Does your Brand have a House in the Metaverse? with Konrad Probst of Property's
Konrad Probst is a serial digital entrepreneur and angel investor from Germany. He is the co-founder and CEO of Property's Digital Ventures and the co-founder and CTO of Pioneers Labs.
His company Property's offers consultancy and implementation services to large international brands that want to take the leap into NFTs, the metaverse and other Web 3.0 products.
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Transcript
Konrad Probst from Property's Digital Ventures
Holly Shannon
0:02
Okay, I'm here today with Konrad Probst from Property's Digital Ventures. Hi!
Konrad Probst
0:08
hey, thanks for having me.
Holly Shannon
0:10
So I want to start with what was behind the idea for creating properties. What was the impetus of thought?
Konrad Probst
0:18
That was a long process. So it originally started with an idea to provide houses or homes to avatars. Because back then, when we entered the market with this idea, there was an abundance of Avatar projects, not a lot more today, you see a bigger variety, diversity within NF TS back then that wasn't the case so much. And we thought, Look, that's something that isn't out there. Turns out that may have been a bit of a foolish or too simple idea. And over over the course of the last, I'd say eight or nine months, we really, you know, we're in a spot where we seeked value that we could provide and that wasn't only homes, but those homes only go so far on the metaverse. No one in theory would need a home to feel secure or to, to you know, keep some of Maslow's hierarchy of needs. Some of those pillars in check. It was always a house would be nice, because we know it from real life. It's not necessary. But the house offers us space that you could leverage as a brand. If you're an individual. If you're an existing established brand, wherever you build that brand and web three, or web two, or whatever web for that reason. There always needs to be a place, wherever that has a roof or not. It's not important, but there needs to be space to showcase your brand and to tell a story authentically, and we are where more and more expanding on that house idea. And we're going into a direction where we see ourselves today as Metaverse, facilitators and what that means we can talk about it later also.
Holly Shannon
1:57
Okay, so as a Metaverse, facilitator, you are always building out strategy to help brands to sort of usher them into metaverse. So in the metaverse and in their houses, are they kind of like brick and mortar stores? So the way we see brands in the web three contexts, and especially with regards to the metaverse is that brands play a crucial role and user onboarding, we if we if we look at a chicken egg problem of who should be first the user or the brand, our answer to it is quite clear cut. It's the brands that need to move first to attract those users because gaming is there and a lot of people play games, they won't be interested in play to earn if the game isn't better, they don't care for a few dollars. Same with with any any users that go into the meta versus if there isn't content, it will become very boring very quickly. And our thesis is that brands are the ones that are interested in this kind of business. They are the content providers in the initial stages. We don't think that there are individuals that would be incentivized to create that kind of content and the sheer amount of content that is needed to keep it interesting. Because there's no incentive for them right now. If they want to create content, they're probably better off on YouTube or doing podcasts. Right. And wherever those podcasts can live on the metaverse Yes. But without a user base to listen to those podcasts. Probably a lot of podcasts house will still stay within the realm of Spotify or Apple Music, right? And brands have that interest for brands. The Metaverse is a new channel. I'd even go as far to say that the metaverse offers multi channels the same way that the real world does, via billboards by our brand activations. Why are cool games, right? There's a lot of ways and those are all individual channels. So we see the metaverse as this new digital and blockchain based omni channel for brands to authentically tell their stories to brand themselves to engage with users and to offer them ways to actually own part of, of, you know, product lines or brands, rent equity that they are interested in. Right. And this This is a new space where again, we think that you know those brands, whatever they are doing, whether it's games, whether it's showcasing in buildings, or showcasing and and the outside world in the metaverse, it's it's always starting with the brands because there is a market for this, but the market will not come there without the brands. And that's how we see it. So Metaverse, facilitator to us means individuals need to be on boarded to the metaverse but so do brands. And we distinct between web two and web three brands web three brands are in inherently brands that have just started that have never existed before that outside of the end. empty spaces have very little to no real brand equity, no one knows about them, or apes is the first example that is slowly venturing into conventional worlds where, you know, influencers and celebrities are stipulating where, where the interest in the hype is going. And we see that, for example, projects like doodles or lazy lions, and a few more of those in that realm. They are managing to create brands outside of web three. And we see they thrive for that reason, because they are touching new user bases. And for us, the way we can provide value to those web three brands is by placing them within the scope of our Metaverse worlds. For example, on the sandbox, we currently have 24 partners, or web three brands that are placed there with clubhouses and mini games. what that creates is a social network of web three communities, May those be 30,000 people up to 250,000 people and our partner network per brand that multiplies quickly and you invite your audience there, your community. Maybe it's 1000 people logging in, but so do all the others. And suddenly, your brand and your clubhouse on our world has an exposure of a few 100,000 compared to having your own world where only your community lifts. And with this social network, the synergies that all those brands create to each other without actually doing anything other than inviting your people. That is something we thought is very interesting. And eventually we opened that up to more prestigious traditional brands. We specifically work with premium brands, because we think those have the biggest overlap between attractive appeal from the premium. But premium isn't luxury. So we can expect quite an influx of people to there's a there's a lot of people owning, for example, Omega watches, right? Not a lot of people own Patek Philippe watches. So omega watch, this would be a good market because it still has that premium feel. But we also see that with within that premium field, we have a lot of users and that's how we tackle web two right now is what our premium brands that we like to work with that we think have a place in the metaverse. There's a lot of them that we don't think are fit for the metaverse yet, either the metaverse is not matching their brand, or their brand is just not yet in a place where the metaverse would actually care about their brand. So we specifically target brands that fit both sides, right where they're where their product, the existing product that they have is already that in a digital shape is already in a state where in the digital shape their their products have a product market fit within the metaverse and that's how we treated right now. So that's that's the b2b side that we're handling, both on v2, sorry, on web three, and web two. b2c looks different. b2c, we think that there will be a lot of individuals like you and me, Holly that will be interested in a metaverse. Some of them eventually want to build brands the same way we I talked about sandbox and our presence there as a social network. Those individuals are part of the social network, some of them over the years and traditional web to have built their brand on Facebook, on Instagram on Tik Tok these days. If they manage to they need tools, they don't only need a presence, which in the metaverse would mean that they may have a building that is branded in their brand. But they need to need to be able to monetize those audiences, because otherwise that becomes a dead end for them really quickly. They cannot spend time creating content all day and not get renumerated for it. So so that's how we see it. And the way we approach it is if you own land, our NF T's provide a house, it's an empty house, you keep the NFT that yields you tokens every every month, purely utility tokens. We're not, we're not venturing into any any cash equivalents and tokens. We want to use those tokens to just enable people to buy items and furniture for their houses, customize those empty houses that they now own. And then in the last third step of that plan, we are offering tools for them to monetize the content that they are creating. And hopefully they are creating that in an environment that benefits all of our community as well.
Holly Shannon
9:29
I love the cross pollination of the different communities. So do you find it's most successful if the brands that you reach out to that there's synergy between them in this space that you've created?
Konrad Probst
9:47
So that's interesting. I think both similarity and diversity creates synergies. It's about finding the synergies and a lot of times I feel like what we've seen in In the current streetwear world is that there's a lot of artists to brand collaborations or brand new brand collaborations. And those are synergies that maybe 10 years ago would not have been so apparent. But these days Adidas X Prada is a normal thing and people get used to it. In Web three, there are similar paths to collaboration, wherever there's use cases that are opened to Avatar projects through our collaborators or not. The bare minimum is that both have audiences that are within a target market. If those audiences meet, different things can happen, a multitude of things. So an example would be individuals that say, Hey, I'm an artist, I would like to co create something for your brand. And I didn't know about you before my community and your community actually married on the metaverse and we got to interact. And so similarity is always the easy path to collaboration. Diversity is harder to find, you know, synergies in, but I am of the opinion that diverse collaborations, oftentimes, if done right yields significantly stronger synergy sets offer a bigger positive sum game for those collaborators.
Holly Shannon
11:20
I would agree, you know, if we go back to your analogy of like the Omega watches, you know, they had done a whole collaboration with the double oh seven, you know, the James Bond type of thing. So if you could think of, you know, utility with omega and maybe the movie, you probably could get a lot of new people that join the Amiga community in the metaverse because maybe the tokens released are physical copies of the original James Bond movies, for example.
Konrad Probst
11:59
So that's interesting that you mentioned that, right? It's about the way those brands leverage NF T's. And if you think about crypto wallets, it's very similar to our actual wallet, what's in there, its cash and cash equivalents. You have one off vouchers, like bus tickets that you may just use once you have membership cards and access cards that get you into your gym. Right? And then maybe there's also memorabilia like pictures of your family or certain notes that you keep sacred for yourself. And they're all in your wallet. And we see it the same way. There's an allowed analogy between that. And here, right? If you look at it that way brands can leverage memberships can leverage vouchers can even leverage certain memorabilia, if there's a value to people that day have an emotional attachment to that memorabilia. So for us, the way we see it is that those brands are actually in a position to to leverage NF T's in various degrees of freedom. And that opens up possibilities where they can go and say, Hey, this NFT allows you to have a subscription to our products every month you get products, and NFT is now verifying your ownership. And in the end, we think that web three is not about decentralization. little sidenote, we talked about it on a yacht party yesterday already, Holly decentralization, we think is long gone, because VCs have already captured quite a significant part of the market. And now it's turning into this blockchain based tech oligopoly the same way it has already been in web two for years. Web three to us is more about transparency and ownership. Not so much about decentralization. That's a nice thought right now. We don't think it's here. Jack Dorsey agrees he opened up web five already people can look that up if you're interested. Because he also agrees there's there's no way right now that we can talk about decentralization and take it serious. Web three offers a lot of space for collaborators. And that's, that's good. And we think that that's already enough. So those brands can use the transparency that comes with the ownership and vice versa, to actually offer new experiences to their customers, but also to touch upon new target markets that they may be able to deliver physical or digital utility in the form of physical or digital products, services, or experiences and events. Right and the way they can play with that, again, the freedom that they have to leverage their brand new ways is unprecedented. And that is important here. It's it's not about decentralization, it's about the opportunities that blockchain based nfts can offer for brands and the interactions that can happen with their communities or with new non existent target markets that they can discover through that.
Holly Shannon
14:59
Okay, so I'm gonna Throw a little left field question in here. If you could have any brand that would really exemplify and lay the framework for the type of Metaverse, you want to build with that client being and do you already have them?
Konrad Probst
15:20
So we do have a client that I cannot talk about, that would be our ideal case. Let's use an analogy.
Holly Shannon
15:31
Rhymes with...
Konrad Probst
15:33
I wouldn't go there, they wouldn't like that. So I think what we can say is that there are certain product brands, I'll just mention a few from from automotive, let's say Audi, from watches, let's say Rolex. Few of those premium brands that have have a large fan base already that have a large aspirational value to to a larger market, than even their target market. Those brands are particularly interesting because they attract audiences themselves. They have an easy time to collaborate with everyone they want to collaborate with whoever artists they want to speak to, they'll get the intro. And those artists are always interested in working with those heritage brands. attracting audiences attracting collaborations, that opens up a lot of a lot of potential for revenue, but also for new branding. And again, web three is about reinventing brands not in a way that the reinvention would harm the original brand, or would interfere with the idea of the original brand. But transporting transporting the brand into new context that makes sense within the web three space. For what I mean by that, because that is all very esoteric talking right now. It's it basically boils down to what can I now do that I have the possibility of transparently showing ownership of constantly digitally providing stuff, meaning experiences, airdrops specific events that people can attend? We're at NF NF T NYC right now, there's holders that are invited to parties, real life events that they can experience for free, being part of the community and being able to transparently verify that ownership to the to the bouncers probably at the parties, right. So overall, we we can boil it down to the possibilities that come again with the transparency in the ownership. And we can boil it down to to the way that they can reinvent their brands. So if we're talking furniture b&b Italia is a very high class furniture publisher. Working with great, great people like Paolo, piva, very great designer. Those are designed pieces with a lot of heritage, do they need to apply to the same physical limitations meaning materials and gravity? No. Right. And it can still be designed classics, but they are. They are limitless in possibilities. Now before that, you can only produce glass in a certain way. Which would mean there's physical limitations to how that glass can really be displayed or which kind of shapes and can take or how fragile the glasses in the metaverse all of that doesn't matter. And that opens up a new way for brands to really create things that are on brand, but new and transformative, innovative.
Holly Shannon
18:42
I I love the idea of creating materials, you know, I come from a material background with with a jewelry. So that's really fascinating to me. Do you think that the smaller creator might get kind of lost in this like I feel like you know, it's so easy for big brands, luxury brands, I mean, you could talk big brands like gap but you could talk luxury brands like Harry Winston jewelers, that would really succeed because they have the marketing arm and they have enough people how do how would a smaller creator create or or combine their community into something like that sounds very cliche, content being out there. Quality content right is so think that the first thing to mention is that I see a lot of people starting also in web three, whether whether certain ignorance to the amount of quality that the space currently demands. Graphics need to be high quality. Communication Needs to be constant. Communities need to be taken very seriously otherwise they hop on. Because if you're not giving them the attention, the same as into her interpersonal relationships, right? Either it's person to person, if you're not giving the attention or you're not getting the attention you may be put off brand to person is no different, right. And whoever that is an existing brand, or a smaller brand, arguably, the smaller ones have to work a lot harder. It's about interacting with those communities, it's about providing them a sense of security, meaning, hey, I spent my time with this brand. And it will be worthwhile. If they don't have that feeling, there's no chance for the smaller creators. So there's always a way for smaller creators, we have not been here a year ago, we have started from scratch, there was no one helping us. We went out there and we started approaching smaller projects that we liked that we saw potential into grow. And again, we formed those synergies, we collaborated with them in ways that with you know, let us tap into new markets and they would be able to tap into new markets. And the smaller ones. Same as the internet, the internet started with a lot of fragmented people all over the world had helped each other build this thing that we use today that changed the world drastically, the internet. On a brand level, it's similar, right? It's it's either you do it on your own, and you are so good and so efficient that you can push out quality content that interests a lot of people constantly over over the years, right constantly, then yes, you can make it as a small creator and you can form your own brand. And we see that with YouTubers who are super successful, right? Logan Paul has, has not had anything and Logan Paul still managed to create content that eventually formed into a very large brand where now whatever he wants to do wherever he wants to collaborate with Nike or wherever he wants to be in the NFT space, that brand already on its own as a standalone. And we we think of small creators like that the Eva Eva find a lot of synergies and help each other up by tapping into their markets, or into each other's markets or ever put, or you're very good on your own. Very few are good on their own. I would agree. So there's a Virgil Abloh that we all know from our flights, who eventually was attractive enough for Louie Vuitton to make him the head of menswear. That doesn't come from you know, collaborating too much. But from being good initially, the the way he blew up, worked on collaborations with Nike and Nike actually won from that it's not him right, he lent his brand to Nike not the other way around the same way Kanye West does it with Adidas, and the EZ brand is arguably bigger, or at least more in demand than Adidas right now. So gap approached us in another collaboration helps him because he taps into a new market, which is arguably more mass market. But all of those have started from impressing people that have done it. And you know, you either find someone that you can be a prodigy to, or you really make it on your own and making it on your own is insanely tough. All of the ones that have made it on their own presumably have had people that they at least impressed with their quality and their drive and their passion. To to you know, help them because there was synergies to be created. And it's about being good. And it's about knowing what good is. And I feel a lot of people are, again, ignorant to the fact what what good quality is. And if you do good quality you usually know. And a lot of people that do good quality will see you do good quality, either good quality, let's do something together. You will not work with someone who does inferior jewelry, right in your background. If you don't like designs, if you don't like the quality, you're not doing it. But if you see if you're approached by your Harry Winston sure you would like to work together and they would like to work together if they approach you because they see quality in you. And it's about that. So it's small creators always have a shot, but they need to be good. And what good is really heavily depends on the industry that you're in some industries, you can slide away with being mediocre, and that works. The NFT space, we have seen that a lot. A lot of projects have sold out, they're not here anymore, because for the moment it worked as as spaces mature and quality demands become significantly higher. being mediocre or just good isn't enough. And being good ones isn't enough. It's about being good and it's about being constantly good. That's I think that's the whole secret and it sounds so cliche and so simple. But break that down to details and it becomes challenge in itself. And it's not just saying being but then it becomes a real, real tough challenge every day to innovate to innovate every day to transform your brand, eventually, when that becomes old, and only those brands survive, I think, and they all started from somewhere. And today is no different. It just became harder, because there's already more out there. So the barrier to entry became higher.
Holly Shannon
25:24
I think you've nailed it in talking about innovation, I think as creators, and brands, we have to constantly innovate. And we have to constantly evolve based on what's happening in the market. And based on not just the market, but what's happening in the world, like in, in this case, the introduction of web three and understanding that so I love that you're building houses. And I'm hoping that maybe even a year from now, if we meet each other again, your all your properties will be sold. What do you think?
Konrad Probst
26:03
So the properties sold in December, in five minutes, we, we sold out which, which gave us good good starting capital of around 2 million back then. We still, obviously make money, we consult brands these days. Again, I cannot talk about US brands until they allow me to when we work with brands that one I've never thought we would work with when we started this. Second brands said give me insurmountable bragging rights to my family. I told you yesterday, right. And we're excited to cherry pick those brands because they all want to work with properties. Because there is there is no floor talk between those brands and brands that I dream of every day suddenly just approached us by email, ask if we could collaborate and work with them in a way that we did it for the other brand that did it very successfully. And they asked around and they asked their brand friends and the CEOs ask each other, or the CIOs ask each other and they're like, who did this for you right and what gets around. And for us at properties, we see all of it important we see the NFT business as as an important way to showcase that we can do it. And an important way to give give a voice to our community and the individuals that want to be part of it, because a lot of them are smaller creators as we talked about earlier. But we also need to need to work with web three brands and the web two brands to actually help onboard more people and more communities. Because only if there's people, there's a market and only if there's a market, there's room for collaboration and innovation. And I think markets are always there. Some of them are still untapped. Think down NFT space has been over tapped with non useful innovation, let me call it that way to find nice words. But it has been a place where a lot of people abused the entry barriers where mediocre behavior was sufficient to make money and where money is there's always people that also want to scam. And we started with the recent market downturn that a lot of the ones that have not thought this through to a level where they know what value they provide other than opening up space for a community to potentially meet and to potentially engage them to potentially provide value to the project to form this. This reciprocal circle of value creation, community rewarding the projects and the projects rewarding the community over and over in this in this very positive visual cycle. And, yeah, the way we see that properties is we need individuals to test this out. Or we need the brands to step in and say, Hey, we are taking the leap. And we're doing it in a way that all these individuals will have value from this. And that's what we're currently seeking. And I feel like we're a few years out from what what you could call mass adoption. This event got a lot bigger compared to last year. But we're we're nowhere near touching, touching what it will actually look like if brands come in and create our content constantly. And when they invite over their audiences in a way that is easy for them. Right. I think the hurdles to entering web three are still too high for for a mass market adoption at this stage.
Holly Shannon
29:35
I would agree with you and there's a lot of friction. And it is a bear market now. But I'm really excited for you. I want to congratulate you that you know even in this bear market, you continue to flourish, and the brands continue to reach out to you which is so cool. And I would probably say that At this time next year, I want to hear that these houses that you build that you turn them into homes, because I think that's where the magic is for the NFT.
Konrad Probst
30:09
That would make me personally happy. And again, it's it's business is always business. I'm not telling you any news here. But on a personal level, it's about fulfillment, right? And ethically, and morally, you need integrity to do business on a level that those brands would work with you, right? Word gets around that we're good to work with, that we are considerate of their brands and not cash grabbing, right? If they say we want to test something out, sure. Let's let's see what we can do at a lower budget. So you don't assume risk. And let's see what we can do in a way that it will never hurt your brand. And if if brands are pushing out NF T's for free, no one stands to lose anything. So the brands surely have a expenditure. That's probably not. Not not really significant to their bottom line. But they opened up a testing ground for their community to to experience something new or experienced the brand in a way that is transformative and an out of the ordinary for that brand. And, again, I also hope next year we sit here and that there are homes, not in terms of houses, but the metaverse as a as a parallel and complementary home to to people that want to experience and interact with brands but also to people that may not like real life social and may feel more comfortable in a new avatar that they can express themselves better with. And I think the metaverse opens open space to mass market individuals and to those very specific individuals that like digital socializing far more, and we've seen that with COVID. A big market for digital socializing has opened and we see the metaverse as, as never replacing the real world ideally, hope it won't ever. That's a scary thought in itself. But we want to see the metaverse as a as a new way for, for brands and for individuals to come together, communicate and socialize in ways that may be uncomfortable or not possible physically in real life.
Holly Shannon
32:18
That's, that's great. I'm gonna end on that note, because I think it's really beautiful. And I want to thank you for spending a little time with me here at NFT. NYC and culture factor.
Konrad Probst
32:29
Good one to talk to so I really liked that.
Holly Shannon
32:32
Great, thanks.