there’s been some good things like I enjoy for example the fact that you can see the views on people’s posts because that brings a bit more transparency into the otherwise like completely mottied situation where you see people with like look I have 200,000 followers on Twitter and then you go and see their posts and they actually have like 20 impressions or views every time they post so we know that all of those are bots that have been acquired from somewhere and we’ve actually kind of we’ve used this partner called Click who are able to give you a kind of NFT based on your Twitter audience and we’ve been doing it in a way where like we don’t just look at your follower count blindly but we look at the API statistics of like okay how many impressions are your posts actually getting relative to your followers and how old is your account and things like this how many followers and average do your followers have and these are kind of ways to then detect like who are actually real so that’s been kind of or that was good but then now
43:31 They killed the API access to these so we haven’t been able to do it anymore so it’s kind of like a very volatile situation I don’t think that like I don’t think he can afford to make Twitter or X a web3 platform in the sense that how we define web3 is that it’s about ownership so you’re not a web3 platform by providing crypto payments that has nothing to do with the ownership of your account the only way to become an actually web3 social platform would be for him to say that okay we are migrating all of your Twitter accounts to lens protocol or to blue skies AT protocol which is not on chain but still like more decentralized set up that gives you at least more control than the current situation he’s talked about giving you access to your followers information that you can take with you he’s talked about it yeah and then he’s probably realized that that’s a very very risky idea where like you can’t put that back in the bottle once you give people that control like there’s going to be I think there is a significant risk that a very large share of people will be migrating to a competing platform at that point and every competing platform will with open arms allow you to input that CSV or whatever output you’re getting from like Elon at that point so I would applaud that and we’d obviously love to have that but I’m very skeptical that that’s going to happen and then the crypto payments I think I still haven’t found any reason for doing that in the sense that
45:23 Why is that better if you want to send lunch money to your friend or you want to tip your favorite creator why is doing that in a cryptocurrency in any way better than doing it through Venmo or doing it through a instant payment system that runs with dollars and pounds and euros like the only kind of benefit of paying with crypto I’ve seen is that when you’re doing international bank transfers the banks are still stuck in the 80s they might take a week and charge you a hundred dollars for transferring your money across accounts whereas if you do it in USDC stablecoins it’s instant and costs you a few dollars but that’s also just like banks being bad it’s not the infrastructure itself being bad they could fix it very quickly if they wanted to because it’s all ones and zeros anyway there’s no manual labor involved with that routing so I think crypto payments is more of a gimmick at that point to be added into it. And you’ve told me before that he you won’t even be able to be in the app store with Apple if you have crypto payments right? They’re not going to allow that.
46:41 Yeah that’s the other challenge that obviously we and everyone building in the industry is facing right now so Apple obviously has the notorious 30% Apple tax on every transaction you make in-app so when you buy an in-game item or you for example even subscribe to Twitter Blue on the app then 30% goes to Apple and Google has the same as well but Apple has the one who put their foot down on that where they’re saying that you cannot for example use NFTs for replacing payments so instead of pay $10 a month to subscribe to my feed you would have buy this $10 a month NFT or this $100 NFT so these kind of direct anything that tries to avoid paying that 30% is essentially explicitly forbidden. Recently Damus which is one of the apps for Noster so one of the kind of protocols that has been built in the kind of decentralized space not really like crypto space but on the other kind of decentralization side like they got like the threat from Apple that they’re going to be kicked out if they keep their Bitcoin tipping that they had in the app Is that the former Twitter CEO?
48:03 Is that his company? That’s the one where Jack Dorsey donated a few Bitcoins to them So they’ve been blocked because they encouraged kind of that micro payment Bitcoin tipping. Yeah or I haven’t seen the latest of the news like where they I’m assuming they probably had to remove the tipping and were allowed to remain but kind of the key learning was that Apple is actually enforcing that like very strictly right now and that is actually a major hindrance for like the crypto payments side of Web3 but at the same time I don’t again like necessarily see the need for the crypto payments to be kind of forced into that because let’s say we wanted to now build the economy in a way where like you can only get your points with favor tokens and you can only tip people in favor tokens then my grandmother who’s now on the application is wondering like okay where do I get favor tokens and then I tell her oh grandma it’s super easy all you need to do is you go to Binance and then you do a KYC this is this know your customer thing where you have to send them your passport and everything and then you wait a couple of days and then they approve you and then you have to go and transfer some money from your bank account to their account then you transfer that into this thing called Ethereum and then you take that Ethereum and then you buy some favor tokens and then you put that favor token into your other wallet and then you come and connect that wallet on favor
49:33 And now you can do that tipping that you wanted to do on favor I don’t think that’s going to be the future it’s at least not a very good future so how we’re seeing it is that like if you want to buy like right now there’s no way to buy favor points yet you earn them by kind of doing beneficial stuff in the app but we are going to be allowing people to buy their favor points in the app within a purchase is paying up 30% and for most people in the world I’d say 99% of the world that is still a significantly better option than the one I just described the only ones where it makes sense for you to do a kind of tokens to points transaction which we do plan to also allow is let’s say you’re a brand who wants to grow their audience and you’re looking to invest $10,000 worth of points into that growth or you’re a super fan of someone you want to give them a tip of $1,000 and you already happen to have a crypto account and know how those work then going to actually buy some favor token from the market and doing the transfer that way and cutting out the 30% is probably going to make sense for you but in general in most cases crypto payments actually end up being way worse for the kind of consumer experience Right, so you’re saying Elon alluding to having crypto payments on Twitter is kind of gimmicky because if people really want to send money to each other they can use so many other ways and since it’s not a Web3 app it doesn’t really have any relation to what
51:11 He’s doing there. Also if he does that he’s going to pay a tax to these app stores which is going to make it very impractical. Yeah or he is essentially kind of like if he wants to do tipping with crypto he cannot allow that on the app version so only the web version can do tipping or he has to find out some very complicated way of figuring out what 30% of that crypto tip is and giving that in dollars to the app store. It’s messy and it’s not coming anytime soon. Yeah or at least it’s not going to be convenient for anyone at this point. Okay now that’s good and at the same time you made a great point about Web3 and this is an important point. By the way web favor is you call it like a 2.5 basically and that is that you’re not expecting everyone including your grandma and by the way my mom in her 70s does have a MetaMask account and my daughter when she was 17 got one and my sons that are 6 and 7 have Bitcoin wallets but the truth is that most people aren’t ready to do all of those steps that you just say I mean I have a crypto and DeFi academy where I spend 4 weeks, well the first 2 weeks getting people to do exactly what you said and it’s a pain and it’s complicated and you lose a lot of people trying to KYC and convert fiat into crypto and then encrypt with the right wallet and then exchange it for the right crypto and then move it somewhere in order to play the game. So with favor, by the way favor.com I’ve just posted
52:31 On my profile which is Brian B. Rose, I just posted a selfie on Uniton and also the link to this episode but once you get inside there right now you can earn these kind of micro payment tokens that I can now send, I actually did a premium post today and used 50 of my tokens I earn those now but in the future I’ll be able to buy them and that’s what you’re saying brands might be able to buy them as well and they’ll be this micro payment layer in there but it’s also a web3 app so it makes sense and this becomes maybe social-fi to a certain extent. Yeah, I think for the foreseeable future there’s no point for favor to try to be fully on-chain and try to make everything fully decentralized because that just makes the user experience worse, it makes everything more expensive, more slow and less flexible and essentially the only place where that would have a kind of positive impact would be if you want to build something from a very idealistic standpoint of everything has to be fully decentralized and hands-off so essentially if you want to build the Bitcoin of social media then you probably want to build it in a completely immutable way and throw away the keys and see what happens. You probably want to do it anonymously because you’re otherwise going to have the FBI knocking on your door pretty quickly on what have you done, where’s the censorship but I think the Web 2.5 or somewhere in that range is kind of the way to go, where the favor
54:07 App itself is just like Twitter or anyone else, the favor stuff is stored in Google Cloud it’s not on the blockchain it’s easy and fast and anybody can onboard without a wallet into that Web 2 version but then as I mentioned earlier the key to making it Web 3 is at the moment you connect in a lens profile everything you start doing everybody following you, you following everybody, you making posts, all of that starts going on-chain onto lenses, essentially a backup and then that is accessible everywhere else so that way you can get that sort of actual ownership of the stuff you’re doing. We can still deplatform people from favor and we have to because there’s people creating 5,000 bots and there’s people doing all kinds of nasty stuff and that will always be the reality, like if you want to see fully uncensored social media you go to the dark web Silk Road that’s fully uncensored social media and that gets really, really dark so that’s kind of never a reality because there are some really bad people out there and if you don’t want to be facilitating hitmen to get new jobs and drug trade then you have to have a certain level of censorship but that’s where the Web 2.5 model works actually very nicely where we can actually kind of pick the stuff that we filter out of favor but at the same time, as I mentioned before, let’s say you and me get into a fight later and I want to deplatform you from favor since you have a lens profile
55:37 All of those connections have been backed up into lens so you just have to tell people like by the way favor sucks the platform does sell, it’s no longer used favor but we can all use this platform that has an all user experience and you can see all my videos there and you don’t have to rebuild your own platform and try to get everybody to join there so it’s kind of, I think that’s the balance that the Web 2.5 brings on the content side and we’re doing the same also on the kind of points and tokens side so again, if you make everything tokens, everything becomes complicated and most people don’t care, they shouldn’t care because most people are not on social media to make money, most people are not on social media to spend money if you look at Supercell the gaming studio behind Clash of Clans, Hay Day Brawl Stars and a bunch of billion dollar making mobile games they have the kind of free new model where it’s free to download and play Clash of Clans but then there’s people who may be spending thousands of dollars every year on playing it and they make still billions in revenue of their games that might be 10 years old because they’re still a very loyal crowd who do that and it’s a pretty small percentage of the total players, most people just play it for 15 minutes a week and they don’t pay anything for it but that’s kind of the same logic that we see for social media where most people will not be making so much favor points
57:07 Out of their actions that they would benefit from cashing those out, they might be using them to improve their experience so they might be tipping their favorite creator, they might be removing advertising from their feed, they might be boosting their post for some extra visibility might be getting some custom backgrounds, all of these kind of microtransactions that you can be doing in a free new model and then if you really are one of those super fans who want to spend a lot of like those guys who spend a thousand on Clash of Clans then it might start making sense for you to get a better exchange rate for acquiring more of those points so that’s where the kind of token transaction can come into play or when London really is going to be huge on favor and you’ve made a million or five million favor points then if you want to actually kind of cash those into tokens that are again then once they’re tokens you own them and nobody can take them away from you as long as they’re points we can’t take them away from you and right now what we’re doing is the bot accounts for example who are just farming the system we’ve been very up front that we are going to be deleting them and we feel zero sympathy for that because they’re just there to make everything worse and if you don’t treat them very harshly then they’re going to destroy the entire platform and the tokenomics and the user experience so that’s where the 2.5 works where the bot accounts can be
58:33 Very easily wiped out and detected but at the same time once you get to a point where you have that lens profile then that like online backup of stuff starts happening but if you’re a bot account you probably have not been amassing a meaningful amount of real followers so your lens profile is not really worth anything right yeah you’re solving a lot of really fascinating issues when it comes to Web3 Social like you’re doing this in real time you know it was rumored that Elon was thinking about doing a Web3 Social app before he bought Twitter and obviously he chose to buy instead or he didn’t choose, he was forced to eventually but that’s after he bid on it that’s true it’s interesting what you’re talking about when it comes to the creation of these pieces can you tell me a little bit about just numbers for favor I know you’ve had like a quarter million downloads of your app I think you’re doing you’re bringing more people on the lens protocol than even lens has, I’m just curious what do some of the numbers look like on favor yeah so overall the lens protocol until now has had only a little bit over 100,000 profiles minted because their first V1 wasn’t really scalable so they discovered that some things need to be changed in order to be able to actually onboard millions of users now there’s a new V2 being launched in a couple of weeks and that’s going to be a lot more scalable so now they’re opening that up but in the meanwhile for the year and a half
1:00:03 That they’ve been kind of iterating before they’re able to open the floodgates we built that kind of dual system where again the favor accounts are the V2 accounts that everybody can create there’s no kind of restrictions it doesn’t cost us anything extra for people to do those, there’s no gas fees and all of these restrictions so we’ve been able to get that 250,000 users and 250,000 by the way that’s a number of unique installs based on the App Store and Play Store data which is important here in the sense that there’s a lot of people who are quoting millions of users in Web3 and none of them can actually have millions of users because there aren’t millions of real people actually using Web3 applications right now there might be 100 million wallets but most of them are controlled by people who have 5000 wallets that they’ve machine generated and they’re trying to farm air drops so that’s why we’re trying to look at kind of the more honest metrics like how many people have actually installed the application into their unique mobile device and then another interesting metric is that for the credibility score that we’ve launched we have over 70,000 wallets connected and again wallet doesn’t mean anything, it can be a air drop hunters throwaway wallet but then what we’re tracking is the total value in those wallets and that’s where it gets interesting so we’re seeing that there’s over 50 million US dollars worth of NFTs and Ethereum
1:01:31 And stablecoins and all kinds of assets in those wallets and that’s kind of the stuff you cannot fake and obviously the NFTs are down whatever 98% so it would be like a billion probably in the bull run but that just proves that there’s like real people who are in depth into crypto are holders of very valuable NFTs and that then also helps us build that credibility so the favorite credit score works based on what’s in your wallets initially primarily based on like which NFTs you hold and if you have a lens profile what kind of badges you’ve been getting have you KYC’d yourself all this but then long term I think like wallets since they have like an unfakeable history you can actually quite easily start detecting like okay this wallet has been around for three years has been doing transactions that look like they are actually made by a human so it’s likely a unique human wallet and these ten wallets look like humans but they look identical to each other so they were probably faking to be a human and they’re all bought wallets there’s a ton of stuff you can actually do with that data to try to kind of figure out who are the real users and these are kind of the things we’re focusing on where right now we’re at like about 30,000 daily active users there’s still probably some bots in there we’re working really hard to squash those out but we do see that over 20,000 people have reached at least a level 2 in the system and looking at the
1:03:05 Unique device IDs of those so again like are they actually on a unique cell phone 98% of them according to our analytics are on unique cell phones so we’ve done a pretty good job at keeping those bots at bay but every day we discover new ways that people are trying to fake the system but that’s the kind of like interesting whack-a-mole game where unlike Elon who doesn’t really have a real incentive to get rid of all the bots he just talks about it a lot and his solution is let’s try to monetize if everybody pays me two dollars we get rid of bots which by the way will not work we’ve already seen that people are actually buying the yellow ticks that cost you $1500 a month in order to scam people with those so like the only ones who have enough money to pay anything are the ones who are either scamming you or trying to overthrow your government from a foreign influence so Russia will always have enough money to fund as many two dollar bot accounts as they ever need to influence elections there was a crazy scary stat about the Slovakian elections in at least the Finnish newspapers where I think they were quoting 185,000 fake accounts on Twitter pushing pro-Russia propaganda during the election in a European Union NATO country and that ending up with the party that was kind of pushing for the pro-Russia agenda winning the election so clearly the bots are doing well and good in those situations whereas for us the more bots we have not only is
1:04:43 The user experience worse and the implications can really be scary but also that’s going to destroy the tokenomics of ours so we only thrive if there’s real users and for the advertising driven platforms the more people even if they’re fake people you have the more advertising you can sell so it’s actually like a flipped incentive for them very important so advertising is not part of your business model not yet it will be part of the business model but it’s not going to be the only part of the business model and we want to be doing the advertising in a way where we really focus not on the kind of how all of the advertising in the web two socials works it’s based on CPM so cost per thousand impressions you’re basically selling eyeballs to people and then if you’re really good at targeting like Facebook then people actually get good revenue out of targeting those eyeballs because you know which eyeballs to target but if you turn it more into like a specified targeting method where especially if let’s say you’re an NFT project or a DeFi project or somebody in the web three space and you want to target high quality users we can actually reach a lot of the high quality users who have voluntarily connected all of their NFT wallets to kind of boost their credibility in the app and we can for example we’ve already done some partnerships actually tomorrow there’s going to be a new partnership with Animoka where our level three and four
1:06:11 Users will be getting the new Moka IDs before others and these are kind of great ways to reach those high quality users kind of where it’s a win-win situation they want their perks they want to be white listed for stuff and the projects want to reach those so long term I think the kind of wallet based targeting will be one way to get rid of that sort of like purely like impression based targeting model and really focusing more like a revenue based and result based targeting which will then mean that every bot is just going to be a wasted opportunity on our side that doesn’t help anyone so if we’re not trying to monetize the fake users then we have to focus on keeping the real users. That’s fantastic. Yeah we know the Animoka guys and the Mokaverse looks really exciting and they’re going to come out with that kind of standard ID across all their ecosystems and yeah I think we’re going to be involved in that deal too so that’s great to hear that you’re plugging into that because that’s such a huge user base.
1:07:09 You guys recently did a really incredible fundraising and raised money in a market where it’s not easy to raise money and then you did a little bit of a launch with Swissborg. Can you just talk about some of those numbers? Yeah there’s the official fundraising element will be going out in two hours so I cannot disclose everything yet there’s an exclusive embargo on some of the details but what I can talk about is the Swissborg part of the raise where we were kind of originally we were planning to only fundraise from BC Investors and Angels because I’ve seen a lot of the projects especially during the bull run that kind of were fundraising like 40 million dollars from their community to build something and in most cases they actually never built whatever they were promising to build and even if they did there’s like very little guarantee of that succeeding so I wouldn’t feel right fundraising from the folks who don’t really have that extra money to put in they’re kind of making a bigger bit than they should be which happened to a lot of people in the kind of investment craze previously so for the first about year and a half we focused on fundraising from VCs and Angels and it obviously hasn’t been easy in this market so every time we reached kind of a critical mass of investors being interested then one of the crashes happened so Three Arrows Capital FTX we somehow always timed our fundraising to be almost ready a week before those
1:08:47 And then everything fell through but it’s been a fun year and a half of meeting over 200 different investors around the world talking to everyone and it’s been like you learn a lot by doing that kiss then there’s not a single objection out there that I wouldn’t have heard and by now that I wouldn’t have a response for so I can very comfortably go into any panel without any preparation kiss I’ve heard them all and I’ve had to figure out an answer for them all during those 200 calls but long story short now we’ve closed the fundraise and one of the most exciting parts was the Swissborg collaboration we did so Swissborg is kind of doing what we’re trying to do for social media kind of democratizing things so they’re doing the same for investments so we wanted like there’s obviously a lot of the community members who were asking us like please let us also invest like we want to be part of this and I think the fair way to do that is that once we actually had the critical mass of money in our account so we know we have enough to get by then let’s offer them kind of the same valuation that we’re charging the investors and allow them to buy small shares so up to a thousand dollars were the biggest tickets for the level 4 users and that way they can kind of buy their stake at the same valuation as the big VC investors do and that was kind of the fair way to do it and what was pretty amazing to see was that the first batch that we
1:10:15 Released for the Swissborg sale we first thought like okay nobody’s buying this is really bad the numbers are not moving but actually it turns out that it was sold out in 8 seconds and it crashed the application so there was just like nothing moving because the whole thing froze and we kind of fully subscribed all the different buckets that we had in the sale raising about another million out of that partially through the Swissborg community partially through our own community and I think that’s something that I’d recommend this model to anybody else who wants to do things kind of in a fair way so if you’ve already built a community once you’re kind of comfortable with your funding so the community is not the only one taking risks like if I’m not putting my own money into this I don’t think our community should be the ones bankrolling from the day one but there’s the VCs who can afford some of their bets to fail and take more risk they put in their money first then when we have enough that it actually looks like this might actually work out then let’s include the regular people into it. Yeah that’s a fantastic hybrid so you get the VCs and then you allow your community to invest at the same levels and then you did it all through the Swissborg app which is amazing and yeah we know Alex and Cyrus Fezell from there. Alex has been on the show before and so they did an amazing job there. We’re actually investors in Swissborg as well so
1:11:39 You know it’s fantastic to see and a million dollar to sell in this market and then you get all these amazing people in the community they’re going to use your app and they’re going to be long term holders it’s just it was a massive success. Yeah we could have probably like looking at the numbers we could have probably raised our entire round based on that one day sale but I said we didn’t want to do that and obviously we don’t want to sell too many tokens upfront because then that’s also going to hurt the token performance so that was kind of the cap that we had but yeah it was good to see and I also like it from like we want to do everything by the book as much as the book has been written so far in crypto it’s not always easy but here kind of like we don’t want to go just like Wild West selling to consumers guess that will probably get everybody into trouble so then going with somebody who’s fully regulated in Europe like Swissborg and they kind of buy a share of our investment allocation and then they can distribute that to their community and our community it’s kind of like a good way to also make sure that somebody has been taking care of the kind of regulatory part of things they do their KYCs and they know who they can sell to so it’s also one where like I can sleep easier knowing that we haven’t been doing anything like dubious on that front because most countries still have not figured out what they want to regulate and as we see in the U.S. right now
1:13:09 They’re kind of retroactively trying to regulate the stuff that they were still saying is okay a few years ago. Yeah, it’s ridiculous and congrats again on that great move with Swissborg and I’m sure you’ll be doing more with them in the future. What does the future look like? So you’ve done your raise, done your community raise, what are the next one year, two year, five years exit look like for you? Yeah, I think now kind of next step is obviously putting the funding into good use so we already have a team of 28 people around the world. We’ve been kind of very heavily investing in the kind of not only developers but also the community management and growth and partnerships teams where we want to make sure that we have kind of not only we want to have the best community in the industry which I really think we do, we have super active users who are helping us out with everything but we also take better care of them than anybody and that’s kind of a key thing for us so like even I spend often an hour a day on early scored answering any tags and questions I get on the favor app and it’s just kind of like we want to make sure that especially in these early days when there’s not a lot of people who want to take the bet of spending hours a day on a brand new web free social app, the least thing we can do is take very good care of them, listen to them and that’s been kind of a key use of the funding so far then kind of in the very
1:14:35 Near future we don’t have an exact timeline the plan is to also get that token released where as kind of briefly discussed the idea is that it’s going to be sort of this exchange method between those people who have been earning a lot of points and those people who want more points and also kind of any advertising that we build will be kind of tied into the token in the sense that the advertisers can either buy the token for a cheaper advertising rate or if they want to pay in dollars or euros then we can buy back some of the tokens from the market with that so it’s going to be a very complex model overall but I think if we can make it work we can actually build kind of this balanced value exchange economy that really is sustainable in the long term so it’s not based on Ponzi-Namix it’s not based on speculation but it’s actually based on there’s enough people who want to spend favor tokens or hold favor tokens for various benefits in the app to offset all of the people who are rewarding with tokens for creating value on the app so creating content, curating content, helping us moderate the content and if we balance those right then it can be actually a machine that kind of feeds itself and can grow in a kind of stable way instead of the kind of A curve that tends to happen where things go up really fast and then they kind of run out of new people to on a board and then they come down equally fast and that’s not going to help anyone if you try to build for the
1:16:03 Five years that you mentioned or hopefully fifty in the long term no kind of like exit plans or such at this point the kind of nice part of tokens is that you can actually get a lot of liquidity if you kind of run a successful token economy so then you don’t need to actually make exit plans necessarily on that and we can just focus on growing and ultimately we want to kind of decentralize the kind of ownership a lot more as well so like long term we want the token holders to also have a say in what we’re actually doing in the meanwhile we’d be obviously very stupid to ignore what our audience is saying about what they want so like we are listening to them very closely because they’re the ones we’re building for so they don’t actually need to have voting power in order to have power in what we’re doing and so this morphs into a DAO in the future potentially once there’s kind of enough regulatory clarity on that front and I think like they still have a few things to kind of iron out on the DAO front where like how you actually make the governance work in an efficient way because most people don’t really care enough to look into things that they vote on and things like that but I think at least from like a sort of advisory counsel perspective it’s pretty easy to start using the tokens as a voting mechanism in the near future and we’ve set up the kind of governance bodies in a way where it’s possible to decentralize fully on the token side. It’s so cool
1:17:35 You know because I’ve had conversations with lots of CEOs over the years and like two things I would say if anyone’s watching or listening they should notice about you first of all when you create this company you’re trying to create it where there’s no moats which is the complete opposite natural human intention because when you’re creating something consciously or subconsciously you’re thinking I’ve got to defend my market my market share I’ve got to defend my customers so you’re thinking we’re going to create a social graph you can take with you that means I’ve got to work harder to make sure I add value every day and then the exit you’re not thinking I’m going to sell it to a billion for Google and Leave you’re thinking well the exit is it just continues to run on its own by the people who own it and that’s not me it’s like this whole different shift in mentality in a Web3 entrepreneur had the same discussion with Stanie when he was here from Ave and I was like what’s your next big plans my next plans are to help the DAO do what they want to do best and we even argued that VC isn’t even a Web3 phenomenon anymore because even the VC model is looking for those big exits and it’s yeah I think what one interesting learning that I had from like my previous ad tech career was like I joined this company called Smartly.io as one of the first employees back in the day in Finland and we had a very different kind of it’s a SaaS product for doing
1:18:59 More scalable Facebook advertising for the big advertisers and typically in SaaS people especially in the US they want to lock you into like one year contracts or as long contracts as possible because they want to retain you and they want to build you promote in a very artificial contractual way and we kind of from the get-go decided that we don’t want to work with customers who are there reluctantly because they’re locked into a contract and I personally hate the companies that lock you into a contract I’ve been in very heated arguments with a lot of them over the years when they don’t deliver and they keep sending me a bill every month for something that like they deliver no value for but we kind of decided like it’s much better to not make them contractually obligated to stay with us so the moment they send us an email like we don’t want to work with you anymore we stop the billing we ask for feedback and welcome them back and in most cases if they left they actually came back like a month later like yeah actually the Facebook native tools were pretty bad were willing to pay this also in the future but that actually helped us kind of really work for the customers over the years and we grew from like no revenue and a few people in Finland to the global market leader and the whole Facebook advertising ecosystem within a few years and over through the companies that had been raising hundreds of millions of funding by actually only
1:20:23 Raising a couple of million of funding in the beginning and just kind of self-funding all the rest with the revenue coming in and that was kind of a learning that I think that can be replicated it’s obviously a very different industry in social media but I was kind of just so inspired by that concept of like every customer we’re working with is there voluntarily and every day we do our best to keep them we serve them as well as we can we build what they need and if they have a problem we try to solve it you cannot obviously solve everybody’s problems in social media especially as the platform grows but I think the same idea of like if the first thing we do is have no lockups and allow you to leave if you don’t want to then we really know that if people are gravitating to another app we can react immediately instead of I think like with Twitter or the other web2 apps I think it’s sort of like the frustration keeps growing and growing and growing and then eventually without any warning it’s gonna collapse in a way where the mass exodus is driven by whatever platform at that point is kind of there to take those people and then if enough people are like okay like I’m done we’re leaving then you can actually kind of like empty out a huge part of the audience at once and you had no way to prepare for that and you don’t really see like for example for Twitter if their audience is higher than before it’s really hard to tell how many of the people
1:21:53 Would still be there and are actually happy with the changes or is it that they just took out their popcorn and are looking at like what is going on in here right now so it’s interesting to see it might not work, we might lose all of our users but also like the whole kind of Zuckerberg metaphor like even if favor is not the one who becomes kind of the biggest app or if we don’t become billionaires that’s not really the kind of main point here is we want to do kind of as much as we can for that sort of decentralization so if we get to a point where we helped kind of like trigger that move and then people eventually go to some other app built in Silicon Valley but it’s built on Lens or one of the decentralized graphs like I’m still happy with what we did Kiss then we’ve actually changed the world in a pretty meaningful way if we were kind of a notable part of that I think that’s kind of a big enough goal for me. Because you and your founder Tommy when you first started you set down you wrote down for favor what you wanted was a quote net positive impact like that was your mission statement. Yeah so we kind of like started figuring out what should be the values of the company and like the first app we actually did was more like a recommendation app for like creators to share their favorite products and with the idea of like if people would buy from like genuine recommendations they would buy less junk from ads that are claiming to be amazing
1:23:23 Because in New York my classes were filled with stuff that looked great in the ad one and then when it arrived it was actually terrible quality so trying to kind of like that would have been a net positive impact if people buy less junk then there is a much lower environmental impact of all that but then realize that’s not working and like now the potential net positive impact of what we’re doing is actually like I don’t know 10,000x that if everything would succeed in the way we hope to but I think that’s kind of for me it’s not enough to be kind of neutral like if you want to be neutral about your existence like move into a cabin in the woods and farm your own food and even then you’re a big net negative probably like every fart you’re doing contributes to global warming but if you really want to be doing something where you leave like a big positive impact then like that should be the goal like whatever you do do something that actually leaves a big mark or as big of a mark as you can and so even if favor doesn’t become the app you want to know that you are a part of transforming social media or transforming the way we exchange information as humans yeah and like I think like that would be kind of enough bragging rights at this point to feel pretty successful even if favor wouldn’t be the final one and obviously the cool part of this is that even if we end up like some point like abandoning favor because something went terribly wrong if we’ve
1:24:55 Been helping to build lens and build these decentralized social graphs and build this sort of whole movement of people owning their own data that can be utilized then all the learnings we have means we can kind of hit reset and build with all those learnings build a new app or build 10 new apps based on all the learnings so it’s not like in web 2 if all the favor users were only in favor and then we decided to kill favor then obviously everything would be gone and all of the community we had would be gone but if we have built it on lens like we do then even if for some reason favor wouldn’t work out and we come up with an idea of a whatever augmented reality social media based on your apple glass then that might be kind of the next big thing and we can have the same audience because we’ve been helping build that audience in a kind of permissionless way yeah you know we just took a picture next to our mission statement on the wall and it says we’re here to create a mass scale transformation of humanity into a fully empowered conscious and cooperative species and so I mean I started London Real because I was in banking and in banking you just care about one person and how much money you can make and it made me really I’m unhappy doing that and so having like a mission that’s important to humanity is like a much better way to live your life and I’ll be honest with you Joonatan like I’ve been trying to get my head around this YouTube deplatforming because
1:26:29 You know you know we had over 400 million views and so like our content like it saved lives it kept people from suicide and drug addiction and it like was it was interconnected into that whole Google search in a way that when it disappears means that so many people will never get access to that and so it was hard because I’m kind of struggling with the fact that everything we created is now gone but like I’m also thinking now like it’s not gone you know I still when I’m in Singapore people are stopping me on the streets talking about my content and people are coming to our movie premieres and like we actually have a social graph out there you know it’s this human connection like we’ve given people moments in their lives some people write the moment they needed it they saw a video from somebody here and it changed their lives and so that’s actually not gone it’s not on YouTube but it’s not gone and so it’s like our work hasn’t been for nothing and it’s just about what we’re going to go with next and so like I’m thinking kind of the way you’re thinking it’s just like we’re going to keep doing this and there is a graph out there somewhere out there in the atmosphere that we’re going to now just continue working on continue developing and just find other ways to do it through favor and through other ways but I’m not going to forget that so we’re just going to keep going and actually we’re going to go harder now I think the key learning there probably is
1:28:01 That kind of for the future like this battle might be repeated multiple times in the next couple of decades for example but if you know kind of start rebuilding that graph in a way where nobody can take it away then you’re kind of like having that safety in there so instead of that graph being in kind of like immaterial way where you kind of people remember and recognize you can actually have it kind of with real on-chain footprints and then kind of whatever resets happen over the years then they will be a lot less hard than the kind of resets from web 2 to web 3 Just want to finish on one concept talk to me about the importance of what you’re doing right now again like this film we just released is on my mind because I’ve watched it like a thousand times as we finished it but it really talks about the war that everyone is in now it’s an information war and battles really aren’t fought anymore with tanks and guns although it still happens locally unfortunately and they’re not necessarily fought on this specific battlefield it’s now fought in your son or daughter’s room on their laptop or their tablet through some social platform and like you said what happened with that Slovakian election I mean that was just you know a political a political purpose was changed and we know these elections are based on very razor thin margins especially in America and we know going forward there’s now artificial intelligence and whatever you think about
1:29:41 AI you can’t disagree it’s probably going to become smarter and smarter and smarter and one of the things that will probably do better than anything else is create narratives that will be able to influence and change human beings and so like we’re at a really dangerous time with social media and it’s not a joking matter or a laughing matter we’re literally controlling people’s thoughts and minds and therefore their actions and right now it can be hijacked through all sorts of ways governments the corporations themselves bad actors etc and I know you’ve thought deeply about this but maybe tell me about the state of the union of where we are and where it goes if we don’t get something like favor right yeah and I think kind of like there’s obviously so many different points of views but I think the kind of most critical for like genuinely critical for humankind is like will we get social media right in a way where it doesn’t end up destroying our governance models putting people against each other like if we look at the US right now like things are so polarized that it’s like closer to a civil war than it’s been for over a hundred years and social media actually plays a huge role in that because like the rise of populism overall is one where kind of it’s very easy to be a populist in a social media driven world because like kind of writing on problems without providing real solutions for them is a great way to get people riled up and social media
1:31:15 Kind of amplifies that and a lot of people have been able to kind of take use of those social media graphs and algorithms to their own purposes and then that means that the people who win the election are not the ones who have the best solutions or are the most qualified it’s the people who kind of build the strongest narrative on social media and make people believe it and a lot of cases might be done by spreading like fake propaganda news through thousands or hundreds of thousands of accounts so it’s really kind of like an actual threat to democracy right now and it doesn’t mean that Web3 is kind of like a silver bullet that’s going to be solving that but I think one thing that will at least like be I think it’s our best bet at that is that we don’t have sort of like three, four, five algorithms and companies in the world who decide the global narrative there’s obviously kind of that whole like spreading fake news kind of narrative that can be very dangerous but also like in the US right now the senators were very worried about like is TikTok spying on your home Wi-Fi and are they spying on your phone and that’s like completely useless information like what videos are you watching on your phone, nobody really cares except that the thing is that TikTok is the one who decides the news narrative in the US nowadays so according to research majority of teenagers get their news primarily on TikTok that means they get their news primarily from a Chinese owned company
1:32:55 Where the governance structure is a bit unclear and nobody is able to with certainty say that there is no government interference in this so at the same time like the US is cared about completely trivial things and ignoring the fact that there is a like non-zero possibility that the Chinese government is deciding what news their teenagers are watching and that’s not scaring them enough at this point and like as long as there’s kind of just a few of these kind of dominant algorithms out there the power they have is so big that even in the best case they will end up kind of causing a lot of damage and worst case obviously if any of those want to be used against us in any way it can be extremely damaging and then at the same time anybody who cracks that algorithm and figures out how to get their virality going can actually do a lot of damage on it so that where we see that it’s not like favor will have a magic algorithm that will make everything right but I think the fact that if nobody has that control and power where one single algorithm is the primary news source for hundreds of millions of people and that has like no media kind of like no media code of ethics no like media sort of like principles behind it but it’s actually an algorithm just like looking at engagement shouldn’t be the case and if we get to a point where there’s let’s say a hundred different applications they all run the same data but they all index things in a different way
1:34:32 It’s going to be much harder for anyone to like game that because there’s a hundred algos you need to game and it’s going to be much harder for anybody to get that sort of echo chamber going in one place for enough people so at least it will be making the nefarious ways of trying to game the algorithm harder and it will also democratize that kind of censorship and decision making so I think in the free interview pictures you mentioned that like favor is an app without censorship but I think nobody can ever be an app without censorship the European Union has a recent regulation that says that certain content needs to be removed and every country has that and there are some things that are so bad that they just simply have to be removed but then what will kind of literally is the democratization of content governance if favor goes too harsh or too loose we’re going to be losing our users to another platform the metaphor I like to use here is nightclubs so if you let everybody into your nightclub and people puke on you all over the place nobody wants to go there anymore and if you’re the nightclub that picks only good looking people from the front row and then they throw you away from the club randomly people will also not want to go there so it’s always a balance and I think the nightclub metaphor pretty well illustrates the balance of you need to certain people if they’re puking all over everyone whether it’s literally or metaphorically
1:36:10 They should be removed because they’re going to make everybody’s experience worse but then like we shouldn’t be in a world where there’s only one nightclub and if you get kicked out of there you can’t go partying ever again so we should be in a world where you have a hundred different options and your group of friends your followers are also decentralized across those so then nobody will ever have that power that Mark Zuckerberg Elon Musk somebody in China have right now man it’s probably the most important fight of humanity right now is controlling or making sure the information is disseminated in the right way it’s a big one how can people download favor, how can they follow you on social what are next steps if people want to join us in this brand new way of communicating with each other yes so the best way to do that go to the app store or Google Play store download favor P-H-A-B-E-R like on my shirt and I guess probably in the title of this video and you can also use the invite code which is your user name so you get the points like on Brian B. Rose give me some points so every time one of the users you want board levels up to level 2 so they kind of prove that they’re real you get a thousand points that person also gets a thousand points so it’s like a double sided referral mechanism so then you can afford to do more premium posts in the future and go follow Brian again Brian B. Rose my favorite user name is Joonatan so J-O-O-N-A-T-A-N
1:37:54 The weird Finnish spelling of Joonatan you can find me there pretty easily usually and if you have any feedback feel free to tag me in your favorite post that’s usually the best way for me to see those we also do have a very active Discord and Telegram if anybody has any questions or feedback to be given and hopefully very soon we’ll be rolling out the new communities feature where then Brian can host his own community and take back control over that relationship with people so now we have the chance to start onboarding everybody on Lens so let’s make sure that we get your community to have that direct relationship with you in the future and then whatever you want to do with it, it’s not up to me it’s not up to even Stani it’s really up to you at that point I love it, yeah I want to create communities for my crypto and DeFi accelerator, for my investment club for all sorts of different communities I want to create in here so when that’s rolled out we’ll send out the invites and get everybody in using those things and Twitter they can follow you as well both at the favor app and I think at Joonatan Lintala is my so if you crack the spelling you can find me also on Twitter, not pretty active there it’s not a very fun place to be but at least favor is there, which is good we’re really excited to be working with you, I love your vision of the future, I love all the values around it, I know it’s going to take time and that’s important to take the time
1:39:24 And do this correctly but it’s just got so many fascinating possibilities and upsides and yeah, a lot of my community is already in there posting every day and doing vlogs and I am as well so looking forward to everything you roll out looking forward to supporting you in all ways, shapes and forms and godspeed and good luck you got some challenges ahead but also I can’t wait to see a web3 social that really gets this right it’s just so many possibilities definitely not an easy task here that’s what makes it exciting and what a great thing if you can do this with your life’s work, I think that’s just an amazing thing so yeah, all the best to you and the team thanks for the time, looking forward to this and yeah, good luck man awesome, thank you
